Company Registration No. 12253108 (England and Wales)
LCap Group Limited
Annual report and
group financial statements
for the period ended 31 March 2024
LCap Group Limited
Company information
Directors
Graham Roadnight
Marco Anatriello
(Appointed 7 December 2023)
Samuel Robberts
(Appointed 7 December 2023)
Mohammed Tahir
(Appointed 7 December 2023)
Catherine Saunderson
(Appointed 4 June 2024)
Company number
12253108
Registered office
71 Queen Victoria Street
London
EC4V 4BE
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
LCap Group Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Group income statement
9
Group statement of comprehensive income
10
Group statement of financial position
11 - 12
Company statement of financial position
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 - 36
LCap Group Limited
Strategic report
For the period ended 31 March 2024
1

The directors present the strategic report for LCap Group Limited (LCap Group) and its group companies for the fifteen month period ended 31 March 2024. The group includes subsidiary companies Drax Executive Limited (Drax), Rowan Recruitment Limited (Rowan) and Altus Partners Limited (Altus).

The LCap Group comprises of:

  1. Drax Executive Limited (Drax) – the “platform company”, is a strategic leadership advisory specialist and executive search provider for high-growth companies across the UK and European market. Supporting investors, founders and leadership teams throughout the value creation life cycle by providing specialist services both pre and post investment.

  2. Rowan Recruitment Limited – the UK specialist Leadership Advisory and Executive Search firm for privately owned companies and growth capital investors across the North West. Rowan was LCap’s first strategic investment, deepening LCap’s reach within the North West, the second largest market within the UK for Private Capital investments in high growth businesses.

  3. Altus Partners Limited - In June 2023 the LCap Group made their second strategic investment in Altus Partners, who provide executive search services to Private Equity Funds for their own investment professional hiring as well as M&A Directors to the fund’s portfolio investee companies across Europe.

In December 2023 the LCap Group took external investment from Three Hills Capital Partners to allow the Group to continue its growth strategy to further develop itself as a Leadership Consulting Group, underpinned by its proprietary digital analytics platform and point solutions, Leadership Dynamics and PACE.

Strategic review of the business

The directors consider the metrics disclosed in the Group Income Statement and Balance Sheet to be the key performance metrics that they review and track, this including revenue, profit before taxation and cash at bank.

Revenue: for the period ended 31 March 2024 was £28,548,220 (FY22: £21,326,048).

Future Prospects and Outlook

The directors are confident the LCap Group will continue to drive strong performance in our business and enhance our offerings to our clients. We are satisfied with the trading results of the period to 31 March 2024 and with the financial position of the Company and Group at the period end.

We believe the outlook for the business is positive, due to the acceleration of Leadership Search, Insights software and Consultancy practices. The current market conditions are now prime for our strategic growth strategy with the support of our investment partner and Leadership team

The directors are not aware, at the date of this report, of any likely major changes in the Group’s activities in the next year.

LCap Group Limited
Strategic report (continued)
For the period ended 31 March 2024
2
Principal risks and uncertainties

The Group’s principal risks and uncertainties comprise of

Liquidity risk. This is managed by ensuring an effective credit control process, careful consideration of working capital requirements and future financial forecasts.

Business environment – The leadership advisory, digital point solutions, Executive search and private equity markets are sensitive to changes in the macro-economic climate however, have a natural resilience based on the private equity deal cycle. The group believes it is well placed in its chosen market to manage such risk by supporting clients in a wide variety of sectors and geographic markets.

Loss of key staff – The success of the group is driven by its key asset being the employees and leadership team. The group manages this risk by ensuring there are appropriate policies for long term staff retention and recruitment.

Loss of key clients - Key client risks are managed by maintaining a diverse and global client base across multiple industries which are both high-growth companies and private equity-backed businesses, as well as supporting private credit and equity houses directly. There is no significant customer concentration and churn rates are low, due to exceptional client service and values, which result in long standing client relationships, therefore loss of key clients is not considered a material risk to the group.

