Company registration number 13984507 (England and Wales)
PITTSHANGER HOLDCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PITTSHANGER HOLDCO LIMITED
COMPANY INFORMATION
Directors
M Beadle
F Blackwell
F Cattani
K Herbert
K Higgs
M Viccars
(Appointed 6 October 2023)
T Kilby
(Appointed 1 November 2023)
Crooklets LLP
(Appointed 25 March 2024)
Company number
13984507
Registered office
Happy Days Nurseries Head Office
Chapel Town, Summercourt
Newquay
Cornwall
United Kingdom
TR8 5YA
Auditor
Azets Audit Services
5 Yeomans Court
Ware Road
Hertford
Hertfordshire
United Kingdom
SG13 7HJ
PITTSHANGER HOLDCO LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Group statement of comprehensive income
11
Group statement of financial position
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
PITTSHANGER HOLDCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Introduction

Pittshanger Holdco Limited is the parent company for the Happy Days Nurseries group, one of the largest regional chains of children's nurseries in the UK, currently with 21 settings and an operating capacity of over 1,750 places. It is the largest operator in Cornwall and has expanded across the South West.

 

Pittshanger Holdco Limited ("the Group") was operating 14 (2022: 11) of the group's nurseries at the end of 2023 with capacity of over 1,750 places.

 

Strategy & Funding

Happy Days opened their first Nursery in 1991 and now operate 30 Nurseries throughout the South West, South East and Wales. We have an ambitious growth plan to expand our portfolio through organic new developments and acquisitions. At the Happy Days Group we pride ourselves on all our Nurseries offering inspiring childcare and education where every child shines.

Our Nurseries are designed and resourced to ensure children have access to safe, challenging, impactful and engaging inclusive high quality indoor and outdoor continuous provision that supports them to be active, curious and independent learners. The Happy Days unique, broad and ambitious “Where Children Shine” curriculum provides opportunities for all children to learn, explore and discover enabling them to have the best start in life. The curriculum values children as unique, strong and resilient individuals, recognising that play is a fundamental aspect of a child’s learning and development. Our curriculum reflects Happy Days mission and vision supporting all children to feel safe and secure. This enables children to thrive and meet their full potential and become strong and motivated learners for life, which will have a positive impact on their future success.

 

The Group's strategy is to extend its geographic footprint across the South West and adjoining regions, with the objective of more than doubling the size of the Group in 5 years by a combination of acquisitions and roll-out.

 

A re-financing was completed in July 2022, when funds managed by Zetland Capital (“Zetland") acquired a majority stake in the business. £12 million was invested by Zetland in loan stock at completion and debt facilities are in place with Zetland for a further £60 million for business expansion.

 

In recent years, the business has expanded through organic growth. The funding from Zetland now presents the opportunity to scale the business by acquisition at a much faster rate, alongside continued opening of new sites.

 

Banking facilities with Santander UK plc ("Santander") were also renewed in July 2022 for a five year period till July 2027. A senior loan of £6 million remains in place and there is a growth capital facility of a further £1 million available for future use.

 

The investment structure used for Pittshanger Holdco is suited to an acquisition and roll-out strategy because the Zetland borrowing does not require payment of interest or repayment of debt until 2027.

PITTSHANGER HOLDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
New Sites

In January, the Group opened a new nursery in Salisbury.

 

May 2023, the Group completed the acquisition of The Hollies Nursery Limited ("The Hollies"), which operates a single site in Cardiff. The Company is actively seeking further acquisitions.

 

In November 2023, the Group completed the acquisition of Yew Tree Nursery Limited (“Yew Tree”), which operates a single site in Yeovil.

 

The leases for two organic sites, Charlton Heights in Bristol and Droitwich Spa in Worcestershire, have recently been assigned by another chain. Both opened in September 2023.

 

Two new organic growth sites are planned to open in early 2024, Verwood in Dorset and Yate in South Gloucestershire.

 

Since 2014, the Group has opened ten modern, high quality nurseries with 70-100 places in areas of strong demographics, of which five sites have been conversions and five have been purpose-built. These sites cover an area spanning Exeter, Bristol, Swindon, Poole and Salisbury.

Business review and Key Performance Indicators (KPIs)

 

Trading Results for 2023

The Group’s turnover increased in 2023 by £7.0m to £16.4m based on the consolidated income statement, however as a result of the construction of the new Group full year revenue for 12 months in 2022 was £13.1m and therefore overall revenue increased by £3.3m on a like-for-like basis. This growth was as a result of recently opened sites continuing to mature and change in the pricing policy implemented during the year.

