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Registered number: 12872639









Back 2 Work Group Limited









Annual Report and Financial Statements

For the Year Ended 31 July 2023

 
Back 2 Work Group Limited
 
 
Company Information


Directors
L Muscat-Terribile 
A P Bailey 
J E Gregson 
T Lewis 
J Painter 




Registered number
12872639



Registered office
Building 4
Universal Square

Devonshire Street

Manchester

M12 6JH




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

Lancashire Gate

21 Tiviot Dale

Stockport

SK1 1TD





 
Back 2 Work Group Limited
 

Contents



Page
Group Strategic Report
 
1 - 4
Directors' Report
 
5 - 6
Independent Auditors' Report
 
7 - 10
Consolidated Statement of Comprehensive Income
 
11
Consolidated Balance Sheet
 
12
Company Balance Sheet
 
13
Consolidated Statement of Changes in Equity
 
14
Company Statement of Changes in Equity
 
15
Consolidated Statement of Cash Flows
 
16 - 17
Consolidated Analysis of Net Debt
 
18
Notes to the Financial Statements
 
19 - 37


 
Back 2 Work Group Limited
 
 
Group Strategic Report
For the Year Ended 31 July 2023

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

Business review
 
The principal activities of the Group during the year continues to be the delivery of training programmes predominately for adult learners, with some training being provided to 16-18 year olds through apprenticeships.
The educational provisions include:
Pre-Employment training 
Upskill programmes to those in work
Apprenticeships
Bootcamps
 
Back 2 Work Group Limited continues to focus on the quality of teaching and support, enabling individuals to gain skills and confidence they need to apply for jobs, secure employment, or upskill within their current role.
The acquisition of Just IT Limited in the prior year bought significant expertise in digital training into the Group, delivering digital training in both apprenticeships and bootcamps which has complemented the existing Back 2 Work training offering and principal activities. 
Back 2 Work Complete Training Limited is directly funded by the Education and Skills Funding Agency (ESFA), the Adult Education Budget (AEB) from devolved combined authorities and a small amount of sub-contracted AEB funding from Further Education colleges and other independent training providers.
Just IT Limited is funded by the Education and Skills Funding Agency (ESFA), devolved authorities and directly with corporate clients for training courses and recruitment activities.

Page 1

 
Back 2 Work Group Limited
 

Group Strategic Report (continued)
For the Year Ended 31 July 2023

Principal risks and uncertainties
 
The majority of revenue is through funding from the government via ESFA or AEB devolved budgets. Changes to government funding priorities therefore remains the primary risk faced by the Group. We are aware of the upcoming elections, and mindful of potential changes. As far as possible we have taken advice on likely policy changes to help us plan through different scenarios. We believe we are well placed to react quickly to any changes due to our experienced management team, structures, and stakeholder relationships.
The Group has had significant success in recent retenders, and in new funding opportunities during the year, which has put us in a strong position as we enter the next financial year.
The principal financial instruments used by the Group are cash, trade debtors and trade creditors. The management of these instruments provides finance for the Group’s operations.
The main risks arising from the Group’s financial instruments are price risk, credit risk, liquidity risk and interest rate risk. The directors review and agree policies for managing these risks as outlined below:
Price risk
The Group closely monitors changes to price across its operation and reacts appropriately and on a timely basis where appropriate.
Credit risk
The Group’s principal financial assets are cash and debtors. The directors review the debtor position regularly and ensure compliance with funding rules to mitigate risk. Given the nature of our customers and their credit worthiness, the risk of bad debt is considered to be low.
Liquidity risk
The Group manages cash closely with regular review of actual and forecast cashflows monthly, supplemented by weekly cash reporting, ensuring liquidity available to meet needs. 