On behalf of the board

Catherine Saunderson
Director
27 November 2024
LCap Group Limited
Directors' report
For the period ended 31 March 2024
3

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

Principal activities

LCap Group Limited (“the Group”) is a strategic leadership specialist to the private equity market, supporting executive search, leadership development and pre-deal advisory. The group includes subsidiary companies Drax Executive Limited, Rowan Recruitment Limited, and Altus Partners Ltd.

Results and dividends

The results for the period are set out on page 9.

Ordinary dividends were paid amount to £nil (2022: £200,000). The directors do not recommend payment of a further dividend.

Directors

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

David Bushell
(Resigned 7 December 2023)
Thomas Cassidy
(Resigned 22 July 2024)
Graham Roadnight
Ruby Sheera
(Resigned 7 December 2023)
Paul Waite
(Resigned 7 December 2023)
Lee Colliss
(Resigned 22 July 2024)
Marco Anatriello
(Appointed 7 December 2023)
Samuel Robberts
(Appointed 7 December 2023)
Mohammed Tahir
(Appointed 7 December 2023)
Catherine Saunderson
(Appointed 4 June 2024)
Auditor

In accordance with the company's articles, a resolution proposing that Saffery LLP be reappointed as auditor of the group will be put at a General Meeting.

LCap Group Limited
Directors' report (continued)
For the period ended 31 March 2024
4
Statement of directors' responsibilities

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

 

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are 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. They are 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.

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 company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Catherine Saunderson
Director
27 November 2024
LCap Group Limited
Independent auditor's report
To the members of LCap Group Limited
5
Opinion

We have audited the financial statements of LCap Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 March 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, 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). The revised financial statements have been prepared under the Companies (Revision of Defective Accounts and Reports) Regulations 2008 and accordingly do not take account of events which may have taken place after the date the original financial statements were approved.

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 revised financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the revised 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 or the parent company’s ability to continue as a going concern for a period of at least twelve months from when the original 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.

 

LCap Group Limited
Independent auditor's report (continued)
To the members of LCap Group Limited
6

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the revised financial statements and our auditor's report thereon. Our opinion on the revised 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 the audit:

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 directors' report.

 

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

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the group and parent company revised 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 revised financial statements.

LCap Group Limited
Independent auditor's report (continued)
To the members of LCap Group Limited
7

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

 

Identifying and assessing risks related to irregularities:

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

 

Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.

 

Audit response to risks identified

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

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

As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.

 

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

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

LCap Group Limited
Independent auditor's report (continued)
To the members of LCap Group Limited
8

