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Registered number: 05110137









LIFECARE RESIDENCES LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
LIFECARE RESIDENCES LIMITED
 
 
COMPANY INFORMATION


Directors
N V Cook 
A J Edwards (resigned 25 January 2024)
C D C Cook 
J M S Smart 
G P Heather (appointed 22 February 2023)
P R Harries (resigned 8 February 2023)
W A Edwards (appointed 25 January 2024)




Registered number
05110137



Registered office
15 Savile Row

London

W1S 3PJ




Independent auditors
White Hart Associates (London) Limited
Chartered Accountants and Statutory Auditors

2nd Floor, Nucleus House

2 Lower Mortlake Road

Richmond

TW9 2JA





 
LIFECARE RESIDENCES LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 3
Directors' Report
4 - 6
Independent Auditors' Report
7 - 10
Consolidated Income Statement
11
Consolidated Statement of Comprehensive Income
12
Consolidated Statement of Financial Position
13 - 14
Company Statement of Financial Position
15 - 16
Consolidated Statement of Changes in Equity
17
Company Statement of Changes in Equity
18
Consolidated Statement of Cash Flows
19 - 20
Notes to the Financial Statements
21 - 46


 
LIFECARE RESIDENCES LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The directors present their strategic report together with the audited financial statements for the year ended 31 March 2023.

Principal activities, trading review and futurre developments
 
LifeCare Residences and its subsidiaries ("the group") develops and operates continuing care retirement communities in London and Southern England. The results for the group show a pre tax loss of £3.2 million (2022 – loss of £3.8 million). The group has a net asset position of £38.5 million (2022 - £41.8 million).
During the year, the group recognised a surplus on revaluation of the investment property of £1.2 million (2022- deficit of £0.4 million) and generated £0.3 million (2022 – profit of £1.6 million) of operating profit at its three retirement villages.
The group currently operates 286 retirement village apartments and 68 nursing home beds.

Staff involvement
 
The key focus of the group in delivering exceptional retirement communities is under pinned by our staff providing impeccable service to our residents. To maintain these standards, the group operates a tailored development programme which involves annual target setting and consistent training programmes. 
Furthermore, all new employees receive a role specific induction to ensure a coherent understanding of the business and its primary objective of providing exceptional retirement communities and care.
Cross village participation and communication is proactively encouraged to ensure best practice ideas and ways of working are shared throughout the group.

Future outlook
 
Since all of the apartments in the Battersea Place development were sold, the company has been operating three completed and fully sold-down retirement villages in the UK. The directors have confidence the business strategy is a viable, profitable and scalable business, and focus is being placed on maintaining and building upon the high standards of luxury care and 5 star amenities provided at the villages.
The company continues to assess the development opportunities available to it with regards to its proposed North London retirement village on the land owned in Hampstead and is committed to delivering a nursing home proposition at Grove Place Village.
Planning options for a revised scheme in Hampstead are continuing, whilst the Grove Place nursing home has been granted revised planning permission in January 2023. 

Page 1

 
LIFECARE RESIDENCES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Principal risks and uncertainties
 
The management of the business and the execution of the group's strategy are subject to a number of risks. 
At the time of writing, management is confident that they have reacted to the global COVID-19 pandemic in a way that has protected its staff and residents and has maintained a platform for future growth. Demand for retirement living continues to outweigh supply and the nursing homes occupancy remains stable. Management therefore believe that the future financial wellbeing of the group has been safeguarded. 
Other key business risks and uncertainties affecting the group are considered to relate to competition from other national and independent operators, executive retention, events leading to reputational risk, product availability, regulatory requirements and tightening of the debt markets.

Financial key performance indicators

1. Value of resales
The table below illustrates the number of resales that have taken place at each retirement community, what the total resale value was and how much of the proceeds were attributable to the group:

 No. of Resales
Total Value of Resales (£m)
Company resales revenue (£m)
 No. of Resales
Total Value of Resales (£m)
Company resales revenue (£m)
2023
2023
2023
2022
2022
2022

Battersea Place Retirement Village

6

8.0

1.6
 
3
 
5.2

1.6

Grove Place Village

5

2.0

0.6
 
13
 
4.8

1.4

Somerleigh Court

11

3.8

0.1
 
14
 
4.1

0.1

Total

22

13.8

2.3
 
30
 
14.1

3.1


2. Care facility occupancy
This is the occupancy rate at the Somerleigh Court and Battersea Place nursing homes. The objective of the group is to maximise the occupancy rate for the nursing homes by providing high quality care services. This objective is important to the group as occupancy is a key driver for EBITDA. 
For the year ended 31 March 2023 the average occupancy at Somerleigh Court was 80% (2022 - 91%). Somerleigh management during FY23 focused on increasing average weekly fee levels and providing the appropriate care types for the home. This resulted in a move away from high-dependency-dementia care as well as a period of upgrade within the home, both of which created a transitional period of lower occupancy.
The lower-than-expected average occupancy in FY23 is therefore viewed as a temporary outcome of the operational improvement process with EBITDA margins improving in FY24. 
Battersea Place average occupancy of 61% (2022 - 47%) is seeing a steady increase through referrals for post-operative care.

Page 2

 
LIFECARE RESIDENCES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


This report was approved by the board on 8 February 2024 and signed on its behalf.



N V Cook
Chairman

Page 3

 
LIFECARE RESIDENCES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.

Results and dividends

The loss for the year, after taxation, amounted to £3.57 million (2022 - £8.56 million)).

During the year, distributions of £Nil were made to the shareholders (2022: £Nil).

Directors

The directors who served during the year were:

N V Cook 
A J Edwards (resigned 25 January 2024)
C D C Cook 
J M S Smart 
G P Heather (appointed 22 February 2023)
P R Harries (resigned 8 February 2023)

Page 4

 
LIFECARE RESIDENCES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Streamlined energy and carbon reporting

The Group's subsidiaries are below the size threshold for reporting energy and carbon information. The parent company's UK energy use is below 40 MWh in the reporting period.

Future developments

A summary of the future developments of the business is given in the strategic report set out on pages 1 - 3.

Engagement with employees

The group has implemented a robust framework for employee engagement, which includes regular team meetings, feedback sessions, and an open-door policy that encourages staff to voice their concerns and suggestions. These initiatives have fostered a positive work environment. Additionally, the introduction of specialised training programmes has not only enhanced the skills of our staff but also demonstrated a significant investment in their professional development. This proactive approach in engaging with employees has contributed to the delivery of high-quality care and services, aligning with the organisation's commitment to excellence in the retirement village sector.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

The £2,922,818 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds A) were settled on 15 June 2023 through the issuance of £3,391,110 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds D) at a discounted subscription price of £2,922,818 and a redemption date of 14 June 2025.
On 4th May 2023, the £2.5m Leumi Loan at Somerleigh was extended, with a prepayment of £0.5m payable immediately and the remaining £2m balance payable on termination date 30th April 2024.

Auditors

The auditorsWhite Hart Associates (London) Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

As permitted by paragraph 1A of schedule 7 to the Large and Medium Sized Companies and Group (Accounts and Reports) Regulation 2008, certain matters which are required to be disclosed in the directors’ report have been omitted as they are included in the strategic report on page 1 - 2. These matters relate to the principal activity and financial risk.

Page 5

 
LIFECARE RESIDENCES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

This report was approved by the board on 8 February 2024 and signed on its behalf.
 





N V Cook
Chairman

Page 6

 
LIFECARE RESIDENCES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LIFECARE RESIDENCES LIMITED
 

Opinion


We have audited the financial statements of Lifecare Residences Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2023, which comprise the Group Income Statement, the Group Statement of Comprehensive Income, the Group and Company Statements of Financial Position, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 March 2023 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.


Independence
We are independent of the group and the 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.


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 or the 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.


Page 7

 
LIFECARE RESIDENCES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LIFECARE RESIDENCES LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Opinion 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 Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 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.


Page 8

 
LIFECARE RESIDENCES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LIFECARE RESIDENCES LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 Group's and 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Auditors' 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 Auditors' 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 Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- We exercise professional judgment and maintain professional skepticism throughout the audit;
- We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the deliberate override of internal control;
- We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control;
- We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made;
- We assess the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, assessing whether the judgements made in making accounting estimates, in particular revenue recognition as well as the valuation of investment properties and property plant and equipment, are indicative of a potential bias; and evaluating the business rationale of significant transactions outside the normal course of business;
- We request and review the minutes of management meetings, and assess any matters identified not already provided for or disclosed that may materially impact the financial statements;
 
Page 9

 
LIFECARE RESIDENCES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LIFECARE RESIDENCES LIMITED (CONTINUED)



- We conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. if we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.





Ms N A Spoor FCA FCCA (Senior Statutory Auditor)
  
for and on behalf of
White Hart Associates (London) Limited
 
Chartered Accountants and Statutory Auditors
  
2nd Floor, Nucleus House
2 Lower Mortlake Road
Richmond
TW9 2JA

8 February 2024
Page 10

 
LIFECARE RESIDENCES LIMITED
 
 
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
Note
£000
£000

  

Turnover
 4 
11,997
10,638

Cost of sales
  
(9,353)
(7,662)

Gross profit
  
2,644
2,976

Administrative expenses
  
(4,154)
(4,505)

Other operating income
 5 
14
441

Fair value movements on investment property
  
1,170
(362)

Operating loss
 6 
(326)
(1,450)

Interest payable and similar expenses
 9 
(2,904)
(2,347)

Loss before tax
  
(3,230)
(3,797)

Tax on loss
 10 
(336)
(4,765)

Loss for the financial year
  
(3,566)
(8,562)

Loss for the year attributable to:
  

Owners of the parent
  
(3,566)
(8,562)

  
(3,566)
(8,562)

The notes on pages 21 to 46 form part of these financial statements.

Page 11

 
LIFECARE RESIDENCES LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
Note
£000
£000


Loss for the financial year

  

(3,566)
(8,562)

Other comprehensive income
  


Unrealised surplus on revaluation of tangible fixed assets
 11 
191
71

Deferred tax movements
  
-
(167)

Other comprehensive income net of tax
  
191
(96)

Total comprehensive income for the year
  
(3,375)
(8,658)

(Loss) for the year attributable to:
  


Owners of the parent Company
  
(3,566)
(8,562)

  
(3,566)
(8,562)

Total comprehensive income attributable to:
  


Owners of the parent Company
  
(3,375)
(8,658)

  
(3,375)
(8,658)

The notes on pages 21 to 46 form part of these financial statements.

Page 12

 
LIFECARE RESIDENCES LIMITED
REGISTERED NUMBER: 05110137

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023

2023
2022
Note
£000
£000

Fixed assets
  

Tangible assets
 11 
30,635
29,566

Investment property
  
81,309
80,139

  
111,944
109,705

Current assets
  

Stocks
 14 
114
634

Debtors: amounts falling due within one year
 15 
1,356
1,002

Cash at bank and in hand
 16 
375
426

  
1,845
2,062

Creditors: amounts falling due within one year
 17 
(9,308)
(14,987)

Net current liabilities
  
 
 
(7,463)
 
 
(12,925)

Total assets less current liabilities
  
104,481
96,780

Creditors: amounts falling due after more than one year
 18 
(45,706)
(34,966)

Provisions for liabilities
  

Deferred taxation
 21 
(20,314)
(19,978)

  
 
 
(20,314)
 
 
(19,978)

Net assets
  
38,461
41,836


Capital and reserves
  

Called up share capital 
 22 
1,619
1,619

Share premium account
 23 
4,672
4,672

Revaluation reserve
 23 
6,463
6,272

Profit and loss account
 23 
25,707
29,273

  
38,461
41,836


Page 13

 
LIFECARE RESIDENCES LIMITED
REGISTERED NUMBER: 05110137
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 February 2024.




N V Cook
Chairman

The notes on pages 21 to 46 form part of these financial statements.

Page 14

 
LIFECARE RESIDENCES LIMITED
REGISTERED NUMBER: 05110137

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023

2023
2022
Note
£000
£000

Fixed assets
  

Tangible assets
 11 
13
26

Investments
 12 
2,444
2,444

  
2,457
2,470

Current assets
  

Stocks
 14 
-
1,300

Debtors: amounts falling due within one year
 15 
14,758
7,925

Cash at bank and in hand
 16 
229
10

  
14,987
9,235

Creditors: amounts falling due within one year
 17 
(14,767)
(13,937)

Net current assets/(liabilities)
  
 
 
220
 
 
(4,702)

Total assets less current liabilities
  
2,677
(2,232)

  

Creditors: amounts falling due after more than one year
 18 
(38,306)
(34,966)

Debtors: amounts falling due after more than one year
 15 
40,116
38,601

  

Net assets excluding pension asset
  
4,487
1,403

Net assets
  
4,487
1,403


Capital and reserves
  

Called up share capital 
 22 
1,619
1,619

Share premium account
 23 
4,672
4,672

Profit and loss account brought forward
  
(4,888)
(3,462)

Profit/(loss) for the year
  
3,084
(1,426)

Profit and loss account carried forward
  
(1,804)
(4,888)

  
4,487
1,403


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 February 2024.


N V Cook
Director

Page 15

 
LIFECARE RESIDENCES LIMITED
REGISTERED NUMBER: 05110137
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2023

The notes on pages 21 to 46 form part of these financial statements.

Page 16

 
LIFECARE RESIDENCES LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Share premium account
Revaluation reserve
Profit and loss account
Total equity

£000
£000
£000
£000
£000


At 1 April 2021
1,619
4,672
6,368
37,835
50,494


Comprehensive income for the year

Loss for the year
-
-
-
(8,562)
(8,562)

Surplus on revaluation of freehold property
-
-
71
-
71

Tax on revaluation of freehold proprty
-
-
(167)
-
(167)



At 1 April 2022
1,619
4,672
6,272
29,273
41,836


Comprehensive income for the year

Loss for the year
-
-
-
(3,566)
(3,566)

Surplus on revaluation of freehold property
-
-
191
-
191


At 31 March 2023
1,619
4,672
6,463
25,707
38,461


The notes on pages 21 to 46 form part of these financial statements.

Page 17

 
LIFECARE RESIDENCES LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£000
£000
£000
£000


At 1 April 2021
1,619
4,672
(3,462)
2,829


Comprehensive income for the year

Loss for the year
-
-
(1,426)
(1,426)



At 1 April 2022
1,619
4,672
(4,888)
1,403


Comprehensive income for the year

Profit for the year
-
-
3,084
3,084


At 31 March 2023
1,619
4,672
(1,804)
4,487


The notes on pages 21 to 46 form part of these financial statements.

Page 18

 
LIFECARE RESIDENCES LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023

2023
2022
£000
£000

Cash flows from operating activities

Loss for the financial year
(3,566)
(8,562)

Adjustments for:

Depreciation of tangible assets
284
274

Interest paid
2,904
2,348

Taxation charge
336
4,765

Decrease/(increase) in stocks
519
(76)

(Increase)/decrease in debtors
(375)
317

(Decrease)/increase in creditors
(289)
707

(Decrease)/increase in amounts owed to associates
(140)
229

Net fair value (gains)/losses recognised in P&L
(1,170)
362

Share based payments
(685)
309

Net cash generated from operating activities

(2,182)
673


Cash flows from investing activities

Purchase of tangible fixed assets and investment property
(1,502)
(645)

Disposal of WIP
340
-

Net cash from investing activities

(1,162)
(645)
Page 19

 
LIFECARE RESIDENCES LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023


2023
2022

£000
£000



Cash flows from financing activities

Shares treated as debt - Issued
8,119
-

Shares treated as debt - Redeemed
(4,632)
-

Interest paid
(876)
(514)

Inrease in loans from related party
10,644
4,209

Repayment of loans from related party
(5,275)
(2,609)

Repayment of bank loans
(1,200)
(800)

Dividends Paid
(3,487)
-

Net cash used in financing activities
3,293
286

Net (decrease)/increase in cash and cash equivalents
(51)
314

Cash and cash equivalents at beginning of year
426
112

Cash and cash equivalents at the end of year
375
426


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
375
426

375
426


Page 20

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

LifeCare Residences Limited is a private company, limited by shares, incorporated in England & Wales under the Companies Act 2006. The address of the registered office is given on the company information page and the nature of the company’s operations and its principal activities are set out in the directors’ report. 
The financial statements have been presented in pound sterling as this is the currency of the primary economic environment in which the company operates and is rounded to the nearest pound.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

Parent company disclosure exemptions
In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:
- only one reconciliation of the number of shares outstanding at the beginning and end of the year has been presented as the reconciliation for the company and the parent company would be identical;
- no statement of cash flows has been presented for the parent company;
- disclosures in respect of the parent company’s financial instruments have not been presented as equivalent disclosures have been provided in respect of the company as a whole; and
- no disclosures have been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the company as a whole. 

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Income Statement from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 21

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.3

Going concern

The group meets its day-to-day working capital requirements primarily through its income, bank loan facilities and when required, the continuing support of its shareholders. The directors prepare financial forecasts and monitor performance of the group on an ongoing basis and have prepared a financial projection for a period of 12 months from the date of approval of the financial statements. These forecasts as approved by the directors are also used to assess the bank loan facilities which includes covenants over annualised interest cover and Loan to Value.
The Group was in compliance with all of its loan covenants as at 31 March 2023.
The forecasts prepared by the directors reflect the repayment of the Leumi loan facility is payable within the 12-month going concern period. It is the intention of the LCR Group to extend and refinance the loan, with Leumi working on a proposal to extend such facility. At the date of signing the accounts, no formal loan agreement has been agreed, and the shareholders have provided a deed of support confirming their intention to support the Group for the duration of the going concern period which includes providing funding to repay the bank debt as required.
As described in the strategic report the Group has been impacted by COVID-19 and the resultant impact on the economy. In assessing going concern the directors have produced cash flow forecasts as stated above which they consider to be an accurate forecast of the business operating in the COVID-19 environment. Given the revised covenant requirements and anticipated future property sales that are suitably advanced for the directors to incorporate the sales into their cashflows, the directors do not consider there be an indication that there is a material uncertainty over the group’s ability to continue as a going concern.

 
2.4

Revenue

Turnover represents the proceeds from sale of long leases on properties, and income from the provision of property management and care services.
Income from the provision of property management and care services is recognised in the period the service is provided.
Sales of properties are recognised on legal completion.
The group sells properties under a long lease, under the lease the group transfers the risks and rewards of ownership to the lessee. Grants of such leases are treated as sales, with the attributable income and costs of sales being taken to the statement of comprehensive income.

 
2.5

Operating leases: the Group as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Page 22

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.7

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated Income Statement in the same period as the related expenditure.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.11

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase/(decrease) in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Page 23

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.12

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 24

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Land is not depreciated. Depreciation on other assets charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold buildings
-
over 50 years per annum
Freehold land
-
Nil
Nursing Home - building
-
over 50 years per annum
Nursing Home - land
-
Nil
Plant and machinery
-
20 - 25%
Fixtures and fittings
-
20 - 25%
Office equipment
-
20 - 25%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Revaluation of tangible fixed assets, including owner occupied property

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.15

Investment property

Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

 
2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 25

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.17

Stocks

Stocks are stated at the lower of cost and net realisable value.

