Caseware UK (AP4) 2022.0.179 2022.0.179 2023-05-312023-05-31false2022-06-013falsefalseNo description of principal activity1 09124855 2022-06-01 2023-05-31 09124855 2021-06-01 2022-05-31 09124855 2023-05-31 09124855 2022-05-31 09124855 2021-06-01 09124855 1 2022-06-01 2023-05-31 09124855 1 2021-06-01 2022-05-31 09124855 2 2022-06-01 2023-05-31 09124855 2 2021-06-01 2022-05-31 09124855 3 2022-06-01 2023-05-31 09124855 3 2021-06-01 2022-05-31 09124855 5 2022-06-01 2023-05-31 09124855 5 2021-06-01 2022-05-31 09124855 1 2022-06-01 2023-05-31 09124855 e:CompanySecretary1 2022-06-01 2023-05-31 09124855 e:Director1 2022-06-01 2023-05-31 09124855 e:Director2 2022-06-01 2023-05-31 09124855 e:RegisteredOffice 2022-06-01 2023-05-31 09124855 d:Buildings d:ShortLeaseholdAssets 2022-06-01 2023-05-31 09124855 d:Buildings d:ShortLeaseholdAssets 2023-05-31 09124855 d:Buildings d:ShortLeaseholdAssets 2022-05-31 09124855 d:ComputerEquipment 2022-06-01 2023-05-31 09124855 d:ComputerEquipment 2023-05-31 09124855 d:ComputerEquipment 2022-05-31 09124855 d:ComputerEquipment d:OwnedOrFreeholdAssets 2022-06-01 2023-05-31 09124855 d:OwnedOrFreeholdAssets 2022-06-01 2023-05-31 09124855 d:CopyrightsPatentsTrademarksServiceOperatingRights 2023-05-31 09124855 d:CopyrightsPatentsTrademarksServiceOperatingRights 2022-05-31 09124855 d:ComputerSoftware 2023-05-31 09124855 d:ComputerSoftware 2022-05-31 09124855 d:CurrentFinancialInstruments 2023-05-31 09124855 d:CurrentFinancialInstruments 2022-05-31 09124855 d:Non-currentFinancialInstruments 2023-05-31 09124855 d:Non-currentFinancialInstruments 2022-05-31 09124855 d:CurrentFinancialInstruments d:WithinOneYear 2023-05-31 09124855 d:CurrentFinancialInstruments d:WithinOneYear 2022-05-31 09124855 d:Non-currentFinancialInstruments d:AfterOneYear 2023-05-31 09124855 d:Non-currentFinancialInstruments d:AfterOneYear 2022-05-31 09124855 d:Non-currentFinancialInstruments d:BetweenOneTwoYears 2023-05-31 09124855 d:Non-currentFinancialInstruments d:BetweenOneTwoYears 2022-05-31 09124855 d:Non-currentFinancialInstruments d:BetweenTwoFiveYears 2023-05-31 09124855 d:Non-currentFinancialInstruments d:BetweenTwoFiveYears 2022-05-31 09124855 d:Non-currentFinancialInstruments d:MoreThanFiveYears 2023-05-31 09124855 d:Non-currentFinancialInstruments d:MoreThanFiveYears 2022-05-31 09124855 d:ReportableOperatingSegment1 2022-06-01 2023-05-31 09124855 d:ReportableOperatingSegment1 2021-06-01 2022-05-31 09124855 f:UnitedKingdom 2022-06-01 2023-05-31 09124855 f:UnitedKingdom 2021-06-01 2022-05-31 09124855 d:UKTax 2022-06-01 2023-05-31 09124855 d:UKTax 2021-06-01 2022-05-31 09124855 d:ShareCapital 2022-06-01 2023-05-31 09124855 d:ShareCapital 2023-05-31 09124855 d:ShareCapital 2022-05-31 09124855 d:ShareCapital 2021-06-01 09124855 d:OtherMiscellaneousReserve 2022-06-01 2023-05-31 09124855 d:OtherMiscellaneousReserve 2023-05-31 09124855 d:OtherMiscellaneousReserve 2 2022-06-01 2023-05-31 09124855 d:OtherMiscellaneousReserve 2022-05-31 09124855 d:OtherMiscellaneousReserve 2021-06-01 09124855 d:RetainedEarningsAccumulatedLosses 2022-06-01 2023-05-31 09124855 d:RetainedEarningsAccumulatedLosses 2023-05-31 09124855 d:RetainedEarningsAccumulatedLosses 2 2022-06-01 2023-05-31 09124855 d:RetainedEarningsAccumulatedLosses 2021-06-01 2022-05-31 