Use of our report

This report is made solely to the parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Roger Weston (Senior Statutory Auditor)
For and on behalf of Saffery LLP
27 November 2024
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
LCap Group Limited
Group income statement
For the period ended 31 March 2024
9
Period
Year
ended
ended
31 March
31 December
2024
2022
Notes
£
£
Turnover
3
28,548,220
21,326,048
Cost of sales
(464,188)
(399,153)
Gross profit
28,084,032
20,926,895
Administrative expenses
(23,099,014)
(16,715,767)
Operating profit
4,985,018
4,211,128
Interest receivable and similar income
6
125,824
35,880
Interest payable and similar expenses
7
(476,251)
(160,981)
Profit before taxation
4,634,591
4,086,027
Tax on profit
8
51,658
(674,906)
Profit for the financial period
4,686,249
3,411,121
Profit for the financial period is attributable to:
- Owners of the parent company
4,325,650
2,950,818
- Non-controlling interests
360,599
460,303
4,686,249
3,411,121
LCap Group Limited
Group statement of comprehensive income
For the period ended 31 March 2024
10
Period
Year
ended
ended
31 March
31 December
2024
2022
£
£
Profit for the period
4,686,249
3,411,121
Other comprehensive income
-
-
Total comprehensive income for the period
4,686,249
3,411,121
Total comprehensive income for the period is attributable to:
- Owners of the parent company
4,325,650
2,950,818
- Non-controlling interests
360,599
460,303
4,686,249
3,411,121
LCap Group Limited
Group statement of financial position
As at 31 March 2024
31 March 2024
11
31 March 2024
31 December 2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
3,965,470
2,341,068
Other intangible assets
11
2,769,987
2,809,641
Total intangible assets
6,735,457
5,150,709
Tangible assets
13
185,047
229,251
6,920,504
5,379,960
Current assets
Debtors
15
9,553,511
5,425,840
Cash at bank and in hand
5,391,388
8,043,144
14,944,899
13,468,984
Creditors: amounts falling due within one year
16
(5,968,367)
(5,754,072)
Net current assets
8,976,532
7,714,912
Total assets less current liabilities
15,897,036
13,094,872
Creditors: amounts falling due after more than one year
17
(6,926,156)
(2,233,186)
Provisions for liabilities
Deferred tax liability
22
652,814
718,265
(652,814)
(718,265)
Net assets
8,318,066
10,143,421
Capital and reserves
Called up share capital
23
74
35
Share premium account
500,000
500,000
Other reserves
1,050,821
826,134
Profit and loss reserves
6,767,171
7,999,535
Equity attributable to owners of the parent company
8,318,066
9,325,704
Non-controlling interests
-
817,717
8,318,066
10,143,421

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

LCap Group Limited
Group statement of financial position (continued)
As at 31 March 2024
31 March 2024
12
The financial statements were approved by the board of directors and authorised for issue on 27 November 2024 and are signed on its behalf by:
27 November 2024
Catherine Saunderson
Director
Company registration number 12253108 (England and Wales)
LCap Group Limited
Company statement of financial position
As at 31 March 2024
31 March 2024
13
31 March 2024
31 December 2022
Notes
£
£
£
£
Fixed assets
Investments
12
13,778,617
4,292,573
Current assets
Debtors
15
2,506,246
35
Creditors: amounts falling due within one year
16
(8,030,498)
(2,966,436)
Net current liabilities
(5,524,252)
(2,966,401)
Total assets less current liabilities
8,254,365
1,326,172
Creditors: amounts falling due after more than one year
17
(6,926,156)
-
Net assets
1,328,209
1,326,172
Capital and reserves
Called up share capital
23
74
35
Share premium account
500,000
500,000
Other reserves
1,050,573
826,137
Profit and loss reserves
(222,438)
-
Total equity
1,328,209
1,326,172

