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COMPANY REGISTRATION NUMBER:
13723212
Beaumont Care Homes Limited |
|
Beaumont Care Homes Limited |
|
Period from 4 November 2021 to 31 December 2022
Officers and professional advisers |
1 |
|
|
Independent auditor's report to the members |
9 to 12 |
|
|
Statement of comprehensive income |
13 |
|
|
Statement of financial position |
14 |
|
|
Statement of changes in equity |
15 |
|
|
Notes to the financial statements |
16 to 24 |
|
|
Beaumont Care Homes Limited |
|
Officers and Professional Advisers |
|
The board of directors |
J A Hill (Appointed 4 November 2021) |
|
W J Waddicor (Appointed 4 November 2021) |
|
R Burrows (Appointed 14 November 2022) |
|
|
Company secretary |
A McKeown |
|
|
Registered office |
91-97 Saltergate |
|
Chesterfield |
|
Derbyshire |
|
S40 1LA |
|
|
Auditor |
MCABA Limited t/a Mitchells |
|
Chartered Accountants & Statutory Auditor |
|
91-97 Saltergate |
|
Chesterfield |
|
Derbyshire |
|
S40 1LA |
|
|
Bankers |
HSBC UK Bank plc |
|
East Midlands Corporate Banking Centre |
|
Second Floor |
|
Donnington Court |
|
Pegasus Business Park |
|
Castle Donnington |
|
DE74 2BU |
|
|
Solicitors |
Knights Professional Services Limited |
|
14 Commercial Street |
|
Sheffield |
|
S1 2AT |
|
|
Beaumont Care Homes Limited |
|
Period from 4 November 2021 to 31 December 2022
The directors present their strategic report of the company for the period ended 31 December 2022. Review of the business
The principal activity of the company during the period was the provision of residential and nursing care to adults
, across 29 care homes in Northern Ireland. The company incorporated on 4 November 2021 and commenced trading on 18 July 2022 when the wider group acquired 29 care homes via an asset purchase from a care provider who was in administration. Beaumont Care Homes Limited
operates the trade of these 29 homes. Results, performance and key performance indicators The company incurred a net loss of £1,738,731 in the period, EBITDA of £(1,414,751) and the balance sheet shows net liabilities of £1,738,531 at 31 December 2022. Since acquisition of the 29 care homes the company and wider group has had a challenging period. Demand for care in Northern Ireland is high and occupancy has increased since acquisition. Average occupancy for the period was 87.3%. However, a shortage of nursing staff and carers in the market has led to significant agency costs and this has been a barrier to being able to increase occupancy to its full potential. Staff costs as a proportion to fees (including head office staff) were 85.2%, although this figure is slightly inflated by the cost of one-to-one care which is reimbursed via the trusts. Rising inflation has led to increased overhead costs, particularly in relation to food, consumables, waste and energy costs. Management have considered and implemented a number of strategies to improve trading performance in the coming period and longer term which are discussed further below. Future developments Whilst the company has experienced a challenging trading period they remain positive and committed to a turnaround plan for the company. At the end of 2022, a sponsorship licence was granted which allows the company to recruit workers from overseas. Since the period end this has started to have a positive impact on the performance of the company, via the reduction of agency staff costs. Whilst the full benefits of the license are yet to be seen, it is forecast that agency costs will continue to fall significantly, staff retention will improve and this will enable the company to be able to increase occupancy further. Inflationary pressures still exist in all cost areas, but the company has strategies in place to monitor costs on an ongoing basis and make savings where possible. Energy prices were exceptionally high in the period but have stabilised post year end and the company is reviewing and negotiating on all current contracts with particular attention paid to any contracts taken over from the previous owner. Food, waste and consumables have all been reviewed and positive actions taken such as changing suppliers and switching to better value products which don't compromise on quality. The group as a whole was in breach of bank covenants during the period. Following an independent business review, the bank re-based the financial covenants on the loan facilities. The group became covenant compliant from July 2023 and continued compliance is forecast. Providing a high quality of care and the well-being and comfort of residents remains at the forefront of the company's ethos and results of Regulation and Quality Improvement Authority (hereafter "RQIA") inspections since acquisition have shown continued signs of improvement since the homes were acquired from the previous owners. Cash flow management is key to the company and wider group's ability to be able to implement its plans and management review cash flow forecasts on a frequent basis. Overall, whilst the directors and management do not underestimate the challenges they face in returning the company to profitability, they are confident that the strategies implemented and forecasts prepared show they are in a position to be able to achieve this. Principal risks and uncertainties The senior management team meet regularly to consider the