The directors present the strategic report for the year ended 30 November 2024.
In the current year, the company has completed its consolidation in reaction to the financial constraints that the pharmacy sector faces. We have disposed of some outlying branches that do not feature within the strategy for the core estate and have disposed of a number of properties within the estate that were previously investment purchases.
The pharmacy branch network covers the South Yorkshire, Derbyshire, Milton Keynes, Lancashire, Merseyside, Greater Manchester and Midlands areas, now stretching down into Worcestershire.
The company is committed to actively work in partnership with local independent commissioning boards in the promotion of additional healthcare services.
Qualitative measures relating to "improvements in service" are important measures of performance to the company and community, however these are difficult to measure. Quantitative measures in terms of business performance and profitability are important to shareholders and provide assurances as to the continuing stability of the organisation.
Following on from the relocation of our central teams into our new site Horizon, located at J29A on the M1, we have now rolled out our automation process to all pharmacies within the estate and are now seeing circa 50% of our original repeat medication prescriptions being dispensed through Horizon.
The introduction of large-scale automation from a dedicated site will continue to transform the way that the company provides services to patients.
We welcomed the new CPFC as a much needed boost to the sector. It shows the expectations that pharmacies will continue to promote the delivery of services and that pharmacy will need to continue to adapt in how it supports patients, in addition to how we free up capacity elsewhere within primary care as a direct result of this.
The development of NHS services needs to create different mindsets from pharmacy teams to support patients. It is a clear message that Government wants all pharmacies across England to offer the same experience for patients and to support them differently, freeing up capacity across the likes of the GP Network and A&E. This is something that we as a business must embrace now.
The assembly of more than 50% of prescriptions via our automation provides a fantastic opportunity to create capacity in pharmacy to support patients differently. It also shows a significant risk reduction in the dispensing processes and a more accurate level of dispensing medication. This is extremely important to us as a business and a sector.
The increase in workload that we have seen at pharmacy level with the development of NHS Services has meant that the volume of prescription medication that we are assembling through Horizon surpasses our initial estimations of workload. We continue to look at our workstreams within Horizon and the number of hours we are open to ensure that patient safety is prioritised and that turnaround times are minimal.
The decrease in assembling medication at pharmacy level means that time is now available to dedicate to customer care, service delivery and development.
Stock control will be more effectively managed. We are working with a third party to ensure that purchases are monitored and that stock is not actively wasted. Additionally, we are now seeing a proportion of our stock (and purchases) coming through Horizon, so this should enable better stock control in pharmacy.
The operational benefits from more colleagues being under a specifically designed single site continues to be positive and build internal relationships.
Legislation change will provide the company the ability to assemble and fulfil prescription medication for other pharmacy groups. This is part of the company's ongoing strategy and consideration is being given to the current operation and what is required to support with third party assembly (without having a detrimental effect on our current patients and pharmacies). We are still awaiting visibility of the legislation and what is expected and will react to this in accordance.
The company is considering expanding the automation process in Horizon. With this in mind, we are looking at extending shifts and opening hours short term to deal with this demand, on top of the increase in demand we are seeing from our own pharmacies.
In June 2025, we have completed the process of moving our lender, after 40+ years with our previous one. The decision was not taken lightly, but we feel the cost of borrowing and the flexibility around any disposals and acquisitions may be better placed elsewhere. Additionally, it gives a better and more longer-term prospect for the company and our strategy.
The company continues to develop and grow teams and we are embarking on more training and development opportunities for colleagues.
We continue to look at innovative ways in which pharmacy can adapt what we do and improve on our patients journeys.
Following on from last year, the company has actively been recruiting pharmacists to ensure stability across the business and currently has its lowest pharmacy vacancies rate in a number of years. We have also employed an in house recruiter to support with recruitment and retention of colleagues and to reduce the costs associated with recruitment agencies.
The NLW increase this year has been challenging once again. However, the company is committed to, and has established a plan to negate salary division amongst colleagues internally and within their various roles. We work hard to ensure that costs do not outweigh revenue generated within a challenging financial situation.
Service levels continue to grow in line with expectation and this will continue with the proportion of work being assembled within our central hub. Understandably, prescription items have taken a dip in line with expectations, as a result of the processes that we have implemented. The company has a strategy to recoup patients and to improve customer service at pharmacy level going forwards.
Performance is considered satisfactory under difficult trading conditions, both inside and outside the sector. The company is confident that the challenges of moving to an automated hub over the last 12 months have been implemented properly and safely. The task at hand regarding this for colleagues and patients alike should not be understated. We are confident that the capacity and change in culture, that central assembling in one location will unlock, will be demonstrated going forwards.
Given the plans outlined above, the company remains optimistic that those contractors in the network who continue to develop services and premises and invest to meet the challenges of the future will ultimately be identified as preferred providers by both local and central commissioning bodies.
