Company registration number 14451715 (England and Wales)
LCAE GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LCAE GROUP LIMITED
COMPANY INFORMATION
Director
Dr R Gill, OBE (Chairman)
Secretary
Mr W K Leung
Company number
14451715
Registered office
19 Charterhouse Street
London
UK
EC1N 6RA
Auditor
King & King Chartered Accountants
5th Floor, Watson House
54-60 Baker Street
London
W1U 7BU
Bankers
NatWest Bank Plc
1 Abbey Road
London
NW10 7RB
LCAE GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 35
LCAE GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 31 December 2023.

 

LCAE Group Limited, incorporated on 31 October 2022, acquired 100% of the equity shares of LCA London Limited through a share-for-share exchange. Subsequently, on 01 January 2023, LCAE Group Ltd acquired 100% of the equity shares of LCA Education Ltd, also via a share-for-share exchange. Consequently, the consolidated group financial statements have been prepared as if the group had been in continuous existence.

Review of the business

The principal activity of the group continues to be the provision of higher education. The group was providing undergraduate and postgraduate courses and entered into academic agreements with Anglia Ruskin University and University of Northampton. During the year 2023, the subsidiary company, LCA Education Ltd, entered into a new academic agreement with the University of Bolton and commenced undergraduate courses at the Manchester premises, and from January 2024 has entered into an academic agreement with University of Central Lancashire and started to offer courses in London.

 

In the current landscape of higher education, characterised by rapid technological advancements and evolving student expectations, the group has remained agile and responsive to industry trends. We have embraced digital transformation, enhancing our teaching infrastructure to support both remote and hybrid learning models, ensuring our students receive excellent tuition regardless of their location.

 

Students are at the heart of our offer and our group. We have greatly increased our focus on reinvestment to improve the quality of life and learning of our students. To further support our students, we have established ongoing initiatives such as Hardship Fund and Attendance Bursary, providing crucial financial assistance and support.

 

The group has continued to expand. There is now over 200,000 sq.ft of administrative and teaching space in central and east London and Manchester. The group has invested heavily in support for people with disabilities, ensuring our facilities and services are inclusive and accessible. Recognising the importance of mental health, the group has also developed a new well-being support department and support services for both students and staff.

 

The group's turnover decreased by 12.6% from £85.5m in 2022 to £74.7m 2023 and the cost of sales marginally decreased from £36.6m in 2022 to £35.7m in 2023. As a result, the Gross Profit reduced significantly by 20.2%, from £48.9m in 2022 to £39.0m in 2023. Despite the downturn in revenue, the company managed to keep a strong financial position by reducing liabilities and effectively managing costs, resulting in a 22.4% increase in net assets, from £56.4m in 2022 to £69.1m in 2023.

 

The decrease in revenue and profit compared to 2022 reflects a reduction in the number of students, as the rate of course completions has outpaced new registrations. During the Covid-19 pandemic, new registrations surged, but this effect has since normalised, impacting overall student numbers. However, we are now seeing a gradual increase in new student registrations.

 

The group had no bank borrowings or overdrafts at the year-end and is building a cash reserve to invest in buildings, facilities, and personnel for the benefit of the student population. Consequently, the group's cah position improved to £48.3m by the end of 2023, earning £2.1m in interest income on this balance.

 

Future developments

Director continue to review the strategy and business models to improve the efficiency of the organisation, to invest in up to date facilities in order to enhance the students' learning experience and outcome. The plan going forward is to build upon efforts already made to increase the new range of course offering.

 

This has already resulted in maintaining the student numbers since the year end and expected to continue to the next financial year. The group strives to provide high quality education and develop good relationship with students and lecturers.

 

In January 2024, LCA Education Ltd, entered into a new academic agreement with the University of Central Lancashire and started to offer courses.

LCAE GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

The principal risks facing the group is the failure to recruit sufficient students at each recruitment cycle. The group mitigates this risk by closely monitoring the student recruitment numbers and adapts its courses by, introducing a wider range of popular courses and discontinuing courses that are no longer in demand.

