The directors present the strategic report together with the audited financial statements for the Period ended 31 December 2023.
Following incorporation on the 15 February 2023 the group acquired Ridge and Partners LLP (Ridge) and its subsidiaries on the 13 April 2023. The acquisition involved two of the group’s subsidiaries acquiring the partnership interests of the former partners for cash and share consideration.
In order to support the financing of the acquisition of Ridge the group put in place bank financing with HSBC of £50.5m drawn borrowings and a further £12.5m of undrawn facilities as at 13 April 2023.
As a Built Environment Consultancy, Ridge provides its clients access to a wide range of integrated expertise and professional disciplines, helping them transform the quality and sustainability of their built environment projects.
Ridge reported growth in turnover to £119.7m for the financial year ended 31 December 2023, an increase of 29% on turnover of £93.0m last year.
Ridge has over 1,100 people who provide expertise with a personal touch, based on understanding, commitment and trust. From across 11 offices, the multidisciplinary teams are Partner-led, providing expert counsel and practical hands-on support, aligned directly with clients’ specific needs. They harness the right skills – at the right time – to deliver the very best results.
As part of the strategic growth plan, Ridge is continuing to expand sector and discipline coverage. In November 2023 the group completed the acquisition of Concert Consulting Group Limited, a long-established project and cost management business that specialises in data centres. Data centres are identified as a key growth opportunity and this acquisition augments the organic data centre capabilities of the group and immediate scale with revenues of £5m. Concert also brings considerable capability and partner level expertise to both the commercial sector and the London office.
During 2023 key hires were recruited to build out capability in net zero consultancy, design management, fire engineering and flood resilience and augmented the regional partner presence in core disciplines such as structural engineering, expert witness, project management, cost management and building surveying.
The group has invested in corporate functions during the year with expansion of the People Team in particular, to enhance employees’ experience at Ridge by nurturing a culture where people feel valued, supported and connected to the vision and strategy. Further investment has also been made in Technology, Social Value and Risk & Compliance. A Chief Financial Officer and Marketing Director were added to the management team and are focused on supporting and driving improvements across strategy, planning, finance operations, brand, marketing and communications as part of the business growth journey.
Given the change in structure and acquisition part way through the year there is no direct correlation between the EBITDA pre-acquisition and the EBITDA post-acquisition, primarily due to the remuneration changes between partnership drawings and employee remuneration post 13 April 2023.
As a built environment consultancy risk derives from those typical to the sector, related nature of the projects and professional services provided. These risk exposures are regularly reviewed and monitored with internal processes and procedures in place to minimize the risks, including internal QA, compliance and audit, health and safety expertise, contractual protections and professional indemnity cover. The business utilizes a captive insurer to take on the first layer of professional indemnity risks before risk transfer to the insurance market.
Financial risk is derived from the borrowing within Rise Bidco Limited at a floating rate linked to SONIA. The profitability, cash generation and headroom are closely monitored with the directors comfortable there is sufficient headroom at the date of the accounts.
The results for the period and the financial position at period end were considered satisfactory by the directors and expect the business to continue to grow in the foreseeable future.
The Group reports to the board on a number of KPIs and where relevant are proforma for all acquisitions at the balance sheet date (and therefore include the full year impact of the acquisition of Ridge and Partners LLP and Concert Consulting Group Ltd.
S172(1) (A) – “The likely consequences of any decision in the long term”
The Directors understand the business and the key stakeholders and assess the impact of its key decisions on all stakeholders including customers, employee, suppliers and society overall. The board of directors meets on a monthly basis to assess current performance and future strategy, including the strategic fit of acquisitions. More frequent interactions occur between the board to ensure the appropriate cadence and speed of decision making.
S172(1)(B) – “The interests of the group’s employees”
Employees are a key element of the business and the success and growth of the business is driven by their contribution, performance and cultural alignment to the Group’s values. Each Ridge office has regular engagement opportunities for employees to participate and contribute and to understand progression of the business towards its objectives. Employees have access to an array of benefits and support and fair terms of employment. Training and development, including professional accreditations are actively encouraged and supported.
