REGISTERED NUMBER: 13896909 (England and Wales) |
Rothley Group Limited |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
REGISTERED NUMBER: 13896909 (England and Wales) |
Rothley Group Limited |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
Rothley Group Limited (Registered number: 13896909) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Report of the Directors | 2 |
Report of the Independent Auditors | 4 |
Consolidated Income Statement | 8 |
Consolidated Other Comprehensive Income | 9 |
Consolidated Balance Sheet | 10 |
Company Balance Sheet | 11 |
Consolidated Statement of Changes in Equity | 12 |
Company Statement of Changes in Equity | 13 |
Notes to the Consolidated Financial Statements | 14 |
Rothley Group Limited |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditors |
Sterling House |
97 Lichfield Street |
Tamworth |
Staffordshire |
B79 7QF |
Rothley Group Limited (Registered number: 13896909) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 December 2023. |
REVIEW OF BUSINESS |
Ultimate holding company |
Rothley Group Limited (RGL) is the ultimate owner of our group which consists of a penultimate holding vehicle Rothley Holdings Limited (RHL) and it's three professional services trading subsidiaries. |
Subsidiary trading |
Money Redress Limited (MRL) was set up on 17th November 2016 and is a Financial Conduct Authority (FCA) regulated Claims Management Company. MRL's case completions depend upon decisions at the Financial Ombudsman Service, Financial Services Compensation Scheme, and The Pension Ombudsman. These bodies continue to have delays processing cases due to undercapacity, which has impacted the levels of case completions, and thus revenue realised in MRL. |
Our success rate on cases, remains high at over 87% so we are confident that the number of cases awaiting processing at these bodies, representing £23.5m on the MRL balance sheet, will generate significant revenue in the years ahead. |
Rothley Law Limited (RLL) was granted a Solicitors Regulatory Authority (SRA) license on 22nd December 2022 with trading commencing on 3rd January 2023. Whilst RLL was set up originally to offer SRA regulated claim services, an opportunity arose to acquire the Midlands based regional mid-sized private client legal services business from Shoosmiths and this was completed on 16th June 2023. |
This consisted of the embedded pipeline work in progress and the entire team of forty one employees including three partners, spread across the divisions of Private Wealth Advisory, Disputed Wills and Trusts and Court of Protection. |
During the year ended 31st December 2023 our group undertook a further refinancing to meet the Shoosmiths acquisition and working capital needs and to provide the necessary investment in infrastructure, flexible offices and recruitment. The RLL private client legal service team traded for the six months ending 31st December 2023, and generated income of £1.8m with a closing pipeline WIP valuation of £2.2m. |
Processing Power Limited (PPL) provides bespoke outsourced claims and administration processing services, on a B2B basis, for other FCA and SRA regulated entities. This business is not a core group activity, but operated on a steady state, profitable basis across the year. |
Group results for the year ended 31 December 2023 |
Our group operating profit for reported year ended 31st December 2023 was £516,898 which compares to £1,201,921 for the prior year. |
As a result of exceptional one-off acquisition, advisory, integration and investment costs, and a related necessary increased cost of financing, this led to a consolidated loss before tax of £3,312,252, and a closing net asset position of £4,977,886. |
It is worth noting that during the prior year, our group carried out a financial restructure and reported an exceptional profit before tax mainly driven by a favourable discounted redemption mechanism on the early exit of debt, and a concurrent adjustment to the amortisation structure for interest on the remaining debt. |
Looking ahead |
Since the reported year end the group has continued to expand its regulated claims workstreams through the introduction of new regulated compensation products, and has made further investment into regional expansion, development and growth of the RLL teams, and their client base. Against this backdrop our year end group pipeline of £26.7m, is reasonably expected to convert to significant and profitable cash flow in the near to medium term. |
Rothley Group Limited (Registered number: 13896909) |
Report of the Directors |
for the Year Ended 31 December 2023 |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Haines Watts Tamworth Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Rothley Group Limited |
Opinion |
We have audited the financial statements of Rothley Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2023 and of the group's loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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. |
Opinions 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Report of the Directors has been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Rothley Group Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit; or |