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 £222,438 (2022 - £200,000 profit).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 27 November 2024 and are signed on its behalf by:
27 November 2024
Catherine Saunderson
Director
Company registration number 12253108 (England and Wales)
LCap Group Limited
Group statement of changes in equity
For the period ended 31 March 2024
14
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
Balance at 1 January 2022
35
500,000
266,290
5,248,717
6,015,042
467,414
6,482,456
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
2,950,818
2,950,818
460,303
3,411,121
Dividends
9
-
-
-
(200,000)
(200,000)
(110,000)
(310,000)
Share based payment
-
-
559,844
-
559,844
-
559,844
Balance at 31 December 2022
35
500,000
826,134
7,999,535
9,325,704
817,717
10,143,421
Period ended 31 March 2024:
Profit and total comprehensive income for the period
-
-
-
4,325,650
4,325,650
360,599
4,686,249
Issue of share capital
23
39
-
0
-
-
39
-
39
Dividends
9
-
-
-
-
-
(62,500)
(62,500)
Share based payment
-
-
224,687
-
224,687
-
224,687
Purchase of shares in subsidiary from non-controlling interest
-
-
-
(5,558,014)
(5,558,014)
(1,115,816)
(6,673,830)
Balance at 31 March 2024
74
500,000
1,050,821
6,767,171
8,318,066
-
0
8,318,066
LCap Group Limited
Company statement of changes in equity
For the period ended 31 March 2024
15
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
35
500,000
266,293
-
0
766,328
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
200,000
200,000
Dividends
9
-
-
-
(200,000)
(200,000)
Share based payment
-
-
559,844
-
559,844
Balance at 31 December 2022
35
500,000
826,137
-
0
1,326,172
Period ended 31 March 2024:
Loss and total comprehensive income for the period
-
-
-
(222,438)
(222,438)
Issue of share capital
23
39
-
0
-
-
39
Share based payment
-
-
224,436
-
224,436
Balance at 31 March 2024
74
500,000
1,050,573
(222,438)
1,328,209
LCap Group Limited
Group statement of cash flows
For the period ended 31 March 2024
16
2024
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
4,216,744
5,310,975
Interest paid
(223,925)
(160,981)
Income taxes paid
(357,833)
(52,985)
Net cash inflow from operating activities
3,634,986
5,097,009
Investing activities
Purchase of business
(2,587,778)
-
Cash acquired on acquisition
561,123
Purchase of intangible assets
(1,085,336)
(1,293,939)
Purchase of tangible fixed assets
(111,904)
(140,035)
Interest received
125,824
35,880
Net cash used in investing activities
(3,098,071)
(1,398,094)
Financing activities
Proceeds from issue of shares
39
-
Repayment of bank loans
(3,104,615)
(871,428)
Payment of finance leases obligations
(21,595)
(29,042)
Dividends paid to equity shareholders
-
0
(200,000)
Dividends paid to non-controlling interests
(62,500)
(110,000)
Net cash used in financing activities
(3,188,671)
(1,210,470)
Net (decrease)/increase in cash and cash equivalents
(2,651,756)
2,488,445
Cash and cash equivalents at beginning of period
8,043,144
5,554,699
Cash and cash equivalents at end of period
5,391,388
8,043,144
LCap Group Limited
Notes to the group financial statements
For the period ended 31 March 2024
17
1
Accounting policies
Company information

LCap Group Limited (“the company”) is a private company limited by shares incorporated in England and Wales. The registered office is 71 Queen Victoria Street, London, EC4V 4BE.

 

The group consists of LCap Group Limited 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 £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

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.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
18
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company LCap Group 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 March 2024. 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.

 

In March 2020, the parent company acquired 100% of the shareholding in Drax Executive Limited following a share for share exchange. The ownership was to be effective from that date. The transaction was accounted for in accordance with the merger accounting basis and the true and fair override was evoked in respect of the legal requirements for merger accounting in respect of the existence of a controlling party.

 

In June 2021, the parent company acquired 64% of the shareholding in Rowan Recruitment Limited. The ownership was to be effective from that date. The transaction was accounted for in accordance with the acquisition accounting basis.

 

In June 2023, the parent company acquired 100% of the shareholding in Altus Partners Ltd. The ownership was due to be effective from that date. The transaction was accounted for in accordance with the merger accounting basis and the true and fair override was evoked in respect of legal requirements for merger accounting in respect of the existence of a controlling party.

 

In December 2023, the parent company acquired the remaining 36% of the shareholding in Rowan Recruitment Limited. The removal of the non-controlling interest was effective from that date. The transaction was accounted for in accordance with the acquisition accounting basis.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.4
Going concern

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.

1.5
Reporting period

The comparative financial period was for the year to 31 December 2022 and is not directly comparable to the current period ended 31 March 2024. The period end changed due to a group restructure.

1.6
Turnover

Turnover represents amounts receivable for services provided, net of value added tax. Turnover is recognised on completion of defined stages or work in accordance with specific terms of business agreed with the company's clients and includes revenue from executive search services and interim placement services.