S172(1)(C) – “The need to foster the Group's business relationships with suppliers, customers and others”
Customer engagement is taken seriously with customer care interviews embedded in the quality process. Complaint are taken seriously and escalated to a senior employee where necessary. A cycle of continuous improvement through learning is also in place. Supplier partnership is recognized as important to our success and ensuring fair terms and appropriate policies to support this is a focus for the business. The business has developed a Social Value team to build out the ethos of having an exponential impact on society and the environment through the work and projects we work on.
S172 (1)(D) – “The impact of the company's operations on the community and the environment”
Social Value has become a core component of our sustainability strategy, helping our teams to understand the social, economic and environmental value we create for our people, communities and supply chain partners. We leverage our strategic relationships with charities to deliver social value across a wide range of communities. We also set a side an annual Community Investment Fund and donate our expertise to support charitable causes.
Our social value approach is guided by 4 strategic social value outcomes:
Equitable economy: We promote fairness and access to opportunities including jobs, education and commercial opportunities
Resilient community: We help to strengthen communities where our offices are based and where our services are delivered.
Safeguarded environment: We take steps to reduce any negative impact on the environment through our business operations
Responsible business: We take bold steps to deliver our business services responsibly.
S172 (1)(E) – “The desirability of the company to maintain a reputation for high standards of business conduct”
The Group is known for its professional service delivery and high stands of customer care and business ethics. A number of UK and international standards are adhered to and there is board oversight of service delivery and the senior management team with the board comprising two investor non-executive directors and a non-executive
Chair.
S172 (1)(F) - “The need to act fairly as between members of the company”
The members of the company are communicated to monthly with a detailed information on performance and other relevant matters.
On behalf of the board
The directors present their annual report and financial statements for the Period ended 31 December 2023.
The results for the Period are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the Period and up to the date of signature of the financial statements were as follows:
The Group manages its cash and borrowing requirements to maximise interest income and minimise interest expense while ensuring day to day liquidity is maintained for business needs. The business has access to a £2.5m revolving credit facility which is undrawn at the balance sheet date.
The Group’s cash and bank loan balances are subject to floating interest rates. The Group manages leverage and cash balances to minimize overexposure to interest rate increases.
Cash balances are held in either Barclays Bank or HSBC. Customer credit terms are set to reduce long term exposure and credit checks are regularly carried out. Outstanding debts are reviewed weekly and any amounts overdue are escalated. Appropriate doubtful debt provisions are maintained.
There are no events to disclose.
Our 360 Sustainability Framework puts carbon reduction at the forefront of our ambitions. The key benefit of the model is that it delivers a holistic, sustainability-led solution, rather than focusing on individual targets. This ensures that we achieve our ambitions via robust and measured outcomes as well as providing us the ongoing opportunity to improve and innovate.
Our ability to achieve our ambitions in Energy, Carbon and Climate are inextricably linked to the other nine themes within the Sustainability framework, in particular: Materials, Resources and Waste; Travel, Transport and Mobility; and Ecology and Biodiversity.
Within the theme dedicated to Energy, Carbon and Climate theme, Ridge has outlined a Carbon Management Plan with a Net Zero Carbon Roadmap. The first stage of the Net Zero Carbon Roadmap is to complete an Emissions Profile. Ridge has conducted a carbon emissions assessment of all relevant categories within scope one and scope two and has completed carbon emissions assessments of material scope three emissions. The Emissions Profile baselines are based on the Science Based Targets Initiative (SBTi) and are being used to refine our more detailed carbon reduction targets. Our aims and objectives in relation to carbon reduction are guided by three overarching principles:
Commitment to be Net Zero carbon.
Minimising energy usage across all business locations
Limiting exposure to climate change and fluctuations in global energy pricing
The group has followed the HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the DEFRA Fuel Emissions Conversion Factors each year for Company Reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per FTE, a recommended ratio for the sector.
We have increased video conferencing technology for meetings to reduce the need for travel between sites, and launched a new additional electric-only car scheme alongside our existing scheme. We have also commenced reviews into energy efficiency measures that fall within our leased spaces such as lighting replacement. During 2024 we have also migrated those offices where we procure electricity directly to green energy tariffs. We carry out annual travel surveys with all our staff and use the information to inform decisions on new office locations and travel to work schemes.
