Company registration number 09905661 (England and Wales)
THE RALPH VETERINARY REFERRAL CENTRE PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
THE RALPH VETERINARY REFERRAL CENTRE PLC
COMPANY INFORMATION
Directors
Mr I A Dhanji
Mr S Jasani
Mr A W Zychowski
Secretary
Mr I A Dhanji
Company number
09905661
Registered office
Fourth Avenue
Globe Business Park
MARLOW
SL7 1YG
Auditor
Saffery LLP
St John's Court
Easton Street
HIGH WYCOMBE
HP1 1JX
Business address
Fourth Avenue
Globe Business Park
MARLOW
SL7 1YG
Solicitors
Harrison Clark Rickerbys Limited
5 Deansway
WORCESTER
WR1 2JG
THE RALPH VETERINARY REFERRAL CENTRE PLC
CONTENTS
Page
Directors' report
1
Chairman's statement
3
Strategic report
5
CEO reflections
10
Independent auditor's report
12 - 14
Income statement
15
Statement of financial position
16
Statement of changes in equity
17
Statement of cash flows
18
Notes to the financial statements
19 - 33
THE RALPH VETERINARY REFERRAL CENTRE PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company continued to be veterinary activities.

Results and dividends

The results for the year are set out on page 15.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr I A Dhanji
Mr S Jasani
Mr A W Zychowski
Statement of directors' responsibilities

The directors are responsible for preparing the annual 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Research and development

Veterinary medicine is a rapidly evolving field of science and The Ralph's specialists are continually seeking to improve canine and feline health care and welfare, by quickly developing technological solutions and new applications of emerging research.

 

During the accounting period under review, the team at The Ralph embarked on a large variety of R&D activities including significant efforts in improving clinical outcomes through developing and extending scientific knowledge in diagnostics, medical and surgical approaches, protocols and techniques. In addition, they have sought to leverage and integrate the outcomes of emerging technologies and research in clinical practice to expand the scope of services offered and remain competitive in a fast-moving industry.

 

THE RALPH VETERINARY REFERRAL CENTRE PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Strategic report:

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. The matters dealt with in the Strategic report include director's duties to stakeholders, financial instrument risk and future developments.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr I A Dhanji
Director
19 August 2024
THE RALPH VETERINARY REFERRAL CENTRE PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
1
Chairman's statement

This is the fifth full year of trading since The Ralph commenced seeing patients in February 2019. The Ralph has made remarkable progress in establishing its reputation as a World Class Veterinary Referral hospital, recruiting a team of c.250 specialists and support staff, embedding the values and ethos of the company and developing and nurturing awareness amongst first opinion vets. This has led to a steady increase in cases referred, in turnover and a first-class reputation.

 

On behalf of the Board, I would like to thank all members of Team Ralph who have worked incredibly hard and been hugely supportive while also providing the very best care to our patients and their human carers.

 

Financial Performance

 

The Ralph generated revenue of £17.1M (2023: £15.3M), a 12% year-on-year increase. This is steady improvement as the company continues to mature and build resilience in all its disciplines. The rebuilding of the Neurology department has continued apace, and this discipline has now become a leading discipline of the hospital.

 

Costs have also increased mainly due to an increase in staff numbers. The Ralph has had to invest in additional staff to build resilience in several disciplines to ensure consistency of service – to cover holidays, time off for Continuing Professional Development, etc. Furthermore, some investment in infrastructure was required to improve resilience, clinical standards and efficiency.

 

Unfortunately, The Ralph experienced a marked reduction in referrals during the first quarter of 2024, (which is also the last quarter of our financial year) that had a material impact on its results. We believe this downturn in the first quarter of 2024, was experienced by many referral hospitals.

 

Hence, despite significant improvements in efficiencies, the above led to The Ralph recording a pre-tax loss of £402K (2023: £364K) which was disappointing.

 

As a response to this performance:

 

Post year-end, The Ralph has had a step change improvement in turnover and profitability as all four months since the start of the new financial year on 1 April 2024 have been profitable with July being a record month for both turnover and profitability.

 

One of the most important objectives for the current financial year is for the company to be consistently profitable which would enhance its value.

 

Fundraising

 

The company did not raise any equity funds during the year (except for the exercise price of EMI share options exercised by members of staff). This is due to the cash benefit received from the R&D tax credits claimed.

THE RALPH VETERINARY REFERRAL CENTRE PLC
CHAIRMAN'S STATEMENT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -

Structural shifts in the sector

 

Covid-19 caused a material increase in demand which led to competitors making investments to increase capacity. This increase in capacity has come onstream just as demand has dropped off which has caused some corporate groups to restructure and consolidate their staffing.

 

The decrease in demand has also generated price competition in some disciplines. The most notable being in Orthopaedics where several specialist hospitals are now competing on price on some common procedures. In addition, First Opinion Practices are engaging Peripatetic Certificate holders to carry out these procedures inhouse thus retaining this revenue. Consequently, there is a significant reduction in routine Orthopaedic procedures being referred and specialist hospitals that are mainly dependent on this work are having to scale back their staffing levels. Fortunately, the impact on The Ralph has been manageable where its strong reputation in Orthopaedics continues to attract referrals, particularly for more complex cases.

 

In addition to the above, the recently announced review of the sector by the Competition and Markets Authority (CMA) is likely to have a negative impact on capital investment into the wider veterinary sector and therefore to the valuations within it.

 

Exit planning for shareholders

 

The Board is conscious that it has been several years that shareholders have been invested in The Ralph and some shareholders may wish to exit due to their personal circumstances and their EIS holding period now met. The Board is also conscious there are many shareholders who wish to remain invested for the medium/long term.