Cost is taken as the purchase price of the relevant land plus the costs of the relevant building costs of the relevant building work. Interest charges incurred in financing the relevant land purchase and relevant building costs are expensed to the statement of comprehensive income as incurred.

 
2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.19

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.20

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.21

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

Page 26

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.22

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Income Statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.

Page 27

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, the directors have had to make the following judgements:
• The directors have considered the nature of the group’s assets and consider it appropriate to classify as investment property the freehold and leasehold property interests on which the group will generate future income from the receipts of deferred fees.
Other key sources of estimation uncertainty
• Tangible fixed assets (see note 11)
Tangible fixed assets, other than investments properties, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re-assessing assets lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
• The freehold property valuations are based on a multiple between 7 to 8.25 times EBITDA.
• The freehold investment property is based on a professional valuation using a net present value of expected cashflow method.
Key inputs into the valuations, were:
Length of cashflows: 25 years
WACC: 8.50% - 10.00%
Average length of stay: 6.5 – 7.5 years
Average property value growth rate: 4 % per annum
50% capital gains share in some properties
Service charge subsidies of £81,890 or service charge losses of up to £930,000 depending on the nature of the property
.
• Accruals (note 17) 
In order to provide for all valid liabilities which exist at the reporting date, the group is required to accrue for certain costs or expenses which have not been invoiced and therefore the amount of which cannot be known with certainty such accruals are based on managements best judgement and past experience.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£000
£000

Care services
8,704
7,679

Sales proceeds on sale of property
3,292
2,959

11,996
10,638


All turnover arose within the United Kingdom.

Page 28

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

5.


Other operating income

2023
2022
£000
£000

Other operating income
14
83

Government grants receivable
-
358

14
441


Included withing Government grants receivable are UK Government COVID related grants.


6.


Operating loss

The operating loss is stated after charging:

2023
2022
£000
£000

Depreciation of tangible fixed asset
296
274

Defined contribution pension cost
147
127


7.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors and their associates:


2023
2022
£000
£000


Fees payable to the Company's auditors and their associates for the audit of the consolidated and parent Company's financial statements
58
63

Page 29

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000


Wages and salaries
5,765
6,424
172
1,172

Social security costs
662
547
146
109

Cost of defined contribution scheme
147
127
38
26

6,574
7,098
356
1,307


During the year directors received emoluments of £397,304 (2022: £111,000). Included in wages and salaries is a negative charge of £-684,710 (2022: £308,883) in relation to a cash settled executive share based payments (see note 25).
The highest paid director was £223,113 (2022: £75,000). Benefits in kind payable was £Nil (2022: £Nil) and there was a charge of £Nil (2022: £82,867) to the income statement regarding a cash settled share based payment scheme.

The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
259
260


9.


Interest payable and similar expenses

2023
2022
£000
£000


Bank interest payable
812
678

Other loan interest payable
9
6

Loans from group undertakings
2,078
1,658

Other interest payable
5
5

2,904
2,347

Dividends paid on preference shares classified as debt are interest by virtue of the instruments characteristics and the obligations attached means it is a financial liability. 

Page 30

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

10.


Taxation


2023
2022
£000
£000



Total current tax
-
-

Deferred tax


Origination and reversal of timing differences
336
4,765

Total deferred tax
336
4,765


Taxation on profit on ordinary activities
336
4,765
Page 31

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£000
£000


Loss on ordinary activities before tax
(3,230)
(3,797)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
(614)
(721)

Effects of:


Fixed assets differences
11
3

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,434
787

Capital gains
259
(68)

Deferred tax not recognised
976
1,587

Income not taxable for tax purposes
(452)
(283)

Adjustments to brought forward values
(4)
(27)

Remeasurement of deferred tax for changes in tax rates
(153)
3,135

Adjustment to prior year
-
355

Exempt distribution income
(1,121)
-

Group relief
-
(3)

Total tax charge for the year
336
4,765


Factors that may affect future tax charges

The group has a potential deferred tax asset amounting to £6,569,120 (2022 - £5,591,132) which has not been recognised on the grounds that there is insufficient evidence at the current time that the asset will be recoverable in the foreseeable future.

Page 32

 


 
LIFECARE RESIDENCES LIMITED


 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023


11.


Tangible fixed assets


Group







Freehold property
Nursing home
Freehold investment property
Plant and machinery
Fixtures and fittings
Land held for development
Total

£000
£000
£000
£000
£000
£000
£000



Cost or valuation


At 1 April 2022
297
12,201
410
1,112
1,556
16,192
31,768


Additions
293
-
-
251
118
840
1,502


Disposals
-
-
-
-
-
(340)
(340)


Revaluations
-
121
70
-
-
-
191



At 31 March 2023

590
12,322
480
1,363
1,674
16,692
33,121



Depreciation


At 1 April 2022
52
-
-
887
1,263
-
2,202


Charge for the year on owned assets
27
-
-
132
125
-
284



At 31 March 2023

79
-
-
1,019
1,388
-
2,486
Page 33

 


 
LIFECARE RESIDENCES LIMITED


 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

           11.Tangible fixed assets (continued)




Net book value



At 31 March 2023
511
12,322
480
344
286
16,692
30,635



At 31 March 2022
245
12,201
410
225
293
16,192
29,566

The freehold property was valued by qualified professional external advisers based on open market value using a projected EBITDA times by multiplier valuation. The valuation was performed in March 2023.
The historical cost of the nursing home is £3,141,509 (2022: £3,141,509).





The net book value of land and buildings may be further analysed as follows:


2023
2022
£000
£000

F/hold property-cost/valuation b/fwd
510
242

Nursing home
12,322
12,201

Investment property
480
410

13,312
12,853


Page 34

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

Company






Plant and machinery
Fixtures and fittings
Total

£000
£000
£000

Cost or valuation


At 1 April 2022
172
40
212


Additions
7
-
7



At 31 March 2023

179
40
219



Depreciation


At 1 April 2022
154
32
186


Charge for the year on owned assets
15
5
20



At 31 March 2023

169
37
206



Net book value



At 31 March 2023
10
3
13



At 31 March 2022
18
8
26






Page 35

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

12.


Fixed asset investments

Company





Investments in subsidiary companies

£000



Cost or valuation


At 1 April 2022
2,444



At 31 March 2023
2,444





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Holding

LCR Developments Limited
England
Property development
100%
Grove Place Village Limited
England
Operation of retirement village
 100%
Grove Place Care Limited
England
Dormant
100%
Somerleigh Court Limited
England
Operation of a care home and retirement village
100%
Battersea Place LLP
England
Property development
100%
Battersea Place Retirement Village Limited
England
Operation of a care home andd retirement village
100%
Renaissance LifeCare Limited
England
Dormant
100%

The class of shares in all of the above companies is ordinary with the exception of Battersea Place LLP where the company is a designated member.
The registered office of all subsidiaries are the same as that of the parent company disclosed on the company information page.


Page 36

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.


Investment property

Group


Investment property

£000



Valuation


At 1 April 2022
80,139


Surplus on revaluation
1,170



At 31 March 2023
81,309

The 2023 valuations were made by Colliers international, on an open market value for existing use basis.

Directors assessments of valuations were based on valuations given by qualified professional external advisers in the year to 31 March 2023.
The historical cost of the investment property was £5,015,000 (2022: £5,015,000).










14.


Stocks

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Work in progress and units for sale
99
618
-
1,300

Finished goods and goods for resale
15
16
-
-

114
634
-
1,300


Page 37

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

15.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Due after more than one year

Amounts owed by group undertakings
-
-
40,116
38,601

-
-
40,116
38,601


Amounts due after more than one year from group entities incur interest at a rate ranging between 5-12% and are due for settlement 31 March 2024. Interest is payable at maturity.

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Due within one year

Trade debtors
443
275
21
-

Amounts owed by group undertakings
-
-
14,452
7,681

Other debtors
374
327
55
64

Prepayments and accrued income
539
400
230
180

1,356
1,002
14,758
7,925


Amounts due within one year and owed by group undertakings as well as related parties are interest free and have no settlement date. 


16.


Cash and cash equivalent

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Cash at bank and in hand
375
426
229
10

375
426
229
10


Page 38

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Bank loans (see note 18)
1,108
9,716
-
-

Payments received on account
65
40
-
-

Trade creditors
617
976
100
247

Amounts owed to group undertakings
-
-
7,716
9,996

Amounts owed to other participating interests
4,404
1,641
4,404
1,641

Other taxation and social security
162
90
87
2

Other creditors
2,017
1,503
1,920
1,429

Accruals and deferred income
935
1,021
540
622

9,308
14,987
14,767
13,937


Disclosure of the terms and conditions attached to the non-equity shares is made in note 22.

Bank loans payable within a year include, a loan in Somerleigh Court Limited with Leumi for £500,000 (2022: £2,495,000) and a loan in Battersea Place Retirement Limited with Investec for £600,000 (2022: £7,200,000). Accumulated interest at year end amounts to £8,000 (2022: £21,000). Further terms and conditions attached to the bank loans is made in Note 18.
Amounts due to group undertakings within one year are unsecured, interest free and repayable on
demand.
Amounts due to other participating interests within a one year have been noted below:
The accumulated value of £2,922,818 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds A) at 31 March 2023 (2022 - £2,733,616) amounted to £2,890,170, having been reassigned from PHC Treasury (UK) to Renaissance Holdings New Zealand in July 2022.
The £0.950m working capital facility with PHC Treasury (UK) at 31 March 2022, was settled on 17th June 2022 through the issuance of £1,123,261 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds B), at a discounted subscription price of £1,002,765 and a redemption date of 16 June 2024. These were assigned to Renaissance Holdings New Zealand in July 2022. The accumulated value of Bonds B at 31 March 2023 amounted to £1,050,238 (2022 - £Nil) and reported under debt falling due after more than one year in Note 18.
The £0.650m working capital facility with PHC Treasury (UK) at 31 March 2022, was assigned to Renaissance Holdings New Zealand in July 2022, and settled on 24th March 2023 through the issuance of £5,003,703 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds C), at a discounted subscription price of £4,466,936 and a redemption date of 23 March 2025. The accumulated value of Bonds C at 31 March 2023 amounted to £4,472,810 (2022 - £Nil) and reported under debt falling due after more than one year in Note 18. 
As at 31 March 2023, amounts owed to other participating interests consists of a £1,500,000 working capital facility with Renaissance Holdings New Zealand at an interest rate of 8% per annum and a final repayment date of 26th March 2023. Related accrued interest amounted to £1,000 (2022 - £Nil). 

Page 39

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

18.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Bank loans
7,400
-
-
-

Amounts owed to associates
5,517
2,733
5,517
2,733

Share capital treated as debt
32,789
29,301
32,789
29,301

Interest payable on share capital treated as debt
-
2,932
-
2,932

45,706
34,966
38,306
34,966


Disclosure of the terms and conditions attached to the non-equity shares is made in note 22.

Bank loans include a loan in Somerleigh Court Limited with Leumi, which is secured over this subsidiary’s property which is held at a valuation of £5,445,000. Interest is repayable at SONIA +3% per annum. On 15th March 2023, Somerleigh Court Limited extended the £2,500,000 Leumi loan facility to 16th May 2023; which was further extended on 4th May 2023, requiring £500,000 (2022: £2,495,000) payable within a year and disclosed under Note 17, with the remaining £2,000,000 (2022: £Nil) payable on the loan termination date of 30th April 2024 and disclosed in the table above as payable after more than a year. 
Bank loans also include a loan in Battersea Place Retirement Village Limited with Investec Bank Plc, which is secured over this subsidiary’s freehold property at Battersea held at valuation of £70,840,000. On 17th March 2023, Battersea Place Retirement Village Limited extended the £6,300,000 Investec loan facility to 31st March 2026. Principle payments will commence on 31 March 2023 on a 6 monthly basis, whilst interest will remain payable on a quarterly basis. Furthermore, the annualised interest cover and EBITDA to net debt financial covers were removed. As at the year-end £5,400,000 (2022 - £Nil) is reflected in the above table payable after more than a year, with £600,000 (2022 - £7,200,000) payable within a year reflected in Note 17.
Included in the amounts due to other participating interests after more than a year include the LCR Zero-Coupon Deep Discount Bonds with an accumulated value of £5,523,048 (2022 - £Nil) at year end.
The total of preference shares in issue at 31 March 2023 amounts to £32,788,763 (2022 - £29,301,339), with £4,632,041 (2022: Nil) shares redeemed and £8,119,465 (2022 - £Nil) new shares issued, on 18th July 2022. £3,487,424 (2022: Nil) of the accumulated dividend was also paid on such date. The shares accrued a 5% annual dividend of £1,705,567 (2022 - £1,465,067) during the year, with £1,149,853 (2022 - £2,931,710) accrued at the year end. Disclosure of the terms and conditions attached to these non-equity shares is made in Note 22.

Page 40

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

19.


Loans

An analysis of the maturity of the loans is given below:


Group
Group
2023
2022
£000
£000

Amounts falling due within one year

Bank loans
1,108
9,716


1,108
9,716

Amounts falling due 1-2 years

Bank loans
3,000
-

Amounts falling due 2-5 years

Bank loans
4,400
-


8,508
9,716



20.


Financial instruments

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Financial assets

Financial assets measured at fair value through profit or loss
1,731
5,073
55,103
46,356


Financial liabilities

Financial liabilities measured at amortised cost
54,852
49,863
52,986
(48,901)

Financial assets measured at amortised cost comprise trade and other debtors, amounts due from group undertakings, accrued income and cash at bank and in hand.
Financial liabilities measured at amortised cost comprise trade and other creditors, amounts due to group undertakings, loans and accruals and bank overdrafts.

Page 41

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

21.


Deferred taxation


Group



2023
2022


£000

£000






At beginning of year
(19,978)
(15,046)


Charged to profit or loss
(336)
(4,409)


Charged to other comprehensive income
-
(167)


Adjustment to prior year
-
(356)



At end of year
(20,314)
(19,978)

The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£000
£000

Accelerated capital allowances
(20,314)
(19,978)

(20,314)
(19,978)


22.


Share capital

2023
2022
£000
£000
Shares classified as equity

Allotted, called up and fully paid



1,500,000 (2022 - 1,500,000) Ordinary shares of £1.00 each
1,500
1,500

Allotted, called up and partly paid



118,800 (2022 - 118,800) G Ordinary shares of £1.00 each
119
119

2023
2022
£000
£000
Shares classified as debt

Allotted, called up and fully paid



32,788,763 (2022 - 29,301,339) Preference shares of £1.00 each
32,789
29,301


Page 42

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

22.Share capital (continued)

In July 2022, £4,632,041 preference shares were redeemed from PHC Treasury (UK) Limited and £8,119,465 preference shares were issued to Renaissance Holdings (NZ) Limited. These were all settled through the promissory notes.


23.


Reserves

Share premium account

The share premium account includes the premium on issue of equity shares, net of any issue costs.

Revaluation reserve

Gain or losses arising on the revaluation of the group's nursing homes.

Retained earnings

Retained earnings represents cumulative profits or losses, net of dividends paid and other adjustments.

24.


Analysis of net debt




At 1 April 2022
Cash flows
At 31 March 2023
£000

£000

£000

Cash at bank and in hand

426

(51)

375

Debt due after 1 year

(29,301)

21,901

(7,400)

Debt due within 1 year

(9,729)

(24,181)

(33,910)


(38,604)
(2,331)
(40,935)

Page 43

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

25.


Share-based payments

The company entered into a cash settled share-based payment scheme for its executives (G Shares). The only vesting condition being that the employee can not be a bad leaver within 7-year period from date of share issue.
There is a put and call option over the shares which can be exercised within 60 days of the 5,6 and 7 year anniversary from when the shares are issued.
Where a marketed related price cannot be fairly determined, the shares are to be valued using a formula as below:
(CV – RHV) X RP
Where CV is the carrying value of the company, using multiple of EBITDA for valuing business operations, adding on any property valuations and discounting time value as we as the lack of marketability of the shares.
RHV is the £100,000,000 hurdle value.
RP is the Participation percentage if each shareholder.
The shares have been valued in the current financial year based on the total liability owed for shares.
The fair value movements on recognizing the groups obligation under this scheme are presented within wages and salaries on the income statement (note 8). The total expense recognised within the income statement during the period was £-684,710 (2022: £308,883).
The total carrying amount at the end of the period was £740,000 (2022: £1,424,710) in relation to the
liabilities arising from the share based payments transactions.

Weighted average exercise price (pence)
2023
Number
2023
Weighted average exercise price
(pence)
2022
Number
2022

Outstanding at the beginning of the year

1,435

106,800

1,435
 
106,800
 
Outstanding at the end of the year
693

106,800

1,435
 
106,800
 





Page 44

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

26.


Pension commitments

The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amouonted to £124,873 (2022- £127,042). Contributions totalling £29,182 (2022 - £23,847) were payable to the fund at the reporting date.


27.


Commitments under operating leases

At 31 March 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Company
Company
2023
2022
£000
£000

Not later than 1 year
148
140

Later than 1 year and not later than 5 years
134
91

Later than 5 years
22
-

304
231

28.


Related party transactions

The group owes £22,620,670 (2022: £4,572,150) to Renaissance Holdings (NZ) Limited. Interest charged to the income statement was £716,554 (2022: £207,825).
The group owes £21,232,151 (2022: £32,035,312 to PHC Treasury (UK) Limited. Interest charged to the income statement was £1,357,714 (2022: £1,326,188).
The group owes £162,833 (2022: £Nil) to NSI Management (NZ) Limited, a New Zealand associated company, associated by virtue of being controlled by the same ultimate shareholders of the group, for recharged expenses included in the financials. 
The group owes £50,612 (2022: £Nil) to Lifecare Residences (NZ) Limited, a New Zealand associated company, associated by virtue of being controlled by the same ultimate shareholders of the group, for recharged expenses included in the financials. 
The related party transactions noted above are due to common directors and shareholders between the companies.
The company has taken advantage of the exemption conferred by Section 33.1A of FRS 102 not to
disclose transactions with wholly owned members of the group headed by LifeCare Residences Limited.
As per note 8 in the accounts transactions were also made with directors in the year.

Page 45

 
LIFECARE RESIDENCES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

29.


Post balance sheet events

The £2,922,818 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds A) were settled on 15 June 2023 through the issuance of £3,391,110 (Nominal Amount) LCR Zero-Coupon Deep Discount Bonds (Bonds D) at a discounted subscription price of £2,922,818 and a redemption date of 14 June 2025.
The Leumi Loan at Somerleigh was extended on 4th May 2023, with further details made in Note 18.


30.


Controlling party

Th company's immediate parent company is Renaissance Holdings (NZ) Limited incorporated in New Zealand. At 31 March 2023 the company's ultimate controlling shareholders are the family trusts of Cliff and Sue Cook.

Page 46