The directors present the strategic report for the year ended 31 December 2022.
As we reflect on 2022, Kingfisher Topco Limited (KTL) has continued to grow and expand our services and patient base throughout the UK. We launched our first dermatology contract in the North West, completed the transformational acquisition of Pennine MSK Partnership Ltd and continued to expand our Talking Therapy services with the successful launch of another service in the North of England.
Our NHS market unit has grown substantially through the year, building on the successful contract mobilisations of prior years. The business successfully implemented another new Mental Health NHS contract, within the North East. These contracts have performed in line with expectation as the year has progressed. We have continued to reinvest in our Mental Health proposition, expanding ways service users can access the services whilst also providing greater support during treatment and through our community-based partnerships.
The Corporate market unit has performed adequately and we believe will continue to growth in 2023 and beyond. We have successfully on-boarded a number of recognised brands along with enhancing our relationships with well-known private medical insurers. The business model continues to be able to provide virtual alongside face to face pathways and these have been well received from both users and Corporate customers alike.
The Private market has yet to fully recover to pre-pandemic levels. City centre locations continue to experience lower volumes, but this has been mitigated by suburban areas, supported by recent acquisitions in these areas.
Despite significant revenue growth during the year, increased administration expenses and interest payments due to increased debt and interest rates have meant an increased loss before tax for the KTL consolidated group of £3,676,086 compared with a loss of £1,716,289 in 2021.
Looking forward, the Directors of the business remain very confident in our ability to continue to grow and deliver results in line with expectation. We have successfully launched another new NHS Mental Health contract in early 2023. We are currently mobilising another NHS Mental Health contract and two additional NHS Dermatology contracts, all of which are due to go live in early 2024.
In common with every other business, the company aims to minimise financial risk. The measures used by the directors to manage this risk include the preparation of profit and cash flow forecasts, regular monitoring of actual performance against these forecasts and ensuring that adequate financing facilities are in place to meet the requirements of the business.
Apart from the risks stated below, the company is dependent on developing and maintaining contracts with a relatively small number of key customers, and the availability of long- term finance as the business grows.
Kingfisher Topco Limited has a financial risk management objective of ensuring that its’ trading financial requirements are supported rather than hindered by exposure to third party (non-equity) financial instruments. To this point, we have engaged with Shawbrook Bank Limited to ensure we have sufficient working capital in order to execute our wider growth ambitions. Furthermore, we retain access to additional facilities available through our ultimate shareholder Archimed SAS (Med I / Med Feeder I) should these be required.
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The company is mainly exposed to credit risk from credit sales. It is group policy to assess the credit risk of new customers before entering contracts. Credit risk also rises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating “A” are used.
Liquidity risk arises from the company’s management working capital and the finance charges and principal repayments on its debt instruments. It is a risk that the group will encounter difficulty in meeting its’ financial obligations as they fall due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 30 days. The Board receives a 12-month rolling cash flow projection on a monthly basis as well as daily information regarding cash balances. Furthermore, we must meet financial covenants as part of our Shawbrook debt facility which are monitored on a quarterly basis (look forward and historic) which adds an additional layer of governance.
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the group’s processes, personnel, technology and infrastructure, and from external factors other than credit and market risk such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. The governance framework supported by detailed operational procedures manages operational risk so as to balance the avoidance of financial losses and damage to reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
The table below summarises the GHG emissions for reporting year: 1st January 2022 to 31st December 2022. As a business we have been assessing our carbon emissions since 2021 and have provided this year and last year’s baseline assessment results for comparison.
