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Registration number: 12449873

Lucess Investco Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2023

 

Lucess Investco Limited

Contents

Company Information

1

Directors' Report

2

Strategic Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Consolidated Profit and Loss Account

8

Consolidated Balance Sheet

9

Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Financial Statements

14 to 25

 

Lucess Investco Limited

Company Information

Directors

R B Sanders

L G Tamberlin

Registered office

11 Wigmore Street
London
W1U 3RW

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Lucess Investco Limited

Directors' Report for the Year Ended 31 December 2023

The directors present their report and the for the year ended 31 December 2023.

Directors of the company

The directors who held office during the year were as follows:

R B Sanders

L G Tamberlin

Important non adjusting events after the financial period

Following the year end, Lucess Bidco Limited, a wholly owned subsidiary has agreed amended terms on their Mezzanine Facility with their banking partner, TC Global Finance Originations Limited. As part of this restatement the termination date has been extended to 31 March 2026 with amended interest rates that step up over time between 5.5% to 11%.

In addition to the refinancing of the group's Mezzanine facility, the group have issued shareholder loan notes to the sum of £750,000 with a repayment date falling 10 years after the initial drawdown of 28 May 2024. These loans incur interest at a margin of 4% per annum.

Disclosure of information to the auditor

Each director has taken the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 29 August 2024 and signed on its behalf by:


R B Sanders
Director

 

Lucess Investco Limited

Strategic Report for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

Principal activity

The principal activity of the group is that of a holding company. The principal activity of the underlying group is the provision of medical services, managed services and consultancy and training to deliver efficiencies and better clinical outcomes for customers in a range of primary and secondary healthcare settings.

Fair review of the business

The results for the year which are set out in the profit and loss account show turnover of £44,021,324 (2022 - £58,255,407) and an operating loss of £942,102 (2022 - profit of £503,902). At 31 December 2023 the group had net liabilities of £325,219 (2022 - net assets of £1,831,084). The directors consider the performance for the year and the financial position at the year end to be satisfactory.

During the year ending December 2023, the group’s annual turnover decreased 24% from £58,255,407 to £44,021,324 (December 2022 - increase 5.8%). In the year there were less assignments than in 2022 due to less clinical on assignment due to NHS funding. Gross profit decreased to £8,064,032 (December 2022 - £10,412,938). Administration expenses decreased 18% from £8,107,910 to £6,648,532. Operating Profit decreased from £503,902 to a loss of £942,102. The directors consider the performance for the year and the financial position at the year end to be satisfactory.


Key performance indicators
Given the nature of the business, the group's directors are of the opinion that key performance indicators are important. The group uses a number of indicators to monitor and improve the development, performance and the position of the business. Indicators are reviewed and altered to meet changes in both the internal and external environment. The directors do not consider the inclusion of an analysis using key performance indicators to be necessary to assist users of the financial statements in their understanding of the financial performance or position of the group.

Principal risks and uncertainties

The management of the business and the execution of the strategy of the group are subject to a number of risks. The key business risks and uncertainties affecting the group are considered to relate to competition from both national and local providers of temporary recruitment staff.

Financial instruments

Objectives and policies

The directors constantly monitor the group's trading results and revise projections as appropriate to ensure that the group can meet its future obligations as they fall due.

Price risk, credit risk, liquidity risk and cash flow risk

The group is exposed to the usual credit and cash flow risks associated with selling on credit and manage this through credit control procedures.

Approved by the Board on 29 August 2024 and signed on its behalf by:


R B Sanders
Director

 

Lucess Investco Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Strategic Report, 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 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 group and company 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Lucess Investco Limited

Independent Auditor's Report to the Members of Lucess Investco Limited

Opinion

We have audited the financial statements of Lucess Investco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 the parent company's 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 auditor 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 ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

 

Lucess Investco Limited

Independent Auditor's Report to the Members of Lucess Investco Limited

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

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.

Extent to which the audit was capable of detecting irregularities, including fraud

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 considered the nature of the group’s industry and its control environment and reviewed the groups’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the group operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgments made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

 

Lucess Investco Limited

Independent Auditor's Report to the Members of Lucess Investco Limited

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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.