 

Turnover for executive search services is recognised on confirmation dates of work completed, typically recognised across three stages. Turnover for interim placement services is recognised when the service has been provided.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
19
1.7
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.8
Intangible fixed assets - goodwill

Goodwill arising on the acquisition of subsidiary undertakings represents the excess of the fair value of the consideration over the fair value of the identifiable assets and liabilities acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.9
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Development costs
Straight line over 5 years
1.10
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.

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:

Fixtures, fittings & equipment
Straight line over 4 years
Computer equipment
Straight line over 3-4 years
Motor vehicles
Straight line over 4 years

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 income statement.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
20
1.11
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.

1.12
Impairment of fixed assets

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.

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
21
1.14
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 statement of financial position 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, 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.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
22
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 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.

1.15
Compound instruments

The component parts of compound instruments issued by the company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. Where it meets the definition of a basic financial instrument it is measured on an amortised cost basis using the effective interest method, otherwise it is measured on a fair value basis through profit or loss until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

1.16
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.

1.17
Taxation

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

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
23
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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

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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.18
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.

1.19
Retirement benefits

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

1.20
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Monte Carlo model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to Other reserves.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
1
Accounting policies (continued)
24
1.21
Leases

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

 

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

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

1.22
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.

2
Critical accounting judgements and key sources of estimation uncertainty

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.

Critical judgements

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

Share based payments

EMI share options were granted to employees in the comparative financial period. The options were valued by management using the Monte Carlo model. The use of the Monte Carlo model required management to make several significant assumptions and estimations, including the volatility of shares and the expected life of the options.

Investment and goodwill impairment

The company conducts an impairment review of the investment in subsidiaries and goodwill on acquisition. Determining whether an asset is impaired requires an estimation of the recoverable amount which requires the company to estimate the value in use which is based on future cash flows and a suitable discount factor in order to calculate the present value. Where the actual cash flows are less than expected, an impairment loss may arise. After reviewing the business environment and the company's strategies and past performance of its cash generating units, management concluded that there was no impairment of investments in subsidiaries or the corresponding goodwill at the current year end.

 

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
25
3
Turnover and other revenue
2024
2022
£
£
Turnover analysed by class of business
Executive search
27,966,618
20,874,410
Interim
581,602
451,638
28,548,220
21,326,048
2024
2022
£
£
Other revenue
Interest income
125,824
35,880
4
Employees

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

Group
Company
2024
2022
2024
2022
Number
Number
Number
Number
146
116
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2024
2022
2024
2022
£
£
£
£
Wages and salaries
15,034,121
10,154,132
-
0
-
0
Social security costs
1,994,751
1,324,894
-
-
Pension costs
355,839
227,112
-
0
-
0
17,384,711
11,706,138
-
0
-
0
5
Auditor's remuneration
2024
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and the company's subsidiaries
66,500
40,500
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
26
6
Interest receivable and similar income
2024
2022
£
£
Interest income
Interest on bank deposits
114,453
897
Other interest income
11,371
34,983
Total income
125,824
35,880
2024
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
114,453
897
7
Interest payable and similar expenses
2024
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
223,553
157,072
Interest on convertible loan notes
252,326
-
0
475,879
157,072
Other finance costs:
Interest on finance leases and hire purchase contracts
372
3,909
Total finance costs
476,251
160,981
8
Taxation
2024
2022
£
£
Current tax
UK corporation tax on profits for the current period
20,604
466,848
Adjustments in respect of prior periods
(179)
32,241
Total current tax
20,425
499,089
Deferred tax
Origination and reversal of timing differences
(72,083)
177,975
Changes in tax rates
-
0
(2,158)
Total deferred tax
(72,083)
175,817
Total tax (credit)/charge
(51,658)
674,906
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
8
Taxation (continued)
27

The actual (credit)/charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:

2024
2022
£
£
Profit before taxation
4,634,591
4,086,027
Expected tax charge based on the standard rate of corporation tax in the UK of 23.82% (2022: 19.00%)
1,103,960
776,345
Tax effect of expenses that are not deductible in determining taxable profit
(31,411)
273,934
Adjustments in respect of prior years
(3,511)
32,241
Double tax relief
-
0
(8,987)
Permanent capital allowances in excess of depreciation
1,066
(16,787)
Amortisation on assets not qualifying for tax allowances
267,748
128,039
Other non-reversing timing differences
(167,484)
2,888
Share based payment charge
49,017
106,370
Other tax allowances
(1,214,484)
(803,941)
Remeasurement of deferred tax for changes in tax rates
(56,559)
184,804
Taxation (credit)/charge
(51,658)
674,906
9
Dividends
2024
2022
Recognised as distributions to equity holders:
£
£
Final paid
-
200,000
During the period dividends of £62,500 (2022: £110,000) were voted paid by subsidiary entities to non-controlling parties and LCap Group Limited waived its rights to dividends.
10
Directors' remuneration
2024
2022
£
£
Remuneration for qualifying services
1,054,425
1,142,056
Company pension contributions to defined contribution schemes
19,059
25,500
1,073,484
1,167,556
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
10
Directors' remuneration (continued)
28
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2022
£
£
Remuneration for qualifying services
330,395
267,243

None of the directors were remunerated through LCap Group Limited, but through the trading subsidiaries Drax Executive Limited and Rowan Recruitment Limited.

11
Intangible fixed assets
Group
Goodwill
Development costs
Total
£
£
£
Cost
At 1 January 2023
2,766,620
4,009,565
6,776,185
Additions
-
0
1,085,336
1,085,336
Additions - separately acquired
2,136,306
-
0
2,136,306
At 31 March 2024
4,902,926
5,094,901
9,997,827
Amortisation and impairment
At 1 January 2023
425,552
1,199,924
1,625,476
Amortisation charged for the period
511,904
1,124,990
1,636,894
At 31 March 2024
937,456
2,324,914
3,262,370
Carrying amount
At 31 March 2024
3,965,470
2,769,987
6,735,457
At 31 December 2022
2,341,068
2,809,641
5,150,709
The company had no intangible fixed assets at 31 March 2024 or 31 December 2022.
12
Fixed asset investments
Group
Company
2024
2022
2024
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
13,778,617
4,292,573
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
12
Fixed asset investments (continued)
29
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
4,292,573
Additions
9,486,044
At 31 March 2024
13,778,617
Carrying amount
At 31 March 2024
13,778,617
At 31 December 2022
4,292,573

On 21 June 2023, the company acquired a 100% interest in Altus Partners Ltd for consideration of £2,587,778

 

On 7 December 2023, the company acquired the remaining 36% interest in Rowan Recruitment Limited from the minority shareholder for consideration of £6,673,830.

 

A share-based payment investment addition of £224,436 has also been recognised, representing the share-based payment charges recognised in subsidiaries Drax Executive Limited and Rowan Recruitment Limited.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
30
13
Tangible fixed assets
Group
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
108,794
384,421
99,099
592,314
Additions
9,959
101,945
-
0
111,904
Business combinations
3,210
19,689
-
0
22,899
Disposals
(25,007)
(54,774)
(99,099)
(178,880)
At 31 March 2024
96,956
451,281
-
548,237
Depreciation and impairment
At 1 January 2023
103,326
205,683
54,054
363,063
Depreciation charged in the period
5,213
112,380
27,027
144,620
Eliminated in respect of disposals
(21,980)
(41,432)
(81,081)
(144,493)
At 31 March 2024
86,559
276,631
-
363,190
Carrying amount
At 31 March 2024
10,397
174,650
-
0
185,047
At 31 December 2022
2,494
181,712
45,045
229,251
The company had no tangible fixed assets at 31 March 2024 or 31 December 2022.

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

Group
Company
2024
2022
2024
2022
£
£
£
£
Motor vehicles
-
0
45,045
-
0
-
0
14
Subsidiaries

Details of the company's subsidiaries at 31 March 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Drax Executive Limited
71 Queen Victoria Street, London, EC4V 4BE
Ordinary
100.00
Rowan Recruitment Limited
Xyz Building, 2 Hardman Boulevard, Manchester, M3 3AQ
Ordinary
100.00
Altus Partners Ltd
71 Queen Victoria Street, London, EC4V 4BE
Ordinary
100.00
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
31
15
Debtors
Group
Company
2024
2022
2024
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,318,121
3,927,821
-
0
-
0
Corporation tax recoverable
433,618
391,932
-
0
-
0
Amounts owed by group undertakings
2,572,747
-
2,444,631
-
Other debtors
608,435
601,848
55
35
Prepayments and accrued income
1,620,590
504,239
61,560
-
0
9,553,511
5,425,840
2,506,246
35
16
Creditors: amounts falling due within one year
Group
Company
2024
2022
2024
2022
Notes
£
£
£
£
Bank loans
18
-
0
871,429
-
0
-
0
Obligations under hire purchase leases
20
-
0
21,595
-
0
-
0
Trade creditors
491,864
558,829
-
0
-
0
Amounts owed to group undertakings
566,243
-
0
6,665,260
2,966,436
Corporation tax payable
51,355
330,228
-
0
-
0
Other taxation and social security
1,232,445
1,152,155
6,199
-
Other creditors
1,645,434
242,091
1,359,039
-
0
Accruals and deferred income
1,981,026
2,577,745
-
0
-
0
5,968,367
5,754,072
8,030,498
2,966,436
17
Creditors: amounts falling due after more than one year
Group
Company
2024
2022
2024
2022
Notes
£
£
£
£
Convertible loan notes
19
6,926,156
-
0
6,926,156
-
0
Bank loans and overdrafts
18
-
0
2,233,186
-
0
-
0
6,926,156
2,233,186
6,926,156
-

 

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
32
18
Loans and overdrafts
Group
Company
2024
2022
2024
2022
£
£
£
£
Bank loans
-
0
3,104,615
-
0
-
0
Payable within one year
-
0
871,429
-
0
-
0
Payable after one year
-
0
2,233,186
-
0
-
0

The bank loans in subsidiary companies were repaid in the period ended 31 March 2024.

 

19
Convertible loan notes
Group
Company
2024
2022
2024
2022
£
£
£
£
Liability component of convertible loan notes
6,926,156
-
6,926,156
-

The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the statement of financial position represents the effective interest rate less interest paid to that date.

These loan notes relate to the purchase of the non-controlling interest in Rowan Recruitment Limited during the period ended 31 March 2024. They hold an expiry date of 7 December 2033 and the effective rate of interest is 12%.

 

20
Hire purchase lease obligations
Group
Company
2024
2022
2024
2022
£
£
£
£
Future minimum lease payments due under hire purchase leases:
Within one year
-
0
21,595
-
0
-
0

Lease payments represent amounts payable by the company or group for certain fixed assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
33
21
Retirement benefit schemes
2024
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
355,839
227,112

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.

22
Deferred taxation

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

Liabilities
Liabilities
2024
2022
Group
£
£
Accelerated capital allowances
652,814
718,265
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the period:
£
£
Liability at 1 January 2023
718,265
-
Credit to profit or loss
(72,083)
-
Deferred tax liability acquired
6,632
-
Liability at 31 March 2024
652,814
-

The deferred tax liability relates to accelerated capital allowances.

23
Share capital
Group and company
2024
2022
2024
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of 0.1p each
5,000
5,000
5
5
B1 Ordinary shares of 0.00001p each
100,000,000
100,000,000
10
10
B2 Ordinary shares of 0.00001p each
100,000,000
100,000,000
10
10
B3 Ordinary shares of 0.00001p each
185,191,185
100,000,000
19
10
R Ordinary shares of 0.00001p each
4,000,000
2,000,000
-
-
B4 Ordinary shares of 0.00001p each
170,601,811
-
17
-
B5 Ordinary shares of 0.00001p each
134,391,667
-
13
-
694,189,663
302,005,000
74
35
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
23
Share capital (continued)
34

On 12 June 2023, 100,000,000 B4 Ordinary shares and 100,000,000 B5 Ordinary shares were issued.

 

On 7 December 2023, 85,191,185 B3 Ordinary shares, 70,601,811 B4 Ordinary shares, 34,391,667 B5 Ordinary shares and 2,000,000 R shares were issued.

 

A ordinary shares are carry voting rights, are entitles to dividend payments and the right to participate in a capital contribution.

 

B1, B2, B3, B4, B5 and R ordinary shares carry no rights to vote, are not entitled to dividend payments and have the right to participate in a capital contribution.

24
Share-based payment transactions

During the period ended 31 March 2024, EMI share options were issued by a director and shareholder over shares of the company to 41 employees (2022: 12 employees). During the period ended 31 March 2024, a transaction leading to group restructure occurred leading to all share options being exercised. No share options remained outstanding at the period end.

 

EMI share options are allocated on a discretionary basis to employees. Share options allocated are subject to non-market vesting conditions and only become exercisable subject to the conditions set out in the option scheme rules. The options may not be exercised later than the 10th anniversary of the option agreement.

Group and company
Number of share options
2024
2022
Number
Number
Outstanding at 1 January 2023
82,625,800
68,250,550
Granted
190,725,809
20,375,250
Forfeited
-
(6,000,000)
Exercised
(190,726,309)
-
Expired
(82,625,300)
-
Outstanding at 31 March 2024
-
82,625,800
Exercisable at 31 March 2024
-
-

The directors value share options at the date of grant and considered the relevant inputs to determine any charge. At the date of the option date, the company considered a valuation model with a vesting period.

 

A charge of £224,436 (2022: £559,844) has been recognised in the subsidiary entities in which the option holders are employed.

LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
35
25
Acquisition of a business

On 21 June 2023 the group acquired 100% of the issued capital of Altus Partners Ltd, a company registered in England and Wales.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
22,899
-
22,899
Trade and other receivables
502,994
-
502,994
Cash and cash equivalents
561,123
-
561,123
Trade and other payables
(546,612)
-
(546,612)
Tax liabilities
(88,932)
-
(88,932)
Total identifiable net assets
451,472
-
451,472
Goodwill
2,136,306
Total consideration
2,587,778
The consideration was satisfied by:
£
Cash
1,228,739
Deferred consideration
1,359,039
2,587,778
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
2,380,790
Profit after tax
160,169
LCap Group Limited
Notes to the group financial statements (continued)
For the period ended 31 March 2024
36
26
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
2024
2022
2024
2022
£
£
£
£
Within one year
367,346
443,037
-
-
Between two and five years
687,321
1,174,127
-
-
1,054,667
1,617,164
-
-
27
Cash generated from group operations
2024
2022
£
£
Profit for the period after tax
4,686,249
3,411,121
Adjustments for:
Taxation (credited)/charged
(51,658)
674,906
Finance costs
476,251
160,981
Investment income
(125,824)
(35,880)
Loss on disposal of tangible fixed assets
34,387
1,123
Amortisation and impairment of intangible assets
1,636,894
950,551
Depreciation and impairment of tangible fixed assets
144,620
93,762
Equity settled share based payment expense
224,687
559,844
Decrease in provisions
(65,451)
-
Movements in working capital:
Increase in debtors
(3,582,991)
(1,627,891)
Increase in creditors
839,580
1,122,458
Cash generated from operations
4,216,744
5,310,975
28
Controlling party

The immediate parent company is LCap Bidco Limited. The ultimate parent company is LCap Topco Limited. The company is controlled by the directors who hold a majority shareholding in the company. The directors consider there to be no one ultimate controlling party.

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