 

The Board has been in various discussions to find a solution. However, with The Ralph not having had a profitable financial year yet and the CMA conducting a review into the sector, any potential value that may be assigned to shares currently would not reflect the true value of The Ralph. We hope we will be in a much better position once these two constraints have eased in the next year or two.

 

 

AGM

 

The AGM will be held on 18 September 2024 at 11:00am at the offices of the Company. For shareholders who cannot attend physically but would like to follow the presentations virtually, the Board has once again decided to stream the AGM using the Zoom platform. Please note that attendance virtually will not count towards a quorum. Hence, all shareholders are encouraged to submit their proxy forms electronically at least two days in advance of the meeting. Further details have been provided in the cover letter.

 

 

Finally, on behalf of the Board, I would like to thank all shareholders for their trust, patience and support; and members of Team Ralph who have worked incredibly hard and been hugely supportive while also providing the very best care to our patients and their human carers.

 

 

 

Iqbal Dhanji

Chairman of the Board

19 August 2024

THE RALPH VETERINARY REFERRAL CENTRE PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
Strategic report

The Ralph Veterinary Referral Centre Plc (The Ralph) is an established, state-of-the-art, multidisciplinary, small animal specialist veterinary referral hospital based in Marlow, Buckinghamshire.

 

The Ralph opened in February 2019 with a clear mission – to set the standard for small animal referral veterinary care with an ethical conscience - and in the space of 5 years, it has become the largest independent (non-corporate, non-university), specialist referral hospital in the Country with one of the largest Emergency and Critical Care (ECC) services in the United Kingdom alongside key specialist clinical services.

 

Its clinical staff are led by Board-certified Diplomates, supported by Advanced Practitioners, Residents and Interns, together with a team of physiotherapists, nurses, patient care assistants and support staff in customer care, finance, community engagement and administration. As of 31 July 2024, The Ralph had 247 team members.

 

The Ralph is a top tier tertiary referral centre on a par with, and indeed at times exceeding both University-grade small animal hospitals and a very small number of other comparable referral centres. Geographically, other than a small referral hospital located about five miles away that offers some similar disciplines and a new multidisciplinary referral hospital that has recently opened in West London, the nearest comparable multidisciplinary referral hospitals considered to be significant competitors are an hour’s drive away.

 

Wider Veterinary Sector

 

Various reports indicate there are 16-17 million pet-owning homes across the UK with consumer expenditure on vets and other services for pets estimated to be c.£4 billion.

 

A major development in the veterinary sector over the last 10 years has been the rapid, significant, and ongoing growth of a few large corporate suppliers. There are around 5,000 First Opinion vet practices (FOPs) in the UK. In 2013, around 10% of these practices belonged to large groups, but this share is now almost 60%. Many of the large corporate groups have expressed an intention to continue expanding through acquisition of independent practices.

 

Mindful of competition concerns and following a review of the sector in September 2023, the Competition and Markets Authority (CMA) announced in May 2024, it would be conducting a full market investigation into veterinary services for household pets (which is expected to take 18-24 months). Please see the CEO Reflections and the section on Principal Risks below where this is discussed in more detail.

 

In the referral space, to the best of our knowledge, The Ralph is the only remaining large independent multidisciplinary referral centre for small animals in the United Kingdom. It is well placed to serve the needs of not only first opinion care vets who prefer to support the independent segment of this sector but also corporate owned practices that may not have a referral hospital that is part of the same corporate group in their proximity, or where such a referral centre does not have the appropriate specialists or capacity to see their patients in a timely manner.

 

Business Performance

 

This has been The Ralph’s fifth full year of operation since opening. This fifth year has been all about consolidation, improving efficiency and building resilience, including:

The Ralph has made considerable progress on all the above.

THE RALPH VETERINARY REFERRAL CENTRE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -

Key Performance Indicators (KPIs)

The Directors monitor several KPIs which they consider are effective in measuring delivery of their strategy and which assist in the management of the business. The main KPIs are:

 

 

 

March 2021

March 2022

March 2023

March 2024

Referral Clinicians

32

35

41

47

Other vets including Residents

and Interns

15

15

24

28

Nurses

55

74

76

83

Patient Care Assistants and

Other Clinical Staff

19

28

43

56

Customer Care Team

11

14

11

12

Management and other Admin

Staff

19

24

25

27

Total

151

190

220

253

 

 

The Ralph has now achieved critical mass of its people and with the facilities in place, it is now focussed on improving workflow and operational systems and processes, to achieve profitability and positive operational cashflow on a month-by-month basis.

 

The financial results for the four months post year-end have been encouraging as The Ralph has achieved profitability and service availability in most disciplines on a consistent basis.

 

The current financial year is focussed on the following key priorities:

 

 

Financials

 

The trading results for the year and the company’s financial position at the end of the year are shown in the attached financial statements. The Directors report a pre-tax loss of £401,640 (2023: £364,017).

THE RALPH VETERINARY REFERRAL CENTRE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -

Directors’ Duties

 

The directors of the company, as those of all UK companies must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:

‘A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:

 

The following paragraphs summarise how the Directors fulfil their duties:

 

Risk management – the Board maintains a Risk Register that it reviews regularly. The major identified risks are disclosed in more detail in the section under ‘principal risks’ later in this Strategic Report.

 

Our people – are what make The Ralph successful. Without them and their dedication, The Ralph would not be able to make the progress it has done so far. Their welfare and alignment to the vision of The Ralph are paramount to the long-term success of The Ralph. We have structured training programmes for their development and support systems for their well-being. Their alignment with the vision of The Ralph is discussed further within the ‘principal risks’ section below under ‘recruitment and retention of staff’.

