ACCOUNTS - Final Accounts


Caseware UK (AP4) 2016.0.181 2016.0.1812018-03-312018-03-31falsefalseNo description of principal activityfalse2017-04-01019656192017-04-012018-03-31019656192016-04-012017-03-31019656192018-03-31019656192017-03-31019656192016-04-0101965619 1 2017-04-012018-03-3101965619 3 2016-04-012017-03-3101965619 5 2017-04-012018-03-3101965619 5 2016-04-012017-03-3101965619 d:CompanySecretary1 2017-04-012018-03-3101965619 d:Director1 2017-04-012018-03-3101965619 d:Director4 2017-04-012018-03-3101965619 d:Director6 2017-04-012018-03-3101965619 d:Director7 2017-04-012018-03-3101965619 d:Director9 2017-04-012018-03-3101965619 d:Director9 2018-03-3101965619 d:Director10 2017-04-012018-03-3101965619 d:Director10 2018-03-3101965619 d:RegisteredOffice 2017-04-012018-03-3101965619 d:Agent1 2017-04-012018-03-3101965619 e:Buildings 2017-04-012018-03-3101965619 e:Buildings 2018-03-3101965619 e:Buildings 2017-03-3101965619 e:Buildings e:LongLeaseholdAssets 2017-04-012018-03-3101965619 e:Buildings e:LongLeaseholdAssets 2018-03-3101965619 e:Buildings e:LongLeaseholdAssets 2017-03-3101965619 e:PlantMachinery 2017-04-012018-03-3101965619 e:PlantMachinery 2018-03-3101965619 e:PlantMachinery 2017-03-3101965619 e:PlantMachinery e:OwnedOrFreeholdAssets 2017-04-012018-03-3101965619 e:PlantMachinery e:LeasedAssetsHeldAsLessee 2017-04-012018-03-3101965619 e:MotorVehicles 2017-04-012018-03-3101965619 e:MotorVehicles 2018-03-3101965619 e:MotorVehicles 2017-03-3101965619 e:MotorVehicles e:OwnedOrFreeholdAssets 2017-04-012018-03-3101965619 e:MotorVehicles e:LeasedAssetsHeldAsLessee 2017-04-012018-03-3101965619 e:FurnitureFittings 2017-04-012018-03-3101965619 e:OwnedOrFreeholdAssets 2017-04-012018-03-3101965619 e:LeasedAssetsHeldAsLessee 2017-04-012018-03-3101965619 e:DevelopmentCostsCapitalisedDevelopmentExpenditure 2017-04-012018-03-3101965619 e:DevelopmentCostsCapitalisedDevelopmentExpenditure 2018-03-3101965619 e:CurrentFinancialInstruments 2018-03-3101965619 e:CurrentFinancialInstruments 2017-03-3101965619 e:Non-currentFinancialInstruments 2018-03-3101965619 e:Non-currentFinancialInstruments 2017-03-3101965619 e:CurrentFinancialInstruments e:WithinOneYear 2018-03-3101965619 e:CurrentFinancialInstruments e:WithinOneYear 2017-03-3101965619 e:Non-currentFinancialInstruments e:AfterOneYear 2018-03-3101965619 e:Non-currentFinancialInstruments e:AfterOneYear 2017-03-3101965619 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2018-03-3101965619 e:Non-currentFinancialInstruments e:BetweenOneTwoYears 2017-03-3101965619 e:Non-currentFinancialInstruments e:BetweenTwoFiveYears 2018-03-3101965619 e:Non-currentFinancialInstruments e:BetweenTwoFiveYears 2017-03-3101965619 e:Non-currentFinancialInstruments e:MoreThanFiveYears 2018-03-3101965619 e:Non-currentFinancialInstruments e:MoreThanFiveYears 2017-03-3101965619 e:UKTax 2017-04-012018-03-3101965619 e:UKTax 2016-04-012017-03-3101965619 e:ShareCapital 2018-03-3101965619 e:ShareCapital 2017-03-3101965619 e:ShareCapital 2016-04-0101965619 e:SharePremium 2018-03-3101965619 e:SharePremium 2017-03-3101965619 e:SharePremium 2016-04-0101965619 e:CapitalRedemptionReserve 2018-03-3101965619 e:CapitalRedemptionReserve 2017-03-3101965619 e:CapitalRedemptionReserve 2016-04-0101965619 e:RevaluationReserve 2018-03-3101965619 e:RevaluationReserve 2017-03-3101965619 e:RevaluationReserve 2016-04-0101965619 e:RetainedEarningsAccumulatedLosses 2017-04-012018-03-3101965619 e:RetainedEarningsAccumulatedLosses 2018-03-3101965619 e:RetainedEarningsAccumulatedLosses 2016-04-012017-03-3101965619 e:RetainedEarningsAccumulatedLosses 2017-03-3101965619 e:RetainedEarningsAccumulatedLosses 2016-04-0101965619 e:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2018-03-3101965619 e:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2017-03-3101965619 e:FinancialAssetsAmortisedCost 2018-03-3101965619 e:FinancialAssetsAmortisedCost 2017-03-3101965619 e:FinancialLiabilitiesAmortisedCost 2018-03-3101965619 e:FinancialLiabilitiesAmortisedCost 2017-03-3101965619 e:AcceleratedTaxDepreciationDeferredTax 2018-03-3101965619 e:AcceleratedTaxDepreciationDeferredTax 2017-03-3101965619 e:OtherDeferredTax 2018-03-3101965619 e:OtherDeferredTax 2017-03-3101965619 d:OrdinaryShareClass2 2017-04-012018-03-3101965619 d:OrdinaryShareClass2 2018-03-3101965619 d:OrdinaryShareClass3 2017-04-012018-03-3101965619 d:OrdinaryShareClass3 2018-03-3101965619 d:FRS102 2017-04-012018-03-3101965619 d:Audited 2017-04-012018-03-3101965619 d:FullAccounts 2017-04-012018-03-3101965619 d:PrivateLimitedCompanyLtd 2017-04-012018-03-3101965619 e:Subsidiary2 2017-04-012018-03-3101965619 e:WithinOneYear 2018-03-3101965619 e:WithinOneYear 2017-03-3101965619 e:BetweenOneFiveYears 2018-03-3101965619 e:BetweenOneFiveYears 2017-03-3101965619 e:MoreThanFiveYears 2018-03-3101965619 e:MoreThanFiveYears 2017-03-3101965619 e:Subsidiary2 1 2017-04-012018-03-3101965619 e:HirePurchaseContracts e:WithinOneYear 2018-03-3101965619 e:HirePurchaseContracts e:WithinOneYear 2017-03-3101965619 e:HirePurchaseContracts e:BetweenOneTwoYears 2018-03-3101965619 e:HirePurchaseContracts e:BetweenOneTwoYears 2017-03-3101965619 e:HirePurchaseContracts e:BetweenTwoFiveYears 2018-03-3101965619 e:HirePurchaseContracts e:BetweenTwoFiveYears 2017-03-31xbrli:sharesiso4217:GBPxbrli:pure

