The directors present the strategic report for the year ended 31 August 2023.
Recruitment
Given the well documented "Cost Of Living Crisis" in 2023, and the significant National Minimum Wage increases in 2023, we have found it increasingly expensive to hire carers. Whilst Prestige Nursing continues to invest in pay and benefits, to stay competitive, resourcing continues to be as difficult as it has been in recent years. We believe the intended changes to the ability to bring in carers workers from overseas will have a detrimental impact on the sector in 2024. At Prestige Nursing, we have never used this option, but it will inevitably squeeze the market further
Client Needs
The same "Cost Of Living Crisis" that makes hiring carers more expensive, also impacted on the cost of providing services and the renewal of contracts we have with suppliers, driving up the cost of providing care. The combined impact of clients having their finances squeezed and the increased cost of care has led to people choosing to delay the decision to start care until later. We continue to react to the changing needs of our client base to counter this.
KPIs
Revenue fell by £4,138,509 driven by a combination of a shift in the market with Local Authorities issuing out smaller packages of work in an attempt to manage their budgets, together with falling carer numbers. Consequently gross profit declined by £1,216,160 from the volume decline offset to some degree by improvements in charge rates. We continue to carefully control administrative expenses and ensure investment is made in the right places. Given the significance of the volume decline the business reported a trading loss in the year.
| 2022-23 | 2021-22 | Change |
Revenue | £31,077,143 | £35,215,652 | -11.8% |
Gross Profit | £7,444,021 | £8,660,181 | -14.0% |
Administrative exp | £10,110,406 | £8,659,271 | +16.8% |
Operating (Loss)/Profit | £(2,666,385) | £910 |
|
Health, Safety and Wellbeing
We will continue to put the health, safety and wellbeing of our clients and professional carers first in everything we do.
Pricing
We continue to work closely with our funders and clients to ensure we deliver the very best care at a competitive price which reflects the investment we continue to make in our workforce and the inflationary environment in which the company is operating.
Pay
We will continue to invest in pay and benefits to ensure that our professional carers and support teams are fairly rewarded for the outstanding job that they do, and will continue to scale up our recruitment activity in order to return the business to growth.
Principal risks and uncertainties
Prestige Nursing Ltd provides a high quality of care to its clients, rated as Good by the Care Quality Commission and Care Inspectorate. Deterioration in the standard of care leading to reputational damage is a principal risk. This will be managed through maintaining rigorous internal controls, staff training and a strong compliance programme.
Equally maintaining adequate staffing levels is key to providing quality care. We manage this risk by providing competitive pay and benefits to carers along with well developed training and support. There is also a continual focus on recruitment within the business.
Changes to government policy affecting the care industry could present a significant risk, however the company believes it is suitably equipped to mitigate such risks and uncertainties.
Future developments
The plan is to grow the business in terms of sales and branches throughout the United Kingdom in future years. The Prestige brand is strong and will benefit from greater effort to promote it.
Directors' statement of compliance with duty to promote the success of the Company
We describe in this section of the report how the directors have had regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. In particular, the section outlines how the directors have acted in a way which is most likely to promote the success of the Company for the benefit of the members as a whole and in doing so having regard for stakeholders’ interests.
The following paragraphs summarise how the Directors’ fulfil their duties and engage with each of the key stakeholder groups.
We take the opportunity here to explain how both:
- The directors have regard to section 172(1) of the Companies Act 2006 in respect of the interests of the Company’s employees; and
- The directors have engaged with employees and the effect of this engagement on principal decisions of the Company.
Employees
The Board recognises that, as a leading provider of care services, its professional carers and support teams are key to the Company´s strength and success. The Board is committed to ensuring:
• Health & Safety
• Ongoing support to all employees
• High levels of employee engagement, wellbeing and communications
• A diverse and inclusive workforce and culture.
Health & Safety
The Company is committed to ensuring a safe and healthy working environment for all its employees, contractors and visitors. Through suitable and sufficient risk assessment and the creation of resulting safe systems of work, the Company provides employees with information, training and instruction to enable them to work safely and to protect the safety and health of those who may be affected by its activities. Compliance with legislative requirements underpins its purpose. The Company tests and challenges itself to continually improve and to engage with its people to ensure everyone has a voice and is properly informed.
The Company believes that health and safety is everyone’s responsibility and through strong leadership, supervision and holding each other to account, health and safety can become a way of life that adds value and drives improved performance. Management and monitoring of performance is achieved through robust reporting, strong audit and monitoring regimes
Employee engagement
We measure the effectiveness Employee Value Proposition (EVP) by conducting annual employee engagement surveys and ad hoc surveys to address specific areas of concern. The data is thematically and statistically analysed to distil an action plan to address the points raised through the survey.
