| The Waverley Care Centre Limited |
| Strategic Report |
|
| Review of business |
The company's financial statements show a profit before taxation of £734,385 (30 June 2021 : £1,428,211). The shareholders' funds total £6,508,666 (30 June 2021: £5,855,589). The company earned a revenue of £3,387,078 (30 June 2021: £6,644,447). The comparative figures are for the 12 months period whereas the current period figures are for a period of 6 months only.
The directors considered the results achieved to be satisfactory given the difficult trading conditions due to Covid-19 and its continuous impact in the business well into 2021.
As in the previous period, the company spent heavily on Covid-19 infection control and sanitation. However the company was able to minimise the financial impact of Covid-19 by utilising various government support measures such as covid support payments for loss of revenue, Welsh government employee grants and statutory sick pay grants. |
|
| Key performance indicators |
| Rather than rely on key performance indicators the directors use monthly management accounts to monitor the business's progress and to plan future development. |
|
| Principal risks and uncertainties |
|
Covid-19
The global outbreak of Covid-19 represents a significant source of uncertainty within the wider macro economical environment, including care home sector. However with the successful rollout of covid-19 vaccinations and discovery of new medicines to treat covid-19 patients effectively, the directors believe that the worst is over and the company can look forward to better year ahead.
Loss of revenue from contracts with UK local authorities
A substantial proportion of the company's revenue derives from publicly funded bodies such as local authorities and NHS bodies. The company expects to continue to rely on the ability and willingness of these bodies to pay for the company's services. There are risks that either budget constraints or other financial pressures could cause such publicly funded bodies to allocate less money to the care home services that the company provides. To mitigate the risk the company provides services to privately funded customers and regularly assesses services provided to ensure they represent value for money. |
|
Staff recruitment and retention
Recruitment and retention in the care sector pose very real threats to the ongoing operations in the industry. The UK government has recognised this problem and initiated drive for recruitment in the care sector. Funding has been made available to drive a new generation of people to work in adult social care. Also, the government has temporarily relaxed immigration rules for overseas care workers in a bid to recruit and keep staff. The directors are confident that these measures together with the company's proactive Human Resources and Recruitment team will help to mitigate the risks of staff recruitment and retention. |
|
| This report was approved by the board on 27 March 2023 and signed on its behalf. |
|
|
|
| Mr Jacob George |
| Director |
|
|
|
| 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.
In conjunction with our walkthrough of the company’s financial close process, we confirmed our understanding of management’s going concern assessment process and ensured all key assumptions and events were considered in their assessment.
We obtained management’s going concern assessment, including review of post year end management accounts and noted that the company continues to make healthy profits. We noted that the company holds substantial cash balance at the year end and post year end. |
| 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 the audit: |
| ● |
the information given in the strategic report and the directors’ report for the financial period 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. |
|
| Matters on which we are required to report by exception |
| The extent to which the audit was considered capable of detecting irregularities, including fraud |
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk 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 and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud. |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
- obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the company operates in and how the company is complying with the legal and regulatory frameworks;
- inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud. |
Based on our understanding of the Company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the Company, which were contrary to applicable laws and regulations including fraud, and we considered that extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's opportunities for fraudulent manipulation of the financial statements (including the risk of override of control), and determined that the principal risks were related to inflated revenue and profit.
