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REGISTERED NUMBER:
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Strategic Report, Directors' Report and |
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Audited Financial Statements for the Year Ended 30 September 2019 |
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Care UK Pharmacy Services Limited |
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REGISTERED NUMBER:
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Strategic Report, Directors' Report and |
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Audited Financial Statements for the Year Ended 30 September 2019 |
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for |
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Care UK Pharmacy Services Limited |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Contents of the Financial Statements |
for the Year Ended 30 September 2019 |
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Page |
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Company Information | 1 |
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Strategic Report | 2 |
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Directors' Report | 6 |
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Statement of Directors' Responsibilities | 8 |
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Report of the Independent Auditors | 9 |
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Statement of Comprehensive Income | 12 |
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Balance Sheet | 13 |
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Statement of Changes in Equity | 14 |
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Notes to the Financial Statements | 15 |
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Care UK Pharmacy Services Limited |
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Company Information |
for the Year Ended 30 September 2019 |
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Directors: |
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Registered office: |
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Registered number: |
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Senior statutory auditor: |
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Independent auditors : |
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Chartered Accountants |
Registered Auditors |
Regus, 4th Floor |
Salt Quay House |
6 North East Quay |
Plymouth |
PL4 0HP |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Strategic Report |
for the Year Ended 30 September 2019 |
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The Directors present their Strategic report, Directors report and financial statements for the year |
ended 30 September 2019. |
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Review of business |
Key performance indicators used to manage the performance of the Company are turnover, gross |
profit and operating profit: |
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2019 | 2018 | Change |
% |
Turnover (£'000) | 6,828 | 7,260 | (6.0 | ) |
Gross profit (£'000) | 644 | 774 | (16.8 | ) |
Gross profit % | 9.4 | 10.7 | (1.3 | ) |
Operating profit (£'000) | 491 | 670 | (26.7 | ) |
Operating profit % | 7.2 | 9.2 | (2.0 | ) |
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Revenue and costs both fell slightly in 2019 as there has been less volatility in drug prices which |
caused revenue to be high in 2018. Allocated overhead costs were higher in 2019 which has |
impacted on Operating profit. The number of operating contracts has remained stable throughout |
the year at 13 with no expectation of this reducing in 2020. |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Strategic Report |
for the Year Ended 30 September 2019 |
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Principal risks and uncertainties |
Care UK faces potential risks associated with the exit by the UK from its membership of the |
European Union, and the potential uncertainty around the transitional arrangements.The UK |
exiting the European Union could materially change both the fiscal and legal framework in which |
Care UK operates, and it could have a material impact on the UK's economy and its future |
economic growth. In addition, prolonged uncertainty regarding aspects of the UK economy due to |
the uncertainty around the proposed exit could damage customers' and investors' confidence. |
These aspects could have a material adverse effect on Care UK's business, results of operations, |
financial condition and growth prospects. |
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The Company is exposed to general and industry specific wage inflation pressures, including |
legislative changes concerning the minimum wage, national living wage and apprenticeship levy. |
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The Company is also exposed to commodity price increases. During the last financial year the |
impact of Brexit on sterling has resulted in a number of price increases for the medical |
consumables and pharmacy items utilised in the provision of our services. However, fortunately |
the savings from the procurement programme more than offset these cost pressures. |
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Appropriate trade terms are negotiated with suppliers. Management reviews these terms and the |
relationships with suppliers to manage any exposure on normal trade terms. |
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The Company prepares regular forecasts of cash flow and liquidity and any requirement for |
additional funding is managed as part of the overall Care UK financing arrangements. The |
company has access to debt finance through its parent company. |
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The Company's principal financial asset is accrued income. The amounts presented in the |
balance sheet are net of allowances for doubtful debts. An allowance for impairment is made |
where there is an identified loss event which, based on previous experience, is evidence of a |
reduction in the recoverability of the cash flows. |
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The credit risk on liquid funds and derivative financial instruments is limited because the |
counterparties are banks with high credit-ratings assigned by international credit-rating agencies. |
The Group has a significant concentration of credit risk with exposure concentrated in public sector |
bodies, with the UK Government the ultimate payer. |
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Payment of suppliers |
The Company does not follow a specific code or statement on payment practice. However, it is the |
company's policy to pay its suppliers in accordance with the payment terms agreed at the outset of |
the relationship providing the supplier adheres to its obligations. The significant expenses incurred |
by the company relate to staff costs and drug supplies. |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Strategic Report |
for the Year Ended 30 September 2019 |
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Employment policies |
Care UK Pharmacy Services Limited is an equal opportunities employer and we welcome |
applications from every sector of the community. It is our policy that people with disabilities should |
have full and fair consideration for all vacancies, and where necessary we will make reasonable |
adjustments to ensure that this happens. During the year, the Company continued to demonstrate |
our commitment to interviewing those people with disabilities who fulfil the minimum criteria, and |
endeavouring to retain employees in the workforce if they become disabled during employment. |
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We depend on the skills and commitment of our employees to maintain a successful and vibrant |
organisation. Our training meets not only statutory and mandatory standards, but we also ensure |
that we cover our customer service objectives and our values programme fulfilling lives. |
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The Company's selection, training, development and promotion policies ensure equal opportunities |
for all employees regardless of factors such as gender, marital status, race, age, sexual |
preference and orientation or ethnic origin. All decisions are based on merit and we believe that to |
be truly successful we must reflect the diversity of the communities that we serve. Internal |
communications are designed to ensure that employees are well informed about the business of |
the company, and we undertake an annual employee survey to understand the opinions of all our |
people. |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Strategic Report |
for the Year Ended 30 September 2019 |
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Covid-19 |
Since the year end, COVID-19 become a global pandemic which is causing a significant impact |
across a number of different industries and sectors, particularly the healthcare sector. Given the |
nature of the Company's current operations and activities, COVID-19 has not had a significant |
impact on operations. However the Company is reliant on Group support either in the form of |
cash flows from its subsidiaries or formalised support for the going concern basis. Therefore |
COVID-19 does have an indirect impact on this company. The most significant financial impact has |
been the cessation of our elective procedures with effect from the end of March, with new |
contracts entered into with the NHS England providing them with full access to our bed capacity on |
a cost plus pricing formula. In addition, there has been an impact on the health and wellbeing of |
our staff, the requirement to purchase additional personal protective equipment ("PPE") and the |
change in working practices required through the lockdown phase. |
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In order to support the going concern basis of preparation of these financial statements, the Group |
has calculated a range of potential scenarios which consider the financial impact of COVID-19. |
This includes consideration of any cost drivers such as PPE purchases, agency usage, change in |
working practices, and an assessment of impact on revenue. The principal uncertainty relate to |
the timeframe when the Group will be in a position to re-commence elective procedures in our |
Hospitals, and the speed at which our pipeline of patients will return to pre COVID-19 levels when |
lockdown ends. The Group acknowledges there is a significant amount of uncertainty in the |
preparation of these financial estimates, however even the most pessimistic of forecasts predict |
that the Group will have sufficient liquidity and resources available to continue over the next 12 |
months. This factors in the agreed extension of the £10m RCF facility by an additional £10m, and |
the waiving of existing financial covenants which have been replaced by a minimum liquidity test to |
September 2021. |
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Taking all available information into account, with the acknowledgement that there is a large |
amount of uncertainty, the Directors believe that it remains appropriate to prepare the financial |
statement on a going concern basis. For further information, please see note 2 in the Accounting |
Policies section of these financial statements. |
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On behalf of the board: |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Directors' Report |
for the Year Ended 30 September 2019 |
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The Directors present their Strategic report, Directors' report and financial statements for the year |
ended 30 September 2019. |
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Principal activity |
