PROGRESS_SCHOOLS_LIMITED - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

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

Progress Schools Limited is a private company limited by shares incorporated in England and Wales. The registered office is Switch House, Suite B2, First Floor, Northern Perimeter Road, Bootle, Liverpool, L30 7PT.

The current reporting period represents a 16-month period to 31 July 2023. The period has been extended to bring the accounting year end in line with the academic year and that of the wider group. As a result of this, the comparative amounts shown in these financial statements (including the related notes) are not entirely comparable.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’ Compensation for key management personnel.

The ultimate UK parent is Progress Group Holdings Limited, a Company registered in England & Wales. Consolidated financial statements are prepared, in which the Company is included. These financial statements can be obtained from Switch House Suite B2, First Floor Northern Perimeter Road, Bootle, United Kingdom, L30 7PT.

Change in basis of accounting

The Company deregistered from VAT at the start of the financial period. Deregistration from a tax is not considered to be a change in accounting policy (requiring a prior year adjustment and other restatement disclosures in the prior year financial statements) but is considered a change in basis of accounting. In all prior years the company was formally VAT registered with HMRC and its comparative financial statements continue to be presented on the net cost basis of accounting for a business which is registered for VAT. Following a voluntarily disclosure by the Company in the period, HMRC deregistered the Company for VAT and from this date all figures are accounted for gross of VAT. Amounts received from HMRC during the period, refunding the company all historically paid (and reclaimed) VAT are disclosed as exceptional items in the current year financial statements (as detailed in note 3).

These financial statements are prepared on the going concern basis. At the time of approving the financial statements, the directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern.

With the support of its Holding Company, beneficial owner and main funder, including an increase and extension of funding agreements during the period, the Directors believe the Company has adequate resources to continue in operational existence for a period of at least 12 months following the approval of the financial statements. Thus the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The material uncertainty in question relates to a number of inadequate Ofsted inspections which were received in both the current and prior periods. The Directors note the significance of these findings and their impact on the Company both operationally and financially, but are confident in the plans in place to implement improvements to return these schools to a 'Good' rating. It must be noted that further inspections since the year end have confirmed improved ratings in some schools from 'Inadequate' to 'Requires Improvement' and from 'Requires Improvement' to 'Good'. It must also be noted that a number of schools have retained their 'Good' rating throughout the period. During this period, the Company is unable to open any new school premises and has revised back its growth plans for a further 12 months. With the support of its Holding Company and beneficial owner, the Directors confirm the Company will be able to continue in existence for a period of at least 12 months following the date of approval of the financial statements. Should further inadequate reports be received in the subsequent 12 months, this may have a further significant impact upon going concern, however this cannot be reliably estimated at this period of time and the Directors continue to devote time and efforts to improving the school provision.

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, inclusive of VAT, following VAT deregistration in the year. Turnover in the comparative period is disclosed exclusive of VAT in accordance with the VAT registration in the prior year.

Revenue from a contract to provide services is recognised in the period in which the services are provided, generally across the academic year from 1 September to 31 July each year. Revenue for other ancillary services is recognised at the point of provision of the services, generally in-line with the school term to which it relates.

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 five years.

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

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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.

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.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

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.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

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

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

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.

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 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 directors in preparing these financial statements considered the useful economic lives of the company's tangible and intangible fixed assets when determining appropriate depreciation and amortisation rates as disclosed in the accounting policies and determine if there are any signs of impairment.

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

On 30 April 2022 Progress Schools Limited deregistered for VAT and submitted a notice of error disclosure dated 17 May 2022. In response to this, HMRC repaid a lump sum that was inclusive of output and input VAT paid/claimed in prior periods.

The adjustments detailed above represent the input VAT on capital items purchased between July 2020 and March 2022 and the accumulated deprecation which would have been charged on this cost, to accurately reflect the net book value of the assets to date, on a VAT inclusive basis.

Bank loans due within one year of £10,000 (2022 - £9,386) are in relation to the Bounce Back Loan Scheme (BBLS). The total outstanding balance of the loan is £28,333 (2022 - £40,703) which is unsecured and is repayable over five years with the last repayment due in 2026. The loan incurs fixed interest of 2.50% per annum with the first year interest covered by the UK government in the form of a Business Interruption Payment.

Other creditors include amounts owed under hire purchase agreements which are secured upon the assets to which they relate.

Bank loans falling due after more than one year of £16,188 (2022: £31,317) are in relation to the Bounce Back Loan Scheme (BBLS). The total outstanding balance of the loan is £28,333 (2022: £40,703) and is unsecured, it is repayable over five years with the last repayment due in 2026. The loan incurs fixed interest of 2.50% per annum with the first year interest covered by the UK government in the form of a Business Interruption Payment.

The remaining balance of £294,000 (2022: £294,000) is part of a group loan facility provided by the ultimate worldwide holding company (Bankers Life Insurance Company), it is interest only, with interest paid quarterly in arrears at a rate of 7% above Bank of England Base Rate applicable at the balance sheet date. At the Balance Sheet date, this group loan facility was due for repayment in full, or refinance, on 3 July 2024, but this has been subsequently extended to 3 July 2027. The loan is secured on the assets of the Company through a fixed charge over all real property.

Other creditors include amounts owed under hire purchase agreements which are secured upon the assets to which they relate.

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified, with a material uncertainty in relation to going concern.

The Company has given security to its ultimate beneficial owner Bankers Life Insurance Company by way of a fixed and floating charge over all freehold, leasehold or immoveable property, as well as trademarks, to which the Company had at the date of instrument or may subsequently acquire.

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

The Company has taken advantage of the exemption within FRS 102 paragraph 33.1A regarding disclosing transactions with group Companies.

The ultimate UK Parent Company is Progress Group Holdings Limited, a Company registered in England & Wales. Consolidated financial statements are prepared, in which the Company is included. These financial statements can be obtained from Switch House Suite B2, First Floor Northern Perimeter Road, Bootle, United Kingdom, L30 7PT.

The ultimate worldwide holding company is Bankers Life Insurance Company, a company incorporated in United States of America.