 

Due to close involvement of senior management, general business risk is identified and addressed on a regular basis. The board of directors review the risk assessment and the management response on a quarterly basis, ensuring proactive approach to risk management. The principal uncertainties facing the group are the general political and economic conditions which can impact both student enrollment and overall business operations. By staying vigilant and adaptable, the company aims to navigate these uncertainties and maintain steady growth.

 

The group uses various financial instruments including cash, debtors and creditors to manage the working capital of the group.

 

Key performance indicators

The director monitors the performance of the group by using a number of financial and non-financial performance indicators. The turnover and student numbers are primary KPIs, regularly reviewed to ensure that they remain appropriate and relevant to monitor the challenges, complexities and improvements in the business.

 

 

2023

2022

YoY Change

Turnover

£74.7m

£85.5m

-12.6%

Student no as at year end

8,312

9,375

-11.3%

In addition to these main KPIs, the following non-financial KPIs closely reviewed to assess the progress of the group’s strategy and objectives.

 

Measured against expectations set by the board to ensure alignment with organizational goals.

 

Compared to forecast targets to assess enrollment performance.

 

Monitored against the budget to ensure financial health and operational efficiency.

 

Conducted on an ongoing basis to compare actual results against the budget, identifying discrepancies and areas for improvement.

 

Performance monitored against Anglia Ruskin University's KPIs, focusing on the National Student Survey (NSS), Graduate Outcomes, and Access and Widening Participation.

 

Overseen to ensure compliance with the Office for Students B3 minimum thresholds.

LCAE GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Section 172

Employee's training and development

To achieve our ambitious goals, we require people who are committed and prepared to embrace our corporate philosophy. We offer plenty of opportunities for career advancement and skill improvement. Training is a continuous process, and whilst basic job training is given, people with commitment and an aptitude for challenges are selected for training for growth and higher responsibilities.

 

Slavery and Human trafficking statement

We have a zero tolerance to slavery in all its forms and are committed to implementing business practices that do not allow any form of slavery to take place, whether internally or as part of our supply chain. Our supply chain includes procurement of study materials, purchase of fixed assets and employing contractors for setting up the classrooms. We carry out an annual review of our Anti-Slavery Policy to determine whether it may be improved for better understanding and applicability.

Supplier relationships

Our suppliers play a pivotal role to our business, in which we use the highest standard study text, and which are delivered to us promptly. Our suppliers keep us informed of any supply chain challenges, and notwithstanding the consequences of the global pandemic we have maintained strong relationships with our key suppliers. We are regularly in contact with our suppliers thereby ensuring our staff retain an open relationship, and our suppliers are always aware of our ongoing requirements.

Customer relationships

Our students are kept up to date with business achievements, future strategy and ongoing business activities and future developments, with a view to nurturing long term partnerships. Our objective is to provide the best level of student service, fulfilling our student's demands and ensuring that the delivery of lectures are of the highest standard, and are delivered in accordance to the university standard. Our staff and management continuously work hard to ensure that we improve the student's quality of life and learning.

On behalf of the board

Dr R Gill, OBE (Chairman)
Director
17 September 2024
LCAE GROUP LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The director presents his annual report and audited financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the group continued to be providers of university and higher education.

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £1,000,000. The director does not recommend payment of a further dividend.

Director

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

Dr R Gill, OBE (Chairman)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its director during the year. These provisions remain in force at the reporting date.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Business relationships

Details on how the Group has fostered relationships with suppliers, customers and others can be found within the Group’s Section 172 statement in the Strategic Report.

Post reporting date events

Post balance sheet events are set out in note 24 to the financial statements.

Future developments

The Group’s future developments are set out in the Group Future development section of the Strategic Report.

Auditor

The auditor,King & King, Chartered Accountants and Statutory Auditor is deemed to be reappointed under section 487(2) of the Companies Act 2006.

LCAE GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Energy and carbon report

LCA London Limited’s environmental performance information is presented in accordance with the Streamlined Energy and Carbon Reporting (“SECR”) Policy. The table below represents LCA London Limited’s energy use and greenhouse gas (GHG) emissions from electricity and fuel for the annual reporting period 01/01/2023 to 31/12/2023. The scope of the reporting includes all UK operations.

