REGISTERED NUMBER: 15435241 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Period 23 January 2024 to 31 December 2024

for

Lovett 2 Care Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

8

Consolidated Income Statement

12

Consolidated Other Comprehensive Income

13

Consolidated Balance Sheet

14

Company Balance Sheet

15

Consolidated Statement of Changes in Equity

16

Company Statement of Changes in Equity

17

Consolidated Cash Flow Statement

18

Notes to the Consolidated Cash Flow Statement

19

Notes to the Consolidated Financial Statements

20

DIRECTORS:

Mr L A Bedson

Mr K R Crockett

Mr C D Harle

REGISTERED OFFICE:

Unit 2 Evolution Hooters Hall Road

Newcastle-Under-Lyme

Staffordshire

ST5 9QF

REGISTERED NUMBER:

15435241 (England and Wales)

AUDITORS:

Freedman Frankl & Taylor

Statutory Auditors

Chartered Accountants

Reedham House

31 King Street West

Manchester

M3 2PJ

Introduction

The directors present their Strategic Report on the group and company for the nine month period ended 31 December 2024.

Group overview

The Lovett 2 Care Holdings Limited Group (the "Group") is a growing UK care home operator providing dementia, nursing, and residential care via a portfolio of 21 care homes.

Lovett Care 2 Holdings, combined with its sister Group, Lovett Care Holdings Limited, aims to increase its footprint in the care industry over the coming years by increasing the number of homes under its operation. Lovett Care has established a leading reputation for the provision of high quality care and is implementing its vision through its core principles of Respect, Accountability, Transparency, Responsiveness and Empowerment. The Group and Lovett Care Holdings have a combined perimeter of 35 care homes covering in excess of 2,500 beds which are either operational or in the process of being built.

Business review and Key performance indicators

On 25 October 2024 the Group acquired New Care Operations Group limited ("New Care") which operates 15 purpose-built leasehold care homes for the elderly. New Care is a long established business with a sustained track record of delivering quality safe care.

In addition the Group is also in process of developing and operating a further six care homes the first of which is due to open in the summer of 2026.

Throughout 2024 New Care made further significant progress in successfully operating its properties with their headline KPIs being summarised below:

Month of:

Mar 2022

Mar 2023

Mar 2024

Dec 2024

No' of Open Homes

9

12

15

15

No' of Available Beds

648

851

1,057

1,057

No' of Occupied Beds

552

682

862

906

Occupancy %

85%

80%

82%

85%

Since 31 December end no further New Care homes have been or are due to be opened and as a result further occupancy improvements have been made and the group is now profitable and cashflow positive.

At the heart of any successful care home, are significantly important intangible factors such as vision, culture, and fundamentally a core commitment to providing excellent care to its residents. Whilst it is naturally difficult to measure such intangibles, the group monitors very closely the non-financial metrics that are available which help to evidence the quality of the care and services provided. Some of these key metrics are detailed in the information above, and these indicate that the operational team have been highly successful in delivering high quality care across the group during this financial year and beyond.

Principal risks and uncertainties

Although government restrictions are no longer in place in relation to the Covid-19 pandemic, our risk monitoring has remained focussed on the potential impact of any further outbreaks on our residents, staff and the business itself. As an operator of multiple elderly care home settings, the outbreak of any infectious disease in the homes, naturally has a profound impact on the business. The processes and procedures implemented during the Covid-19 pandemic have helped in preventing any further outbreaks and in minimising the impact of any potential future outbreaks.

Key Events

On 25 October 2024 the Group was acquired the New Care Group for a total anticipated consideration of £31.0 million of which £26.7 million had been paid by the 31 December 2024 period end. Further earn out payments will be made in the event that New Care exceeds pre agreed financial targets with a maximum earn out payment of £8.0m being payable through New Care trading performance to 31 December 2027. The New Care acquisition was financed by a mixture of the issuance of new share capital and shareholder loans.

The Group funds its care home development activities via a mixture of the issue of new shareholder loans and third party debt finance. Two properties are currently in build phase the first of which is due to open in the summer of 2026.

Section 172(1) Statement

The Board of Directors always consider, both individually and collectively, that they have acted in the way 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 (having regard to the stakeholders and matters set out in s172(1)(a)-(f) of the Companies Act 2006) in the decisions taken during the period ended 31 December 2024. Our plan is designed to have a long term beneficial impact on the company to contribute to its success.

Our plan took into account the impact of the company's operations on the community and environment and our wider social responsibilities, and in particular how we comply with environmental legislation and pursue waste-saving opportunities and react promptly to local community concerns.

Disabled employees

We ensure that disabled employees are given full and fair consideration for all roles and opportunities within the company, both during recruitment and throughout their employment. Where existing employees become disabled, every effort is made to provide continued employment, including making reasonable adjustments to their working environment or role.

Engagement with Suppliers, Customers, and Other Stakeholders

As part of our commitment to fulfilling our duties under Section 172(1) of the Companies Act 2006, the Board has actively engaged with key stakeholders, including suppliers, customers, employees, and the wider community, to ensure their interests are considered in our decision-making processes.

Suppliers

We value strong, collaborative relationships with our suppliers and continually review and discuss any issues or queries to ensure alignment on quality, sustainability, and delivery expectations.

Customers

Our customers are at the heart of our business. We have strong customer service channels with queries and requests considered both locally and centrally, ensuring timely and effective support.

Employees

Recognising the importance of our workforce, we have prioritized their well-being and professional development by:

- Offering training programs to enhance skills and career progression opportunities.

- Implementing initiatives to support mental health and work-life balance.

- Encouraging open communication through an "open door" policy and regular team meetings.

Community and Environment

We are committed to making a positive impact on the communities we operate in. We engage with local stakeholders to address community concerns and foster goodwill.

The Board remains dedicated to maintaining transparent and meaningful engagement with all stakeholders, ensuring their voices are heard and their interests are reflected in our strategic decisions.

As the Board of Directors, our intention is to behave responsibly and ensure that the management operate the business in a responsible manner, operating within the high standards of business conduct and governance expected for a business such as ours and in doing so, will contribute to the delivery of our plan. The intention is to nurture our reputation, through both the construction and delivery of our plan, that reflects our beliefs and culture.

ON BEHALF OF THE BOARD:

Mr L A Bedson - Director

30 September 2025

The directors present their report with the financial statements of the company and the group for the period 23 January 2024 to 31 December 2024.

INCORPORATION

The group was incorporated on 23 January 2024 .

DIVIDENDS

No dividends will be distributed for the period ended 31 December 2024.

FUTURE DEVELOPMENTS

For future developments, see details contained in the Strategic report.

DIRECTORS

The directors who have held office during the period from 23 January 2024 to the date of this report are as follows:

Mr L A Bedson - appointed 23 January 2024

Mr K R Crockett - appointed 23 January 2024

Mr C D Harle - appointed 7 October 2024

STREAMLINED ENERGY AND CARBON REPORTING

The energy used by the Group in the year ended 31 December 2024 is as follows:

Energy type

Number

Type

KgCO2e

%

Electricity

2,907,346

kwh's

655,170

33%

Natural gas

7,308,863

kwh's

1,336,791

67%

Transport

-

miles

-

0%

Total

1,991,962

100%

Beds

1060

1,879

The associated CO2 emissions amounted to 1,991,962 Kg. The intensity measure used by the Group is Kilograms of CO2e per registered bed. On this measure, the intensity value for the period ended 31 December 2024 is 1,879 kgCO2e per registered bed. The data has been collected and provided by an external energy management company who manage the Group's energy billing, reporting, data and cost validation on a day-to-day basis.

The Group takes its impact on the global climate seriously, recognising the importance of good environmental practice. Where possible, the Group is committed to adopting energy efficiency measures to help reduce its impact on climate change and also recognises the need to increase the focus on sustainability within a 24-hour 365-day operation.

A strategy aimed towards achieving Net Zero Carbon is now incredibly important. Energy efficiency measures taken during the year include the installation of many new highly efficient boilers to replace aged equipment, LED lighting, modern heating controls and optimised controls of lighting and plant rooms. Plans are currently underway to look at ensuring all homes have the right levels of loft and wall insulation and that windows are adequately glazed.