Martin Howard (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

29 August 2024

 

Lucess Investco Limited

Consolidated Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
 £

2022
 £

Turnover

3

44,021,324

58,255,407

Cost of sales

 

(35,957,292)

(47,842,469)

Gross profit

 

8,064,032

10,412,938

Administrative expenses (excluding depreciation, amortisation and exceptional items)

 

(6,648,532)

(8,107,910)

Earnings before interest, tax, depreciation and amortisation

 

1,415,500

2,305,028

Depreciation

 

(111,027)

(98,430)

Amortisation

 

(1,399,304)

(1,399,304)

Exceptional items

5

(847,271)

(303,392)

Operating (loss)/profit

4

(942,102)

503,902

Other interest receivable and similar income

6

6

52

Interest payable and similar charges

7

(1,223,583)

(1,182,776)

Loss before tax

 

(2,165,679)

(678,822)

Taxation

11

9,376

(195,174)

Loss for the financial year

 

(2,156,303)

(873,996)

The above results were derived from continuing operations.

The group has no other comprehensive income for the year.

 

Lucess Investco Limited

(Registration number: 12449873)
Consolidated Balance Sheet as at 31 December 2023

Note

2023
 £

2022
 £

Fixed assets

 

Intangible assets

12

8,611,582

10,010,886

Tangible assets

13

157,030

271,295

 

8,768,612

10,282,181

Current assets

 

Debtors

15

3,675,527

6,423,557

Cash at bank and in hand

 

225,806

253,537

 

3,901,333

6,677,094

Creditors: Amounts falling due within one year

16

(11,892,718)

(10,361,468)

Net current liabilities

 

(7,991,385)

(3,684,374)

Total assets less current liabilities

 

777,227

6,597,807

Creditors: Amounts falling due after more than one year

16

(1,061,379)

(4,749,686)

Provisions for liabilities

18, 11

(41,067)

(17,037)

Net (liabilities)/assets

 

(325,219)

1,831,084

Capital and reserves

 

Called up share capital

20

4,866,700

4,866,700

Share premium reserve

532,062

532,062

Profit and loss account

(5,723,981)

(3,567,678)

Equity attributable to owners of the company

 

(325,219)

1,831,084

Total equity

 

(325,219)

1,831,084

Approved and authorised by the Board on 29 August 2024 and signed on its behalf by:
 

R B Sanders
Director

 

Lucess Investco Limited

(Registration number: 12449873)
Balance Sheet as at 31 December 2023

Note

2023
 £

2022
 £

Fixed assets

 

Investments

14

5,400,000

5,400,000

Current assets

 

Debtors

15

1,300

1,300

Net assets

 

5,401,300

5,401,300

Capital and reserves

 

Called up share capital

20

4,866,700

4,866,700

Share premium reserve

534,600

534,600

Total equity

 

5,401,300

5,401,300

The company made a loss after tax for the financial year of £nil.

Approved and authorised by the Board on 29 August 2024 and signed on its behalf by:
 

R B Sanders
Director

 

Lucess Investco Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 January 2023

4,866,700

532,062

(3,567,678)

1,831,084

Loss for the year

-

-

(2,156,303)

(2,156,303)

At 31 December 2023

4,866,700

532,062

(5,723,981)

(325,219)

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 January 2022

4,866,700

532,062

(2,693,682)

2,705,080

Loss for the year

-

-

(873,996)

(873,996)

At 31 December 2022

4,866,700

532,062

(3,567,678)

1,831,084

 

Lucess Investco Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Share premium
£

Total
£

At 1 January 2023

4,866,700

534,600

5,401,300

At 31 December 2023

4,866,700

534,600

5,401,300

Share capital
£

Share premium
£

Total
£

At 1 January 2022

4,866,700

534,600

5,401,300

At 31 December 2022

4,866,700

534,600

5,401,300

 

Lucess Investco Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
 £

2022
 £

Cash flows from operating activities

Loss for the year

 

(2,156,303)

(873,996)

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

1,510,331

1,497,734

Loss on disposal of tangible assets

15,157

-

Finance income

6

(6)

(52)

Finance costs

7

1,223,583

1,182,776

Income tax expense

11

(9,376)

195,174

 

583,386

2,001,636

Working capital adjustments

 

Decrease/(increase) in trade debtors

15

2,074,999

(763,193)

(Decrease)/increase in trade creditors

16

(1,014,740)

775,230

Cash generated from operations

 

1,643,645

2,013,673

Income taxes paid

11

(8,600)

(8,712)

Net cash flow from operating activities

 

1,635,045

2,004,961

Cash flows from investing activities

 

Interest received

6

52

Acquisitions of tangible assets

(11,919)

(190,262)

Proceeds from sale of tangible assets

 

-

16,541

Net cash flows from investing activities

 

(11,913)

(173,669)

Cash flows from financing activities

 

Interest paid

 

(1,120,593)

(1,024,755)

Repayment of bank borrowing

 

(1,060,540)

(861,720)

Proceeds from bank refinancing

 

530,270

-

Net cash flows from financing activities

 

(1,650,863)

(1,886,475)

Net decrease in cash and cash equivalents

 

(27,731)

(55,183)

Cash and cash equivalents at 1 January

 

253,537

308,720

Cash and cash equivalents at 31 December

 

225,806

253,537

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
11 Wigmore Street
London
W1U 3RW

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.