2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
976,546
947,178
- Electricity purchased
926,925
1,065,280
1,903,471
2,012,458
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
178.60
172.30
- Fuel consumed for owned transport
-
-
178.60
172.30
Scope 2 - indirect emissions
- Electricity purchased
191.90
220.60
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
-
-
Total gross emissions
370.50
392.90
Intensity ratio
Tonnes CO2e per employee
1.39
1.48
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.

Measures taken to improve energy efficiency

We have installed smart meters, energy saving equipment and lights across all sites and increased video conferencing technology for staff meetings, to reduce the need for travel between locations.

LCAE GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Statement of director's responsibilities

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

 

 

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

Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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 strategic report. The director has chosen to present the "Business review and the future development" and "Financial risk management objectives and policies" in the strategic report.

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 auditor of the group is unaware. Additionally, the director individually has taken all the necessary steps that he ought to have taken as director in order to make himself aware of all relevant audit information and to establish that the auditor of the group is aware of that information.

Going concern

The director has prepared financial forecasts, which include sensitivities taking into account plausible downside scenarios likely to arise from unexpected costs. The director has reasonable expectation that the group has adequate resources to cope with any downside scenario for at least twelve months from the date of approval of the accounts.

On behalf of the board
Dr R Gill, OBE (Chairman)
Director
17 September 2024
LCAE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LCAE GROUP LIMITED
- 7 -
Opinion

We have audited the financial statements of LCAE GROUP LTD (the 'parent company') and its subsidiaries (the 'group') for the year 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 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 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 director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:

LCAE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LCAE GROUP LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.

 

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

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the parent company or to cease operations, or has 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatements in respect of irregularities including fraud and non-compliance with laws and regulations, we consider the following:

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.

 

 

 

 

LCAE GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LCAE GROUP LIMITED
- 9 -

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.

 

 

Rajesh Patel
Senior Statutory Auditor
For and on behalf of King & King Chartered Accountants
17 September 2024
Statutory Auditor
5th Floor, Watson House
54-60 Baker Street
London
W1U 7BU
LCAE GROUP LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
as restated
Notes
£
£
Turnover
3
74,714,495
85,516,741
Cost of sales
(35,674,490)
(36,567,462)
Gross profit
39,040,005
48,949,279
Administrative expenses
(23,280,419)
(20,047,488)
Operating profit
4
15,759,586
28,901,791
Interest receivable and similar income
8
2,260,486
81,730
Interest payable and similar expenses
9
(158,795)
(143,641)
Profit before taxation
17,861,277
28,839,880
Tax on profit
10
(4,219,923)
(5,167,432)
Profit for the financial year
13,641,354
23,672,448
Profit for the financial year is all attributable to the owner of the parent company.
LCAE GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
as restated
£
£
Profit for the year
13,641,354
23,672,448
Other comprehensive income
-
-
Total comprehensive income for the year
13,641,354
23,672,448
Total comprehensive income for the year is all attributable to the owners of the parent company.
LCAE GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
12
14,698,307
11,546,512
Current assets
Debtors falling due after more than one year
15
4,955,957
4,352,519
Debtors falling due within one year
15
21,270,489
19,086,858
Cash at bank and in hand
48,368,379
42,020,841
74,594,825
65,460,218
Creditors: amounts falling due within one year
16
(14,666,485)
(15,518,963)
Net current assets
59,928,340
49,941,255
Total assets less current liabilities
74,626,647
61,487,767
Provisions for liabilities
Provisions
17
5,287,969
4,247,653
Deferred tax liability
18
255,453
798,244
(5,543,422)
(5,045,897)
Net assets
69,083,225
56,441,870
Capital and reserves
Called up share capital
20
100
50
Profit and loss reserves
69,083,124
56,441,819
Equity attributable to owner of the parent company
69,083,224
56,441,869
Non-controlling interests
1
1
69,083,225
56,441,870
The financial statements were approved and signed by the director and authorised for issue on 17 September 2024
17 September 2024
Dr R Gill, OBE (Chairman)
Director
Company registration number 14451715 (England and Wales)
LCAE GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Investments
13
359,485
359,435
Current assets
Debtors
15
22,241,192
13,513,071
Cash at bank and in hand
31,999
70,297
22,273,191
13,583,368
Creditors: amounts falling due within one year
16
(66,759)
(365,685)
Net current assets
22,206,432
13,217,683
Net assets
22,565,917
13,577,118
Capital and reserves
Called up share capital
20
100
50
Profit and loss reserves
22,565,817
13,577,068
Total equity
22,565,917
13,577,118

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £9,988,750 (2022 - £13,577,068 profit).