 

Business relationships – with our referring community, with suppliers and other stakeholders, are crucial to the long-term success of The Ralph. One of the principal risks identified is the loss of reputation which would impact the referrals The Ralph gets from first opinion vets, and this is discussed within the relevant section under principal risks below. The Ralph ensures it keeps to agreed credit terms with suppliers to ensure we get the best service and price for materials and services.

 

Community – The Ralph has a dedicated Community Engagement team whose sole responsibility is to engage with, respond to and seek feedback from our referral community of vet practices. The team also provide updates to carers of their pets who are inpatients.

 

Shareholders – The Ralph engages regularly with shareholders via Investor Updates, publication of the Annual Report and Accounts, hosting the Annual General Meeting and welcomes contact by email, with the Chairman.

 

Environmental Social Governance

 

The Ralph seeks to conduct its affairs responsibly and to consider environmental, human rights, social and community issues. No penalties were imposed on the company for failure to comply with any regulatory or human rights issues.

 

In consideration of the environment, various steps have been taken to improve inventory management and reduce waste with an increased emphasis on sustainability.

 

On social governance, The Ralph has developed a strong culture on team member interactions, with support structures to create good working conditions for all staff.

THE RALPH VETERINARY REFERRAL CENTRE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -

Principal Risks

 

The Directors have identified several principal risks facing The Ralph and have strategies to mitigate them.

 

Loss of reputation

 

A key risk to the Company is the loss of reputation related to clinical performance and standards of patient care. The Clinical Director and all the senior clinicians are acutely aware of this risk and monitor this closely. This risk is mitigated by frequent internal reviews, on-going continuous improvement processes and with all employed staff being awarded Enterprise Management Incentive (EMI) share options to ensure they have a vested interest in the success of the hospital. The hospital has also built a reputation for its acts of kindness and compassion.

 

Recruitment and retention of staff

 

The success of The Ralph is dependent on recruiting, supporting and retaining appropriate personnel. To that end, The Ralph has a recruitment process that is complemented by a comprehensive on-boarding procedure once an employee commences work together with a social contract on how team members interact with each other. This is to ensure all employees understand the core values and culture of The Ralph. In addition, The Ralph provides excellent working conditions, support structures and processes for staff wellbeing, and all employees are awarded EMI share options that can be exercised from the end of year four to year ten from the date they are granted. Some members of staff have taken the opportunity to exercise their share options becoming shareholders.

 

The Ralph employs veterinary surgeons, nurses and other members of staff that are citizens of other EU countries. Implementation of the new Immigration legislation with new salary thresholds for recruiting veterinary professionals from abroad needing visa sponsorship and removing veterinary surgeons from the occupation shortage list is making recruitment of specialists-in-training (interns and residents) much more challenging. There is therefore a risk of a shortage of skilled staff in the future particularly with referral hospitals being set up in the EU, attracting qualified EU staff from the UK.

 

Financial

 

Credit risk - The Ralph operates a debtor’s policy with the majority of debtors covered by pet insurance which is on average settled within 15 days of a claim being raised with the relevant insurance company.

Where carers do not have insurance for their pets, they either pay the full invoice for treatment at the end of a course of treatment or apply for credit finance from a finance company we have made arrangements with. In the rare instances where carers do not have pet insurance or do not qualify for a credit facility, carers are encouraged to find alternative means of meeting their bills.

 

Liquidity and cashflow risks - the Management of the Company monitor the cashflow position regularly. The Board meets monthly to discuss the Management Accounts and reviews the cashflow forecast on a regular basis. Where required, capital expenditure has mostly been funded either through the Company’s own cash resources or through asset finance, while the working capital requirements to fund the growth of The Ralph as it moves towards profitability has been funded by equity and R&D tax credits.

 

Continuity of referrals

 

The long-term success and viability of The Ralph is dependent on first opinion vets continuing to refer cases to The Ralph. To this end, relationships with first opinion vets and staff will continue to be developed and nurtured through professional support, hosting Continuing Professional Development (CPD) sessions and providing excellent care, communication and acts of kindness. This continued relationship building, support and care is creating a strong foundation for the long-term success of The Ralph.

 

THE RALPH VETERINARY REFERRAL CENTRE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -

Financial hardship due to the cost-of-living crisis and inflation

 

Although the Covid-19 pandemic encouraged many households to take the plunge and adopt a pet, the return to work, cost of living crisis with high interest rates and inflation has led to an increase in euthanasia, an increase in pets in rescue centres and a drop in affordability leading to a decrease in caseload/turnover. This has caused several corporate groups to recently announce restructuring and consolidation of their staffing. We do not believe this is necessary at The Ralph, nevertheless, the Directors will continue to monitor demand for The Ralph’s services and take action as appropriate.

 

 

The original thesis for The Ralph remains that even during times of uncertainty, pets will continue to receive the very best care from their carers. Post year-end, The Ralph has been busier than ever, and the Directors continue to look for selective growth opportunities.

 

Competitions and Market Authority (CMA) review

 

The CMA announced on 23 May 2024 that it would be conducting a full-blown review of the sector. Previously, the CMA had identified five critical concerns that it proposed to investigate further as follows:

 

  1. Consumers may not be given enough information to enable them to choose the best veterinary practice or the right treatment for their needs.

