The loss making Pop Brixton remains in debt according to its recently released annual accounts, and looks likely to remain so.
Despite showing an operating profit for the year of £139,000, after four and a half years of trading at a loss, Pop Brixton still owes its creditors over £655,000. This includes a loan of £500,000, which was due to be paid off on 1st January 2020.
Even before the Covid 19 pandemic, this will have made a huge dent on their bottom line. On top of this, they still have accumulated losses of over £800,000 from previous years to pay off.
Pop Brixton claims that is has paid Lambeth “£21,500 in early profit share in 2019, with £53,750 having been paid in total to date.”
This will surprise many Brixton Buzz readers, as a recent Brixton Buzz Freedom of Information request to Lambeth showed that the Council had received zero ground rent or profit.
Whatever the real figure is, £53,750 for renting a piece of prime real estate in the heart of Brixton for four and a half years works out at less than £1,000 a month. Hardly a good return for Lambeth tax payers.
The original agreement between Lambeth and Pop Brixton was that Lambeth would receive a 50/50 share of Pop Brixton’s profits. When no profits materialised after several years of trading, this arrangement was changed so that Pop Brixton pay an annual rent and a “potential profit share… if this is achieved”.
The level of annual rent has not been disclosed but tellingly it is described in the Lambeth decision making process as “supported by an independent open market valuation which has been adjusted to reflect the project’s social value, time limit and relative maturity.” In other words, significantly less than market value.
It is noteworthy where Pop Brixton’s priorities lie. It is true to say that Pop Brixton has reduced its liabilities in the year. This is primarily due to Pop Brixton paying off a £543,000 loan to its owners, property developers The Collective.
Pop Brixton has also been paying £4,166 per month interest on their £500,000 loan. These figures dwarf any amount that Lambeth council might have received. The accounts also show that a further £321,000 has been pumped into Pop Brixton’s reserves.
Elsewhere, Makeshift, the backers of Pop Brixton, had another year of making a loss. The accounts show a loss in the year of £1.8 million. Despite the losses, Makeshift, which is also bank-rolled by The Collective, received an injection of £7.8 million into the business.
Clearly the backers of Pop Brixton have plenty of money to keep their project afloat but are not so generous when it comes to paying back Lambeth tax payers for the free use of a publicly owned asset.
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Trump Style Accounting