Registered number: 01965619










WELLBURN CARE HOMES LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2018

 
WELLBURN CARE HOMES LIMITED
 
 
COMPANY INFORMATION


Directors
Mr S W Beckett 
Mr C J Davey 
Mrs R Buckland (Chair) 
Mr S Buckland 
Mr R D Guppy (appointed 11 September 2017)




Company secretary
Mr R D Guppy



Registered number
01965619



Registered office
Tyne View House
9 Grange Road

Newburn

Newcastle Upon Tyne

NE15 8ND




Independent auditors
Waltons Clark Whitehill Limited
Chartered Accountants & Statutory Auditors

Maritime House

Harbour Walk

The Marina

Hartlepool

TS24 0UX




Bankers
Yorkshire Bank PLC
110 Quayside

Newcastle upon Tyne

NE1 3DX





 
WELLBURN CARE HOMES LIMITED
 

CONTENTS



Page
Directors' report
1 - 3
Strategic report
4
Independent auditors' report
5 - 7
Statement of comprehensive income
8
Balance sheet
9 - 10
Statement of changes in equity
11
Statement of cash flows
12 - 13
Notes to the financial statements
14 - 31


 
WELLBURN CARE HOMES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2018

The directors present their report and the financial statements for the year ended 31 March 2018.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The profit for the year, after taxation, amounted to £1,797,057 (2017 - £1,191,452).

A dividend of £91,915 (2017: £91,937) has been declared and paid in the year.