 

The Group achieved an operating loss of £4.8m in 2023 (2022: operating loss of £3.2m).

 

Depreciation resulted in a charge against profit of £0.7m (2022: £0.4m) within administrative expenses. Before this non-cash flow item, the Group recorded an operating loss of around £4.1m in 2023 (2022: £2.8m).

 

The net liabilities at the reporting date were £10.9m (2022: £3.9m) and the Group held cash of £1.3m (2022: £1.3m).

 

During 2023 the Group opened 3 new settings and acquired 2 settings. The business intends to continue to grow through acquisition and organic new developments.

Banking

Santander provides debt facilities, current accounts, deposit accounts and payment facilities to the Group.

Regulatory Regime

Childcare is regulated in England by the Office for Standards in Education, Children's Services and Skills (Ofsted). Ofsted judgements on individual settings are a key measure of quality. All of the Group's nurseries that have been inspected were rated as either “Outstanding" or "Good” by Ofsted at 31 December 2023.

PITTSHANGER HOLDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Principal Risks and Uncertainties

The Group manages key risks as follows:

 

Health & Safety

Health & safety is paramount in all aspects of the Group's activities, with strict policies & processes operated and regularly updated to ensure compliance with regulations.

 

Economy

The UK economy is experiencing a period of high inflation, experiencing cost and wage inflation and there is a risk of recession. We are managing the associated risks by carefully controlling costs, managing the portfolio of nurseries and maintaining forecasts.

 

Liquidity risk

Cash flow forecasts are maintained to ensure that the Group operates within its resources.

 

Customer credit risk

Customer credit risk is considered to be low and is managed through maximising payments in advance by direct debit and tax free childcare combined with credit control procedures.

 

Credit risk

The Group’s principal financial assets are bank balances, therefore the credit risk of the Group is low.

 

Cashflow

Majority of interest bearing liabilities are held at fixed rates to ensure certainty of cash flows.

 

Interest rate risk

Interest rates on Zetland loans to the company are fixed. Interest rates on Santander loans to the company are at Bank of England Base Rate plus a margin.

 

Regulatory risk

The nurseries are registered and regulated by Ofsted. Internal control procedures are in place to ensure high quality care and compliance with regulations.

On behalf of the board

T Kilby
Director
21 January 2025
PITTSHANGER HOLDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of Pittshanger Holdco Limited ("the Company") continued to be that of a holding company.

 

The principal activity of the Company's subsidiaries continued to be the operation of childcare facilities. The Company and it's subsidiaries are referred to as "the Group".

Results and dividends

The results for the year are set out on page 11.

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

Directors

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

M Beadle
F Blackwell
F Cattani
M Goddard
(Resigned 25 March 2024)
K Herbert
K Higgs
I Sanders
(Resigned 6 October 2023)
M Viccars
(Appointed 6 October 2023)
T Kilby
(Appointed 1 November 2023)
Crooklets LLP
(Appointed 25 March 2024)
Financial risk management

Where material for the assessment of the assets, liabilities, financial position and profit or loss of the Group, the directors have included comment on the financial risk management objectives and policies relevant by reference to the strategic report under principal risks and uncertainties.

Disabled persons

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

Employee involvement

The Group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

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

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the Group's performance.

PITTSHANGER HOLDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Post reporting date events

On 28 June 2024, the Group completed the acquisition of Home Counties Nurseries and Day Care Limited, a single setting nursery in Surrey, Toddletown Nursery and Daycare (Farnham) Ltd, a single setting nursery in Surrey and Toddletown Nursery and Daycare (Eastleigh) Ltd, a single setting nursery in Hampshire.

 

On 27 September 2024, the Group completed the acquisition of Tiddlers Day Nursery Limited, a single setting nursery in Bristol.

 

On 30 October 2024, the Group completed the acquisition R&J Care Limited, a single setting nursery in Portsmouth.

 

The costs of investment and value of net assets acquired at completion were:

 

 

Cost of investment

Net assets acquired

 

£

£

Home Counties Nursery and Day Care Limited

2,940,000

333,000

Toddletown Nursery and Daycare (Farnham) Limited

4,280,000

605,000

Toddletown Nursery and Daycare (Eastleigh) Limited

2,121,000

379,000

Tiddlers Day Nursery Limited

1,301,000

517,000

R&J Care Limited

1,969,000

1,238,000

 

The acquisitions were funded by a shareholder loan from Zetland Capital Partners LLP.

Future developments

The directors intend to continue the development of the Group's principal activities and are confident of the future financial performance of the Group.

Auditor

Azets Audit Services were appointed as auditor to the Group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Strategic report

The Group has chosen in accordance with Companies Act 2006, s414C(11) to set out in the Group's strategic report information required by Schedule 7 to the Large and Medium-sized Companies and Group's Accounts and Reports Regulations 2008. true

 

Certain matters which are required to be disclosed in the directors' report have been omitted as they are included in the strategic report. These matters relate to the business review and principal risks and uncertainties.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the Group is unaware. Additionally, the 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 Group is aware of that information.

 

The annual report and financial statements set out on pages 11 to 36, which have been prepared on the going concern basis, were approved by the board of directors on 21 January 2025, and were signed on its behalf by:

T Kilby
Director
21 January 2025
PITTSHANGER HOLDCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

The directors are responsible for preparing the strategic report, directors' 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) including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland;.

 

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 Group and of the or 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 transactions and disclose with reasonable accuracy at any time the financial position of the Group 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

PITTSHANGER HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PITTSHANGER HOLDCO LIMITED
- 7 -
Opinion

We have audited the financial statements of Pittshanger Holdco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

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.

PITTSHANGER HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PITTSHANGER HOLDCO LIMITED
- 9 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Other matter – prior period financial statements

In forming our opinion on the Financial Statements, which is not modified, we note that the prior period Financial Statements for the company were not audited. Consequently, International Standards on auditing (UK and Ireland) require the auditor to state that the corresponding figures contained within these Financial Statements are unaudited.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

PITTSHANGER HOLDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PITTSHANGER HOLDCO LIMITED
- 10 -
Gary Tamkin (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
Chartered Accountants
Statutory Auditor
5 Yeomans Court
Ware Road
Hertford
Hertfordshire
United Kingdom
SG13 7HJ
21 January 2025
PITTSHANGER HOLDCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Year
Period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
16,366,606
9,318,712
Cost of sales
(14,467,225)
(9,675,109)
Gross profit/(loss)
1,899,381
(356,397)
Administrative expenses
(6,700,553)
(3,496,845)
Other operating income
9,897
866,692
Exceptional costs
4
-
0
(253,385)
Operating loss
5
(4,791,275)
(3,239,935)
Interest receivable and similar income
9
13,246
4,976
Interest payable and similar expenses
10
(2,234,967)
(721,144)
Loss before taxation
(7,012,996)
(3,956,103)
Tax on loss
11
(10,178)
191
Loss for the financial year
(7,023,174)
(3,955,912)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

There was no other comprehensive income for 2023 (2022: £Nil).

The notes on pages 17 to 36 form part of these financial statements.

PITTSHANGER HOLDCO LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
10,249,354
10,105,831
Other intangible assets
12
69,356
-
0
Total intangible assets
10,318,710
10,105,831
Tangible assets
13
7,793,303
5,665,051
18,112,013
15,770,882
Current assets
Stocks
16
-
31,015
Debtors
17
753,472
601,175
Cash at bank and in hand
1,291,904
1,283,647
2,045,376
1,915,837
Creditors: amounts falling due within one year
18
(3,593,473)
(2,756,514)
Net current liabilities
(1,548,097)
(840,677)
Total assets less current liabilities
16,563,916
14,930,205
Creditors: amounts falling due after more than one year
19
(27,127,540)
(18,856,109)
Provisions for liabilities
Provisions
22
375,093
-
0
Deferred tax liability
10,214
-
0
(385,307)
-
Net liabilities
(10,948,931)
(3,925,904)
Capital and reserves
Called up share capital
24
10
10
Share premium account
25
30,145
29,998
Profit and loss reserves
(10,979,086)
(3,955,912)
Total equity
(10,948,931)
(3,925,904)

The notes on pages 17 to 36 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
21 January 2025
T Kilby
Director
Company registration number 13984507 (England and Wales)
PITTSHANGER HOLDCO LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
14
100
100
Current assets
Debtors
17
26,486
30,008
Creditors: amounts falling due within one year
18
(36,010)
(100)
Net current (liabilities)/assets
(9,524)
29,908
Net (liabilities)/assets
(9,424)
30,008
Capital and reserves
Called up share capital
24
10
10
Share premium account
25
30,145
29,998
Profit and loss reserves
(39,579)
-
Total equity
(9,424)
30,008

The notes on pages 17 to 36 form part of these financial statements.

As permitted by S408 Companies Act 2006, the Company has not presented its own statement of comprehensive income and related notes. The Company’s loss for the year was £39,579 (2022: £0 profit).