risks that face the company and wider group and how established processes and controls are used to manage these risks. Key risks and uncertainties are outlined below: Market risk The market in which the company operates is highly competitive. As a result, there is constant pressure on margins, amplified by increases in UK inflation. The sector uses a significant amount of food, energy and labour all of which saw high price growth particularly as a result of the increases in National Living Wage. Recruitment and retention of competent and qualified personnel remains challenging. Legislative and regulatory risk The company's operations are subject to a high level of regulation by various regulators in the UK. Inspections at our care homes are frequent and primarily unannounced. The results of such inspections are crucial in determining the operational capability of a home and compliance with regulatory standards. Failure to comply with the appropriate standards set down by the regulators can result in either temporary, or in the worst-case scenario, permanent closure. To mitigate the risk, the group has invested in quality and compliance personnel who regularly visit the homes to ensure that the appropriate standards of care are being delivered. Reputational risk The company provides care to elderly people as well as younger adults. Any serious breach in the standard of care provided could result in negative publicity and increased scrutiny from regulators, residents and families. To mitigate this risk, the company devotes a considerable amount of time to delivering comprehensive and mandatory clinical training to employees. All employees are checked via the Access NI service prior to being offered employment. Financial risks The company and wider group has bank loans. The current economic environment and the increases in the Bank of England base rate are a risk to the company and wider group. The group prepares cash flow forecasts and applies sensitivities as applicable to ensure they are well placed to be able to meet capital and interest repayments as they fall due. The group has an open relationship with the bank and provides monthly, quarterly and annual financial and operating information to them and is currently covenant compliant. Going concern The directors acknowledge that the performance of the company and wider group may suggest a degree of doubt on the company's ability to continue as a going concern. However, the directors have considered all available information to them in forming their opinion to assuage this doubt as follows: The company is part of a wider group banking facility with HSBC Bank UK plc. Throughout the period to 31 December 2022 the company and wider group was loss making and in breach of its group financial covenants. The bank requested an independent business review which was completed in June 2023. As a result of the review, the bank increased current overdraft facilities for a period of time to assist cashflow whilst certain issues were being addressed and reset the financial covenants. The group became covenant compliant from July 2023 and the loan facility is agreed for a period of more than 12 months from the date of the audit report. The overdraft facility is however up for renewal in July 2024. The directors are continuously and consistently keeping HSBC Bank UK plc up to date with regards current and forecasted performance and continue to receive their full understanding, support and encouragement and therefore believe the risk of the facility not being renewed is low. A director has assisted in financially supporting the company and wider group since the period end and the terms of the amended overdraft facility agreement requires further financial support by the director through the injection of funds into the group by 31 December 2023. The company and wider group are aware of these obligations and confident that funds will be received as it has the full financial support of the directors. The directors are aware that a breach of such terms could lead to the withdrawal of overdraft and banking facilities. The directors have implemented a number of strategies to improve performance of the company and wider group which include applying for and being granted a sponsorship licence to attract overseas workers, to ease the UK market staff shortages and reduce agency staff costs. This strategy is considered to be instrumental in the turnaround of the company and wider group. Group forecasts have been prepared based on what are considered by the directors to be reasonable assumptions. The forecasts were stress tested and factors which impact on risks and uncertainties were properly considered such as shortage of labour, potential delays in visa applications, inflationary pressures etc. The forecasts show a positive EBITDA by the year ended 31 March 2024 and beyond and predict cash flow to remain within the revised overdraft limit whilst meeting the minimum liquidity covenant in place. The directors are therefore satisfied that the company has sufficient cash reserves and available credit facilities to meets its obligations as they fall due for at least 12 months from the date of signing of these financial statements. As such, the directors are satisfied that the company has adequate resources to continue to operate for the foreseeable future. For this reason, they continue to adopt the going concern basis for preparing the financial statements. S172 (1) statement As the directors of Beaumont Care Homes Limited