The principal activity of the Company in the year under review was that of the provision of |
pharmacy services in the healthcare sector. |
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Dividends |
No dividends will be distributed for the year ended 30 September 2019 (2018: £nil). |
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Future developments |
All customer contracts are with other Care UK group companies and would be renewed when the |
associated external prison contract are renewed. These expect to come up for renewal between |
2020 and 2023. As such, the Directors consider the future outlook to be satisfactory. |
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Events since the end of the year |
Information relating to events since the end of the year is given in the notes to the financial statements. |
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Directors |
The directors shown below have held office during the whole of the period from 1 October 2018 to |
the date of this report. |
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Other changes in directors holding office are as follows: |
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report. |
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but prior to the date of this report. |
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Political and charitable donations |
The Company made £nil political donations during the year (2018: £nil), and £nil charitable |
donations during the year (2018: £nil). |
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Disclosure in the strategic report |
The review of business is stated in the Strategic report. |
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Statement as to disclosure of information to auditors |
So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 |
of the Companies Act 2006) of which the Company's auditor is 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 Company's auditor is aware of that information. |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Directors' Report |
for the Year Ended 30 September 2019 |
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Auditors |
Pursuant to Section 487 of the Companies Act 2006, the auditors will be deemed to be reappointed |
and KPMG LLP will therefore continue in office. |
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On behalf of the board: |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Statement of Directors' Responsibilities |
for the Year Ended 30 September 2019 |
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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 they have elected to prepare the financial statements in accordance with UK accounting |
standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 |
The Financial Reporting Standard applicable in the UK and Republic of Ireland. |
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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: |
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- | select suitable accounting policies and then apply them consistently; |
- | make judgements and estimates that are reasonable and prudent; |
- | state whether applicable UK accounting standards have been followed, subject to any |
material departures disclosed and explained in the financial statements; |
- | assess the Company's ability to continue as a going concern, disclosing, as applicable, |
matters related to going concern; and |
- | use the going concern basis of accounting unless they either intend to liquidate the |
Company or to cease operations, or have no realistic alternative but to do so. |
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The Directors are responsible for keeping adequate accounting records that are sufficient to show |
and explain the company's transactions and disclose with reasonable accuracy at any time the |
financial position of the Company and enable them to ensure that the financial statements comply |
with the Companies Act 2006. They are responsible for such internal control as they determine is |
necessary to enable the preparation of financial statements that are free from material |
misstatement, whether due to fraud or error, and have general responsibility for taking such steps |
as are reasonably open to them to safeguard the assets of the Company and to prevent and detect |
fraud and other irregularities. |
Report of the Independent Auditors to the Members of |
Care UK Pharmacy Services Limited |
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Opinion |
We have audited the financial statements of Care UK Pharmacy Services Limited ("the Company") |
for the year ended 30 September 2019 which comprise, the Statement of Comprehensive Income, |
the Balance Sheet, the Statement of Changes in Equity and related notes, including the accounting |
policies in note 2. |
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In our opinion the financial statements: |
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- | give a true and fair view of the state of the Company's affairs as at 30 September 2019 |
and of its profit for the year then ended; |
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have been properly prepared in accordance with UK accounting standards, including FRS
102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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Basis for opinion |
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We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") |
and applicable law. Our responsibilities are described below. We have fulfilled our ethical |
responsibilities under, and are independent of the company in accordance with, UK ethical |
requirements including the FRC Ethical Standard. We believe that the audit evidence we have |
obtained is a sufficient and appropriate basis for our opinion. |
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Going concern |
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The Directors have prepared the financial statements on the going concern basis as they do not |