- | the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Group Strategic Report or in preparing the Report of the Directors. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Rothley Group Limited |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Identifying and assessing potential risks related to irregularities |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: |
- results of our enquiries of management about their own identification and assessment of the risks and irregularities |
- any matters we identified having obtained an understanding of the company policies and procedures relating to |
- identifying, evaluating and complying with laws and regulations and whether they are aware of any instances of |
non-compliance |
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or |
alleged fraud |
- the internal controls set up to mitigate risks of fraud or non-compliance with laws and regulations |
- the matters discussed among the audit engagement team regarding how and where fraud might occur in the |
financial statements and any potential indicators of fraud. |
- obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those |
laws and regulations that had a direct effect on the financial statements, including UK Companies Act 2006, |
pensions and tax legislation |
- provisions of other laws and regulations that do not have a direct effect on the financial statements but |
compliance with which may be fundamental to the company's ability to operation or to avoid material penalty. |
As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance with laws and regulations. |
Audit response to risks identified |
Our procedures to respond to risks identified included the following: |
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with |
provisions of relevant laws and regulations described as having a direct effect on the financial statements |
- enquiring of management concerning actual and potential legal action and claims |
carrying out analytical procedure to identify any unusual or unexpected relationships that may indicate risks of |
material misstatement due to fraud |
- reading minutes of meetings of those charged with governance -in addressing the risk of fraud through |
management override of controls, testing the appropriateness of journal entries and other adjustments; assessing |
whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating |
the business rationale of any significant transactions that are unusual or outside the normal course of business. |
- considering performance targets and their influence on efforts made by management to manage earnings |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Rothley Group Limited |
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 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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
Sterling House |
97 Lichfield Street |
Tamworth |
Staffordshire |
B79 7QF |
Rothley Group Limited (Registered number: 13896909) |
Consolidated Income Statement |
for the Year Ended 31 December 2023 |
Period |
7.2.22 |
Year Ended | to |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER | 4,796,399 | 2,823,659 |
Cost of sales | 2,082,595 | 100,451 |
GROSS PROFIT | 2,713,804 | 2,723,208 |
Administrative expenses | 2,196,906 | 1,521,287 |
OPERATING PROFIT | 4 | 516,898 | 1,201,921 |
Financial restructuring and acquisition costs | 5 | (671,772 | ) | (147,304 | ) |
Financial debt restructure | 5 | - | 5,446,152 |
Debt amortisation adjustment | 5 | - | 5,174,969 |
(154,874 | ) | 11,675,738 |
Interest receivable and similar income | 183,206 | - |
28,332 | 11,675,738 |
Interest payable and similar expenses | 3,340,584 | 1,737,175 |
(LOSS)/PROFIT BEFORE TAXATION | (3,312,252 | ) | 9,938,563 |
Tax on (loss)/profit | (530,168 | ) | (81,968 | ) |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR | ( |
) |
(Loss)/profit attributable to: |
Owners of the parent | (2,780,638 | ) | 10,015,634 |
Non-controlling interests | (1,446 | ) | 4,897 |
(2,782,084 | ) | 10,020,531 |
Rothley Group Limited (Registered number: 13896909) |
Consolidated Other Comprehensive Income |
for the Year Ended 31 December 2023 |
Period |
7.2.22 |
Year Ended | to |
31.12.23 | 31.12.22 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | (2,782,084 | ) | 10,020,531 |
OTHER COMPREHENSIVE INCOME |
Changes in fair value of accrued income | 1,437,532 | (3,975,915 | ) |
Income tax relating to other comprehensive income |
(424,948 |
) |
701,770 |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
1,012,584 |
(3,274,145 |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(1,769,500 |
) |
6,746,386 |
Total comprehensive income attributable to: |
Owners of the parent | (1,768,054 | ) | 6,741,489 |
Non-controlling interests | (1,446 | ) | 4,897 |
(1,769,500 | ) | 6,746,386 |
Rothley Group Limited (Registered number: 13896909) |
Consolidated Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 7 | 5,500 | - |
Tangible assets | 8 | 95,747 | 42,263 |
Investments | 9 | - | - |
101,247 | 42,263 |
CURRENT ASSETS |
Debtors | 10 | 25,249,054 | 22,396,582 |
Cash at bank | 2,447,451 | 1,643,669 |
27,696,505 | 24,040,251 |
CREDITORS |
Amounts falling due within one year | 11 | 3,646,132 | 3,740,028 |
NET CURRENT ASSETS | 24,050,373 | 20,300,223 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
24,151,620 |
20,342,486 |
CREDITORS |
Amounts falling due after more than one year | 12 | (14,308,702 | ) | (8,578,701 | ) |
