The directors present the strategic report for the year ended 31 December 2024.

The MG operates with a commitment to providing high-quality care and support services to elderly residents, including those requiring specialized nursing care and respite care. The primary focus remains on delivering person-cantered care that prioritizes residents' health, safety, and well-being while ensuring compliance with national health and care standards.

In 2024, the business has maintained a steady occupancy rate, reflecting the ongoing demand for elderly care services. Efforts have been made to enhance the quality of care through staff training programs, facility upgrades, and the introduction of more resident- focused activities. The care home also continues to work closely with local healthcare providers to ensure that medical care is delivered efficiently.

1. Staffing Shortages and Retention

   One of the most significant risks for the care home is the recruitment and retention of qualified staff. The care industry faces a well-documented shortage of skilled care workers, which could lead to increased operational pressures and impact the quality of care. Staff turnover remains a concern, and any further difficulties in recruitment could drive up costs related to agency staff and overtime.

    

2. Regulatory and Compliance Risks

   The care home operates in a highly regulated environment, with regular inspections from bodies such as the Care Quality Commission (CQC). Any failure to meet regulatory standards could result in enforcement actions, fines, or reputational damage, potentially leading to a loss of business. Ongoing efforts are being made to stay fully compliant with all regulatory requirements, including health and safety, safeguarding, and infection control protocols.

    

3. Health and Safety Risks

   The ongoing risk of infectious disease outbreaks, such as COVID-19, remains a considerable uncertainty. While robust infection control measures are in place, the potential for future outbreaks poses a serious threat to resident health and the home’s operations. In the event of a significant outbreak, the care home may face increased costs for protective equipment, additional staffing, and other necessary resources, alongside potential disruptions to service delivery.

    

4. Financial Pressure from Rising Costs

   Rising operational costs, particularly energy and food prices, coupled with higher wage demands in the care sector, could place significant financial pressure on the care home. Managing these rising expenses while keeping resident fees affordable remains a key challenge. There is also the uncertainty of future government funding, which may fluctuate depending on national policy changes.

    

5. Changes in Government Policy

   The care sector is highly sensitive to changes in government policy, particularly regarding funding models for social care. Any reduction in public funding or changes to the funding structure could directly impact the financial viability of the business. The care home must remain adaptable to these shifts, maintaining close relationships with local authorities and monitoring policy developments.

    

6. Reputation and Resident Satisfaction

The MG's reputation is a critical factor in maintaining occupancy levels. Negative feedback from residents or their families, either through online reviews or word of mouth, could have an adverse effect on the home’s ability to attract new residents. Ensuring high levels of resident satisfaction through ongoing engagement, quality care, and transparent communication is key to mitigating this risk.

The financial health of the MG has remained stable, with income primarily driven by resident fees and government funding. Cost management has been a key focus, particularly in light of rising inflation and higher operating expenses, including energy costs and staffing. Despite these challenges, the care home has managed to maintain a positive cash flow, although margins have tightened compared to previous years.

At the year-end the Company's net assets were £4,931,939 (2023: £4,001,104) which represents an increase of £930,835 compared to the previous year.

KPI            2024    2023    Definition and method of calculation

Growth in turnover (%)    4.85%    4.05%    Year-on-year movement in turnover from continuing operations.

Operating profit (%)    42.7%    42.8%    The ratio of operating ratio to turnover.

The MG continues to navigate a challenging landscape, balancing the demand for high- quality care with financial sustainability and operational efficiency. While significant risks, such as staffing shortages, rising costs, and health and safety concerns, remain, the care home is actively working to address these issues through targeted strategies and ongoing investment in staff and resources. Maintaining compliance with regulatory standards and adapting to external uncertainties will be essential to securing long-term success.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The principal activity of the company was that of care home management.

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £147,211. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The company intends to continue with the expansion of its care home, committing to capital expenditure of nearly £3m prior to the year-end, as detailed in note 25.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of principal risks and uncertainties.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent; 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.

We have audited the financial statements of Middleton Grove Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its profit for the year then ended;

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

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

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 are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We obtained an understanding of the company and the laws and regulations that could reasonably be expected to have a direct effect on the financial statements through discussion with the directors and management and the application of our knowledge and experience. We discussed with management whether there were any known or suspected instances of fraud and/or non-compliance with relevant laws and regulations. We also obtained an understanding of the company's accounting systems and internal controls.

We audited the risk of management override of controls, by testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business. Our other audit procedures included, but were not limited to, attending a year end stock count, carrying out detailed substantive testing of a sample of income and expenditure transactions arising in the year and a sample of balance sheet items such as fixed assets, debtors, creditors, etc. We also reviewed the financial statements and checked disclosures to supporting documentation to assess compliance with applicable law and regulation.

Because of the inherent risk 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. The 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 is greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion omission or misrepresentation.

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 income statement has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Middleton Grove Limited is a private company limited by shares incorporated in England and Wales. The registered office is Head Office Middleton Grove, 11 Portland Road, Hove, East Sussex, BN3 5DR.

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. The principal accounting policies adopted are set out below.

The company is exempt from preparing consolidated accounts due to the sole subsidiary being dormant in the current and prior period.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover represents amounts receivable for goods and services.

Revenue is recognised when a tenant has occupied the residence or a service carried out, including expenses and disbursements. Revenue is recognised in the period to which it relates.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 10 years.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land is not depreciated as it is deemed to have an infinite useful life.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. 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.

Stock is stated at the lower of cost or net realisable value.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, 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 company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

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.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax 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 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 company 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.

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 leases asset are consumed.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The directors do not consider that there are any material sources of estimation uncertainty that require disclosure within the accounts.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of assets. They are amended when necessary to reflect current estimates, technological advancements, future investments, economic utilisation and the physical condition/maintenance of the assets.

More specifically, at the Balance Sheet date, freehold land and property is considered to have a residual value greater than the net book value at the same date. For this reason no further depreciation has been charged in this set of financial statements.

Useful economic lives and residual values are reassessed annually.

The directors estimate the amount of deferred tax that is likely to be recovered by the almost certain capital allowances to be claimed on the completion of the building works following an expert's review.

During the year the company received no government grants.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

In keeping with its statutory obligations, the directors have arranged for separate financial statements for the year to 31 December 2024 to be prepared for the subsidiary. The directors have chosen not to prepare consolidated financial statements due to the triviality of the dormant subsidiary, in accordance with s405 Companies Act.

Details of the company's subsidiaries at 31 December 2024 are as follows:

The investments in subsidiaries are all stated at cost.

Bank borrowings are secured by a fixed charge over the company's freehold property and by a fixed and floating charge over all of the company's other assets.

The bank loan is repayable over 60 months commencing 3 February 2023. The interest is payable monthly and is charged at a fixed rate of 7.5%.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The deferred tax asset is based on the almost certain clawback of Corporation Tax from a Capital Allowances/Surveyors report on completion of works where we are estimating the likely magnitude of Corporation Tax reduction based upon the Capital Allowances report from a previous care home extension. The balance is anticipated to increase over the next 12 months with the continuation of the building development. The building works are forecast to be completed in 12-18 months following the end of the financial period and it is anticipated that on completion the deferred tax asset will reverse.

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totaling £3,172 (2023 - £2,866) were payable to the fund at the balance sheet date and are included in creditors.

Both the Ordinary shares and Ordinary A shares hold full rights in respect of voting, and entitle the holder to full participation in respect of equity and in the event of a winding up of the company. The Ordinary and Ordinary A shares may be considered by the directors when considering dividends from time to time.

Profit and loss reserves include all current and prior period retained profits and losses.

Amounts contracted for but not provided in the financial statements:

During the year the company received loan advances of £234,759 from, and made repayments of £213,002 to, Bay House Care Limited, a company controlled by the directors. At the year-end the amount owed by Bay House Care Limited was £33,668 (2023 - £11,911). The company paid management charges of £6,121 to Bay House Care Limited for the use of an employee, and received management charges of £14,354 from Bay House Care Limited for the use of one of its employees.

During the year the company received loan advances of £14,856 from, and made repayments of £38,463 to, Aspen Place Limited, a company controlled indirectly by the directors. At the year-end the amount owed from Aspen Place Limited was £1,267 (2023 - £24,873). The company paid management charges of £32,500 to Aspen Place Limited for the use of an employee, and received management charges of £14,354 from Aspen Place Limited for the use of one of its employees.

During the year the company made loan advances of £165,200 to Intelligendo Limited, a company controlled by the directors. At the year-end the amount owed from Intelligendo Limited was £330,400 (2023 - £165,200).

All loans are interest-free and repayable on demand.

Dividends totalling £147,211 (2023 - £375,000) were paid in the year in respect of shares held by the company's directors.