 

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The financial statements were approved by the board of directors and authorised for issue on 21 January 2025 and are signed on its behalf by:
21 January 2025
T Kilby
Director
Company registration number 13984507 (England and Wales)
PITTSHANGER HOLDCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
1
-
-
0
1
Period ended 31 December 2022:
Loss and total comprehensive income
-
-
(3,955,912)
(3,955,912)
Issue of share capital
24
9
29,998
-
30,007
Balance at 31 December 2022
10
29,998
(3,955,912)
(3,925,904)
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(7,023,174)
(7,023,174)
Issue of share capital
24
-
0
147
-
147
Balance at 31 December 2023
10
30,145
(10,979,086)
(10,948,931)

The notes on pages 17 to 36 form part of these financial statements.

PITTSHANGER HOLDCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
1
-
0
-
0
1
Period ended 31 December 2022:
Profit and total comprehensive income for the period
-
-
-
-
0
Issue of share capital
24
9
29,998
-
30,007
Balance at 31 December 2022
10
29,998
-
0
30,008
Year ended 31 December 2023:
Loss and total comprehensive income
-
-
(39,579)
(39,579)
Issue of share capital
24
-
0
147
-
147
Balance at 31 December 2023
10
30,145
(39,579)
(9,424)

The notes on pages 17 to 36 form part of these financial statements.

PITTSHANGER HOLDCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
33
(2,333,478)
(1,178,509)
Interest paid
(488,813)
(190,900)
Net cash outflow from operating activities
(2,822,291)
(1,369,409)
Investing activities
Purchase of business
(1,242,445)
(1,085,708)
Purchase of intangible assets
(69,356)
-
Purchase of tangible fixed assets
(2,586,044)
(846,055)
Net cash used in investing activities
(3,897,845)
(1,931,763)
Financing activities
Proceeds from issue of shares
147
30,008
Proceeds from borrowings
6,715,000
4,549,835
Interest (paid)/received
13,246
4,976
Net cash generated from financing activities
6,728,393
4,584,819
Net increase in cash and cash equivalents
8,257
1,283,647
Cash and cash equivalents at beginning of year
1,283,647
-
0
Cash and cash equivalents at end of year
1,291,904
1,283,647

The notes on pages 17 to 36 form part of these financial statements.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

Pittshanger Holdco Limited (“the Company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Happy Days Nurseries Head Office, Chapel Town, Summercourt, Newquay, Cornwall, United Kingdom, TR8 5YA.

 

The group consists of the Company and all of its subsidiaries ("the Group").

1.1
Reporting period

The prior reported period was for less than 12 months from 1 July 2022 to 31 December 2022. The reason for the change in reporting period was to align with the calendar year. The current period covers the 12 months ended 31 December 2023. The two periods are therefore not necessarily comparable.

1.2
Accounting convention

 

Basis of preparation

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 Group. Monetary amounts in these financial statements are rounded to the nearest £.

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

 

The Company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit and loss account.

Exemptions for qualifying entities under FRS 102

The Company is a qualifying entity for the purposes of FRS 102. The Company has taken advantage of exemptions from the following disclosure requirements:

 

1.3
Basis of consolidation

The consolidated Group financial statements consist of the financial statements of the Company together with all entities controlled by the Company (its subsidiaries).

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

 

All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

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

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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.

 

The Group has access to finance facilities provided by the ultimate controlling entity, Zetland Special Situations Fund II SICAV-RAIF, which can be drawn down to support the Group’s acquisition strategy and to fund working capital needs. These facilities have a final repayment date of July 2027.

 

The Group has received a commitment from the ultimate controlling entity that it will continue to provide financial support to the Group, if required for a period of at least 12 months from the approval of these financial statements. In addition, confirmation has been received that the related party loan balances will not be recalled unless sufficient liquidity exists.

 

As at the reporting date the Group had net current liabilities of £1,548,097 (2022: net current liabilities of £840,677), the directors consider they have sufficient access to funding to meet these liabilities when they fall due. The balance outstanding on the related party loans was £20,829,930 at the yearend (2022: £12,522,740). As part of their assessment the directors have reviewed the financial projections, cash flow forecast and facilities available, to satisfy themselves that there is sufficient cash and headroom on loan covenants to support the going concern basis.

 

Based on this review the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

1.5
Turnover

Turnover represents the total invoice value of nursery services provided during the year and is recognised through the Statement of Comprehensive Income. Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group in the period in which the services are provided. Turnover is recognised if it can be reliably measured, if it is probable that the Group will receive the consideration due under the contract and the costs incurred to complete the contract can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life (10 years).

1.7
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:

Website
5 years
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.8
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:

Leasehold improvements
Straight line over the life of the lease
Plant and equipment
25% straight line
Fixtures and fittings
between 10% and 33% straight line
IT equipment
33% straight line
Motor vehicles
25% straight line
Office equipment
between 10% and 33% straight line

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.

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

 

Tangible fixed assets also comprise assets in the course of construction which are held at cost. Depreciation is due to commence when the assets are fully operational.

1.9
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the statement of comprehensive income.

 

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.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.11
Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.12
Financial instruments

The Group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price less any impairments whereas loans receivable are initially measured at fair value net of transaction costs. Subsequently, basic financial assets are carried at amortised cost using the effective interest method.

Basic financial liabilities

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Debt instruments

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

1.13
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.

1.14
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 Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Deferred tax

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

 

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

1.15
Provisions

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

 

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

1.16
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 Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

 

The contributions are recognised as an expense in statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.18
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.

1.19
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.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.20

Interest Income

Interest income is recognised in the statement of comprehensive income using the effective interest method.

1.21

Finance costs

Finance costs are charged to the statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as reduction in the proceeds of the associated capital instrument.

1.22

Exceptional costs

Exceptional costs are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the Group. They are costs that are material either because of their size or their nature, and are considered non-recurring. These items are presented within the line items to which they best relate and reported separately as exceptional costs.

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

In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

The directors consider there to be no critical accounting estimates or judgements that are material to the Group.

Critical judgements

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

Useful economic life of assets

The useful economic life of assets are determined based on management's judgement, considering the specific circumstances of the tangible assets and the expected period over which the assets will contribute to the entity's cash flows.

Key sources of estimation uncertainty

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

Dilapidation provisions

The Group has assessed whether at the reporting date that a provision is required in respect of the obligation stated in the lease to return a property to the original condition. The provision is based on an estimate of the cost required considering the condition and size of the property. The estimate of the provision is revisited at each reporting date.

Recoverability of assets - goodwill

The recoverable amount of goodwill is considered relative to the individual performance of the sites to which the goodwill relates. The net book value of goodwill at year end is £10,249,354 (2022: £10,105,831) and is stated after an impairment of £350,000 (2022: £Nil).

 

In determining whether or not an impairment provision is required, the directors take into account a variety of factors such as the expected use of the acquired business, and the expected useful life of the cash generating units to which the goodwill is attributed.

3
Turnover

The turnover of the Group is generated from its principal activity. The directors consider there to be only one geographical market, the United Kingdom.

 

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
4
Exceptional costs
2023
2022
£
£
Fixed asset write offs
-
16,844
IT projects
-
204,262
Professional fees
-
9,187
Restructuring costs
-
23,092
-
253,385

Exceptional costs incurred in the prior year are considered to be non-recurring. These include IT projects, professional fees, restructuring costs and write off of fixed assets costs at the closed sites.

5
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging:
Depreciation of owned tangible fixed assets
708,797
238,023
Amortisation of intangible assets
1,140,491
622,559
Impairment of intangible assets
350,000
-
0
Operating lease charges
1,506,438
1,108,458
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
9,000
-
Audit of the financial statements of the company's subsidiaries
106,500
74,335
115,500
74,335
For other services
Other assurance services
29,500
-
Taxation compliance services
13,400
-
42,900
-
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
7
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Nursery and administrative staff
558
444
-
-
Directors
8
5
8
5
Total
566
449
8
5

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
11,007,822
7,236,368
-
0
-
0
Social security costs
820,304
651,806
-
-
Pension costs
268,364
152,177
-
0
-
0
12,096,490
8,040,351
-
0
-
0
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
589,263
558,648
Company pension contributions to defined contribution schemes
111,776
53,635
701,039
612,283

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2022 - 5).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
136,913
133,583
Company pension contributions to defined contribution schemes
19,270
13,292
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
13,246
4,976
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
642,469
721,144
Interest on finance leases and hire purchase contracts
308
-
Interest on shareholder loans
1,592,190
-
Total finance costs
2,234,967
721,144
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
10,178
(191)

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

2023
2022
£
£
Loss before taxation
(7,012,996)
(3,956,103)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
(1,648,054)
(751,660)
Expenses not deductible for tax purposes
305,173
(66,992)
Income not taxable for tax purposes/Non taxable income
-
0
(6,635)
Change in tax rate
(67)
-
Group relief
(16,306)
-
0
Adjustments to tax charge in respect of prior periods
-
0
(191)
Remeasurement of deferred tax for changes in tax rates
-
0
292,494
Fixed asset differences
44,817
62,873
Deferred tax not recognised
1,485,988
463,239
Non trade loan relationship deficit b/f utilised under s463G CTA
(3,643)
-
Utilisation of tax losses not previously recognised
(155,505)
-
Capitalised revenue expenditure allowable on accounts basis
(2,225)
-
Other timing differences leading to an increase/(decrease) in taxation
-
6,681
Taxation charge/(credit)
10,178
(191)
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
12
Intangible fixed assets
Group
Goodwill
Website
Total
£
£
£
Cost
At 1 January 2023
10,728,390
-
0
10,728,390
Additions
1,634,014
69,356
1,703,370
At 31 December 2023
12,362,404
69,356
12,431,760
Amortisation and impairment
At 1 January 2023
622,559
-
0
622,559
Amortisation charged for the year
1,140,491
-
0
1,140,491
Impairment losses
350,000
-
0
350,000
At 31 December 2023
2,113,050
-
0
2,113,050
Carrying amount
At 31 December 2023
10,249,354
69,356
10,318,710
At 31 December 2022
10,105,831
-
0
10,105,831
The Company had no intangible fixed assets at 31 December 2023 or 31 December 2022.

At the reporting date, management assessed the goodwill for "The Hollies Nursery Limited" and reported an impairment charge of £350,000.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
13
Tangible fixed assets
Group
Leasehold improvements
Assets under construction
Plant and equipment
Fixtures and fittings
IT equipment
Motor vehicles
Office equipment
Total
£
£
£
£
£
£
£
£
Cost
At 1 January 2023
7,506,417
845,005
-
0
1,458,621
735,762
-
0
-
0
10,545,805
Additions
260,409
2,209,979
5,462
49,393
44,591
-
0
-
0
2,569,834
Acquisition of subsidiary
242,416
-
0
14,798
258
-
0
9,743
-
0
267,215
Disposals
(72,863)
-
0
(6,127)
(501,211)
(160,999)
-
0
-
0
(741,200)
Transfers
2,195,488
(2,581,916)
(19,327)
362,642
43,113
-
0
-
0
-
0
Reclassification
-
0
-
0
5,194
(5,194)
(180,291)
-
0
180,291
-
0
At 31 December 2023
10,131,867
473,068
-
0
1,364,509
482,176
9,743
180,291
12,641,654
Depreciation and impairment
At 1 January 2023
3,005,212
-
0
-
0
1,222,359
653,183
-
0
-
0
4,880,754
Depreciation charged in the year
511,757
-
0
7,377
126,887
59,662
3,114
-
0
708,797
Eliminated in respect of disposals
(72,863)
-
0
(6,127)
(501,211)
(160,999)
-
0
-
0
(741,200)
Transfers
5,402
-
0
(11,716)
-
0
6,314
-
0
-
0
-
0
Reclassification
-
0
-
0
10,466
(10,466)
(169,016)
-
0
169,016
-
0
At 31 December 2023
3,449,508
-
0
-
0
837,569
389,144
3,114
169,016
4,848,351
Carrying amount
At 31 December 2023
6,682,359
473,068
-
0
526,940
93,032
6,629
11,275
7,793,303
At 31 December 2022
4,501,205
845,005
-
0
236,262
82,579
-
0
-
0
5,665,051
The Company had no tangible fixed assets at 31 December 2023 or 31 December 2022.
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
100
100
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
100
Carrying amount
At 31 December 2023
100
At 31 December 2022
100
15
Subsidiaries

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

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Pittshanger Bidco Limited
England
Intermediate holding company.
Ordinary
100.00
-
H. Days Holdings Limited
England
Operation of childcare facilities
Ordinary
0
100.00
Happy Days Consultancy Limited
England
Management services in the childcare sector
Ordinary
0
100.00
Happy Days South West Limited
England
Operation of childcare facilities
Ordinary
0
100.00
Happy Days Day Nurseries Limited
England
Operation of childcare facilities
Ordinary
0
100.00
The Hollies Nursery Limited
England
Operation of childcare facilities
Ordinary
0
100.00
Yew Tree Nursery Limited
England
Operation of childcare facilities
Ordinary
0
100.00

Registered office addresses (all UK unless otherwise indicated):

England
Happy Days Nurseries Chapel Town, Summercourt, Newquay, Cornwall, TR8 5YA
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Subsidiaries
(Continued)
- 30 -
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Pittshanger Bidco Limited
(19,694)
(25,346)
H. Days Holdings Limited
(15,568,063)
(4,526,715)
Happy Days Consultancy Limited
412,777
(100,389)
Happy Days South West Limited
453,552
(1,242,493)
Happy Days Day Nurseries Limited
5,631,192
462,816
The Hollies Nursery Limited
175,603
21,135
Yew Tree Nursery Limited
1,876
(17,451)

See note 27 for details regarding the acquisition of subsidiary undertakings.

16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Finished goods
-
31,015
-
-
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
72,045
32,143
-
0
-
0
Amounts owed by group undertakings
-
-
26,486
30,008
Other debtors
67,039
35,126
-
0
-
0
Prepayments and accrued income
613,962
533,480
-
0
-
0
753,046
600,749
26,486
30,008
Deferred tax asset
426
426
-
0
-
0
753,472
601,175
26,486
30,008

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

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Obligations under finance leases
21
1,708
-
0
-
0
-
0
Trade creditors
524,273
649,727
-
0
-
0
Corporation tax payable
78,695
-
0
-
0
-
0
Other taxation and social security
228,095
157,507
-
-
Other creditors
2,250,832
1,450,045
100
100
Accruals and deferred income
509,870
499,235
35,910
-
0
3,593,473
2,756,514
36,010
100

See note 21 for details regarding obligations under finance leases.

19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
20
6,004,504
5,807,843
-
0
-
0
Obligations under finance leases
21
1,203
-
0
-
0
-
0
Other borrowings
20
20,829,930
12,522,740
-
0
-
0
Accruals and deferred income
291,903
525,526
-
0
-
0
27,127,540
18,856,109
-
-

See note 20 for details regarding bank loans and other borrowings and see note 21 for details regarding obligations under finance leases.

20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
6,004,504
5,807,843
-
0
-
0
Loans from related parties
20,829,930
12,522,740
-
0
-
0
26,834,434
18,330,583
-
-
Payable after one year
26,834,434
18,330,583
-
0
-
0
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Loans and overdrafts
(Continued)
- 32 -

Bank loans falling due after more than one year includes £6,001,292 (2022: £5,802,391) relating to senior debt facilities. This amount is secured by fixed and floating charges over the undertaking, all property and all assets present and future of H. Days Holdings Limited, a subsidiary within the Group. The loan is interest bearing at a margin of 5% above the Bank of England base rate per annum and has capital repayments falling due from July 2025, accrued interest falls due July 2027. Interest payable is calculated on a quarterly basis and compounded quarterly, where unpaid.

 

A further growth capital facility of £1,000,000 is available for future investments which at the period end remained undrawn. A commitment fee of 1.75% per annum calculated is calculated on a quarterly basis and compounded quarterly, where unpaid which at the period end amounted to £3,212 (2022: £5,452). When drawn, this amount will be interest bearing at a margin of 5-10% above the Bank of England base rate per annum depending on the level of leverage facilitated.

 

Loans from related parties falling due after more than one year of £20,829,930 (2022: £12,522,740) relates to an interest bearing loan agreement provided by a related party of the Group. This amount is unsecured, interest bearing at 10% per annum and has a final repayment date for capital and accrued interest of July 2027. Interest payable is calculated on a quarterly basis and compounded annually, where unpaid.

21
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
2,177
-
0
-
0
-
0
In two to five years
1,533
-
0
-
0
-
0
3,710
-
-
-
Less: future finance charges
(799)
-
0
-
0
-
0
2,911
-
-
0
-
0

Finance lease obligations relate to assets held under hire purchase contracts that are on a fixed repayment basis and are secured against the assets they relate to.

22
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
375,093
-
-
-
Movements on provisions:
Group
£
Additional provisions in the year
375,093
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Provisions for liabilities
(Continued)
- 33 -

The directors have estimated the cost of restoration where the lease contains an obligation to return the property to its original condition.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to the statement of comprehensive income in respect of defined contribution schemes
268,364
152,177

The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions to the defined contribution pension scheme are expected to be settled wholly within 12 months of the reporting period.

24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
80,000 A Ordinary shares of 0.01p each
80,000
80,000
8
8
17,284 B Ordinary shares of 0.01p each
17,284
17,200
2
2
97,284
97,200
10
10

A Ordinary Shares and B Ordinary Shares rank pari passu in respect of the distribution of income and the rights to receive dividends.

 

A Ordinary Shares have full voting rights, are entitled to the appointment of directors and are entitled to receive capital in accordance with the articles. These shares are not redeemable.

 

B Ordinary Shares have voting rights, are entitled to receive capital in accordance with the articles. Class rights attached to these shares can be abrogated capital in accordance with the articles.

 

On 13 October 2023, 84 B Ordinary Shares were allocated at a nominal value per share of £0.0001 for a consideration of £1.74 per share.

25
Share premium account

The share premium account represents the excess of proceeds received from the issue of shares over their nominal value.

 

As a result of the B Ordinary Shares allotted on 13 October 2023, share premium of £147 was generated and is recognised in the share premium account.

26
Profit and loss reserve

This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
27
Acquisition of a business

On 5 July 2023 the group acquired the issued capital of The Hollies Nursery Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
245,000
-
245,000
Investments
57,000
-
57,000
Cash and cash equivalents
20,000
-
20,000
Trade and other payables
(174,000)
-
(174,000)
Total identifiable net assets
148,000
-
148,000
Goodwill
849,000
Total consideration
997,000
The consideration was satisfied by:
£
Cash
997,000

On 2 November 2023 the group acquired the issued capital of Yew Tree Nursery Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Property, plant and equipment
6,000
-
6,000
Trade and other receivables
21,000
-
21,000
Cash and cash equivalents
539,000
-
539,000
Trade and other payables
(547,000)
-
(547,000)
Total identifiable net assets
19,000
-
19,000
Goodwill
785,000
Total consideration
804,000
The consideration was satisfied by:
£
Cash
804,000
PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
28
Financial commitments, guarantees and contingent liabilities

H. Days Holdings Limited, a subsidiary within the Group, and their subsidiaries are party to cross guarantees given in respect of certain bank borrowings between H. Days Holdings Limited and Santander UK PLC, providing access to a senior loan facility of £6,000,000 and a growth capital facility of £1,000,00, which at the period end amounted to £6,004,504 (2022: £5,807,843). This guarantee is secured by fixed and floating charges over the undertaking, all property and assets present and future including land, shares and securities, intellectual property, investments, monetary claims, plant and equipment, goodwill, uncalled capital, assigned contracts and assigned insurances of H. Days Holdings Limited.

29
Operating lease commitments
Lessee

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

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
3,262,120
1,295,097
-
-
Between two and five years
12,667,242
4,762,339
-
-
In over five years
43,369,318
14,288,057
-
-
59,298,680
20,345,493
-
-
30
Events after the reporting date

On 28 June 2024, the Group completed the acquisition of Home Counties Nurseries and Day Care Limited, a single setting nursery in Surrey, Toddletown Nursery and Daycare (Farnham) Ltd, a single setting nursery in Surrey and Toddletown Nursery and Daycare (Eastleigh) Ltd, a single setting nursery in Hampshire.

 

On 27 September 2024, the Group completed the acquisition of Tiddlers Day Nursery Limited, a single setting nursery in Bristol.

 

On 30 October 2024, the Group completed the acquisition of R&J Care Limited, a single setting nursery in Portsmouth.

 

The costs of investment and value of net assets acquired at completion were:

 

 

Cost of investment

Net assets acquired

 

£

£

Home Counties Nursery and Day Care Limited

2,940,000

333,000

Toddletown Nursery and Daycare (Farnham) Limited

4,280,000

605,000

Toddletown Nursery and Daycare (Eastleigh) Limited

2,121,000

379,000

Tiddlers Day Nursery Limited

1,301,000

517,000

R&J Care Limited

1,969,000

1,238,000

 

The acquisitions were funded by a shareholder loan from Zetland Capital Partners LLP.

PITTSHANGER HOLDCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
31
Related party transactions

The company has taken advantage of the exemption available under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' not to disclose related party transactions with wholly owned subsidiaries within the group.

32
Controlling party

The immediate parent company is ZSSF ll RA Holdings S.a.r.l., a company registered in Luxembourg.

 

The directors of Pittshanger Holdco Limited consider the ultimate controlling entity to be Zetland Special Situations Fund II SCSp SICAV-RAIF, a company registered in Luxembourg and the ultimate controlling party to be A Hamdani.

33
Cash absorbed by group operations
2023
2022
£
£
Loss for the year after tax
(7,023,174)
(3,955,912)
Adjustments for:
Taxation charged
10,178
-
Finance costs
2,234,659
740,870
Amortisation and impairment of intangible assets
1,490,491
628,019
Depreciation and impairment of tangible fixed assets
725,006
237,448
Increase in provisions
375,093
-
Movements in working capital:
Decrease in stocks
31,015
3,593
Increase in debtors
(142,906)
(116,936)
(Decrease)/increase in creditors
(33,840)
1,284,409
Cash absorbed by operations
(2,333,478)
(1,178,509)
34
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,283,647
8,257
1,291,904
Borrowings excluding overdrafts
(18,330,583)
(8,503,851)
(26,834,434)
Obligations under finance leases
-
(2,911)
(2,911)
(17,046,936)
(8,498,505)
(25,545,441)
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