PROVISIONS FOR LIABILITIES | 13 | (4,865,032 | ) | (5,016,399 | ) |
NET ASSETS | 4,977,886 | 6,747,386 |
CAPITAL AND RESERVES |
Called up share capital | 14 | 1,000 | 1,000 |
Retained earnings | 4,973,435 | 6,741,489 |
SHAREHOLDERS' FUNDS | 4,974,435 | 6,742,489 |
NON-CONTROLLING INTERESTS | 15 | 3,451 | 4,897 |
TOTAL EQUITY | 4,977,886 | 6,747,386 |
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime. |
The financial statements were approved by the Board of Directors and authorised for issue on 30 July 2024 and were signed on its behalf by: |
C Rutherford - Director |
Rothley Group Limited (Registered number: 13896909) |
Company Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 7 |
Tangible assets | 8 |
Investments | 9 |
CURRENT ASSETS |
Debtors | 10 |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS/(LIABILITIES) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 14 |
Retained earnings |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 121,608 | 54,924 |
The financial statements were approved by the Board of Directors and authorised for issue on |
Rothley Group Limited (Registered number: 13896909) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Non-controlling | Total |
capital | earnings | Total | interests | equity |
£ | £ | £ | £ | £ |
Changes in equity |
Issue of share capital | 1,000 | - | 1,000 | - | 1,000 |
Total comprehensive income | - | 6,741,489 | 6,741,489 | 4,897 | 6,746,386 |
Balance at 31 December 2022 | 1,000 | 6,741,489 | 6,742,489 | 4,897 | 6,747,386 |
Changes in equity |
Total comprehensive income | - | (1,768,054 | ) | (1,768,054 | ) | (1,446 | ) | (1,769,500 | ) |
Balance at 31 December 2023 | 1,000 | 4,973,435 | 4,974,435 | 3,451 | 4,977,886 |
Rothley Group Limited (Registered number: 13896909) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Changes in equity |
Issue of share capital | - |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2023 |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Rothley Group Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Tangible fixed assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. |
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation. |
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 credited or charged to profit or loss. |
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. |
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. |
Depreciation is charged to write off the cost of assets over their estimated useful lives, as follows: |
Office equipment | 3 years (straight line) |
Furniture & fixtures | 3 years (straight line) |
Computer equipment | 3 years (straight line) |
Residual values, estimated useful lives and depreciation rates and methods are reviewed, and adjusted prospectively if required, if there is an indication of a significant change since the last reporting date. |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The Group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. |
Financial instruments are recognised when the company becomes party to the contractual provisions of the |
instrument. |
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
Financial assets |
Financial assets are recognised when the company becomes party to the contracts that gives rise to them and are classified as loans or borrowings, receivable, payables, financial instruments fair valued through profit and loss or available for sale financial assets as appropriate. The company determines the classification of its financial assets and liabilities at initial recognition and, where allowed and appropriate, re-evaluate this designation at each financial year end. |
Receivables relating to future fee income are classified as Available for Sale. Such receivables are carried at fair value, and the company has elected to recognise changes in the fair value recognised through Other |
Comprehensive Income as allowed under FRS 102 and will recycle gains to the P&L when they become realised. The associated commission and fees will be classed as Other Financial Liabilities (financial liability) and are carried at amortised cost with movements being recognised through the Profit and Loss account. |
The fair value of receivables for future fee income and the related payables is calculated using a discounted cash flow model. A risk adjusted interest rate relevant to the risk profile of the company is utilised for discounting. The cash flows for the model are estimated considering the following key assumptions: |
- expected fee per claim, |
- number of active claims, |
- expected claim success rate, and |
- expected timing of receipt. |
Financial liabilities |
Financial liabilities are recognised when the company becomes party to the contracts that give rise to them and are classified as loans or borrowings, receivables, payables, financial instruments fair valued through profit and loss or available for sale financial asset as appropriate. The company determines the classification of its financial assets and liabilities at initial recognition and, where allowed and appropriate, re-evaluate this designation at each financial year end. |
When financial liabilities are recognised initially, they are measured at fair value, being the transaction price plus and directly attributable transaction costs. |
Borrowings |
Interest-bearing borrowings are initially recorded at fair value and subsequently measured at amortised cost. |
