The directors present the strategic report for the year ended 31 March 2023.
The principal activity of AMG Consultancy Services Limited (AMG) during the year is the provision of NHS and Local Authority funded community services. The business holds contracts with more than 10 public commissioning authorities across a range of services including community nursing, reablement and primary care.
The Directors expect the Company to continue to grow next year with revenue expected from additional contracts that we have successfully tendered for.
The Company is ideally placed to further improve frontline care for service users by developing innovative services in partnership with NHS and Local Authorities and has a strong track record of service redesign and transformation.
The Company has a well-established central administrative service, training, human resources, payroll and financial support. The comprehensive range of support enables the development and growth of the organisation and enables it to deliver high quality services.
The Company aspires to be the provider of choice for commissioners who are seeking the highest calibre NHS and related social care services and as such the organisation has continued to invest significantly to make the business capable of adapting quickly to meet those needs. There has been an increase in turnover (£2.45m) and a corresponding expenditure increase too (£1.46m). As a result, the company has seen a increase in gross profit of £987k (7.6%).
Profit after taxation increased from £5.46m to £5.62m.
During the year we have continued to focus on rebalancing the range of work undertaken within each Branch to ensure that there is an eclectic mix of contracts to provide sustainable work which ensures longevity, spend certainty within an agreed financial envelope.
The Company funds its growth and development projects through cash reserves. The company has no external third party borrowings.
The Company generates positive cash flow from existing services as a result of good cash collection and tight cost control, using these funds to invest in new and existing services to expand the business.
At the balance sheet date net assets have increased by £2.32m from £12.19m to £14.51m.
Business Growth
The Directors ensure that the business has the capacity to respond to increases in service demands and to mobilise more than one large contract at a time. The Directors are satisfied that such matters are properly discussed by the senior management team and are adequately resourced.
Commissioning models and operating framework
Recent changes in the health and social care sector present as challenges and opportunities for the business. The commercial and political environment in which we operate is monitored by the senior management team. Having an awareness of the operating framework and appropriately responding to market changes within the sectors will mitigate the impact of any material risk.
Credit Risk
The Company ensures that Credit Checks are completed on all limited and non-limited companies prior to any new business relationship and any issues are escalated to the senior management team before work is scheduled. The senior management team are then in a position to open dialogue with the company to see if a business relationship can be formed.
COVID-19 Pandemic
Although the regulations relating to COVID-19 have significantly changed, the measures to protect service users, care workers and staff have been integrated into the infection control measures deployed by AMG. Utilisation of the NHS supply chain has continued to improve access to PPE items. AMG remains vigilant to the risk of the spread of infection and new variants of COVID-19 virus which have the potential to affect all branches. Infection rates are constantly monitored to identify any capacity concerns within the workforce.
The Directors have identified three key operational priorities for the year ending 31 March 2023, which are summarised below:
Priority 1: Delivering high quality and safe services which are outcome focused and evidence based.
The Company has continued to focus on improving the quality and safety of its services. The Company has continued to employ nursing staff to support care workers in the delivery of care to meet complex care needs and to deliver clinical effectiveness programmes. Working closely with NHS colleagues we have continued to deliver a rapid response and enablement service to ensure that medical fit Service users are able to be discharged without delay. The Company has monitored Service User satisfaction and consequently has made a number of improvements to the services throughout the year.
Priority 2: Providing services underpinned by a robust governance framework and quality assurance processes:
The Company has enhanced its workforce to increase our clinical and care capability for rapid service mobilisation, development, and training. Investment in our IT infrastructure has enabled the company to utilise real time data to enhance the quality of the services provided. A robust auditing programme has enhanced the quality assurance processes across the entire organisation ensuring that lessons learnt and audit outcomes are immediately addressed.
Priority 3: Enhance the service delivery model and extend our reach to a wider national coverage
The Company has identified key areas of growth across the country to develop alongside current procurement opportunities. The growth and development will be supported by established teams in the Midlands and North Wales.
The Company has a number of KPIs which are used to analyse current performance and assist with business development. Monthly KPIs are used to monitor financial and operational performance and are used to inform our business decisions. The KPIs include revenue growth, gross profit margin and cash management. They also include any contractual KPIs applicable to the services provided.
Financial KPIs:
2023 2022
% %
Revenue growth/(decline) 5.8 9.1
Gross profit margin 30.9 30.4
£ £
Cash at bank and in hand 10,894,717 8,198,850
The Company places a strong emphasis on providing the highest quality service under pinned by a comprehensive range of policies and procedures. Our approach to delivering safe and effective care is underpinned by evidence-based practice and a range of non-financial KPIs focused on compliance with regulatory standards and Service User experience.
Regulated by Care Quality Commission and Care Inspectorate Wales our branches were rated:
Branches 2023 2022
Chester (inc Wales) Good Good
Burton Good Good
Nottingham Good Good
Crewe Requires improvement Requires improvement
Lincoln Good Good
Wolverhampton Good Good
Stone Good Good
Additional quality audit measures have been introduced in 2022/23 to improve performance and compliance with regulatory standards across all branches. Staff have been recruited into new roles in the Crewe branch with specific responsibilities to improve the services provided.
Service User experience is key to the achievement of our strategic objectives. A number of metrics are used to assess Branch performance in meeting service user expectations. New systems of collating information have been introduced to measure satisfaction levels and demonstrate improvements.
The individual Directors are aware and mindful of their duty under s.172(1) of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of AMG and in doing so have regard (amongst other matters) to the likely consequences of any decision in the long term, the interests of AMG care workers and staff, the need to foster the business relationships with commissioners, service users and others, the impact of AMG's operations on the community and the environment, the desirability of maintaining a reputation for high standards of business conduct and the need to act fairly.
The Directors recognise that difficult decisions must sometimes be taken which requires each Director to exercise independent judgment and apply reasonable care, skill and diligence in the decision-making process. In doing so, the Directors recognise their responsibilities to AMG's different, but mainly interrelated, stakeholder groups.
The Directors have determined the AMG key stakeholder groups to be: Commissioners (both Health and Social Care), Care Regulators England and Wales, the service user community, care workers and staff (together, the "Stakeholder Groups"). Each Stakeholder Group plays an important role in the ability of AMG to execute its strategy to deliver high quality services in accordance with our values.
AMG has processes in place to capture and consider the views of its Stakeholder Groups and share their views at relevant levels within the business, to ensure that regard is given to these views in decision-making processes.
Examples are provided below of typical methods of engagement with the Stakeholder Groups and how the Directors stay appraised of their views to inform their decision-making.
Engagement with care workers and staff employees
The Directors recognise that AMG care workers and staff are fundamental and core to our business and to the delivery of our strategic ambitions. The success of our business depends on attracting, retaining, and motivating our care workers and staff. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the Directors factor the implications of their decisions on care workers and staff where relevant and feasible.
AMG employs various tools to seek and utilise the views of its people including via informal feedback, meeting forums, periodic opinion surveys and formal reporting through the governance framework. The Operations Director keeps the Directors directly informed as to people and culture matters. In 2023, the care workers and staff of each Branch participated in an online opinion survey, the results of which were shared with the Branches and actions were taken to improve the work life experience for all concerned. Feedback was given to the care workers and staff to ensure that the actions taken had the desired impact and this was subsequently monitored in later surveys.
Working in accordance with government guidelines, the additional safety measures introduced within the work environment to ensure care workers and staff remained safe during the COVID-19 pandemic were incorporated into our infection control measures. Additional PPE continues to be provided to keep care workers and service users safe within their own home. Although the changes made to the office environment to meet the statutory guidance were relaxed, heightened surveillance of staff sickness absences to monitor infections rates and to ensure that staff remained safe was continued.
Engagement with Suppliers, Customers and Others
Service User Community:
AMG prides itself on anticipating the needs of the people it cares for so it can deliver a high quality and safe service to its Service User. Various methods are utilised to understand Service User’s experience, including surveys, visits, complaints, and compliments. Views gathered from Service Users are reported, discussed and lessons learnt utilised at all levels of the performance and governance framework. In 2022, the Company further developed its online reporting system to maximise the time available for client interactions within commissioned parameters. It also provided assurance that the right care was given at the right time and to the right person. Real time monitoring enabled the branches to immediately address any concerns to enhance the care experience of Service Users.
Although the COVID-19 restrictions were relaxed, robust Infection control measures have remained in place for the care workers and staff. Provision of enhanced PPE and monitoring of infection rates has ensured that AMG has the workforce capability and capacity to meet the care needs of all Service Users. The utilisation of a capacity model for service delivery has ensured that AMG has remained a significant contributor to the NHS enablement pathway.
Commissioners:
The Directors recognise the need to foster mutually beneficial relationships with a wide range of Health and Social Care commissioners. They ensure the Branch Managers have processes in place to engage and consult with commissioners on a regular basis to develop and maintain lasting and meaningful relationships. The Directors conduct regular strategic reviews with Local Authorities, ICBs and CHCs to understand their strategic agenda, key strategic initiatives and identify opportunities for business development.
Regulators:
The Branches proactively participate in periodic meetings and interactions with the regulators as appropriate to fully understand regulatory views and feedback, including full and active participation in thematic reviews and application of any resulting learnings to drive business improvements. The senior management operates a horizon-scanning process to ensure that upcoming regulatory change, consultations, guidance and "hot topics" are known and understood by the business, enabling any resulting internal actions to be taken.
Regulatory matters are reported, discussed, and actioned at all levels within the Company's governance framework. The Business Transformation Director reports regulatory matters and briefings into regulatory topics are held as and when required. This ensures that Directors are kept informed of regulatory views and matters to enable them to make decisions which are aligned with regulatory objectives and views. We continually review our quality audit process which resulted in changes to reflect the approach that regulators took during inspection providing feedback on the key lines of enquiry. Outcomes of inspection and audits were shared with the other branches. Improvement plans were agreed and monitored via performance management and governance. This ensured that lessons learnt were applied, enabling other branches to successfully achieve a good rating at inspection.
