Company registration number 12365749 (England and Wales)
LCM FUNDING UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
LCM FUNDING UK LIMITED
COMPANY INFORMATION
Director
D Collins
(Appointed 4 October 2024)
Company number
12365749
Registered office
181 Queen Victoria Street
Bridge House
London
EC4V 4EG
Auditor
Beavis Morgan Audit Limited
82 St John Street
London
EC1M 4JN
LCM FUNDING UK LIMITED
CONTENTS
Page
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 18
LCM FUNDING UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The director presents the strategic report for the year ended 30 June 2024.
Review of the business
D Collins
Director
24 April 2025
LCM FUNDING UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
The director presents his annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of investing in litigation financing projects.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
P Moloney
(Resigned 21 February 2025)
M Gangemi
(Resigned 5 September 2024)
D Collins
(Appointed 4 October 2024)
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to XX day's purchases, based on the average daily amount invoiced by suppliers during the year.
Auditor
The auditor, Beavis Morgan Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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
D Collins
Director
24 April 2025
LCM FUNDING UK LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is 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 financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
LCM FUNDING UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LCM FUNDING UK LIMITED
- 4 -
Opinion
We have audited the financial statements of LCM Funding UK Limited (the 'company') for the year ended 30 June 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 Reduced Disclosure Framework (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 30 June 2024 and of its profit for the year 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the director's report has been prepared in accordance with applicable legal requirements.
LCM FUNDING UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LCM FUNDING UK LIMITED
- 5 -
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 director's report.
We have nothing to report in respect of the following matters where 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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors report and from the requirement to prepare a strategic report.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
LCM FUNDING UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LCM FUNDING UK LIMITED
- 6 -
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, 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.
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, company law and Tax and pensions legislation; and
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
25 April 2025
Matthew Burge (Senior Statutory Auditor)
For and on behalf of Beavis Morgan Audit Limited
Chartered Accountants
82 St John Street
London
EC1M 4JN
LCM FUNDING UK LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 7 -
2024
2023
Notes
£
£
Revenue
3
2,280
16,828,256
Cost of sales
(51,927)
(3,626,713)
Gross (loss)/profit
(49,647)
13,201,543
Administrative expenses
63,182
(13,162,731)
Operating profit
4
13,535
38,812
Investment income
6
105
Finance costs
7
(143)
(133)
Other gains and losses
8
25,513,259
7,961,983
Profit before taxation
25,526,756
8,000,662
Tax on profit
9
(6,586,876)
(1,991,578)
Profit and total comprehensive income for the financial year
18,939,880
6,009,084
The income statement has been prepared on the basis that all operations are continuing operations.
LCM FUNDING UK LIMITED
STATEMENT OF FINANCIAL POSITION
- 8 -
2024
2023
Notes
£
£
£
£
Non-current assets
Contract assets falling due after more than one year
10
171,206,054
110,916,745
Current assets
Contract assets
10
15,346,703
-
Trade and other receivables
11
5,026,707
980,994
Cash and cash equivalents
3,394,407
266,798
23,767,817
1,247,792
Current liabilities
12
(41,469,939)
(13,466,970)
Net current liabilities
(17,702,122)
(12,219,178)
Total assets less current liabilities
153,503,932
98,697,567
Non-current liabilities
12
(98,616,687)
(69,333,958)
Provisions for liabilities
Deferred tax liabilities
14
(13,891,756)
(7,308,000)
Net assets
40,995,489
22,055,609
Equity
Called up share capital
15
1
1
Retained earnings
40,995,488
22,055,608
Total equity
40,995,489
22,055,609
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 24 April 2025 and are signed on its behalf by:
D Collins
Director
Company registration number 12365749
LCM FUNDING UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 July 2022
1
16,046,524
16,046,525
Year ended 30 June 2023:
Profit and total comprehensive income
-
6,009,084
6,009,084
Balance at 30 June 2023
1
22,055,608
22,055,609
Year ended 30 June 2024:
Profit and total comprehensive income
-
18,939,880
18,939,880
Balance at 30 June 2024
1
40,995,488
40,995,489
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
1
Accounting policies
Company information
LCM Funding UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 181 Queen Victoria Street, Bridge House, London, EC4V 4EG. The company's principal activities and nature of its operations are disclosed in the director's report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared prepared under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Litigation Capital Management Limited. The group accounts of Litigation Capital Management Limited are available to the public and can be obtained from the company's website https://www.lcmfinance.com/shareholders/annual-reports-financial-reports/.