we have a legal responsibility under section 172 of the Companies Act 2006 to act in a way we consider, in good faith, would be most likely to promote the company's success for the benefit of the members as a whole, and to have regard to the long-term effect of our decisions on the company and its stakeholders. This statement addresses the ways in which we, as directors, have considered this responsibility. Promoting the company's success for its members The directors and management are involved in the decision-making processes of the company, this ensures that fairness is maintained between all members of the company. We aim to develop the company to not only provide financial rewards for ourselves but to give benefit to the employees and those using our services. We make strategic decisions to enable the company and wider group to grow and develop. Where we look to grow the company and wider group through acquisition, this is considered against the needs of the local area and the potential competition with our existing care homes. Engaging with stakeholders Our key stakeholders, and the ways in which we engage with them, are as follows: Our employees - the company is heavily reliant on staff to ensure the necessary services are delivered to residents. The company has policies in place to ensure: - Staff are remunerated at the relevant level dependent on role, qualifications and experience - Bonuses are set at a level that are motivational but not unachievable - Staff in key roles are involved in decision making processes to ensure they represent the interests of those involved at a home level Our customers - we understand that maintaining a good relationship with the trusts is vital for the continuation of our business. We strive to maintain a positive working relationship with trusts to ensure that they are happy to place residents into our care and to help with any disputes over fees to be resolved amicably. Our suppliers - we understand that the supply chain is vital to ensure the smooth operation of all of our care homes. We maintain a good working relationship with our key suppliers to ensure that when we require their services we can rely on a prompt and high-quality service. Our professional bodies - a good working relationship with our professional bodies is necessary to enable any issues that arise to be dealt with in a timely manner in order to continue to trade. We work to try and improve all our homes and any issues that arise as a result of inspections are dealt with as quickly as possible. We strive for excellence and are, therefore, always looking at ways to improve the services provided in our homes. Our community - we appreciate that local communities can be affected by care homes when being refurbished in their vicinity. When we refurbish a home, we try to keep any disturbance of the local community to a minimum. We also try to obtain staff for homes from the local area and, therefore, reduce additional traffic. Our planet - we always try to be as environmentally friendly as possible within how we operate. We minimise the use of vehicles and recycle wherever possible. The nature of our business does not generate excessive environmental issues but where improvements can be made, we would always be open to considering them.
This report was approved by the board of directors on 3 November 2023 and signed on behalf of the board by:
Beaumont Care Homes Limited |
|
Period from 4 November 2021 to 31 December 2022
The directors present their report and the financial statements of the company for the period ended
31 December 2022
.
Directors
The directors who served the company during the period were as follows:
J A Hill
|
(Appointed
4 November 2021) |
W J Waddicor
|
(Appointed
4 November 2021) |
R Burrows
|
(Appointed
14 November 2022) |
|
|
Dividends
The directors do not recommend the payment of a dividend.
Future developments
These are detailed in the Strategic Report.
Greenhouse gas emissions and energy consumption
Information not included
The company is exempt from the requirement to disclose greenhouse gas emissions and energy consumption as the relevant SECR data is obliged to be disclosed in the consolidated group financial statements of its ultimate parent entity, Beaumont Care Homes Holdings Limited.
Employment of disabled persons
The company strives to meet its business objectives by motivating and encouraging its employees to be responsive to the needs of its end users and continually maintain, and where possible improve, the high standards of care offered. The company is committed to providing equality of opportunity to employees and potential employees. This applies to the provision of appropriate training, career development and opportunities for promotion for all employees, regardless of physical ability, gender, sexual orientation, religion, age or ethnic origin. Full and fair consideration is given to applications for employment received from disabled persons, according to their skills and capabilities. The services to any existing employee disabled during their period of employment are retained under normal terms and conditions wherever practicable.
Employee involvement
The group has a policy to provide employees with information about the business through internal media methods in which employees are also encouraged to present any suggestions and views on performance they may have. Regular meetings held between local management and employees allow a free flow of information.
Financial instruments
Financial risk management objectives and policies
The company and wider group use various financial instruments, which include loans, overdrafts and cash, as well as various items that arise directly from its operations, including trade debtors and trade creditors. The existence of these financial instruments exposes the company and wider group to financial risks which are detailed further in the Strategic Report.
Disclosure of information in the strategic report
Details of how the directors consider the continuous development of relationships with suppliers, customers and others to be important to the business can be seen within the strategic report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial period. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on
3 November 2023
and signed on behalf of the board by:
Beaumont Care Homes Limited |
|
Independent Auditor's Report to the Members of
Beaumont Care Homes Limited |
|
Period from 4 November 2021 to 31 December 2022
Opinion
We have audited the financial statements of Beaumont Care Homes Limited (the 'company') for the period ended 31 December 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the period then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
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 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.
Material uncertainty related to going concern
We draw attention to Note 3 on going concern in the financial statements concerning the company's ability to continue as a going concern.
Having weighed up the risks to going concern together with the ability to take mitigating action in response to those risks, and prepared financial forecasts for the period to 31 December 2024, the directors have concluded there is sufficient headroom available on group debt facilities and that they have a reasonable expectation of having sufficient cash to meet their liabilities as they fall due throughout that period. In reaching that conclusion however, the directors recognise that it is reliant on on inherent uncertainties relating to the company and wider group's ability to operate within their current debt facilities and ability to raise additional funding from shareholders.
The company is experiencing ongoing staffing shortages, which are proving to take longer to resolve than anticipated. This continues to impact their ability to increase occupancy and reduce reliance on agency staff. The employment of overseas workers via a sponsorship licence has seen the first workers being employed by the company post period end and is a solution to staffing shortages. However, this has not been at the anticipated pace and so is incurring significant one-off costs and hence forecasted improvements in EBITDA are yet to be realised.
Due to breaching bank covenants, HSBC UK Bank plc requested an independent business review report which was completed in June 2023. As a result of this report the bank re-based the financial covenants on the loan facilities and increased the overdraft limit until January 2024 due to it taking longer than expected for the improvement to trading performance to materialise.
The group is forecasting a return to a positive EBITDA and to remain within its overdraft limit. These forecasts are based upon the following key assumptions:
-
Ability to open in excess of 20-30 beds before the end of December 2023 across the homes as a result of higher staffing levels.
-
Agency staff costs to continue to reduce as more staff are employed from overseas under the sponsorship licence. The group estimate they will be fully staffed for care staff by the end of February 2024 and nursing staff by the end of June 2024.
-
Reduction in food, medical and consumables costs to bring in line with industry standards whilst still accounting for high inflation levels.
However, as all future events cannot be predicted with certainty and subsequent events may result in outcomes that are inconsistent with the judgements that were reasonable at the time they were made, there remains a risk that the group may have insufficient cash resources to meet liabilities as they fall due.
As stated in Note 3, these events or conditions, along with other matters as set forth in Note 3, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Key audit matters
Except for the matter described in the Material uncertainty related to going concern section, we have determined that there are no other key audit matters to be communicated in our 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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
-
the information given in the strategic report and the directors' report for the financial period 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or 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, or returns adequate for our audit have not been received from branches not visited by us; or - the 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.
Responsibilities of directors
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.
