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COMPANY REGISTRATION NUMBER: 12871686
Hadfield Group Limited
Consolidated Financial Statements
31 August 2023
Hadfield Group Limited
Consolidated Financial Statements
Year Ended 31 August 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Director's report
4
Independent auditor's report to the members
6
Consolidated statement of income and retained earnings
10
Company statement of income and retained earnings
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of cash flows
14
Notes to the consolidated financial statements
15
Hadfield Group Limited
Officers and Professional Advisers
Director
Mr R Hadfield
Registered office
91-97 Saltergate
Chesterfield
Derbyshire
S40 1LA
Auditor
MCABA Limited t/a Mitchells
Chartered Accountants & Statutory Auditor
91-97 Saltergate
Chesterfield
Derbyshire
S40 1LA
Bankers
Triodos Bank
Deanery Road
Bristol
BS1 5AS
Royal Bank of Scotland
5 Church Street
Sheffield
S1 1HF
Hadfield Group Limited
Strategic Report
Year Ended 31 August 2023
The director presents his strategic report on the group for the year ended 31 August 2023. Review of the business The principal activity of the company is that of a holding company. The principal activity of the group during the year was the operation of homes catering for residents with learning disabilities. The company owns five 100% subsidiaries; Action for Care Limited, Four Care Plus Limited, Progress4Care Limited, Brindwood Properties Limited and Action for Care Contracts Limited. Progress4Care Limited and Brindwood Properties Limited were dissolved during the year. Results and performance The results of the group for the year show an increase in turnover of 14.1% and a profit on ordinary activities before taxation of £525,591 (2022: £400,680). The director, and industry as a whole, however places more reliance on Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), which is £1,244,313 (2022: £1,002,489). The group continues to see high demand for the services being provided and has sought to consolidate its position within the market during the period. The director has great faith in seeing growth in both revenue and profit in the coming years as the care environment continues to evolve alongside social-economic changes. Key performance indicators The director monitors the progress of the group by reference to key performance indicators. The key performance indicators for the group are those that communicate the financial performance and strength of the group as a whole, being turnover, gross profit margin and wages as a percentage of fees. Factors such as the rise in minimum wage, pension auto enrolment contributions, the nationwide shortage of healthcare staff and pressures facing local authorities regarding residents' fees all impact the performance of the group and are constantly monitored by the director and senior management. The gross profit margin for the group is 24.0% (2022: 23.4%), with a gross profit of £2,643,059 (2022: £2,259,042). Wages as a proportion of fees was 72.8% (2022: 73.7%), this is slightly above the industry benchmark and is an indication of the supply and demand issues within the care sector alongside the inflation of the national minimum wage. The group prides itself on the standard of care it offers and strives to ensure standards are met. The group is in regular contact with both local authorities and the CQC in an effort to maintain standards in an ever more challenging environment. Principal risks and uncertainties The director and senior management team meet regularly to consider the risks that face the group and how established processes and controls are used to manage these risks. Key risks and uncertainties are outlined below: Cost of living crisis The impact of significant inflation had an effect on the group throughout the year. The director and management team made efforts to minimise costs without reducing service levels whilst also seeking increases in funding from local authorities. The combined effect of these have ensured the group is able to continue as a going concern. Market risk The market is currently under pressure regarding costs and quality standards. The group regularly monitors quality standards in all of its homes and produces detailed interim financial information which enables them to react quickly to any issues. Legislative and regulatory risk All of the group's services are monitored by the Care Quality Commission (CQC) and local authorities. The group has internal systems in place to monitor the standards in each of its homes and has excellent, open relationships with the CQC and local authorities. At the present time eight out of the ten homes within the group have a grading of at least "good" with the CQC, it is the group's ambition to maintain this level of service and improve the rating of the remaining homes. Labour and recruitment There is no specific impact of Brexit from a customer perspective. However, as there is already a shortage of labour in the care industry any barriers to employing EU Care staff are likely to make competition for employment more intense. The group remains proactive in its ability to recruit and retain high quality staff. Minimum wage increases continue to impact the group moving forward. Financial risks The group has outstanding bank loans. The group has an excellent, open relationship with the bank and provides quarterly and annual financial information to them.