We monitor attrition rates, feedback from exit interviews, and absenteeism levels in an effort to identify emerging people risks, trends, and to ensure appropriate action is taken to address these. Emerging people risks and trends are highlighted to the Board together with proposed action plans.
The Company continues to provide ongoing support to all employees and provides a confidential route (‘Speak-Up’) for staff to raise concerns
The Company is proud of all of its teams and their dedication and agility as our client and business needs continue to evolve.
Clients
We recognise that client retention is the first step to growth. We provide the best possible care to our clients and carefully monitor and act on their feedback.
Suppliers
The Company manages their end-to-end supply chain to meet legislative requirements, mitigate risks and satisfy customer demands for supply chain transparency. All suppliers of goods and services to the Company are prequalified to ensure they are capable and competent to deliver the goods or carry out the work they are being contracted to supply. Vendors are assessed against the Company's Supplier Code of Conduct. The level of initial assessment and ongoing monitoring relates directly to the services/products provided or to be performed and the associated risk.
The Company is committed to ensuring that slavery and human trafficking is not taking place in any of its supply chains or any part of its business and has in place measures to manage this risk.
Shareholder
The Board of the Company duly considers the views of its ultimate shareholder, the Halifax Group, and the interests of the Group as a whole as part of any major decisions and transactions undertaken by the Company. The Chair and the Board members provide the channel of communication between the Company and its shareholder.
Long‑term decision making
The directors continue to review the Company’s organisational structure, cost base, service offers, investments and other business plans to ensure all are optimal as our environment evolves.
Standards of business conduct
The Company's Code of Ethics applies to all Directors and employees of the Company, and it embodies the Group´s commitment to maintaining the highest standards of ethical business conduct and integrity. This is underpinned through regular training and an embedded ethical culture. The Company has implemented a Whistleblower facility whereby staff can raise issues that could be misconduct. Regular mandatory training for staff on the principles of Responsible Business Conduct is in place and completion rates are monitored.
The Ethics & Compliance Committee receives, considers, and manages concerns raised under the Code of Ethics, Anti Bribery Policy, Gifts & Hospitality Policy and Whistleblower Policy (including any allegations of bribery and corruption), conducts investigations, takes appropriate action, monitors and reviews incidents and training, measures trends and reports appropriately to the Board. The Committee maintains an incident log.
The Company shares the same ethical principles as those set out in the Modern Slavery Act, 2015. We believe in the elimination of all forms of compulsory labour and work to ensure slavery and human trafficking do not take place within any part of our business supply chain.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 August 2023.
The results for the year are set out on page 12. The company's loss after tax for the year was £2,726,563 (2022: £87,375 profit after tax) and net assets as at 31 August 2023 were £1,228,044 (2022: £3,954,607).
No ordinary dividends were paid (2022: £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 11 day's purchases, based on the average daily amount invoiced by suppliers during the year.
Following the change in ownership of the Company, KPMG LLP will not be seeking reappointment as the Company auditor and a new auditor will be appointed.
Greenhouse gas emissions, energy consumption and energy efficiency action
In compliance with “The Companies Act 2006” (Strategic Report and Directors’ Report) and in particular Part 7A to Schedule 7 “Dealing with energy and carbon disclosures by large unquoted companies”, the following information discloses energy and CO2e consumption for the Company covering the year ended 31 August 2023.
The information includes the reporting of greenhouse gas emissions (scope 1 and 2), energy consumption data for natural gas, electricity and transport, and associated energy intensity ratio. The declaration identifies some of the energy saving measures implemented during the financial year.
GHG Emissions
For financial year ending August 2023, Prestige Nursing Limited’s energy consumption and greenhouse gas emissions were calculated to be:
Natural gas 96,405 kWh (2022: 103,546 kWh)
Electricity (renewable-backed) 136,866 kWh (2022: 87,748 kWh)
Electricity (non renewable-backed) 50,953 kWh (2022: 119,948 kWh)
Transport 228,684 kWh (2022: 228,224 kWh)
Total carbon emissions (market-based) 87.6 tonnes CO2e (2022: 86.5 tonnes CO2e)
Total carbon emissions (location-based) 112.61 tonnes CO2e (2022: 103.47 tonnes CO2e)
Underlying Global Energy Use
All of Prestige Nursing Limited’s energy use comes from operations within the UK, and therefore, global energy use and UK energy are equivalent.
Energy Intensity Ratio
Total building energy (natural gas and electricity) has been assessed to correlate with building floor area (square metres). Using energy consumed per square metre as an energy performance indicator (EnPI) allows for a more accurate monitoring of energy consumption each year as the estate portfolio changes.