Business risks
The main risks to the business are namely the reliance on the government and NHS which provide both the majority of business and control the drug tariff prices paid, in addition to activities of the major competitors within the locality.
Financial risks
The company's principal financial instruments comprise bank balances, bank loans and overdrafts, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations.
Due to the nature of the financial instruments used by the company there is no exposure to price risk. the company's approach to managing other risks applicable to the financial instruments concerned is shown below.
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest.
In respect of loans, these comprised loans from the directors and loans from financial institutions. The interest rate on the loans from financial institutions was variable but the repayments were fixed. The company managed the liquidity risk by ensuring there were sufficient funds to meet the payments. No interest is currently being charged by the directors on their loan accounts.
The majority of trade debtors represent amounts owed by the NHS. Other trade debtors are managed closely in respect of credit and cash flow risk.
Trade creditor liquidity risk is managed by ensuring funds are available to meet amounts due.
Since the year end the company has new finance facilities from a new finance provider, HSBC.
Basic KPI's (Key Performance Indicators) on which the company bases financial evaluations are gross profit, net profit and staff cost based. There is a direct link between profitability and branch staffing levels, which is reflected in the budgeting process.
Gross profit has increased slightly from 29.9% in 2023 to 30.1% in 2024.
Staffing remains the greatest asset, but also the largest cost to the company, amounting to £34.3m in 2023 and £36.0m in 2024. Staff costs as a percentage of turnover were 17% in 2023 and 18% in 2024, and as a percentage of gross profit 57% in 2023 and 60% in 2024.
Other costs are not significant to the profitability of the company, and so are not deemed sufficient KPI's.
Net profit before tax is considered to be a KPI. PBIT cover (being Profit before interest, depreciation, exceptional items and tax over net interest costs) was 3 in 2023 and 2 in 2024. Company shareholders will note that the net profit before depreciation, exceptional items and tax as a percentage of turnover has decreased from 3% in 2023 to 1% in 2024. EBITDA (Earnings before interest, tax, depreciation and amortisation) was £7.9m in 2023 compared to £5.3m in 2024. In the forthcoming year the company expects profitability to be maintained.
At the balance sheet date the company had net assets of £10m.
Our planning is designed to have a long-term beneficial impact on the group and contribute to its future success through improving quality, operating within budgetary controls and in line with our regulatory targets. This requires us to consider the long-term in all our strategic decisions at board level.
Our employees are fundamental to the success of our group. We aim to be a responsible employer in our approach to the pay and benefits our employees receive. The health, safety and well-being of our employees is one of our primary considerations in how we operate.
We aim to act responsibly and fairly in how we engage with suppliers. The group has oversight of the procurement processes and receives regular updates on any matter of significance. The group is very much focused on its customers, and the directors commit considerable time, effort and resources into understanding and responding to the needs of customers. The directors also seek to build strong relationships with other stakeholders in the areas where we operate.
As an independent pharmacy chain, the directors understand the impact of the group's operations on the communities it serves and the environment, an attribute to behaving as a responsible business.
The directors' intention is to behave responsibly and ensure that management operates in a responsible manner, operating within the high standards of conduct and good governance required for a business in our sector. All of our people are expected to act within the regulatory framework dictated by our sector. Our reputation is important and the reputational impact of decisions made by the directors are always considered.
As a group, our intention is to behave responsibly toward our shareholders and to treat them fairly and equally, so they too may benefit from the group's success.
Section 172 (1) of the Companies Act 2006 requires the directors of the group to act in a way which they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and in doing so have regard to the interest of the stakeholders, including customers, suppliers and the wider community in which it operates. In doing this, section 172 requires each director to have regard to all of the above matters.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 November 2024.
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
The company aims to act responsibly and fairly in how it engages with suppliers and customers and has policies in place for entering and maintaining relationships to ensure that it treats all suppliers and customers equitably.
Since the year end the company has acquired one pharmacy for £0.1m, sold 2 pharmacies for £0.4m and sold 5 properties for £1.5m.
The company has also restructured its finance facilities with new bankers.
The company will continue to adopt measures to ensure that the group remains profitable and financially stable despite the pharmacy market being a difficult sector to operate in.
The company has continued to improve efficiency and minimise fuel consumption within its warehouses.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per full-time employee, the recommended ratio for the sector.
The electric vehicle scheme continues for high mileage employees and this will be rolled out further in future years. Reviews of van mileage have been carried out regularly with adjustments made to schedules when required.
Work was completed on the building of a new warehouse facility in 2024 that is now fully operational. This has increased consumption in the short term as we were operating from additional warehouses. The previous warehouse facilities have now been consolidated into one building, built with energy efficient measures in mind. We are exploring opportunities to reduce our consumption further by installing solar panels.
The store estate has reduced during the year. The company's ongoing upgrade programme continues to ensure that boilers, fridges, lights and air conditioning, if replaced, are more efficient than previous.
The implementation of delivery hubs has reduced both mileage and the number of vans on the road, positively impacting direct emissions.
We have audited the financial statements of PCT Healthcare (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 November 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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.
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.
From the preliminary stages of the audit, we ensure our understanding of the entity is up to date. This includes, but is not limited to, current knowledge of their activities, the business and control environments, and their compliance with the applicable legal and regulatory frameworks. This information supports our risk identification and the subsequent design of audit procedures to mitigate those risks; ensuring that the audit evidence obtained is sufficient and appropriate to support our opinion.
In response to the risks identified, specific to this entity, we designed procedures which included, but were not limited to:
Enquiry of management and those charged with governance around actual and potential litigation and claims;
Reviewing minutes of meetings of those charged with governance, where available;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
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.
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £3,182,325 (2023 - £2,905,549 loss).
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
The notes on pages 19 to 37 form part of these financial statements.
PCT Healthcare (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 11 Manchester Road, Walkden, Manchester, United Kingdom, M28 3NS.
The group consists of PCT Healthcare (Holdings) Limited and all of its subsidiaries.
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 investment properties at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company PCT Healthcare (Holdings) Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 November 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholders' share of changes in equity since the date of the combination.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to benefit from its activities.
In assessing the validity of the going concern basis for a period of at least twelve months from the date of approval of these financial statements, the directors have considered profit and loss and cash flow forecasts they have prepared for the period ended 30 November 2026. Additionally, they have considered the level of bank facilities available to the group and compliance with bank covenant tests both during the period and the period ahead. In June 2025, the company entered into a new facilities agreement with its new bankers until June 2030.
Having considered the group's financial forecasts and investment and financing commitments, the directors believe that the group has sufficient current and future facilities available for them to meet their liabilities including finance obligations whilst in compliance with its banking covenants for at least twelve months from the date of signing these financial statements.
Having considered the above, at the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually at point of sale or on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Where a reasonable and consistent basis of allocation can be identified, assets are allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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 group after deducting all of its 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The company estimates the useful lives and residual values of plant, fixtures and equipment in order to calculate depreciation charges. Changes in these estimates could result in changes being required to annual depreciation charges in the profit and loss account and the carrying values of plant, fixtures and equipment.
The company estimates the useful lives and residual values of intangible assets in order to calculate amortisation charges. Changes in these estimates could result in changes being required to annual amortisation charges in the profit and loss account and the carrying values of intangible fixed assets.
The company is subject to review of certain income which may result in a clawback of revenue by the Department of Health. In the directors' view there was a reduction in the provision required in the current year.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
More information on impairment movements in the year is given in note 11.
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 30 November 2024 by W T Gunson Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's active subsidiaries at 30 November 2024 were as follows:
The subsidiary companies W R Evans Healthcare Limited and Sawley Investments Limited are exempt from the Companies Act 2006 requirements relating to the audit of their financial statements by virtue of section 279A of the Act as this company has guaranteed each subsidiary undertaking under section 479C of the Act.
Bank borrowings are secured by fixed charges over the investments and book debts together with a floating charge over the assets of the company.
In the previous year the company secured a new bank facility with a term of 5 years with the group's bankers.
Since the year end the company has secured for the group, with new bankers, a new term loan and revolving bank facility for £30m over a term of 5 years from June 2025, together with a £10m receivables finance facility to replace the previous facilities. Interest is payable at a maximum of 2.25% above SONIA on the term loan and revolving bank finance facilities.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Preference A shares
The Preference A shares have a right to a fixed cumulative preferential dividend at the rate of 8% per annum. They are non-voting and have no rights on winding up other than to be redeemed at par prior to any distribution to the ordinary shareholders.
Preference C shares
The Preference C shares carry a fixed cumulative dividend (other than payment of dividends in relation to the Preference A shares which shall have priority) at the rate of SONIA plus 2.15% per annum on the capital for the time being paid up other than to be redeemed at par prior to any distribution to the ordinary shareholders.
This reserve records the nominal value of shares repurchased by the company.
Merger reserve
This reserve represents the premium arising on each share issued as part of a reorganisation on 15 March 2021.
This reserve records retained earnings and accumulated losses.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Since the year end the company has acquired one pharmacy for £0.1m, sold 2 pharmacies for £0.4m and sold 5 properties for £1.5m.
The company has also restructured its finance facilities with new bankers.
The group occupied three properties owned by Mr P and Mrs A J Cattee and one property owned by the P & A J Cattee (Directors) Pension Scheme. Rent paid in respect of these properties amounted to £16,800 and £30,000 respectively, (2023 £25,200 and £47,750 respectively).
The amounts due to Mr G A Tims and Mr P Cattee at the balance sheet date were £1,404,295 and £14,054,119, respectively (2023 £1,711,282 and £14,342,313). The loans are interest free.
Dividends totalling £56,160 (2023 - £56,160) were paid in the year in respect of Preference A shares held by the company's directors.