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REGISTERED NUMBER: 08778350 (England and Wales)














Financial Statements

for the Year Ended 31 December 2022

for

Lovett Care Limited

Lovett Care Limited (Registered number: 08778350)






Contents of the Financial Statements
for the Year Ended 31 December 2022




Page

Balance Sheet 1

Notes to the Financial Statements 2


Lovett Care Limited (Registered number: 08778350)

Balance Sheet
31 December 2022

2022 2021
as restated
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 4 153,157 160,996
Investments 5 1,179,438 1,179,438
Investment property 6 38,730,000 37,685,000
40,062,595 39,025,434

CURRENT ASSETS
Debtors 7 9,832,954 11,515,732
Cash at bank and in hand 101,621 355,261
9,934,575 11,870,993
CREDITORS
Amounts falling due within one year 8 2,996,646 240,032
NET CURRENT ASSETS 6,937,929 11,630,961
TOTAL ASSETS LESS CURRENT LIABILITIES 47,000,524 50,656,395

CREDITORS
Amounts falling due after more than one year 9 (49,101,308 ) (45,999,646 )

PROVISIONS FOR LIABILITIES (2,098,454 ) (1,444,562 )
NET (LIABILITIES)/ASSETS (4,199,238 ) 3,212,187

CAPITAL AND RESERVES
Called up share capital 204 204
Non distributable retained
earnings 12 6,285,279 5,501,529
Retained earnings (10,484,721 ) (2,289,546 )
SHAREHOLDERS' FUNDS (4,199,238 ) 3,212,187

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Profit and Loss Account has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 2 February 2024 and were signed on its behalf by:





L A Bedson - Director


Lovett Care Limited (Registered number: 08778350)

Notes to the Financial Statements
for the Year Ended 31 December 2022

1. STATUTORY INFORMATION

Lovett Care Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address are as below:

Registered number: 08778350

Registered office: Unit 2 Evolution
Hooters Hall Road
Newcastle-under-Lyme
Staffordshire
ST5 9QF

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

In the year ended 30 December 2022 the company generated a loss after tax of £7,411,425 (2021 as restated: profit of £249,291). Cash and cash equivalents were £101,621 (2021: £355,261) as at 30 December 2022.

The directors have prepared detailed cash flow forecasts for the company for a period of at least 12 months from the date of approval of the financial statements. The forecasts consider the directors' views of current and future economic conditions that are expected to prevail over the period. The Company's forecasts are dependent on the group providing further funding in a severe but plausible downside scenario. Lovett Care Holdings Limited, "The Group", has indicated that it intends to provide financial support to the Company as required. The directors have concluded that the Group has the ability and intent to provide this support.

The key factors considered in reaching this conclusion are summarised below:

- The Group has access to debt facilities consisting of an external term loan of £60m and a shareholder term loan of £52m.
Both facilities are subject to covenant compliance.
- The aggregate value of group debt as at 30 December 2022 is £48m.
- The external term loan was granted in March 2023 and is repayable in February 2029. The shareholder term loan expires or is repayable in August 2024. The cash flow forecasts assume the shareholder term loan will not become repayable and instead, will be transferred to shareholder equity. Subsequent to the year-end the shareholders commenced a process to formally consider equitizing the shareholder term loan debt facility. A subordination agreement between the external loan provider, Group and shareholders prevents the shareholder debt being repaid should it result in a covenant breach on the external debt.

In performing their assessment, the directors have considered a severe but plausible downside scenario which models the impact of a downturn in trade. In this scenario revenues are combined with increased costs due to inflationary pressures. This results in a corresponding fall in profitability with the impacted earnings before interest, tax, depreciation and amortisation (EBITDA) although covenants continue to be met.

As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.

Consequently, the directors are confident that the Company will have sufficient funds to continue to meet its liabilities as that fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared these financial statements on a going concern basis.