No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made after tax for the financial year results of £- (2022 - £-).

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements or estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The group recognises revenue when the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the group's activities.

Tax

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

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the statement of financial position 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.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Furniture, fittings and equipment

20% straight line

Computer equipment

33% straight line

Leasehold improvements

33% straight line

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Goodwill

Goodwill is amortised over its useful life, which shall not exceed five years if a reliable estimate of the useful life cannot be made.

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10 years straight line

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtors.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

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.

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Provisions

Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023


Financial instruments (continued)

Impairment (continued)
The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

3

Revenue

The total turnover of the company has been derived from its principal activity wholly undertaken in the United Kingdom.

 

4

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

111,027

98,430

Amortisation expense

1,399,304

1,399,304

Operating lease expense - property

170,114

210,658

Operating lease expense - plant and machinery

400

544

 

5

Exceptional items

2023
 £

2022
 £

Exceptional expenses

847,271

303,392

Exceptional items in the year 31 December 2023 relate to outsourcing roles, refinancing, disposal of Neath Hill practice, payroll, and an onerous provision. The exceptional items at 31 December 2022 relate to professional fees, termination fees, software and liquidation costs.

 

6

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

6

52

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

7

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

1,119,809

1,024,755

Finance costs adjacent to interest

103,774

158,021

1,223,583

1,182,776

 

8

Staff costs

Group
The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

4,967,190

6,702,680

Social security costs

458,956

619,517

Pension costs, defined contribution scheme

58,819

104,913

5,484,965

7,427,110

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Sales, administration and support

86

97


Company
The company incurred no staff costs and had no employees other than the directors.

 

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

84,095

77,471

 

10

Auditors' remuneration

2023
£

2022
£

Audit of these financial statements

16,500

17,000


 

2023
£

2022
£

All other non-audit services

14,750

17,600

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

11

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

-

195,174

UK corporation tax adjustment to prior periods

(8,082)

-

(8,082)

195,174

Deferred taxation

Arising from origination and reversal of timing differences

(1,294)

-

Tax (receipt)/expense in the income statement

(9,376)

195,174

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 23.5% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Loss before tax

(2,165,679)

(678,822)

Corporation tax at standard rate

(508,935)

(128,976)

Effect of expense not deductible in determining taxable profit (tax loss)

70,396

45,164

Tax increase from effect of capital allowances and depreciation

352,479

264,204

Tax increase from effect of unrelieved tax losses carried forward

50,536

-

Other tax effects for reconciliation between accounting profit and tax expense (income)

26,148

14,782

Total tax (credit)/charge

(9,376)

195,174

Deferred tax

Group

Deferred tax assets and liabilities

2023

Liability
£

Differences between accumulated depreciation and amortisation and capital allowances

15,743

15,743

2022

Liability
£

Differences between accumulated depreciation and amortisation and capital allowances

17,037

17,037

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

12

Intangible assets

Group

Goodwill
 £

Cost

At 1 January 2023 and at 31 December 2023

13,993,044

Amortisation

At 1 January 2023

3,982,158

Amortisation charge

1,399,304

At 31 December 2023

5,381,462

Carrying amount

At 31 December 2023

8,611,582

At 31 December 2022

10,010,886

 

13

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Total
£

Cost

At 1 January 2023

123,190

603,312

726,502

Additions

3,466

8,455

11,921

Disposals

-

(212,224)

(212,224)

At 31 December 2023

126,656

399,543

526,199

Depreciation

At 1 January 2023

20,822

434,385

455,207

Charge for the year

41,930

69,097

111,027

Eliminated on disposal

-

(197,065)

(197,065)

At 31 December 2023

62,752

306,417

369,169

Carrying amount

At 31 December 2023

63,904

93,126

157,030

At 31 December 2022

102,368

168,927

271,295

Included within the net book value of land and buildings above is £63,904 (2022 - £102,368) in respect of leasehold land and buildings.
 

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

14

Investments

Company

2023
£

2022
£

Investments in subsidiaries

5,400,000

5,400,000

Subsidiaries

£

Cost and carrying amount

At 1 January 2023 and at 31 December 2023

5,400,000

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Medical Staffing Limited

United Kingdom

Ordinary

100%

100%

Key Medical Services Limited

United Kingdom

Ordinary

100%

100%

TNA Medical Limited

United Kingdom

Ordinary

100%

100%

111 Lifeline Limited

United Kingdom

Ordinary

100%

100%

Lucess Bidco Limited

United Kingdom

Ordinary

100%

100%

Lucess Topco Limited

United Kingdom

Ordinary

100%

100%

Lucess Midco Limited

United Kingdom

Ordinary

100%

100%

Celsus Group Limited

United Kingdom

Ordinary

100%

100%

The principal activity of the companies within the group are that of staffing, medical services, managed services, consultancy and training and holding companies.

All Lucess companies have the same registered office as Lucess Investco Limited with all remaining group companies having a registered office of 400 Capability Green, Suite B, Floor 2, Luton, Bedfordshire, England, LU1 3LU.

 

15

Debtors

 

Group

Company

2023
 £

2022
 £

2023
 £

2022
 £

Trade debtors

2,700,247

4,539,176

-

-

Amounts owed by group undertakings

-

-

1,300

1,300

Other debtors

723,525

1,633,122

-

-

Prepayments

251,755

251,259

-

-

3,675,527

6,423,557

1,300

1,300

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

16

Creditors

   

Group

Company

Note

2023
 £

2022
 £

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

17

6,471,797

4,830,004

-

-

Trade creditors

 

1,085,128

751,436

-

-

Social security and other taxes

 

846,698

875,516

-

-

Outstanding defined contribution pension costs

 

12,070

13,146

-

-

Other creditors

 

2,683,962

2,186,265

-

-

Accrued expenses

 

635,922

1,531,278

-

-

Corporation tax liability

11

157,141

173,823

-

-

 

11,892,718

10,361,468

-

-

Due after one year

 

Loans and borrowings

17

1,061,379

4,749,686

-

-

Included within the outstanding bank borrowings at year end of £5,269,937 (2022 - £5,545,885) are both a cash flow and mezzanine facility which are repayable by equal monthly instalments ending in December 2026. The loans contain both a fixed and floating charge and are secured. The loans incur interest at 5.95% and 11% respectively.

 

17

Loans and borrowings

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Current loans and borrowings

Bank borrowings

4,208,558

796,199

-

-

Invoice discounting arrangements

2,263,239

4,033,805

-

-

6,471,797

4,830,004

-

-

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

1,061,379

4,749,686

-

-

Included within the outstanding bank borrowings at year end of £5,269,937 (2022 - £5,545,885) are both a cash flow and mezzanine facility which are repayable by equal monthly instalments ending in December 2026. The loans contain both a fixed and floating charge and are secured. The loans incur interest at 5.95% and 11% respectively.

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

18

Provisions for liabilities

Group

Deferred tax
£

Other provisions
£

Total
£

At 1 January 2023

17,037

-

17,037

Increase (decrease) in existing provisions

(1,294)

25,324

24,030

At 31 December 2023

15,743

25,324

41,067

 

19

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £58,819 (2022 - £104,913).

Contributions totalling £12,070 (2022 - £13,146) were payable to the scheme at the end of the year and are included in creditors.

 

20

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary A of £0.01 each

540,000

5,400

540,000

5,400.00

Ordinary Hurdle of £0.01 each

130,000

1,300

130,000

1,300.00

Preference of £1 each

4,860,000

4,860,000

4,860,000

4,860,000

 

5,530,000

4,866,700

5,530,000

4,866,700

 

21

Obligations under leases and hire purchase contracts

Group

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

161,053

145,582

Later than one year and not later than five years

328,605

118,821

489,658

264,403

 

Lucess Investco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

22

Analysis of changes in net debt

Group

At 1 January 2023
£

Financing cash flows
£

Other non-cash changes
£

At 31 December 2023
£

Cash and cash equivalents

Cash

253,537

(27,731)

-

225,806

Borrowings

Bank borrowings

5,545,885

(341,469)

65,521

5,269,937

Invoice discounting arrangements

4,033,805

(1,770,566)

-

2,263,239

9,579,690

(2,112,035)

65,521

7,533,176

 

9,833,227

(2,139,766)

65,521

7,758,982

 

23

Non adjusting events after the financial period

Following the year end, Lucess Bidco Limited, a wholly owned subsidiary has agreed amended terms on their Mezzanine Facility with their banking partner, TC Global Finance Originations Limited. As part of this restatement the termination date has been extended to 31 March 2026 with amended interest rates that step up over time between 5.5% to 11%.

In addition to the refinancing of the group's Mezzanine facility, the group have issued shareholder loan notes to the sum of £750,000 with a repayment date falling 10 years after the initial drawdown of 28 May 2024. These loans incur interest at a margin of 4% per annum.

24

Parent and ultimate parent undertaking

There is considered to be no single controlling party of Lucess Investco Limited.