Audit procedures performed included: review of financial statement disclosures to underlying supporting documentation, review of correspondence with and reports to the regulators, enquiries of management and testing of journals and evaluating of whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud. |
| The Waverley Care Centre Limited |
| Statement of Cash Flows |
| for the period from 1 July 2021 to 31 December 2021 |
|
| Notes |
31/12/21 |
30/6/21 |
| £ |
£ |
| Operating activities |
| Profit for the period |
653,077 |
|
1,131,512 |
|
| Adjustments for: |
| Loss on sale of fixed assets |
- |
|
2,985 |
| Interest receivable |
- |
|
(39) |
| Interest payable |
- |
|
542 |
| Tax on profit on ordinary activities |
81,308 |
|
296,699 |
| Depreciation |
70,585 |
|
148,963 |
| Amortisation of goodwill |
- |
|
3,125 |
| Increase in debtors |
(751,272) |
|
(234,754) |
| Increase in creditors |
623,747 |
|
62,188 |
|
|
|
677,445 |
|
1,411,221 |
|
| Interest received |
- |
|
39 |
| Interest paid |
|
|
- |
|
(542) |
| Corporation tax paid |
- |
|
(355,126) |
|
| Cash generated by operating activities |
677,445 |
|
1,055,592 |
|
|
|
|
|
|
| Investing activities |
| Payments to acquire tangible fixed assets |
(235,742) |
|
(181,895) |
|
| Cash used in investing activities |
(235,742) |
|
(181,895) |
|
|
|
|
|
|
| Financing activities |
| Equity dividends paid |
- |
|
(1,119,726) |
|
| Cash used in financing activities |
- |
|
(1,119,726) |
|
|
|
|
|
|
| Net cash generated/(used) |
| Cash generated by operating activities |
677,445 |
|
1,055,592 |
| Cash used in investing activities |
(235,742) |
|
(181,895) |
| Cash used in financing activities |
- |
|
(1,119,726) |
|
| Net cash generated/(used) |
441,703 |
|
(246,029) |
|
| Cash and cash equivalents at 1 July |
1,329,443 |
|
1,575,472 |
| Cash and cash equivalents at 31 December |
1,771,146 |
|
1,329,443 |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
| Cash at bank |
1,771,146 |
|
1,329,443 |
|
|
|
|
|
|
|
|
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
|
|
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
|
| 2 |
Analysis of turnover |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Fees |
2,818,061 |
|
5,559,525 |
|
Covid support payments |
569,017 |
|
975,649 |
|
|
|
|
|
|
3,387,078 |
|
6,535,174 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
3,387,078 |
|
6,535,174 |
|
|
|
|
|
|
|
|
|
|
| 3 |
Operating profit |
31/12/21 |
30/6/21 |
| £ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
70,585 |
|
148,963 |
|
Amortisation of goodwill |
- |
|
3,125 |
|
Auditors' remuneration for audit services |
6,000 |
|
7,200 |
|
Key management personnel compensation (including directors' emoluments) |
|
- |
|
10,951 |
|
Carrying amount of direct cost |
121,689 |
|
182,063 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Directors' emoluments |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Emoluments |
- |
|
10,951 |
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
31/12/21 |
30/6/21 |
| Number |
Number |
|
|
Defined contribution plans |
- |
|
2 |
|
|
|
|
|
|
|
|
|
|
| 5 |
Staff costs |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Wages and salaries |
1,946,460 |
|
3,682,793 |
|
Other pension costs |
- |
|
20,000 |
|
|
|
|
|
|
1,946,460 |
|
3,702,793 |
|
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
185 |
|
177 |
|
|
|
|
|
|
185 |
|
177 |
|
|
|
|
|
|
|
|
|
|
| 6 |
Interest payable |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Bank loans and overdrafts |
- |
|
542 |
|
|
|
|
|
|
|
|
|
|
|
| 7 |
Taxation |
31/12/21 |
30/6/21 |
| £ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
148,555 |
|
271,010 |
|
Adjustments in respect of previous periods |
(33,007) |
|
- |
|
|
|
|
|
|
115,548 |
|
271,010 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
(34,240) |
|
25,689 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
81,308 |
|
296,699 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
| 31/12/21 |
30/6/21 |
| £ |
£ |
|
Profit on ordinary activities before tax |
734,385 |
|
1,428,211 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
19% |
|
19% |
|
| £ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
139,533 |
|
271,360 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
13,412 |
|
28,897 |
|
Capital allowances |
(4,390) |
|
(29,813) |
|
Other adjustments |
- |
|
566 |
|
Adjustments in respect of previous periods |
(33,007) |
|
- |
|
|
Current tax charge for period |
115,548 |
|
271,010 |
|
|
|
|
|
|
|
|
|
|
|
|
| 8 |
Intangible fixed assets |
£ |
|
Goodwill: |
|
|
Cost |
|
At 1 July 2021 |
150,000 |
|
At 31 December 2021 |
150,000 |
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 1 July 2021 |
150,000 |
|
At 31 December 2021 |
150,000 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 December 2021 |
- |
|
|
|
|
|
|
|
|
|
|
Goodwill is being written off in equal annual instalments over its estimated economic life of 20 years. |
|
|
|
|
|
|
|
|
|
| 9 |
Tangible fixed assets |
|
|
Land and buildings |
|
Motor vehicles |
|
Fixtures, fittings, tools and equipment |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
| £ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 July 2021 |
5,759,048 |
|
23,995 |
|
943,921 |
|
6,726,964 |
|
Additions |
234,302 |
|
- |
|
1,440 |
|
235,742 |
|
At 31 December 2021 |
5,993,350 |
|
23,995 |
|
945,361 |
|
6,962,706 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 July 2021 |
820,638 |
|
8,295 |
|
697,216 |
|
1,526,149 |
|
Charge for the period |
49,538 |
|
1,963 |
|
19,084 |
|
70,585 |
|
At 31 December 2021 |
870,176 |
|
10,258 |
|
716,300 |
|
1,596,734 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 December 2021 |
5,123,174 |
|
13,737 |
|
229,061 |
|
5,365,972 |
|
At 30 June 2021 |
4,938,410 |
|
15,700 |
|
246,705 |
|
5,200,815 |
|
|
|
|
|
|
|
|
|
|
|
| 10 |
Debtors |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Trade debtors |
534,968 |
|
188,917 |
|
Amounts owed by group undertakings |
|
475,355 |
|
31,769 |
|
Other debtors |
72,076 |
|
60,816 |
|
Prepayments and accrued income |
30,895 |
|
80,520 |
|
|
|
|
|
|
1,113,294 |
|
362,022 |
|
|
|
|
|
|
|
|
|
|
| 11 |
Creditors: amounts falling due within one year |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Trade creditors |
75,318 |
|
32,490 |
|
Corporation tax |
386,558 |
|
271,010 |
|
Other taxes and social security costs |
63,128 |
|
59,341 |
|
Other creditors |
363,869 |
|
263,102 |
|
Accruals and deferred income |
694,611 |
|
218,246 |
|
|
|
|
|
|
1,583,484 |
|
844,189 |
|
|
|
|
|
|
|
|
|
|
| 12 |
Deferred taxation |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Accelerated capital allowances |
158,262 |
|
192,502 |
|
|
|
|
|
|
|
|
|
|
| 31/12/21 |
30/6/21 |
| £ |
£ |
|
|
At 1 July |
192,502 |
|
166,813 |
|
(Credited)/charged to the profit and loss account |
(34,240) |
|
25,689 |
|
|
At 31 December |
158,262 |
|
192,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13 |
Share capital |
Nominal |
31/12/21 |
31/12/21 |
30/6/21 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
100 |
|
100 |
|
100 |
|
|
|
|
|
|
|
|
|
|
| 14 |
Profit and loss account |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
At 1 July |
5,855,489 |
|
5,843,703 |
|
Profit for the period |
653,077 |
|
1,131,512 |
|
Dividends |
- |
|
(1,119,726) |
|
|
At 31 December |
6,508,566 |
|
5,855,489 |
|
|
|
|
|
|
|
|
|
|
| 15 |
Dividends |
31/12/21 |
30/6/21 |
| £ |
£ |
|
|
Dividends on ordinary shares (note 14) |
- |
|
1,119,726 |
|
|
|
|
|
|
|
|
|
|
| 16 |
Charges |
|
|
The freehold property at 122/124 Plymouth Road, Penarth, CF64 5DN has been given as a first charge to Barclays Bank Plc towards the associated borrowings or the acquisition of this business by the parent company Bellavista Care Centre Ltd.
In addition, there are fixed and floating charges to Barclays Bank Plc against the properties or undertakings of the company. |
|
|
| 17 |
Related party transactions |
|
|
Other creditors include £129,990 (30 June 2021: £30,662) due to Bellavista Care (Cardiff) Limited, a company controlled by its directors.
Other debtors include £475,355 (30 June 2021: £31,769) due from Bellavista Care Centre Ltd, the company's parent company, £15,891 (30 June 2021: £nil) due from Bellavista Properties Developments Ltd, a company controlled by the directors and £8,704 (30 June 2021: £8,704) due from one of the directors.
During the period, the company was charged service fee amounting to £102,000 (30 June 2021: £235,000) by its parent company and staff cost of £98,971 (30 June 2021: £nil) by Bellavista Care (Cardiff) Ltd. |
|
|
| 18 |
Controlling party |
|
|
The company is a wholly owned subsidiary of Bellavista Care Centre Limited, a company registered in the UK. The consolidated financial statements of the group can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ. |
|
|
| 19 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
| 20 |
Legal form of entity and country of incorporation |
|
|
The Waverley Care Centre Limited is a private company limited by shares and incorporated in Wales. |
|
| 21 |
Principal place of business |
|
|
The address of the company's principal place of business is: |
|
122-124 Plymouth Road |
|
Penarth |
|
CF64 5DN |