09124855 d:RetainedEarningsAccumulatedLosses 2022-05-31 09124855 d:RetainedEarningsAccumulatedLosses 2021-06-01 09124855 d:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2023-05-31 09124855 d:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2022-05-31 09124855 d:FinancialLiabilitiesFairValueThroughProfitOrLoss d:UnlistedNon-exchangeTraded 2023-05-31 09124855 d:FinancialLiabilitiesFairValueThroughProfitOrLoss d:UnlistedNon-exchangeTraded 2022-05-31 09124855 e:OrdinaryShareClass1 2022-06-01 2023-05-31 09124855 e:OrdinaryShareClass1 2023-05-31 09124855 e:OrdinaryShareClass1 2022-05-31 09124855 e:OrdinaryShareClass2 2022-06-01 2023-05-31 09124855 e:OrdinaryShareClass2 2023-05-31 09124855 e:FRS102 2022-06-01 2023-05-31 09124855 e:Audited 2022-06-01 2023-05-31 09124855 e:FullAccounts 2022-06-01 2023-05-31 09124855 e:PublicLimitedCompanyPLCNotQuotedOnAnyExchange 2022-06-01 2023-05-31 09124855 d:Subsidiary1 2022-06-01 2023-05-31 09124855 d:Subsidiary1 1 2022-06-01 2023-05-31 09124855 d:Subsidiary2 2022-06-01 2023-05-31 09124855 d:Subsidiary2 1 2022-06-01 2023-05-31 09124855 d:Subsidiary3 2022-06-01 2023-05-31 09124855 d:Subsidiary3 1 2022-06-01 2023-05-31 09124855 d:Subsidiary4 2022-06-01 2023-05-31 09124855 d:Subsidiary4 1 2022-06-01 2023-05-31 09124855 d:Subsidiary5 2022-06-01 2023-05-31 09124855 d:Subsidiary5 1 2022-06-01 2023-05-31 09124855 d:Subsidiary6 2022-06-01 2023-05-31 09124855 d:Subsidiary6 1 2022-06-01 2023-05-31 09124855 d:Subsidiary7 2022-06-01 2023-05-31 09124855 d:Subsidiary7 1 2022-06-01 2023-05-31 09124855 d:Subsidiary8 2022-06-01 2023-05-31 09124855 d:Subsidiary8 1 2022-06-01 2023-05-31 09124855 d:Subsidiary9 2022-06-01 2023-05-31 09124855 d:Subsidiary9 1 2022-06-01 2023-05-31 09124855 d:Subsidiary10 2022-06-01 2023-05-31 09124855 d:Subsidiary10 1 2022-06-01 2023-05-31 09124855 d:Subsidiary11 2022-06-01 2023-05-31 09124855 d:Subsidiary11 1 2022-06-01 2023-05-31 09124855 d:Subsidiary12 2022-06-01 2023-05-31 09124855 d:Subsidiary12 1 2022-06-01 2023-05-31 09124855 d:Subsidiary13 2022-06-01 2023-05-31 09124855 d:Subsidiary13 1 2022-06-01 2023-05-31 09124855 d:Subsidiary14 2022-06-01 2023-05-31 09124855 d:Subsidiary14 1 2022-06-01 2023-05-31 09124855 d:Subsidiary15 2022-06-01 2023-05-31 09124855 d:Subsidiary15 1 2022-06-01 2023-05-31 09124855 d:Subsidiary16 2022-06-01 2023-05-31 09124855 d:Subsidiary16 1 2022-06-01 2023-05-31 09124855 d:Subsidiary17 2022-06-01 2023-05-31 09124855 d:Subsidiary17 1 2022-06-01 2023-05-31 09124855 d:Subsidiary18 2022-06-01 2023-05-31 09124855 d:Subsidiary18 1 2022-06-01 2023-05-31 09124855 d:Subsidiary19 2022-06-01 2023-05-31 09124855 d:Subsidiary19 1 2022-06-01 2023-05-31 09124855 d:Subsidiary20 2022-06-01 2023-05-31 09124855 d:Subsidiary20 1 2022-06-01 2023-05-31 09124855 d:WithinOneYear 2023-05-31 09124855 d:WithinOneYear 2022-05-31 09124855 d:BetweenOneFiveYears 2023-05-31 09124855 d:BetweenOneFiveYears 2022-05-31 09124855 2 2022-06-01 2023-05-31 09124855 6 2022-06-01 2023-05-31 09124855 d:CopyrightsPatentsTrademarksServiceOperatingRights d:OwnedIntangibleAssets 2022-06-01 2023-05-31 09124855 d:ComputerSoftware d:OwnedIntangibleAssets 2022-06-01 2023-05-31 09124855 2 2023-05-31 09124855 2 2022-05-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 09124855