The financial statements were approved and signed by the director and authorised for issue on 17 September 2024
17 September 2024
Dr R Gill, OBE (Chairman)
Director
Company registration number 14451715 (England and Wales)
LCAE GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
-
38,787,169
38,787,169
1
38,787,170
Impact of correction of error
-
(1,658,365)
(1,658,365)
-
(1,658,365)
As restated
-
0
37,128,804
37,128,804
1
37,128,805
Year ended 31 December 2022:
Profit and total comprehensive income
-
23,672,448
23,672,448
-
23,672,448
Issue of share capital
20
50
-
50
-
50
Dividends
11
-
(4,000,000)
(4,000,000)
-
(4,000,000)
Other movements
-
(359,433)
(359,433)
-
(359,433)
Balance at 31 December 2022
50
56,441,819
56,441,869
1
56,441,870
Year ended 31 December 2023:
Profit and total comprehensive income
-
13,641,354
13,641,354
-
13,641,354
Issue of share capital
20
50
-
50
-
50
Dividends
11
-
(1,000,000)
(1,000,000)
-
(1,000,000)
Other movements
-
(49)
(49)
-
(49)
Balance at 31 December 2023
100
69,083,124
69,083,224
1
69,083,225
LCAE GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
-
0
-
0
-
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
13,577,068
13,577,068
Issue of share capital
20
50
-
50
Balance at 31 December 2022
50
13,577,068
13,577,118
Year ended 31 December 2023:
Profit and total comprehensive income
-
9,988,749
9,988,749
Issue of share capital
20
50
-
50
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 December 2023
100
22,565,817
22,565,917
LCAE GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
15,083,040
22,931,747
Interest paid
(16)
-
0
Income taxes paid
(4,684,617)
(5,000,001)
Net cash inflow from operating activities
10,398,407
17,931,746
Investing activities
Purchase of tangible fixed assets
(5,311,355)
(4,619,220)
Interest received
2,260,486
81,730
Net cash used in investing activities
(3,050,869)
(4,537,490)
Financing activities
Dividends paid to equity shareholders
(1,000,000)
(4,000,000)
Net cash used in financing activities
(1,000,000)
(4,000,000)
Net increase in cash and cash equivalents
6,347,538
9,394,256
Cash and cash equivalents at beginning of year
42,020,841
32,626,585
Cash and cash equivalents at end of year
48,368,379
42,020,841
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

LCAE GROUP LTD (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 19 Charterhouse Street, London, UK, EC1N 6RA.

 

The group consists of LCAE GROUP LTD and all of its subsidiaries.

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 £. Prior period comparatives have been reclassified to align to the current period presentational approach.

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:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company LCAE GROUP LTD 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.

 

LCAE Group Limited, incorporated on 31 October 2022, acquired 100% of the equity shares of LCA London Limited through a share-for-share exchange. Subsequently, on 01 January 2023, LCAE Group Ltd acquired 100% of the equity shares of LCA Education Ltd, also via a share-for-share exchange. Consequently, the consolidated group financial statements have been prepared as if the group had been in continuous existence.

1.4
Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration 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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Turnover is measured at the fair value of the consideration receivable for higher educational and related services rendered, net of discounts. Where an element of the fees relates to services provided in the subsequent financial years, that proportion is accounted as deferred income and released to turnover when the courses and related services has been delivered.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Cost includes original purchase price, costs directly attributable to bringing the assets to its working condition for its intended use, dismantling and restoration costs.

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

Leasehold improvements
Over the lease term
Plant and equipment
25% reducing balanced method
Fixtures and fittings
20% reducing balanced method
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

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.

