REGISTERED NUMBER: 02607541 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2025

for

St. Michael's Homes Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

17

DIRECTORS:

S P Watson

P J Watson

Miss C N Watson

SECRETARY:

Miss C N Watson

REGISTERED OFFICE:

Dudbrook Hall Dudbrook Road

Kelvedon Common

Brentwood

Essex

CM14 5TQ

REGISTERED NUMBER:

02607541 (England and Wales)

AUDITORS:

Sygma Chartered Accountants

1 Sopwith Crescent

Wickford

Essex

SS11 8YU

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

REVIEW OF BUSINESS

St Michael's Homes has maintained strong occupancy across both care homes throughout the 2025 financial year. Year-on-year turnover has increased steadily, helping the company manage some of the highest inflationary pressures and operating costs seen for many years.

Dudbrook House Care Centre, now in its second year of operation, has continued to maintain good occupancy levels. Across both homes, average occupancy has been 94%, with some months closer to 97%, supporting the overall increase in turnover.

Howard Lodge currently holds an "Outstanding" CQC rating, and we expect a further inspection in due course. Dudbrook House was rated "Good" in 2024, and we will continue to focus on achieving an "Outstanding" rating at its next inspection.

Expenditure has continued to increase, particularly in relation to wages, National Insurance contributions, utilities and other core operating costs, which has impacted profitability. We are also continuing a refurbishment programme at Howard Lodge, as the building is now over 11 years old.

Staffing vacancies have remained low, reducing the company's reliance on costly agency staff. Staff wages increased during the year, largely due to National Minimum Wage uplifts, resulting in an overall increase of approximately 15%.

Residents' fees were increased during the year to help offset higher wage costs. Cost pressures are expected to continue into 2026, reflecting the need to maintain staffing levels, meet National Minimum Wage requirements and accommodate further increases in National Insurance contributions.

Throughout the year, the Directors' focus has been to maintain high occupancy, continue to deliver excellent quality of care for residents, and uphold the company's strong reputation within the community. The Directors have decided to repay, as far as possible, any outstanding debt while maintaining healthy cash flow levels.

The results for the year and the financial position at year-end were considered satisfactory by the Directors given the current trading environment.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors continue to regularly review the risks associated with the business and take appropriate action to mitigate those within their control. All laws and regulations are strictly adhered to with frequent visits from regulatory bodies.

KEY PERFORMANCE INDICATORS

The directors regularly review key performance indicators including the turnover achieved against the number of employees and resident levels.

Direct wages as a percentage of sales was 54.21% compared to 54.72% last year. This has in a very similar gross margin compared with the previous year.

Resident levels remain excellent with waiting lists for both homes. This has improved turnover.

The directors believe that continued monitoring of these items will help increase the company's profitability.

ON BEHALF OF THE BOARD:

S P Watson - Director

18 June 2026

The directors present their report with the financial statements of the company for the year ended 31 December 2025.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2025 to the date of this report.

S P Watson

P J Watson

Miss C N Watson

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the 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 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;

-	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.

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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Sygma Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S P Watson - Director

18 June 2026

Opinion

We have audited the financial statements of St. Michael's Homes Limited (the 'company') for the year ended 31 December 2025 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 31 December 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 Auditors' 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 directors are responsible for the other information. The other information comprises the information in the 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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

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:

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

- we obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, International Financial Reporting Standards, and UK taxation legislation.

- we obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.

- we assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.

- we inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.

- based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.

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.

Alan Brading FCA (Senior Statutory Auditor)

for and on behalf of Sygma Chartered Accountants

1 Sopwith Crescent

Wickford

Essex

SS11 8YU

18 June 2026

TURNOVER

10,297,772

9,028,267

Cost of sales

6,960,009

6,097,482

GROSS PROFIT

3,337,763

2,930,785

Administrative expenses

1,807,560

1,631,629

OPERATING PROFIT

4

1,530,203

1,299,156

Interest receivable and similar income

38,354

66,752

1,568,557

1,365,908

Interest payable and similar expenses

5

528,404

617,907

PROFIT BEFORE TAXATION

1,040,153

748,001

Tax on profit

6

340,392

19,943

PROFIT FOR THE FINANCIAL YEAR

699,761

728,058

PROFIT FOR THE YEAR

699,761

728,058

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

699,761

728,058

FIXED ASSETS

Tangible assets

7

14,673,368

14,924,368

CURRENT ASSETS

Debtors

8

1,156,414

613,726

Cash at bank and in hand

2,326,975

1,600,786

3,483,389

2,214,512

CREDITORS

Amounts falling due within one year

9

1,292,933

577,532

NET CURRENT ASSETS

2,190,456

1,636,980

TOTAL ASSETS LESS CURRENT LIABILITIES

16,863,824

16,561,348

CREDITORS

Amounts falling due after more than one year

10

(7,680,201

)

(8,283,093

)

PROVISIONS FOR LIABILITIES

14

(555,123

)

(349,516

)

NET ASSETS

8,628,500

7,928,739

CAPITAL AND RESERVES

Called up share capital

15

40,000

40,000

Retained earnings

16

8,588,500

7,888,739

SHAREHOLDERS' FUNDS

8,628,500

7,928,739

The financial statements were approved by the Board of Directors and authorised for issue on 18 June 2026 and were signed on its behalf by:

S P Watson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2024

40,000

7,160,681

7,200,681

Changes in equity

Total comprehensive income

-

728,058

728,058

Balance at 31 December 2024

40,000

7,888,739

7,928,739

Changes in equity

Total comprehensive income

-

699,761

699,761

Balance at 31 December 2025

40,000

8,588,500

8,628,500

Cash flows from operating activities

Cash generated from operations

1

1,652,515

1,066,712

Interest paid

(528,404

)

(617,907

)

Tax paid

(16,439

)

(25,204

)

Net cash from operating activities

1,107,672

423,601

Cash flows from investing activities

Purchase of tangible fixed assets

(84,784

)

(58,272

)

Interest received

38,354

66,752

Net cash from investing activities

(46,430

)

8,480

Cash flows from financing activities

New loans in year

-

103,332

Loan repayments in year

(335,053

)

(135,966

)

Amount introduced by directors

-

25,000

Net cash from financing activities

(335,053

)

(7,634

)

Increase in cash and cash equivalents

726,189

424,447

Cash and cash equivalents at beginning of year

2

1,600,786

1,176,339

Cash and cash equivalents at end of year

2

2,326,975

1,600,786

1.	RECONCILIATION OF PROFIT FOR THE FINANCIAL YEAR TO CASH GENERATED FROM OPERATIONS

31.12.25

31.12.24

£

£

Profit for the financial year

699,761

728,058

Depreciation charges

335,784

335,142

Finance costs

528,404

617,907

Finance income

(38,354

)

(66,752

)

Taxation

340,392

19,943

1,865,987

1,634,298

Increase in trade and other debtors

(542,688

)

(189,812

)

Increase/(decrease) in trade and other creditors

329,216

(377,774

)

Cash generated from operations

1,652,515

1,066,712

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:

Year ended 31 December 2025

31.12.25

1.1.25

£

£

Cash and cash equivalents

2,326,975

1,600,786

Year ended 31 December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

1,600,786

1,176,339

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.25

Cash flow

At 31.12.25

£

£

£

Net cash

Cash at bank and in hand

1,600,786

726,189

2,326,975

1,600,786

726,189

2,326,975

Debt

Debts falling due within 1 year

-

(267,838

)

(267,838

)

Debts falling due after 1 year

(8,283,093

)

602,892

(7,680,201

)

(8,283,093

)

335,054

(7,948,039

)

Total

(6,682,307

)

1,061,243

(5,621,064

)

1.	STATUTORY INFORMATION

St. Michael's Homes 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 Company 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.

Turnover

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

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

not provided

Improvements to property

-

2% on cost

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the 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.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

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

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

31.12.25

31.12.24

£

£

Wages and salaries

6,000,823

5,331,313

Social security costs

697,109

499,347

Other pension costs

121,474

99,728

6,819,406

5,930,388

The average number of employees during the year was as follows:

31.12.25

31.12.24

Administration

85

77

Care

137

135

222

212

31.12.25

31.12.24

£

£

Directors' remuneration

151,220

146,066

Directors' pension contributions to money purchase schemes

1,827

1,321

4.	OPERATING PROFIT

The operating profit is stated after charging:

31.12.25

31.12.24

£

£

Other operating leases

25,963

16,032

Depreciation - owned assets

335,784

335,142

Auditors' remuneration

7,500

7,000

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.25

31.12.24

£

£

Bank interest on loans and

overdrafts

528,404

617,907

528,404

617,907

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.12.25

31.12.24

£

£

Current tax:

UK corporation tax

134,785

16,439

Deferred tax

205,607

3,504

Tax on profit

340,392

19,943

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

31.12.25

31.12.24

£

£

Profit before tax

1,040,153

748,001

Profit multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 24.600%)

260,038

184,008

Effects of:

Expenses not deductible for tax purposes

1,990

354

Capital allowances in excess of depreciation

(27,619

)

(18,981

)

Utilisation of tax losses

(99,624

)

(145,438

)

Deferred tax adjustment

205,607

-

Total tax charge

340,392

19,943

7.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

Freehold

to

and

Motor

property

property

fittings

vehicles

Totals

£

£

£

£

£

COST

At 1 January 2025

1,594,688

14,203,918

910,959

26,876

16,736,441

Additions

-

59,250

23,534

2,000

84,784

At 31 December 2025

1,594,688

14,263,168

934,493

28,876

16,821,225

DEPRECIATION

At 1 January 2025

-

1,170,553

635,081

6,439

1,812,073

Charge for year

-

285,263

44,912

5,609

335,784

At 31 December 2025

-

1,455,816

679,993

12,048

2,147,857

NET BOOK VALUE

At 31 December 2025

1,594,688

12,807,352

254,500

16,828

14,673,368

At 31 December 2024

1,594,688

13,033,365

275,878

20,437

14,924,368

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.25

31.12.24

£

£

Trade debtors

114,040

374,478

Other debtors

993,361

203,397

Prepayments

49,013

35,851

1,156,414

613,726

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.25

31.12.24

£

£

Bank loans and overdrafts (see note 11)

267,838

-

Trade creditors

102,441

87,375

Tax

134,785

16,439

Social security and other taxes

167,998

121,163

Other creditors

486,321

224,523

Wages and salaries control

125,150

119,632

Accrued expenses

8,400

8,400

1,292,933

577,532