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges. |
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit or loss, unless the charge is attributable to an item of income or expense recognised as other comprehensive income or to an item recognised directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity respectively. |
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date. |
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is relaised or the liability is settles based on tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition n the financial statements. |
Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
In preparing the financial statements of the Group, transactions in currencies other than the functional currency of sterling are recognised at the spot rate at the dates of the transactions, or at an average rate where this rate approximates the actual rate at the date of the transaction. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
Contributions to the Group's defined contribution pension scheme are charged to profit or loss in the year in which they become payable. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments. |
Employee benefits |
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. |
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits. |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Operating leases and lease incentives |
Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessors) are recognised in profit or loss on a straight-line basis over the period of the lease. |
Incentives received to enter into an operating lease are credited to the profit and loss account, to reduce the lease expense, on a straight-line basis over the period of the lease. |
3. | EMPLOYEES AND DIRECTORS |
The average number of employees during the year was |
The average number of employees by undertakings that were proportionately consolidated during the year was NIL (2022 - NIL). |
The figures above represent the average number of employees for the group across the entire 12 month financial period. Had the Rothley Law Limited employee numbers been averaged across the period since the acquisition of Shoosmiths' team, as opposed to the whole 12 months, the average would have been 67 in 2023. |
4. | OPERATING PROFIT |
The operating profit is stated after charging: |
Period |
7.2.22 |
Year Ended | to |
31.12.23 | 31.12.22 |
£ | £ |
Depreciation - owned assets | 39,970 | 22,415 |
5. | EXCEPTIONAL ITEMS |
Period |
7.2.22 |
Year Ended | to |
31.12.23 | 31.12.22 |
£ | £ |
Financial restructuring and acquisition costs | (671,772 | ) | (147,304 | ) |
Financial debt restructure | - | 5,446,152 |
Debt amortisation adjustment | - | 5,174,969 |
(671,772 | ) | 10,473,817 |
6. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
7. | INTANGIBLE FIXED ASSETS |
Group |
Other |
intangible |
assets |
£ |
COST |
Additions | 5,500 |
At 31 December 2023 | 5,500 |
NET BOOK VALUE |
At 31 December 2023 | 5,500 |
8. | TANGIBLE FIXED ASSETS |
Group |
Plant and |
machinery |
etc |
£ |
COST |
At 1 January 2023 | 64,678 |
Additions | 93,454 |
At 31 December 2023 | 158,132 |
DEPRECIATION |
At 1 January 2023 | 22,415 |
Charge for year | 39,970 |
At 31 December 2023 | 62,385 |
NET BOOK VALUE |
At 31 December 2023 | 95,747 |
At 31 December 2022 | 42,263 |
9. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
9. | FIXED ASSET INVESTMENTS - continued |
The Company directly owns 99.95% of the ordinary share capital of Rothley Holdings Limited, a company registered in England and Wales with the registered office of Vantage Park, 22 High View Close, Leicester, LE4 9LJ. The principal activity of Rothley Holdings limited is that of an investment holding company with its subsidiaries carrying out financial compensation claims and processing services. |
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 1,160,504 | 214,520 |
Amounts owed by group undertakings | - | - |
Other debtors | 24,088,550 | 22,182,062 |
25,249,054 | 22,396,582 |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts | 2,619,225 | 2,927,813 |
Trade creditors | 264,423 | 192,546 |
Amounts owed to group undertakings | - | - |
Taxation and social security | 323,901 | 221,634 |
Other creditors | 438,583 | 398,035 |
3,646,132 | 3,740,028 |
12. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Bank loans | 14,308,700 | 8,578,699 |
Other creditors | 2 | 2 |
14,308,702 | 8,578,701 |
Amounts falling due in more than five years: |
Group |
2023 | 2022 |
£ | £ |
Repayable by instalments |
Bank loans more 5 yr by instal | 8,224,952 | 8,578,699 |
Rothley Group Limited (Registered number: 13896909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
13. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | 4,865,032 | 5,016,399 |
Group |
Deferred |
tax |
£ |
Balance at 1 January 2023 | 5,016,399 |
Credit to Income Statement during year | (576,315 | ) |
Other comprehensive income | 424,948 |
Balance at 31 December 2023 | 4,865,032 |
14. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 1,000 | 1,000 |
15. | NON-CONTROLLING INTERESTS |
On 31 March 2022 the Company acquired control of Rothley Holdings Limited through the purchase of 99.95% of the share capital. The non-controlling interest values disclosed in the financial statements relate to the remaining 0.05%. |