 

The asset's residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. The effect of any is accounted for prospectively.

1.7
Fixed asset investments

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.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

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.

1.9
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.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.10
Financial instruments

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

 

Financial instruments are recognised 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

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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

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.

Derecognition of financial assets

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.

Classification of financial liabilities

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.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Basic financial 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

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.

1.12
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
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 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.

1.13
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.14
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.

1.15
Retirement benefits

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

1.16
Leases

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.

 

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Operating lease commitments

The group has entered into property leases. As management have determined that the group has not obtained substantially all the risks and rewards of ownership of these properties, the leases have been classified as operating leases and accounted for accordingly.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Estimatation of useful lives of assets

The group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the group considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Dilapidations provision

Provision is made for dilapidations. This requires management's best estimate of the expenditure that will be incurred based on contractual requirements. In addition, the timing of the cash flows and the discount rates used to establish net present value of the obligations require management's judgement.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Course fee
74,714,495
85,516,741
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
74,714,495
85,516,741
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 24 -
2023
2022
£
£
Other revenue
Interest income
2,260,486
81,730
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
2,159,560
2,032,263
Operating lease charges
7,004,007
6,776,099
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,300
4,286
Audit of the financial statements of the company's subsidiaries
63,750
53,572
69,050
57,858
For other services
All other non-audit services
16,000
23,142
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Administrative staff
113
106
2
2
Lecturing sraff
174
194
-
-
Total
287
300
2
2
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 25 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
13,082,044
13,136,901
-
0
-
0
Social security costs
977,849
1,042,814
-
-
Pension costs
643,676
619,080
-
0
-
0
14,703,569
14,798,795
-
0
-
0
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
291,261
283,704
Company pension contributions to defined contribution schemes
439
263
291,700
283,967
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
291,261
283,704
Company pension contributions to defined contribution schemes
439
263

The directors' remuneration is only payable to the director, Dr R Gill.

 

One director (2022 : One) is member of defined contribution scheme.

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,069,425
81,730
Other interest income
191,061
-
Total income
2,260,486
81,730
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
9
Interest payable and similar expenses
2023
2022
£
£
Unwinding of discount on provisions
158,779
143,641
Other interest
16
-
Total finance costs
158,795
143,641
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
4,225,017
5,596,011
Adjustments in respect of prior periods
(6,670)
-
0
Total current tax
4,218,347
5,596,011
Deferred tax
Origination and reversal of timing differences
1,576
(428,579)
Total tax charge
4,219,923
5,167,432

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

2023
2022
£
£
Profit before taxation
17,861,277
28,839,880
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
4,465,319
5,479,577
Tax effect of expenses that are not deductible in determining taxable profit
126,047
65,676
Unutilised tax losses carried forward
(11,654)
(66,881)
Adjustments in respect of prior years
(6,670)
2,455
Effect of change in corporation tax rate
(265,756)
-
Permanent capital allowances in excess of depreciation
(88,938)
115,184
Deferred tax adjustment current year
1,575
(428,579)
Taxation charge
4,219,923
5,167,432

In the Spring budget 2021, the UK Government announced that from 01 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19%, as previously enacted). This new law was substantially enacted on 24 May 2021, for the financial year ended 31 December 2023. The current weighted average tax rate was 25%.

 

Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Interim paid
1,000,000
-
12
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2023
7,467,084
2,131,305
9,461,892
19,060,281
Additions
4,527,608
453,994
329,753
5,311,355
At 31 December 2023
11,994,692
2,585,299
9,791,645
24,371,636
Depreciation and impairment
At 1 January 2023
2,781,150
1,049,902
3,682,717
7,513,769
Depreciation charged in the year
812,856
345,982
1,000,722
2,159,560
At 31 December 2023
3,594,006
1,395,884
4,683,439
9,673,329
Carrying amount
At 31 December 2023
8,400,686
1,189,415
5,108,206
14,698,307
At 31 December 2022
4,685,934
1,081,403
5,779,175
11,546,512
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
359,485
359,435
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
359,435
Additions
50
At 31 December 2023
359,485
Carrying amount
At 31 December 2023
359,485
At 31 December 2022
359,435
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
LCA London Limited
United Kingdom
Provision of higher education
Ordinary
66.67
LCA Education Limited
United Kingdom
Provision of higher education
Ordinary
100.00

The ultimate controlling party is Dr R Gill owns 100% of the issued ordinary equity share capital of LCAE Group Limited.

 

"Ordinary A Share" is entitled to appoint two directors and two votes in the board of the subsidiary company, LCA London Limited but not entitled to any dividend or distribution rights.

 

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
8,561,019
7,282,081
-
0
-
0
Corporation tax recoverable
75,526
-
0
-
0
-
0
Amounts owed by group undertakings
-
-
14,400,493
6,975,493
Other debtors
7,842,299
6,539,828
7,840,699
6,537,578
Prepayments and accrued income
4,741,077
4,670,014
-
0
-
0
21,219,921
18,491,923
22,241,192
13,513,071
Deferred tax asset (note 18)
50,568
594,935
-
0
-
0
21,270,489
19,086,858
22,241,192
13,513,071
Amounts falling due after more than one year:
Rent deposit
4,955,957
4,352,519
-
0
-
0
Total debtors
26,226,446
23,439,377
22,241,192
13,513,071

Other debtors include an amount of £7,840,699 (2022: £6,537,577) due from Peninsula Investment Property Limited, a related party on which there is a significant influence by the directors of the company. This amount is unsecured, repayable on demand, and non-interest bearing.

 

Amounts owed by group undertakings are unsecured, interest free, have no fixed date of payment and are repayable on demand.

16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Deferred income
2,078,449
2,464,138
-
0
-
0
Trade creditors
3,302,289
3,865,843
67
300
Corporation tax payable
-
0
390,744
-
0
-
0
Other taxation and social security
586,425
380,872
-
-
Other creditors
419,716
867,485
60,392
359,385
Accruals
8,279,606
7,549,881
6,300
6,000
14,666,485
15,518,963
66,759
365,685

Other creditors include £418,792 (2022 - £505,870) loan from the director Dr R Gill and which is unsecured, repayable on demand and is non-interest bearing.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
17
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Provision for dilapidation cost
5,287,969
4,247,653
-
-
Movements on provisions:
Provision for dilapidation cost
Group
£
At 1 January 2023
4,282,999
Additional provisions in the year
881,537
Unwinding of discount
123,433
At 31 December 2023
5,287,969

As part of the group's property leasing arrangements there is an obligation to repair damages which incur during the life of the lease, such as wear and tear. The cost is charged to profit and loss as the obligation arises. The provision is expected to be utilised between 2021 to 2036 as the leases terminate.

Due to a number of leased properties in the group and the difficulties in predicting expenditure that will be required on return of a property to the landlord many years in the future, the dilapidations provision is considered a source of significant estimation uncertainty. The provision has been calculated using historical experiences of actual expenditure incurred on dilapidations and estimated lease termination dates. The director considered the possible range of dilapidations provision at 31 December 2023 the most likely amount within the range has been recognised in the balance sheet.

18
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
255,453
798,244
(888,782)
(356,070)
Tax losses
-
-
939,350
951,005
255,453
798,244
50,568
594,935
The company has no deferred tax assets or liabilities.
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Deferred taxation
(Continued)
- 31 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
203,309
-
Charge to profit or loss
1,576
-
Liability at 31 December 2023
204,885
-

The deferred tax liability set out above is expected to reverse by £236,488 within next 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
205,523
188,943

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.

20
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
50
100
50

There is a single class of ordinary shares. There are no restrictions on the distribution of the dividends and the repayment of capital.

 

 

21
Business combinations

On 1 January 2023, the group acquired 100% of the equity shares of LCA Education Limited through a share-for-share exchange from Dr R Gill. Consequently, the consolidated group financial statements have been prepared under merger accounting principles as if the group had been in continuous existence.