  2. Concentrated local markets, in part driven by sector consolidation, may be leading to weak competition in some areas.

  3. Large corporate groups may have incentives to act in ways which reduce choice and weaken competition.

  4. Pet owners might be overpaying for medicines or prescriptions.

  5. The regulatory framework is outdated and may no longer be fit for purpose.

 

From The Ralph’s perspective – there is nothing here about which we should be unduly concerned about as The Ralph is an Independent, single site tertiary hospital (not a first opinion practice). We are happy to assist the CMA in any way.

 

Nevertheless, a formal CMA investigation is likely to have a negative impact on capital investment into the wider veterinary sector and therefore to the valuations within it.

 

 

 

 

This report was approved by the Board on 19 August 2014 and signed by its order.

 

 

Iqbal Dhanji

Chairman

 

THE RALPH VETERINARY REFERRAL CENTRE PLC
CEO REFLECTIONS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
CEO reflections

Welcome to this year’s CEO Reflections. I’d like to thank all our shareholders, Team Ralph, our referring practice community and the families we have served over the last twelve months for your support and trust. We celebrated The Ralph’s fifth anniversary on 14th February 2024 - we could not have got here without you! The Ralph's mission is "to set the standard for small animal referral veterinary care with an ethical conscience". The last year has been one of consolidation and maturation as we continue to pursue this mission in a financially positive and sustainable way as the UK’s largest independent (non-corporate, non-university) multidisciplinary specialist referral centre. This period has also thrown up new challenges for the UK veterinary sector and, therefore, for The Ralph.

 

Over the last twelve months, our top and interrelated objectives have been to become consistently profitable and improve our operations in clinical and non-clinical areas, focusing on workflow efficiency and cashflow, respectively. It takes a variable amount of time for a startup to reach a tipping point where profitability is achieved and sustained. Myriad factors influence this period, and it is difficult to predict with certainty, especially in a large, complex healthcare business like The Ralph. At the end of May 2023, Team Ralph comprised approximately 230 members with various employment arrangements and working patterns. This number grew by less than 10% over the subsequent twelve months, our slowest rate of team expansion to date. At the same time, this period has seen the business set new weekly and monthly highs for turnover and new patient referrals. We have built depth in our clinical teams to provide service capacity more predictably than in our earlier years with less dependency on locum cover. Since the start of the new financial year, The Ralph has seen our most extended period of consistent profitability, a trend that we are working hard to secure. This progress has been in part due to the ongoing growth of our Neurology & Neurosurgery service, our thriving Internal Medicine service, and an increased focus on accepting emergency referrals across all disciplines. If this trend continues, we will have achieved sustained profitability in a little over five years. This will be an excellent outcome given that The Ralph opened as the largest UK startup referral centre ever and has had to navigate considerable challenges as an independent business, both foreseeable (e.g. veterinary workforce crisis, corporate consolidation) and much less so (e.g. the Covid-19 pandemic, rapid cost inflation and interest from the Competition and Markets Authority (CMA)).

 

Over the last six months, one key focus area has been improving inventory management and waste reduction. Our new Pharmacy & Inventory Co-Leads and Inventory Taskforce have overseen this activity. This focus has not only improved the control of our costs but also contributed to an increased emphasis on sustainability. The building works for The Ralph was undertaken in 2018 and early 2019. Additional work has been completed since then, and the facilities have certainly been put through their paces as our team and patient caseload have grown significantly over this period. Overall, the hospital has performed well under this use, especially considering the budget available for the initial development. Various parts of the infrastructure have undergone scheduled five-year reviews without significant concerns. Our Maintenance team is in the process of touching up and refreshing many parts of the hospital. We have also installed an on-site generator to mitigate the risks of power outages to patient safety and workflow. In 2023, we undertook an initial internal consultation and preliminary discussions about expanding our facilities and service capacity by developing the unused mezzanine area at the back of the first floor (Project REACH). We subsequently put these discussions on hold in light of the sector developments described below so we could continue to monitor events while focusing on the business’s financial performance.

 

The second half of 2023 and the first half of 2024 saw significant changes in the UK veterinary sector. The CMA announced an initial sector review in September 2023 and published its initial findings in March 2024. After further consultation, it announced in May that it would be undertaking a full investigation into the sector. The CMA intends to publish its initial report for feedback in Q1 2025 and its final report in Q4 2025. Key areas of consideration include adequate local choice and treatment information for pet carers, weakened competition through corporate business practices, and transparency regarding prices (especially of medications), fees and ownership. The Ralph is a single-site referral practice that is not part of a large group and considers ethical practice one of our key tenets. As such, the CMA investigation is not a cause of concern. We can and have made some minor improvements in light of the CMA’s critical review areas. Their investigation undoubtedly shines a light on a sector that has already been struggling with many challenges in recent years, including but not limited to workforce recruitment and retention, mental wellbeing challenges and burnout. Notwithstanding these concerns, my perspective is that the CMA investigation is, on balance, a positive development in light of the trends in the UK veterinary sector over the last decade or more.

THE RALPH VETERINARY REFERRAL CENTRE PLC
CEO REFLECTIONS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -

The Ralph stands ready to assist the CMA with enquiries and our pet carer community with any questions that may arise while supporting Team Ralph and shielding them from any backlash, as we always seek to do.

 

The aforementioned 12-month period also saw increased macroeconomic financial pressure on UK pet carers. The pet care industry is defensible, meaning consumers will protect expenditures on their beloved animal companions over and above other expenses. Nonetheless, this is finite, and the veterinary sector has come under increasing economic pressure. The period between 2012 and 2022 saw something of a bubble form in the UK animal companion veterinary sector concerning practice valuations and, to some extent, specialist salaries and locum rates. Corporate acquisitions, competition for consolidation, and increasing consumer spending as animal companions have increasingly become part of the family unit fuelled this bubble. At the time of this report, the bubble has popped or, at the very least, is leaking. Acquisitions are at a standstill, large groups have announced non-clinical and clinical redundancies, specialist recruitment has significantly slowed, and locum rates have reduced.

 

There is also a trend towards new primary care and referral practices opening or being in the planning stages for future openings. These practices range from ‘traditional independent’ setups to practices opened by veterinary professionals in partnership with new private equity and similar funders entering the veterinary market for the first time. In the last couple of years, several announcements have been made about new employee ownership trusts as some independent practices seek to safeguard their future succession. The Ralph was ahead of its time in the sector, implementing an employee share option scheme as part of the founding model in 2019. After the mandatory four years of employment, some Ralphers have since taken the opportunity to exercise their options becoming shareholders. It is heartwarming to see other practices engaging with employee ownership and, perhaps, going beyond what we are in a position to do. Another noteworthy development in 2024 has been the implementation of new Immigration legislation with new salary thresholds for recruiting veterinary professionals from abroad needing visa sponsorship and removing veterinary surgeons from the occupation shortage list. This new legislation has made recruiting specialists-in-training (interns, residents) from abroad much more challenging.

 

The next few years will be very interesting in the UK animal companion veterinary sector in light of macroeconomic developments, the CMA’s investigation, the leaking bubble and the trend towards new practices. The Ralph is uniquely positioned as the largest multidisciplinary specialist referral centre in the UK that is not part of a large group, especially in light of our reputation for kindness, compassion, and genuinely caring for our patients and people. Suppose our current financial performance indeed heralds a trend of sustainable profitability. In that case, we will be making decisions about the future of the business, including expanding our facilities through Project REACH, and seeking to ensure that any shareholders wishing to realise their investment can do so.

 

I’d like to end by reiterating my gratitude to our shareholders, Team Ralph, and our referral and pet carer communities. I hope we show our appreciation to our patients for the opportunity to care for them through the compassionate, individually tailored care that we deliver “as if they are our own”. As the Founder, CEO and Clinical Director, the many examples of this care I encounter daily fuel the ongoing journey that began more than ten years ago and lighten the weight of the responsibilities. When all is said, it is first and foremost about the patients. The Ralph has a unique and generational opportunity to serve as a beacon of patient- and people-centric ethical business practices whilst being a profitable and progressive company.

 

Shailen

 

Shailen Jasani MA VetMB MRCVS DACVECC

Founder, CEO & Clinical Director

THE RALPH VETERINARY REFERRAL CENTRE PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE RALPH VETERINARY REFERRAL CENTRE PLC
- 12 -
Opinion

We have audited the financial statements of The Ralph Veterinary Referral Centre Plc (the 'company') for the year ended 31 March 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

THE RALPH VETERINARY REFERRAL CENTRE PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE RALPH VETERINARY REFERRAL CENTRE PLC (CONTINUED)
- 13 -
Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

 

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and updating our understanding of the sector in which the company operates.

 

Laws and regulations of direct significance in the context of the company include The Companies Act 2006, UK Tax legislation, and The Misuse of Drugs Act 1971.

 

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

THE RALPH VETERINARY REFERRAL CENTRE PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE RALPH VETERINARY REFERRAL CENTRE PLC (CONTINUED)
- 14 -

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

 

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. Also, 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 or intentional misrepresentations, or through collusion.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.

Luke Hanratty (Senior Statutory Auditor)
For and on behalf of Saffery LLP
19 August 2024
Chartered Accountants
Statutory Auditor
St John's Court
Easton Street
HIGH WYCOMBE
HP1 1JX
THE RALPH VETERINARY REFERRAL CENTRE PLC
Income Statement
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
2024
2023
Notes
£
£
Turnover
2
17,062,960
15,306,072
Cost of sales
(13,108,819)
(10,944,288)
Gross profit
3,954,141
4,361,784
Administrative expenses
(4,757,856)
(4,637,063)
Exceptional item
3
480,000
-
0
Operating loss
4
(323,715)
(275,279)
Interest receivable and similar income
8
6,298
-
0
Interest payable and similar expenses
9
(84,223)
(88,738)
Loss before taxation
(401,640)
(364,017)
Tax on loss
10
699,618
521,951
Profit for the financial year
297,978
157,934

The profit and loss account has been prepared on the basis that all operations are continuing operations.

THE RALPH VETERINARY REFERRAL CENTRE PLC
Statement of Financial Position
AS AT
31 MARCH 2024
31 March 2024
- 16 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,817,459
3,057,385
Current assets
Stocks
12
460,166
412,274
Debtors
13
1,577,774
1,339,683
Cash at bank and in hand
1,024,107
960,197
3,062,047
2,712,154
Creditors: amounts falling due within one year
14
(2,446,328)
(2,495,934)
Net current assets
615,719
216,220
Debtors falling due after more than one year
Debtors - deferred tax
18
1,259,336
1,287,603
Total assets less current liabilities
4,692,514
4,561,208
Creditors: amounts falling due after more than one year
15
(1,127,390)
(1,367,258)
Net assets
3,565,124
3,193,950
Capital and reserves
Called up share capital
21
128,196
127,326
Share premium account
7,734,589
7,734,589
Other reserves
238,658
253,332
Distributable profit and loss reserves
(4,536,319)
(4,921,297)
Total equity
3,565,124
3,193,950
The financial statements were approved by the board of directors and authorised for issue on 19 August 2024 and are signed on its behalf by:
Mr I A Dhanji
Director
Company registration number 09905661 (England and Wales)
THE RALPH VETERINARY REFERRAL CENTRE PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
Share capital
Share premium account
Share based payment reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2022
127,166
7,715,749
165,932
(5,079,231)
2,929,616
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
-
157,934
157,934
Issue of share capital
21
160
18,840
-
-
19,000
Share based payment charge
-
-
87,400
-
0
87,400
Balance at 31 March 2023
127,326
7,734,589
253,332
(4,921,297)
3,193,950
Balance at 1 April 2023
127,326
7,734,589
253,332
(4,921,297)
3,193,950
Year ended 31 March 2024:
Profit and total comprehensive income
-
-
-
297,978
297,978
Exercise of share options
20, 21
870
-
(87,000)
87,000
870
Share based payment charge
-
-
72,326
-
0
72,326
Balance at 31 March 2024
128,196
7,734,589
238,658
(4,536,319)
3,565,124
THE RALPH VETERINARY REFERRAL CENTRE PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(217,813)
(237,330)
Interest paid
(84,223)
(88,738)
Income taxes refunded
727,885
1,265,774
Net cash inflow from operating activities
425,849
939,706
Investing activities
Purchase of tangible fixed assets
(137,140)
(152,977)
Proceeds from disposal of tangible fixed assets
-
0
56,563
Interest received
6,298
-
0
Net cash used in investing activities
(130,842)
(96,414)
Financing activities
Proceeds from issue of shares
870
19,000
Repayment of bank loans
(80,004)
(173,915)
Payment of finance leases obligations
(151,963)
(150,902)
Net cash used in financing activities
(231,097)
(305,817)
Net increase in cash and cash equivalents
63,910
537,475
Cash and cash equivalents at beginning of year
960,197
422,722
Cash and cash equivalents at end of year
1,024,107
960,197
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
1
Accounting policies
Company information

The Ralph Veterinary Referral Centre Plc is a private company limited by shares incorporated in England and Wales. The registered office is Fourth Avenue, Globe Business Park, MARLOW, SL7 1YG.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

1.3
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Over the lease term
Plant and equipment
Over 10 years
Fixtures, fittings and equipment
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.4
Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock is recognised as an expense in the period in which the related revenue is recognised.

1.5
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 20 -
1.6
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including trade and other creditors and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

1.7
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

 

The Company recognises research and development tax credits receivable in cash as a current asset under the heading corporation tax receivable, when the amount can be estimated reliably. Any difference to amounts received are dealt with as adjustments to prior period tax

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 21 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.8
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.9
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.10
Share-based payments

The company has granted share options to employees at various dates from 2019 to 2023 under the Enterprise Management Incentive employee share option scheme. The company's policy is to offer participation in the employee share option scheme at the time of recruitment. These options must be measured at fair value and recognised as an expense in the profit and loss account with a corresponding increase in shareholders' funds. The fair value of the options has been estimated at the date of grant using the Black-Scholes option-pricing model. The fair value will be charged as an expense in the profit and loss account over the vesting period. The charge is adjusted each year to reflect the expected and actual level of vesting. The credit entry is contained within a separate reserve called the Share-Based Payment Reserve in the company's reserves and shown in the Movement in Shareholders' Funds. On exercise of share options, the amount of equity built up in the share based payment reserve relating to these share options is transferred to retained earnings.

1.11
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
2
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Services rendered
17,062,960
15,306,072
2024
2023
£
£
Turnover analysed by geographical market
UK
17,062,960
15,306,072
2024
2023
£
£
Other revenue
Interest income
6,298
-
3
Exceptional item
2024
2023
£
£
Expenditure
Release of over accrued business rates
(480,000)
-
4
Operating loss
2024
2023
Operating loss for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
241,114
233,508
Depreciation of tangible fixed assets held under finance leases
135,952
135,956
Profit on disposal of tangible fixed assets
-
(194)
Share-based payments
72,326
87,400
Operating lease charges
645,721
700,314
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
26,950
26,950
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
241
204

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
9,626,292
8,333,179
Social security costs
1,049,116
886,906
Pension costs
215,219
157,346
10,890,627
9,377,431
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
428,266
467,440
Company pension contributions to defined contribution schemes
42,632
2,632
470,898
470,072

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
269,314
268,981
Company pension contributions to defined contribution schemes
1,316
1,755
270,630
270,736
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
6,298
-
0
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
39,294
39,769
Other finance costs:
Interest on finance leases and hire purchase contracts
44,929
48,969
84,223
88,738
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(727,885)
(688,613)
Deferred tax
Origination and reversal of timing differences
28,267
166,662
Total tax credit
(699,618)
(521,951)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Loss before taxation
(401,640)
(364,017)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(100,410)
(69,163)
Tax effect of expenses that are not deductible in determining taxable profit
69,580
-
0
Tax effect of utilisation of tax losses not previously recognised
80,630
274,830
Effect of change in deferred tax rate
-
0
(21,841)
Research and development tax credit
(727,885)
(688,613)
Tax relief on share options
(21,533)
-
0
Deferred tax adjustments in respect of prior years
-
0
(17,164)
Taxation credit for the year
(699,618)
(521,951)
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 April 2023
3,261,708
1,266,090
248,610
4,776,408
Additions
19,614
88,697
28,829
137,140
At 31 March 2024
3,281,322
1,354,787
277,439
4,913,548
Depreciation and impairment
At 1 April 2023
1,064,581
505,775
148,667
1,719,023
Depreciation charged in the year
218,755
129,341
28,970
377,066
At 31 March 2024
1,283,336
635,116
177,637
2,096,089
Carrying amount
At 31 March 2024
1,997,986
719,671
99,802
2,817,459
At 31 March 2023
2,197,127
760,315
99,943
3,057,385

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Plant and equipment
648,124
777,862
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
460,166
412,274
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,273,557
1,027,661
Prepayments and accrued income
304,217
312,022
1,577,774
1,339,683
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
13
Debtors
(Continued)
- 26 -
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 27)
1,259,336
1,287,603
Total debtors
2,837,110
2,627,286
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
16
57,084
80,001
Obligations under finance leases
17
124,076
153,130
Trade creditors
947,883
704,409
Taxation and social security
905,534
771,751
Other creditors
23,097
109,594
Accruals and deferred income
388,654
677,049
2,446,328
2,495,934
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
110,823
167,910
Obligations under finance leases
17
215,254
338,163
Other creditors
-
0
4,162
Accruals and deferred income
801,313
857,023
1,127,390
1,367,258

 

16
Loans and overdrafts
2024
2023
£
£
Bank loans
167,907
247,911
Payable within one year
57,084
80,001
Payable after one year
110,823
167,910
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
16
Loans and overdrafts
(Continued)
- 27 -

Interest on Bank loans range from 3.3% to 6.9%. Amounts pursuant to these loans are secured on the assets to which they relate and with personal guarantees from the Executive Directors of the Company. The remaining term range between 12 and 44 months.

 

 

 

 

17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
124,076
153,130
In two to five years
215,254
335,520
In over five years
-
0
2,643
339,330
491,293

Interest on Hire purchase agreements range from 3% to 5.4%. Amounts borrowed pursuant to these loans are secured on the assets to which the relate and with personal guarantees from the Executive Directors of the Company. The remaining term range between 12 and 34 months.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(346,621)
(369,080)
Tax losses
1,605,957
1,656,683
1,259,336
1,287,603
2024
Movements in the year:
£
Asset at 1 April 2023
(1,287,603)
Charge to profit or loss
28,267
Asset at 31 March 2024
(1,259,336)
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
18
Deferred taxation
(Continued)
- 28 -

The deferred tax asset set out above partly relates to the utilisation of tax losses against future expected profits. The asset is expected to reverse over the next 24-36 months based on directors forecasts.

The deferred tax asset also partly relates to accelerated capital allowances, forming a deferred tax liability netted off against the above asset relating to tax losses. These accelerated capital allowances arise on the acquisition of fixed assets, and are expected to crystallise over the estimated useful economic life of the assets.

The rate at which deferred tax is calculated is 25% (2023 - 25%).

 

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
215,219
157,346

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

 

 

 

 

 

 

 

 

 

20
Share-based payments for employee share schemes

On 25 February 2019, the company granted options over 1,396,000 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 49 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from February 2019 to February 2029. The period over which the outstanding options are capable of being exercised is the period from February 2023 to February 2029 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

 

On 12 July 2019, the company granted options over 508,000 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 21 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from July 2019 to July 2029. The period over which the outstanding options are capable of being exercised is the period from July 2023 to July 2029 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

 

On 12 December 2019, the company granted options over 455,000 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 19 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from December 2019 to December 2029. The period over which the outstanding options are capable of being exercised is the period from December 2023 to December 2029 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Share-based payments for employee share schemes
(Continued)
- 29 -

On 28 August 2020, the company granted options over 348,000 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 14 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from August 2020 to August 2030. The period over which the outstanding options are capable of being exercised is the period from August 2024 to August 2030 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

 

On 22 November 2021, the company granted options over 980,000 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 43 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from November 2021 to November 2031. The period over which the outstanding options are capable of being exercised is the period from November 2025 to November 2031 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

 

On 15 August 2022, the company granted options over 656,750 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 15 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from August 2022 to August 2032. The period over which the outstanding options are capable of being exercised is the period from August 2026 to August 2032 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

 

On 1st September 2023, the company granted options over 535,000 shares through a tax-advantaged Enterprise Management Incentives employee share option scheme to a total of 16 employees on an all-employee basis at an option price of £0.001 per A Ordinary Share. The period over which the outstanding options are capable of subsisting is the period from September 2023 to September 2033. The period over which the outstanding options are capable of being exercised is the period from September 2027 to September 2033 during the period of employment of the scheme participants or at an exit event at any time in the ten-year period.

 

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Share-based payments for employee share schemes
(Continued)
- 30 -

The arrangements for an employee on leaving the company are as follows:

 

Leaving through Resignation

If the employee ceases to hold office or employment within the company as a consequence of resignation before exercising the option, then the employee is not allowed to exercise the option and the option lapses immediately at the date of leaving.

 

Leaving through Dismissal

If the employee ceases to hold office or employment within the company as a consequence of dismissal through gross misconduct or actively engaging in competition against the company or committing a material breach of either the Articles of Association or any shareholders agreement that is in existence at the time, then the employee is not allowed to exercise the option and the option lapses immediately at the date of leaving.

 

Leaving for a reason other than Resignation or Dismissal before Fourth Anniversary

If the employee leaves the employment of the company before the expiry of the fourth anniversary of the date of grant of the option for any reason other than resignation or dismissal, then the exercise of the option by the employee is fully at the discretion of the board of directors who must notify the employee of their decision within three months of the date of leaving and in the event that the board of directors does not give its permission to exercise the option then the Option will lapse immediately following the decision.

Leaving for a reason other than Resignation or Dismissal after Fourth Anniversary

If the employee leaves the employment of the company at any time after the fourth anniversary of the date of grant and has already exercised the option, thereby ensuring ownership of the shares, then the employee will be allowed to retain ownership of the shares, whatever the reason for leaving.

 

Death in Service

If the employee dies whilst holding employment within the company before exercising the option, then at the discretion of the board of directors the personal representative will be allowed to exercise the option within the period of twelve months of the date of death.

 

The expense calculation for the options granted on 25 February 2019, 12 July 2019, 12 December 2019, 28 August 2020, 22 November 2021, 15 August 2022 and 1 September 2023 using the Black-Scholes option-pricing valuation model, is based on the following assumptions:

 

Assumptions

 

2019

Grant

25.02.2019

 

2019

Grant

12.07.2019

 

2019

Grant

12.12.2019

 

2020

Grant

28.08.2020

 

2021

Grant

22.11.2021

2022

Grant

15.08.2022

2023

Grant

01.09.2023

Expected volatility

 

20%

20%

20%

20%

20%

20%

20%

Expected dividend yield

 

0%

0%

0%

0%

0%

0%

0%

Exercise price

 

£0.001

£0.001

£0.001

£0.001

£0.001

£0.001

£0.001

Market value

 

£0.10

£0.10

£0.125

£0.125

£0.125

£0.125

£0.125

Expected life

 

4 years

4 years

4 years

4 years

4 years

4 years

4 years

Risk-free rate

 

1.0%

1.0%

1.0%

1.0%

1.0%

4.0%

4.0%

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Share-based payments for employee share schemes
(Continued)
- 31 -

The outstanding options at the end of the year:

 

Shares over which

Options granted

 

2019

Grant

25.02.2019

 

2019

Grant

12.07.2019

 

2019

Grant

12.12.2019

 

2020

Grant

28.08.2020

 

2021

Grant

22.11.2021

2022

Grant

15.08.2022

2023

Grant

01.09.2023

All

Grants of Options

Original Grants

1,396,000

508,000

455,000

348,000

980,000

656,750

535,000

4,878,750

Forfeited during the year to 31.03.2019 (leavers)

 

0

0

0

0

0

0

0

0

Forfeited during the year to 31.03.2020

(leavers)

 

185,000

55,000

25,000

0

0

0

0

265,000

Forfeited during the year to 31.03.2021

(leavers)

 

215,000

55,000

82,000

0

0

0

0

352,000

Forfeited during the year to 31.03.2022

(leavers)

 

43,000

49,000

15,000

135,000

30,000

0

0

272,000

Forfeited

during the year

to 31.03.2023

(leavers)

 

65,000

0

30,000

23,000

100,000

0

 

0

218,000

Forfeited

during the year

to 31.03.2024

(leavers)

 

25,000

2,500

10,000

25,000

125,000

123,750

0

311,250

 

Exercises

during the year

to 31.03.2024

 

457,500

292,500

120,000

0

0

0

0

870,000

Outstanding at the end of the year

 

405,500

54,000

173,000

165,000

725,000

533,000

535,000

2,590,500

 

THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Share-based payments for employee share schemes
(Continued)
- 32 -

The involvement of the executives and employees in the employee share schemes:

 

 

 

 

 

 

 

Shares

subject to

options:

year to

31.03.2019

Shares

subject to

options:

year to

31.03.2020

Shares

subject to

options:

year to

31.03.2021

Shares

subject to

options:

year to

31.03.2022

Shares subject to options:

year to 31.03.2023

Shares subject to

options:

year to

31.03.2024

Outstanding at the start of the year

 

0

1,396,000

2,094,000

2,090,000

2,798,000

3,236,750

Granted during the year

 

1,396,000

963,000

348,000

980,000

656,750

535,000

Forfeited during the year (leavers)

 

0

265,000

352,000

272,000

218,000

311,250

Exercised during the year

 

0

0

0

0

0

870,000

Expired or lapsed during the year

 

0

0

0

0

0

0

Outstanding at the end of the year

 

1,396,000

2,094,000

2,090,000

2,798,000

3,236,750

2,590,500

21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of 0.1p each
76,196,426
75,326,426
76,196
75,326
B Ordinary shares of 0.1p each
52,000,000
52,000,000
52,000
52,000
128,196,426
127,326,426
128,196
127,326

The A & B Ordinary shares entitle the holder to full voting rights and to participate fully in any dividend or capital distributions. The A & B shares are not redeemable.

22
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
432,207
703,147
Between two and five years
1,855,440
1,816,932
In over five years
9,112,500
9,562,500
11,400,147
12,082,579
THE RALPH VETERINARY REFERRAL CENTRE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 33 -
23
Cash absorbed by operations
2024
2023
£
£
Profit for the year after tax
297,978
157,934
Adjustments for:
Taxation credited
(699,618)
(521,951)
Finance costs
84,223
88,738
Investment income
(6,298)
-
0
Gain on disposal of tangible fixed assets
-
(194)
Depreciation and impairment of tangible fixed assets
377,066
369,464
Equity settled share based payment expense
72,326
87,400
Movements in working capital:
Increase in stocks
(47,892)
(99,336)
Increase in debtors
(238,091)
(282,741)
Decrease in creditors
(57,507)
(36,644)
Cash absorbed by operations
(217,813)
(237,330)
24
Analysis of changes in net funds
1 April 2023
Cash flows
Non-cash flows
31 March 2024
£
£
£
£
Cash at bank and in hand
960,197
63,910
-
1,024,107
Borrowings excluding overdrafts
(247,911)
119,298
(39,294)
(167,907)
Obligations under finance leases
(491,293)
196,892
(44,929)
(339,330)
220,993
380,100
(84,223)
516,870
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