Dependent upon the cost of energy and the subsequent impact upon payback periods solar PV installations on care home roofs are currently being explored alongside other newer innovations such as air source heap pump dryers to replace gas.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group 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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

GOING CONCERN

Management have prepared detailed, group wide trading forecasts for the group to December 2029 and as a result of the continued maturing of the group and the care homes within, these indicate consistent and improving profitability. The directors, having given consideration and applied relevant sensitivities, consider that it is appropriate to prepare the financial statements on a going concern basis. The directors are satisfied that the company and the group have adequate resources and the support of its shareholders and key stakeholders, for a period of at least 12 months from the date of approval of these financial statements, to enable them to continue trading as a going concern.

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

The company granted an indemnity to one or more directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the director’s report.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr L A Bedson - Director

30 September 2025

Opinion

We have audited the financial statements of Lovett 2 Care Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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 group's and of the parent company affairs as at 31 December 2024 and of the group's loss for the period then ended;

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

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

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the 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

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

Audit response to risks identified

-

the nature of the industry and sector, control environment and business performance;

-

results of enquiries of management about their own identification and assessment of the risks of irregularities;

-

any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:

-

identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

-

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

-

the matters discussed among the audit engagement team and involving other internal specialists including tax regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risks of management override.

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.

As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud.

Our procedures to respond to risks identified included the following:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

-

enquiring of management concerning actual and potential litigation and claims;

-

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

-

obtained an understanding of provisions and held discussions with management to understand the basis of recognition or non-recognition of tax provisions; and

-

in addressing the risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Samuel Bacall BSc (Hons) BFP FCA (Senior Statutory Auditor)

for and on behalf of Freedman Frankl & Taylor

Statutory Auditors

Chartered Accountants

Reedham House

31 King Street West

Manchester

M3 2PJ

30 September 2025

TURNOVER

3

12,122,851

Cost of sales

(7,597,273

)

GROSS PROFIT

4,525,578

Administrative expenses

(4,423,714

)

101,864

Other operating income

318

OPERATING PROFIT

5

102,182

Interest receivable and similar income

51,918

154,100

Interest payable and similar expenses

6

(363,064

)

LOSS BEFORE TAXATION

(208,964

)

Tax on loss

7

(54,361

)

LOSS FOR THE FINANCIAL PERIOD

(263,325

)

Loss attributable to:

Owners of the parent

(263,325

)

LOSS FOR THE PERIOD

(263,325

)

OTHER COMPREHENSIVE INCOME

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(263,325

)

Total comprehensive income attributable to:

Owners of the parent

(263,325

)

ASSETS

FIXED ASSETS

Intangible assets

9

29,454,908

Tangible assets

10

11,198,191

Investments

11

-

40,653,099

CURRENT ASSETS

Debtors

12

10,691,174

Cash at bank and in hand

9,398,494

20,089,668

60,742,767

CAPITAL, RESERVES AND LIABILITIES

CAPITAL AND RESERVES

Called up share capital

13

33,643,946

Retained earnings

14

(263,325

)

SHAREHOLDER FUNDS

33,380,621

PROVISIONS FOR LIABILITIES

15

832,095

CREDITORS

Amounts falling due within one year

16

20,912,051

Amounts falling due after more than one year

17

5,618,000

60,742,767

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

Mr L A Bedson - Director

ASSETS

FIXED ASSETS

Intangible assets

9

-

Tangible assets

10

-

Investments

11

33,163,054

33,163,054

CURRENT ASSETS

Debtors

12

19,289,280

Cash at bank

2,847

19,292,127

52,455,181

CAPITAL, RESERVES AND LIABILITIES

CAPITAL AND RESERVES

Called up share capital

13

33,643,946

Retained earnings

14

(452,628

)

SHAREHOLDERS' FUNDS

33,191,318

CREDITORS

Amounts falling due within one year

16

14,628,863

Amounts falling due after more than one year

17

4,635,000

52,455,181

Company's loss for the financial year

(452,628

)

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2025 and were signed on its behalf by:

Mr L A Bedson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

33,643,946

-

33,643,946

Total comprehensive income

-

(263,325

)

(263,325

)

Balance at 31 December 2024

33,643,946

(263,325

)

33,380,621

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

33,643,946

-

33,643,946

Total comprehensive income

-

(452,628

)

(452,628

)

Balance at 31 December 2024

33,643,946

(452,628

)

33,191,318

Cash flows from operating activities

Cash generated from operations

1

12,299,791

Interest paid

(363,064

)

Net cash from operating activities

11,936,727

Cash flows from investing activities

Purchase of tangible fixed assets

(10,537,502

)

Investment in subsidiaries

(26,684,000

)

Interest received

51,918

Net cash from investing activities

(37,169,584

)

Cash flows from financing activities

New loans in year

983,000

Share issue

33,643,946

Net cash from financing activities

34,626,946

Increase in cash and cash equivalents

9,394,089

Cash and cash equivalents at beginning of period

2

-

Cash and cash equivalents at end of period

2

9,394,089

1.	RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

£

Loss before taxation

(208,964

)

Profit on disposal of fixed assets

(295,204

)

Depreciation and amortisation charges

747,567

Finance costs

363,064

Finance income

(51,918

)

554,545

Increase in trade and other debtors

(2,682,230

)

Increase in trade and other creditors

14,427,476

Cash generated from operations

12,299,791

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Period ended 31 December 2024

31.12.24

23.1.24

£

£

Cash and cash equivalents

9,398,494

-

Bank overdrafts

(4,405

)

-

9,394,089

-

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 23.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

-

9,398,494

9,398,494

Bank overdrafts

-

(4,405

)

(4,405

)

-

9,394,089

9,394,089

Debt

Debts falling due after 1 year

-

(983,000

)

(983,000

)

-

(983,000

)

(983,000

)

Total

-

8,411,089

8,411,089

1.	STATUTORY INFORMATION

Lovett 2 Care Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The directors have opted to adopt option 2 under the Companies Act 2006 with regards to the presentation of its Statement of financial position. This is to more accurately represent the prevailing funding structure of the company to shareholders and key stakeholders.

Reduced Disclosure Exemptions

-

Only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the group and the parent company would be identical.

-

No cash flow statement has been presented for the parent company;

-

No disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole.

Basis of consolidation

The group financial statements include the financial statements of the company and all its subsidiary undertakings.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

In the consolidated financial statements, intragroup shareholdings, liabilities, receivables and transactions are eliminated. Also, the results on transactions between group companies are eliminated to the extent that the results are not realised through transactions with third parties outside the group and no impairment loss is applicable. For a transaction whereby an entity has a less than a 100% interest in the selling group company, the elimination from the group result is allocated pro rata to the minority interest based on the interest of the minority in the selling group company.

Subsidiaries are all consolidated in full.

Goodwill arising on the acquisition of subsidiary undertakings which represents the excess of cost over fair value of group share of tangible assets acquired is capitalised as an intangible asset and amortised by equal instalments against profits over its expected life of 10 years.

Related party exemption

The company has taken advantage of exemption, under the 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.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Critical accounting judgements and key sources of estimation uncertainty

Preparation of the financial statements required management to make judgements and estimates.The items in the financial statements where these judgements and estimates have been made include:

Recognition of deferred tax asset: Management have recognised a deferred tax asset in the financial statements in the current year, based on detail Board approved forecasts and budgets showing future profitability.

The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the Group will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

Care home fee income is recognised in the period the resident has stayed at the care home and other care home income is recognised at the point the service has been provided to the resident.

Development income is received dependent on the stage of completion.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2024, is being amortised evenly over its estimated useful life of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Contract customers and beds are being amortised evenly over their estimated useful life of 30 months.

Brands are being amortised evenly over their estimated useful life of 14 months.

Computer software is being amortised evenly over its estimated useful life of four years.

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over estimated useful lives.

Depreciation is provided on the following basis:

Assets under construction

- No depreciation will be charged until the asset is in use

Short-term leasehold

- 10% straight line basis

Improvements to property

- 25% straight line basis

Plant and machinery

- 25% straight line basis

Fixtures and fittings

- 25% straight line basis

Computer, office and medical equipment

- 25% straight line basis

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated statement of comprehensive income.

Stamp duty land tax is being amortised evenly over period of lease.

Impairment of fixed assets

Fixed assets and goodwill are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset is tested for impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Fixed assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

Where indicators exist for a decrease in an impairment loss previously recognised for assets other than goodwill, the prior impairment loss is tested to determine whether all or part of the impairment loss should be reversed. An impairment loss is reversed on an individual impaired asset to the extent that it does not increase the carrying amount of the asset above the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment been recognised. Impairment losses on goodwill are not reversed.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.