The directors present the strategic report for the year ended 31 December 2024.
The directors, in preparing this strategic report, have complied with section 414C of the Companies Act 2006.
Turnover for the year ended 31 December 2024 was £18,542,712 (17m period ending 31 December 2023 “prior period 2023”): £20,097,276). EBITDA for the year ended 31 December 2024 was £1,213,516 (prior period 2023: £185,768).
During 2024 the group’s strategic objectives were on the successful integration of acquisitions made in the prior period 2023 through embedding consistent excellent operational practices across the clinic estate, as well as optimising pricing structures and the group’s cost base in order to strengthen margins.
The group purchased Platt & Common on 28 June 2024, and the clinic has contributed Turnover of £748,043 and EBITDA of £158,599 to the group’s financial performance in 2024. Integration of the clinic was substantially completed by the end of 2024.
The group also made significant capital investment across 4 clinic locations to increase the number of surgeries by a further 6 in support of the group’s objective to drive accessibility and to make dental health services available to communities across Scotland.
2024 also saw the development of the group’s 3-year strategic plan to support key growth objectives up to and including 2028. These objectives provide for both:
growth through future acquisitions, where potential targets provide access to new geographic locations and patient demographics; and
organic growth through capital investment in existing clinic estate where there are opportunities for the business to scale in existing locations to expand its offering of a wide range of high quality, patient-centred dental services to individuals and families.
Post period, the group has also progressed execution of capital investment plans for its leading clinics in both Edinburgh and Glasgow, which will see a further 6 surgeries being added to the capacity of the group’s existing estate.
On 1 April 2025, the group acquired one further clinic, Duncan Smith Dental Practice, and now operates twenty-two practices throughout Scotland with overall performance in line with expectations.
Additionally, the group has also secured a new site to launch Advanced Dentistry at Winchburgh later in the year which will be the first dental practice to be established in this fast-growing West Lothian village - and the 23rd location for the group.
Operations
As part of the group’s execution of its 3-year plan, the directors have also recognised that as the business scales, it is necessary to embed further operational efficiencies needed to support sustained growth. To address this, the group has implemented of a new organisational framework designed to streamline operations and foster a culture of increased autonomy, accountability, and ownership at Clinic level. The new organisational structure within operations enables a more direct escalation process, with clear reporting lines from Clinic Supervisor/Manager to Operational Regional Managers and the Senior Management Team.
Post period end, the group finalised a refinancing of its facilities with HSBC UK Bank plc ("HSBC") and now has a £13,500,000 facility to support further acquisitions.
The management of the business and the execution of the group’s strategy are subject to a number of risks and uncertainties set out below, together with the group’s approach to monitoring and mitigation.
Recruitment and retention of Associate Dentists and Clinical Staff
The group’s ability to recruit and retain Associate Dentists (self employed) and Clinical Staff (employed) is essential to its continuing operations and future growth. The group has invested in its recruitment team and now has two full time dedicated recruiters who focus on the specific requirements of each vacant post. The group offers competitive packages for both Associate Dentists and Clinical Staff.
The group has built up a reputation in the Scottish market for being a leader in learning and development opportunities for Associate Dentists, and this continues to be an area of focus for the future.
Clinical Standards
The group is regulated by NHS Scotland and is held to high levels of clinical standards. Regular clinic inspections take place and if required standards are not met, the clinics could be closed and there would be a negative impact on the group’s reputation in the market. The directors are committed to ensuring clinical standards are met and provide support to the clinical teams.
Growth Strategy
As the Group continues to grow, each potential acquisition is assessed by experienced Directors and supplemented by external advisors as necessary to ensure it meets the group's principal criteria.
Facility Covenants
The group is required to report regularly to the bank and its key stakeholders on its financial performance and must meet covenants set out in the facility documents.
The directors and board consider group financial KPIs in the evaluation of business performance on a regular basis.
| 2024 (12 months) | 2023 (17 months) |
Turnover | £18,542,712 | £20,097,726 |
EBITDA | £1,213,516 | £185,768 |
In addition, the Group’s cashflow is carefully monitored to ensure sufficient funds for ongoing operations and covenant compliance. Through regular reporting of revenue and profitability, the bank and key stakeholders are kept well informed of progress. The board believe these indicators are performing as expected based on the current plan.
The group's financial risk management objectives are to ensure there is sufficient working capital and cash flow to meet its operating needs and to ensure there is sufficient support for its growth strategy. This is achieved through careful management of cash resources and by obtaining bank facilities and investor funding.
The group's principal financial instruments are bank loans, and loan notes and equity from its investors. Such financial instruments are utilised to fund clinic acquisitions and for working capital.
Bank loans are secured by floating charge, inter-company guarantees and standard security over properties owned by related parties. They are subject to market rate interest. Loan notes are unsecured and are repayable in installments between 2026 and 2028.
The group is exposed to interest rate risk with regards to its facilities. It is subject to minimal credit risk and no forex risk. No treasury transactions or derivatives are entered into.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 9.
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:
Details with regards to events ocurring post reporting date can be found in note 28 to the financial statements.
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of SDC Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the group, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
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 £4,413,141 (2023 - £4,935,178 loss).
SDC Group Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 20 Blythswood Square, Glasgow, G2 4BG.
The group consists of SDC Group Limited and all of its subsidiaries.
The financial statements are presented for a period of twelve months from 1 January 2024 to 31 December 2024. The comparative figures are presented for a period of seventeen months from 1 August 2022 to 31 December 2023 following the extension of the company's accounting reference date. As such, amounts presented in the financial statements (including related notes) are not entirely comparable with the comparative figures.
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 certain financial instruments 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 SDC Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business. In satisfaction of their responsibility, the directors have considered the group's ability to meet its liabilities as they fall due. This assessment considers its principal risks and uncertainties and is dependent on a number of factors including financial performance and available financial resources.
To this end, the directors have reviewed the company's cash flow forecasts, and associated risks and sensitivities. These forecasts consist of the company's annual forecast to December 2025 and its projections extending out to 2027. The group has net liabilities of £4.2m at the year end, but the directors fully anticipate the group becoming profitable in the foreseeable future as the volume of clinics under its control expands to absorb costs through continuation of its buy and build growth model.
The key factors underpinning the directors’ assessment of going concern are as follows:
Its parent entity has committed bank facilities of up to £13.5m until December 2026.
Its parent entity has met all financial covenants since the renegotation of its covenants during the year including those subsequent to the period-end.
Its parent entity has committed loan note facilities from its investors until March 2028 with interest payments deferred until such time that certain financial indicators are met.
The group continues to receive support from its investors.
The results of the business subsequent to the period end indicate that the business is on track to deliver positive year on year growth in its key performance indicators of both Turnover and EBITDA.
The group has made solid progress with its 3 year strategic plan and is well positioned to accelerate execution of this plan in the next 12-18 months.
Furthermore, the directors consider that they have sufficient mitigating actions (such as direct variable costs, and delaying capex spend) within their control that could reduce the impact of plausible downward scenarios. Based on this assessment, and with the continued support of its investors, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future and have concluded it is appropriate for the financial statements to be prepared on a going concern basis.
Revenue 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue principally relates to services provided in the course of dentistry.
Private and NHS dental revenue is recognised by reference to the stage of completion of the service performed during the course of treatment.
Revenue from the sale of ancillary goods is recognised when the significant risks and rewards of ownership of the goods have passed to the customer.
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, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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.
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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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 assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs.
The group's A Ordinary shares are considered to be compound instruments. Whilst these bear non-discretionary dividends at a minimum rate of 10% (effective from 2026), they also include an equity component through voting rights, and participation upon an exit event. They are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is calculated at the net present value of future contractual cash flows using the a discount rate for a similar instrument excluding an equity component. This amount is recorded as a liability and re-measured at each balance sheet date until the instrument is de-recognised or extinguished. The equity component is determined by deducting the amount of the liability component from the fair value of the instrument as a whole. This is recognised and included in equity and is not subsequently remeasured.
Dividends on A Ordinary shares are recognised as an interest expense in the profit or loss as accrued. Dividends payable on other 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.
Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
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 and estimates have had the most significant effect on amounts recognised in the financial statements.
There are various estimates and judgements applied in the group's business combinations. These include:
The estimate of fair values of certain assets and liabilities acquired in the business combination.
The purchase price allocation and classification of directly attributable costs.
The fair value of contingent consideration.
Fair values of assets & liabilities acquired in business combinations are assessed by Management based on their knowledge of the industry and physical conditions of the assets acquired.
The purchase price allocation and classification of directly attributable costs are determined by Management based on their knowledge and experience.
The fair value of contingent consideration is estimated by Management based on the estimated future profitability of the acquired business.
The group's A Ordinary shares are considered to be compound instruments. This judgement considers the substance of the contractual arrangement in that whilst they bear non-discretionary dividends at a minimum rate of 10% (effective from 2026), they also include an equity component through voting rights, and participation upon an exit event.
The allocation of the liability and equity component parts in the prior period required a degree of estimation. This included the effective discount rate applied to discount future expected cash flows to their net present value, and the discount rate and growth rate applied to the calculate the terminal value of future expected cash flows. Changes in those rates applied would have impacted the value and classification of debt and equity recognised by the group in relation to the A Ordinary shares.
Subsequent meausurement of the debt component at reporting period end is also subject to judgement and estimation on the same basis with movement in fair value recognised in the Profit and loss account.
An analysis of the group's turnover is as follows:
All turnover arose within the United Kingdom and is attributable to the principal activity as disclosed within the directors report.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2023 - 5).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/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:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 December 2024 are as follows:
All of the above subsidiaries are registered at 20 Blythswood Square, Glasgow, G2 4BG. All subsidiaries are dormant other than SDC Clinics Limited.
The following indirect subsidiaries were dissolved during the year:
Oban Dental Clinic Ltd | Hazel House Dental Clinic Ltd |
Cardonald Dental Clinic Ltd | Dumfries Dental Clinic Ltd |
Lochthorn Dental Clinic Ltd | Hilton Dental Clinic Ltd |
Inverness Dental Clinic Ltd | Linlithgow Dental Clinic Ltd |
Bishopton Dental Clinic Ltd | Shotts Dental Clinic Ltd |
Culloden Dental Clinic Ltd | Castle House Dental Practice Ltd |
SDC Newlands Ltd | Granite City Clinic Ltd |
Winchburgh Dental Clinic Ltd | Stoneyfield Dental Clinic Ltd |
Scotdent Clinics Limited and Mathewson Dental Practice Limited were dissolved after the year end.
At the year end, the company held a £8m revolving credit facility with HSBC. This facility had a termination date of July 2025 with interest payable at the Bank of England's bank rate + 3%.
The facilities are secured by floating charge, inter-company guarantee from certain group and related party entities, and standard security on property owned by related parties.
Subsequent to the year end, the facilities were extended to 31 December 2026. Further information can be found in note 28 to the financial statements.
Details with regards to compound financial instruments relating to the company's A Ordinary shares can be found in note 24 to the financial statements.
Other loans relate to investor loan notes. Loan notes are unsecured and repayable in bi-annual installments from 2026 to 2028. These are subject to fixed rate interest of 10% and a fixed redemption premium of £3m.
The debts are subject to subordination agreement.
Finance lease payments represent rentals payable by the group for certain items of plant and machinery. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Leases are secured over the assets to which they relate and no restrictions are placed on the use of the assets.
At the year end, the group held an unrecognised deferred tax asset amounting to £1.2m (2023 - £0.6m) in respect of unutilised tax losses. No deferred tax asset has been recognised due to uncertainty over when it will be recovered against the reversal of deferred tax liabilities or future taxable profits.
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.
During the year, the company issued 985 B Ordinary shares of 0.1p, 8,848 D Ordinary share of 0.1p and 2 E Ordinary shares of 0.1p.
The rights associated to the share capital are noted below:
Capital | Dividend rights | Voting rights |
|
Ordinary | Right to dividends pro rata to the equity held | Full rights |
|
A Ordinary | Preferential dividend rights | Full rights |
|
B Ordinary | Right to dividends pro rata to the equity held | Full rights |
|
C Ordinary | No rights to dividends | No voting rights |
|
D Ordinary E Ordinary | No rights to dividends No rights to dividends | No voting rights No voting rights |
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The capital rights of all shares are subject to ranking priority in accordance with the articles of association.
The group's A Ordinary shares are considered to be compound instruments. Whilst these bear non-discretionary dividends at a minimum rate of 10% (effective from 2026), they also include an equity component through voting rights, and participation upon an exit event. The value of the debt component at the period end was £1,320,444 (2023 - £896,546) with the movement in fair value recognised in the Profit and loss account.
This reserve represents the amount above the nominal value received for shares issued, less transaction costs relating to the issue of equity.
The retained earnings include all current and prior year retained profits or losses, less dividends paid.
On 28 June 2024, the group acquired the business, trade and assets of Platt & Common Limited.
All goodwill is being amortised over its anticipated useful life of ten years. Since the date of acquisition, the businesses have contibuted £748,043 in Revenue and £158,559 in EBITDA to the company.
Operating lease payments represent rentals payable by the group for its properties. Lease terms are on average a term of 15 years. No contingent rents are payable.
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:
After the year end, the following events have ocurred:
The company extended its RCF loan facilities to 31 December 2026, increasing its facility to £13.5m from £8m. Since the year end, £1.7m of the new facility has been drawn down.
SDC Clinics Limited entered into a business combination for initial consideration of £1,200,000.
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
Purchases from Other related parties relate to property rentals paid to an entity under common ownership.
Balances due from Entities over which the entity has control, joint control or significant influence relates to inter-company loans. All inter-company loans are interest free and due on demand.
Balances due to Entities with control, joint control or significant influence over the company relate to compound instruments, loan notes and accrued interest due to the company's investors. Further details can be found in note 20 to the financial statements.
The company has taken advantage of exemption, under terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland,' not to disclose related party transactions with wholly owned subsidiaries within the group.
Dividends totalling £0 (2023 - £0) were paid in the year in respect of shares held by the company's directors.
At the balance sheet date, the directors owed the group £30,242 (2023 - £25,256). Director loans are unsecured, interest free and repayable on demand.