As members of the CQC oversight group, regular meetings are held with the CQC oversight team which has the responsibility of ensuring AMG remain financially viable and have good governance structures in place to provide services of high quality and which are safe. AMG is considered to be low risk in all areas.
Environment and social responsibility:
As part of AMG's environment and social responsibility, the Company actively engages in strengthening its local community, while operating its business with a meaningful environmental commitment. For example, the Company participates in local network groups to better understand what matters to those in its community and how the Company can utilise its expertise and support to add value. In 2022, social responsibility and sustainability matters were discussed at Board meetings which were informed by both internal briefings and emerging regulatory views, particularly relating to climate change considerations.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2023.
The results for the year are set out on page 13.
Ordinary dividends were paid amounting to £3,320,050 (2022 - £3,100,000). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company has taken advantage of the available exemption not to disclose energy and carbon reporting in accordance with the Environmental Reporting Guidelines. This information is included in the group directors report of AMG Care Services Group Limited.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including legislation such as the Companies Act 2006, taxation legislation, data protection, employment, health and safety legislation and CQC regulations; and
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and reviewing expenditure on legal & professional services.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries posted during the period and at the period end to identify unusual transactions; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims;
reviewing correspondence and inspection reports for the company from the CQC and where no new reports had been issued during the period, reviewing the record held by the CQC to ensure there have been no changes along with the results of internal audits carried out;
confirming for a sample of relevant employees that DBS procedures were followed; and
reviewing legal and professional fees incurred during the period to identify any potential indications of non-compliance with laws and regulations.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
AMG Consultancy Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Rugby House, Brooms Road, Stone Business Park, Stone, Staffordshire, England, ST15 0SH.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of AMG Care Services Group Limited as at 31 March 2023. These consolidated financial statements are available from its registered office, Rugby House, Brooms Road, Stone Business Park, Stone, Staffordshire, ST15 0SH.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Leasing commitments
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Share based payment transactions
The parent company of AMG Consultancy Services Limited operates a share based compensation plan. The fair value of employee services received in exchange for the grant of options is recognised as an expense in the financial statements of AMG Consultancy Services Limited rather than the parent company, where the scheme is in place, due to employees holding share options being employees of AMG Consultancy Services Limited and not the parent company. The total to be expensed over the vesting period is determined by reference to the fair value of options granted. Non market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable. The proceeds received net of any attributable transaction costs are credited to share capital (nominal value) and share premium in the parent company when the options are exercised.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The directors consider that there are no key estimates or assumptions used in preparing the financial statements.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Factors affecting future tax charges
The main corporation tax rate was legislated to increase from 19% to 25% with effect from 1 April 2023, significantly increasing the tax payable on profits earned.
Given the change to the main corporation tax rate, deferred tax has been provided for at 25% where appropriate.
Amounts owed to group undertakings are secured by an all assets debenture.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £96,662 (2022 - £22,346) were payable to the fund at the balance sheet date and are included in creditors.
Each ordinary share has full voting rights, full dividend rights, is non-redeemable and has no right to participate in a distribution of capital, except on winding up.
Profit and loss reserves represents the accumulated profits less accumulated losses and distributions up to the reporting date. This is a distributable reserve.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the company entered into the following transactions with related parties:
Directors' loan account
At the balance sheet date the company owed £492,983 (2022 - £292,740) to the directors.
Other transactions with related parties
During the year the company paid rent to the Directors' pension scheme of £109,044 (2022 - £122,271).
At the year end, amounts were owed to the company by the Directors' pension scheme of £nil (2022 - £3,786) owed by the company).
At the year end, amounts owing to close family members of the ultimate controlling parties totalled £nil (2022 - £367,000).
During the year the company also paid a total of £176,765 (2022 - £175,151) to close family members of key management personnel.
Loans to related parties
At the year end, total amounts owing from a related party company in respect of a loan were £100,100 (2022 - £100,100).
No repayments of amounts for this loan have been made and no interest has been charged on this loan.
The company has previously made loans to the Directors' pension scheme. At the year end, amounts owing from the Directors' pension scheme to the company totalled £550,379 (2022 - £779,005).
Interest is being charged on the loan to the Directors' pension scheme of 3% plus the base rate of interest. Interest income in relation to this loan during the year totalled £29,017 (2022 - £22,342).
These loans to related parties are presented in debtors.
Mr J R Trippett and Mrs S Trippett, the directors, control the company jointly as a result of holding 91% of the issued share capital of the ultimate parent company, AMG Care Services Group Limited.
The company is a 100% owned subsidiary of AMG Care Services Group Limited, which is the ultimate parent company. The ultimate parent company prepares consolidated financial statements as at 31 March 2023 and these financial statements may be obtained from Rugby House, Brooms Road, Stone Business Park, Stone, Staffordshire, ST15 0SH.