The directors present the strategic report for the year ended 31 August 2025.

Fair review of the business

The Halliwell Group of companies offers "clinically informed practice" through the medium of education, fostering and residential care. Our objective is to enhance the psychological health of children within the care system. Our Restorative Parenting® Recovery Programme is a therapeutic re-parenting programme which focuses on addressing the emotional, behavioural, social, and developmental needs of the child.  Our approach sets us apart from standard residential childcare providers in that it is clinically informed in every aspect of the child’s lived therapeutic experience with the specific aim of helping traumatised children achieve psychological wellbeing.

The Restorative Parenting® Recovery Programme operates on an environmental, interpersonal, and individual level. Psychological growth and recovery are facilitated through the applied understanding of childhood trauma and attachment needs, Positive Behaviour Support and a focus on engagement and achievement through active participation in education and a wide range of activities. Our practice is guided by knowledge and experience of the power of the narrative and reframing, solution focused approaches and is responsive, consistent, and attuned to the child’s needs.

The progress of individual children is monitored monthly through the Restorative Parenting Recovery Index and using additional normed psychological scales where appropriate. Detailed discussion of children’s progress takes place at monthly consultations with a psychologist and additional input is provided on a flexible basis by Halliwell’s clinical team, which includes Psychiatry and Clinical Psychology.

We operate 4 homes in the Northwest of England alongside our sister company Halliwell Home (Midlands Division) who operate 3 in the Midlands area. A plan is now in place to open one additional home in the Stoke area in 2027.

Results for the year ended 31st August 2025

The directors are pleased to report a successful year for the financial year to 31st August 2025. Halliwell Homes Limited achieved high levels of occupancy, stable staff teams with reducing agency costs and a good, consistent level of service quality. We are also pleased to continue to report successful outcomes for the children placed with us. We have an average programme completion rate of more than 90%, meaning that more than 4 out of five of the children are currently on track to move out of our programme and be ready for a foster family placement, meeting the objectives of our Restorative Parenting Programme.

Key Performance Indicators

Adjusted EBITDA for the period was £2,442k and 21 children made a transition from the programme having sufficiently recovered from childhood trauma whilst placed with Halliwell. 100% Staffing in the homes was also achieved by the end of the period.

The Board of Directors expect the business to run at >92% total occupancy in the future given the large number of children in the looked after sector that require a specialist placement.

A primary risk for the business in the upcoming period is the ongoing staffing shortage within the sector. In order achieve the expected outcomes for the children on the programme, a stable team of highly qualified and experienced practitioners is required. However, while the sector has historically had a high staff turnover over the last 12 months Halliwell has consistently achieved and maintained full staffing and plans to overstaff during 2026 in preparation for the opening of a new home in the Midlands region.

The Halliwell Group that Halliwell Homes Limited is part of have and will continue to invest significantly in the recruitment, development and retention of the staff team to ensure that full staffing is maintained, and any risk is mitigated. Our in-house clinical and Learning and Development teams provide an extensive and in-depth programme of continuous professional development for our practitioners as well as clinical oversight and support. This has enabled Halliwell to achieve 100% staffing during this period and to support significant positive outcomes for the children in the looked after system. We intend to continue and build on our focus and investment in the development of our practitioners in the coming year, with the goal of achieving and maintaining full staffing and continuing to further improve the length of time that they stay with the company.

The restructuring of Halliwell to become an Employee Ownership Trust during 2022 has had a positive effect on staff recruitment and retention, with Halliwell achieving staffing capacity well above the average in sector which will support achieving and maintaining high occupancy levels in the coming year. It will also enable Halliwell to offer greater engagement opportunities for all employees in the development of the organisation going forward as well as greater benefits and rewards when the business performs well.

This structure allows Halliwell to most closely align the best interests of the children in its care, our local authority customers and our skilled and committed staff team, meaning the business is well placed to deliver its service objectives and perform successfully financially.

All other risks are managed day to day in the normal course of business.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 August 2025.

The principal activity of the company continued to be that of education, fostering and residential care for children.

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

Ordinary dividends were paid amounting to £3,400,000. The directors do not recommend payment of a further dividend.

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

The auditor, BK Plus Audit Limited, formerly Geens Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

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 Halliwell Homes Limited (the 'company') for the year ended 31 August 2025 which comprise the statement of comprehensive income, the balance sheet, 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 August 2025 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.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management and from our knowledge and experience of the client and businesses in similar sectors;

• we assessed the extent of compliance with the laws and regulations identified through making enquiries of management and inspecting any available legal correspondence; and

• the audit team were in regular communication in relation to laws and regulations and potential instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias: and

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• enquiring of management as to actual and potential litigations and claims;

• reviewing legal and professional expenses for ongoing litigation work: and

• reviewing correspondence with HMRC.

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. 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 also 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 profit and loss account 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.

Halliwell Homes Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pearce House, 80 Cawdor Street, Eccles, Manchester, M30 0QF.

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 the revaluation of freehold properties at fair value. The principal accounting policies adopted are set out below.

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 is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

The company recognises revenue when the amount of revenue can be measured reliably and when it is probable future economic benefits will flow to the entity.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 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:

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:

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.

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.

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.

The company 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 company's balance sheet 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.

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.

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.

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 and loans from fellow group companies , 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.

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 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 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 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 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 when the company has 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.

The costs of short-term employee benefits are recognised as a liability and an expense.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rentals payable under operating leases are charged to profit or loss on a straight line basis over the term of the relevant lease.

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

Their aggregate remuneration comprised:

Redundancy benefits paid in the year totalled £131,061, in 2024 this was £33,000 (3 employees).

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2024 - 4).

Directors' remuneration includes termination benefits paid to a director of £131,061.

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:

Land and buildings with a carrying amount of £2,975,160 (2024 - £3,035,960) have been pledged to secure borrowings of Halliwell Care Holding Limited. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

Land and buildings were last revalued at 24th July 2024 by Christie & Co, who are independent valuers, not connected with the company, on the basis of market value. The valuation was undertaken in accordance with the Royal Institute of Chartered Surveyors Valuation Standards and was based on recent market transactions on arms length terms for similar properties.

If land and buildings had been measured using the cost model the carrying amounts would have been as follows:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

Bank Loans

The company has charges over its assets in the form of debentures as senior first-ranking security for the bank loans of £12,674,106 (2024 - £9,479,167) held by parent company Halliwell Care Holding Limited. These bank loans are secured on all the assets of Halliwell Homes Limited and fellow group undertaking Halliwell Homes (Midlands Division) Limited, including (without limitation) a legal mortgage of the land and buildings and a floating charge over all other assets.

Deferred consideration

The group undertook a restructuring on 24th May 2022 whereby the former shareholders of the Halliwell Homes Group sold their shares to Halliwell Homes Employee Ownership Trust. Halliwell Care Holding Limited made a contribution to the trust to fund the initial consideration. The Halliwell Homes Group companies are committed to funding quarterly contributions to cover deferred consideration and accrued interest to the former shareholders. As at 31 August 2024 the amount of deferred consideration due was £7.8m (2024 - £11.2m) plus interest accrued.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The group as taken advantage of the exemption provided in Financial Reporting Standards 102. Disclosures need not be given of transactions entered in to between two or members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.

The amounts owed to directors of the company at the year end was £nil (2024 - £nil).

The immediate parent company is Halliwell Care Holding Limited, a company registered in England and the ultimate controlling party is Halliwell Homes EOT Trust which owns 51% of the share capital of Halliwell Care Holding Limited.