Little Elms Daycare Nursery Pro Hold Ltd - Limited company accounts 23.2

REGISTERED NUMBER: 08713949 (England and Wales)

LITTLE ELMS DAYCARE NURSERIES PROPERTY

HOLDING COMPANY LIMITED

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2023

Page

Company information

1

Group strategic report

2

Report of the directors

3

Report of the independent auditors

4

Consolidated income statement

7

Consolidated other comprehensive income

8

Consolidated balance sheet

9

Company balance sheet

10

Consolidated statement of changes in equity

11

Company statement of changes in equity

12

Consolidated cash flow statement

13

Notes to the consolidated cash flow statement

14

Notes to the consolidated financial statements

15

DIRECTORS:

M Lancaster

S Lancaster

REGISTERED OFFICE:

29 Beckenham Road

Beckenham

Kent

BR3 4PR

REGISTERED NUMBER:

08713949 (England and Wales)

AUDITORS:

Berringers LLP

Chartered Accountants

and Statutory Auditors

Lygon House

50 London Road

Bromley

Kent

BR1 3RA

The directors present their strategic report of the company and the group for the year ended 31 May 2023.

REVIEW OF BUSINESS

The principal activity of the group during the year under review was that of the daycare nursery services.

RESULTS

The results for the year and financial position of the company and the group are shown in the annexed financial statements.

Group turnover has increased from £7,284,019 in 2022 to £8,190,898.

The post tax group profit for the year stood at £789,405 compared to £676,232 in 2022.

Net assets have increased to £3,073,485 from £3,015,080.

KEY PERFORMANCE INDICATORS

There are key performance indicators to be considered, both financial and non-financial; An increase in turnover, improvement in efficiencies and a happier workforce.

PRINCIPAL RISKS AND UNCERTAINTIES

The group operates in a sophisticated market and its performance is related to ensuring it provides a high quality of childcare to satisfy all of its customers requirements.

The main financial risks arising from the group's activities are credit risk, interest rate risk and liquidity risk. These are monitored by the directors.

ON BEHALF OF THE BOARD:

M Lancaster - Director

29 February 2024

The directors present their report with the financial statements of the company and the group for the year ended 31 May 2023.

DIVIDENDS

The total distribution of dividends for the year ended 31 May 2023 will be £ 731,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 June 2022 to the date of this report.

M Lancaster

S Lancaster

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group strategic report, the Report of the directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Berringers LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Lancaster - Director

29 February 2024

Opinion

We have audited the financial statements of Little Elms Daycare Nurseries Property Holding Company Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise the Consolidated income statement, Consolidated other comprehensive income, Consolidated balance sheet, Company balance sheet, Consolidated statement of changes in equity, Company statement of changes in equity, Consolidated cash flow statement and Notes to the consolidated cash flow statement, Notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2023 and of the group's 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

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

-	the Group strategic report and the Report of the directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of directors' responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and error, we considered the following:

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

- results of our enquiries to management about their own assessment of the risks of fraud and error;

- the matters discussed among the audit engagement team regarding how and where fraud may occur in the financial statements and any potential indicators of fraud.

Our procedures to respond to risk include the following:

- reviewing the financial statement disclosures and testing to supporting documentation;

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

- addressing the risk of fraud and error through management override of controls, testing the appropriateness of journals, assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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.

Paul Allan BSocSc FCA (Senior Statutory Auditor)

for and on behalf of Berringers LLP

Chartered Accountants

and Statutory Auditors

Lygon House

50 London Road

Bromley

Kent

BR1 3RA

29 February 2024

TURNOVER

8,190,898

7,284,019

Cost of sales

4,233,972

3,880,633

GROSS PROFIT

3,956,926

3,403,386

Administrative expenses

2,871,563

2,560,531

1,085,363

842,855

Other operating income

500

46,151

OPERATING PROFIT

4

1,085,863

889,006

Interest receivable and similar income

30,138

30,145

1,116,001

919,151

Interest payable and similar expenses

5

137,098

80,547

PROFIT BEFORE TAXATION

978,903

838,604

Tax on profit

6

189,498

162,372

PROFIT FOR THE FINANCIAL YEAR

789,405

676,232

Profit attributable to:

Owners of the parent

789,405

676,232

PROFIT FOR THE YEAR

789,405

676,232

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

789,405

676,232

Total comprehensive income attributable to:

Owners of the parent

789,405

676,232

FIXED ASSETS

Tangible assets

9

4,561,688

2,994,434

Investments

10

-

-

4,561,688

2,994,434

CURRENT ASSETS

Debtors

11

8,398,955

6,422,202

Cash at bank and in hand

865,183

1,248,807

9,264,138

7,671,009

CREDITORS

Amounts falling due within one year

12

8,151,751

4,992,032

NET CURRENT ASSETS

1,112,387

2,678,977

TOTAL ASSETS LESS CURRENT LIABILITIES

5,674,075

5,673,411

CREDITORS

Amounts falling due after more than one year

13

(2,590,590

)

(2,648,331

)

PROVISIONS FOR LIABILITIES

17

(10,000

)

(10,000

)

NET ASSETS

3,073,485

3,015,080

CAPITAL AND RESERVES

Called up share capital

18

1,522,202

1,522,202

Retained earnings

19

1,551,283

1,492,878

SHAREHOLDERS' FUNDS

3,073,485

3,015,080

The financial statements were approved by the Board of Directors and authorised for issue on 29 February 2024 and were signed on its behalf by:

M Lancaster - Director

S Lancaster - Director

FIXED ASSETS

Tangible assets

9

2,048,720

1,984,920

Investments

10

1,522,600

1,522,500

3,571,320

3,507,420

CURRENT ASSETS

Debtors

11

4,898,335

3,795,254

Cash at bank

144

15,784

4,898,479

3,811,038

CREDITORS

Amounts falling due within one year

12

4,307,278

3,091,802

NET CURRENT ASSETS

591,201

719,236

TOTAL ASSETS LESS CURRENT LIABILITIES

4,162,521

4,226,656

CREDITORS

Amounts falling due after more than one year

13

2,571,365

2,648,331

NET ASSETS

1,591,156

1,578,325

CAPITAL AND RESERVES

Called up share capital

18

1,522,202

1,522,202

Retained earnings

68,954

56,123

SHAREHOLDERS' FUNDS

1,591,156

1,578,325

Company's profit for the financial year

743,831

1,169,121

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 29 February 2024 and were signed on its behalf by:

M Lancaster - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2021

1,522,202

1,978,146

3,500,348

Changes in equity

Dividends

-

(1,161,500

)

(1,161,500

)

Total comprehensive income

-

676,232

676,232

Balance at 31 May 2022

1,522,202

1,492,878

3,015,080

Changes in equity

Dividends

-

(731,000

)

(731,000

)

Total comprehensive income

-

789,405

789,405

Balance at 31 May 2023

1,522,202

1,551,283

3,073,485

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2021

1,522,202

48,502

1,570,704

Changes in equity

Dividends

-

(1,161,500

)

(1,161,500

)

Total comprehensive income

-

1,169,121

1,169,121

Balance at 31 May 2022

1,522,202

56,123

1,578,325

Changes in equity

Dividends

-

(731,000

)

(731,000

)

Total comprehensive income

-

743,831

743,831

Balance at 31 May 2023

1,522,202

68,954

1,591,156

Cash flows from operating activities

Cash generated from operations

1

2,701,038

1,818,167

Interest paid

(137,098

)

(80,547

)

Tax paid

(162,366

)

(257,698

)

Net cash from operating activities

2,401,574

1,479,922

Cash flows from investing activities

Purchase of tangible fixed assets

(1,651,155

)

(176,804

)

Interest received

30,138

30,145

Net cash from investing activities

(1,621,017

)

(146,659

)

Cash flows from financing activities

Loan repayments in year

(126,066

)

(238,980

)

New hire purchase

28,394

-

Hire purchase repayments in year

(4,167

)

-

Amount withdrawn by directors

(331,342

)

421

Equity dividends paid

(731,000

)

(1,161,500

)

Net cash from financing activities

(1,164,181

)

(1,400,059

)

Decrease in cash and cash equivalents

(383,624

)

(66,796

)

Cash and cash equivalents at beginning of year

2

1,248,807

1,315,603

Cash and cash equivalents at end of year

2

865,183

1,248,807

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

2023

2022

£

£

Profit before taxation

978,903

838,604

Depreciation charges

83,900

89,806

Finance costs

137,098

80,547

Finance income

(30,138

)

(30,145

)

1,169,763

978,812

Increase in trade and other debtors

(1,645,411

)

(172,169

)

Increase in trade and other creditors

3,176,686

1,011,524

Cash generated from operations

2,701,038

1,818,167

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 May 2023

31.5.23

1.6.22

£

£

Cash and cash equivalents

865,183

1,248,807

Year ended 31 May 2022

31.5.22

1.6.21

£

£

Cash and cash equivalents

1,248,807

1,315,603

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.6.22

Cash flow

At 31.5.23

£

£

£

Net cash

Cash at bank and in hand

1,248,807

(383,624

)

865,183

1,248,807

(383,624

)

865,183

Debt

Finance leases

-

(24,226

)

(24,226

)

Debts falling due within 1 year

(192,263

)

49,100

(143,163

)

Debts falling due after 1 year

(2,648,331

)

76,966

(2,571,365

)

(2,840,594

)

101,840

(2,738,754

)

Total

(1,591,787

)

(281,784

)

(1,873,571

)

1.	STATUTORY INFORMATION

Little Elms Daycare Nurseries Property Holding Company Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Basis of consolidation

The consolidated financial statements, incorporate the financial statements of the company and all of its subsidiaries for the year ended 31 May 2023.

The group accounts for the year have been prepared under the acquisition accounting method.

Going concern

After reviewing the company's forecasts and projections, the directors have reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its consolidated financial statements.

The directors have reviewed the post year end financial information available at the time of approving these financial statements, giving consideration to the worldwide coronavirus pandemic (COVID 19), and have concluded that the financial statements should be prepared on a going concern basis.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenditures during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. Management do not consider that there is significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period.

Turnover

Turnover is attributable to the principal activity of the group, and relates to nursery fees received, which are recognised in the profit and loss account by reference to the period they relate to. Fees received in advance are included within deferred income and are released to the profit and loss account once the group has fulfilled its obligations to the customer.

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

Short leasehold

-

Straight line over 10 years

Improvements to property

-

not provided, over period of lease and Straight line over 10 years

Furniture and equipment

-

20% on cost, 20% on reducing balance and at varying rates on cost

Fixtures and fittings

-

20% on cost and 20% on reducing balance

The properties and improvements to properties are included in the financial statements at valuation provided by the recent purchases of the properties by the company. The directors have measured properties held by the companies that are rented to other group members by reference to cost, rather than fair value.

No depreciation is provided in respect of the freehold properties. This departure from the requirements of the Companies Act 2006, for all properties to be depreciated, is, in the opinion of the directors, necessary for the financial statements to give a true and fair view in accordance with applicable accounting standards as the properties are included in the financial statements at the appropriate value. The properties will maintain a long useful economic life and residual value through the policy of regular maintenance and repair (charges for which are recognised in the profit and loss account) such that the assets are kept to the previously assessed levels.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

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.

Investments

Investments are stated at cost less any provision for a permanent diminution in value.

3.	EMPLOYEES AND DIRECTORS

2023

2022

£

£

Wages and salaries

4,417,251

3,974,606

Social security costs

463,971

393,976

4,881,222

4,368,582

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

2023

2022

Nursery

266

228

Administration

24

22

290

250

2023

2022

£

£

Directors' remuneration

61,116

26,427

4.	OPERATING PROFIT

The operating profit is stated after charging:

2023

2022

£

£

Depreciation - owned assets

83,901

89,806

Auditors remuneration

15,409

15,798

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2023

2022

£

£

Bank loan interest

137,098

80,547

6.

TAXATION

Analysis of the tax charge

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

2023

2022

£

£

Current tax:

UK corporation tax

189,498

162,366

Under provision in prior year

-

6

Tax on profit

189,498

162,372