The zombie company behind Nigel Farage's newsletter

When a small company that has been loss-making for years writes down a deferred tax asset to zero, the end is usually nigh. But not always...

In December 2023, The Times reported that Southbank Investment Research Ltd, whose flagship newsletter The Fleet Street Letter is fronted by Nigel Farage, had made a £600,000 loss. But a look at its accounts showed that the loss was only the tip of the iceberg.

Southbank Investment Research Ltd. is persistently and heavily loss-making. There have been "going concern" warnings on its accounts every year since 2018. In 2022 its loss was £606,526, up from £127,360 in 2021, but losses in previous years have been much larger. Because of its accumulated losses, it is deeply underwater: its liabilities exceed its assets by well over £5m.

Farage joined Southbank Investment Research in 2022, though its website claims the editors first approached him to write for them twenty years ago. There was an increase in subscriptions in 2022, so perhaps hiring such a flamboyant character did bring in more revenue. But it wasn't enough to save it.

The notes to the accounts reveal that the company has had to write down a deferred tax asset (DTA) of £251,993 to zero:

This means that the management now believes it has no prospect of ever generating sufficient profits to repay to HMRC the tax credit it received as a result of previous losses. In short, it is a zombie.

For an independent company, complete writedown of a DTA means it is on the road to insolvency, though it may take some years to get there. But Southbank Investment Research Ltd. isn’t an independent company.

The 2022 accounts say Southbank Investment Research Ltd.’s ultimate owner is Agora Holdings Ltd, Cyprus, and its ultimate beneficial owner is Francisco Jose Patron Costas, an Argentinian lawyer. But this is by no means the whole story.