This report was approved by the board of directors on 29 August 2024 and signed on behalf of the board by:
Mr R Hadfield
Director
Hadfield Group Limited
Director's Report
Year Ended 31 August 2023
The director presents his report and the consolidated financial statements of the group for the year ended 31 August 2023 .
Director
The director who served the company during the year was as follows:
Mr R Hadfield
Dividends
Particulars of recommended dividends are detailed in note 14 to the consolidated financial statements.
Future developments
The group continues to look at improving the operations of its existing homes and seek out opportunities for growth where they are available and fit with the current group provisions.
Employment of disabled persons
The group gives full and fair consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a disabled person. Where existing employees become disabled, it is the group's policy, wherever practical, to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.
Employee involvement
During the year the policy of providing employees with information about the group has been continued through internal media methods. Employees have also continued to be encouraged to present their suggestions and views on the group's performance. Regular meetings are held between local management and employees to allow a free flow of information and ideas.
Financial instruments
Financial risk management objectives and policies
The director has reviewed the financial risks facing the group and has devised systems and controls to mitigate these risks.
Interest rate risk
The group is exposed to volatility in interest rate movements on its debt. With interest rates remaining high at present, the group continues to review the bank debt on an ongoing basis and revises its performance targets when changes occur.
Director's responsibilities statement
The director is responsible for preparing the strategic report, director's report and the consolidated financial statements in accordance with applicable law and regulations. Company law requires the director to prepare consolidated financial statements for each financial year. Under that law the director has elected to prepare the consolidated financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the consolidated financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and the company and the profit or loss of the group for that period. In preparing these consolidated financial statements, the director is required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the consolidated financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.
This report was approved by the board of directors on 29 August 2024 and signed on behalf of the board by:
Mr R Hadfield
Director
Hadfield Group Limited
Independent Auditor's Report to the Members of Hadfield Group Limited
Year Ended 31 August 2023
Opinion
We have audited the consolidated financial statements of Hadfield Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2023 which comprise the consolidated statement of income and retained earnings, company statement of income and retained earnings, consolidated statement of financial position, company statement of financial position, consolidated statement of cash flows and the related notes, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the consolidated financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 31 August 2023 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the consolidated 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 consolidated 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 consolidated financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the consolidated financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the consolidated financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the consolidated financial statements and our auditor’s report thereon. The director is responsible for the other information. Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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 consolidated 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.
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 strategic report and the director's report for the financial year for which the consolidated financial statements are prepared is consistent with the consolidated financial statements; and
- the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company consolidated financial statements are not in agreement with the accounting records and returns; or - certain disclosures of director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the consolidated financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the director is 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 director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the consolidated 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 my 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 in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at https: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. Auditor's responsibilities for detecting irregularities, including fraud The objectives of our audit are: to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: - We obtained an understanding of the legal and regulatory frameworks applicable to the group and the sector in which they operate. We determined that the following laws and regulations were most significant; the Companies Act 2006, UK corporate taxation laws, employment law, health and safety laws, the Health and Social Care Act 2012 and the Care Quality Commission (Registration) Regulations 2009. - We obtained an understanding of how the group is complying with those legal and regulatory frameworks by making inquiries to relevant members of the management team. We corroborated our inquiries though our review and inquiry into legal fees incurred in the year. - We assessed the susceptibility of the group's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: - Identifying the controls management has in place to prevent and detect fraud and assessing the operation of these controls - Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process - Identifying and testing journal entries, in particular any journal entries that were large or unusual in nature - Assessing the extent of compliance with the relevant laws and regulations governing the group and the sector it operates within. This included a review of any potential breaches during and since the year end; and - Challenging assumptions and judgements made by management in its significant accounting estimates. There are inherent limitations in the audit procedures described above 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 would become aware of it. 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, intentional misrepresentations or collusion. Use of our report This report is made solely to the group'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 group'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 group and the group's members as a body, for our audit work, for this report, or for the opinions we have formed.
