Company registration number 04228592 (England and Wales)
SOUTHERN HEALTHCARE (WESSEX) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
SOUTHERN HEALTHCARE (WESSEX) LTD
COMPANY INFORMATION
Directors
Mr G D Cox
Mr D Cox
Miss T Cox
Mr J Cox
Company number
04228592
Registered office
11 Plantation Terrace
Dawlish
Devon
EX7 9DS
Auditor
Hill Osborne Ltd
Tower House
Parkstone Road
Poole
Dorset
BH15 2JH
Business address
45 Old Tiverton Road
Exeter
Devon
EX4 6NG
Parkwood House
72/74 Exmouth Road
Plymouth
Devon
PL1 4QJ
Seaton Nursing Home
Fore Street
Seaton
Devon
EX12 2AN
Sefton Hall
11 Plantation Terrace
Dawlish
Devon
EX7 9DS
SOUTHERN HEALTHCARE (WESSEX) LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 27
SOUTHERN HEALTHCARE (WESSEX) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 1 -
The directors present the strategic report for the year ended 31 August 2024.
Fair review of the business
The key financial highlights are as follows:
Principal risks and uncertainties
The Social Care sector as always continues to operate under a range of concurrent challenges, and it still remains increasingly important as ever to find effective ways to meet those challenges. Southern Healthcare (Wessex) Ltd has continued to evolve its range of strategies to do so as set out hereafter.
Economic Climate
Government measures, initially instigated during the banking crisis, have effectively continued over the last 15 years, with Brexit, Covid and the cost-of-living crisis following national and global events which have restricted the eligibility of the funding of publicly commissioned care services affecting over 2 million people (Age UK), both from Local Authorities and from the NHS.
Increasingly, Local Authorities have been steadily restrictive both in setting care fees in general and agreeing eligibility in social care, hence the incidence of ‘unmet needs’ where no support is available, is now an increasing occurrence in society.
The Fair Cost of Care exercise in social care, announced and initiated by the Government in 2022, identified the funding gap (and which was widely acknowledged) between low social care funding levels and the rising cost of care.
However, the Government abandoned the implementation of the intended changes to the funding and eligibility criteria as widely promised at the (2019) election and / or to ‘fix’ the social care challenge.
Most councils were aiming to close ‘the funding gap’ but have in fact struggled to do so.
Funding Source
Whilst the ratio of, and funding levels, of residents who are funded publicly versus privately, varies considerably from one geographical location to another, (generally in line with the varying level of locational affluence), it also varies in relation to the resources and attitude of each commissioning organisation i.e., an individual Local Authority or an individual Health region, (now known as ‘ICS’s).
In more affluent areas, some Providers have prioritised self-funding residents at higher fees above Local Authority funded residents.
Southern Healthcare (Wessex) Ltd.’s revenue has always depended on a mixture of funding sources, both publicly and self-funded.
Care fees calculated by Southern Healthcare are assessed by reference to the dependency and complexity level of support for each Resident. This is because the company increasingly specialises in supporting residents with more complex circumstances, for example residents with more advanced Dementia, more complex nursing requirements and increasingly, Residents with complex mental health conditions.
In such circumstances there is little difference in individual fee levels between the sources of funding as these are more dependency based.
SOUTHERN HEALTHCARE (WESSEX) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 2 -
Development and performance
Demand
Local commissioning demand however remains strong for more complex needs and Southern Healthcare supports the needs of such an increasingly complex resident group.
Southern Healthcare is very confident that it delivers both value for money robustly, and a very high quality of care and quality of life for its Residents. This is particularly important as the level of dependency and complexity of Residents has increased so much and supporting this is key to its business development aims, objectives and success in terms of support, the high skills needed by staff enhanced training that enables such progression.
Team recruitment
Nationally and globally, the Health and Social Care sectors have been significantly challenged in terms of health and social care workforce recruitment and retention, (and especially in terms of qualified Nurses). These challenges were exacerbated by the 2016 UK referendum decision to leave the EU and the subsequential ending of free movement of labour within the EU, upon which many sectors, including Health, Social Care and many other sectors, were highly dependent.
Southern Healthcare has therefore made team wellbeing training, retention, and a key priority and has been able retain members of the team effectively.
The company will continue to prioritise these aspects even more in the year ahead.
The company won the 2024 Caring UK’s ‘Care Employer of the Year’ at the national final and also won the ‘Commitment to Training and Development’ award at the same event. Additionally, the company won the ‘Commitment to Training and Development’ award at the National Care Awards national final in 2024
Occupancy
2023/4 has also been a steady year for the company with sustained Resident occupancy levels, steady advances in turnover, whilst keeping its cost base in a reasonable relationship to its turnover, despite significant wage increases.
Three of the companies Homes retain an ‘Outstanding’ rating with CQC (the regulator), with the other Home rated Good overall and Outstanding in the ‘Responsive’ category.
Training
The company continues to train extensively in complex Dementia care and anticipates that demand for these increasingly specialised services will remain robust.
The company maintained the ‘Butterfly’ / ‘Dragonfly’ status at the highest award level following external audits by Meaningful Care Matters in July 2024 and attained external Eden validations at Platinum levels in 2024 at the top level 1, which is about quality of life.
A key factor in providing sustainability of its services is not just the robustness of the team and the care service itself (which remains very important), but also the developing a high quality of life, developing meaningful activity to maintain purpose and, working in partnership with Residents, their families, friends and of course the team, whose extraordinary dedication is exceptional.
The stated aims of the company are to continue to develop a highly robust, professional and effective workforce, to deliver the highest possible quality of person centredness both in care, quality of life and quality of interaction, whilst maintaining a viable business within the context of continuing economic constraint.
Other performance indicators
The key performance indicators are:
Gross profit margin - 33% (2023; 34%)
Occupancy level - 91% (2023; 91%)
Employment costs - 62% (2023; 61%)
SOUTHERN HEALTHCARE (WESSEX) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 3 -
Other information and explanations
Future Retention
Southern Healthcare (Wessex) Ltd remains committed to recruiting, retaining, and developing skilled employees at all levels within the company to meet its stated goals, aims and business objectives.
Up to date employment policies and procedures are designed to support these objectives and continuing comprehensive training and development are significantly key parts of the strategy. All employees are required to undertake ongoing relevant, appropriate and further training relevant to their individual roles and the Company’s expectations and within the specific aim of developing its people to the highest level.
Feedback
Information gathered from all forms of review and feedback is overwhelmingly positive and all feedback is incorporated into its employment and practice policies and continually developed in line with the company’s goals, aims and objectives.
Facilities Improvement
The Company continues to carry out an ongoing maintenance and improvement programme to all its environments and continues to make significant investment and progress, with many additions to its facilities.
Generally
Whilst 2023/24 has been a year of challenge for all health and social care environments, it has also been a year of continued progress for Southern Healthcare.
It maintains a highly engaged staff team and maintains a high individual quality of life focus for its residents as well as delivering robustness, resilience and consistency in terms of regulatory compliance.
Financially, the business continues to see consistency in its revenue, its viability as well as its reputation, and a strong demand for its services in delivering increasingly complex and specialised care, as well as quality of life.
Mr G D Cox
Director
29 May 2025
SOUTHERN HEALTHCARE (WESSEX) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 4 -
The directors present their annual report and financial statements for the year ended 31 August 2024.
Principal activities
The Company's principal activities are the operation of care homes for the elderly, primarily with nursing care, complex nursing care and respite care needs and for the provision of more specialist services for people with a form of dementia.
The company has four care homes and accommodates up to 168 residents.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr G D Cox
Mr D Cox
Miss T Cox
Mr J Cox
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Financial instruments
Interest rate risk
The company finances its operations by a mixture of retained profits, bank borrowings and long term loans. The company considers the use, where appropriate , of interest rate swaps and collars to control the desired interest profile and to manage the company's exposure to interest rate fluctuations.
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 company continues and that the appropriate training is arranged. It is the policy of the company 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 company'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 company'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 company's performance.
Auditor
The auditor, Hill Osborne Ltd, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
SOUTHERN HEALTHCARE (WESSEX) LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 5 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr G D Cox
Director
29 May 2025
SOUTHERN HEALTHCARE (WESSEX) LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2024
- 6 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SOUTHERN HEALTHCARE (WESSEX) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOUTHERN HEALTHCARE (WESSEX) LTD
- 7 -
Opinion
We have audited the financial statements of Southern Healthcare (Wessex) Ltd (the 'company') for the year ended 31 August 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 August 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
SOUTHERN HEALTHCARE (WESSEX) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOUTHERN HEALTHCARE (WESSEX) LTD
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures in response to those risks, including obtaining appropriate audit evidence to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations we considered the following:
- the nature of the industry and the laws and regulations that the company must comply with, in particular regarding the Care Quality Commission
- the company's own assessment of the risks that irregularities may occur as a result of fraud or error
- results of our enquiries of management
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
- reviewing the financial statement disclosures
-enquiring of management
-reviewing the Care Quality Commission reports
-reviewing insurance certificates
-in addressing the risk of fraud through management override we have assessed whether the judgements made in making accounting estimates are indicative of a potential bias and tested the appropriateness of journal entries.
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.
SOUTHERN HEALTHCARE (WESSEX) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOUTHERN HEALTHCARE (WESSEX) LTD
- 9 -
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.
James Hill (Senior Statutory Auditor)
For and on behalf of Hill Osborne Ltd
29 May 2025
Chartered Accountants
Statutory Auditor
Tower House
Parkstone Road
Poole
Dorset
BH15 2JH
SOUTHERN HEALTHCARE (WESSEX) LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
11,930,255
10,824,517
Cost of sales
(7,976,783)
(7,182,388)
Gross profit
3,953,472
3,642,129
Administrative expenses
(2,792,750)
(2,336,858)
Other operating income
27,488
60,503
Operating profit
4
1,188,210
1,365,774
Interest receivable and similar income
8
55,748
15,813
Interest payable and similar expenses
9
(381,054)
(325,308)
Profit before taxation
862,904
1,056,279
Tax on profit
10
(233,658)
(230,387)
Profit for the financial year
629,246
825,892
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SOUTHERN HEALTHCARE (WESSEX) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
- 11 -
2024
2023
£
£
Profit for the year
629,246
825,892
Other comprehensive income
-
-
Total comprehensive income for the year
629,246
825,892
SOUTHERN HEALTHCARE (WESSEX) LTD
BALANCE SHEET
AS AT
31 AUGUST 2024
31 August 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
25,667
71,659
Tangible assets
12
8,954,180
8,885,252
8,979,847
8,956,911
Current assets
Stocks
14
9,600
11,350
Debtors
15
3,946,970
3,000,315
Cash at bank and in hand
1,391,946
1,692,609
5,348,516
4,704,274
Creditors: amounts falling due within one year
16
(1,668,228)
(1,534,293)
Net current assets
3,680,288
3,169,981
Total assets less current liabilities
12,660,135
12,126,892
Creditors: amounts falling due after more than one year
17
(4,447,088)
(4,567,297)
Provisions for liabilities
Deferred tax liability
19
468,118
443,912
(468,118)
(443,912)
Net assets
7,744,929
7,115,683
Capital and reserves
Called up share capital
22
225,000
225,000
Revaluation reserve
1,331,244
1,331,244
Profit and loss reserves
6,188,685
5,559,439
Total equity
7,744,929
7,115,683
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 May 2025 and are signed on its behalf by:
Mr G D Cox
Mr D Cox
Director
Director
Company registration number 04228592 (England and Wales)
SOUTHERN HEALTHCARE (WESSEX) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 September 2022
225,000
1,331,244
4,733,547
6,289,791
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
-
825,892
825,892
Balance at 31 August 2023
225,000
1,331,244
5,559,439
7,115,683
Year ended 31 August 2024:
Profit and total comprehensive income for the year
-
-
629,246
629,246
Balance at 31 August 2024
225,000
1,331,244
6,188,685
7,744,929
SOUTHERN HEALTHCARE (WESSEX) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
1,536,783
1,478,912
Interest paid
(381,054)
(325,308)
Income taxes paid
(205,505)
(171,497)
Net cash inflow from operating activities
950,224
982,107
Investing activities
Purchase of tangible fixed assets
(324,565)
(584,228)
Proceeds on disposal of tangible fixed assets
2,600
13,255
Proceeds from other investments and loans
(869,212)
(97,028)
Interest received
55,748
15,813
Net cash used in investing activities
(1,135,429)
(652,188)
Financing activities
Repayment of borrowings
350,000
Repayment of bank loans
(114,162)
(1,185,000)
Net cash used in financing activities
(114,162)
(835,000)
Net decrease in cash and cash equivalents
(299,367)
(505,081)
Cash and cash equivalents at beginning of year
1,680,454
2,185,535
Cash and cash equivalents at end of year
1,381,087
1,680,454
Relating to:
Cash at bank and in hand
1,391,946
1,692,609
Bank overdrafts included in creditors payable within one year
(10,859)
(12,155)
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
- 15 -
1
Accounting policies
Company information
Southern Healthcare (Wessex) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 11 Plantation Terrace, Dawlish, Devon, EX7 9DS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.
1.5
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.
Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Freehold
Nil
Land and buildings Leasehold
Nil
Fixtures, fittings & equipment
20% reducing balance basis
Motor vehicles
20% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
No depreciation is being charged on land and buildings because the residual value is considered to be close to the current carrying value such that total depreciation would not be material.
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 16 -
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss.
1.7
Stocks
Stocks consist of medical supplies and PPE stated at cost, along with estimates for food, cleaning supplies and laundry.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 18 -
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.15
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Depreciation and amortisation of assets
Tangible and intangible assets are written off over their estimated useful life. Calculation of this requires the directors' to make judgements regarding the rates at which these assets are written down and constantly review the carrying values of these assets in the accounts to ensure that they are reasonable.
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.
Land and buildings valuation
The land and buildings in the accounts are valued on an existing use basis having regard for trading potential. The valuation obtained by the directors' was not a suitable valuation for the purposes of the accounts. The last valuation is out of date and it has not been possible to establish a fair carrying value.
Fee income debtor
The fee income debtor is a manual calculation and requires the directors' to assess each room in each home and establish the correct amounts owing.
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 19 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Fees receivable
11,930,255
10,824,517
2024
2023
£
£
Other revenue
Interest income
55,748
15,813
Grants received
19,496
49,303
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(19,496)
(49,303)
Fees payable to the company's auditor for the audit of the company's financial statements
18,840
18,000
Depreciation of owned tangible fixed assets
239,555
204,683
Loss on disposal of tangible fixed assets
13,482
23,631
Amortisation of intangible assets
45,992
50,050
Cost of stocks recognised as an expense
618,416
541,556
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
18,840
18,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Nursing
245
225
Admin
11
11
Total
256
236
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
6
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
7,058,625
6,394,224
Social security costs
666,129
594,109
Pension costs
140,473
127,279
7,865,227
7,115,612
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
225,665
221,759
Company pension contributions to defined contribution schemes
2,056
2,056
227,721
223,815
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
148,452
144,580
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
55,748
15,813
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
55,748
15,813
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
381,054
325,308
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 21 -
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
209,452
172,758
Deferred tax
Origination and reversal of timing differences
24,206
57,629
Total tax charge
233,658
230,387
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
862,904
1,056,279
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.50%)
215,726
227,100
Tax effect of expenses that are not deductible in determining taxable profit
1,400
826
Tax effect of income not taxable in determining taxable profit
(4,874)
(5,239)
Permanent capital allowances in excess of depreciation
23,675
7,700
Taxation charge for the year
235,927
230,387
Taxation charge in the financial statements
233,658
230,387
Reconciliation - the current year tax charge does not reconcile to the above analysis. Please review figures in the database.
2,269
-
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 22 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 September 2023 and 31 August 2024
1,384,000
Amortisation and impairment
At 1 September 2023
1,312,341
Amortisation charged for the year
45,992
At 31 August 2024
1,358,333
Carrying amount
At 31 August 2024
25,667
At 31 August 2023
71,659
12
Tangible fixed assets
Land and buildings Freehold
Land and buildings Leasehold
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 September 2023
7,719,937
63,169
2,372,774
189,220
10,345,100
Additions
81,438
158,512
84,615
324,565
Disposals
(57,690)
(57,690)
At 31 August 2024
7,801,375
63,169
2,473,596
273,835
10,611,975
Depreciation and impairment
At 1 September 2023
1,396,707
63,141
1,459,848
Depreciation charged in the year
206,708
32,847
239,555
Eliminated in respect of disposals
(41,608)
(41,608)
At 31 August 2024
1,561,807
95,988
1,657,795
Carrying amount
At 31 August 2024
7,801,375
63,169
911,789
177,847
8,954,180
At 31 August 2023
7,719,937
63,169
976,067
126,079
8,885,252
Freehold land and buildings with a carrying amount of £7,801,375 (2023 - £7,719,937) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
The freehold land and buildings are valued on an existing use basis by a firm of chartered surveyors. A re-valuation last took place in November 2007 and was undertaken by Savills Commercial Ltd.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
12
Tangible fixed assets
(Continued)
- 23 -
2024
2023
£
£
Cost
6,264,622
6,183,184
13
Financial instruments
2024
2023
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
3,517,277
2,618,745
Carrying amount of financial liabilities
Measured at amortised cost
5,605,797
5,617,991
14
Stocks
2024
2023
£
£
Sundry stocks
9,600
11,350
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
135,643
104,927
Corporation tax recoverable
352,411
318,049
Other debtors
3,381,634
2,513,818
Prepayments and accrued income
77,282
63,521
3,946,970
3,000,315
Other debtors includes directors' overdrawn loan accounts amounting to £1,239,789
The corporation tax is not recoverable until nine months following the end of the financial year in which the directors overdrawn loan account is repaid.
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 24 -
16
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
241,309
252,155
Trade creditors
434,351
439,104
Corporation tax
243,814
205,505
Other taxation and social security
187,725
180,617
Government grants
20
15,595
19,495
Other creditors
85,226
84,409
Accruals and deferred income
460,208
353,008
1,668,228
1,534,293
17
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
18
4,384,703
4,489,315
Government grants
20
62,385
77,982
4,447,088
4,567,297
18
Loans and overdrafts
2024
2023
£
£
Bank loans
4,615,153
4,729,315
Bank overdrafts
10,859
12,155
4,626,012
4,741,470
Payable within one year
241,309
252,155
Payable after one year
4,384,703
4,489,315
The long-term loans are secured by fixed charges over the company's freehold and leasehold properties.
The bank loan was refinanced on 11 July 2024 and is repayable over a five year term by quarterly instalments leaving a residual settlement balance of £3,416,502 at the termination date. The interest rate on the loan is 2.95% plus base rate.
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 25 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
468,118
443,912
2024
Movements in the year:
£
Liability at 1 September 2023
443,912
Charge to profit or loss
24,206
Liability at 31 August 2024
468,118
20
Government grants
2024
2023
£
£
Arising from government grants
77,980
97,477
Included in the financial statements as follows:
Current liabilities
15,595
19,495
Non-current liabilities
62,385
77,982
77,980
97,477
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
140,473
127,279
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
22
Share capital
2024
2023
£
£
Ordinary share capital
Issued and fully paid
225,000 Ordinary A shares of £1 each
225,000
225,000
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 26 -
23
Directors' transactions
Dividends totalling £0 (2023 - £0) were paid in the year in respect of shares held by the company's directors.
A director of the company has given a personal guarantee of £150,000 in favour of the company's bankers.
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Loan
-
1,131,799
96,813
-
1,228,612
Loan
-
9,754
-
(3,577)
6,177
Loan
-
-
5,000
-
5,000
1,141,553
101,813
(3,577)
1,239,789
24
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
391,757
375,672
Transactions with related parties
During the year the company entered into the following transactions with related parties:
During the year the company loaned Southern Healthcare Properties Ltd, a company under common control, a sum amounting to £814,817 (2023; £825,592).
SOUTHERN HEALTHCARE (WESSEX) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 27 -
25
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
629,246
825,892
Adjustments for:
Taxation charged
233,658
230,387
Finance costs
381,054
325,308
Investment income
(55,748)
(15,813)
Loss on disposal of tangible fixed assets
13,482
23,631
Amortisation and impairment of intangible assets
45,992
50,050
Depreciation and impairment of tangible fixed assets
239,555
204,683
Movements in working capital:
Decrease in stocks
1,750
2,790
(Increase) in debtors
(43,081)
(216,155)
Increase in creditors
110,372
72,508
(Decrease) in deferred income
(19,497)
(24,369)
Cash generated from operations
1,536,783
1,478,912
26
Analysis of changes in net debt
1 September 2023
Cash flows
31 August 2024
£
£
£
Cash at bank and in hand
1,692,609
(300,663)
1,391,946
Bank overdrafts
(12,155)
1,296
(10,859)
1,680,454
(299,367)
1,381,087
Borrowings excluding overdrafts
(4,729,315)
114,162
(4,615,153)
(3,048,861)
(185,205)
(3,234,066)
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