Lovett Care Limited (Registered number: 08778350)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

2. ACCOUNTING POLICIES - continued

Preparation of consolidated financial statements
The financial statements contain information about Lovett Care Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Lovett Care Holdings Limited, Unit 2 Evolution, Hooters Hall Road, Newcastle-under-Lyme, Staffordshire, ST5 9QF.

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Fixtures and fittings - 15% on reducing balance
Computer equipment - 30% on reducing balance

Investments in subsidiaries
Investments in subsidiary undertakings are recognised at cost.

Investment property
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3. EMPLOYEES AND DIRECTORS

The average number of employees during the year was 21 (2021 - 15 ) .

Lovett Care Limited (Registered number: 08778350)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

4. TANGIBLE FIXED ASSETS
Fixtures
and Computer
fittings equipment Totals
£    £    £   
COST
At 1 January 2022 104,275 104,487 208,762
Additions 30,817 16,768 47,585
Disposals (19,800 ) - (19,800 )
At 31 December 2022 115,292 121,255 236,547
DEPRECIATION
At 1 January 2022 17,672 30,094 47,766
Charge for year 12,979 24,844 37,823
Eliminated on disposal (2,199 ) - (2,199 )
At 31 December 2022 28,452 54,938 83,390
NET BOOK VALUE
At 31 December 2022 86,840 66,317 153,157
At 31 December 2021 86,603 74,393 160,996

5. FIXED ASSET INVESTMENTS
Shares in
group
undertakings
£   
COST
At 1 January 2022
and 31 December 2022 1,179,438
NET BOOK VALUE
At 31 December 2022 1,179,438
At 31 December 2021 1,179,438

6. INVESTMENT PROPERTY
Total
£   
FAIR VALUE
At 1 January 2022 37,685,000
Revaluations 1,045,000
At 31 December 2022 38,730,000
NET BOOK VALUE
At 31 December 2022 38,730,000
At 31 December 2021 37,685,000

Lovett Care Limited (Registered number: 08778350)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

6. INVESTMENT PROPERTY - continued

Fair value at 31 December 2022 is represented by:
£   
Valuation in 2020 1,466,728
Valuation in 2021 4,997,162
Valuation in 2022 1,045,000
Cost 31,221,110
38,730,000

Investment property was valued on an open market basis on 31 December 2022 by Kroll .

7. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
as restated
£    £   
Trade debtors - 20,177
Amounts owed by group undertakings 9,339,013 10,397,791
Other debtors 493,941 1,097,764
9,832,954 11,515,732

8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
as restated
£    £   
Trade creditors 120,490 91,592
Amounts owed to group undertakings 2,297,383 21,902
Taxation and social security 57,973 38,147
Other creditors 520,800 88,391
2,996,646 240,032

9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2022 2021
as restated
£    £   
Other creditors 49,101,308 45,999,646

10. LEASING AGREEMENTS
At 31st December 2022, the company had total commitments under non-cancellable operating leases over the remaining life of those leases of £705,587 (2021 - £75,651).

11. SECURED DEBTS

The following secured debts are included within creditors:

2022 2021
as restated
£    £   
Other loans 49,101,308 45,999,646

The other loan is secured by fixed and floating charge created 21st August 2019 over the property and undertaking of the company together with a charge created on 10th September 2019 over the investment property of the company.

Lovett Care Limited (Registered number: 08778350)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

12. RESERVES
Non
distributable
retained
earnings
£   
At 1 January 2022 5,501,529
Transfer of revaluation 783,750

At 31 December 2022 6,285,279

13. DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Clare Partridge (Senior Statutory Auditor)
for and on behalf of KPMG LLP

14. ULTIMATE PARENT COMPANY

The parent company is Lovett Care Holdings Limited, a company registered in England and Wales and the registered office is Unit 2 Evolution, Hooters Hall Road, Newcastle-under-Lyme, Staffordshire, ST5 9QF.

Consolidated financial statements are available from the registered office.

The ultimate controlling party is TEMPUS HOLDINGS 62 S.A.R.L.