David Waining FCA
(Senior Statutory Auditor)
For and on behalf of
MCABA Limited t/a Mitchells
Chartered Accountants & Statutory Auditor
91-97 Saltergate
Chesterfield
Derbyshire
S40 1LA
29 August 2024
Hadfield Group Limited
Consolidated Statement of Income and Retained Earnings
Year Ended 31 August 2023
2023
2022
Note
£
£
Turnover
4
11,012,197
9,650,887
Cost of sales
8,369,138
7,391,845
-------------
------------
Gross Profit
2,643,059
2,259,042
Administrative expenses
1,561,057
1,746,735
Other operating income
5
291
198,788
------------
------------
Operating Profit
6
1,082,293
711,095
Exceptional items
200
Other interest receivable and similar income
11
15
147
Interest payable and similar expenses
12
556,917
310,562
------------
------------
Profit Before Taxation
525,591
400,680
Tax on profit
13
186,478
86,089
---------
---------
Profit for the Financial Year and Total Comprehensive Income
339,113
314,591
---------
---------
Dividends paid and payable
14
( 37,500)
Retained Earnings at the Start of the Year
3,070,746
2,756,155
------------
------------
Retained Earnings at the End of the Year
3,372,359
3,070,746
------------
------------
All the activities of the group are from continuing operations.
Hadfield Group Limited
Company Statement of Income and Retained Earnings
Year Ended 31 August 2023
2023
2022
Note
£
£
Profit for the financial year and total comprehensive income
44,013
( 6,402)
Dividends paid and payable
14
( 37,500)
Retained Losses at the Start of the Year
( 6,402)
--------
-------
Retained Earnings/(Losses) at the End of the Year
111
( 6,402)
--------
-------
Hadfield Group Limited
Consolidated Statement of Financial Position
31 August 2023
2023
2022
Note
£
£
Fixed Assets
Intangible assets
15
17,533
30,960
Tangible assets
16
12,479,192
12,554,563
Investments
17
200
-------------
-------------
12,496,725
12,585,723
Current Assets
Stocks
18
3,300
3,300
Debtors
19
2,542,410
1,158,194
Cash at bank and in hand
758,787
830,576
------------
------------
3,304,497
1,992,070
Creditors: amounts falling due within one year
20
2,408,027
1,824,474
------------
------------
Net Current Assets
896,470
167,596
-------------
-------------
Total Assets Less Current Liabilities
13,393,195
12,753,319
Creditors: amounts falling due after more than one year
21
9,781,737
9,504,445
Provisions
22
239,447
178,476
-------------
-------------
Net Assets
3,372,011
3,070,398
-------------
-------------
Capital and Reserves
Called up share capital
25
102
102
Other reserves, including the fair value reserve
26
( 450)
( 450)
Profit and loss account
26
3,372,359
3,070,746
------------
------------
Shareholders Funds
3,372,011
3,070,398
------------
------------
These consolidated financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These consolidated financial statements were approved by the board of directors and authorised for issue on 29 August 2024 , and are signed on behalf of the board by:
Mr R Hadfield
Director
Company registration number: 12871686
Hadfield Group Limited
Company Statement of Financial Position
31 August 2023
2023
2022
Note
£
£
Fixed Assets
Investments
17
102
302
Current Assets
Debtors
19
490,000
Cash at bank and in hand
1
1
---------
----
490,001
1
Creditors: amounts falling due within one year
20
489,890
6,603
---------
-------
Net Current Assets/(Liabilities)
111
( 6,602)
----
-------
Total Assets Less Current Liabilities
213
( 6,300)
----
-------
Net Assets/(Liabilities)
213
( 6,300)
----
-------
Capital and Reserves
Called up share capital
25
102
102
Profit and loss account
26
111
( 6,402)
----
-------
Shareholders Funds/(Deficit)
213
( 6,300)
----
-------
The profit for the financial year of the parent company was £ 44,013 (2022: £ 6,402 loss).
These consolidated financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These consolidated financial statements were approved by the board of directors and authorised for issue on 29 August 2024 , and are signed on behalf of the board by:
Mr R Hadfield
Director
Company registration number: 12871686
Hadfield Group Limited
Consolidated Statement of Cash Flows
Year Ended 31 August 2023
2023
2022
£
£
Cash Flows from Operating Activities
Profit for the financial year
339,113
314,591
Adjustments for:
Depreciation of tangible assets
137,742
162,230
Amortisation of intangible assets
13,427
86,300
Other interest receivable and similar income
( 15)
( 147)
Interest payable and similar expenses
556,917
310,562
Loss on disposal of tangible assets
10,651
11,777
Loss on disposal of intangible assets
31,087
Loss on disposal of subsidiaries
200
Tax on profit/(loss)
186,478
86,089
Changes in:
Trade and other debtors
( 885,369)
( 305,807)
Trade and other creditors
250,001
335,611
---------
------------
Cash generated from operations
609,145
1,032,293
Interest paid
( 556,917)
( 310,562)
Interest received
15
147
Tax received/(paid)
57,714
( 167,228)
---------
------------
Net cash from operating activities
109,957
554,650
---------
------------
Cash Flows from Investing Activities
Purchase of tangible assets
( 73,022)
( 101,875)
Proceeds from sale of tangible assets
10,252
Purchase of intangible assets
( 17,240)
---------
------------
Net cash used in investing activities
( 73,022)
( 108,863)
---------
------------
Cash Flows from Financing Activities
Repayments of borrowings
( 297,315)
( 326,157)
Payments of finance lease liabilities
( 5,177)
Dividends paid
( 37,500)
Increase/(decrease) in director's loan account
724,939
(542,922)
Increase/(decrease) in related party balances
( 498,848)
( 190,490)
---------
------------
Net cash used in financing activities
( 108,724)
( 1,064,746)
---------
------------
Net Decrease in Cash and Cash Equivalents
( 71,789)
( 618,959)
Cash and Cash Equivalents at Beginning of Year
830,576
1,449,535
---------
------------
Cash and Cash Equivalents at End of Year
758,787
830,576
---------
------------
Hadfield Group Limited
Notes to the Consolidated Financial Statements
Year Ended 31 August 2023
(continued)
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 91-97 Saltergate, Chesterfield, Derbyshire, S40 1LA. The company's place of business is Unit 4, Courtyard, 8 Market Place, Belper, DE56 1FZ.
2. Statement of compliance
These consolidated financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102: (a) No cash flow statement has been presented for the company.
Consolidation
The financial statements consolidate the financial statements of the group and all of its subsidiary undertakings. The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account. The company incorporated on 10 September 2020 and subsequently on 30 April 2021 there was a group reconstruction. As a result of the share for share exchange the ultimate shareholders remained the same and all the relevant criteria were met to use the merger accounting method. Under the merger accounting method the results and cash flows of all the combining entities have been brought into the financial statements of the company from the beginning of the financial year in which the combination occurred, adjusted so as to achieve uniformity of accounting policies where applicable.
Government grants
Government and local authority grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the group will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accruals model.
Financing costs
Bank fees incurred regarding the arrangement of long term loans are amortised over the term of the loans.