intend to liquidate the Company or to cease its operations, and as they have concluded that the |
Company's financial position means that this is realistic. They have also concluded that there are |
no material uncertainties that could have cast significant doubt over its ability to continue as a |
going concern for at least a year from the date of approval of the financial statements ("the going |
concern period"). |
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We are required to report to you if we have concluded that the use of the going concern basis of |
accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant |
doubt over the use of that basis for a period of at least a year from the date of approval of the |
financial statements. In our evaluation of the Directors' conclusions, we considered the inherent |
risks to the Company's business model and analysed how those risks might affect the Company's |
financial resources or ability to continue operations over the going concern period. We have |
nothing to report in these respects. |
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However, as we cannot predict all future events or conditions and as subsequent events may result |
in outcomes that are inconsistent with judgements that were reasonable at the time they were |
made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee |
that the company will continue in operation. |
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Report of the Independent Auditors to the Members of |
Care UK Pharmacy Services Limited |
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Strategic report and Directors' report |
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The Directors are responsible for the Strategic report and the Directors' report. Our opinion on the |
financial statements does not cover those reports and we do not express an audit opinion thereon. |
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Our responsibility is to read the Strategic report and the Directors' report and, in doing so, consider |
whether, based on our financial statements audit work, the information therein is materially |
misstated or inconsistent with the financial statements or our audit knowledge. Based solely on |
that work: |
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we have not identified material misstatements in the Strategic report and the
Directors'report; |
- | in our opinion the information given in those reports for the financial year is consistent with |
the financial statements; and |
- | in our opinion those reports have been prepared in accordance with the Companies |
Act 2006. |
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Matters on which we are required to report by exception |
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Under the Companies Act 2006 we are required to report to you if, in our opinion: |
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- | 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; or |
- | the Directors were not entitled to take advantage of the small companies exemption from the |
requirement to prepare a Strategic report. |
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We have nothing to report in these respects. |
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Responsibilities of Directors |
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As explained more fully in their statement set out on page 7, the Directors are responsible for: the |
preparation of the financial statements and for being satisfied that they give a true and fair view; |
such internal control as they determine is necessary to enable the preparation of financial |
statements that are free from material misstatement, whether due to fraud or error; 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 they either intend to |
liquidate the Company or to cease operations, or have no realistic alternative but to do so. |
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Our responsibilities for the audit of the financial statements |
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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 our opinion |
in an auditor's report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic |
decisions of users taken on the basis of the financial statements. |
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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/auditorresponsibilities. This description |
forms part of our Report of the Auditors. |
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Report of the Independent Auditors to the Members of |
Care UK Pharmacy Services Limited |
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The purpose of our audit work and to whom we owe our responsibilities |
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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 an auditor's 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 members, as a body, for our |
audit work, for this report, or for the opinions we have formed. |
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for and on behalf of
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Chartered Accountants |
Registered Auditors |
Regus, 4th Floor |
Salt Quay House |
6 North East Quay |
Plymouth |
PL4 0HP |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Statement of Comprehensive Income |
for the Year Ended 30 September 2019 |
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2019 | 2018 |
Notes | £'000 | £'000 |
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Turnover |
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Cost of sales | ( |
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Gross profit |
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Administrative expenses | ( |
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Operating profit | 5 |
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Interest payable and similar
expenses |
6 |
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Profit before taxation |
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Tax on profit | 7 |
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Profit for the financial year |
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Other comprehensive income | - | - |
Total comprehensive income for
the year |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Balance Sheet |
30 September 2019 |
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2019 | 2018 |
Notes | £'000 | £'000 |
Fixed assets |
Tangible assets | 8 |
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Current assets |
Stocks | 9 |
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Debtors | 10 |
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Cash at bank |
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Creditors |
Amounts falling due within one year | 11 | ( |
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Net current liabilities | ( |
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Total assets less current liabilities | ( |
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Capital and reserves |
Called up share capital | 12 |
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Profit and Loss account | 13 | ( |
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Shareholders' funds | ( |
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The financial statements were approved by the Board of Directors on
signed on its behalf by: |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Statement of Changes in Equity |
for the Year Ended 30 September 2019 |
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Called up | Profit and |
share | Loss | Total |
capital | account | equity |
£'000 | £'000 | £'000 |
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Balance at 1 October 2017 |
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( |
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Changes in equity |
Total comprehensive income | - |
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Balance at 30 September 2018 |
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( |
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Changes in equity |
Total comprehensive income | - |
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Balance at 30 September 2019 |
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( |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Notes to the Financial Statements |
for the Year Ended 30 September 2019 |
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1. | Statutory information |
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Care UK Pharmacy Services Limited is a private company, limited by shares , registered in |
England and Wales. The company's registered number and registered office address can be |
found on the Company Information page. |
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2. | Accounting policies |
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Basis of preparing the financial statements |
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Notwithstanding net current liabilities of £699k as at 30 September 2019, a profit for the year |
then ended of £470k, the financial statements have been prepared on a going concern basis |
which the Directors consider to be appropriate for the following reasons. |
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The Directors have prepared cash flow forecasts for a period of (at least 12) months from |
the date of approval of these financial statements which indicate that, taking account of |
reasonably possible downsides, the Company will have sufficient funds, through access to |
the revolving credit facility and in downside cases funding from its ultimate company, Care |
UK Health Care Topco Limited, to meet its liabilities as they fall due for that period. |
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Those forecasts are dependent on Care UK Health Care Topco Limited providing additional |
financial support during that period. Care UK Health Care Topco Limited has indicated its |
intention to continue to make available such funds as are needed by the Company for the |
period covered by the forecasts. As with any company placing reliance on other group |
entities for financial support, the Directors acknowledge that there can be no certainty that |
this support will continue although, at the date of approval of these financial statements, they |
have no reason to believe that it will not do so. |
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The Directors of the Company have reviewed Care UK Health Care Topco Limited's cash |
flow forecasts prepared for the period up to 30 June 2021 which have taken into account a |
severe but plausible downside scenario as a result of COVID-19. Key assumptions used in |
this scenario were: |
· In specific service lines, a return to pre-COVID 19 revenue levels may not occur until |
mid-2021 ; |
· In specific service lines, cash out-flows due to COVID 19 related government contract |
true-up reviews; |
· Potential mitigating actions such as a reduction in expenses or uncommitted capital |
expenditure |
Furthermore, the Directors of the Company have reviewed the Group's most recent trading |
performance for the period ending 31 May 2020 and have noted that specific service lines |
continued to perform at pre-COVID 19 revenue levels. |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
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Based on the above, the Directors of the Company are confident that the Group will continue |
to be able to meet its liabilities as well as have the ability to provide additional financial |
support to the Company during the forecast period. |
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Consequently, the Directors are confident that the Company will have sufficient funds to |
continue to meet its liabilities as they fall due for at least 12 months from the date of |
approval of the financial statements and therefore have prepared the financial statements on |
a going concern basis. |
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The accounting policies set out below have, unless otherwise stated, been applied |
consistently to all periods presented in these financial statements. |
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Judgements made by the Directors, in the application of these accounting policies that have |
significant effect on the financial statements and estimates with a significant risk of material |
adjustment in the next year are discussed below. |
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Financial Reporting Standard 102 - reduced disclosure exemptions |
The Company has taken advantage of the following disclosure exemptions in preparing |
these financial statements, as permitted by FRS 102 "The Financial Reporting Standard |
applicable in the UK and Republic of Ireland": |
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• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of Section 3 Financial Statement Presentation paragraph 3.17(d); |
• | the requirement of Section 33 Related Party Disclosures paragraph 33.7. |
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Significant judgements and estimates |
The preparation of the Financial Statements in conformity with FRS 102 requires |
management to make estimates and assumptions that affect the reported amounts of assets |
and liabilities at the date of the Financial Statements and the reported amounts of revenue |
and expenses during the year then ended. Management bases its estimates on historical |
experience and various other assumptions that are believed to be reasonable under the |
circumstances. Actual results may differ from those estimates. |
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Estimates are used in accounting for allowances for uncollectible receivables, depreciation, |
amortisation and impairment, pensions, taxes, provisions, and contingencies. Estimates and |
assumptions are reviewed periodically and the effects of revisions are reflected in the |
Financial Statements in the year that an adjustment is determined to be required. |
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Management regularly discusses with the Group Audit Committee the development, |
selection and disclosure of the company's critical accounting policies and estimates and the |
application of these policies and estimates. |
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Turnover |
All turnover is derived from the rendering of dispensing services to group companies in the |
UK at arm's length. Pricing is in line with industry rates for the provision of pharmacy |
dispensing services. It is calculated based on dispensing activity during the month (cost of |
products plus a mark up to account for dispensing costs in line with industry averages). |
Invoices are raised in the month to which they relate. |
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Tangible fixed assets |
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Fixtures and fittings | - |
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Care UK Pharmacy Services Limited (Registered number: 02482660) |
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Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
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2. | Accounting policies - continued |
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Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance |
for obsolete and slow moving items. |
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Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement |
of Comprehensive Income, except to the extent that it relates to items recognised in other |
comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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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. |
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Deferred taxation |
Deferred tax is recognised in respect of all timing differences that have originated but not |
reversed at the balance sheet date. |
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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. |
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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. |
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Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over |
the period of the lease. |
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Impairment excluding stocks and deferred tax assets |
Financial assets (including trade and other debtors) |
A financial asset not carried at fair value through profit or loss is assessed at each reporting |
date to determine whether there is objective evidence that it is impaired. A financial asset is |
impaired if objective evidence indicates that a loss event has occurred after the initial |
recognition of the asset, and that the loss event had a negative effect on the estimated |
future cash flows of that asset that can be estimated reliably. |
|
An impairment loss in respect of a financial asset measured at amortised cost is calculated |
as the difference between its carrying amount and the present value of the estimated future |
cash flows discounted at the asset's original effective interest rate. For financial instruments |
measured at cost less impairment an impairment is calculated as the difference between its |
carrying amount and the best estimate of the amount that the Company would receive for |
the asset if it were to be sold at the reporting date. Interest on the impaired asset continues |
to be recognised through the unwinding of the discount. Impairment losses are recognised in |
profit or loss. When a subsequent event causes the amount of impairment loss to decrease, |
the decrease in impairment loss is reversed through profit or loss. |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
2. | Accounting policies - continued |
|
Non-financial assets |
The carrying amounts of the Company's non-financial assets, other than stocks and deferred |
tax assets, are reviewed at each reporting date to determine whether there is any indication |
of impairment. If any such indication exists, then the asset's recoverable amount is |
estimated. The recoverable amount of an asset or cash-generating unit is the greater of its |
value in use and its fair value less costs to sell. 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 the purpose of impairment testing, assets that cannot be tested individually are |
grouped together into the smallest group of assets that generates cash inflows from |
continuing use that are largely independent of the cash inflows of other assets or groups of |
assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the |
purpose of impairment testing is allocated to cash-generating units, or ("CGU") that are |
expected to benefit from the synergies of the combination. For the purpose of goodwill |
impairment testing, if goodwill cannot be allocated to individual CGUs or groups of CGUs on |
a non-arbitrary basis, the impairment of goodwill is determined using the recoverable amount |
of the acquired entity in its entirety, or if it has been integrated then the entire entity into |
which it has been integrated. |
|
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its |
estimated recoverable amount. Impairment losses are recognised in profit or loss. |
Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying |
amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the |
other assets in the unit (group of units) on a pro rata basis. |
|
An impairment loss is reversed if and only if the reasons for the impairment have ceased to |
apply. |
|
Impairment losses recognised in prior periods are assessed at each reporting date for any |
indications that the loss has decreased or no longer exists. An impairment loss is reversed |
only to the extent that the asset's carrying amount does not exceed the carrying amount that |
would have been determined, net of depreciation or amortisation, if no impairment loss had |
been recognised. |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
2. | Accounting policies - continued |
|
Financial guarantee |
Where the Company enters into financial guarantee contracts to guarantee the indebtedness |
of other companies within its group, the company treats the guarantee contract as a |
contingent liability until such time as it becomes probable that the company will be required |
to make a payment under the guarantee. |
|
Classification of financial instruments issued by the Company |
In accordance with FRS 102.22, financial instruments issued by the Company are treated as |
equity only to the extent that they meet the following two conditions: |
|
(a) they include no contractual obligations upon the company to deliver cash or other |
financial assets or to exchange financial assets or financial liabilities with another party under |
conditions that are potentially unfavourable to the company; and |
|
(b) where the instrument will or may be settled in the company's own equity instruments, it is |
either a non-derivative that includes no obligation to deliver a variable number of the |
company's own equity instruments or is a derivative that will be settled by the company's |
exchanging a fixed amount of cash or other financial assets for a fixed number of its own |
equity instruments. |
|
To the extent that this definition is not met, the proceeds of issue are classified as a financial |
liability. Where the instrument so classified takes the legal form of the company's own |
shares, the amounts presented in these financial statements for called up share capital and |
share premium account exclude amounts in relation to those shares. |
|
Basic financial instruments |
|
Trade and other debtors / creditors |
Trade and other debtors are recognised initially at transaction price less attributable |
transaction costs. Trade and other creditors are recognised initially at transaction price plus |
attributable transaction costs. Subsequent to initial recognition they are measured at |
amortised cost using the effective interest method, less any impairment losses in the case of |
trade debtors. If the arrangement constitutes a financing transaction, for example if payment |
is deferred beyond normal business terms, then it is measured at the present value of future |
payments discounted at a market rate of instrument for a similar debt instrument. |
|
Interest-bearing borrowings classified as basic financial instruments |
Interest-bearing borrowings are recognised initially at the present value of future payments |
discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing |
borrowings are stated at amortised cost using the effective interest method, less any |
impairment losses. |
|
3. | Employees and directors |
|
The average number of persons employed by the company (including directors), during the |
year were nil (2018: nil) and staff costs were £nil (2018: £nil). |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
4. | Directors' emoluments |
|
The Directors received £nil emoluments during the financial year ended 30 September 2019 |
for their services to the Company (2018: £nil). |
|
The emoluments of A Prosser and J Easton for services to the Healthcare division are paid |
by and disclosed within the accounts of Care UK Healthcare Holdings Ltd. |
|
The emoluments of M Parish and P Whitecross for services to the Group are paid by Care |
UK Ltd and disclosed within the accounts of Care UK Health and Social Care Investments |
Ltd. |
|
No Directors are members of pension scheme to which the Company makes contributions. |
|
5. | Operating profit |
|
The operating profit is stated after charging: |
|
2019 | 2018 |
£'000 | £'000 |