Under Companies Act 2006,s454,on a voluntary basis, the members can amend these financial statements if they subsequently prove to be defective.
1.2
Going concern
The director has at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus he continue to adopt the going concern basis of accounting in preparing the financial statements.
The company has obtained continuing support from the parent company to meet any current liabilities that the company is unable to for the foreseeable future.
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 11 -
1.3
Revenue
The company recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the company is expected to be entitled in exchange for transferring services to a customer. For each contract with a customer the company: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money;allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct service to be delivered;and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the services promised.
Variable consideration within the transaction price, if any, reflects the variability of potential outcomes in awards or settlements of the litigation and any other contingent events. Such estimates are determined using either the "expected value" or "most likely amount" method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.
Litigation service revenue
The performance of a litigation service contract by the company entails the management and progression of the litigation project during which costs are incurred by the company over the life of the litigation project.
As consideration for providing litigation management services and financing of litigation projects, the company receives either a percentage of the gross proceeds of any award or settlement of the litigation, or a multiple of capital deployed, and is reimbursed for all invested capital.
Revenue, which includes amounts in excess of costs incurred and the reimbursement for all invested capital, is not recognised as revenue until the successful completion of the litigation project i.e. complete satisfaction of the performance obligation, which is generally at the point in time when a judgment has been awarded or on an agreed settlement between the parties to the litigation, and therefore when the outcome is considered highly probable. On this basis, revenue is not recognised over time and instead recognised at the point in time when the company satisfies the performance obligation. Costs includes only external costs of funding the litigation, such as solicitors' fees, counsels' fees and experts' fees.
The terms and duration of each settlement or judgment varies by litigation project. Payment terms are not defined by the company's litigation contracts however upon successful completion of a litigation project, being the satisfaction of a single performance obligation, funds are generally paid into trust within 28 days. The funds will remain in trust until the distribution amounts have been determined and agreed by the relevant parties, after which payment will be received by the company.
1.4
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call with financial institutions.
1.5
Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 12 -
Financial assets at fair value through profit or loss
Financial assets are carried in the statement of financial position at their fair value net of changes in fair value recognised through the Income Statement. This category includes litigation funding assets. The litigation funding assets are derecognised when the underlying litigation resolves.
1.6
Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition
Other financial liabilities
Other financial liabilities, including financial liabilities relating to third party interests, are initially recognised at fair value in the statement of financial position. Gains or losses on financial liabilities held at fair value are recognised through the Income Statement.
Other financial liabilities are derecognised when the obligation to settle through cash flows has expired or has been transferred .
1.7
Issued capital
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
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 is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
1.9
Foreign exchange
Foreign currency transactions are translated into the entity’s functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
1.10
Contract costs recoverable
Contract costs are recognised as an asset when the company incurs costs in fulfilling a contract and when all the following are met: (i) the costs relate directly to the contract; (ii) the costs generate or enhance resources of the company that will be used to satisfy future performance obligations; (iii) the costs are expected to be recovered.
1.11
Impairment of non-financial assets
Non-financial assets are review for impairment at each reporting date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
2
Critical accounting estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed as follows:
Critical judgements
Revenue from contracts with customers
The entity’s active involvement in litigation service contracts to achieve a successful resolution for the client is the predominant purpose of the service provided and accordingly the litigation funding contracts are within the scope of IFRS 15 ‘Revenue from Contracts with Customers’, and so are excluded from the scope of IFRS 9 ‘Financial Instruments’ which would require the recognition of a financial asset for each contract, measured at fair value.
Performance obligations and recognition of revenue
In the provision of litigation management services and financing of litigation projects, management has determined that there is a single performance obligation and that complete satisfaction of that performance obligation occurs at the point in time when the company achieves a successful resolution for the client as it is the predominant purpose of the service provided. On this basis, revenue is not recognised over time and only recognised at the point in time when the company satisfies that performance obligation.
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
2
Critical accounting estimates and judgements
(Continued)
- 14 -
Key sources of estimation uncertainty
Impairment of non-financial assets other than goodwill
The company assesses impairment of non-financial assets other than goodwill at each reporting date, and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, by evaluating conditions specific to the company and to the particular asset that may lead to impairment. This includes evaluating the expected outcome pursuant to the contracts, including consideration of whether each individual litigation contract is likely to result in a successful outcome, the cost and timing to completion and the ability of the defendant to pay the settlement or award. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves value in use calculations, which incorporate a number of key estimates and assumptions.
3
Revenue
2024
2023
£
£
Revenue analysed by class of business
Litigation service revenue
2,280
16,828,256
2024
2023
£
£
Revenue analysed by geographical market
United Kingdom
2,280
16,828,256
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(326,243)
(58,260)
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
2
2
6
Investment income
2024
2023
£
£
Interest income
Interest on bank deposits
105
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 15 -
7
Finance costs
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on loans
-
133
Interest on other loans
143
143
133
8
Other gains and losses
2024
2023
£
£
Change in value of financial assets at fair value through profit or loss
25,513,259
7,961,983
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
3,120
1,082
Deferred tax
Origination and reversal of temporary differences
6,583,756
1,990,496
Total tax charge
6,586,876
1,991,578
The charge for the year can be reconciled to the profit per the income statement as follows:
2024
2023
£
£
Profit before taxation
25,526,756
8,000,662
Expected tax charge based on a corporation tax rate of 25.00% (2023: 25.00%)
6,381,689
2,000,166
Other permanent differences
205,219
(8,768)
Tax at marginal rate
(32)
180
Taxation charge for the year
6,586,876
1,991,578
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 16 -
10
Contracts with customers
2024
2023
2023
Period end
Period end
Period start
£
£
£
Contracts in progress
Contract costs recoverable
186,552,757
110,916,745
83,054,481
Analysis of contract assets
2024
2023
£
£
Opening balance
110,916,745
83,054,481
Fair value adjustment to contract assets
47,982,301
16,762,069
Additions
27,970,766
25,980,960
Litigation service expense - write down
(317,055)
(14,880,765)
186,552,757
110,916,745
Post year-end, judgement on a carriage hearing was awarded against an LCM funded case, resulting in the case being stayed with the Competition Appeal Tribunal. The fair value of the case as at 30 June 2024 was £11,237,649 with total costs deployed of £2,497,575.
11
Trade and other receivables
Current
Non-current
2024
2023
2024
2023
£
£
£
£
Amount owed by parent undertaking
1
1
Amounts owed by related parties
5,026,706
980,993
-
-
Other receivables
-
-
171,206,054
110,916,745
5,026,707
980,994
171,206,054
110,916,745
12
Liabilities
Current
Non-current
2024
2023
2024
2023
Notes
£
£
£
£
Trade and other payables
13
41,469,831
13,462,159
98,616,687
69,333,958
Corporation tax
108
4,811
-
-
41,469,939
13,466,970
98,616,687
69,333,958
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 17 -
13
Trade and other payables
Current
Non-current
2024
2023
2024
2023
£
£
£
£
Trade payables
8,415,722
1,244,044
Amounts owed to fellow group undertakings
21,718,770
12,213,115
-
-
Amounts owed to related parties
11,330,339
Accruals and deferred income
5,000
5,000
Other payables - related parties
-
-
98,616,687
69,333,958
41,469,831
13,462,159
98,616,687
69,333,958
14
Deferred taxation
Liabilities
2024
2023
£
£
Deferred tax balances
13,891,756
7,308,000
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Fair value uplifts
£
Liability at 1 July 2022
5,317,504
Deferred tax movements in prior year
Charge/(credit) to profit or loss
1,990,496
Liability at 1 July 2023
7,308,000
Deferred tax movements in current year
Charge/(credit) to profit or loss
6,583,756
Liability at 30 June 2024
13,891,756
15
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. Each share entitles the holder to one vote. The company does not have a limited amount of authorised capital.
LCM FUNDING UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 18 -
16
Related party transactions
The company has taken advantage of the exemptions available to it under FRS101 Section 8 not to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is party to the transactions is wholly owned by such a member.
17
Controlling party
The immediate parent company is LCM Group Holdings Pty Limited, a company registered in Australia, replacing Litigation Capital Management Limited as the immediate parent company. The ultimate parent company is Litigation Capital Management Limited, an Australian company which prepares consolidated accounts for the group. These accounts are available from the company's website https://www.lcmfinance.com/shareholders/annual-reports-financial-reports/.
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