We have audited the financial statements of Rise Midco Limited (the 'parent company') and its subsidiaries (the 'group') for the Period ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the group 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).
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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The 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 information given in the strategic report and the directors' report for the financial Period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their 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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our knowledge and experience;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence where applicable; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims;
reviewing relevant correspondence.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £7,600.
Rise Midco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O Horizon Capital LLP Level 9, The Shard, 32 London Bridge Street, London, SE1 9SG.
The group consists of Rise Midco Limited and all its subsidiaries.
The period runs from 15 February 2023 to 31 December 2023. There is no comparative period as the company was incorporated on 15 February 2023.
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 £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Rise Topco Limited.
These consolidated financial statements are available from its registered office, C/O Horizon Capital LLP
Level 9, The Shard, 32 London Bridge Street, London, SE1 9SG.
The consolidated group financial statements consist of the financial statements of the parent company Rise Midco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Fee income is recognised as earned when, and to the extent that, the group obtains the right to consideration in exchange for its performance under these contracts. It is measured at the fair value of the right to consideration, which represents amounts chargeable to clients, including expenses and disbursements but excluding VAT.
Revenue is generally recognised as contract activity progresses so that for incomplete contracts it reflects the partial performance of the contractual obligations. For such contracts the amount of revenue reflects the accrual of the right to consideration by reference to the value of the work performed. Revenue not billed to clients is included in unbilled receivables, and payments on account in excess of the relevant amount of revenue are included in creditors.
Fee income that is contingent on events outside the control of the firm is recognised when the contingent event occurs.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Fixed assets are depreciated over their estimated useful economic lives.
At the year-end the amount of revenue generated on contracts is estimated using the contract fee and the estimate of percentage of the work that has been completed.
Goodwill is calculated as the total amount of consideration paid upon acquisition of a company less the net identifiable assets value as at the acquisition date.
Goodwill is amortised over its estimated useful economic life.
The average monthly number of persons (including directors) employed by the group and company during the Period was:
Their aggregate remuneration comprised:
The actual charge for the Period can be reconciled to the expected credit for the Period based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2023 are as follows:
Concert Consulting Group Limited, Concert (CG2) Limited and Concert (CG3) Limited are exempt from the requirement relating to the audit of the financial statements under Section 479A of the Companies Act 2006.
Amounts owed to group undertakings are amounts owed to Rise Holdco Limited the immediate parent of Rise Midco Limited. Whilst these amounts are technically repayable on demand, there is no expectation that the amounts will become due within the next 12 months as all entities fall under the same management.
Deferred consideration of £2.144m (in Creditors: amounts falling due after more than one year) relates to the earnout payment due to the former shareholders of Concert Consulting Group. This is contingent on performance and is included at the forecast amount due and payable 62.5% in cash and 37.5% in preference shares of the Group. The actual amount payable could be higher or lower than the estimate based on actual performance in the 12 months following completion.
The bank loan is secured by a charge over the group's assets.
The bank loan is repayable in 2030 and attracts a 5.5% margin over SONIA.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
1 Ordinary share of £1 was issued in the period for consideration of £1.
On 13 April 2023 the group acquired 100 percent of the issued capital of Ridge and Partners LLP.
On 3 November 2023 the group acquired 100 percent of the issued capital of Concert Consulting Group Limited.
The group has a contingent liability at 31 December 2023 to subscribe up to £1,000,000 of further shares in the insurance captive investment, if called upon by the company in the future.
Deferred consideration of £2.144m (in Creditors: amounts falling due after more than one year) relates to the earnout payment due to the former shareholders of Concert Consulting Group. This is contingent on performance and is included at the forecast amount due and payable 62.5% in cash and 37.5% in preference shares of the Group. The actual amount payable could be higher or lower than the estimate based on actual performance in the 12 months following completion.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The following amounts were outstanding at the reporting end date:
Borrowings include bank loans (£48,846,000) and loans from group undertakings (£65,002,000)