Directors

The directors who served during the year were:

Mr S W Beckett 
Mr C J Davey 
Mrs R Buckland (Chair) 
Mr S Buckland 
Mr M C Butler (resigned 17 July 2017)
Mr R D Guppy (appointed 11 September 2017)

Page 1

 
WELLBURN CARE HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018

Land and buildings

The directors have valued the land and buildings using a model which takes into account expected occupancy levels, room rates and staffing levels. The model follows the methodology used by Colliers International Healthcare UK LLP, agents, valuers and surveyors when they prepared an independent, external valuation at 31 March 2016.
The properties, with one exception, vary between 100 and 300 years old. Again with one exception, all of the properties are in conservation areas and four are Grade II listed. The company has always maintained its properties to very high standards, and will continue to do so, and all maintenance costs are written off immediately.

Future developments

The Financial Year to 31 March 2019 will continue to present challenges. Profits for the first quarter are ahead of those achieved in the same period last year through stronger occupancy whilst maintaining good room rates. We completed a review of our strategic objectives during the year and this confirmed the direction of the business - we continue to invest to increase our attractiveness to residents whilst maintaining our high care standards, for example through investment in property refurbishment, introduction of CCTV, improvements in systems for documenting and recording care. We continue to review our direct and overhead costs to ensure that we get value for money whilst ensuring that the quality of services is maintained at a high level. As a result, the directors are confident that this year’s results will again show an improvement over the previous year.
Looking forward to future years, we have the challenge of meeting the cost of further increases to the ‘National Living Wage’. Negotiations with Local Councils (at local and regional levels) have provided some uplifts in fees, but the negotiation process will be ongoing whilst we move towards the Government’s Living Wage ‘goal’ in 2020.
The directors believe that a continued commitment to quality care, from the ambience of the Homes through to the excellence of our Care Services, is the best way to ensure the progress of the company over the years to come.

Employee involvement

The directors endeavour to provide appropriate management information to employees to keep them appraised of company performance. The directors encourage employees to comment on such information, and will always consider carefully any views expressed. Regular meetings are held with senior employees to promote understanding of performance and discuss possible improvements.
Disabled Employees
The company has a Dignity and Equality at Work policy in place and encourages good employment practice. The company recognises a clear legal and moral responsibility to ensure everyone is offered equal opportunities for employment and progression.
In order to ensure this applicants will be selected for employment solely on the basis of relevant aptitude, skills and abiliites. If anyone becomes disabled during employment steps will be taken to make adjustments as needed. Staff are advised of their responsibility to actively avoid discrimination.

Matters covered in the strategic report

The business review, principal risks and uncertainties and financial key performance indicators are all included in the strategic report. 

Page 2

 
WELLBURN CARE HOMES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the company since the year end.

Auditors

The auditorsWaltons Clark Whitehill Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





Mrs R Buckland (Chair)
Director

Date: 20 September 2018

Page 3

 
WELLBURN CARE HOMES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2018

Business review
 
The directors are pleased to report the continued improvement in the Company’s trading performance despite the ongoing significant challenges faced by the care sector. The increase in turnover is a combination of improvement in room rates and achievement of good occupancy. Payroll costs (the Company’s major cost) increased again due to the impact of the ‘National Living Wage’ and related incremental increases. The increase in other care costs, administration and overhead costs reflected the change of food suppliers (to provide high quality, nutritional food to our residents) and other inflationary increases.
The increase in Capital and Reserves shown within the Balance Sheet at 31 March 2018 reflects the retention of profit for the year after corporation tax, deferred taxation charges and dividends. The directors have reviewed the assessment of the valuation of the Company’s property portfolio and are comfortable that the carrying value of the properties remains reasonable. It is pleasing to note that the Company’s gearing continues to move towards a more stable basis due to the retention of profits and continued repayment of borrowings, and the directors will continue with the policy of profit retention for the foreseeable future. 

Principal risks and uncertainties
 
Increasing emphasis on monitoring and review of Care Homes by C.Q.C. and Local Councils raises the possibility of our Homes being downgraded due to compliance, rather than care quality, issues. Our emphasis on quality of care should ensure that Homes retain their grading, but income could be reduced if our Homes are downgraded at any point.
As stated previously, negotiations with Local Councils have generally produced reasonable uplifts to fee rates in most (but not all) areas. The company is helped by its historically high level of privately funded residents (over 60% of our residents are privately funded, producing over 70% of our fee income) but, in conjunction with local and national care associations, we keep pressing the Government and Local Councils to ensure that wage increases forced upon us by legislation are mitigated by increased Local Council fee levels.
Our continued policy of maintaining our properties to high standards inevitably requires higher than industry benchmark figures for repair and maintenance costs.  However, we will continue with this policy to maintain our commitment to the highest quality of care provision to our residents.

Financial and other key performance indicators
 
The company’s key performance indicator, occupancy, averaged 89.3% over the year, compared to 88.6% in the previous year. We are working to improve occupancy levels for the future. 
Gross profit margin for 2017/18 at 42.9% was slightly worse than the previous year’s 43.1%.  The directors are working to increase margins by maximising income and careful control of costs.

 

This report was approved by the board on and signed on its behalf.


Mrs R Buckland (Chair)
Director

Date: 20 September 2018

Page 4

 
WELLBURN CARE HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLBURN CARE HOMES LIMITED
 

Unqualified opinion


We have audited the financial statements of Wellburn Care Homes Limited (the 'company') for the year ended 31 March 2018, which comprise the statement of comprehensive income, the balance sheet, the statement of cash flows, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 March 2018 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 United Kingdom, including the Financial Reporting Council'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


We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:


the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.



Other information


The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report 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 statementsour 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
Page 5

 
WELLBURN CARE HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLBURN CARE HOMES LIMITED (CONTINUED)


inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.


Opinion 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 year for which the financial statements are prepared is consistent with the financial statements; and

the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.



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 directors' report.


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


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

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

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

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


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement on page 1, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


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


Page 6

 
WELLBURN CARE HOMES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLBURN CARE HOMES LIMITED (CONTINUED)


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


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 auditors' report.


Use of our report
 

This report is made solely to the company's shareholders, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the company's shareholders those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's shareholders, as a body, for our audit work, for this report, or for the opinions we have formed.





Paul Harrison MSc BSc FCA (senior statutory auditor)
  
for and on behalf of
Waltons Clark Whitehill Limited
 
Chartered Accountants
Statutory Auditors
  
Maritime House
Harbour Walk
The Marina
Hartlepool
TS24 0UX

21 September 2018
Page 7

 
WELLBURN CARE HOMES LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2018

2018
2017
Note
£
£

  

Turnover
 4 
17,609,354
16,858,727

Cost of sales
  
(10,052,373)
(9,588,528)

Gross profit
  
7,556,981
7,270,199

Administrative expenses
  
(4,108,985)
(3,913,758)

Operating profit
 5 
3,447,996
3,356,441

Income from fixed assets investments
  
14,700
-

Interest payable and expenses
 10 
(1,813,514)
(1,877,722)

Profit before tax
  
1,649,182
1,478,719

Tax on profit
 11 
147,875
(287,267)

Profit for the year
  
1,797,057
1,191,452

There was no other comprehensive income for 2018 (2017:£NIL).

The notes on pages 14 to 31 form part of these financial statements.

Page 8

 
WELLBURN CARE HOMES LIMITED
REGISTERED NUMBER: 01965619

BALANCE SHEET
AS AT 31 MARCH 2018

2018
2017
Note
£
£

Fixed assets
  

Intangible assets
 13 
23,189
-

Tangible assets
 14 
50,015,270
49,643,888

Investments
 15 
200
200

  
50,038,659
49,644,088

Current assets
  

Stocks
 17 
42,000
42,000

Debtors: amounts falling due within one year
 18 
1,599,551
1,472,353

Cash at bank and in hand
 19 
161,392
34,694

  
1,802,943
1,549,047

Creditors: amounts falling due within one year
 20 
(4,217,730)
(3,901,213)

Net current liabilities
  
 
 
(2,414,787)
 
 
(2,352,166)

Total assets less current liabilities
  
47,623,872
47,291,922

Creditors: amounts falling due after more than one year
 21 
(21,838,827)
(22,819,001)

  
25,785,045
24,472,921

Provisions for liabilities
  

Deferred tax
 25 
(2,036,621)
(2,429,639)

Net assets
  
23,748,424
22,043,282

Page 9

 
WELLBURN CARE HOMES LIMITED
REGISTERED NUMBER: 01965619
    
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2018

2018
2017
Note
£
£

Capital and reserves
  

Called up share capital 
 26 
19,895
19,895

Share premium account
 27 
34,742
34,742

Revaluation reserve
 27 
17,571,720
17,571,720

Capital redemption reserve
 27 
219,450
219,450

Profit and loss account
 27 
5,902,617
4,197,475

  
23,748,424
22,043,282


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 20 September 2018.




Mrs R Buckland (Chair)
Director

The notes on pages 14 to 31 form part of these financial statements.

Page 10

 
WELLBURN CARE HOMES LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2018


Called up share capital
Share premium account
Capital redemption reserve
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£
£
£


At 1 April 2016
19,895
34,742
219,450
17,571,720
3,097,960
20,943,767



Profit for the year
-
-
-
-
1,191,452
1,191,452

Dividends: Equity capital
-
-
-
-
(91,937)
(91,937)



At 1 April 2017
19,895
34,742
219,450
17,571,720
4,197,475
22,043,282



Profit for the year
-
-
-
-
1,797,057
1,797,057

Dividends: Equity capital
-
-
-
-
(91,915)
(91,915)


At 31 March 2018
19,895
34,742
219,450
17,571,720
5,902,617
23,748,424

Page 11

 
WELLBURN CARE HOMES LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2018
2018
2017
£
£

Cash flows from operating activities

Profit for the financial year
1,797,057
1,191,452

Adjustments for:

Amortisation of intangible assets
5,920
-

Depreciation of tangible assets
291,392
269,160

Interest payable
1,813,514
1,877,722

Dividend receivable from fixed asset investment
(14,700)
-

Taxation
(147,875)
287,267

Increase in debtors
(119,996)
(439,197)

Increase in creditors
269,904
192,451

Corporation tax paid
(275,921)
(161,177)

Net cash generated from operating activities

3,619,295
3,217,678

Cash flows from investing activities

Purchase of intangible fixed assets
(16,768)
-

Purchase of tangible fixed assets
(675,115)
(768,994)

Sale of tangible fixed assets
-
2,231

Purchase of fixed asset investment
-
(100)

HP interest paid
(4,148)
(2,049)

Dividends received
7,500
-

Net cash from investing activities

(688,531)
(768,912)

Cash flows from financing activities

Repayment of loans
(927,012)
(868,916)

Net (repayment of)/new finance leases
24,227
35,803

Dividends paid
(91,915)
(91,937)

Interest paid
(1,809,366)
(1,875,673)

Net cash used in financing activities
(2,804,066)
(2,800,723)
Page 12

 
WELLBURN CARE HOMES LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018


2018
2017

£
£



Net increase / (decrease) in cash and cash equivalents
126,698
(351,957)

Cash and cash equivalents at beginning of year
34,694
386,651

Cash and cash equivalents at the end of year
161,392
34,694


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
161,392
34,694

161,392
34,694

The notes on pages 14 to 31 form part of these financial statements.

Page 13

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

1.


General information

Wellburn Care Homes Limited is a company limited by share capital, incorporated in the United Kingdom and registered in England and Wales.
The registered office address is: 
Tyne View House
9 Grange Road
Newburn
Newcastle Upon Tyne
NE15 8ND

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The directors, having made due and careful enquiry and preparing forecasts, are of the opinion that the company has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. As a result the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.

 
2.3

Revenue

Revenue represents amounts charged for care home fees. This is recognised in the period in which the service is provided when all of the following conditions are satisfied:
•  the amount of revenue can be measured reliably;
•  it is probable that the company will receive the consideration due under the contract; and
•  in accordance with the timing of the care given.

 
2.4

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

 The estimated useful lives range as follows:

Software
-
4
years

Page 14

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

2.Accounting policies (continued)

 
2.5

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is provided on the following basis:

Additions to leasehold premises
-
over 10 years
Motor vehicles
-
over 4 years
Fixtures, fittings and equipment
-
over 4 to 15 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.

 
2.6

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.
Fair values are determined from market based evidence based on a methodology originally undertaken by professionally qualified valuers.
Revaluation gains and losses are recognised in the statement of changes in equity unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.7

Operating leases: the company as lessee

Rentals paid under operating leases are charged to the statement of comprehensive income on a straight line basis over the lease term.

 
2.8
Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

Page 15

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

2.Accounting policies (continued)

 
2.9

Valuation of investments

Investments in subsidiaries & associates are measured at cost less accumulated impairment.

 
2.10

Stocks

Stocks are valued at the estimated cost amount per home of consumables, such as food, held at the year end, taking into account any provision for impairment.

 
2.11

Debtors

Short term debtors are measured at transaction price, less any impairment.

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions.
In the statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the company's cash management.

 
2.13

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, and loans to related parties.

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the directors. 

 
2.15

Leased assets: the company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the statement of comprehensive income so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Page 16

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

2.Accounting policies (continued)

 
2.16

Pensions

Defined contribution pension plan
The company contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
At the year end contributions totalling £9,573 (2017: £8,458) were included in other creditors.

 
2.17

Borrowing costs

All borrowing costs are recognised in the statement of comprehensive income in the year in which they are incurred.

 
2.18

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
•  The recognition of deferred tax assets is limited to the extent that it is probable that      they will be recovered against the reversal of deferred tax liabilities or other future      taxable profits; and
•  Any deferred tax balances are reversed if and when all conditions for retaining      associated tax allowances have been met.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The valuation of the properties is based on a multiplier of future profits and this is reliant upon anticipated room rates and levels of occupancy. As such were these to change the calculated value could also change.
The directors have had regard to a valuation prepared by Colliers International Healthcare UK LLP in setting the methodology for the valuation.

Page 17

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

4.


Turnover

The whole of the turnover is attributable to the provision of residential and nursing care, together with some day care accomodation for the elderly.

All turnover arose within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

2018
2017
£
£

Depreciation of tangible fixed assets
291,392
269,160

Amortisation of intangible assets
5,920
-

Defined contribution pension cost
63,665
62,211


6.


Auditors' remuneration

2018
2017
£
£


Fees payable to the company's auditor and its associates for the audit of the company's annual accounts
17,280
17,220


17,280
17,220

Fees payable to the company's auditor and its associates in respect of:


Other services including those relating to taxation
12,720
11,417


12,720
11,417



Page 18

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2018
2017
£
£

Wages and salaries
8,797,922
9,033,258

Social security costs
615,840
575,839

Cost of defined contribution scheme
63,665
62,211

9,477,427
9,671,308


The average monthly number of employees, including the directors, during the year was as follows:


        2018
        2017
            No.
            No.







Care home staff
515
537



Administration, management and maintenance
33
37

548
574


8.


Directors' remuneration

2018
2017
£
£

Directors' emoluments
382,296
434,681

Company contributions to defined contribution pension schemes
12,046
11,285

394,342
445,966


During the year retirement benefits were accruing to 4 directors (2017 - 4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £111,052 (2017 - £132,119).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £372 (2017 - £372).

Page 19

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

9.


Income from investments

2018
2017
£
£





Dividends receivable
14,700
-

14,700
-



10.


Interest payable and similar expenses

2018
2017
£
£


Bank interest payable
1,809,366
1,875,673

Finance leases and hire purchase contracts
4,148
2,049

1,813,514
1,877,722


11.


Taxation


2018
2017
£
£

Corporation tax


Current tax on profits for the year
245,143
225,920

Adjustments in respect of previous periods
-
1,072


Total current tax
245,143
226,992

Deferred tax


Origination and reversal of timing differences
(11,476)
32,649

Movement on revaluation of land and buildings
(381,542)
27,626

Total deferred tax
(393,018)
60,275


Taxation on (loss)/profit on ordinary activities
(147,875)
287,267
Page 20

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2017 - lower than) the standard rate of corporation tax in the UK of 19% (2017 - 20%). The differences are explained below:

2018
2017
£
£


Profit on ordinary activities before tax
1,649,182
1,478,719


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2017 - 20%)
313,344
295,743

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
270
272

Capital allowances for year in excess of depreciation
(47,708)
(70,095)

Adjustments to tax charge in respect of prior periods
-
1,072

Origination and reversal of timing differences
(393,018)
60,275

Revenue items capitalised
(20,763)
-

Total tax charge for the year
(147,875)
287,267


Factors that may affect future tax charges

There were no factors that may affect future tax charges.




12.


Dividends

2018
2017
£
£


Dividends paid on equity capital
91,915
91,937

91,915
91,937

Page 21

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

13.


Intangible assets




Software

£



Cost


Additions
16,768


Transfer between classes
13,350



At 31 March 2018

30,118



Amortisation


Charge for the year
5,920


Transfer between classes
1,009



At 31 March 2018

6,929



Net book value



At 31 March 2018
23,189



At 31 March 2017
-

Page 22

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

14.


Tangible fixed assets





Land and buildings
Additions to leasehold premises
Furniture, fittings and equipment
Motor vehicles
Total

£
£
£
£
£



Cost or valuation


At 1 April 2017
49,018,641
289,194
4,515,191
193,950
54,016,976


Additions
423,372
-
251,743
-
675,115


Transfers between classes
-
-
(13,350)
-
(13,350)



At 31 March 2018

49,442,013
289,194
4,753,584
193,950
54,678,741



Depreciation


At 1 April 2017
-
281,423
3,958,186
133,479
4,373,088


Charge for the year on owned assets
-
7,771
229,426
9,239
246,436


Charge for the year on financed assets
-
-
30,432
14,524
44,956


Transfers between classes
-
-
(1,009)
-
(1,009)



At 31 March 2018

-
289,194
4,217,035
157,242
4,663,471



Net book value



At 31 March 2018
49,442,013
-
536,549
36,708
50,015,270



At 31 March 2017
49,018,641
7,771
557,005
60,471
49,643,888

The net book value of assets held on hire purchase at the year end is £109,119 (2017: £80,028).

Page 23

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

14.  Tangible fixed assets (continued)
 Land and buildings were revalued at 31 March 2018 by the directors, using methodology used by    external professional valuers Colliers International Healthcare UK LLP, agents, valuers and surveyors at  31 March 2016. The valuations by Colliers International Healthcare UK LLP were based on a multiple of  the existing profitability of each individual care home, the standard for the industry, and also reflect the    company's ongoing improvement programme. 
 The directors have taken this valuation as a basis for their own calculations and have prepared a    valuation taking allowance of expected occupancy levels and room rates. 
 The directors having suitable knowledge and qualification considered the above valuation to be a fair    reflection of the value of land and buildings at 31 March 2018.
 If land and buildings had not been revalued they would have been included at a historical cost of    £33,847,103 (2017: £33,423,731). 
 The valuation of land and property includes long leasehold property of £2,123,939.


15.


Fixed asset investments





Investments in Subsidiary Companies
Investments in Associates
Total

£
£
£



Cost 


At 1 April 2017
200
-
200


Transfers intra group
(100)
100
-



At 31 March 2018

100
100
200






Net book value



At 31 March 2018
100
100
200

The intra group transfer relates to the reclassification between subsidiary and associate of Wellburn Construction Limited as the percentage shareholding was diluted.

Page 24

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

16.Subsidiary undertakings

The following was a subsidiary undertaking of the company:

Name

Class of shares
Holding
Principal activity

Wellburn Care Limited
Ordinary
 100%
Dormant

The registered office address is:
Tyne View House, 9 Grange Road, Newburn, Newcastle Upon Tyne, United Kingdom, NE15 8ND




Aggregate of share capital and reserves
£
Wellburn Care Limited

100

100



17.


Stocks

2018
2017
£
£

Food and consumables
42,000
42,000

42,000
42,000


Stock recognised in cost of sales during the year as an expense was £1,284,293 (2017: £1,031,521).

Page 25

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

18.


Debtors

2018
2017
£
£


Trade debtors
1,397,395
1,275,155

Other debtors
11,758
4,728

Prepayments and accrued income
190,398
192,470

1,599,551
1,472,353



19.


Cash and cash equivalents

2018
2017
£
£

Cash at bank and in hand
161,392
34,694

161,392
34,694



20.


Creditors: Amounts falling due within one year

2018
2017
£
£

Bank loans
989,101
927,012

Trade creditors
570,922
519,496

Corporation tax
195,143
225,920

Taxation and social security
143,827
117,711

Obligations under finance lease and hire purchase contracts
43,208
27,909

Other creditors
568,498
545,509

Accruals and deferred income
1,707,031
1,537,656

4,217,730
3,901,213


Page 26

 
WELLBURN CARE HOMES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018

21.


Creditors: Amounts falling due after more than one year

2018
2017
£
£

Bank loans
21,783,570
22,772,672

Net obligations under finance leases and hire purchase contracts
55,257
46,329

21,838,827
22,819,001


Secured loans
The bank overdraft and loan facilities are secured by:
1. Legal mortgages over the company's freehold and leasehold properties.
2. A fixed and floating charge over all assets of the company.
The hire purchase loans are secured on the assets to which they relate.



Page 27

 
WELLBURN CARE HOMES LIMITED