LOYAL NORTH PLC









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2023

 
LOYAL NORTH PLC
 
 
COMPANY INFORMATION


Directors
K Bobkova 
A Ilinskaia 




Company secretary
K Bobkova



Registered number
09124855



Registered office
2 Queen Anne's Gate Buildings
22 Dartmouth Street

London

SW1H 9BP




Independent auditor
Adler Shine LLP
Chartered Accountants & Statutory Auditor

Aston House

Cornwall Avenue

London

N3 1LF





 
LOYAL NORTH PLC
 

CONTENTS



Page
Strategic report
 
1 - 3
Directors' report
 
4 - 5
Independent auditor's report
 
6 - 9
Statement of comprehensive income
 
10
Balance sheet
 
11
Statement of changes in equity
 
12
Statement of cash flows
 
13 - 14
Analysis of net debt
 
15
Notes to the financial statements
 
16 - 33


 
LOYAL NORTH PLC
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023

The directors present their strategic report for the year ended 31 May 2023.
 
Principal activities
The principal activities of Loyal North Plc ("the Company") continued to be that of a holding company and the provision of centralised support services to its operating subsidiaries of Independent Financial Advisers (IFAs), which together with the Company form the 'Loyal North Group'.

Business review and financial performance
 
The long-term strategy of the Company remains focused on growing the business through both organic growth and acquisitions of local IFA practices to build a nationally recognised brand, with strategic locations serving the financial advice market in the United Kingdom.
The acquired IFA businesses in the Loyal North Group benefit from centralised operational, investment, finance and compliance resources, as well as access to Loyal North Group’s propriety digital hybrid advice solution JustFA platform via JustFA Technology Limited (“JustFA”), a subsidiary of the Company. JustFA platform services is also being made available for use by other financial planning firms outside the Loyal North Group.
During the year ended 31 May 2023, the Company acquired the assets of financial advice firm Paul Wallis Financial Solutions in April 2023, bolstering the Company’s existing presence in the Southeast England and brought a further £40m of client funds to the Loyal North Group. The acquired business joined Loyal North’s regional firm H&D Financial Planning Limited, based in Maidstone, Kent.
The Loyal North Group also embarked on the restructuring of its fully owned IFA business operations covering Kent geographical area focusing on efficiencies through the combination of H&D Wealth, Hellier Independent Financial Services and Carter Financial Planning into a single umbrella IFA firm – H&D Financial Planning Limited.
During the year, the Company continued to invest in its management team through the recruitment of a Group Compliance Director. The Company’s management team together with the management teams of each Loyal North IFA businesses worked closely on the IFA’s FCA consumer duty implementation to ensure that each of the four principles of consumer duty brings the best outcome possible for the Loyal North IFA customers.
Following a successful JustFA new shares placement with external stakeholders in December 2021, further external placement of its JustFA new shares were achieved in September 2022 and in April 2023 to finance its operations and future development. 
The Company reported a profit for the year, after taxation, amounted to £1,985,134 
(2022 - £3,122,206).

Page 1

 
LOYAL NORTH PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023

Key performance indicators
 
The management team reviews and considers the following financial and non-financial measures as performance indicators of the Company and the Loyal North Group on a monthly and quarterly basis:
Financial measures:

EBITDA performance and its growth on prior period;
Cash flows management;
Debt Service Cover Ratio;
Leverage Ratio; and
Revenue performance.

Non-financial measures

Asset under management (“AUM”) growth both organic and acquisition; 
Reviews of existing clients; and
Number of new clients. 

These are reviewed and compared with targets to gain understanding of the Company’s overall performance.

Principal risks and uncertainties
 
The main risks identified by the Company are that of:
 
1.Concentration risk, which is defined as the potential for financial loss due to overexposure to a single counterparty or geographic region is being mitigated by diversifying into various IFA firms and clients base across the UK;

2.Operational risk, which is defined as the potential for business operations disruption arising from systems failures, inadequate processes, people and external events is being mitigated by developing and implementing robust policies and procedures, management team oversight, and the promotion of stability, engagement and diversity in the workforce;

3.Financial risk, which is defined as the potential for the Company and its Loyal North Group having insufficient financial resources or suffering loss from adverse market conditions or the failure/default of counterparties. The Company has a secured term loan facility with a bank and is bound by certain covenant compliance thresholds, which is being mitigated through prudent management of its Loyal North Group cost base, revenue growth and cash flows; and 

4.Regulatory risk as the Loyal North Group operates in a fast-moving regulatory environment and is mitigated by robust compliance process being in place. These are supported and overseen by the Group Compliance Director (“GCD”) who promotes a client centric and compliance-focused culture.