Financial key performance indicators
The Group uses a number of financial key performance indicators to monitor business performance:

 

Year ended 
Year ended 

31 July 2023
31 July 2022
Turnover 
£26,799,795
£15,115,394
Gross margin
31%
31%
Adjusted EBITDA
£3,538,910
£2,685,633
Adjusted EBITDA %
13%
18%
Cash in bank & in hand 
£1,932,240
£3,027,795

Page 2

 
Back 2 Work Group Limited
 

Group Strategic Report (continued)
For the Year Ended 31 July 2023

Directors' statement of compliance with duty to promote the success of the Group
 
The desirability of the Group maintaining a reputation for high standards of business conduct
Delivering high standards of business conduct and maintaining a positive reputation with our commissioners, stakeholders and service users is fundamental to the success of our business. When making decisions, the directors consider the insights obtained through engagement activities with these groups and best industry practice, and are cognisant of the importance of maintaining our reputation for high standards of business conduct. The directors provide the systems, processes, and people to ensure our conduct is driven by our values across the whole organisation, and that all employees understand the part they play in this ambition.
Primary board focus and decision making during the year
Core focus and strategy in the year has been different within the Group. Back to Work Complete Training's focus has been adjusting its curriculum and delivery in readiness for changing funding rules. These changes have implications for both the funding value and course lengths. Challenges include learner commitment to the longer courses and ensuring financial robustness of the new model given its inherently higher costs to deliver. The board has also been working on strategies to engage with learners that are classed as economically inactive, working with a wider circle of community groups to engage and upskill.
Within Just IT Training, the core focus has been on quality and curriculum to support our vision of becoming the number one IT digital training provider. During the year we have invested in key management roles to support this objective and are already seeing great value in the additional knowledge and expertise they have bought.
After the successful acquisition of Just IT Training in FY21/22, the board continues to look for further acquisition opportunities that would both complement existing provisions or deliver sector training within growth sectors that we currently do not provide. All potential targets are appraised on numerous factors, primarily being quality, potential growth opportunities, cross group opportunities and financial strength.
The need to foster the Group's business relationships with suppliers, customers and others
The Group is committed to fostering good business relationships with suppliers, customers and other stakeholders which are fundamental to our business model. The business is operated in an ethical and responsible way with high standards of business conduct, driven by the senior management team. There are processes and policies in place to ensure that all our customers are treated fairly, and with care and respect. In relation to suppliers, the Group procurement and outsourcing policies ensure that any tender processes are fair and transparent and suppliers receive constructive feedback. The Group has been in frequent communication with both suppliers and customers throughout the year ensuring any potential issues are identified early and managed effectively.
Staff wellbeing and engagement 
The Group is a “mission driven” organisation guided by a strong set of established values. Through ongoing communication and monthly business updates the full workforce is kept informed of business performance, market conditions and strategic direction as determined by Senior Leadership. The Group prides itself on a robust wellbeing and support offer for its workforce including trained mental health champions, access to funded counselling and medical support, HR policies supporting flexible working and a general positive approach to engaging with staff regarding any challenges they face, work related or not. 

Page 3

 
Back 2 Work Group Limited
 

Group Strategic Report (continued)
For the Year Ended 31 July 2023

Group non-financial and sustainability information statement
 
The Group recognises its impact on communities in which we operate, and regularly engages with employers, local government, community groups, representative bodies and individuals across England to deliver government funded education, training and employment support to residents who have the need to increase their knowledge and skills or require support to access employment. We gain their feedback through formal and informal processes and use this insight to evolve and improve our services to futureproof our provision. 
The Group recognises the need to consider the environmental impact of our operations and we review our delivery regularly to ensure we minimise our impact and positively deliver against our carbon reduction plan. As well as corporate level initiatives, staff training ensures environmental impact is considered in our everyday decision making and service design.


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



L Muscat-Terribile
Director
Date: 3 March 2024

Page 4

 
Back 2 Work Group Limited
 
 
 
Directors' Report
For the Year Ended 31 July 2023

The directors present their report and the financial statements for the year ended 31 July 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;

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.

Results and dividends

The loss for the year, after taxation, amounted to £2,171,554 (2022 - loss £2,180,169).

No dividends have been recommended for payment in the financial year.

Directors

The directors who served during the year were:

L Muscat-Terribile 
A P Bailey 
J E Gregson 
T Lewis 
J Painter 

Future developments

The Group maintains a robust financial position and with the support of Palatine Private Equity LLP,  will continue to deliver government funded education and training programmes to both unemployed and in-work learners.