For financial year ending August 2023:
Total building energy 284,224 kWh (2022: 311,242 kWh)
Gross floor area 2,664 m2 (2022: 2,966 m2)
EnPI total building energy per square metre 106.7 kWh/m2 (2022: 104.9 kWh/m2)
Methodology
To calculate the disclosure, similar methodology to ESOS, CRC, and ISO 50001 compliance has been used where applicable for consistency in reporting. Building operation energy use has been captured, in order of preference, using invoiced consumption figures were available; meter readings supplied by facilities management teams; or pro-rata estimations. Transport data has been extracted from internal employee expense returns, and fuel card database. Carbon emissions conversion factors have been taken from ‘UK Government GHG Conversion Factors for Company Reporting 2023’. Energy intensity relevant variable building floor area has been provided by Sodexo Estates team.
Energy Efficiency Measures
All company offices are supplied with 100% renewable-backed electricity and the company is continuing to transfer its fleet to hybrid cars to reduce fuel consumption and carbon emissions.
The directors continue to adopt the going concern basis in the preparation of the financial statements.
As at 31st October 2023, the shareholders of Prestige Nursing Limited agreed to sell all their shares to Elevate Care International Limited, a newly created entity under the ownership of The Halifax Group a mid-tier US private equity firm. On completion of the sale of the business to The Halifax Group, the inter-company loans and other payables to the Sodexo Group, as shown in the financial statements, were fully repaid and sufficient funding strategies put in place by the new owners.
The new shareholders have a strong belief in the future success of the Company, due to the essential nature of the service it provides and can see opportunities for organic growth provided we can continue to attract, recruit and retain professional carers in an increasingly tight labour market.
As inflationary pressures continue, we work with our clients to ensure we receive a fair price for the services that we provide, so that we can continue to invest in our workforce. Agility, good commercial management, and careful cost control continue to be critical to our ongoing success.
To inform the basis of preparation of these accounts, the directors have performed a going concern assessment to consider cash and profit scenarios for forward trade over the next 12 months. The directors manage cash requirements across the Prestige Group headed by Prestige Nursing Limited with routine peaks in cash requirements during the trading cycle funded from the cash balance the of the Company / The Prestige Group of companies. The Prestige Group of companies have indicated their intention to continue make available such funds as are needed by the Company, through the Prestige Group cash pool, during the going concern assessment period. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Based on these analyses and facts, the directors believe that the Company will be able to continue to meet its liabilities as they fall due for at least the next 12 months and therefore have prepared the financial statements on a going concern basis.
We have audited the financial statements of Prestige Nursing Ltd (the 'Company') for the year ended 31 August 2023 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and related notes, including the accounting policies in note 1.
Basis for opinion
Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
In our evaluation of the directors’ conclusions, we considered the inherent risks to the Company’s business model and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
Enquiring of directors and inspection of policy documentation as to the Company’s high-level policies and procedures to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or alleged fraud.
Reading Board minutes.
Considering remuneration incentive schemes and performance targets for management and directors.
Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit targets, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because there is no material judgement or estimation and, given the low value and high-volume nature of transactions, limited opportunity for recording material fraudulent accounting entries.
We did not identify any additional fraud risks.
We performed procedures including identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and others management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and social care act, health and safety, data protection laws, anti-bribery and employment law. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Strategic report and directors' report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
we have not identified material misstatements in the strategic report and the directors’ report;
in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
All amounts above relate to continuing operations. The notes on pages 16 to 32 form part of these financial statements.
The notes on pages 16 to 32 form part of these financial statements.
The notes on pages 16 to 32 form part of these financial statements.
Prestige Nursing Ltd is a private company limited by shares incorporated and domiciled in England and Wales. The registered number is 01006953 and the registered office is 1st Floor, Kirkgate, 19-31 Church Street, Epsom, Surrey, KT17 4PF. The company's principal activities and nature of its operations are disclosed in the strategic report.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:
Cash Flow Statement and related notes;
Certain disclosures regarding revenue;
Certain disclosures regarding leases;
Comparative period reconciliations for share capital and tangible fixed assets;
Disclosures in respect of transactions with wholly owned subsidiaries; and
Disclosures in respect of the compensation of Key Management Personnel;
The Company’s ultimate parent undertaking at 31 August 2023, Sodexo S.A. includes the Company in its consolidated financial statements. The consolidated financial statements of Sodexo S.A. are prepared in accordance with International Financial Reporting Standards and are available to the public and are published on the company's website at www.sodexo.com.
Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.