Directors' statement of compliance with duty to promote the success of the Company
 
The Board of Directors is responsible for establishing, implementing and maintaining adequate and proportionate policies and procedures sufficient to ensure that the Company complies with its obligations in maintaining the Company’s operations. Procedures are enforced and developed on an ongoing basis in order to effectively mitigate various risks that may arise during the course of business.

Page 2

 
LOYAL NORTH PLC
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023


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



A Ilinskaia
Director

Date: 29 January 2024

Page 3

 
LOYAL NORTH PLC
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023

The directors present their annual report on the affairs of the Company, together with the financial statements for the year ended 31 May 2023.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial 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 of the profit or loss of the Company for that period.

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


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

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £1,985,134 (2022 - £3,122,206).

No dividends have been declared during the year or the prior year.

Directors

The directors who served during the year and up to the date of signing of these financial statements were:

K Bobkova 
A Ilinskaia 

Future developments

The Company's objective is to acquire financial advice firms (IFA) with different operating systems and client proposition. The Company is also looking to strengthen its ranks via organic growth.

Engagement with suppliers, customers and others

The Company has the commitment with a leading bank for uncommitted accordion loan up to £5,000,000 for the purpose of acquiring IFA companies in the next few years.

Page 4

 
LOYAL NORTH PLC
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023

Disclosure of information to auditor

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's auditor is 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's auditor is aware of that information.

Post balance sheet events

On 29 June 2023, the Company’s subsidiary, Bidco GPFM Limited, acquired 100% of the shares is Quay Financial Planning Limited.
On 11 October 2023, the Company purchased 249 shares in Bidco ML Limited, increasing its stake in the company from 75.1% to 100%.
On 1 November 2023, the Company’s subsidiary, Lowland Financial Services Limited, acquired the business and assets of Sovereign Financial Services (Scottish Borders) Limited.
On 2 November 2023, the Company’s subsidiary, Bidco ML Limited, acquired the business and assets of S&C Richards Partnership.

Auditor

The auditor, Adler Shine LLPwill be proposed for reappointment in accordance with section 489 of the Companies Act 2006.

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





A Ilinskaia
Director

Date: 29 January 2024

Page 5

 
LOYAL NORTH PLC
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOYAL NORTH PLC
 

Opinion


We have audited the financial statements of Loyal North PLC (the 'Company') for the year ended 31 May 2023, which comprise the statement of comprehensive income, the balance sheet, the statement of cash flows, the 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 Company's affairs as at 31 May 2023 and of its profit 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 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 6

 
LOYAL NORTH PLC
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOYAL NORTH PLC (CONTINUED)


Other information


The other information comprises the information included in the annual report other than the financial statements and  our auditor's report thereon.  The directors are responsible for the other information contained within the annual report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.  If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves.  If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


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 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 strategic report and the directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement 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 Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
LOYAL NORTH PLC
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOYAL NORTH PLC (CONTINUED)


Auditor's responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. 
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have:

considered the nature of the industry and sectors, control environment and business performance;
made enquires of management about their own identification and assessment of the risk of irregularities;
performed audit work over the risk of management override of controls, including testing of journal entries and  other adjustments for appropriateness and reviewing accounting estimates for bias;
undertaken appropriate sample based testing of bank transactions;
identified and evaluated compliance with relevant laws and regulations and made enquiries of any instances of non-compliance;
discussed matters among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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 auditor's report.


Page 8

 
LOYAL NORTH PLC
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LOYAL NORTH PLC (CONTINUED)


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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Christopher Taylor FCA (senior statutory auditor)
for and on behalf of
Adler Shine LLP
Chartered Accountants
Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF

31 January 2024
Page 9

 
LOYAL NORTH PLC
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
Note
£
£

  

Turnover
 4 
31,402
58,888

Gross profit
  
31,402
58,888

Administrative expenses
  
(495,776)
(375,669)

Fair value movements
  
2,751,094
3,427,559

Operating profit
 5 
2,286,720
3,110,778

Income from shares in group undertakings
  
310,707
120,919

Gain on disposal of investment
  
49,995
-

Interest receivable and similar income
 8 
297,298
218,847

Interest payable and similar expenses
 9 
(964,076)
(352,323)

Profit before tax
  
1,980,644
3,098,221

Tax on profit
 10 
4,490
23,985

Profit for the financial year
  
1,985,134
3,122,206

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

The notes on pages 16 to 33 form part of these financial statements.

Page 10

 
LOYAL NORTH PLC
REGISTERED NUMBER: 09124855

BALANCE SHEET
AS AT 31 MAY 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 11 
216,531
243,011

Tangible assets
 12 
7,930
9,150

Investments
 13 
9,483,320
8,432,331

  
9,707,781
8,684,492

Current assets
  

Debtors
 14 
3,646,524
3,871,864

Cash at bank and in hand
 15 
6,139
1,482

  
3,652,663
3,873,346

Creditors: amounts falling due within one year
 16 
(691,554)
(3,305,935)

Net current assets
  
 
 
2,961,109
 
 
567,411

Total assets less current liabilities
  
12,668,890
9,251,903

Creditors: amounts falling due after more than one year
 17 
(3,230,464)
(4,353,321)

  

Net assets
  
9,438,426
4,898,582


Capital and reserves
  

Called up share capital 
 20 
2,856,500
56,500

Other reserves
 21 
-
245,290

Profit and loss account
 21 
6,581,926
4,596,792

Total equity
  
9,438,426
4,898,582


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




A Ilinskaia
Director

Date: 29 January 2024

The notes on pages 16 to 33 form part of these financial statements.

Page 11

 
LOYAL NORTH PLC
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023


Called up share capital
Equity component of convertible bond
Profit and loss account
Total equity

£
£
£
£


At 1 June 2021
56,500
245,290
1,474,586
1,776,376



Profit for the year
-
-
3,122,206
3,122,206



At 1 June 2022
56,500
245,290
4,596,792
4,898,582



Profit for the year
-
-
1,985,134
1,985,134

Shares issued during the year
2,800,000
-
-
2,800,000

Eliminated on conversion of bond
-
(245,290)
-
(245,290)


At 31 May 2023
2,856,500
-
6,581,926
9,438,426


The notes on pages 16 to 33 form part of these financial statements.

Page 12

 
LOYAL NORTH PLC
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,985,134
3,122,206

Adjustments for:

Amortisation of intangible assets
26,479
19,951

Depreciation of tangible assets
2,119
655

Loss on disposal of assets
(49,995)
-

Interest paid
964,076
352,323

Interest received
(297,298)
(339,766)

Taxation charge
(4,490)
(23,985)

(Increase) in debtors
(3,424)
(28,817)

Decrease/(increase) in amounts owed by groups
45,190
(2,954,839)

(Decrease)/increase in creditors
(180,010)
199,405

Net fair value (gains) recognised in P&L
(2,751,094)
(3,427,559)

Dividends received from group undertakings
(310,707)
-

Corporation tax received
4,490
23,985

Net cash generated from operating activities

(569,530)
(3,056,441)


Cash flows from investing activities

Purchase of tangible fixed assets
(899)
(9,805)

Purchase of unlisted and other investments
-
(10,000)

Purchase of fixed asset investments
-
(296,607)

Sale of fixed asset investments
50,000
-

Interest received
397,556
458

Dividends received
310,707
120,919

Net cash from investing activities

757,364
(195,035)

Cash flows from financing activities

New secured loans
15,323
2,800,000

Purchase of debenture loans
-
38,595

Other new loans
-
250,689

Interest paid
(198,500)
(302,516)

Net cash used in financing activities
(183,177)
2,786,768

Net increase/(decrease) in cash and cash equivalents
4,657
(464,708)

Cash and cash equivalents at beginning of year
1,482
466,190

Cash and cash equivalents at the end of year
6,139
1,482

Page 13

 
LOYAL NORTH PLC
 

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


2023
2022

£
£


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
6,139
1,482


The notes on pages 16 to 33 form part of these financial statements.

Page 14

 
LOYAL NORTH PLC
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2023





At 1 June 2022
Cash flows
Other non-cash changes
At 31 May 2023
£

£

£

£

Cash at bank and in hand

1,482

4,657

-

6,139

Debt due after 1 year

(4,353,321)

(33,143)

1,156,000

(3,230,464)

Debt due within 1 year

(2,723,760)

(490,000)

2,723,760

(490,000)


(7,075,599)
(518,486)
3,879,760
(3,714,325)

The notes on pages 16 to 33 form part of these financial statements.

Page 15

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

1.


General information

Loyal North Plc is a public company limited by shares and registered in England and Wales. Its principal place of business and registered office address is 2 Queen Anne’s Gate Buildings, 22 Dartmouth Street, London, SW1H 9BP.
The principal activities of Loyal North Plc ("the Company") continued to be that of a holding company and the provision of centralised support services to its operating subsidiaries of Independent Financial Advisers (IFAs), which together with the Company form the “Loyal North Group”.
The financial statements are presented in Sterling (£), and rounded to the nearest £1.

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 ("FRS 102") 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 management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Exemption from preparing consolidated financial statements

The Company, and the group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and group are considered eligible for the exemption to prepare consolidated accounts.

 
2.3

Going concern

The Company and its subsidiaries continued to show strong growth. Due to this strong performance and the ongoing acquisitions both during and following the year end the directors are optimistic about the future prospects of the Company and its subsidiaries.
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. At the balance sheet date, the Company had £2,325,323 in outstanding bank loans which are subject to term loan facility covenant that is measured on a quarterly basis. Management are confident the agreed covenant will be met throughout the outlook period. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Page 16

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Operating leases: the Company 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.

 
2.6

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

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Company in independently administered funds.

Page 17

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

 
2.9

Taxation

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 operates and generates income.

 
2.10

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.

 
2.11

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
-
over the term of the lease
Computer equipment
-
over 3 years

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.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

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.

Page 18

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)

 
2.14

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 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 Company's cash management.

 
2.15

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.

 
2.16

Financial instruments

The Company 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.

Investments in non-derivative instruments that are equity to the issuer are measured:
at fair value with changes recognised in the statement of comprehensive income if the shares are publicly traded or their fair value can otherwise be measured reliably;
at cost less impairment for all other investments.

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 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of
Page 19

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

2.Accounting policies (continued)


2.16
Financial instruments (continued)

derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the process of applying the Company's accounting policies, management makes various judgments which can significantly affect the amounts recognised in the financial statements. They are also required to use certain critical accounting estimates and assumptions regarding the future that may have a significant risk or giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial year. The critical judgments are considered to be the following:
Convertible bonds
In order to calculate the year end balance of the liability and equity elements of the convertible bonds, the Company makes estimates principally relating to the assumptions used in the calculation of the present value of the liability. The convertible bonds were settled in the current period. 
Investments in subsidiaries
The Company holds investments in subsidiaries that have been designated at fair value through profit and loss. The Company determines the fair value of these financial instruments that are not quoted using valuation techniques in line with industry standards. These techniques are significantly affected by key assumptions, and the derived fair value cannot always be substantiated by comparison with independent markets, and, in many cases, may not be capable of being realised immediately.


4.


Turnover

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


2023
2022
£
£

Support service fees
31,402
58,888


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
31,402
58,888


Page 20

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

5.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Other operating lease rentals
36,819
10,990

Amortisation of intangible fixed assets
26,479
19,951

Depreciation of computer equipment
45
-

Depreciation of leasehold property
2,074
655


6.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor and its associates:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements
15,000
11,000

Fees payable to the Company's auditor and its associates in respect of:

Taxation compliance services
1,750
1,500

Page 21

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

7.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
178,038
113,525

Social security costs
12,124
11,107

Cost of defined contribution scheme
2,943
1,110

193,105
125,742


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


        2023
        2022
            No.
            No.







Operations
1
-



Administration
2
1

3
1

No remuneration was paid to the directors during the year (2022: £Nil). No directors are considered to be employees.


8.


Interest receivable

2023
2022
£
£


Interest receivable from group companies
297,235
218,839

Other interest receivable
63
8

297,298
218,847

Page 22

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

9.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
331,431
229,211

Other loan interest payable
632,645
123,100

Other interest payable
-
12

964,076
352,323

Included in other loan interest payable is £601,723 (2022: £Nil) arising from the settlement of the 2023 Bonds.


10.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
(4,490)
(23,985)

Total current tax
(4,490)
(23,985)

Deferred tax

Total deferred tax
-
-


Tax on profit
(4,490)
(23,985)
Page 23

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

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

2023
2022
£
£


Profit on ordinary activities before tax
1,980,644
3,098,221


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
376,322
588,662

Effects of:


Capital allowances for year in excess of depreciation
-
(152)

Non-taxable income
(523,468)
(651,236)

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
(4,490)
(23,985)

Dividends from UK companies
(59,034)
(22,975)

Unrelieved tax losses carried forward
206,180
85,701

Total tax charge for the year
(4,490)
(23,985)


Factors that may affect future tax charges

From 1 April 2023 the corporation tax rate increased to 25% for companies with profits of over £250,000. A small profits rate was also introduced for companies with profits of £50,000 or less so that they continue to pay corporation tax at 19%. From this date companies with profits between £50,000 and £250,000 pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.

Page 24

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

11.


Intangible assets




Trademarks
Computer software
Total

£
£
£



Cost


At 1 June 2022
3,674
261,125
264,799



At 31 May 2023

3,674
261,125
264,799



Amortisation


At 1 June 2022
2,204
19,584
21,788


Charge for the year on owned assets
368
26,112
26,480



At 31 May 2023

2,572
45,696
48,268



Net book value



At 31 May 2023
1,102
215,429
216,531



At 31 May 2022
1,470
241,541
243,011



Page 25

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

12.


Tangible fixed assets





Short-term leasehold property
Computer equipment
Total

£
£
£



Cost or valuation


At 1 June 2022
9,805
-
9,805


Additions
495
404
899



At 31 May 2023

10,300
404
10,704



Depreciation


At 1 June 2022
655
-
655


Charge for the year on owned assets
2,074
45
2,119



At 31 May 2023

2,729
45
2,774



Net book value



At 31 May 2023
7,571
359
7,930



At 31 May 2022
9,150
-
9,150




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


2023
2022
£
£

Short leasehold
7,571
9,150


Page 26

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

13.


Fixed asset investments





Investments in subsidiary companies
Unlisted investments
Total

£
£
£



Cost or valuation


At 1 June 2022
6,732,331
1,700,000
8,432,331


Disposals
(105)
(1,700,000)
(1,700,105)


Revaluations
2,751,094
-
2,751,094



At 31 May 2023
9,483,320
-
9,483,320






Net book value



At 31 May 2023
9,483,320
-
9,483,320



At 31 May 2022
6,732,331
1,700,000
8,432,331


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Loyal North Estate Planning Services Limited
England and Wales
Ordinary
100%
JustFA Technology Limited
England and Wales
Ordinary
83.06%
BIDCO GPFM Limited
England and Wales
Ordinary
75.2%
BIDCO HDW Limited
England and Wales
Ordinary
100%
BIDCO ML Limited
England and Wales
Ordinary
75.1%
BIDCO HIFS Limited
England and Wales
Ordinary
100%
BIDCO MCFS Limited
England and Wales
Ordinary
100%
BIDCO LFS Limited
England and Wales
Ordinary
100%
BIDCO IC Limited
England and Wales
Ordinary
100%
H&D Financial Planning Limited
England and Wales
Ordinary
100%
* JustFA Advisers Limited
England and Wales
Ordinary
83.06%
* H&D Wealth Limited
England and Wales
Ordinary
100%
* Hellier Independent Financial Services Limited
England and Wales
Ordinary
100%
* Macbeth Currie Financial Services Limited
Scotland
Ordinary
100%
* Lowland Financial Services Limited
Scotland
Ordinary
100%
* Gerald Pepper Financial Management Limited
England and Wales
Ordinary
75.2%
* GPFM Online Limited
England and Wales
Ordinary
75.2%
* Milsted Langdon Financial Services Limited
England and Wales
Ordinary
75.1%
* Financial Planning for Professionals Limited
England and Wales
Ordinary
75.1%
* Consular Financial Planning Limited
England and Wales
Ordinary
75.1%

Page 27

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
Subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 31 May 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Loyal North Estate Planning Services Limited
1,000
-

JustFA Technology Limited
7,476
(1,277,648)

BIDCO GPFM Limited
1,021,299
728,781

BIDCO HDW Limited
463,269
136,745

BIDCO ML Limited
828,136
534,574

BIDCO HIFS Limited
97,405
26,291

BIDCO MCFS Limited
2,648
3,361

BIDCO LFS Limited
728,447
49,163

BIDCO IC Limited
100
-

H&D Financial Planning Limited
(305,106)
(123,728)

* JustFA Advisers Limited
(5,112)
(2,542)

* H & D Wealth Limited
39,001
66,748

* Hellier Independent Financial Services Limited
134,660
52,130

* Macbeth Currie Financial Services Limited
174,048
(72,724)

* Lowland Financial Services Limited
79,867
(201,666)

* Gerald Pepper Financial Management Limited
673,077
(126,302)

* GPFM Online Limited
100
-

* Milsted Langdon Financial Services Limited
700,266
283,806

* Financial Planning for Professionals Limited
105,761
(371,614)

* Consular Financial Planning Limited
766
-

Page 28

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

14.


Debtors

2023
2022
£
£

Due after more than one year

Amounts owed by group undertakings
3,130,940
3,314,373

Other debtors
9,840
9,840

Prepayments and accrued income
161,125
191,928

3,301,905
3,516,141

Due within one year

Trade debtors
10,727
-

Amounts owed by group undertakings
320,801
335,329

Other debtors
4,556
15,626

Prepayments and accrued income
8,535
4,768

3,646,524
3,871,864



15.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
6,139
1,482



16.


Creditors: amounts falling due within one year

2023
2022
£
£

Debenture loans
-
2,723,760

Bank loans
490,000
-

Trade creditors
18,105
11,790

Amounts owed to group undertakings
11,946
4,579

Other taxation and social security
10,611
3,095

Other creditors
1,100
210,144

Accruals and deferred income
159,792
352,567

691,554
3,305,935


Page 29

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

17.


Creditors: amounts falling due after more than one year

2023
2022
£
£

Bank loans
2,325,323
2,800,000

Other loans
905,141
1,553,321

3,230,464
4,353,321



18.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
490,000
-

Debenture loans
-
2,723,760

Amounts falling due 1-2 years

Bank loans
638,450
631,256

Other loans
-
663,161

Amounts falling due 2-5 years

Bank loans
1,686,873
2,168,744

Other loans
905,141
868,083

Amounts falling due after more than 5 years

Other loans
-
22,077

3,720,464
7,077,081


In July 2022, the Company gave the Notice to the Debenture Bondholders about its election to convert the 2023 Bonds into Conversion Shares at a price of £1 per nominal value of the 2023 Bonds for £1 of the Settlement Shares. On 31 July 2022, the Settlement Shares were converted into Preference Shares.
In July 2022, the Company converted a loan of £645,600 plus accrued interest of £20,366 into 2023 Bonds. The 2023 Bonds were exchanged for Settlement Shares. On 31 July 2022, the Settlement Shares were converted into Preference Shares.
The Preference Shares of £1 each receive a fixed cumulative preferential cash dividend of 3% per annum, accruing from 1 January 2024 and payable yearly on 31 December.

Page 30

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

19.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
9,483,320
6,732,331


Financial liabilities


Financial liabilities measured at amortised cost
-
2,723,760


Financial assets measured at fair value through profit or loss comprise unlisted subsidiary investments using valuation techniques in line with industry standards.


Other financial liabilities measured at fair value through profit or loss comprise the liability element of the convertible bond debenture issued by the Company.


20.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



56,500 (2022 - 56,500) Ordinary shares of £1.00 each
56,500
56,500
2,800,000 (2022 - Nil) Preference shares of £1.00 each
2,800,000
-

2,856,500

56,500


In July 2022, the Company issued 2,800,000 Preference Shares of £1 each. The Preference Shareholders receive a fixed cumulative preferential cash dividend of 3% per annum, accruing from 1 January 2024 and payable yearly on 31 December. The preference shares have no redemption entitlement. On a winding-up the holders have priority before all other classes of shares to receive repayment of capital plus any arrears of dividend. 


21.


Reserves

Other reserves

Other reserves comprise of the equity component of convertible bonds issue by the Company.

Profit and loss account

The profit and loss accounts comprises of accumulated distributable retained earnings of the Company.
The profit and loss account includes non-distributable reserves of £9,184,905 (2022: £6,433,812), and a deficit in distributable reserves of £2,606,979 (£1,837,020).

Page 31

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

22.


Pension commitments

The Company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the Company to the scheme and amounted to £2,943 (2022 - £1,110).


23.


Commitments under operating leases

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

2023
2022
£
£


Not later than 1 year
34,796
24,600

Later than 1 year and not later than 5 years
75,621
87,476

110,417
112,076


24.


Related party transactions

The Company has advanced loans to its subsidiaries. At the year end £3,451,741 (2022 - £3,649,702) was due from the subsidiaries. Interest of £297,235 (2022: £218,839) has been charged at interest rates between 5% and 11% p.a. during the year on these loans.
An additional debtor balance of £4,474 (2022: £2,325) was due from subsidiaries as reimbursement of expenses paid at the year end.
Support service fees and cost recharges of £31,402 (2022: £58,888) were made to subsidiaries during the year.
At the year end £905,141 (2022 - £1,554,420) was due to companies under common control. Interest was charged at rates between 1% and 2.6% during the year on these loans. The amount of interest charged in the year was £14,981 (2022: £12,760).
An additional creditor balance of £2,697 (2022 - £1,375) was due to a company under common control.


25.


Post balance sheet events

On 29 June 2023, the Company’s subsidiary, Bidco GPFM Limited, acquired 100% of the shares is Quay Financial Planning Limited.
On 11 October 2023, the Company purchased 249 shares in Bidco ML Limited, increasing its stake in the company from 75.1% to 100%.
On 1 November 2023, the Company’s subsidiary, Lowland Financial Services Limited, acquired the business and assets of Sovereign Financial Services (Scottish Borders) Limited.
On 2 November 2023, the Company’s subsidiary, Bidco ML Limited, acquired the business and assets of S&C Richards Partnership.

Page 32

 
LOYAL NORTH PLC
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023

26.


Controlling party

The parent company is Loyal North Holdings Limited. The ultimate controlling party is Kirill Ilinski.

 
Page 33