Breakdown of Vita Health Group’s 2022 GHG Emissions:
Scope | Emission Source | Location-based (tCO₂e) | Market-based (tCO₂e) |
1 | Natural Gas | 13.65 | 13.65 |
Company vehicles | 1.67 | 1.67 | |
Refrigerants | 2.40 | 2.40 | |
Scope 1 Total | 17.73 | 17.73 | |
2 | Electricity | 63.78 | 106.92 |
Scope 2 Total | 63.78 | 106.92 | |
3.1
| Non-controlled site electricity | 50.35 | 83.50 |
Paper | 0.37 | 0.37 | |
Water | 0.26 | 0.26 | |
3.2 | Computing | 263.14 | 263.14 |
3.3 | Scopes 1 and 2 Well-to-Tank | 18.12 | 17.89 |
Transmission & Distribution | 11.84 | 11.72 | |
3.5 | Waste | 53.13 | 53.13 |
Wastewater | 0.48 | 0.48 | |
3.6 | Grey Fleet (employee-owned vehicles) | 102.58 | 102.58 |
Hotel Stays | 19.36 | 19.36 | |
Rail | 11.04 | 11.04 | |
Flights | 4.42 | 4.42 | |
Taxi | 2.13 | 2.13 | |
Company vehicles off-site charging (scope 3) | 0.16 | 0.16 | |
3.7 | Commuting (estimated) | 210.72 | 210.72 |
Homeworking | 82.13 | 82.13 | |
Scope 3 Total | 830.23 | 863.04 | |
Tonnes of CO₂e | 911.74 | 987.68 | |
Tonnes of CO₂e per employee | 0.77 | 0.84 | |
Tonnes of CO₂e per £ million turnover | 15.77 | 17.09 | |
Total Energy Consumption (kWh)* | 968,651 |
*Total Energy Consumption includes UK site electricity, UK site natural gas, company owned vehicles, and employee-owned vehicles (grey fleet).
Scope 1 | Electricity generated on-site | 0 |
Site gas | 13.65 | |
Site Gas Oil | 0 | |
Site Coal (electricity generation) | 0 | |
Site LPG | 0 | |
Site Diesel (retail) | 0 | |
Refrigerants | 2.4 | |
Company car travel | 1.67 | |
Vehicle fuel usage | 0 | |
Owned Vans | 0 | |
Lorry freight (owned) | 0 | |
Process emissions | 0 | |
Scope 2 | Electricity generation | 104.42 |
District heating generation | 0 | |
Scope 3 | Cash opt out car travel | 0 |
Employee-owned car travel (grey fleet) | 81.15 | |
Motorbike travel | 0 | |
Bus travel | 0 | |
Taxi travel | 1.72 | |
Rail travel | 8.82 | |
Ferry travel | 0 | |
Flights | 3.98 | |
Outsourced Logistics - Rail | 0 | |
Outsourced Logistics - Road | 0 | |
Outsourced Logistics - Sea | 0 | |
Outsourced Logistics - Air | 0 | |
Van travel and distribution (Outsourced) | 0 | |
Waste | 53.13 | |
Water (and wastewater) | 0.74 | |
Electricity transmission & distribution | 9.55 | |
District heating distribution | 0 | |
Hotel stays | 19.36 | |
Hire cars | 0 | |
Home-workers | 82.13 | |
Paper | 0.37 | |
Non-Controlled Site electricity | 0 | |
Non-Controlled Site gas | 0 | |
Non-Controlled Site gas oil | 0 | |
Non-Controlled Site coal | 0 | |
Non-Controlled Site LPG | 0 | |
Non-Controlled Site diesel | 0 | |
Non-Controlled Site district heating | 0 | |
Well To Tank | 97.85 | |
Company Electric Vehicles (charged off-site) | 0.16 | |
Commuting | 167.49 | |
Computing | 263.14 | |
Total tonnes of CO2e | 911.74 |
Measures that have been taken during the financial year covered by the Director’s Report to improve energy efficiency include:
Increased consideration of estates based environmental impacts.
Maximising the use of energy efficient fittings (e.g. lighting).
Maintaining and servicing relevant equipment and machinery in line with best practice (e.g. boilers and AC).
Increase implementations/utilisation of smart meters.
Further consideration of environmental impacts in organisational policy development.
Internal and external campaigns to raise awareness and change behaviours around environmental issues – inc. energy consumption and carbon emissions.
We are delighted to be able to show we have reduced our location-based greenhouse gas emissions by 3.5% since last year.
Activity | Baseline Year (2021) | Current Year (2022) |
Total energy consumed (kWh) | 639,449.88 | 968,651.42 |
Total Gross Location-Based Emissions (tCO2e) | 990.94 | 956.09 |
Total Gross Market-Based Emissions (tCO2e) | 907.23 | 987.68 |
Carbon offsets (tCO2e) | 0 | 0 |
Total Net Market-Based Emissions (tCO2e) | 907.23 | 987.68 |
Intensity ratio: tCO2e (gross Scope 1 & 2, market-based) per £M revenue | 2.57 | 2.16 |
The leadership of our business is focused on delivering value for all members that we interact with. We set out below how we meet these requirements.
The success of our business is dependent on the support of all our stakeholders. Building positive relationships that hold common values enables us to deliver value and improve outcomes for all – from patients, staff, customers, suppliers, and shareholders.
Our group consist of business units focussed on different customer sets – NHS, Corporate and Direct Consumers. However, the long-term success of our business requires successful working practices with staff, suppliers, customers, and patients. We exist to ‘Make People Better’ and focus on this daily. We ensure compliance with group policies and seek to make decisions that balance views across all stakeholders.
The leadership terms of each area make decisions with a long-term view in mind. To fulfil their duties, the Directors of each business and the Group take care to consider potential consequences on all stakeholders of decisions and actions taken. Where possible, affected groups are conferred with in advance as we attempt to fully understand the range of views.
Reports are regularly made to Group Board by the business units about the underlying performance and key strategic direction. Core decisions will be escalated appropriately, and a balance of stakeholders is sought as it is vital for our organisation to consider the impact on all to succeed.
Our Patients are at the heart of everything we do. Our purpose to ‘Make People Better’ means that our clinical standards and governance is critical to the long-term success of our business. We ensure that appropriate treatment is provided with supervision and reviews implemented at appropriate levels. Our breadth of services now encompasses Musculoskeletal, Mental Health and Dermatology enabling us to treat various conditions, many of which often overlap, which we firmly believe is to the benefit of our patients.
We could not deliver our fantastic services without our staff. Our colleagues have once again demonstrated their commitment to the business, ensuring our propositions continue to lead the market effectively and efficiently. We have invested materially in our People Services Team during 2022, reflecting our commitment to addressing issues on Equality, Diversity and Inclusion which has been positively received by our staff. This focus will continue as we strive to lead the way and ensure that our staff base is reflective of the patients we serve.
Our customers have clear KPIs that we must adhere to. We have regular dialogue with key customers and always seek to work collaboratively to meet challenges when they arise. We are proud of the feedback that we receive and are delighted to welcome new Customers in 2022.
Many of our suppliers provide systems and support that are the backbone of our business. We have monthly discussions with key suppliers, ensure engagement is at the correct level and seek to understand their challenges and opportunities to align wherever possible.
Shareholders are supportive and have an aligned view that long term success is dependent on delivering exceptional service whilst managing risk appropriately. Ensuring risks are identified and mitigated is a key consideration with a robust governance framework in place. Dialogue with key shareholders is on a regular basis with minority shareholder engaged as and when appropriate.
We believe optimal health outcomes can be achieved through working with local communities. An example of this in our NHS Talking Therapy contracts where we have many instances of working with local, third sector organisations to ensure engagement and that those people who can benefit from our services have an improved awareness of the available support.
Our impact on the environment is a continued focus – we have employed a dedicated Sustainability Manager to drive awareness and lead initiative to reduce our environmental impact. Furthermore, we have once again commissioned a report assessing our Greenhouse Gas emissions in accordance with the UK Government’s ‘Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance’. This report reflects the action taken in 2022 to reduce our emissions including measures such as maximising energy efficient lighting, increased implementation of smart meters and improve awareness and behavioural change around environmental topics. This has resulted in a 3.5% reduction in our location-based Greenhouse Gas emissions compared to 2021.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 14.
No ordinary dividends were paid (2021 : £Nil). The directors do not recommend payment of a further dividend (2021 : £Nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The auditor, RSM UK Audit LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Kingfisher Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 group's and parent 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
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent 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 parent 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.
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the group and parent company operate in and how the group and parent company are complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures and evaluating statutory tax information prepared by the group's tax advisers.
The group audit engagement team identified the risk of management override of controls and revenue recognition as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business, challenging judgments and estimates applied, and testing of revenue cut off and completeness.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://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 members, as a body, 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 members those matters we are required to state to them 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £13,938 (2021:£831 loss).
Kingfisher Topco Limited (“the company”) is a private limited company limited by shares and is registered, domiciled and incorporated in England and Wales. The registered office is First Floor Premises, 14 Woolhall Street, Bury St. Edmunds, Suffolk, IP33 1LA.
The group consists of Kingfisher Topco Limited and all of its subsidiaries.
The company's and the group's principal activities and nature of its operations are disclosed in the Strategic Report and the Directors' Report.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006, including the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
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 £.
The financial statements have been prepared under the historical cost convention, The principal accounting policies adopted are set out below.
The 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 for parent company information presented within the consolidated financial statements:
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of Kingfisher Topco Limited and all of its subsidiaries (i.e entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group is expected to have adequate resources to continue in operational existence for a period of one year from the date of signing these financial statements.
In arriving at this conclusion, the directors have taken into consideration the results to date for the current year along with the forecasts and cash flow through to 31 December 2024. The external debt and associated interest due by KML is not due until late 2026 and group forecasts show a positive cash position for the trading group. A significant proportion of the income arising across the group is under multi-year agreements and there are also numerous corporate contracts. The group has continued to grow with acquisitions and new contract wins which are expected to increase group income and EBITDA over the next twelve months. The directors consider that measures put in place enable the group to continue to meet their obligations as they fall due for at least the next twelve months.
Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover represents amounts receivable for goods and services provided to customers net of trade discounts. Turnover is recognised on the accruals basis over the period to which it relates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue in respect of services provided to customers is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Negative goodwill arises when the cost of a business combination is less than the fair value of the interest in the identifiable assets, liabilities and contingent liabilities acquired. The amount up to the fair value of the non-monetary assets acquired is credited to profit or loss in the period in which those non-monetary assets are recovered. Negative goodwill in excess of the fair value of the non-monetary assets acquired is credited to profit or loss in the periods expected to benefit, which the directors consider to be 5 years.
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 recognised in the profit and loss account.
In the separate accounts of the company, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include trade and other debtors, accrued income, amounts owed by group undertakings and cash and bank balances, are initially measured at transaction price including transactions costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its liabilities.
Basic financial liabilities, including trade and other creditors (including accruals), bank loans and overdrafts, other loans, obligations under finance leases and amounts owed to group undertakings, 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities are derecognised when, and only when, the group's contractual obligations are discharged, cancelled, or they expire.
Equity instruments issued by the group are recorded at the fair value of proceeds received, net of transaction costs.
The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.
Current and deferred tax is charged or credited to profit of loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.
Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if any only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.
Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profit and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
For defined contribution schemes the amount charged to profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either other creditors or other debtors.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the group’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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Goodwill is amortised over its estimated useful economic life.
Mobilisation intangibles are amortised over the life of the contract. In cases where the company controls any extension of the contract, the mobilisation intangibles are amortised over the life of the contract plus the extension if the company expects to enact this.
Assessing whether or not investments in subsidiary entities remain unimpaired requires the exercising of judgement, particularly during a period of change in the underlying business and as a strategy of growth and performance improvement is pursued. In undertaking this assessment directors have regards to estimates of future profitability, discount rates and/or multiples of value that might be realised on sale. Each of these elements is subject to estimation uncertainty that may be subject to future revision and such uncertainty is heightened by the relatively early stage of the Company's development in its present form. Having undertaken a review as at 31 December 2022, the directors do not consider that any material impairment has arisen.
Assessing the adequacy of an allowance for doubtful debts necessitates an assessment of a customer's ability and agreement to pay. The combination of these factors is subject to estimation and uncertainty.
All the group's turnover for the year and prior period was within the United Kingdom.
Included within administrative costs are exceptional costs incurred in respect of professional fees of £1,170,330 (2021:£426,683).
During the year, no applications were made under the governments Coronavirus Job Retention Scheme (2021:£61,313), as the scheme ceased in September 2021.
The group received training rebate income from Health Education England (HEE) or Integrated Care Boards (ICB) relating to trainee Psychological Wellbeing Practitioners of £4,428,536 and other non-HEE/ICB grant income of £46,722. Total income recognised in the year was £4,475,258 (2021:£2,844,040). £70,779 (2021:£487,097) was receivable at the year end.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Directors' remuneration for the year and the prior year has been borne by the subsidiary company Vita Health Group Limited.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2021:3).
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The group goodwill disclosed above has a remaining amortisation period of between 1 year and 6 months and 5 years and 8 months.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The investments in subsidiaries are all stated at cost.
On 31 March 2022 the group acquired 100% of the issued share capital of Physiotherapy2Fit Limited (see Note 27).
On 23 April 2022 the group acquired 100% of the issued share capital of Pennine MSK Partnership Limited (see Note 27).
On 19 July 2022 the group dissolved VHG Holdco Limited, a dormant subsidiary company.
Under s479A-479C of the Companies Act 2006, the following subsidiaries are claiming exemption from audit of their individual financial statements as guaranteed subsidiaries of Kingfisher Topco Limited;
Physio For All Limited
The Abbey Clinic Limited
The Bisham Abbey Knee Clinic Limited
Physiotherapy2Fit Limited
Pennine MSK Partnership Limited
Other debtors totalling £98,877 (2021:£95,619) relate to rental deposits due after one year.
Amounts owed by group undertakings are interest free and are repayable on demand.
Amounts owed to group undertakings are interest free and are payable on demand.
Bank loans of £10,749,167 (2021:£5,590,278) are secured by a fixed and floating charge over the assets of the group.
Loans from related parties comprise loan notes from Med I and Med I Feeder investment funds, the ultimate controlling party. The loan notes bear interest at 10% p.a. with accrued interest added to the outstanding loans. The loan notes and the related interest are due for repayment by 1 October 2026.
Other loans comprise loan notes which bear interest at 10% p.a. with the accrued interest added to the outstanding loans. The loan notes and the related interest are due for repayment by 1 October 2026.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The group has deferred tax losses of £6,125,000 (2021:£5,888,428) available for carry forward against future trading profits. The deferred tax asset in relation to these losses of £1,531,000 (2021:£1,472,107) has not been recognised as the directors consider future profits are unlikely to absorb them in the short term.
A defined contribution pension scheme is operated for all qualifying employees of the group. The assets of the scheme are held separately from those of the group in an independently administered fund. At the year end £528,426 (2021:£1,037,027) remained outstanding and included in other creditors.
Ordinary and ordinary A shares rank parri passu in respect of entitlement to distribution and voting rights. The holders of ordinary B shares have no rights in respect of distribution or votes.
Of the above share capital 2,863,201 ordinary shares of £1 each, 537,827 ordinary A shares of £1 each and 38,267 ordinary B shares of £1 each, are paid.
At 31 December 2022, 293,055 ordinary A shares and 6,996 ordinary B shares remain unpaid.
On 23 April 2022 the group acquired 100% of the issued capital of Pennine MSK Partnership Limited.
On 31 March 2022 the group acquired 100% of the issued capital of Physiotherapy2Fit Limited.
Vita Health Group Limited, Vita Health Wellness Limited and Vita Health Solutions Limited are included in a group registration for VAT purposes and therefore are jointly and severally liable for the unpaid debts of the companies. As at 31 December 2022, the VAT liability of Vita Health Group Limited amounted to £805 (2021:asset of £5,415), the VAT liability of Vita Health Wellness Limited amounted to £173,273 (2021:£189,360) and the VAT asset of Vita Health Solutions Limited amounted to £1,416 (2021:£4,047) and are reflected in their balance sheets.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date: