Company registration number 01337123 (England and Wales)
SOUTH COAST NURSING HOMES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
SOUTH COAST NURSING HOMES LIMITED
COMPANY INFORMATION
Directors
Mr P G Colville
Mrs S M L Hazell
Mrs R C C Scott
Secretary
Mr P G Colville
Company number
01337123
Registered office
Winchester House
34 Crescent Road
Worthing
West Sussex
BN11 1RL
Auditor
Sumer Audit
Amelia House
Crescent Road
Worthing
West Sussex
BN11 1RL
SOUTH COAST NURSING HOMES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
SOUTH COAST NURSING HOMES LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the period ended 31 March 2024.
Fair review of the business
The Directors are pleased with the performance of the company for the 17-month period ended 31 March 2024, achieving significant revenue growth at a consistent margin.
The company continues to perform above budgetary expectations. Much work has been achieved with our strengthened management team and the results are being reflected in all areas of performance. During the period The Poets has slowly achieved its targets, however it has now reached 90% occupancy and is performing very well as our premier care home.
P/E 31/03/24 Y/E 31/10/22 Y/E 31/10/21 Y/E 31/10/20
£ £ £ £
Revenue 36,682,569 21,181,957 18,164,874 18,370,363
Gross profit 13,174,553 7,522,583 5,907,453 6,306,299
Profit before tax 2,986,102 2,665,387 3,348,068 2,964,497
The board has conducted strategy meetings during the period with full discussions on the direction the company may pursue. Fully achieving our core values and vision are paramount. Alongside this commitment the option of further homes was considered. This latter possibility was balanced against reviewing the fitness for purpose and the viability going forward of all existing homes. Whilst this review is ongoing, two homes were under question and one was considered appropriate for complete redevelopment. These discussions will continue in the new year.
Staffing levels throughout the period have been well maintained with a subsequent fall in agency usage into 2024/25. The board has appointed a replacement finance manager since the end of the period under review. Whilst wishing Mike Fleming a happy retirement we welcomed Tim Davies to the company.
The board is conscious of increasing competition in the market place and is constantly considering our marketing strategy which is very social media focused. We are very confident moving forward and will be looking to maintain our position as a market leader in quality care.
Principal risks and uncertainties
Interest rates continued to see significant increases in the period before levelling off, as the Bank of England addressed escalating inflation, partially driven by increased energy costs. The company successfully used surplus cash to reduce borrowing and mitigate some of the impact of the increased cost of debt, and continues to do so. Cash generation remains strong.
Competitive energy contracts with key suppliers were negotiated, locking in rates through to 2025, providing much needed stability. The company has continued to take advantage of its significant solar panel investment across all homes.
Maintaining levels of quality care home staff is still a challenge within the industry and while the company continues to make use of agency staff when required in 2024/25, this is at a much lower level. The recruitment strategy adopted has delivered significant improvements in terms of vacancy and turnover numbers, including the continued sponsoring of overseas employees' Visas.
The impact of Brexit continues to have little impact with our key suppliers being able to ensure continuity of supply without significant cost increases.
SOUTH COAST NURSING HOMES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 2 -
S.172 statement
The company continues to provide first class service and care, offering over 400 beds in the areas of Nursing, Dementia and Residential care for the elderly.
The resourcefulness and strength of our staff continues to be a great asset to the company, with a focus on developing qualified staff from within the organisation whilst ensuring robust recruitment and screening processes get the best staff from the external job market.
We continue to provide staff welfare services such as a health and wellbeing confidential support service which is able to offer advice to staff regarding health, finance, legal and mental health issues.
Our market leading HR and payroll system, Dayforce, is constantly improving in terms of information availability to staff regarding their levels of remuneration, performance appraisal and enhanced training programmes, which includes taking advantage of the apprenticeship levy scheme where applicable.
The company has invested during the period in the enhancement of its Health and Safety systems and personnel. Staff remuneration remains above the national living wage and the senior management team continues to be strengthened.
The company provides first class care in a safe environment for our residents and continues to significantly invest in the infrastructure of the business. It also continues to have a very strong reputation within the care sector and the shareholders and Directors of the business are committed to enhancing this reputation further.
Mr P G Colville
Director
14 November 2024
SOUTH COAST NURSING HOMES LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the period ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of the ownership and management of private nursing and care homes.
Results and dividends
The results for the period are set out on page 9.
Dividends totalling £485,000 (2022 - £160,000) were declared during the period. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Mr P G Colville
Mrs S M L Hazell
Mrs R C C Scott
Financial instruments
Interest rate risk
The company operates a number of policies to ensure there is sufficient liquidity and cash. Regular cash flow forecasts are prepared to ensure the company is able to cover its interest payments.
Disabled persons
The company's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information of 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 company's performance.
The business has built its success over the years with a significant contribution to this success from the employees within the business. The company has a significant number of employees with long service. The company has a policy in which we will pay our staff at minimum the level of the National Living Wage.
The managers of each of the homes are encouraged to meet regularly with their staff. The directors also ensure that there are regular meetings with the managers and that any training required for them is implemented.
SOUTH COAST NURSING HOMES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 4 -
Business relationships
The directors have a philosophy of fairness and honesty with all our residents and their families and decisions are made always with regard to the wellbeing of the home residents in conjunction with relatives.
The directors have built a business where there are a significant number of long-term suppliers to the business. The company also has robust systems in place whereby suppliers are paid within their credit terms and reports separately on this. With new suppliers the company will offer equal terms to those offered to longer term suppliers.
The company has supported national and local charities throughout the year whether it be within the home themselves (e.g. Macmillan Nurses appeals) or local based charities such as the YMCA and their work with local homeless people.
Future developments
The directors have detailed future developments requiring disclosure within the strategic report.
Auditor
In accordance with the company's articles, a resolution proposing that Sumer Audit be reappointed as auditor of the company will be put at a General Meeting.
Energy and carbon report
In line with the Government's new Streamlined Energy and Carbon Reporting (SECR) policy, the company has disclosed the following in respect of its annual energy consumption:
P/E 31/03/24 Y/E 31/10/22
KWh KWh
Gas usage 3,211,771 2,223,260
Electricity usage 1,875,894 1,048,703
Fuel usage 120,200 64,663
Total usage 5,207,865 3,336,626
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr P G Colville
Director
14 November 2024
SOUTH COAST NURSING HOMES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 MARCH 2024
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SOUTH COAST NURSING HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOUTH COAST NURSING HOMES LIMITED
- 6 -
Opinion
We have audited the financial statements of South Coast Nursing Homes Limited (the 'company') for the period ended 31 March 2024 which comprise the Statement of Comprehensive Income, the Statement Of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its profit for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SOUTH COAST NURSING HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOUTH COAST NURSING HOMES LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. the extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law, the valuation of investment properties and compliance with the UK Companies Act.
SOUTH COAST NURSING HOMES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOUTH COAST NURSING HOMES LIMITED
- 8 -
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws, Care Quality Commission and other regulations, and fraud;
Reviewing minutes of meetings of the board and senior management;
Reading correspondence with regulators;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to depreciation and embedded assets included within freehold property; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
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.
Robin Evans BA FCA CTA DChA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
21 November 2024
Chartered Accountants
Statutory Auditor
Worthing
Sumer Audit is the trading name of Sumer Auditco Limited
SOUTH COAST NURSING HOMES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2024
- 9 -
Period
Year
ended
ended
31 March
31 October
2024
2022
Notes
£
£
Revenue
3
36,682,569
21,181,957
Cost of sales
(23,508,016)
(13,659,374)
Gross profit
13,174,553
7,522,583
Administrative expenses
(7,482,169)
(4,798,207)
Other operating income
3
120,190
344,821
Operating profit
4
5,812,574
3,069,197
Investment income
88,301
Finance costs
8
(1,269,044)
(403,810)
Other gains and losses
9
(1,645,729)
-
Profit before taxation
2,986,102
2,665,387
Tax on profit
10
(1,188,905)
(592,288)
Profit for the financial period
1,797,197
2,073,099
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
SOUTH COAST NURSING HOMES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024
31 March 2024
- 10 -
31 March 2024
31 October 2022
Notes
£
£
£
£
Non-current assets
Intangible assets
12
137,104
193,952
Property, plant and equipment
13
33,488,029
34,143,201
Investment property
14
426,059
426,059
34,051,192
34,763,212
Current assets
Inventories
25,000
25,000
Trade and other receivables
15
1,046,199
2,157,045
Cash and cash equivalents
1,003,131
435,247
2,074,330
2,617,292
Current liabilities
16
(5,328,413)
(4,406,136)
Net current liabilities
(3,254,083)
(1,788,844)
Total assets less current liabilities
30,797,109
32,974,368
Non-current liabilities
17
(11,654,133)
(15,258,489)
Provisions for liabilities
Deferred tax liability
19
870,000
755,100
(870,000)
(755,100)
Net assets
18,272,976
16,960,779
Equity
Called up share capital
21
7,500
7,500
Revaluation reserve
436,960
440,490
Capital redemption reserve
27,580
27,580
Retained earnings
17,800,936
16,485,209
Total equity
18,272,976
16,960,779
The financial statements were approved by the board of directors and authorised for issue on 14 November 2024 and are signed on its behalf by:
Mr P G Colville
Director
Company registration number 01337123 (England and Wales)
SOUTH COAST NURSING HOMES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2024
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Retained earnings
Total
Notes
£
£
£
£
£
Balance at 1 November 2021
7,500
442,980
27,580
14,569,620
15,047,680
Year ended 31 October 2022:
Profit and total comprehensive income
-
-
-
2,073,099
2,073,099
Dividends
11
-
-
-
(160,000)
(160,000)
Transfers
-
(2,490)
-
2,490
-
Balance at 31 October 2022
7,500
440,490
27,580
16,485,209
16,960,779
Period ended 31 March 2024:
Profit and total comprehensive income
-
-
-
1,797,197
1,797,197
Dividends
11
-
-
-
(485,000)
(485,000)
Transfers
-
(3,530)
-
3,530
-
Balance at 31 March 2024
7,500
436,960
27,580
17,800,936
18,272,976
SOUTH COAST NURSING HOMES LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2024
- 12 -
2024
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
7,688,822
4,264,441
Interest paid
(1,269,044)
(403,810)
Income taxes refunded/(paid)
75,460
(727,188)
Net cash inflow from operating activities
6,495,238
3,133,443
Investing activities
Purchase of intangible assets
(200,640)
Purchase of property, plant and equipment
(573,473)
(3,452,154)
Loans made to other entities
(1,400,000)
(826,511)
Repayments received
627,000
Interest received
42,083
Net cash used in investing activities
(1,304,390)
(4,479,305)
Financing activities
Proceeds from new bank loans
3,353,381
Repayment of bank loans
(4,137,935)
(2,180,398)
Dividends paid
(485,000)
(160,000)
Net cash (used in)/generated from financing activities
(4,622,935)
1,012,983
Net increase/(decrease) in cash and cash equivalents
567,913
(332,879)
Cash and cash equivalents at beginning of period
435,218
768,097
Cash and cash equivalents at end of period
1,003,131
435,218
Relating to:
Cash at bank and in hand
1,003,131
435,247
Bank overdrafts included in creditors payable within one year
(29)
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information
South Coast Nursing Homes Limited is a company limited by shares incorporated in England and Wales. The registered office is Winchester House, 34 Crescent Road, Worthing, West Sussex, BN11 1RL.
1.1
Reporting period
The financial statements have been prepared for 17 months and the comparative period is a year. This is due to the company bringing the year end in line with the annual fee increases for residents. As a result, the comparative period amounts presented in these financial statements will not be entirely comparable.
1.2
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 £1.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered relevant information, including the company’s principal risks and uncertainties, the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.true
1.4
Revenue
Revenue represents the total invoice value of residential room fees and other services recognised net of trade discounts, other sales taxes, VAT and on an accruals basis.
1.5
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.
Software
20% per annum straight line
1.6
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Land and buildings freehold
1% per annum straight line for buildings only, 10% per annum straight line for embedded plant and machinery and 5% per annum straight line for integral features
Fixtures, fittings & equipment
25% per annum straight line
Computer equipment
25% per annum straight line
Motor vehicles
25% per annum diminishing balance
Freehold land and assets under construction are not depreciated. Depreciation will start to be charged on assets under construction once the construction is complete.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.8
Impairment of non-current assets
At each reporting period end date, the company 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 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.
1.9
Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and loans from related parties.
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
Debt instruments like loans and other accounts receivable and payable are initially measured at the transaction price (including transaction costs) and subsequently at amortised cost using the effective interest method; Debt instruments that are payable or receivable within one year are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Financial liabilities are derecognised when, and only when, the company's obligations are discharged, cancelled, or they expire.
1.12
Equity instruments
Equity instruments issued by the company 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 company.
1.13
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 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 company’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.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
3
Revenue
The company operates in one principal activity, that of the supply of services, which is wholly undertaken in the United Kingdom. Revenue is therefore made up 100% by the fees in relation to the supply of these services.
4
Operating profit
2024
2022
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
(75,487)
(313,733)
Depreciation of owned property, plant and equipment
1,228,645
713,601
Amortisation of intangible assets
56,848
6,688
Operating lease charges
114,744
80,996
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 company
20,000
17,785
For other services
Taxation compliance services
500
2,370
Other taxation services
3,500
Services relating to corporate finance transactions
2,500
All other non-audit services
1,800
918
8,300
3,288
6
Directors' remuneration
2024
2022
£
£
Remuneration for qualifying services
397
954
Company pension contributions to defined contribution schemes
28,400
28,400
28,797
29,354
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 17 -
7
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2024
2022
Number
Number
Head office, administration and maintenance staff
30
27
Nursing and domestic staff
573
523
Total
603
550
Their aggregate remuneration comprised:
2024
2022
£
£
Wages and salaries
18,800,705
11,116,487
Social security costs
1,587,260
937,034
Pension costs
411,998
242,649
20,799,963
12,296,170
8
Finance costs
2024
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
1,269,044
403,810
9
Other gains and losses
2024
2022
£
£
Amounts written off current loans (see note 24)
1,645,729
-
10
Taxation
2024
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,103,000
1,000
Adjustments in respect of prior periods
(28,995)
188
Total current tax
1,074,005
1,188
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
10
Taxation
2024
2022
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
114,900
449,300
Changes in tax rates
141,800
Total deferred tax
114,900
591,100
Total tax charge
1,188,905
592,288
The actual 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
2,986,102
2,665,387
Expected tax charge based on the standard rate of corporation tax in the UK of 23.19% (2022: 19.00%)
692,477
506,424
Tax effect of expenses that are not deductible in determining taxable profit
387,606
24,221
Adjustments in respect of prior years
(28,995)
188
Permanent capital allowances in excess of depreciation
(1,242)
(104,499)
Depreciation on assets not qualifying for tax allowances
47,531
25,898
Other non-reversing timing differences
880
Deferred tax adjustments in respect of prior years
89,900
(3,700)
Effect of change in local deferred tax rate
1,900
141,800
Rounding on current and deferred tax
(272)
1,076
Taxation charge for the period
1,188,905
592,288
11
Dividends
2024
2022
£
£
Interim paid
485,000
160,000
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 19 -
12
Intangible fixed assets
Software
£
Cost
At 1 November 2022 and 31 March 2024
200,640
Amortisation and impairment
At 1 November 2022
6,688
Amortisation charged for the period
56,848
At 31 March 2024
63,536
Carrying amount
At 31 March 2024
137,104
At 31 October 2022
193,952
13
Property, plant and equipment
Land and buildings freehold
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 November 2022
40,421,128
2,129,192
273,526
118,797
42,942,643
Additions
86,400
402,548
23,643
60,882
573,473
At 31 March 2024
40,507,528
2,531,740
297,169
179,679
43,516,116
Depreciation and impairment
At 1 November 2022
6,560,610
1,936,271
223,227
79,334
8,799,442
Depreciation charged in the period
1,008,796
161,157
33,253
25,439
1,228,645
At 31 March 2024
7,569,406
2,097,428
256,480
104,773
10,028,087
Carrying amount
At 31 March 2024
32,938,122
434,312
40,689
74,906
33,488,029
At 31 October 2022
33,860,518
192,921
50,299
39,463
34,143,201
The company applied the transitional arrangements of Section 35 of FRS 102 and used a previous valuation as the deemed cost for certain freehold land and buildings. These buildings are being depreciated from the valuation date. As the assets are being depreciated or sold an appropriate transfer is made from the revaluation reserve to retained earnings.
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
13
Property, plant and equipment
(Continued)
- 20 -
If assets were stated on an historical cost basis rather than a deemed cost basis, the total amounts included would have been as follows:
2024
2022
£
£
Cost
39,889,084
39,802,684
Accumulated depreciation
(7,510,241)
(6,505,414)
Carrying value
32,378,843
33,297,270
14
Investment property
2024
£
Fair value
At 1 November 2022 and 31 March 2024
426,059
The fair value of the investment properties has been arrived at on the basis of a valuation carried out by the directors at the reporting date, who deemed that there had been no material movements in the market values between the date of acquisition in July 2020 and the reporting date.
15
Trade and other receivables
2024
2022
Amounts falling due within one year:
£
£
Trade receivables
599,254
619,134
Corporation tax recoverable
272,535
591,535
Other receivables
12,964
851,454
Prepayments and accrued income
161,446
94,922
1,046,199
2,157,045
Included within other receivables is a directors' current account balance of £Nil (2022 - £826,511).
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 21 -
16
Current liabilities
2024
2022
Notes
£
£
Bank loans and overdrafts
18
642,204
1,175,812
Trade payables
789,966
963,255
Corporation tax
1,103,000
272,535
Other taxation and social security
576,503
446,211
Other payables
1,608,356
1,379,309
Accruals and deferred income
608,384
169,014
5,328,413
4,406,136
Included within other payables is a directors' current account balance of £355,166 (2022 - £363,794). The directors have confirmed their continued support to the company by not requesting payment of the above balance unless there are sufficient funds available to do so.
17
Non-current liabilities
2024
2022
Notes
£
£
Bank loans
18
11,654,133
15,258,489
Amounts included above which fall due after five years are as follows:
Payable by instalments
8,736,441
10,631,088
18
Borrowings
2024
2022
£
£
Bank loans
12,296,337
16,434,272
Bank overdrafts
29
12,296,337
16,434,301
Payable within one year
642,204
1,175,812
Payable after one year
11,654,133
15,258,489
The bank loans are subject to a rate of interest being SONIA plus between 1.4% to 1.6%.
The bank loans are secured by the way of first legal charges over the company's freehold land and buildings as well as a debenture over all assets of the company.
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 22 -
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2022
Balances:
£
£
Accelerated capital allowances
881,500
874,400
Tax losses
-
(115,000)
Retirement benefit obligations
(11,500)
(4,300)
870,000
755,100
2024
Movements in the period:
£
Liability at 1 November 2022
755,100
Charge to profit or loss
114,900
Liability at 31 March 2024
870,000
The directors have considered the deferred tax liabilities notes above and concluded that it is not possible to state the estimated liabilities which will reverse within the next 12 months. This is due to the level of reversal being dependant on events which are not yet known.
20
Retirement benefit schemes
2024
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
411,998
242,649
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
At the statement of financial position date £61,190 (2022 - £42,195) of pension costs remained unpaid.
21
Share capital
2024
2022
2024
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
6,300
6,300
6,300
6,300
Preferred ordinary shares of £1 each
1,200
1,200
1,200
1,200
7,500
7,500
7,500
7,500
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
21
Share capital
(Continued)
- 23 -
Ordinary shares have attached to them full voting and dividend rights.
The preferred ordinary shares of £1 each are non-voting and have a preferred ordinary share entitlement of £1,000 per share.
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2022
£
£
Within one year
80,996
80,996
Between two and five years
121,494
323,983
202,490
404,979
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2022
£
£
Aggregate compensation
190,143
132,904
Transactions with related parties
During the period, dividends were declared to shareholders who are also directors totalling £485,000 (2022 - £160,000).
During the period the company was charged £959,600 (2022 - £1,225,000) in management charges from a connected company under the control of the directors. At the statement of financial position date £133,179 was due from the connected company (2022 - £182,714), which is included within other payables.
During the period, the company employed two close family members of the directors, who received combined remuneration of £114,902 (2022 - £80,469).
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 24 -
24
Directors' transactions
Advances or credits have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Amounts written off
Closing balance
£
£
£
£
£
£
Mrs S M L Hazell - Director's loan account
-
-
1,400,000
19,598
(600,000)
(819,598)
-
Mrs R C C Scott - Director's loan account
-
826,511
-
26,620
(27,000)
(826,131)
-
826,511
1,400,000
46,218
(627,000)
(1,645,729)
-
Amounts owed by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Amounts written off
Closing balance
£
£
£
£
£
£
Mr P G Colville - Director's loan account
-
(363,794)
343,471
-
(334,843)
-
(355,166)
(363,794)
343,471
-
(334,843)
-
(355,166)
SOUTH COAST NURSING HOMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
- 25 -
25
Ultimate controlling party
The ultimate controlling party is Mr P G Colville.
26
Cash generated from operations
2024
2022
£
£
Profit for the period after tax
1,797,197
2,073,099
Adjustments for:
Taxation charged
1,188,905
592,288
Finance costs
1,269,044
403,810
Investment income
(88,301)
Amortisation and impairment of intangible assets
56,848
6,688
Depreciation and impairment of property, plant and equipment
1,228,645
713,601
Other gains and losses
1,645,729
-
Movements in working capital:
Increase in trade and other receivables
(34,665)
(163,486)
Increase in trade and other payables
625,420
638,441
Cash generated from operations
7,688,822
4,264,441
27
Analysis of changes in net debt
1 November 2022
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
435,247
567,884
1,003,131
Bank overdrafts
(29)
29
435,218
567,913
1,003,131
Borrowings excluding overdrafts
(16,434,272)
4,137,935
(12,296,337)
(15,999,054)
4,705,848
(11,293,206)
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