Auditor's responsibilities for the audit of the financial statements
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. Auditor's responsibilities for detecting irregularities, including fraud The objectives of our audit are: to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: - We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the following laws and regulations were most significant; the Companies Act 2006, UK corporate taxation laws, Health and Social Care (Reform) Act (NI) 2009, Health and Social Care Act (NI) 2022, The Nursing Homes Regulations (NI) 2005 and Care Standards for Nursing Homes (April 2015). - We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making inquiries to relevant members of the management team. We corroborated our inquiries though our review and inquiry into legal fees incurred in the year. - We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: - Identifying the controls management has in place to prevent and detect fraud and assessing the operation of these controls - Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process - Identifying and testing journal entries, in particular any journal entries that were large or unusual in nature - Assessing the extent of compliance with the relevant laws and regulations governing the company and the sector it operates within. This included a review of any potential breaches during and since the year end; and - Challenging assumptions and judgements made by management in its significant accounting estimates. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements the less likely we would become aware of it. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error as fraud may involve deliberate concealment by, for example, forgery, intentional misrepresentations or collusion. A further description of our responsibilities is available on the Financial Reporting Council's website at: 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.
Andrew McDaid BFP FCA |
(Senior Statutory Auditor) |
|
For and on behalf of |
MCABA Limited t/a Mitchells |
Chartered Accountants & Statutory Auditor |
91-97 Saltergate |
Chesterfield |
Derbyshire |
S40 1LA |
|
3 November 2023
Beaumont Care Homes Limited |
|
Statement of Comprehensive Income |
|
Period from 4 November 2021 to 31 December 2022
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
Note |
£ |
Turnover |
4 |
25,699,880 |
|
|
|
Cost of sales |
22,923,165 |
|
------------- |
Gross Profit |
2,776,715 |
|
|
Administrative expenses |
4,671,726 |
Other operating income |
5 |
240,130 |
|
|
------------ |
Operating Loss |
6 |
(
1,654,881) |
|
|
|
Interest payable and similar expenses |
10 |
83,850 |
|
------------ |
Loss Before Taxation |
(
1,738,731) |
|
|
|
Tax on loss |
11 |
– |
|
------------ |
Loss for the Financial Period and Total Comprehensive Income |
(
1,738,731) |
|
------------ |
|
|
|
All the activities of the company are from continuing operations.
Beaumont Care Homes Limited |
|
Statement of Financial Position |
|
31 December 2022
Fixed Assets
Tangible assets |
12 |
|
3,786,948 |
|
|
|
|
Current Assets
Stocks |
13 |
58,000 |
|
Debtors |
14 |
3,337,449 |
|
Cash at bank and in hand |
678,743 |
|
|
------------ |
|
|
4,074,192 |
|
|
|
|
|
Creditors: amounts falling due within one year |
15 |
9,599,671 |
|
|
------------ |
|
Net Current Liabilities |
|
5,525,479 |
|
|
------------ |
Total Assets Less Current Liabilities |
|
(
1,738,531) |
|
|
------------ |
Net Liabilities |
|
(
1,738,531) |
|
|
------------ |
|
|
|
|
Capital and Reserves
Called up share capital |
19 |
|
200 |
Profit and loss account |
20 |
|
(
1,738,731) |
|
|
------------ |
Shareholders Deficit |
|
(
1,738,531) |
|
|
------------ |
|
|
|
|
These financial statements were approved by the
board of directors
and authorised for issue on
3 November 2023
, and are signed on behalf of the board by:
Company registration number:
13723212
Beaumont Care Homes Limited |
|
Statement of Changes in Equity |
|
Period from 4 November 2021 to 31 December 2022
|
Called up share capital |
Profit and loss account |
Total |
|
£ |
£ |
£ |
At 4 November 2021 |
– |
– |
– |
|
|
|
|
Loss for the period |
|
(
1,738,731) |
(
1,738,731) |
|
---- |
------------ |
------------ |
Total Comprehensive Income for the Period |
– |
(
1,738,731) |
(
1,738,731) |
|
|
|
|
Issue of shares |
200 |
– |
200 |
|
---- |
---- |
---- |
Total Investments by and Distributions to Owners |
200 |
– |
200 |
|
|
|
|
|
---- |
------------ |
------------ |
At 31 December 2022 |
200 |
(
1,738,731) |
(
1,738,531) |
|
---- |
------------ |
------------ |
|
|
|
|
Beaumont Care Homes Limited |
|
Notes to the Financial Statements |
|
Period from 4 November 2021 to 31 December 2022
(continued)
1.
General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 91-97 Saltergate, Chesterfield, S40 1LA. The business address is 35 Cardy Close, Bangor, BT19 1AT.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis
. The financial statements are prepared in sterling, which is the functional currency of the entity
.
Going concern
The directors acknowledge that the performance of the company and wider group may suggest a degree of doubt on the company's ability to continue as a going concern. However, the directors have considered all available information to them in forming their opinion to assuage this doubt as follows: The company operates the trade of 29 care homes. The company is part of a wider group banking facility with HSBC Bank UK plc. Throughout the period to 31 December 2022 the company and wider group was loss making and in breach of its group financial covenants. The bank requested an independent business review which was completed in June 2023. As a result of the review, the bank increased current overdraft facilities for a period of time to assist cashflow whilst certain issues were being addressed and reset the financial covenants. The group became covenant compliant from July 2023 and the loan facility is agreed for a period of more than 12 months from the date of the audit report. The overdraft facility is however up for renewal in July 2024. The directors are continuously and consistently keeping HSBC Bank UK plc up to date with regards current and forecasted performance and continue to receive their full understanding, support and encouragement and therefore believe the risk of the facility not being renewed is low. A director has assisted in financially supporting the company and wider group since the period end and the terms of the amended overdraft facility agreement requires further financial support by the director through the injection of funds into the group by 31 December 2023. The company and wider group are aware of these obligations and confident that funds will be received as it has the full financial support of the directors. The directors are aware that a breach of such terms could lead to the withdrawal of overdraft and banking facilities. The directors have implemented a number of strategies to improve performance of the company and wider group which include applying for and being granted a sponsorship licence to attract overseas workers, to ease the UK market staff shortages and reduce agency staff costs. This strategy is considered to be instrumental in the turnaround of the company and wider group. Group forecasts have been prepared based on what are considered by the directors to be reasonable assumptions. The forecasts were stress tested and factors which impact on risks and uncertainties were properly considered such as shortage of labour, potential delays in visa applications, inflationary pressures etc. The forecasts show a positive EBITDA by the year ended 31 March 2024 and beyond and predict cash flow to remain within the revised overdraft limit whilst meeting the minimum liquidity covenant in place. The directors are therefore satisfied that the company has sufficient cash reserves and available credit facilities to meets its obligations as they fall due for at least 12 months from the date of signing of these financial statements. As such, the directors are satisfied that the company has adequate resources to continue to operate for the foreseeable future. For this reason, they continue to adopt the going concern basis for preparing the financial statements.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of
Beaumont Care Homes Holdings Limited
which can be obtained from the Registrar of Companies (England and Wales). As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company. (b) No disclosure has been given for the aggregate remuneration of key management personnel.
Judgements and key sources of estimation uncertainty
In the process of applying the company's accounting policies, the directors are required to make certain estimates, judgements and assumptions that they believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be relevant to the company, including the impact of COVID-19. Actual results may differ from the estimates, the effect of which is recognised in the period in which the facts that give rise to the revision become known. The estimate and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Useful life and residual values Tangible assets The charge in respect of depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the company's assets may vary depending on several factors such as, technological innovation, maintenance programmes and future market conditions. They are determined by management at the time the asset is acquired and reviewed annually for appropriateness. Impairment of fixed assets The company reviews all categories of fixed assets annually for indicators of impairment. Judgements are required to make an assessment as to whether there is an indication of impairment. At the period end the directors feel the carrying value of the fixed assets is not materially different to its fair value. Recoverability of trade debtors The directors make provisions for doubtful debts based on an assessment of the recoverability of trade debtors. Provisions are applied to trade debtors where events or changes in circumstances indicate that the carrying amounts may not be recoverable. This methodology is applied on a resident by resident basis. Recoverability of intercompany and related party balances Determination of whether the company's intercompany and related party balances have been impaired, requires estimation of the fellow group and related party entities net asset or liability position and their ability to generate future cash flows to settle the balances. The directors have performed a review of each balance based on these indicators and assessed recoverability. Leases Determining whether leases entered into by the company as a lessee are operating or finance leases requires judgement. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee based on the evaluation of the terms and conditions of the arrangements on a lease by lease basis.
Revenue recognition
The turnover shown in the income statement represents residents' fees earned during the period. Turnover is recognised at the point at which the services are supplied to residents. Where services are performed over time, turnover is recognised as the activity progresses.
Taxation
Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Fixtures and fittings |
- |
15% reducing balance |
|
Equipment |
- |
15% reducing balance |
|
|
|
|
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at cost.
Government grants
Government and local authority grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model.
Financial instruments
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided.
Irrecoverable VAT
The company is a member of a VAT group. It is the company's policy to write off irrecoverable VAT on items of expenditure relating to the profit and loss account. VAT on tangible fixed assets is capitalised and written off over the same period to the asset to which it relates.
4.
Turnover
Turnover arises from:
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Residents' fees |
25,699,880 |
|
------------- |
|
|
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5.
Other operating income
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Government grant income |
240,130 |
|
--------- |
|
|
6.
Operating loss
Operating profit or loss is stated after charging/crediting:
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Depreciation of tangible assets |
266,630 |
Gains on disposal of tangible assets |
(
26,500) |
Impairment of trade debtors |
247,186 |
|
--------- |
|
|
7.
Auditor's remuneration
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Fees payable for the audit of the financial statements |
40,000 |
|
-------- |
|
|
Fees payable to the company's auditor and its associates for other services:
Taxation compliance services |
4,000 |
|
-------- |
|
|
The company has not disclosed remuneration receivable by auditors for other services as the ultimate parent company's financial statements disclose this information.
8.
Staff costs
The average number of persons employed by the company during the period, including the directors, amounted to:
|
31 Dec 22 |
|
No. |
Management, care and support staff |
1,517 |
|
------- |
|
|
The aggregate payroll costs incurred during the period, relating to the above, were:
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Wages and salaries |
15,797,823 |
Social security costs |
1,362,471 |
Other pension costs |
294,923 |
|
------------- |
|
17,455,217 |
|
------------- |
|
|
9.
Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Remuneration |
74,359 |
Company contributions to defined contribution pension plans |
2,107 |
|
-------- |
|
76,466 |
|
-------- |
|
|
The number of directors who accrued benefits under company pension plans was as follows:
|
31 Dec 22 |
|
No. |
Defined contribution plans |
2 |
|
---- |
|
|
10.
Interest payable and similar expenses
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Interest on banks loans and overdrafts |
80,225 |
Other interest payable and similar charges |
3,625 |
|
-------- |
|
83,850 |
|
-------- |
|
|
11.
Tax on loss
Reconciliation of tax income
The tax assessed on the loss on ordinary activities for the period is higher than the
standard rate of corporation tax in the UK
of
19
%.
|
Period from |
|
4 Nov 21 to |
|
31 Dec 22 |
|
£ |
Loss on ordinary activities before taxation |
(
1,738,731) |
|
------------ |
Loss on ordinary activities by rate of tax |
(
330,359) |
Effect of expenses not deductible for tax purposes |
9,997 |
Effect of capital allowances and depreciation |
(
132,095) |
Unused tax losses |
452,457 |
|
------------ |
Tax on loss |
– |
|
------------ |
|
|
Factors that may affect future tax income
The company has carried forward gross tax losses of £2,381,000 available for future use.
The main rate of corporation tax increased from 19% to 25% on 1 April 2023.
12.
Tangible assets
|
Fixtures and fittings |
Equipment |
Total |
|
£ |
£ |
£ |
Cost |
|
|
|
At 4 November 2021 |
– |
– |
– |
Additions |
3,609,204 |
444,374 |
4,053,578 |
|
------------ |
--------- |
------------ |
At 31 December 2022 |
3,609,204 |
444,374 |
4,053,578 |
|
------------ |
--------- |
------------ |
Depreciation |
|
|
|
At 4 November 2021 |
– |
– |
– |
Charge for the period |
244,586 |
22,044 |
266,630 |
|
------------ |
--------- |
------------ |
At 31 December 2022 |
244,586 |
22,044 |
266,630 |
|
------------ |
--------- |
------------ |
Carrying amount |
|
|
|
At 31 December 2022 |
3,364,618 |
422,330 |
3,786,948 |
|
------------ |
--------- |
------------ |
|
|
|
|
13.
Stocks
|
31 Dec 22 |
|
£ |
Consumables |
58,000 |
|
-------- |
|
|
14.
Debtors
|
31 Dec 22 |
|
£ |
Trade debtors |
1,278,012 |
Amounts owed by group undertakings |
1,245,842 |
Prepayments and accrued income |
653,567 |
Other debtors |
160,028 |
|
------------ |
|
3,337,449 |
|
------------ |
|
|
15.
Creditors:
amounts falling due within one year
|
31 Dec 22 |
|
£ |
Bank loans and overdrafts |
2,817,111 |
Trade creditors |
750,246 |
Amounts owed to group undertakings |
602,348 |
Accruals and deferred income |
2,721,240 |
Social security and other taxes |
846,518 |
Other creditors |
1,862,208 |
|
------------ |
|
9,599,671 |
|
------------ |
|
|
The aggregate amount of secured liabilities, secured on the assets of the company at the period end amounted to £2,817,111.
16.
Security and contingencies
The company has entered into cross-guarantees for loan facilities made available to the group. It is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for in these financial statements.
The group treats guarantees and indemnities of this nature as contingent liabilities until such time as it becomes probable that the group/companies will be required to make a payment under the terms of the arrangement.
As at 31 December 2022 the value of the group wide bank borrowings was £17.3 million.
There is a legal charge, incorporating a fixed and floating charge, over the properties and assets owned by the group.
17.
Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
294,923
.
18.
Government grants
The amounts recognised in the financial statements for government grants are as follows:
Recognised in other operating income:
Government grants recognised directly in income |
240,130 |
|
--------- |
|
|
19.
Called up share capital
Issued, called up and fully paid
|
31 Dec 22 |
|
No. |
£ |
Ordinary shares of £ 1 each |
20 |
20 |
Ordinary A shares of £ 1 each |
180 |
180 |
|
---- |
---- |
|
200 |
200 |
|
---- |
---- |
|
|
|
On 4 November 2021 200 Ordinary £1 shares were issued at par. On 8 July 2022 180 Ordinary £1 shares were redesignated to 180 Ordinary A £1 shares. The Ordinary shares and Ordinary A shares rank pari passu and have full rights regarding voting, payment of dividends and distributions.
20.
Reserves
Called up share capital - this represents the nominal value of the shares that have been issued.
Profit and loss account - this reserve records retained earnings and accumulated losses.
21.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
31 Dec 22 |
|
£ |
Not later than 1 year |
23,902 |
|
-------- |
|
|
22.
Related party transactions
The company has taken advantage of exemption conferred by FRS 102 S33.1A, removing the requirement to disclose transactions between group members. During the period the company provided and received loans from related parties. The balances outstanding due from/(to) related parties at 31 December 2022 are as follows:
|
|
2022 |
|
|
£ |
|
Amounts due from entities holding a controlling interest |
1,201,349 |
|
Amounts owed to entities holding a controlling interest |
(602,348) |
|
Amounts due from entities under common control |
44,493 |
|
Amounts due from other related parties |
127,028 |
|
|
|
Outstanding balances with entities are unsecured, interest free and repayable on demand.
23.
Controlling party
Beaumont Care Homes Limited
is the 90% subsidiary of Beaumont Care Homes Property Limited
, a company registered in England and Wales. The directors consider the ultimate parent undertaking to be Beaumont Care Homes Holdings Limited
, a company registered in England and Wales. Consolidated financial statements can be obtained from the company's registered address; 91-97 Saltergate, Chesterfield, Derbyshire, S40 1LA.