Other operating leases |
|
|
Auditor's remuneration |
|
|
|
6. | Interest payable and similar expenses |
2019 | 2018 |
£'000 | £'000 |
Group interest payable |
|
|
|
7. | Taxation |
|
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the profit for the year was as follows: |
2019 | 2018 |
£'000 | £'000 |
Current tax: |
UK corporation tax |
|
|
Corporation tax - prior year | ( |
) |
|
|
Tax on profit | ( |
) |
|
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
7. | Taxation - continued |
|
Reconciliation of total tax (credit)/charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. |
The difference is explained below: |
|
2019 | 2018 |
£'000 | £'000 |
Profit before tax |
|
|
Profit multiplied by the standard rate of corporation tax in the
UK of |
|
|
|
Effects of: |
Adjustments to tax charge in respect of previous periods | ( |
) |
|
Group relief claimed | ( |
) | ( |
) |
|
|
|
Total tax (credit)/charge | ( |
) |
|
|
Factors that may affect future tax charges |
Reduction in the UK corporation tax rate from 19% to 17% (effective 1 April 2020) was fully |
enacted on 15 September 2016. This will reduce the company's future current tax charge |
accordingly. The deferred tax asset at 30 September 2019 has been calculated based on |
these rates fully enacted at the year-end date. |
|
The March 2020 Budget announced that a rate of 19% would continue to apply with effect |
from 1 April 2020, and this change was substantively enacted on 17 March 2020. |
|
8. | Tangible fixed assets |
Fixtures |
and |
fittings |
£'000 |
Cost |
Additions |
|
At 30 September 2019 |
|
Net book value |
At 30 September 2019 |
|
|
9. | Stocks |
|
The stock value consists of medical consumables. |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
10. | Debtors: amounts falling due within one year |
2019 | 2018 |
£'000 | £'000 |
Trade debtors |
|
|
Other debtors |
|
|
VAT |
|
|
Prepayments |
|
|
Accrued income | 460 | 675 |
|
|
|
11. | Creditors: amounts falling due within one year |
2019 | 2018 |
£'000 | £'000 |
Trade creditors |
|
|
Amounts owed to group undertakings |
|
|
Corporation Tax |
|
|
Accruals |
|
|
|
|
|
The amounts owed to group undertakings bear interest at the annual fixed rate of 7.5%, |
charged monthly on the previous quarter end balance. The loan is unsecured. The amounts |
advanced are repayable in full by 30 September 2020. The Company may, at its discretion, |
make repayments on account of the principal amounts outstanding. |
|
12. | Called up share capital |
|
|
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2019 | 2018 |
value: | £ | £ |
|
Ordinary Shares | 1 | 2 | 2 |
|
13. | Reserves |
Profit and |
Loss |
account |
£'000 |
|
At 1 October 2018 | ( |
) |
Profit for the year |
|
At 30 September 2019 | ( |
) |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
14. | Contingent liabilities |
|
The Company has a number of cross guarantees between group companies relating to |
debtor balances. In addition, the Company has provided parent company guarantees over |
the lease obligations and delivery of certain healthcare services by certain subsidiary |
companies. These guarantees cover the period of the contractual obligations. The Directors |
consider that the likelihood of these guarantees being called upon is remote. |
|
In addition the Company is a guarantor to the funding arrangements disclosed in the |
Financial Statements of Care UK Health & Social Care Investments Limited - please refer to |
those Financial Statements for full details; a brief summary of which is given below. |
|
Facility B Term Loan |
|
On 25th January 2019, the Group successfully completed the refinancing of its 2014 Loan |
Notes and 2014 Senior Secured Notes Interest through a £250m utilisation under a new |
Facility B Term Loan which was put in place on the same date. The margin payable on any |
loan utilisation is in the range of 5.0% to 5.5% above LIBOR depending on the total net |
leverage of the Group which is paid in arrears based on agreed utilisation period. At 30 |
September 2019, the £250m loan had been issued under a 3 month utilisation period. The |
termination date of Facility B is 25th July 2024. |
|
15. | Post balance sheet events |
|
On 25th October 2019, the Group sold its shares in Care UK Healthcare Holdings Limited to |
a new company Care UK Healthcare Bidco Ltd, whose equity ownership sits outside the |
Group but continues to be managed by Bridgepoint. On this date, as part of the ongoing |
financing and capital arrangements of the Group, Care UK Healthcare Bidco Ltd has |
entered into an agreement for a new revolving credit facility of £10m. |
Care UK Pharmacy Services Limited (Registered number: 02482660) |
|
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2019 |
|
16. | Ultimate controlling party |
|
The controlling party is Care UK Health & Rehabilitation Services Limited. |
|
The ultimate controlling party is
|
|
Bridgepoint Europe IV (Nominees) Limited holds 78.2% of the issued ordinary share capital |
that carries voting rights of Care UK Health & Social Care Holdings Limited as nominee for |
Bridgepoint Europe IV "A" LP, Bridgepoint Europe IV "B" LP, Bridgepoint Europe IV "C" LP, |
Bridgepoint Europe IV "D" LP, Bridgepoint Europe IV "E" LP, Bridgepoint Europe IV "F" LP |
and Bridgepoint Europe IV "G" LP (together the "BEIV Fund"). The BEIV Fund is managed |
by Bridgepoint. |
|
Copies of the Financial Statements of Care UK Health & Social Care Holdings Limited, the |
largest group consolidated Financial Statements which include the results of this company, |
are available from its registered office at: |
|
Connaught House |
850 The Crescent |
Colchester Business Park |
Colchester |
Essex |
CO4 9QB |
|
From 25 October 2019, BEP IV (Nominees) Limited has held 99.86% of the issued ordinary |
share capital of Care UK Health Care Topco Limited as nominee for the Bridgepoint Europe |
Portfolio IV LP fund. Bridgepoint Advisers Limited acts as fund manager for and on behalf of |
Bridgepoint Europe Portfolio IV LP fund. |