22
Financial commitments, guarantees and contingent liabilities

The group did not have any other financial commitments, guarantees or contingent liabilities at year end other than those disclosed under contingencies.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
23
Operating lease commitments
Lessee

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:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
6,920,073
6,002,660
-
-
Between two and five years
21,694,400
20,877,707
-
-
In over five years
11,363,968
10,989,701
-
-
39,978,441
37,870,068
-
-

Operating lease rent is recognised as an expense in the year amount to £6,975,073 (2022 - £6,080,739).

24
Events after the reporting date

There were no events or transactions except the below which have occurred after the reporting date that require adjustment or disclosure in the financial statements.

 

In January 2024, LCA Education Ltd, entered into a new academic agreement with the University of Central Lancashire and started to offer courses.

 

 

25
Related party transactions
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Purchases
Purchases
2023
2022
£
£
Group
Entities with control, joint control or significant influence over the group
-
10,327,534
2023
2022
£
£
Group
Entities over which the entity has control, joint control or significant influence
1,303,122
6,508,626
Other related parties
-
2,842,019
Other information

During the year, the group has taken advantage of the exemption and has not disclosed transactions and balances with its wholly owned group companies.

LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
26
Controlling party

The ultimate controlling party is Dr R Gill who owns 100% of the issued ordinary equity share capital of the group. The composition of the board of director of the group is solely controlled by Dr R Gill.

 

27
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
13,641,354
23,672,448
Adjustments for:
Taxation charged
4,219,923
5,167,432
Finance costs
158,795
143,641
Investment income
(2,260,486)
(81,730)
Depreciation and impairment of tangible fixed assets
2,159,560
2,032,263
Increase in provisions
881,537
4,104,012
Movements in working capital:
(Increase)/decrease in debtors
(3,255,908)
585,018
Decrease in creditors
(461,735)
(12,691,337)
Cash generated from operations
15,083,040
22,931,747
28
Analysis of changes in net funds - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
42,020,841
6,347,538
48,368,379
29
Prior period adjustment
Changes to the balance sheet - group
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Fixed assets
Tangible assets
9,405,324
2,141,188
11,546,512
Provisions for liabilities
Other provisions
-
(4,247,653)
(4,247,653)
Net assets
58,548,335
(2,106,465)
56,441,870
Capital and reserves
Profit and loss reserves
58,548,284
(2,106,465)
56,441,819
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
29
Prior period adjustment
(Continued)
- 34 -
Changes to the profit and loss account - group
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Administrative expenses
(19,743,029)
(304,459)
(20,047,488)
Interest payable and similar expenses
-
(143,641)
(143,641)
Profit after taxation
24,120,548
(448,100)
23,672,448
Reconciliation of changes in equity - group
1 January
31 December
2022
2022
£
£
Adjustments to prior year
Depreciation on leasehold asset
(1,062,169)
(1,366,628)
Unwinding of discount of provision
(596,196)
(739,837)
Total adjustments
(1,658,365)
(2,106,465)
Equity as previously reported
38,787,170
58,548,335
Equity as adjusted
37,128,805
56,441,870
Analysis of the effect upon equity
Profit and loss reserves
-
(2,106,465)
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Depreciation on leasehold asset
(304,459)
Unwinding of discount of provision
(143,641)
Total adjustments
(448,100)
Profit as previously reported
24,120,548
Profit as adjusted
23,672,448
Reconciliation of changes in equity - company
The prior period adjustments do not give rise to any effect upon equity.
LCAE GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
29
Prior period adjustment
(Continued)
- 35 -
Reconciliation of changes in profit for the previous financial period
2022
£
Adjustments to prior year
Total adjustments
-
Profit as previously reported
13,577,068
Profit as adjusted
13,577,068
Notes to reconciliation

The subsidiaries of the company - LCA London Ltd and LCA Education Ltd have not accounted for the estimated dilapidation cost related to the leasehold premises in its financial statements since the start of lease agreements. As a consequence, the dilapidation cost lability and related asset have been understated. As this omission has occurred before the prior period presented (2022), correction was done restating the opening balances of assets, liabilities and equity for the earliest prior period presented (01.01.2022).                        