Judgements and key sources of estimation uncertainty
In the process of applying the group's accounting policies, the director is required to make certain estimates, judgements and assumptions that he believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from the estimates, the effect of which is recognised in the period in which the facts that give rise to the revision become known. The estimate and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Useful life and residual values Intangible assets The charge in respect of amortisation is derived after determining an estimate of the useful life of goodwill arising on business combinations. This estimate is based on a variety of factors such as expected use of the acquired business, the expected useful life of the cash generating unit to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit the useful life and assumptions that market participants would consider in respect of similar businesses. Tangible assets The charge in respect of depreciation is derived after determining an estimate of an asset's expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the company's assets may vary depending on several factors such as, technological innovation, maintenance programmes and future market conditions. They are determined by management at the time the asset is acquired and reviewed annually for appropriateness. Depreciation of freehold property There is no charge in respect of depreciation on freehold buildings for the year. In determining the residual value of freehold buildings, the director has considered the amount he would currently obtain from disposal of the asset if the asset were already of the age and condition expected at the end of its useful life, having regard to the factors mentioned above. As a result, the director estimates any depreciation charge to be immaterial and as such the depreciation charge is nil for the year. Recoverability of trade debtors The director makes provisions for doubtful debts based on an assessment of the recoverability of trade debtors. Provisions are applied to trade debtors where events or changes in circumstances indicate that the carrying amounts may not be recoverable. This methodology is applied on a resident by resident basis. Leases Determining whether leases entered into by the group as a lessee are operating or finance leases requires judgement. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee based on the evaluation of the terms and conditions of the arrangements on a lease by lease basis.
Revenue recognition
The turnover shown in the profit and loss account represents residents' fees earned during the year.
Exceptional items
Exceptional items are disclosed separately in the consolidated financial statements in order to provide further understanding of the financial performance of the entity. They are material items of income or expense that have been shown separately because of their nature or amount.
Taxation
Current tax represents the amount of tax payable or receivable in respect of the taxable profit (or loss) for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Goodwill
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed five years.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Goodwill
-
5 years straight line
Other intangible assets
-
15% reducing balance
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Long leasehold property
-
5 years straight line
Fixtures and fittings
-
15% reducing balance
Motor vehicles
-
33% reducing balance
Depreciation has not been provided for on freehold property. More information is given on this in the judgements and key sources of estimation uncertainty accounting policy shown above.
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell.
Financial instruments
Debtors and creditors with no stated interest rate and receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided.
4. Turnover
Turnover arises from:
2023
2022
£
£
Rendering of services
11,012,197
9,650,887
-------------
------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Other operating income
2023 2022
£ £
Coronavirus grant income 291 198,788
---- ---------
6. Operating loss
Operating profit or loss is stated after charging:
2023
2022
£
£
Amortisation of intangible assets
13,427
86,300
Depreciation of tangible assets
137,742
162,230
Loss on disposal of tangible assets
10,651
11,777
Loss on disposal of intangible assets
31,087
Loss on disposal of subsidiaries
200
Impairment of trade debtors
55,376
---------
---------
7. Auditor's remuneration
2023
2022
£
£
Fees payable for the audit of the consolidated financial statements
32,225
17,718
--------
--------
8. Staff costs
The average number of persons employed by the group during the year, including the director, amounted to:
2023
2022
No.
No.
Nursing and administration staff (including directors)
264
249
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
7,393,190
6,472,674
Social security costs
501,537
487,546
Other pension costs
135,025
160,586
------------
------------
8,029,752
7,120,806
------------
------------
9. Director's remuneration
The director's aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
12,000
13,051
Company contributions to defined contribution pension plans
173
173
--------
--------
12,173
13,224
--------
--------
The number of directors who accrued benefits under company pension plans was as follows:
2023
2022
No.
No.
Defined contribution plans
1
1
----
----
10. Exceptional items
Group
Company
2023
2022
2023
2022
£
£
£
£
Exceptional items
200
200
----
----
----
----
Included in exceptional items is a credit of £200 (2022: £nil) relating to the write off of balances with two entities within the Hadfield Group companies, which were dissolved on 9 May 2023.
11. Other interest receivable and similar income
2023
2022
£
£
Interest on cash and cash equivalents
15
12
Other interest receivable and similar income
135
----
----
15
147
----
----
12. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
555,056
310,562
Other interest payable and similar charges
1,861
---------
---------
556,917
310,562
---------
---------
13. Tax on profit/(loss)
Major components of tax income
2023
2022
£
£
Current tax:
UK current tax income
125,677
102,352
Adjustments in respect of prior periods
( 170)
( 17,823)
---------
---------
Total current tax
125,507
84,529
---------
---------
Deferred tax:
Origination and reversal of timing differences
60,971
1,560
---------
--------
Tax on profit/(loss)
186,478
86,089
---------
--------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 21.50 % (2022: 19 %).
2023
2022
£
£
Profit on ordinary activities before taxation
525,591
400,680
---------
---------
Profit on ordinary activities by rate of tax
113,102
76,129
Adjustment to tax charge in respect of prior periods
( 170)
( 17,823)
Effect of expenses not deductible for tax purposes
9,298
4,528
Effect of capital allowances and depreciation
3,277
21,695
Deferred tax movement
60,971
1,560
---------
---------
Tax on profit/(loss)
186,478
86,089
---------
---------
14. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
37,500
--------
----
15. Intangible assets
Group
Goodwill
Other intangible assets
Total
£
£
£
Cost
At 1 September 2022 and 31 August 2023
3,713,298
29,135
3,742,433
------------
--------
------------
Amortisation
At 1 September 2022
3,702,965
8,508
3,711,473
Charge for the year
10,333
3,094
13,427
------------
--------
------------
At 31 August 2023
3,713,298
11,602
3,724,900
------------
--------
------------
Carrying amount
At 31 August 2023
17,533
17,533
------------
--------
------------
At 31 August 2022
10,333
20,627
30,960
------------
--------
------------
The company has no intangible assets.
16. Tangible assets
Group
Freehold property
Long leasehold property
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 September 2022
11,913,758
37,480
1,068,801
556,919
13,576,958
Additions
8,074
64,948
73,022
Disposals
( 23,541)
( 23,541)
-------------
--------
------------
---------
-------------
At 31 August 2023
11,921,832
37,480
1,110,208
556,919
13,626,439
-------------
--------
------------
---------
-------------
Depreciation
At 1 September 2022
37,480
610,502
374,413
1,022,395
Charge for the year
77,486
60,256
137,742
Disposals
( 12,890)
( 12,890)
-------------
--------
------------
---------
-------------
At 31 August 2023
37,480
675,098
434,669
1,147,247
-------------
--------
------------
---------
-------------
Carrying amount
At 31 August 2023
11,921,832
435,110
122,250
12,479,192
-------------
--------
------------
---------
-------------
At 31 August 2022
11,913,758
458,299
182,506
12,554,563
-------------
--------
------------
---------
-------------
The company has no tangible assets.
17. Investments
Group
Shares in group undertakings
£
Cost
At 1 September 2022
200
Disposals
( 200)
----
At 31 August 2023
----
Impairment
At 1 September 2022 and 31 August 2023
----
Carrying amount
At 31 August 2023
----
At 31 August 2022
200
----
Company
Shares in group undertakings
£
Cost
At 1 September 2022
302
Disposals
( 200)
----
At 31 August 2023
102
----
Impairment
At 1 September 2022 and 31 August 2023
----
Carrying amount
At 31 August 2023
102
----
At 31 August 2022
302
----
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
Registered office
Class of share
Percentage of shares held
Subsidiary undertakings
Action for Care Limited
91-97 Saltergate, Chesterfield, S40 1LA
Ordinary
100
Four Care Plus Limited
91-97 Saltergate, Chesterfield, S40 1LA
Ordinary
100
Action for Care Contracts Limited
Unit 4, Courtyard, 8 Market Place, Belper, DE56 1FZ
Ordinary
100
Brindwood Properties Ltd
91-97 Saltergate, Chesterfield, S40 1LA
Ordinary
100
(dissolved 9 May 2023)
Progress4Care Ltd
91-97 Saltergate, Chesterfield, S40 1LA
Ordinary
100
(dissolved 9 May 2023)
18. Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods
3,300
3,300
-------
-------
----
----
19. Debtors
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade debtors
635,210
458,468
Prepayments and accrued income
287,069
260,115
Other debtors
1,620,131
439,611
490,000
------------
------------
---------
----
2,542,410
1,158,194
490,000
------------
------------
---------
----
20. Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
327,601
297,352
Trade creditors
433,020
333,750
Amounts owed to group undertakings
447,848
6,402
Accruals and deferred income
496,976
388,839
4,541
Corporation tax
225,362
42,141
Social security and other taxes
228,014
134,536
Director loan accounts
415,987
295,905
37,500
Other creditors
281,067
331,951
1
201
------------
------------
---------
-------
2,408,027
1,824,474
489,890
6,603
------------
------------
---------
-------
Total liabilities disclosed under creditors falling due within one year secured by the company are £Nil (2022: £Nil). Total liabilities disclosed under creditors falling due within one year secured by the group are £317,538 (2022: £287,537).
21. Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans and overdrafts
9,037,096
9,364,660
Director loan accounts
744,641
139,785
------------
------------
----
----
9,781,737
9,504,445
------------
------------
----
----
Triodos Bank holds a fixed and floating charge over the undertaking and all the property and assets of the group. Total liabilities disclosed under creditors falling due in more than one year secured by the company are £Nil (2022: £Nil). Total liabilities disclosed under creditors falling due in more than one year secured by the group are £9,020,517 (2022: £9,337,397). Included within creditors amounts falling due after more than one year is an amount of £7,096,234 (2022: £7,938,288) for the group and £Nil (2022: £Nil) for the company in respect of liabilities payable or repayable by instalments which fall due for payment after more than five years from the reporting date. The bank loan is repayable over 20 years at an interest rate of 2.15% over the base rate.
22. Provisions
Group
Deferred tax (note 23)
£
At 1 September 2022
178,476
Additions
60,971
---------
At 31 August 2023
239,447
---------
The company does not have any provisions.
23. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Included in provisions (note 22)
239,447
178,476
---------
---------
----
----
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2023
2022
2023
2022
£
£
£
£
Accelerated capital allowances
239,447
178,476
---------
---------
----
----
24. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 135,025 (2022: £ 160,586 ).
25. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
102
102
102
102
----
----
----
----
26. Reserves
Called up share capital - this represents the nominal value of the shares that have been issued. Merger reserve - this represents the difference between the value of shares issued by the company in exchange for the value of shares acquired in respect of the acquisition of subsidiaries accounted for under share for share exchanges. Profit and loss account - this reserve records retained earnings and accumulated losses.
27. Analysis of changes in net debt
At 1 Sep 2022
Cash flows
At 31 Aug 2023
£
£
£
Cash at bank and in hand
830,576
(71,789)
758,787
Debt due within one year
(593,257)
(150,331)
(743,588)
Debt due after one year
(9,504,445)
(277,292)
(9,781,737)
------------
---------
------------
( 9,267,126)
( 499,412)
( 9,766,538)
------------
---------
------------
28. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
Group
Company
2023
2022
2023
2022
£
£
£
£
Not later than 1 year
8,384
6,250
Later than 1 year and not later than 5 years
3,646
9,375
--------
--------
----
----
12,030
15,625
--------
--------
----
----
Hadfield Group Limited
Notes to the Consolidated Financial Statements (continued)
Year Ended 31 August 2023
29. Related party transactions
Group
During the year the group provided and received loans from related parties. The balances outstanding due to related parties at the year end were as follows:
2023 2022
£ £
Amounts owed by related parties 1,111,228 100,388
All loans are unsecured, interest free and repayable on demand. All directors and any senior employees who have authority and responsibility for planning, directing and controlling the activities of the group are considered to be key management personnel. Remuneration paid by the group relating to key management personnel amounted to £221,918 (2022: £239,993).
Company
Advantage has been taken of the exemptions conferred by FRS102 from the requirement to make disclosures concerning other group companies. The company does not have any related party balances.