Engagement with employees

The directors have chosen to set out disclosures relating to engagement with employees in the strategic report.

Page 5

 
Back 2 Work Group Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 July 2023

Matters covered in the Group Strategic Report

The directors have chosen to set out the disclosures relating to financial risk objectives & policies and information on exposure to price risk, credit risk, liquidity risk, and cash flow risk in the strategic report.

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

Post year end, Back 2 Work Holdings Limited has acquired 100% of the share capital in both Bespoke Professional Development and Training Limited and Greendale Limited.

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





L Muscat-Terribile
Director
Date: 3 March 2024

Page 6

 
Back 2 Work Group Limited
 
 
 
Independent Auditors' Report to the Members of Back 2 Work Group Limited
 

Opinion


We have audited the financial statements of Back 2 Work Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 July 2023, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, 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 July 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.


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.


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.


Page 7

 
Back 2 Work Group Limited
 
 
 
Independent Auditors' Report to the Members of Back 2 Work Group Limited (continued)


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.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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:
Page 8

 
Back 2 Work Group Limited
 
 
 
Independent Auditors' Report to the Members of Back 2 Work Group Limited (continued)


Identifying and assessing potential risks related to irregularities
 
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
 
The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual suspected, or alleged fraud.
Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. 
The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Antibribery and Corruption, compliance with Education and Skills Funding Agency "ESFA" and Adult Education Budget "AEB" funding regulations. 
 
Audit response to risks identified
 
Our procedures to respond to the risks identified included the following:
 
Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. 
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
Evaluating and testing of the operating effectiveness of management's controls designed to prevent and detect irregularities.
Enquiring of management about any actual and potential litigation and claims.
Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud. 

We have also considered the risk of fraud through management override of controls by:
 
Testing the appropriateness of journal entries and other adjustments. We have used data analytics to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error.
Challenging assumptions made by management in their significant accounting estimates, and assesing whether the judgements made in making accounting estimates are indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Page 9

 
Back 2 Work Group Limited
 
 
 
Independent Auditors' Report to the Members of Back 2 Work Group Limited (continued)


There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatements 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 or intentional misrepresentations, or through collusion.


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.





Helen Besant-Roberts (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
SK1 1TD

4 March 2024
Page 10

 
Back 2 Work Group Limited
 
 
Consolidated Statement of Comprehensive Income
For the Year Ended 31 July 2023

2023
2022
Note
£
£

  

Turnover
 4 
26,799,795
15,115,394

Cost of sales
  
(18,622,055)
(10,369,957)

Gross profit
  
8,177,740
4,745,437

Administrative expenses
  
(7,851,348)
(4,909,357)

Other operating income
 5 
-
1,300

Operating profit/(loss)
 6 
326,392
(162,620)

Interest receivable and similar income
 10 
-
(150)

Interest payable and similar expenses
 11 
(1,964,099)
(1,710,983)

Loss before taxation
  
(1,637,707)
(1,873,753)

Tax on loss
 12 
(533,847)
(306,416)

Loss for the financial year
  
(2,171,554)
(2,180,169)

(Loss) for the year attributable to:
  

Owners of the parent Company
  
(2,171,554)
(2,180,169)

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 19 to 37 form part of these financial statements.

Page 11

 
Back 2 Work Group Limited
Registered number: 12872639

Consolidated Balance Sheet
As at 31 July 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
17,527,127
19,660,721

Tangible assets
 14 
265,756
264,941

  
17,792,883
19,925,662

Current assets
  

Stocks
 16 
2,949
3,687

Debtors: amounts falling due after more than one year
 17 
42,959
33,750

Debtors: amounts falling due within one year
 17 
4,923,606
4,157,800

Cash at bank and in hand
 18 
1,932,240
3,027,795

  
6,901,754
7,223,032

Creditors: amounts falling due within one year
 19 
(4,839,739)
(4,878,966)

Net current assets
  
 
 
2,062,015
 
 
2,344,066

Total assets less current liabilities
  
19,854,898
22,269,728

Creditors: amounts falling due after more than one year
 20 
(25,783,935)
(22,594,753)

Provisions for liabilities
  

Deferred taxation
  
(48,129)
(50,173)

Other provisions
 23 
-
(3,437,739)

  
 
 
(48,129)
 
 
(3,487,912)

Net liabilities
  
(5,977,166)
(3,812,937)


Capital and reserves
  

Called up share capital 
 24 
1,112
1,020

Share premium account
 25 
124,598
117,375

Capital redemption reserve
 25 
10
-

Profit and loss account
 25 
(6,102,886)
(3,931,332)

  
(5,977,166)
(3,812,937)


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


L Muscat-Terribile
Director
Date: 3 March 2024

The notes on pages 19 to 37 form part of these financial statements.

Page 12

 
Back 2 Work Group Limited
Registered number: 12872639

Company Balance Sheet
As at 31 July 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 15 
43,979
43,979

Current assets
  

Debtors: amounts falling due within one year
 17 
81,394
75,135

Creditors: amounts falling due within one year
 19 
(8,686)
(5,741)

Net current assets
  
 
 
72,708
 
 
69,394

Total assets less current liabilities
  
116,687
113,373

  

  

Net assets
  
116,687
113,373


Capital and reserves
  

Called up share capital 
 24 
1,112
1,020

Share premium account
 25 
124,598
117,375

Capital redemption reserve
 25 
10
-

Profit and loss account brought forward
  
(5,022)
(1,929)

Loss for the year
  
(4,011)
(3,123)

Profit on share re-purchase

  

-
30

Profit and loss account carried forward
  
(9,033)
(5,022)

  
116,687
113,373


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


L Muscat-Terribile
Director

Date: 3 March 2024

The notes on pages 19 to 37 form part of these financial statements.

Page 13

 
Back 2 Work Group Limited
 

Consolidated Statement of Changes in Equity
For the Year Ended 31 July 2023


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

£
£
£
£
£


At 1 August 2021
1,050
117,375
-
(1,751,193)
(1,632,768)


Comprehensive income for the year

Loss for the year
-
-
-
(2,180,169)
(2,180,169)

Purchase of own shares
-
-
-
30
30

Shares cancelled during the year
(30)
-
-
-
(30)


Total transactions with owners
(30)
-
-
30
-



At 1 August 2022
1,020
117,375
-
(3,931,332)
(3,812,937)


Comprehensive income for the year

Loss for the year
-
-
-
(2,171,554)
(2,171,554)

Purchase of own shares
-
-
10
-
10

Shares issued during the year
102
7,223
-
-
7,325

Shares cancelled during the year
(10)
-
-
-
(10)


Total transactions with owners
92
7,223
10
-
7,325


At 31 July 2023
1,112
124,598
10
(6,102,886)
(5,977,166)


The notes on pages 19 to 37 form part of these financial statements.

Page 14

 
Back 2 Work Group Limited
 

Company Statement of Changes in Equity
For the Year Ended 31 July 2023


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

£
£
£
£
£


At 1 August 2021
1,050
117,375
-
(1,929)
116,496


Comprehensive income for the year

Loss for the year
-
-
-
(3,123)
(3,123)

Purchase of own shares
-
-
-
30
30

Shares cancelled during the year
(30)
-
-
-
(30)


Total transactions with owners
(30)
-
-
30
-



At 1 August 2022
1,020
117,375
-
(5,022)
113,373


Comprehensive income for the year

Loss for the year
-
-
-
(4,011)
(4,011)

Purchase of own shares
-
-
10
-
10

Shares issued during the year
102
7,223
-
-
7,325

Shares cancelled during the year
(10)
-
-
-
(10)


Total transactions with owners
92
7,223
10
-
7,325


At 31 July 2023
1,112
124,598
10
(9,033)
116,687


The notes on pages 19 to 37 form part of these financial statements.

Page 15

 
Back 2 Work Group Limited
 

Consolidated Statement of Cash Flows
For the Year Ended 31 July 2023

2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(2,171,554)
(2,180,169)

Adjustments for:

Amortisation of intangible assets
2,284,589
1,811,342

Depreciation of tangible assets
118,176
134,479

Interest payable
1,964,099
1,710,983

Interest receivable
-
(150)

Taxation charge
533,847
306,416

Decrease/(increase) in stocks
738
(3,687)

(Increase)/decrease in debtors
(775,015)
70,605

Increase in creditors
1,285,724
2,707,509

(Decrease)/increase in provisions
(3,437,739)
3,437,739

Corporation tax (paid)
(520,485)
(132,120)

Net cash generated from operating activities

(717,620)
7,862,947


Cash flows from investing activities

Purchase of intangible fixed assets
(150,995)
-

Purchase of tangible fixed assets
(118,991)
(242,987)

Purchase of fixed asset investments
-
(8,124,520)

Interest received
-
150

Cash acquired with subsidiary
-
1,028,903

Net cash from investing activities

(269,986)
(7,338,454)

Cash flows from financing activities

Issue of ordinary shares
7,325
-

New secured loans
2,500,000
-

Repayment of loans
(645,000)
(520,000)

Purchase of debenture loans
-
2,000,000

Repayment of debenture loans
(6,175)
-

Interest paid
(1,964,099)
(1,710,983)

Net cash used in financing activities

(107,949)
(230,983)
Page 16

 
Back 2 Work Group Limited
 

Consolidated Statement of Cash Flows (continued)
For the Year Ended 31 July 2023


2023
2022

£
£



Net (decrease)/increase in cash and cash equivalents
(1,095,555)
293,510

Cash and cash equivalents at beginning of year
3,027,795
2,734,285

Cash and cash equivalents at the end of year
1,932,240
3,027,795


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,932,240
3,027,795


The notes on pages 19 to 37 form part of these financial statements.

Page 17

 
Back 2 Work Group Limited
 

Consolidated Analysis of Net Debt
For the Year Ended 31 July 2023




At 1 August 2022
Cash flows
At 31 July 2023
£

£

£

Cash at bank and in hand

3,027,795

(1,095,555)

1,932,240

Debt due after 1 year

(19,655,041)

(1,348,825)

(21,003,866)

Debt due within 1 year

(520,000)

(500,000)

(1,020,000)


(17,147,246)
(2,944,380)
(20,091,626)

The notes on pages 19 to 37 form part of these financial statements.

Page 18

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

1.


General information

Back 2 Work Group Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office is Building 4, Universal Square, Devonshire Street North, Manchester, M12 6JH. The company's registered number is 12872639.
The nature of the group's operation and its principal activity is to provide pre and post-employment training throughout the UK.
The consolidated financial statements of Back 2 Work Group Limited as at and for the year ended 31 July 2023 comprise the financial statements of Back 2 Work Group Limited and its subsidiaries (together referred to as "the Group"). These subsidiaries are disclosed in the fixed asset investments note of these accounts.

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).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

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 Balance Sheet, 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 Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. 
Rendering of services
Revenue from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Revenue is only recognised to the extent of recoverable expenses when the outcome of the contract cannot be estimated reliably.

Page 19

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

2.Accounting policies (continued)

 
2.4

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.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.5

Government grants

Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

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.

 
2.8

Borrowing costs

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

 
2.9

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 Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 20

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

2.Accounting policies (continued)

 
2.10

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 balance sheet 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 balance sheet 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 balance sheet date.

 
2.11

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Page 21

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

2.Accounting policies (continued)

 
2.12

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.

Depreciation is 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:

Short-term leasehold property
-
straight line over the lease period
Motor vehicles
-
20%
straight line
Fixtures and fittings
-
25%
straight line
Office equipment
-
33%
straight line
Computer equipment
-
33%
straight line

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.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.14

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.15

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.

Amounts recoverable on contracts is valued by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs.

Page 22

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

2.Accounting policies (continued)

 
2.16

Cash

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.

 
2.17

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.

 
2.18

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 balance sheet 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 Balance Sheet.

 
2.19

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 Statement of Comprehensive Income.

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.
Page 23

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

2.Accounting policies (continued)


2.19
Financial instruments (continued)


Financial assets and liabilities are offset and the net amount reported in the Balance Sheet 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.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates that affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the reporting period. Actual outcomes may differ from these judgements, estimates and assumptions. The judgements, estimates and assumptions that have the most significant effect on the carrying value of assets and liabilities of the Group as at 31 July 2023 are discussed below:
Revenue recognition and work in progress
The management of the Group exercise significant judgement in making an assessment of the stage of completion of a contract at the year-end and the appropriate amount of revenue and attributable profit to recognise. The Group has recognised amounts recoverable on contract with a carrying value of £4,059,558 (2022: £3,049,686) and deferred income with a carrying value of £279,429 (2022: £560,777).
Goodwill
Goodwill acquired on business combinations is capitalised on the balance sheet and amortised over its expected useful economic life or ten years, whichever is shorter. At 31 July 2023, the carrying value of goodwill was £17,527,127 (2022: £19,660,721).
Should these estimates vary, the profit or loss and balance sheet of the following years could be significantly impacted.
There are no other significant estimates or judgements.


4.


Turnover

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


2023
2022
£
£

Provision of pre-employment training
26,799,795
15,115,394


All turnover arose within the United Kingdom.

Page 24

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

5.


Other operating income

2023
2022
£
£

Government grants receivable
-
1,300


Government grants receivable relate to the Coronavirus Job Retention Scheme.


6.


Operating profit/(loss)

The operating profit/(loss) is stated after charging:

2023
2022
£
£

Depreciation of tangible assets
118,176
134,479

Amortisation of intangible assets, including goodwill
2,284,589
1,811,342

Other operating lease rentals
428,602
471,521


7.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
1,950
1,750

Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements
20,900
18,750

Fees payable to the Group's auditor and its associates for taxation compliance services
4,745
4,250

Page 25

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

8.


Employees

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


Group
Group
2023
2022
£
£


Wages and salaries
12,204,874
9,930,416

Social security costs
1,339,752
1,054,205

Cost of defined contribution scheme
238,766
167,157

13,783,392
11,151,778


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


        2023
        2022
            No.
            No.







Management
7
10



Delivery
235
243



Support
100
43

342
296

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL)

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
225,718
120,000

Group contributions to defined contribution pension schemes
3,112
1,321

228,830
121,321


During the year retirement benefits were accruing to 3 directors (2022 - 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £90,000 (2022 - £90,000).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,321 (2022 - £1,321).

Page 26

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

10.


Interest receivable

2023
2022
£
£


Other interest receivable
-
(150)


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
123,742
76,014

Other loan interest payable
1,840,357
1,634,969

1,964,099
1,710,983

Page 27

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
535,891
275,249

Deferred tax


Origination and reversal of timing differences
(2,044)
31,167


Taxation on profit on ordinary activities
533,847
306,416

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 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(1,637,707)
(1,873,753)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
(409,427)
(356,013)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
571,147
344,155

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
479,991
320,807

Change in tax rates
(101,860)
11,933

Utilisation of tax losses
(686)
-

Adjustments to tax charge in respect of prior periods
(204)
-

Super-deduction
(5,114)
(14,466)

Total tax charge for the year
533,847
306,416


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 28

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

13.


Intangible assets

Group and Company





Goodwill

£



Cost


At 1 August 2022
22,808,144


Additions
150,995



At 31 July 2023

22,959,139



Amortisation


At 1 August 2022
3,147,423


Charge for the year
2,284,589



At 31 July 2023

5,432,012



Net book value



At 31 July 2023
17,527,127



At 31 July 2022
19,660,721



Page 29

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

14.


Tangible fixed assets

Group






Short-term leasehold property
Motor vehicles
Fixtures and fittings
Office equipment
Computer equipment
Total

£
£
£
£
£
£



Cost or valuation


At 1 August 2022
4,705
88,788
15,547
71,856
246,885
427,781


Additions
-
-
34,841
1,372
82,778
118,991


Disposals
-
-
(2,965)
-
(8,078)
(11,043)



At 31 July 2023

4,705
88,788
47,423
73,228
321,585
535,729



Depreciation


At 1 August 2022
3,764
4,439
(11,667)
51,554
114,750
162,840


Charge for the year
941
17,758
13,287
12,487
73,703
118,176


Disposals
-
-
(2,965)
-
(8,078)
(11,043)



At 31 July 2023

4,705
22,197
(1,345)
64,041
180,375
269,973



Net book value



At 31 July 2023
-
66,591
48,768
9,187
141,210
265,756



At 31 July 2022
941
84,349
27,214
20,302
132,135
264,941

The Company has no tangible fixed assets.

Page 30

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 August 2022
43,979



At 31 July 2023
43,979





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Back 2 Work Holdings Limited
Ordinary
100%
Back 2 Work Complete Training Limited *
Ordinary
100%
Just IT Training Limited*
Ordinary
100%
Skills Team Limited**
Ordinary
100%

* Direct subsidiary of Back 2 Work Holdings Limited.
** Direct subsidiary of Just IT Training Limited.
The registered office of all subsidiaries is Building 4, Universal Square, Devonshire Street, Manchester, M12 6JH.
The results of all subsidiaries are included in the Consolidated Financial Statements.


16.


Stocks

Group
Group
2023
2022
£
£

Exam / Training Materials
2,949
3,687


Page 31

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

17.


Debtors

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

Due after more than one year

Other debtors
42,959
33,750
-
-


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

Due within one year

Trade debtors
376,044
705,315
-
-

Amounts owed by group undertakings
-
-
20,815
14,640

Other debtors
113,424
97,008
59,805
59,806

Prepayments and accrued income
374,580
305,791
774
689

Amounts recoverable on long term contracts
4,059,558
3,049,686
-
-

4,923,606
4,157,800
81,394
75,135



18.


Cash and cash equivalents

Group
Group
2023
2022
£
£

Cash at bank and in hand
1,932,240
3,027,795


Page 32

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

19.


Creditors: Amounts falling due within one year

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

Bank loans
1,020,000
520,000
-
-

Trade creditors
997,145
941,392
-
-

Amounts owed to group undertakings
-
-
8,686
5,741

Corporation tax
234,744
219,338
-
-

Other taxation and social security
594,200
683,321
-
-

Other creditors
532,497
529,278
-
-

Accruals and deferred income
1,461,153
1,985,637
-
-

4,839,739
4,878,966
8,686
5,741


Back 2 Work Complete Training Limited has an overdraft facility which includes a fixed and floating charge over its assets. The amount overdrawn was £nil (2022: £nil) at the period end.
Loan A totals £2,550,000, with a related interest rate of Base Rate + 3.5% until September 2025. The loan is repayable on a quarterly basis. The loan is secured by way of a fixed and floating charge over all property or undertaking of the Group.
Loan B totals £1,250,000, and is a bullet loan, with the full capital amount due in full in September 2025. The loan
is secured by way of a fixed and floating charge over all property or undertaking of the Group.

Page 33

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

20.


Creditors: Amounts falling due after more than one year

Group
Group
2023
2022
£
£

Debentures loans
18,478,866
18,485,041

Bank loans
2,525,000
1,170,000

Accruals and deferred income
4,780,069
2,939,712

25,783,935
22,594,753


Loan A totals £2,550,000, with a related interest rate of Base Rate + 3.5% until September 2025. The loan is repayable on a quarterly basis. The loan is secured by way of a fixed and floating charge over all property or undertaking of the Group.
Loan B totals £1,250,000, and is a bullet loan, with the full capital amount due in full in September 2025. The loan
is secured by way of a fixed and floating charge over all property or undertaking of the Group.
Debenture loans totalling £16,485,041 are entitled to interest at 10% per annum. They are redeemable at par along with any unpaid interest five years from the date of issue, which is 22 October 2025. The loan notes are secured on a fixed and floating charge over all property or undertaking of the company.
Debenture loans totalling £2,000,000 attract interest of 10% per annum, and are redeemable at par five years from the date of issue, which is 8 June 2027.


21.


Loans

Analysis of the maturity of loans is given below:


Group
Group
2023
2022
£
£

Amounts falling due within one year

Bank loans
1,020,000
520,000

Amounts falling due 1-2 years

Bank loans
1,020,000
520,000

Amounts falling due 2-5 years

Bank loans
1,505,000
650,000

Debenture loans
18,478,866
18,485,041


22,023,866
20,175,041


Page 34

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

22.


Deferred taxation


Group



2023
2022


£

£






At beginning of year
(50,173)
(14,824)


Charged to profit or loss
2,044
(31,167)


Arising on business combinations
-
4,182



At end of year
(48,129)
(50,173)

The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£
£

Accelerated capital allowances
(66,660)
(65,822)

Pension surplus
18,531
15,649

(48,129)
(50,173)


23.


Provisions


Group



Earn-out provision

£





At 1 August 2022
3,437,739


Charged to profit or loss
150,000


Utilised in year
(3,587,739)



At 31 July 2023
-

Page 35

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

24.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



49,154 (2022 - 42,979) Ordinary A shares of £0.01 each
492
430
1,000 (2022 - 1,000) Ordinary A1 shares of £0.01 each
10
10
30,425 (2022 - 30,425) Ordinary B1 shares of £0.01 each
304
304
16,596 (2022 - 16,596) Ordinary B2 shares of £0.01 each
166
166
9,000 (2022 - 7,000) Ordinary C shares of £0.01 each
90
70
2,000 (2022 - 2,000) Ordinary D1 shares of £0.01 each
20
20
2,000 (2022 - 2,000) Ordinary D2 shares of £0.01 each
20
20
1,000 (2022 - NIL) Ordinary D3 shares of £0.01 each
10
-

1,112

1,020


A debt-to equity swap took place in the year at £1 per share, leading to 6,175 new A ordinary shares being issued at a nominal value of £0.01 each, with a share premium of £0.99.
3,000 C ordinary shares were issued in the year at £0.38 per share with a nominal value of £0.01, with a share premium of £0.37 each. 1,000 of these C ordinary shares were later repurchased and cancelled.
1,000 D3 ordinary shares were issued in the year at par with a nominal value of £0.01.


25.


Reserves

Share premium account

The share premium account is an equity account that represents the additional amount shareholders paid for the issued shares that were in excess of the par value.

Capital redemption reserve

The capital redemption reserve represents the nominal value of shares that have been purchased by the company and cancelled. The reserve is non-distributable and can only be used for limited purposes as set out in the Companies Act 2006.

Profit and loss account

The profit and loss account includes all current retained profits and losses.


26.


Pension commitments

The Group operates a defined contributions 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 during the year and amounted to £238,766 (2022: £167,157). Contributions totalling £75,564 (2022: £64,403) were payable to the fund at the balance sheet date and are included in other creditors.

Page 36

 
Back 2 Work Group Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 July 2023

27.


Commitments under operating leases

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


Group
Group
2023
2022
£
£

Land and buildings

Not later than 1 year
308,190
388,883

Later than 1 year and not later than 5 years
206,971
708,568

515,161
1,097,451


Group
Group
2023
2022
£
£

Other

Not later than 1 year
2,830
2,866

Later than 1 year and not later than 5 years
4,404
7,234

7,234
10,100

The Company had no commitments under non-cancellable operating leases at the balance sheet date.


28.


Related party transactions

The directors have chosen not to disclose transactions entered into with other companies wholly owned with the group as permitted under FRS 102 paragraph 33.1A.
Loan notes totalling £16,485,041 have been issued to shareholders. The loan notes attract interest at 10% per annum. During the year, interest of £1,640,357 (
2022: £1,634,969) was incurred. The loan notes are redeemable at par five years from the date of issue which is 22 October 2025.
Loan notes totalling £2,000,000 have also been issued to shareholders. The loan notes attract interest at 10% per annum. During the year, interest of £200,000 (
2022: £16,350) was incurred. The loan notes are redeemable at par five years from the date of issue which is 8 June 2027.
Key Management Personnel
Key management additional to the statutory directors is considered to be the sales/operations director, who is not a statutory director. Total remuneration in the year relating to this director was £111,374 (2022: £135,097).

 
Page 37