Revenue from contracts for the provision of care services are recognised when the service has been provided and is based on time spent by staff during the period.
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is reviewed for impairment at each reporting date.
The gain on a bargain purchase is recognised in profit or loss in the period of the acquisition.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
The preparation of financial statements requires the management to make estimates and judgements which affect the amounts reported for assets, liabilities and contingent liabilities as of the date of preparation of the financial statements, and for revenues and expenses for the period.
Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
There are no critical estimates or judgements in applying the Company's accounting policies.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
Directors received no remuneration from Prestige Nursing Ltd during the year. Directors receive remuneration from another of the Sodexo group companies.
On 1 April 2023, the standard rate of corporation tax changed from 19% to 25% for companies with profits of over £250,000. For the purpose of the company accounts to 31 August 2023, a blended rate of 21.52% corporation tax has been applied.
The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%).
The charge for the year can be reconciled to the loss per the income statement as follows:
Goodwill is tested annually for impairment. Goodwill relating to acquisitions of trade and assets of care branches considered significant in comparison to the Company’s total carrying amount of such assets have been shown as cash generating units (individual branches) as follows:
The recoverable amount of each cash generating unit has been calculated with reference to its value in use, which is determined by performing discounted future post-tax cash flow calculations for a five-year period and projected into perpetuity.
The five-year cash flow forecasts are based on the detailed budget for each branch for the following year (year one) and then growth rates in line with the strategic business plans for years two to five. The key assumptions used in the models are outlined below.
Growth rates for gross profits and overheads in years two to five reflect anticipated market conditions and branch activities and are in line with management’s expectations for the branches’ operations as at the year end date (FY23: 3%, FY22: 2%).
The discount rate used is post-tax and has been estimated based on current market assessment and reflects risks and uncertainties, and is aligned to the wider group (FY23: 10%, FY22: 8.30%).
Cash flows beyond year 5 are projected into perpetuity using long-term terminal growth rate in line with management’s long-term expectations for the prevailing rates of inflation as a proxy to economic growth (FY23: 3%, FY22: 2%).
The total recoverable amount in respect of goodwill for all of the CGUs as assessed by the Directors using the above assumptions is greater than the carrying amount and therefore no impairment charge has been recorded in each period.
For all of the goodwill balances, there were no reasonably possible changes to assumptions that would result in an impairment given the market outlook and performance of the business.
Property, plant and equipment includes right-of-use assets, as follows:
These financial statements are separate company financial statements for Prestige Nursing Ltd.
Details of the company's subsidiaries at 31 August 2023 are as follows. All shares held are ordinary shares.
Registered office addresses (all UK unless otherwise indicated):
The company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost. Amounts receivable from group undertakings are repayable on demand and interest free other than a loan receivable from Prestige Nursing Scotland Ltd. Principal amount of £300,000 borrowed. The principal amount including interest is repayable 31 December 2023. Interest is charged at 4.99% and paid on an annual basis.
Two loans were existence at the 31 August 2023, both were from Sodexo Finance DAC. Loan 1 is for £4m repayable in five equal instalments at an interest rate of 1.37% per annum from March 2022 to March 2026. Loan 2 is for £8m repayable at the end of five years (i.e. March 2026) at an interest rate of 1.64%. Interest is payable annually.
Amounts payable to group undertakings are repayable on demand and interest free.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The fair value of the company's lease obligations is approximately equal to their carrying amount.
See note 11 for further details of depreciation on right of use assets recognised in the profit or loss.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.
The Company provides long term incentives, such as shares in Sodexo SA to help retain talent and recognise future leaders.
On a periodic basis Sodexo SA invites senior managers to participate in its performance share scheme. Under the FY22 plan, shares vest over a three year period, provided the performance criteria is met and the beneficiary continued to be employed by the Sodexo Group at the vesting date. Following the sale of the business to The Halifax Group, Sodexo SA is continuing to honour the scheme.
The Company has also taken the exemptions available under FRS 101 in relation to group settled share based payments as the consolidated financial statements of Sodexo SA include the relevant disclosures.
There were no capital commitments in place as at 31 August 2023 (2022: £nil).
As at 31 October 2023, the shareholders of Prestige Nursing Limited agreed to sell all their shares to Elevate Care International Limited, a newly created entity under the ownership of The Halifax Group a mid-tier US private equity firm.
On completion of the sale of the business to The Halifax Group, the inter-company loans, borrowings and other payables to Sodexo Ltd and Sodexo Finance DAC, as shown in the financial statements, were fully repaid and sufficient funding strategies put in place by the new owners.
From 31 October 2023, the ultimate controlling party is HCP V CK LP.