2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.100Dr R Gill, OBE (Chairman)Mr W K Leungfalse14451715bus:Consolidated2023-01-012023-12-31144517152023-01-012023-12-3114451715bus:Director12023-01-012023-12-3114451715bus:CompanySecretary12023-01-012023-12-3114451715bus:RegisteredOffice2023-01-012023-12-3114451715bus:Agent12023-01-012023-12-3114451715core:CapitalRedemptionReserve2021-12-3114451715core:OtherMiscellaneousReserve2021-12-3114451715core:ShareCapitalbus:Consolidated2023-12-3114451715core:ShareCapitalbus:Consolidated2022-12-3114451715core:ShareCapital2023-12-3114451715core:ShareCapital2022-12-3114451715core:RetainedEarningsAccumulatedLosses2023-12-3114451715core:ShareCapitalbus:Consolidated2021-12-31144517152021-12-3114451715core:RetainedEarningsAccumulatedLossesbus:Consolidated2022-12-3114451715core:Non-controllingInterestsbus:Consolidated2022-12-3114451715bus:Consolidated2022-12-3114451715core:RetainedEarningsAccumulatedLossesbus:Consolidated2023-12-3114451715core:Non-controllingInterestsbus:Consolidated2023-12-3114451715bus:Consolidated2023-12-3114451715core:ShareCapital2021-12-3114451715core:RetainedEarningsAccumulatedLosses2021-12-3114451715core:RetainedEarningsAccumulatedLosses2022-12-31144517152023-12-3114451715bus:Consolidated2022-01-012022-12-31144517152022-01-012022-12-3114451715core:LeaseholdImprovementsbus:Consolidated2023-12-3114451715core:PlantMachinerybus:Consolidated2023-12-3114451715core:FurnitureFittingsbus:Consolidated2023-12-3114451715core:LeaseholdImprovementsbus:Consolidated2022-12-3114451715core:PlantMachinerybus:Consolidated2022-12-3114451715core:FurnitureFittingsbus:Consolidated2022-12-31144517152022-12-3114451715core:ShareCapitalbus:Consolidated2022-01-012022-12-3114451715core:ShareCapitalbus:Consolidated2023-01-012023-12-3114451715core:ShareCapital2022-01-012022-12-3114451715core:ShareCapital2023-01-012023-12-3114451715bus:Consolidated2021-12-3114451715core:LeaseholdImprovements2023-01-012023-12-3114451715core:PlantMachinery2023-01-012023-12-3114451715core:FurnitureFittings2023-01-012023-12-3114451715core:UKTaxbus:Consolidated2023-01-012023-12-3114451715core:UKTaxbus:Consolidated2022-01-012022-12-3114451715bus:Consolidated12023-01-012023-12-3114451715bus:Consolidated12022-01-012022-12-3114451715core:LeaseholdImprovementsbus:Consolidated2022-12-3114451715core:PlantMachinerybus:Consolidated2022-12-3114451715core:FurnitureFittingsbus:Consolidated2022-12-3114451715bus:Consolidated2022-12-3114451715core:LeaseholdImprovementsbus:Consolidated2023-01-012023-12-3114451715core:PlantMachinerybus:Consolidated2023-01-012023-12-3114451715core:FurnitureFittingsbus:Consolidated2023-01-012023-12-3114451715core:CurrentFinancialInstruments2023-12-3114451715core:CurrentFinancialInstruments2022-12-3114451715core:Non-currentFinancialInstrumentsbus:Consolidated2023-12-3114451715core:Non-currentFinancialInstrumentsbus:Consolidated2022-12-3114451715core:Non-currentFinancialInstruments2023-12-3114451715core:Non-currentFinancialInstruments2022-12-3114451715core:CurrentFinancialInstrumentsbus:Consolidated2023-12-3114451715core:CurrentFinancialInstrumentsbus:Consolidated2022-12-3114451715core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2023-12-3114451715core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2022-12-3114451715core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3114451715core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3114451715bus:PrivateLimitedCompanyLtd2023-01-012023-12-3114451715bus:FRS1022023-01-012023-12-3114451715bus:Audited2023-01-012023-12-3114451715bus:ConsolidatedGroupCompanyAccounts2023-01-012023-12-3114451715bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP