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Registration number: 07019141

Lorien Limited

Annual Report

for the 52 weeks ended 3 January 2025

 

Lorien Limited

Contents

Company Information

1

Strategic Report

2 to 3

Section 172(1) statement

3

Directors' Report

4 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 11

Profit and Loss Account

12

Statement of Comprehensive Income

13

Balance Sheet

14

Statement of Changes in Equity

15

Notes to the Financial Statements

16 to 24

 

Lorien Limited

Company Information

Directors

T Briant

J Weston

Registered office

First Floor, Mulberry House
Parkland Square
750 Capability Green
Luton
LU1 3LU

Auditors

BDO LLP
Eden Building
Irwell Street
Salford
Manchester
M3 5EN

 

Lorien Limited

Strategic Report for the 52 weeks ended 3 January 2025

The directors present their strategic report for the 52 weeks ended 3 January 2025.

Fair review of the business

The principal activity of the company is that of an investment holding company. There were no recognised pre-tax gains or losses for the current or prior financial periods. The directors are satisfied with the performance of the company for the period and expect no change in the foreseeable future.

On 13 December 2023 the ultimate parent company at the time, Impellam Group Plc. announced the agreement to sell the Impellam Group of companies ("the Group"), which include the Company, to HeadFirst Global Plc, which is partly owned by Icelake, a Europe-based investment fund that invests in exceptional companies. The sale completed on 21 March 2024.

Principal risks and uncertainties

The principal risks and uncertainties of the Group, which include those of the company, are discussed in the Finance Report in the Group’s annual report which does not form part of this report. Certain of the Group's business and financial risks are managed at a Group level, rather than at an individual company level. For this reason, the company’s directors believe that a discussion of the Group’s risks would not be appropriate for an understanding of the development, performance or position of the company.

Environmental matters

Although we are a service-based organisation with no manufacturing facilities and limited transportation requirements, we are still committed to following environmental best practices in the day-to-day conduct of our business. This includes the use of sustainable and/or recyclable materials when available. A regular review of the potential impacts on the various businesses is undertaken and parts of the Company have achieved accreditation to ISO 14001 in relation to their environment management systems.

A Streamlined Energy and Carbon report has not been included within the report as it is included within the group report of Impellam Group Limited.

Social and community issues

As part of the Company’s mission to find people fulfilling work, we strongly oppose modern slavery in all its forms and will try to prevent it by any means that we can. We expect anyone who has any suspicions of modern slavery in our business or our supply chain to raise their concerns without delay. In light of the Modern Slavery Act 2015 we annually review internal and external measures to ensure we are doing what we can to prevent slavery and human trafficking in our businesses and in our supply chains. Our policy is available on the website of Impellam Group Limited, our ultimate parent company, at www.impellam.com.

We have a commitment to carrying out business fairly, honestly and openly. We also have zero tolerance towards bribery. Our Bribery Policy is in place to provide relevant guidance and information to all our people in compliance with the law relating to bribery and corruption, in particular the Bribery Act 2010 (‘the Act’). We are determined to maintain our reputation as a business that will not tolerate fraudulent or corrupt dealings – whether they are attempted against us from outside, from within our own workforce, or towards our clients or suppliers.

 

Lorien Limited

Strategic Report for the 52 weeks ended 3 January 2025 (continued)

Section 172(1) statement

Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters in their decision-making. We believe we have a history of collaborative, informative stakeholder engagement and decision-making based on long-term success, and we maintain governance structures and processes that support good decision-making.

This section articulates how the Directors have acted to promote the success of the Company for the benefit of its stakeholders. In meeting this responsibility, the Directors have had regard, amongst other matters, to:
a) the likely consequences of any decisions in the long term;
b) the interests of the Company’s colleagues;
c) the need to foster the Company’s business relationships with suppliers, customers and others;
d) the impact of the Company’s operations on the community and environment;
e) the Company’s reputation for high standards of business conduct; and
f) the need to act fairly as between members of the Company.

Other than the directors, the Company has no employees, however, as a subsidiary holding Company the Directors consider the impact of the Company’s activities on its shareholder, its subsidiaries, the wider Impellam Group and other stakeholders. The Company’s stakeholders are consulted routinely on a wide range of matters including funding decisions, investment strategy, governance of its subsidiaries and compliance with Group policies with the aim of maximising investment returns for the benefit of its shareholder and ensuring that its subsidiaries maintain high standards of business conduct and governance.

The Company engages with its shareholder and subsidiaries on an ad hoc basis on requests for additional capital distributions or funding. The Directors assess such requests in light of the Company’s minimum capital requirements to maintain profitability in the long term.

The performance of the Company’s investments are monitored periodically in light of the Impellam Group’s corporate and social responsibility strategy.

The Directors continued to provide oversight governance of the subsidiaries of the Company to ensure that they comply with the Group’s policies and maintain high standards of business conduct. The subsidiaries provide regular updates on their activities.

Approved by the Board on 21 July 2025 and signed on its behalf by:
 

.........................................
T Briant
Director

 

Lorien Limited

Directors' Report for the 52 weeks ended 3 January 2025

The directors present their report and the financial statements for the 52 weeks ended 3 January 2025.

Directors' of the company

The directors, who held office during the period, were as follows:

T Briant

J Robertson (resigned 6 February 2025)

The following director was appointed after the period end:

J Weston (appointed 6 February 2025)

Principal activity

The principal activity of the company is that of an investment holding company and nothing has occurred to change this expectation for the future.

Dividends

No dividend is paid or recommended in respect of the current or prior periods.

Financial instruments

Objectives and policies

The company's principal financial instruments comprise cash and access to the Group Receivables Purchase Agreements. The main purpose of these financial instruments is to raise finance for the company's operations. The company has various other financial instruments such as various debtors and creditors, which arise directly from transactions with fellow group companies. The company does not enter into derivative transactions.

Political donations

The company made no political donations during either the current or prior periods.

Employee and supplier engagement

Engagement with employees and suppliers are discussed in the Section 172(1) statement on page 3.

Going concern

The directors have set out their business review for the Company in the Strategic Report on page 2. After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In coming to their conclusion, the Directors have considered the Group’s profit and cash flow plans for FY25 and FY26 (the going concern forecast period), as well as considering potential downside scenarios and their potential impact on the trading performance and cash flows of the Group.

Prior to the acquisition of the Group by HeadFirst Global Plc, the Group operated with a £132.5m Revolving Credit Facility (‘RCF’) with a £30m accordion facility. On completion of the acquisition, outstanding amounts on the RCF were repaid on 12 April 2024 and the facility terminated. On 3 June 2024, a new 3 year US$400m (£313m on the date the facility was taken out) committed Receivable Purchase Agreement (‘RPA’) facility was entered into by the Group, of which US$362m (£292m) is drawn as at 3 January 2025. The borrowing base under the RPA is determined by the value of the Group’s USD and GBP receivables and is subject to overall Group liquidity levels as well as leverage and interest cover covenants and capped at US$400m, with a floor of $175m. The Group’s going concern projections assess the potential debt requirements against the Group’s US$400m of committed facilities and against the key covenant ratios over the period to the end of FY26.

The new RPA borrowing facilities are subject to Accelerated Collection Payment Event (ACPE) and Master Servicer Termination Event (MSTE) covenants that are measured monthly. The ACPE covenants are net debt to EBITDA (leverage) of a maximum of 7.0x until May 2025, 6.75x for June and July 2025 and 6.0x thereafter and interest cover of a minimum of 1.5x over the entire length of the facility. The MSTE provides higher covenant headroom with leverage at 7.0x EBITDA until August 2025 and 6.5x thereafter and Interest cover at 1.7x. The Group liquidity basis must be maintained at a minimum of £30m under the ACPE covenant and £20m under the MSTE covenant, which is measured weekly. All covenants are forecast to be met throughout the going concern forecast period.

 

Lorien Limited

Directors' Report for the 52 weeks ended 3 January 2025 (continued)

The Group has modelled sensitivities over the going concern forecast period, as well as assessing reverse stress test scenarios using the ACPE covenant thresholds to be conservative. Therefore, further headroom would exist in these scenarios under the MSTE covenant. The most sensitive assumptions and covenants relate to EBITDA and net debt forecasts. The reverse stress testing focused on a reduction in EBITDA, reduced gross profit and cost savings. A fall in gross profit of more than 4.4% for FY25 would cause a breach in the leverage covenant and require mitigating actions to be initiated. The first action would be pre-emptively not recruit forecast incremental headcount if associated revenues are not materialising, then reduce the discretionary annual bonus accrual which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment. These actions could offset at least 12% reduction in gross profit before the leverage covenant was breached, which is deemed highly unlikely in the current trading climate. The Group is currently trading in FY25 in line with profit forecasts.

Similar to other organisations, it remains hard to predict an uncertain macro-economic backdrop which continues through 2025. Consequently, there is a degree of uncertainty in respect of future forecasts. However, the Group has the finance facility committed until June 2027, subject to extension application in June 2026 and a blend of revenue streams covering permanent, contract, interim and recruitment process outsourcing and a diverse range of clients and suppliers across three regions (UK & Europe, North America and APAC). The various stress test scenarios and mitigating actions indicate the Group can continue operation within its banking covenants and existing cash and financing facilities. Importantly, liquidity risk is mitigated to an extent as a proportion of the Group trade creditors are on a ‘paid when paid’ contractual basis; further working capital is typically released in any downturn scenario, in the contract recruitment sector, and the group continues to maintain credit insurance, to mitigate the impact of any unexpected non-payment by key customers. Further details of the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described within the Strategic Report of Impellam Group Limited.

The going concern forecasts set out above assess the Group on a standalone basis, as the RPA facility is provided to the Group entities only, and not the wider HeadFirst group of companies. Within these forecasts, the directors have considered and included, as necessary, any requirements to provide funding to HeadFirst Group, the ultimate Parent Company, or other subsidiaries that do not form part of the Group.

The going concern assessment required careful consideration of the forecasted cash flows over at least the next 12 months, including assumptions on gross profit, cost control, and timing of cash receipts and payments. Given the inherent uncertainty in these forecasts, management exercised significant judgement in:
• Estimating future revenue and gross profit on current market conditions and new business growth
• Assessing the timing and amount of working capital requirements
• Evaluating compliance with borrowing facilities financial covenants
• Considering potential mitigating actions, such as cost reductions such as reducing the discretionary annual bonus which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment.

The directors are satisfied that the forecasts are reasonable and support the entity’s ability to meet its obligations as they fall due. The directors are also satisfied that mitigating actions would be sufficient to allow the Group to operate within its covenants in any reasonably likely scenario. The directors are also of the judgement that it has a good relationship with its primary lender and that they would be willing to offer forbearance in the unlikely event that the covenants are breached for such time as it takes to rectify the situation.

Based on the above, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

Directors' liabilities

During the period and to the date of these financial statements, the company had in force an indemnity provision in favour of one or more Directors of the company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006.

 

Lorien Limited

Directors' Report for the 52 weeks ended 3 January 2025 (continued)

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

The auditors BDO LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved by the Board on 21 July 2025 and signed on its behalf by:
 

.........................................
T Briant
Director

 

Lorien Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 101 'Reduced Disclosure Framework' ('FRS 101'). 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether FRS 101 has 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 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.

 

Lorien Limited

Independent Auditor's Report to the Members of Lorien Limited

Opinion on the financial statements

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 3 January 2025 and of its profit for the period then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Lorien Limited (the 'company') for the 52 week period ended 3 January 2025, which comprise the Profit and Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and Notes to the Financial Statements, including material accounting policy information. 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).

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
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.

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

Other information

The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. 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.

 

Lorien Limited

Independent Auditor's Report to the Members of Lorien Limited (continued)

Other Companies Act 2006 reporting

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

the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

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 Statement of Directors' Responsibilities, 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.

Extent to which the audit was 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:

Non-compliance with laws and regulations

Based on:

Our understanding of the Company and the industry in which it operates;

Discussion with management and those charged with governance; and

Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.

We considered the significant laws and regulations to be FRS101, the Companies Act 2006 and relevant tax legislation.

 

Lorien Limited

Independent Auditor's Report to the Members of Lorien Limited (continued)

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be data protection laws and anti-money laundering regulations.

Our procedures in respect of the above included:

Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;

Review of financial statement disclosures and agreeing to supporting documentation; and

Involvement of tax specialists in the audit.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

Obtaining an understanding of the Company’s policies and procedures relating to:

o Detecting and responding to the risks of fraud; and

o Internal controls established to mitigate risks related to fraud.

Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

Based on our risk assessment, we considered the areas most susceptible to fraud to be posting of inappropriate journal entries and management bias in accounting estimates.

Our procedures in respect of the above included:

Testing a sample of journal entries throughout the year, which met a defined risk criterion, by agreeing to supporting documentation; and

Challenging assumptions and judgements made by management in their significant accounting estimates.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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

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.

 

Lorien Limited

Independent Auditor's Report to the Members of Lorien Limited (continued)

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.

......................................
Steven Roberts (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor

Manchester, UK

22 July 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

 

Lorien Limited

Profit and Loss Account for the 52 weeks ended 3 January 2025

Note

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Profit before tax

 

-

-

Tax on profit

6

174

213

Profit for the period

 

174

213

The above results were derived from continuing operations.

 

Lorien Limited

Statement of Comprehensive Income for the 52 weeks ended 3 January 2025

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Profit for the period

174

213

Total comprehensive income for the period

174

213

 

Lorien Limited

(Registration number: 07019141)
Balance Sheet as at 3 January 2025

Note

3 January
2025
£ 000

5 January
2024
£ 000

Non-current assets

 

Investments

7

17,225

17,225

Trade and other receivables

8

16,862

16,688

 

34,087

33,913

Creditors: Amounts falling due within one year

9

(27,000)

(27,000)

Net assets

 

7,087

6,913

Capital and reserves

 

Called up share capital

10

1

1

Share premium reserve

 

20

20

Retained earnings

 

7,066

6,892

Shareholders' funds

 

7,087

6,913

These financial statements were approved by the Board on 21 July 2025 and signed on its behalf by:

.........................................
T Briant
Director

 

Lorien Limited

Statement of Changes in Equity for the 52 weeks ended 3 January 2025

Share capital
£ 000

Share premium
£ 000

Retained earnings
£ 000

Total
£ 000

At 31 December 2022

1

20

6,679

6,700

Profit for the period

-

-

213

213

Total comprehensive income

-

-

213

213

At 5 January 2024

1

20

6,892

6,913

Share capital
£ 000

Share premium
£ 000

Retained earnings
£ 000

Total
£ 000

At 6 January 2024

1

20

6,892

6,913

Profit for the period

-

-

174

174

Total comprehensive income

-

-

174

174

At 3 January 2025

1

20

7,066

7,087

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025

1

General information

The company is a private company limited by share capital, incorporated and domiciled in United Kingdom.

The address of its registered office is:
First Floor, Mulberry House
Parkland Square
750 Capability Green
Luton
LU1 3LU

These financial statements were authorised for issue by the Board on 21 July 2025.

2

Accounting policies

Summary of material accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK adopted international accounting standards.

Summary of disclosure exemptions

In these financial statements, the company has taken advantage of the exemptions available under FRS 101 in respect of the following disclosures:

IFRS 7 - ‘Financial instruments: Disclosures’.

Paragraph 38 of IAS 1 - ‘Presentation of financial statements’ (comparative information requirements in respect of):

The following paragraphs of IAS 1 - ‘Presentation of financial statements’ (removing the requirement to present):

- 10(d) (statement of cash flows);

- 16 (statement of compliance with all IFRS);

- 38B-D (additional comparative information);

- 111 (cash flow statement information);

- 134-136 (capital management disclosures)

IAS 7 - ‘Statement of cash flows’.

Paragraphs 30 and 31 of IAS 8 - ‘Accounting policies, changes in accounting estimates and errors’ (requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective).

Paragraph 17 of IAS 24 - ‘Related party disclosures’ (key management compensation).

The requirements in IAS 24, ‘Related party disclosures’ (to disclose related party transactions entered into between two or more members of a group).

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Finance income and costs policy

Interest income receivable on deposits with financial institutions is recognised on an accrued basis. Contract liabilities are recognised when an invoice has been raised in advance of the service provision discussed above.

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Investments

Fixed asset investments are stated at cost less a provision for impairment. The carrying values of investments are reviewed for impairment at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit to which the assets are allocated. Estimating the value in use requires the company to make an estimate of the future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Amounts owed by related parties

Amounts owed by related parties are assessed for impairment based upon the current financial position and expected future performance of the party to which they relate. Amounts due from related parties are interest free demand loans.

The Company applies the IFRS 9 general approach to measuring expected credit losses. This approach requires an assessment at the initiation of the loan as to the risk of default, and a further assessment when the credit risk profile of the loans change. IFRS 9 applies a 3 stage model that is applied when calculating the expected credit losses:
• Stage 1 is defined as having no Significant Increase In Credit Risk (‘SICR’) – a 12 month expected credit loss is recognised at this point.
• Stage 2 is defined as having a SICR – a lifetime expected credit loss is recognised at this point.
• Stage 3 is defined as being credit impaired – a lifetime expected credit loss is recognised at this point.

There is no impact to any interest due to the Group company loans being interest free.

The Company defines the following:
Definition of a default - A loan is considered to be in default when there is evidence that the borrower is in significant financial difficulty such that it will have insufficient assets to repay the loan on demand.
SICR assessment – The risk that the borrower will default on a demand loan depends on whether the party has sufficient cash or other assets to repay the loan immediately (meaning that the risk of default is very low and the loan is in Stage 1); or does not have sufficient cash or other assets to repay the loan immediately (meaning that the risk of default is higher, and the loan could be in Stage 2 or Stage 3).
Credit impaired indicators - A loan is considered to be credit impaired if it meets the definition of a defaulted loan.

The Company performs this assessment qualitatively by reference to the borrower’s immediate cash flow and asset position.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Financial instruments

Initial recognition

Financial assets and financial liabilities comprise all assets and liabilities reflected in the balance sheet, although excluding investments.

Classification and measurement

Financial instruments are classified at inception into one of the following categories, which then determine the subsequent measurement methodology:

Financial assets are classified into one of the following three categories:-
• financial assets at amortised cost;
• financial assets at fair value through other comprehensive income (FVTOCI); or
• financial assets at fair value through the profit or loss (FVTPL).

Financial liabilities are classified into one of the following two categories:
• financial liabilities at amortised cost; or
• financial liabilities at fair value through the profit or loss (FVTPL).

The company’s accounting policy for each category is as follows:

Financial assets at amortised cost

Impairment provisions for current and non-current debtors are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade debtors is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade debtors. For trade debtors, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within cost of sales in the statement of comprehensive income. On confirmation that the trade debtor will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. From time to time, the company elects to renegotiate the terms of trade debtors due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in the statement of comprehensive income (operating profit).

Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI only if it meets both of the following conditions and is not designated as at FVTPL:
• the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
• the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The company does not have any such assets nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Financial assets at fair value through the profit or loss (FVTPL)

The company does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Financial liabilities at amortised cost

The company classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The company does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss. The company’s accounting policy for each category is as follows:
• Trade creditors and other short-term monetary liabilities, which are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest method.

Financial liabilities at fair value through the profit or loss

The company does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Changes in accounting policy

None of the other standards, interpretations and amendments effective for the first time from 6 January 2024 have had a material effect on the financial statements.

Exemption from preparing group accounts

The financial statements contain information about Lorien Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under section 400 of the Companies Act 2006 from the requirement to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of Impellam Group Limited, a company incorporated in United Kingdom.

Going concern

The directors have set out their business review for the Company in the Strategic Report on page 2. After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In coming to their conclusion, the Directors have considered the Group’s profit and cash flow plans for FY25 and FY26 (the going concern forecast period), as well as considering potential downside scenarios and their potential impact on the trading performance and cash flows of the Group.

Prior to the acquisition of the Group by HeadFirst Global Plc, the Group operated with a £132.5m Revolving Credit Facility (‘RCF’) with a £30m accordion facility. On completion of the acquisition, outstanding amounts on the RCF were repaid on 12 April 2024 and the facility terminated. On 3 June 2024, a new 3 year US$400m (£313m on the date the facility was taken out) committed Receivable Purchase Agreement (‘RPA’) facility was entered into by the Group, of which US$362m (£292m) is drawn as at 3 January 2025. The borrowing base under the RPA is determined by the value of the Group’s USD and GBP receivables and is subject to overall Group liquidity levels as well as leverage and interest cover covenants and capped at US$400m, with a floor of $175m. The Group’s going concern projections assess the potential debt requirements against the Group’s US$400m of committed facilities and against the key covenant ratios over the period to the end of FY26.

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

The new RPA borrowing facilities are subject to Accelerated Collection Payment Event (ACPE) and Master Servicer Termination Event (MSTE) covenants that are measured monthly. The ACPE covenants are net debt to EBITDA (leverage) of a maximum of 7.0x until May 2025, 6.75x for June and July 2025 and 6.0x thereafter and interest cover of a minimum of 1.5x over the entire length of the facility. The MSTE provides higher covenant headroom with leverage at 7.0x EBITDA until August 2025 and 6.5x thereafter and Interest cover at 1.7x. The Group liquidity basis must be maintained at a minimum of £30m under the ACPE covenant and £20m under the MSTE covenant, which is measured weekly. All covenants are forecast to be met throughout the going concern forecast period.

The Group has modelled sensitivities over the going concern forecast period, as well as assessing reverse stress test scenarios using the ACPE covenant thresholds to be conservative. Therefore, further headroom would exist in these scenarios under the MSTE covenant. The most sensitive assumptions and covenants relate to EBITDA and net debt forecasts. The reverse stress testing focused on a reduction in EBITDA, reduced gross profit and cost savings. A fall in gross profit of more than 4.4% for FY25 would cause a breach in the leverage covenant and require mitigating actions to be initiated. The first action would be pre-emptively not recruit forecast incremental headcount if associated revenues are not materialising, then reduce the discretionary annual bonus accrual which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment. These actions could offset at least 12% reduction in gross profit before the leverage covenant was breached, which is deemed highly unlikely in the current trading climate. The Group is currently trading in FY25 in line with profit forecasts.

Similar to other organisations, it remains hard to predict an uncertain macro-economic backdrop which continues through 2025. Consequently, there is a degree of uncertainty in respect of future forecasts. However, the Group has the finance facility committed until June 2027, subject to extension application in June 2026 and a blend of revenue streams covering permanent, contract, interim and recruitment process outsourcing and a diverse range of clients and suppliers across three regions (UK & Europe, North America and APAC). The various stress test scenarios and mitigating actions indicate the Group can continue operation within its banking covenants and existing cash and financing facilities. Importantly, liquidity risk is mitigated to an extent as a proportion of the Group trade creditors are on a ‘paid when paid’ contractual basis; further working capital is typically released in any downturn scenario, in the contract recruitment sector, and the group continues to maintain credit insurance, to mitigate the impact of any unexpected non-payment by key customers. Further details of the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described within the Strategic Report of Impellam Group Limited.

The going concern forecasts set out above assess the Group on a standalone basis, as the RPA facility is provided to the Group entities only, and not the wider HeadFirst group of companies. Within these forecasts, the directors have considered and included, as necessary, any requirements to provide funding to HeadFirst Group, the ultimate Parent Company, or other subsidiaries that do not form part of the Group.

The going concern assessment required careful consideration of the forecasted cash flows over at least the next 12 months, including assumptions on gross profit, cost control, and timing of cash receipts and payments. Given the inherent uncertainty in these forecasts, management exercised significant judgement in:
• Estimating future revenue and gross profit on current market conditions and new business growth
• Assessing the timing and amount of working capital requirements
• Evaluating compliance with borrowing facilities financial covenants
• Considering potential mitigating actions, such as cost reductions such as reducing the discretionary annual bonus which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment.

The directors are satisfied that the forecasts are reasonable and support the entity’s ability to meet its obligations as they fall due. The directors are also satisfied that mitigating actions would be sufficient to allow the Group to operate within its covenants in any reasonably likely scenario. The directors are also of the judgement that it has a good relationship with its primary lender and that they would be willing to offer forbearance in the unlikely event that the covenants are breached for such time as it takes to rectify the situation.

Based on the above, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

The new RPA borrowing facilities are subject to Accelerated Collection Payment Event (ACPE) and Master Servicer Termination Event (MSTE) covenants that are measured monthly. The ACPE covenants are net debt to EBITDA (leverage) of a maximum of 7.0x until May 2025, 6.75x for June and July 2025 and 6.0x thereafter and interest cover of a minimum of 1.5x over the entire length of the facility. The MSTE provides higher covenant headroom with leverage at 7.0x EBITDA until August 2025 and 6.5x thereafter and Interest cover at 1.7x. The Group liquidity basis must be maintained at a minimum of £30m under the ACPE covenant and £20m under the MSTE covenant, which is measured weekly. All covenants are forecast to be met throughout the going concern forecast period.

The Group has modelled sensitivities over the going concern forecast period, as well as assessing reverse stress test scenarios using the ACPE covenant thresholds to be conservative. Therefore, further headroom would exist in these scenarios under the MSTE covenant. The most sensitive assumptions and covenants relate to EBITDA and net debt forecasts. The reverse stress testing focused on a reduction in EBITDA, reduced gross profit and cost savings. A fall in gross profit of more than 4.4% for FY25 would cause a breach in the leverage covenant and require mitigating actions to be initiated. The first action would be pre-emptively not recruit forecast incremental headcount if associated revenues are not materialising, then reduce the discretionary annual bonus accrual which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment. These actions could offset at least 12% reduction in gross profit before the leverage covenant was breached, which is deemed highly unlikely in the current trading climate. The Group is currently trading in FY25 in line with profit forecasts.

Similar to other organisations, it remains hard to predict an uncertain macro-economic backdrop which continues through 2025. Consequently, there is a degree of uncertainty in respect of future forecasts. However, the Group has the finance facility committed until June 2027, subject to extension application in June 2026 and a blend of revenue streams covering permanent, contract, interim and recruitment process outsourcing and a diverse range of clients and suppliers across three regions (UK & Europe, North America and APAC). The various stress test scenarios and mitigating actions indicate the Group can continue operation within its banking covenants and existing cash and financing facilities. Importantly, liquidity risk is mitigated to an extent as a proportion of the Group trade creditors are on a ‘paid when paid’ contractual basis; further working capital is typically released in any downturn scenario, in the contract recruitment sector, and the group continues to maintain credit insurance, to mitigate the impact of any unexpected non-payment by key customers. Further details of the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described within the Strategic Report of Impellam Group Limited.

The going concern forecasts set out above assess the Group on a standalone basis, as the RPA facility is provided to the Group entities only, and not the wider HeadFirst group of companies. Within these forecasts, the directors have considered and included, as necessary, any requirements to provide funding to HeadFirst Group, the ultimate Parent Company, or other subsidiaries that do not form part of the Group.

The going concern assessment required careful consideration of the forecasted cash flows over at least the next 12 months, including assumptions on gross profit, cost control, and timing of cash receipts and payments. Given the inherent uncertainty in these forecasts, management exercised significant judgement in:
• Estimating future revenue and gross profit on current market conditions and new business growth
• Assessing the timing and amount of working capital requirements
• Evaluating compliance with borrowing facilities financial covenants
• Considering potential mitigating actions, such as cost reductions such as reducing the discretionary annual bonus which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment.

The directors are satisfied that the forecasts are reasonable and support the entity’s ability to meet its obligations as they fall due. The directors are also satisfied that mitigating actions would be sufficient to allow the Group to operate within its covenants in any reasonably likely scenario. The directors are also of the judgement that it has a good relationship with its primary lender and that they would be willing to offer forbearance in the unlikely event that the covenants are breached for such time as it takes to rectify the situation.

Based on the above, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

3

Critical accounting judgements and key sources of estimation uncertainty

Investments
Fixed asset investments are stated at cost less a provision for impairment. The carrying values of investments are reviewed for impairment at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit to which the assets are allocated. Estimating the value in use requires the company to make an estimate of the future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

4

Directors' remuneration

The directors are remunerated by Impellam Group Limited for their services to the Group as a whole. The directors do not believe it is practical to apportion their remuneration between their services to this company and their services as directors of the parent company and fellow subsidiaries.

The average number of persons employed by the company (including directors) during the period, analysed by category was as follows:

52 weeks
3 January
2025
No.

53 weeks
5 January
2024
No.

Administration and support

2

2

2

2

5

Auditors' remuneration

Auditor's remuneration of £1,000 (5 January 2024: £1,000) has been borne by a Group company for the current and prior periods.

6

Income tax

Tax credited in the profit and loss account:

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Current taxation

UK corporation tax

(174)

(168)

UK corporation tax adjustment to prior periods

-

(45)

(174)

(213)

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

6

Income tax (continued)

The main rate of corporation tax increased from 19% to 25% with effect from 1 April 2023. As the Company’s prior year accounting period ended 5 January 2024 straddled 1 April 2023, a blended rate of 23.52% was used to calculate the prior year tax charge. The rate of 25% has been used for the current period. The tax on profit for the period is lower than the standard rate of corporation tax in the UK (5 January 2024 - lower than the standard rate of corporation tax in the UK) of 19% (5 January 2024 - 23.52%).

The differences are reconciled below:

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Profit before tax

-

-

Corporation tax at standard rate

-

-

Decrease in current tax from adjustment for prior periods

-

(45)

Decrease from transfer pricing adjustments

(174)

(168)

Total tax credit

(174)

(213)

UK legislation requires, in broad terms, that most transactions between connected parties be at an arm's length price for tax purposes (commonly known as 'transfer pricing'). As a result, this company must make an adjustment for deemed net interest on intercompany balances that has not been recognised in the financial statements.

7

Investments

Subsidiaries

£ 000

Cost or valuation

At 6 January 2024

17,225

At 3 January 2025

17,225

Provision

At 6 January 2024

-

At 3 January 2025

-

Carrying amount

At 3 January 2025

17,225

At 5 January 2024

17,225

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

7

Investments (continued)

Details of the subsidiaries as at 3 January 2025 are as follows:

Name of subsidiary
 

Principal activity
 

Registered office
 

Holding
 

Proportion of ownership interest and voting rights held
3 January
2025

5 January 2024

Lorien Resourcing Limited*

Employment agency

First Floor
Mulberry House
Parkland Square
750 Capability Green
Luton LU1 3LU

United Kingdom

Ordinary

100%

100%

* indicates direct investment of the company

8

Trade and other receivables

Trade and other receivables falling due after more than one year

3 January
2025
£ 000

5 January
2024
£ 000

Receivables from related parties

16,862

16,688

Receivables from related parties are interest free, unsecured and repayable on demand.

9

Trade and other payables

3 January
2025
£ 000

5 January
2024
£ 000

Amounts due to related parties

27,000

27,000

Payables to related parties are interest free, unsecured and repayable on demand.

10

Share capital

Allotted, called up and fully paid shares

 

3 January
2025

5 January
2024

 

No.

£

No.

£

A Ordinary shares of £0.000100 each

390,000

39

390,000

39

B Ordinary shares of £0.000100 each

500,000

50

500,000

50

C Ordinary shares of £0.000010 each

600,000

6

600,000

6

D Ordinary shares of £0.000001 each

3,400,000

3

3,400,000

3

Ordinary shares of £0.000100 each

5,951,496

595

5,951,496

595

 

10,841,496

693

10,841,496

693

 

Lorien Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

10

Share capital (continued)

Rights, preferences and restrictions

The A, B, C and D shares were issued under the terms of a long term incentive plan ("LTIP") that was put in place for key executives in March 2010, the performance period for which expired on 31 January 2015. The B and C shares hold no voting rights and no dividend rights. The D shares hold voting rights but no dividend rights. The A shares hold no voting rights but do have dividend rights in certain prescribed circumstances.

11

Related party transactions

The company has taken advantage of the exemptions in FRS 101 Section 8 from disclosing transactions with other wholly owned members of the Group and key management compensation. There are no other related party transactions which are required to be disclosed.

12

Parent of group in whose consolidated financial statements the company is consolidated

The name of the parent of the largest group in whose consolidated financial statements the Company's financial statements are consolidated is HeadFirst Global Plc. The name of the parent of the smallest group in whose consolidated financial statements the Company's financial statements are consolidated is Impellam Holdings Limited. The registered office of Headfirst Global Plc and of Impellam Group Limited is First Floor, Mulberry House, Parkland Square, 750 Capability Green, Luton LU1 3LU, United Kingdom.

These financial statements are available upon request from Registrar of Companies, Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.

13

Parent and ultimate parent undertaking

At the year end the Company identified IceLake Capital Management BV as the ultimate controlling party by virtue of its role in managing the majority of the shareholdings in the ultimate parent company and having the power to appoint the majority of the Board for the ultimate parent entity

 The company's immediate parent is Impellam Holdings Limited.

The ultimate parent is HeadFirst Global Plc.