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

The key financial highlights are as follows:

The UK economy has been challenged by a number of significant events; the banking crisis, austerity, Brexit, ongoing international turbulence and recent legislation changes.

The social care sector faces the challenges of a growing elderly population, living longer with complex conditions whilst resources remain constrained and it remains increasingly important to find effective ways to meet those challenges. Southern Healthcare (Wessex) Ltd continues to evolve its range of strategies to do so.

Eligibility and funding of publicly commissioned care services, both from Local Authorities and from the NHS and the resources available continue to lag behind both demand and the cost of care.

Local Authorities have become increasingly restrictive both in setting care fees in general and agreeing eligibility in social care in particular, hence the incidence of ‘unmet needs’ where no support is available, is an increasing occurrence in society.

Just as the NHS has experienced intolerable increases in waiting lists in the face of rising demand and reducing capacity, the same is true of publicly funded social care provision, as a result of which, demand has substantially outstripped supply, manifesting itself in budget cutbacks, denied or withdrawn provision, as demand rises.

The Fair Cost of Care exercise in social care, announced and initiated by the Government in 2022, identified the funding gap (as widely acknowledged) between persistently low social care funding levels and the rising cost of care.

However, the Government abandoned implementation of the intended changes to the funding and eligibility criteria as widely promised at the (2024) election and / or to ‘fix’ the social care challenge.

Whilst the ratio of, and funding levels, of residents who are funded publicly versus privately, varies considerably from one geographical location to another, (generally in line with the varying level of locational affluence), it also varies in relation to the individual resources and attitude of each commissioning organisation i.e., an individual Local Authority and/or an individual Health region, (known as ‘ICB’s).

Providers therefore increasingly prioritised self-funding residents above Local Authority funded residents.

Southern Healthcare (Wessex) Ltd.’s revenue has a balance of publicly and self-funded residents.

Southern Healthcare specialises in providing support to people with high levels of dependency and complexity. The company increasingly specialises in supporting residents with more complex Dementia, more complex nursing requirements and increasingly, Residents with mental health conditions in addition to support and care needs.

Southern Healthcare delivers both significantly high value for money, a very high quality of care and quality of life for its Residents. This is increasingly important as the level of dependency and complexity of Residents increases. In term of support, increasingly high skills are needed by staff enhanced through training to enable such progression.

Nationally and globally, the Health and Social Care sectors have been significantly challenged in terms of health and social care workforce recruitment and retention. These challenges were exacerbated by the 2016 UK referendum decision to leave the EU and the subsequential ending of free movement of labour within the EU in 2020, upon which many sectors, including Health, Social Care and many other sectors, were highly dependent.

Southern Healthcare has long made team wellbeing, training and retention a key priority and has been able retain members of the team effectively. The company will continue to prioritise these aspects even more in the years ahead.

The company maintained the ‘Butterfly’ / ‘Dragonfly’ status at ‘Outstanding’ or ‘Excellent’ level following external audits by Meaningful Care Matters in July and August 2025 and attained external Eden validations at ‘Platinum’ levels in 2025 at the top level 1, which is about resident quality of life

The company continues to train extensively in complex Dementia care and anticipates that demand for these increasingly specialised services will remain robust.

A key factor in providing sustainability of its services is both the robustness of the team and the care service itself and developing a high quality of life, developing meaningful activity to maintain purpose and, working in partnership with Residents, their families, friends and the team, whose extraordinary dedication is exceptional.

In 2024 the company won Caring UK’s ‘Care Employer of the Year’, the ‘Commitment to Training and Development’ award at the same event and won the ‘Commitment to Training and Development’ award at the National Care Awards national final. The company also won Caring UK’s ‘Care Group of the Year’ in 2025.

2024/5 has also been a steady year for the company with sustained high occupancy levels, steady advances in turnover, whilst maintaining its cost base in a reasonable relationship to its turnover, despite significant wage increases, and other cost increases.

Three of the companies’ homes retain an ‘Outstanding’ rating with CQC (the regulator), with the other home rated ‘Good’ overall and ‘Outstanding’ in the ‘Responsive’ category.

The key performance indicators are:

Gross profit margin - 32% (2024; 33%)

Occupancy level - 92% (2024; 91%)

Employment costs - 63% (2024; 62%)

Future Team Retention - Southern Healthcare (Wessex) Ltd remains committed to retaining, developing skilled employees at all levels within the company to meet its stated goals, aims and business objectives and recruiting and continues to do so.

Up to date employment policies and procedures to support these objectives and continuing comprehensive training and development are significantly key parts of the strategy. All employees are required to undertake relevant statutory and discretionary further training appropriate to their individual roles and the Company’s expectations and within the specific aim of developing its people to the highest level.

Feedback - Information is gathered from all forms of review, feedback is overwhelmingly positive and continues to be so. All feedback is incorporated into its employment and practice policies and continually developed in line with the company’s goals, aims and objectives.

Facilities Improvement - The Company continues to carry out an ongoing maintenance and improvement programme to all its environments and continues to make significant investment and progress, with many additions to its facilities. A large extension is in progress at Sefton Hall due for completion in Summer 2026.

Generally - Whilst 2024/25 has been a year of challenge for all health and social care environments, it has also been a year of continued progress for Southern Healthcare.

It maintains a highly engaged staff team and maintains a high individual quality of life focus for its residents as well as delivering robustness, resilience and consistency in terms of regulatory compliance and performance.

Financially, the business continues to see consistency in its revenue, its viability as well as its reputation, and a strong demand for its services in delivering increasingly complex and specialised care, as well as quality of life for its residents.

On behalf of the board

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

The Company's principal activities are the operation of care homes for the elderly, primarily with nursing care, complex nursing care and respite care needs and for the provision of more specialist services for people with a form of dementia.

The company has four care homes and accommodates up to 168 residents.

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

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

The auditor, Hill Osborne Ltd, 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.

Qualified opinion arising from disagreement about accounting treatment

We have audited the financial statements of Southern Healthcare (Wessex) Ltd (the 'company') for the year ended 31 August 2025 which comprise the profit and loss account, 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).

The company has a policy of revaluation of its land and buildings. The last valuation took place in 2007. The timing of this valuation is not in accordance with FRS102 and is now out of date.

In our opinion, except for the effects of the matter described above, 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 qualified 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 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 in response to those risks, including obtaining appropriate audit evidence to provide a basis for our opinion.

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:

- the nature of the industry and the laws and regulations that the company must comply with, in particular regarding the Care Quality Commission

- the company's own assessment of the risks that irregularities may occur as a result of fraud or error

- results of our enquiries of management

Our procedures to respond to the risks identified included the following:

- reviewing the financial statement disclosures

-enquiring of management

-reviewing the Care Quality Commission reports

-reviewing insurance certificates

-in addressing the risk of fraud through management override we have assessed whether the judgements made in making accounting estimates are indicative of a potential bias and tested the appropriateness of journal entries.

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.

Southern Healthcare (Wessex) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 11 Plantation Terrace, Dawlish, Devon, EX7 9DS.

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 and to include investment properties and certain financial instruments 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.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.

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

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.

No depreciation is being charged on land and buildings because the residual value is considered to be close to the current carrying value such that total depreciation would not be material.

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.

Stocks consist of medical supplies and PPE stated at cost, along with estimates for food, cleaning supplies and laundry.

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 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 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.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

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.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

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.

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.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

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

Tangible and intangible assets are written off over their estimated useful life. Calculation of this requires the directors' to make judgements regarding the rates at which these assets are written down and constantly review the carrying values of these assets in the accounts to ensure that they are reasonable.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The land and buildings in the accounts are valued on an existing use basis having regard for trading potential. The valuation obtained by the directors' was not a suitable valuation for the purposes of the accounts. The last valuation is out of date and it has not been possible to establish a fair carrying value.

The fee income debtor is a manual calculation and requires the directors' to assess each room in each home and establish the correct amounts owing.

An analysis of the company's turnover is as follows:

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:

Freehold land and buildings with a carrying amount of £7,895,001 (2024 - £7,801,375) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

The freehold land and buildings are valued on an existing use basis by a firm of chartered surveyors. A re-valuation last took place in November 2007 and was undertaken by Savills Commercial Ltd.

If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

Other debtors includes directors' overdrawn loan accounts amounting to £1,275,325

The corporation tax is not recoverable until nine months following the end of the financial year in which the directors overdrawn loan account is repaid.

The long-term loans are secured by fixed charges over the company's freehold and leasehold properties.

The bank loan was refinanced on 11 July 2024 and is repayable over a five year term by quarterly instalments leaving a residual settlement balance of £3,416,502 at the termination date. The interest rate on the loan is 2.95% plus base rate.

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

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.

The remuneration of key management personnel is as follows.

During the year the company entered into the following transactions with related parties:

At the year end, Southern Healthcare Properties Ltd, a company under common control, owed Southern Healthcare (Wessex) Limited a sum amounting to £810,761 (2024; £814,817).

Dividends totalling £0 (2024 - £0) were paid in the year in respect of shares held by the company's directors.

A director of the company has given a personal guarantee of £150,000 in favour of the company's bankers.

Interest free loans have been granted by the company to its directors as follows: