Alpha Plus Holdings plc
Annual Report and Financial Statements
31 August 2022
Company Registration No. 04418776
Alpha Plus Holdings plc
Company No. 04418776
1
Officers and advisors
Directors
Sir John Ritblat
G G Able
M D Hanley-Browne
J E B Bowden
R D Jones
E M Francis
T H P Haynes
P D Brereton
R Proscia
R G Seaman
Dame Rosalind Savill
S M Lancaster
Secretary
J C Norton
Registered office
Bankers
Barclays Bank PLC
One Churchill Place
London E14 5HP
Auditors
BDO LLP
31 Chertsey Street
Guildford
Surrey GU1 4HD
Copies of these financial statements may be downloaded from the Company’s website:
www.alphaplusgroup.co.uk/Investors.
Alpha Plus Holdings plc
Company No. 04418776
2
Strategic Report
Principal activity
Business review
Having navigated the challenges brought by the Covid-19 pandemic, management is pleased to report improved
financial performance for the year ended 31 August 2022.
The Group’s schools and nurseries recruited a net 134 pupils during the 2021/22 academic year, more than
recovering from the decline of 107 entering the 2021/22 academic year. The Group’s nurseries experienced
particularly strong demand through the year, supported by the Group’s new “Plus Programme” which provides a
comprehensive early learning programme designed by Alpha Plus’s team of expert early years practitioners, for both
parents and children.
College student numbers had been particularly impacted by Covid, declining from 1,047 at the end of the 2019/20
academic year to 866 at the end of 2020/21 as international students were less willing or able to travel to board in
the UK. The secondary student intake in January 2022 saw a net 57 additional students joining the Group. Following
which, the recruitment season for the September 2022 intake has been encouraging, adding another net 63 students.
Movements in pupil and student numbers (expressed in full-time equivalent terms) are summarised below:
Number
Schools &
nurseries
Colleges Total
At 2020/21 academic year end
3,401
866
4,267
Net (decrease)/increase
(107)
1
(106)
At 2021/22 academic year start
3,294
867
4,161
Net increase during the year
134
57
191
At 2021/22 academic year end
3,428
924
4,352
Net increase
5
63
68
At 2022/23 academic year start
3,433
987
4,420
The Group continues to pursue innovative ways to deliver academic excellence. At Portland Place School in central
London, there are two learning options on offer: a traditional day school; and hybrid learning where students mainly
learn online, supplemented with one or two days per week in the day school. This concept was conceived during the
pandemic but since then has grown in popularity, providing a flexible alternative for families whose working patterns
are changing as well as providing a route back into the mainstream for those who have been struggling to cope with
full time school attendance.
Alpha Plus Holdings plc
Company No. 04418776
3
Strategic Report continued
Business review continued
Once again, a number of the Group’s schools have been recognised through prestigious external national
nominations and awards. DLD College London was shortlisted for Boarding School of the Year at the Independent
Schools of the Year Awards, which it won in 2020, as well as being finalist for a third consecutive year in the
International Student Experience category. Portland Place School was shortlisted for the Talk Education Awards for
Innovation in Education: Best Use of Technology category. Three Alpha Plus schools were included in the Tatler
Schools Guide 2022: DLD College London, Wetherby Preparatory School and Pembridge Hall. We would like to
congratulate the staff at these schools and colleges for gaining recognition at the very highest level.
Review of financial performance
The Group’s key financial performance indicators are revenue growth and reported EBITDA across the Group’s
portfolio of schools, nurseries and colleges.
Group revenue for the year grew by £12.3m (12%) to £116.5m. Tuition fees increased by £6.0m (7%) to £96.3m as
a result of higher pupil and student numbers, as well as increases to fees. In the prior year an 8.5% school fee rebate
was offered for the period of the Covid-19 lockdown in Spring 2021, which has not recurred.
Accommodation income increased by £3.7m (37%) to £13.5m, with demand for boarding accommodation recovering
strongly in most of the Group’s main international recruitment markets. Other ancillary fees grew by £2.6m to £6.6m,
driven by the resumption of regular school activities such as clubs and residential trips which were restricted during
the height of the pandemic. Other operating income increased by £0.7m to £1.7m, with the Group able once more
to offer space at its sites for activities outside of term, such as summer camps.
Operating expenses increased by £3.6m (4%) to £88.4m, driven by the cost of resuming activities which were
restricted or reduced during the pandemic, such as catering, transport, clubs and trips.
Adjusted earnings before interest, tax, depreciation, amortisation, impairment and revaluation of properties (‘Adjusted
EBITDA’) was £29.8m (2021: £20.5m), growing by 46% due to the higher pupil and student numbers and the recovery
of boarding demand at the Group’s colleges. The Group delivered a profit before interest and tax of £9.6m (2021:
loss of £6.2m), which in addition to the £9.3m EBITDA growth was due to the net impairment charge of £1.0m this
year being lower than the £7.2m experienced in the prior year (see Notes 12 and 13). After deduction of net finance
costs of £15.8m (2021: £16.2m), loss before tax was £6.2m (2021: loss of £22.4m) and loss after tax was £8.0m
(2021: loss of £19.1m).
Net assets at 31 August 2022 were £30.5m, an increase of £1.0m versus prior year due largely to a £13.5m gain on
revaluation of the Group’s freehold properties, which more than offset the £8.0m loss for the year after tax (see Note
12).
Cash flow and capital expenditure
Cash and cash equivalents at 31 August 2022 were £19.5m, a £9.8m increase versus prior year. Cash generated
from operations was £36.8m, £12.7m year on year growth driven by improved trading performance and strong fee
collections in advance of the 2022/23 academic year. Payments relating to lease liabilities totalled £20.7m, a £1.6m
increase from prior year, driven by the Group entering into a new overriding lease at 49 Hugon Road, for which there
were corresponding finance lease cash inflows (see Note 14). Balance sheet movements, including cash flows
associated with right-of-use assets and lease liabilities, are disclosed in notes 13 and 21 respectively. Capital
expenditure increased slightly from £3.5m to £4.0m, while net interest paid of £2.7m was lower than the £4.0m paid
in the prior year as the new deep-discount bonds issued to parent companies to replace the previous term loans do
not incur cash interest (see Note 20).
Alpha Plus Holdings plc
Company No. 04418776
4
Strategic Report continued
Other non-financial key performance indicators
The Group monitors pupil and student numbers, being one of the major drivers for revenue and EBITDA, as described
above. Other non-financial key performance indicators include the outcome of external inspections, external
examination results and university destinations, as well as the proportion of pupils and students moving to their first
choice follow-on school.
All of the Group’s UK schools and colleges are subject to regular external inspections by the Independent Schools
Inspectorate (‘ISI’) or Ofsted. The Board’s aspiration is for all of the schools and colleges to be rated Good or Excellent
(Outstanding in the case of Ofsted) in cyclical inspections and this had been achieved at the date of this report.
The Board and Governors receive an annual report each Autumn setting out the destinations of graduating pupils
and students as well as the results of external examinations for each respective school and college. These are also
published on individual school and college websites.
Future developments
In October 2022, the Board was delighted to announce the opening of a new co-educational senior school in 2025:
Wetherby Arts School. Set in a 60,000 square foot state-of-the-art building in the prestigious Olympia development
in West London, Wetherby Arts will combine a strong academic focus, pastoral care and outstanding facilities, with
a major emphasis on the creative and performing arts. In a ground-breaking partnership with the BRIT School,
Wetherby Arts will also widen access to the creative industries for children resident in the Borough of Hammersmith
and Fulham and beyond. Wetherby Arts will have use of a bespoke theatre with a capacity of 200 seats, and
classrooms will be technology-enabled for hybrid teaching and learning, allowing students to attend lessons on site
or remotely at the same time.
Section 172 statement
Section 172(1) of the Companies Act 2006 requires the Directors to act in a way that they consider, in good faith,
would be most likely to promote the success of the Company for the benefit of its shareholder, having regard to
(amongst other things) the following:
The likely long term consequences of decisions;
The interests of employees;
The need to foster relationships with suppliers, customers and others;
The impact of the Company’s operations on the community and the environment; and
The desirability to maintain a reputation for high standards of business conduct.
Identity of shareholder
The Company is a wholly owned subsidiary of DV4 Holdings Alpha Plus Co. Limited which is ultimately owned by
DV4 Limited, a private investment company incorporated in the British Virgin Islands.
Alpha Plus Holdings plc
Company No. 04418776
5
Strategic Report continued
Section 172 statement continued
Aims and values
The Company is committed to providing the best possible start in life for all of the pupils and students in its care. To
ensure that these high standards are met and to ensure that achievement can be measured the Company has
developed the “Alpha Plus Gold Standard” which includes the following components:
High aspirations and expectations for all pupils and staff;
Outstanding leadership at all levels;
Working closely in partnership with parents;
A focus on high quality teaching and learning; and
A commitment to self-review and continuous improvement.
Other key stakeholders
These include the following:
Pupils and students and their respective fee payers (usually their parents);
Regulatory bodies (ISI & Ofsted);
Debt finance providers currently comprising holders of the Company’s secured sterling bonds and the
Company’s bankers;
Employees of the Group; and
Certain suppliers.
Key decisions during the year
On 29 October 2021, the Group entered into an overriding lease with DV4 Properties Fulham Co. Limited, a
subsidiary of DV4 Limited, in respect of a building at 49 Hugon Road, Fulham, London SW6 and in doing so became
landlord to the occupational tenant, Thomas’s London Day Schools (Thomas’s Fulham). This complements the
Group’s position as a landlord, as well as being an operator, at no additional cost as the rent received is the same
as the rent paid.
On 8 December 2021, the Company resolved to issue deep-discount bonds to its parent companies and to use the
proceeds to refinance the £48.1m 4.5% loans from parent companies. The deep-discount bonds have the same
value and redemption date as the 4.5% loans, as well as the same effective finance charge, however the deep-
discount bonds do not incur cash interest before maturity and so are beneficial from a cashflow perspective.
Subsequent to the year end, on 3 October 2022 the Company loaned £5.2m to its ultimate parent company DV4
Limited, on the same terms as its £19.7m loan due on 31 March 2024. The 7% interest on the loan was considered
to be a satisfactory rate of return, and management were satisfied that the Group has sufficient funds to meet its
needs as they fall due.
Maintaining a reputation for high standards of business conduct
The Group has its own internal governance process. This includes termly visits to each school and college by
representatives of the Governing body which monitor pupil and student progress and achievement as well as
facilitating leadership training for Head Teachers, College Principals and other members of the respective senior
leadership teams.
Alpha Plus Holdings plc
Company No. 04418776
6
Strategic Report continued
Section 172 statement continued
Maintaining a reputation for high standards of business conduct continued
The Group maintains its own internal Code of Ethical and Professional Conduct with which all employees are required
to affirm compliance annually. The Group has a zero tolerance approach to any form of bribery by, or of, our
employees, agents or consultants, or any person or body acting on the Group’s behalf. The Group’s Anti-Bribery
and Corruption Policy sets out the responsibilities of employees and other individuals associated with the Group;
clarifies unacceptable conduct; and sets out protocols for record keeping and raising any matters of concern.
Risk Management
Approach to risk management
The Board has established a Risk Committee which meets at least twice a year to:
Identify the nature and extent of significant risks facing the Group’s businesses;
Advise the Board on the Company’s appetite and tolerance of the risks it is willing to take in achieving its strategic
objectives; and
Consider mitigation plans to address key risks and to present solutions for managing those which cannot be
eliminated.
A two-part risk register framework has been developed:
A Group risk register which contains enterprise-wide risks such as strategic, financial and operational risks; and
A school and college risk register template which focuses on those risks that are best managed at a school or
college level.
The Group risk register is reviewed at least annually by the Risk Committee. The school and college registers are
reviewed annually by the Directors who line manage the respective head teachers and college principals.
The Group has adopted a risk management policy designed to ensure that:
Current and emerging business risks are identified and understood;
Prudent risk management systems to manage these risks are developed and implemented; and
Residual risk levels are monitored to ensure that they remain within the Group’s risk appetite.
During the year, the Risk Committee has overseen the implementation of a new risk management tool which will
support the active management and monitoring of enterprise-wide risks.
Alpha Plus Holdings plc
Company No. 04418776
7
Strategic Report continued
Risk management continued
Principal risks and uncertainties
The Group’s activities expose it to a number of risks, the most significant of which are summarised below:
Area of Risk
Potential Impact
Mitigating Actions
Educational
Excellence (Alpha
Plus "Gold Standard")
Unsatisfactory external exam results,
pupils not being enrolled at chosen
follow-on school. Poor external
inspection outcomes. Risk of
reputational damage.
Rigorous internal educational governance
program as outlined in the Alpha Plus
prospectus which is published on the Group's
website.
Health and Safety
Risks to the health and safety of staff,
pupils, students and visitors.
Group policies designed to ensure
compliance with all regulatory requirements.
External annual review of premises to assess
building-related health and safety risks and
necessary remedial actions taken.
Safeguarding
Child protection and safeguarding
regulations not adhered to resulting in
reputational damage.
Group policies designed to ensure
compliance with all regulatory requirements
coupled with internal governance processes
to ensure adherence to those policies.
People
Failure to leverage the extensive skills
and talents of the Group's teaching and
support staff. Loss of key staff through
resignation or long-term absence, and
failure to attract and recruit suitable
talent into the Group.
Development of an on-line Education Hub to
promote the professional development of
teachers and leaders. Regular internal
forums to share and develop best practice
across the Group. Staff turnover is
monitored. The Group’s ability to attract
suitable candidates is reviewed regularly.
Financing
Insufficient funding for day-to-day
activities. Failure to execute the
refinancing of the Group’s £80m sterling
bonds and £50m deep-discount bonds
which mature in March and December
2024 respectively, in which unlikely
scenario the lenders may assume
control of the assets held as security.
Regularly reviewed cash flow projections and
scenario planning. Maintenance of bank
overdraft facility and other funding resources.
Early preparations for the refinancing of the
Group’s debt are already underway with
support from advisors, and management
remains confident of a satisfactory outcome.
Alpha Plus Holdings plc
Company No. 04418776
8
Strategic Report continued
Risk management continued
Principal risks and uncertainties continued
Financial risks also include interest rate risk, foreign currency risk, credit risk and liquidity risk. These risks are
described further in note 25 to the financial statements.
Approved by the Board of Directors and signed on behalf of the Board.
J C Norton
Secretary
7 December 2022
Area of Risk
Potential Impact
Mitigating Actions
Economic
The emerging cost of living crisis may
lead to a reduced ability or willingness
of families to fund independent
education, and therefore reduced
demand for the Group’s services.
The Group remains focused on the provision
of the Gold Standard of educational
excellence, so that the Group’s services
remain attractive for those families that seek
independent education. The Group also
offers a number of bursaries, scholarships
and discounts to support the families of
talented children in accessing the Group’s
services.
Major external
disruptive event, such
as Covid-19
Disruption to the continuity of
educational services, potential loss of
revenues and increased operational
costs.
Business continuity planning. Crisis
management response by the Directors and
senior management team. Financial
modelling and planning encompassing a
number of scenarios.
Alpha Plus Holdings plc
Company No. 04418776
9
Directors Report
The Directors present their annual report and the audited Group financial statements for the year ended 31 August
2022. A review of the business together with commentary regarding future developments and risk management is
given in the Strategic Report.
Directors
The Directors who served during the year and to date of signing were:
Sir John Ritblat Chairman
G G Able Non-Executive Deputy Chairman
M D Hanley-Browne Chief Executive Officer
J E B Bowden Chief Financial Officer
R D Jones Director of Property
E M Francis Director of Governance & Standards
T H P Haynes Director of Senior Schools
P D Brereton Director of HR
R Proscia Director of Sales and Marketing
R G Seaman Director of IT
Dame Rosalind Savill Non-Executive Director
C B Wagman Non-Executive Director (resigned 23 June 2022)
S M Lancaster Non-Executive Director
Directors’ interests
As at 31 August 2022, the Directors and their connected parties collectively held £12,000 (2021: £12,000) nominal
value of the Company’s 5% March 2024 secured sterling bonds.
Corporate Governance
Since the ordinary shares of the Company are not listed on any stock exchange, the Company is not required to
comply with any UK corporate governance regime. However, certain aspects of the Group’s governance are set out
below.
Audit Committee
The Audit Committee comprises G G Able (Interim Chairman of the Committee), Sir John Ritblat, Mr A Owen and Mr
B Creegan, who was appointed on 11 November 2022.
Mr C B Wagman was Chairman of the Audit Committee until
23 June 2022. The Audit Committee meets twice a year and is responsible for reviewing and reporting to the Board
on a range of matters including the interim and annual financial statements, the appropriateness of the Group’s
accounting policies and practices and the effectiveness of the Group’s internal control and risk management systems.
The Audit Committee also advises the Board on the appointment of external auditors, their remuneration for audit
and non-audit work, their cost effectiveness, independence and objectivity, as well as discussing the nature, scope
and results of the annual audit with the external auditors.
Alpha Plus Holdings plc
Company No. 04418776
10
Directors Report continued
Corporate Governance continued
Preparation of financial information
The Group operates a centralised accounting function. Annual budgets and monthly internal management accounts
are prepared by the finance function and are reviewed by the Chief Financial Officer prior to submission to the Board.
Any significant variances between actual and budget performance are investigated and explained as part of this
process. The Audit Committee and the Board also review both the interim and annual Group financial statements.
The Audit Committee receives reports from management and the external auditors regarding all matters pertinent to
the financial statements including significant judgements and any changes in accounting policies and estimates.
Going concern
The financial statements have been prepared on a going concern basis. In considering whether this is appropriate,
the Directors have taken into account the following:
The Group is principally financed by £80m of secured sterling bonds which are listed on the London Stock
Exchange Order Book for Retail Bonds (“ORB”) and which mature in March 2024, and by £50.4m deep-discount
bonds issued to its parent companies which mature in December 2024. No repayments of capital fall due before
the £80m bond maturity date in March 2024. Early preparations for the refinancing of the Group’s debt which
matures in March and December 2024 are underway, with support from advisors. Based on initial advice from
advisors, the Directors are confident that the refinancing will be successfully executed sufficiently in advance of
31 March 2024.
The Group held £19.5m of cash and cash equivalents at 31 August 2022 and has a committed £5m bank
overdraft facility.
At 31 August 2022, the Company had loaned £19.7m to the ultimate parent company, and subsequently on 3
October 2022 the Company loaned a further £5.2m to the same company. Although repayment is not due until
March 2024, the ultimate parent company has agreed to repay these amounts upon receipt of a request from the
Company (see note 16 to the financial statements) and to provide further financial support if required. The Board
is satisfied that the parent company has sufficient liquidity to make such repayments should the need arise.
As at 31 August 2022, the Group had
£51.2m net current liabilities (2021: £51.8m). However, the net current
liabilities included £43.0m deferred income which is a non-cash item (2021: £32.6m); and £14.7m other payables
of which the majority is deposits from parents which are unlikely to be paid within the next twelve months (2021:
£14.8m).
The Directors have referred to cash flow forecasts for the period ending 31 March 2024 in order to understand the
working capital requirements of the Group. A variety of scenarios in respect of the period ending 31 March 2024 have
also been modelled and reviewed by the Board, including a possible reduction in pupil and student numbers.
In all of these scenarios, the Group would still have significant available funding, notably the residual element of the
parent company loan referred to above. As a result, the Directors have a reasonable expectation that the Group
has adequate financial resources to continue in operational existence for the foreseeable future, and consider it
appropriate to prepare the financial statements on a going concern basis.
Alpha Plus Holdings plc
Company No. 04418776
11
Directors Report continued
Staff policies
The Group seeks to involve all employees in the development of the Group’s business. Those Directors who are also
Governors of the Group’s schools and colleges regularly meet with the head teachers and college principals
informally, but also more formally, as part of the Group’s internal governance process to review not only the
development of their respective schools and colleges but also the wider development of the Group. Heads and
principals disseminate this information to the employees in their respective school or college. In this way the Group
undertakes to provide employees with information of concern to them that is likely to affect their interests.
The Group supports the principle of equal opportunities in employment and opposes all forms of discrimination. Every
step is taken to ensure that individuals are treated equally and fairly and decisions on recruitment, training, promotion
and career development are based only on objective and job related criteria. The Group gives full and fair
consideration to applications for employment from disabled persons and also seeks to continue to employ, with
suitable training, if appropriate, any person who becomes disabled whilst employed by the Group.
Anti-slavery and human trafficking statement
Alpha Plus is a values-led organisation that maintains high expectations of its own conduct and of those with whom
it works. The Group’s code of ethical and professional conduct is an integral part of the Alpha Plus Gold Standard of
educational excellence. The Group takes pride in its reputation and recognises that its values are just as important
as the services it provides. The Group is rigorous in the recruitment and development of people and in the selection
and management of suppliers. The Group expects Directors and all other employees within the Group, along with its
suppliers, to act with the highest levels of professionalism and integrity and within the law. The principles of the
Group’s code apply to all dealings with those who interact with, or may be affected by, the activities of the Group.
This includes pupils, parents, employees, customers, suppliers, inspectors and regulators, shareholders, local
communities and the environment in which the Group operates.
Consistent with its commitment to act ethically in all relationships and a zero tolerance of unethical or exploitative
employment practices, the Group is committed to doing whatever it can to combat slavery and human trafficking. The
Group will not engage in business with any party whom it deems to present a risk of participating in slavery or human
trafficking.
Environmental and social matters
The Environmental, Social and Governance Management Committee is chaired by one of the Directors. The purpose
is to oversee the development of the Group’s Environmental, Social and Governance strategy, and consider the
sustainability and societal impact of the Group’s current and future activities.
Charitable donations
The Group made charitable donations of £2,000 (2021: £8,000) during the year. The 2021 comparative included
£5,000 to support the United World Schools charity.
Beyond this, the Group works with its schools, alumni, parents and other members of the community to facilitate
fundraising for a large number of charities ranging from local community charities to those providing bursarial support.
In the year to 31 August 2022, over £800,000 (2021: over £500,000) was raised in gifts and pledges for these charities
from the Alpha Plus “family”.
Energy and emission reporting
The Company has followed the GHG Reporting Protocol – Corporate Standard for company reporting to identify and
report relevant energy and GHG emissions over which it has operational control for the year ending 31 August 2022.
Alpha Plus Holdings plc
Company No. 04418776
12
Directors Report continued
Environmental and social matters continued
Energy and emission reporting continued
The Company has considered the materiality of environmental impacts arising from its UK operations and identified
greenhouse gas emissions (generated via energy use and vehicle emissions) to be the most significant. These are
summarised below:
The Group tracks energy consumption per school using league tables and heat maps. An extensive programme to
fit LED lighting throughout the portfolio of schools and colleges is currently being undertaken to reduce future
emissions and is on track to be completed by August 2023. Emissions per £ revenue is considered a key metric and
was 14.02 kg of CO2 per £000 of revenue in the year ended 31 August 2022 (2021: 15.74 kg).
Subsequent events
On 3 October 2022 the Company loaned £5.2m to its ultimate parent company DV4 Limited, on the same terms as
its £19.7m loan due on 31 March 2024 which attracts interest at a rate of 7%.
Responsibility statements under the Disclosure and Transparency Rules
Each of the Directors listed above who were members of the Board at the time of approving the financial statements
confirm that, to the best of their knowledge and belief:
the financial statements, prepared in accordance with IFRS as adopted by the United Kingdom, give a true
and fair view of the assets, liabilities, financial position and loss of the Group and the undertakings included
in the consolidation taken as a whole; and
the Strategic Report includes a fair review of the development and performance of the business and the
position of the Group, and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties they face.
Absolute energy use
(Mwh)
Absolute carbon
dioxide equivalent
(tonnes)
2022 2021 2022 2021
Direct emissions - gas and vehicles (scope 1) 5,201 6,037 1,055 1,228
Indirect emissions - electricity (scope 2)
3,111
1,792
602
381
8,312
7,829
1,657
1,609
Alpha Plus Holdings plc
Company No. 04418776
13
Directors Report continued
Directors’ statement as to disclosure of information to auditors
The Directors who were members of the Board at the time of approving the Directors’ Report are shown above.
Having made enquiries of fellow Directors and of the Group’s auditor, each of these Directors confirms that:
to the best of each Director‘s knowledge and belief, there is no information (that is, information needed by
the Group‘s auditor in connection with preparing their report) of which the Group’s auditor is unaware; and
each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of
relevant audit information and to establish that the Group’s auditor is aware of that information.
Approved by the Board of Directors and signed on behalf of the Board.
J C Norton
Secretary
7 December 2022
Alpha Plus Holdings plc
Company No. 04418776
14
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements
in accordance with UK adopted international accounting standards and 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 Group financial statements in accordance with UK adopted International
Accounting standards and the Company financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors
must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company, and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether the Group financial statements have been prepared in accordance with UK adopted
International Accounting Standards, subject to any material departures disclosed and explained in the Group
financial statements;
state whether the Company financial statements have been prepared in accordance with applicable UK
Accounting Standards, subject to any material departures disclosed and explained in the Company financial
statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and the Company will continue in business; and
prepare a Directors’ Report and a Strategic Report which comply with the requirements of the Companies
Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Group and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of
the Group and the Company and enable them to ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the Group and the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for
ensuring that the annual report and financial statements, taken as a whole, are fair, balanced, and understandable
and provides the information necessary for shareholders to assess the group’s performance, business model and
strategy.
Website publication
The Directors are responsible for ensuring that the annual report and financial statements are made available on a
website. Financial statements are published on the Company’s website in accordance with legislation in the United
Kingdom regarding the preparation and dissemination of financial statements, which may differ from legislation in
other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
Alpha Plus Holdings plc
Company No. 04418776
15
Statement of Directors’ Responsibilities continued
Directors’ responsibilities pursuant to DTR4
The Directors confirm that to the best of their knowledge:
The financial statements have been prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.
The annual report includes a fair review of the development and performance of the business and the
financial position of the group and company, together with a description of the principal risks and uncertainties
that they face.
Alpha Plus Holdings plc
Company No. 04418776
16
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 31 August 2022 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice;
• the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
We have audited the financial statements of Alpha Plus Holdings Plc (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 August 2022 which comprise the Group statement of comprehensive income,
Group balance sheet, Group statement of changes in equity, Group statement of cash flows, Company balance
sheet, Company statement of changes in equity and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has been applied in the preparation of Group
financial statements is applicable law and UK adopted international accounting standards. The financial reporting
framework that has been applied in the preparation of the Parent Company financial statements is applicable law
and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure
Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the audit
committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Directors in July 2020 to audit the
financial statements for the year ended 31 August 2020 and subsequent financial periods. The period of total
uninterrupted engagement including retenders and reappointments is 3 years, covering the years ending 31 August
2020 to 31 August 2022. We remain independent of the Group and the Parent Company in accordance with the
ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. The non-audit services prohibited by that standard were not provided to the
Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue to adopt the
going concern basis of accounting included:
An evaluation of the Directors’ assessment of going concern budgets covering the period to 31 March 2024.
We reviewed and challenged the year-on-year movements in key assumptions, specifically student
numbers, pricing growth and EBITDA margins used in these forecasts and performed sensitivity analysis
on key inputs.
A detailed review of the Directors’ monthly cash flow base case and worst case scenarios to 31 March
2024, against audit evidence from our review of the FY22 and FY23 budgets and FY21 actual results.
Consideration of the FY22 budget against actual student numbers in October 2022 to check the accuracy
of forecasts.
Alpha Plus Holdings plc
Company No. 04418776
17
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Conclusions relating to going concern continued
A comparison of the cash requirements shown by the forecasts above to the available facilities of the group
and considered liquidity of the Group’s current assets.
An assessment of FY21 results and cash flows against the Directors’ forecasts as an indicator of budgeting
accuracy.
An assessment of the loan covenant valuation of the security portfolio prepared by the Directors’ property
expert and recalculation of covenant headroom to confirm compliance. This included a review of the
assumptions and methodologies used in valuing these properties and the market evidence supporting the
valuation assumptions. We also assessed the expertise and independence of the external property expert.
Comparison of the Directors’ disclosures on the Group’s going concern position within the financial
statements against best practice guidance per the regulators and accounting standards.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
Coverage
95% (2021: 96%) of Group loss before tax
98% (2021: 98%) of Group revenue
95% (2021: 96%) of Group net liabilities
Key audit matters
2022
2021
Revenue Recognition
Recovery of goodwill and non-financial
assets – Group
Recoverability of Parent Company
investments in subsidiaries
Going concern
x
Revaluation of freehold property
Deferred tax
x
Going concern is no longer a key audit matter in the current
year. Group performance and overall trend since the
pandemic has been positive with headroom on key
covenants improving year on year.
Materiality
Group financial statements as a whole
£1,181,000 (2021: £525,000) based on 1.0% (2021: 0.5%)
of Revenue and Other Operating Income.
Alpha Plus Holdings plc
Company No. 04418776
18
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including assessing whether there was evidence of
bias by the Directors that may have represented a risk of material misstatement.
Audit work to respond to the assessed risks was performed directly by the Group engagement team, and full scope
audit procedures were performed on the parent company and the UK operating entity of the group, which were
considered to be the significant components of the group. We considered it appropriate to group the school and
college component operating balances together and audit it as a single component, which reflects the legal entity
structure, given the consistency in systems, process and transactions across sites.
The financial information of the non-significant components, were subject to analytical procedures with specific
procedures performed on material asset balances. All work was performed by the Group engagement team.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Alpha Plus Holdings plc
Company No. 04418776
19
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Key audit matter
How the scope of our audit
addressed the key audit matter
Revenue
recognition
(Notes 2.3b,
2.3c and 6)
As detailed in note 2.3b and 2.3c,
the Group’s revenue primarily
relates to the provision of tuition
and accommodation, with other
ancillary education services
recognised over time. The Group
also receives rental income
recognised over time, and
revenue for education-related
services recognised at a
point in time.
Revenue is recognised net of
discounts provided.
There is a risk around
inappropriate revenue recognition
and deferral around the year end
for revenue that is recognised
over time and discounts
applicable to those streams. We
therefore determined the
recognition of
revenue to be a key audit matter.
Our audit work included the following:
We performed a review of the
Group’s revenue recognition
policy to confirm that it was in
line with applicable accounting
standards.
We recalculated expected
recognisable and deferred
tuition and accommodation fee
income (excluding discounts) by
college, school and nursery
based on published fee rates
and student number data
extracted from the internal
systems. A sample of students
were traced to registration and
attendance supporting records
to confirm existence. We
compared our expectation of
revenue to revenue recognised
and deferred at year end in the
financial statements.
We tested a sample of other
discounts applied to supporting
invoice and relevant approvals
and policies in place.
We recalculated rental income
based on lease contract and the
latest rent reviews, comparing
this to revenue recognised.
We tested a sample of other
income and examined
supporting evidence of revenue
value and point of recognition.
We tested invoices and credit
notes raised around the year
end by agreeing a sample to
supporting documents to check
that these were recognised in
the correct period.
Key observations:
We did not identify any indicators to
suggest that revenue has not been
recognised appropriately in accordance
with the applicable accounting
standards.
Alpha Plus Holdings plc
Company No. 04418776
20
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Recoverability
of goodwill
and non-
financial
assets -
Group (Note
2.3a, 11)
Recoverability
of Parent
Company
Investment in
subsidiaries –
Parent
Company
(Note 2.1a, 4)
The Group’s accounting policy in
relation to impairment of goodwill
and non-financial assets is
included within note 2.3a and
further explained in note 11 and
note 12 of the group financial
statements.
The Parent Company’s
accounting policy on investment
in subsidiaries is included within
Company note 2.1a.
Accounting standards require
management to perform an
impairment review annually to
consider possible impairment of
goodwill and consider whether
there are any indicators of
impairment impacting other group
non-current assets, including
property, plant and equipment
and right of use assets, and
investments in subsidiaries
balances in the parent company.
Management exercise significant
judgement in determining the
underlying assumptions used in
the impairment review of the
operating cash generating units
(CGUs). These assumptions
include the discount rate, the
forecast operating margins and
the growth rate.
Because of the judgements
exercised by management over
this area we determined it to be a
key audit matter.
Our audit work included the following:
We utilised our internal valuation
experts to assess the
methodology employed by
management, and review key
inputs including discount rate,
forecasting period and terminal
value against externally
available data, best practise and
applicable accounting standard
requirements.
We assessed directors’
determination of cash
generating units (CGUs) against
the requirements of applicable
accounting standards.
We recalculated the CGU
component’s value in use using
our calculated discount rate,
based on applicable gearing,
risk and equity premiums, and
methodology in line with
accounting standards and
compared these values against
the CGU component asset value
and the investment in
subsidiaries value.
We have challenged and
assessed the reasonableness of
the CGU component level
seven-year budgets and
expected growth rate
assumptions within the
impairment models through
discussions with management,
and, where appropriate,
agreement to supporting
documentation and historical
trends.
We have challenged and
assessed the sensitivity analysis
performed by management over
the key assumptions used by
management, specifically the
discount rate, long term growth
rate and EBITDA.
Key observations: We did not identify
anything to suggest that the judgements
made by management in their annual
impairment review were inappropriate,
or that the impairment review failed to
identify indicators impacting the
recoverability of goodwill and non-
current assets in the group or
investments in subsidiaries in the
parent.
Alpha Plus Holdings plc
Company No. 04418776
21
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Revaluation of
freehold and
investment
property
(Note 2.3e,
2.3g, 12 and
15)
As detailed in note 2.3e and 2.3g,
the Group’s freehold and
investment property is revalued
annually.
As a result a fair value
assessment was required as at
31 August 2022 with movements
in fair value recognised within the
statement of comprehensive
income.
There is significant judgement
involved in the selection of
appropriate valuation
methodology, and estimation in
selecting an appropriate EBITDA
and the discount/yield rates
employed. Management utilised a
valuation expert to assist with this
valuation. Detail on key
assumptions are included in Note
12 for freehold property and 15
for investment property.
Due to the significant judgements
and estimates involved in the
calculation, we consider the
valuation of freehold and
investment property to be a key
audit matter.
Our audit work included the following:
We utilised our internal property
valuation experts to assess the
tiered valuation methodology
applied across mature schools,
schools in a transition phase,
and underperforming schools
and nurseries for freehold
property and comparative
market methodology for
investment property.
We met with the Group’s
external valuer to understand
the assumptions and
methodologies used in valuing
these properties and the market
evidence supporting the
valuation assumptions.
We corroborated the inputs
used in these valuations to
verifiable source data for fee
rates, student numbers and
costs.
We compared the estimates in
growth, EBITDA multiples and
discount rates to historic results
and comparable market data.
We recalculated the valuations
and performed sensitivity
analysis on the inputs and
estimates.
We considered the
independence and qualifications
of the management expert
performing the valuations.
Key observations: We did not identify
any indicators to suggest that the
judgements applied by management in
the valuation of the freehold and
investment property were unreasonable.
Alpha Plus Holdings plc
Company No. 04418776
22
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Deferred tax
(Note 2d, 3
and 10)
As detailed in note 2.d and 3,
Deferred tax liabilities are
recognised for all taxable
temporary differences and
Deferred tax assets are
recognised for deductible
temporary differences.
There is a material deferred tax
liability in the balance sheet
largely due to the temporary
difference that has arisen from
the carrying value of properties
owned by the Group being higher
than the tax base cost. The
deferred tax liability is presented
net of deferred tax assets in the
Group’s Balance Sheet.
There are significant judgements
involved in determining the
deferred tax position including the
recognition of deferred tax assets
for deductible temporary
differences and unused tax
losses (tax credits) carried
forward, to the extent that it is
probable that future taxable
profits will be available. The
Directors consider a seven-year
projection period an appropriate
lookout period over which there is
sufficient certainty as to the
expected utilisation of the losses.
Therefore, we consider deferred
tax to be a key audit matter.
Our audit work included the following:
We utilised our internal tax
accounting specialists to review
the Group tax computations
prepared by management’s tax
advisors.
We met with the Group’s
external tax advisor to
understand the key judgements
and methodologies used in
preparing the Group tax
computation.
We corroborated the inputs and
rates used in the tax
computations to verifiable
source data.
We challenged key judgements
and estimates used in the
preparation of the Group tax
computation by reference to
relevant accounting standards.
In relation to the prior oeriod
audit adjustment:
o We obtained
Managements
calculation and checked
for arithmetical
accuracy;
o We obtained
confirmation of
immediate parent entity
loss position in 2020
and 2021; and
o With the use of our
internal tax specialists
we determined the
scope of the
adjustment, quantum
and appropriateness of
judgements involved.
Key observations: We did not identify
any indicators to suggest that the
judgements applied by management in
their assessment of deferred tax were
inappropriate.
Alpha Plus Holdings plc
Company No. 04418776
23
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a
lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements
Parent company financial
statements
2022
2021
2022
2021
Materiality
£1,181,000
£525,000
£886,000
£394,000
Basis for
determining
materiality
1.0% Revenue
0.5%
Revenue
75% Group materiality
Rationale for the
benchmark
applied
Revenue and other operating
income is a key performance
indicator for the Group and was
considered to be the most stable
and reliable indicator of
underlying performance.
Capped at 75% of Group materiality
given the assessment of the
components aggregation risk.
Performance
materiality
£738,000
£289,000
£554,000
£217,000
Basis for
determining
performance
materiality
62.5% (2021:55%) materiality, considering various factors including the
expected total value of known and likely misstatements (based on past
experience), the number of accounts subject to material estimates, and
the planned nature of testing.
Component materiality
Apart from the Parent Company, whose materiality is set out above, we set materiality for the other significant
component at £886,000 (2021: £382,000), being 75% (2021: 75%) of Group materiality, based on our assessment
of the risk of material misstatement of the component. We further applied performance materiality level of 62.5%
(2021: 55%) of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of
£24,000 (2021: £11,000). We also agreed to report differences below this threshold that, in our view, warranted
reporting on qualitative grounds.
Alpha Plus Holdings plc
Company No. 04418776
24
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Other information
The directors are responsible for the other information. The other information comprises the information included in
the Annual Report and Financial Statements other than the financial statements and our auditor’s 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. Our responsibility is to
read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic
report and
Directors’
report
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.
In the light of the knowledge and understanding of the Group and Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic R
eport or the Directors’
Report.
Matters on
which we are
required to
report by
exception
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 by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
the Parent Company financial statements are not in agreement with
the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not
made; or
we have not received all the information and explanations we require
for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, 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 Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Alpha Plus Holdings plc
Company No. 04418776
25
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Auditor’s 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 auditor’s 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.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in
line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the Group and the industry
in which it operates. We focused on laws and regulations that could give rise to a material misstatement in
the Group and Parent Company financial statements, including the applicable accounting standards,
Companies Act 2006 and certain requirements from UK and US tax legislation.
Our tests included agreement of the financial statement disclosures to underlying supporting
documentation, review of correspondence with regulators and legal advisors, enquiries of management,
those charged with governance and review of board minutes.
We assessed the susceptibility of the financial statements to material misstatement, including fraud and
considered these risks to be highest within areas of material estimation, including impairment of goodwill
and non-financial assets, the valuation of deferred tax assets and revenue recognition (refer to the key audit
matters section for procedures performed over these areas), and the disclosures in respect of these
judgements, which was assessed by performing financial statement disclosure reviews with reference to
relevant accounting standards and tailored disclosure checklists.
We addressed the risk of management override of controls, by performing testing over unusual journals
including, manual journals at component and consolidation level, as well transactions around the year end
by agreeing to supporting documentation, and evaluating whether there was evidence of bias by the
directors that represented a risk of material misstatement due to fraud.
To address the risk of fraud due to revenue recognition through our journals testing we obtained a list of
journal entries to revenue and corroborated manual postings with values greater than predetermined
thresholds to supporting documentation.
We communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,
recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations
or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-
compliance with laws and regulations is from the events and transactions reflected in the financial statements, the
less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our auditor’s report.
Alpha Plus Holdings plc
Company No. 04418776
26
Independent Auditor’s Report to the Members of Alpha Plus Holdings plc
continued
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company
and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have
formed.
Nick Poulter (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Guildford, UK
7 December 2022
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
27
Group statement of comprehensive income
for the year ended 31 August 2022
2022
2021
restated*
Notes
£000
£000
Revenue
6
Other operating income
6
Operating expenses
6
(88,371 )
(84,722 )
Adjusted EBITDA
†
Amortisation of intangible assets
11
(32 )
Depreciation and impairment of property, plant &
equipment
12 (9,386 ) (11,654 )
Depreciation and impairment of right-of-use assets
13
(12,065 )
(15,869 )
Reversal of past impairment losses
12,13
Lease modification
21
Net revaluation of freehold and investment properties
12,15
Profit / (loss) before interest and tax
(6,228 )
Finance costs
8
(17,348 )
(18,187 )
Finance income
9
Loss before tax
(6,180 )
(22,431 )
Tax (charge) / credit
10
(1,847 )
Loss for the year
(8,027 )
(19,105 )
Other comprehensive income / (deficit)
Other comprehensive income / (loss) that will not be
reclassified to profit or loss in subsequent periods:
Gain on property revaluation
12
Deferred tax relating to property revaluation
10
(3,005 )
(9,272 )
Other comprehensive loss that may be reclassified to
profit or loss in subsequent periods (net of tax):
Exchange losses on translation of foreign operations
(1,549 )
(107 )
Total comprehensive income / (deficit) for the year
(20,271 )
All losses and comprehensive income were attributable to the owners of the parent company. The notes on pages
32 to 66 form part of these financial statements.
*As restated to reflect the impact of a prior year adjustment to deferred tax. See note 29 for further information.
†
Adjusted EBITDA represents earnings before interest, tax, depreciation, amortisation, impairment and revaluation
of properties.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
28
Group balance sheet
as at 31 August 2022
* As restated to reflect the impact of a prior year adjustment to deferred tax. See note 29 for further information.
2022
2021
restated*
2020
restated*
Notes
£000
£000
£000
Non-current assets
Intangible assets 11 2,206 2,206 2,238
Property, plant and equipment 12 229,066 219,737 219,495
Right-of-use assets 13 174,069 176,764 210, 908
Finance lease receivable 14 1,992 - -
Investment property 15 4,200 4,20 0 4,292
Financial assets 16 23,767 22,319 3,540
Current assets
Trade and other receivables 17 4,584 2,83 6 3,55 4
Financial lease receivable 14 961 - -
Financial assets 16 1,001 943 24,574
Cash and cash equivalents 18 19,455 9,625 7,244
Total assets
Current liabilities
Trade and other payables 19 62,849 52,612 49, 698
Loans and borrowings 20 2,641 2,814 1,729
Lease liabilities 21 11,712 9,818 8,801
Non-current liabilities
Loans and borrowings 20 130,075 127,398 127,378
Lease liabilities 21 193,526 191, 978 219, 903
Deferred tax liabilities 10 29,958 24,421 18,476
Total liabilities
Net assets
Equity attributable to equity shareholders
Share capital 22 16 16 16
Revaluation reserve
Foreign currency translation reserve
(1,702 ) (153 ) (46 )
Retained losses
(49,547 ) (42,200 ) (23,732 )
Total equity
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
29
Group balance sheet continued
The notes on pages 32 to 66 form part of these financial statements.
The financial statements were approved by the Board and authorised for issue on 7 December 2022.
J E B Bowden
Chief Financial Officer
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
30
Group statement of changes in equity
for the year ended 31 August 2022
Issued
capital
Revaluation
reserve
Foreign
currency
translation
reserve
Retained
losses
Total
equity
£000
£000
£000
£000
£000
At 31 August 2020 as previously stated 16 75,109 (46 ) (23,732 ) 51,347
Effect of prior year adjustment*
(1,487 )
(1,487 )
At 31 August 2020 as restated*
(46 )
(23,732 )
Loss for the year - - - (19,105 ) (19,105 )
Other comprehensive income / (losses):
Gain on property revaluation
Deferred tax relating to property
revaluation*
Exchange loss on translation of foreign
operations
Transfer between reserves:
Transfer of depreciation relating to
property revaluation
At 31 August 2021 as restated* 16 71,926 (153 ) (42,200 ) 29,5 89
Loss for the year
(8,027 )
(8,027 )
Other comprehensive income / (losses):
Gain on property revaluation
Deferred tax relating to property
revaluation
Exchange loss on translation of foreign
operations
Transfer between reserves:
Transfer of depreciation relating to
property revaluation
At 31 August 2022
(1,702 )
(49,547 )
The notes on pages 32 to 66 form part of these financial statements.
* As restated to reflect the impact of a prior year adjustment to deferred tax. See note 29 for further information.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
31
Group statement of cash flows
for the year ended 31 August 2022
2022 2021
Notes
£000
£000
Cash generated from operations
28
Investing activities
Additions of property, plant and equipment
12
(3,955 )
(3,450 )
Interest received
Loan drawn by parent undertaking
16
(200 )
Loan repaid by parent undertaking
Finance lease principal received
14
Rent deposit received
Rent deposit paid
(424 )
Net cash (outflow) / inflow from investing activities
(1,936 )
Financing activities
Interest paid on loan and borrowings
(4,000 )
(5,094 )
Other interest paid
(97 )
(738 )
New loans drawn from parent undertakings
20
Repayment of loans drawn from parent undertakings
20
(6,700 )
Interest paid on lease liabilities 21 (10,574 ) (11,039 )
Principal paid on lease liabilities
21
(10,164 )
(8,056 )
Taxes paid on acquisition of new leases
(225 )
Net cash outflow from financing activities
(25,060 )
(25,127 )
Net increase in cash and cash equivalents
Foreign exchange differences on cash
Cash and cash equivalents at 1 September
Cash and cash equivalents at 31 August
18
The notes on pages 32 to 66 form part of these financial statements.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
32
Notes forming part of the accounts
1. Corporate information
The consolidated financial statements of Alpha Plus Holdings plc and its subsidiaries (“the Group”) for the year
ended 31 August 2022 were authorised for issue in accordance with a resolution of the Directors on 7 December
2022. The Company is a public company limited by shares and is incorporated and domiciled in England and Wales .
The principal activity of the Group is the provision of educational services.
2.1 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with UK adopted
International Accounting Standards.
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The
areas where significant judgements and estimates have been made in preparing the financial statements and their
effect are disclosed in note 3.
The consolidated financial statements are presented in Sterling which is the functional currency of the parent
company and the primary operating subsidiary. All values are rounded to the nearest thousand (£000), except
when otherwise indicated.
Consistent accounting policies and presentation have been used in both years presented in the financial statements.
The financial statements for the years ended 31 August 2021 and 31 August 2020 have been restated as set out in
note 29.
Going concern
The financial statements have been prepared on a going concern basis. In considering whether this is appropriate,
the Directors have taken into account the following:
The Group is principally financed by £80m of secured sterling bonds which are listed on the London Stock
Exchange Order Book for Retail Bonds (“ORB”) and which mature in March 2024, and by £50.4m deep-discount
bonds issued to its parent companies which mature in December 2024. No repayments of capital fall due before
the £80m bond maturity date in March 2024. Early preparations for the refinancing of the Group’s debt which
matures in March and December 2024 are underway, with support from advisors. Based on initial advice from
advisors, the Directors are confident that the refinancing will be successfully executed sufficiently in advance of
31 March 2024.
The Group held £19.5m of cash and cash equivalents at 31 August 2022 and has a committed £5m bank
overdraft facility.
At 31 August 2022, the Company had loaned £19.7m to the ultimate parent company and subsequently on 3
October 2022 the Company loaned a further £5.2m to the same company. Although repayment is not due
until March 2024, the ultimate parent company has agreed to repay these amounts upon receipt of a request
from the Company (see note 16 to the financial statements) and to provide further financial support if required.
The Board is satisfied that the parent company has sufficient liquidity to make such repayments should the
need arise.
As at 31 August 2022, the Group had £51.2m net current liabilities (2021: £51.8m). However, the net current
liabilities included £43.0m deferred income which is a non-cash item (2021: £32.6m); and £14.7m other
payables of which the majority is deposits from parents which are unlikely to be paid within the next twelve
months (2021: £14.8m).
The Directors have referred to cash flow forecasts for the period ending 31 March 2024 in order to understand the
working capital requirements of the Group. A variety of scenarios in respect of the period ending 31 March 2024
have also been modelled and reviewed by the Board, including a possible reduction in pupil and student numbers.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
33
Notes forming part of the accounts continued
2.1 Basis of preparation (continued)
In all of these scenarios, the Group would still have significant available funding, notably the residual element of the
parent company loan referred to above. As a result, the Directors have a reasonable expectation that the Group
has adequate financial resources to continue in operational existence for the foreseeable future and consider it
appropriate to prepare the financial statements on a going concern basis.
2.2 Basis of consolidation
The Group financial statements comprise the financial statements of Alpha Plus Holdings plc and its subsidiaries
as at 31 August 2022.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries
are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-
group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are
eliminated in full.
2.3 Summary of significant accounting policies
a) Business combinations and goodwill
Business combinations are accounted for using the acquisition method.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred over the
net identifiable assets acquired and liabilities assumed.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the
Group’s cash-generating units, being schools and colleges, which are expected to benefit from the combination.
b) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. The specific recognition criteria
described below must also be met before revenue is recognised.
Contracts with customers
The majority of the Group’s revenue is derived from contracts with customers, usually the parents of pupils and
students, and includes tuition fees together with fees for ancillary education-related services and student
accommodation. These fees are set in advance of the commencement of a financial year and generally do not
change until the beginning of the next financial year. The Group’s performance obligations in respect of these
revenue streams are delivered evenly over time, typically a school term or an academic year, and so revenue is
recognised on this basis with fees initially recognised as deferred income (contract liabilities) and then transferred
to the income statement over the period of time to which the fees relate.
Discounts, which may take the form of scholarships, bursaries and similar fee reductions are applied to reduce
revenue evenly over the same periods in which the respective tuition or boarding accommodation fees are
recognised.
Certain revenue streams, including registration fees, exam fees and the retention of non-refundable deposits, are
recognised at the point in time at which the Group has no further performance obligation.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
34
Notes forming part of the accounts continued
2.3 Summary of significant accounting policies continued
c) Other income
Rental income
Rents receivable from tenants are recognised on a straight-line basis over the lease term. Contingent rents, which
are not fixed at lease inception, for example inflation-linked rent review increments, are recognised over the period
in which they are earned.
Interest income
Interest income is recognised using the effective interest rate approach.
d) Taxes
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax liabilities are recognised for all taxable temporary differences including the revaluation of freehold land
and buildings, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profits
will be available against which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
e) Property, plant and equipment
Property, plant and equipment is stated at cost or valuation, net of accumulated depreciation and/or accumulated
impairment losses, if any.
Donations received from parents as a contribution towards the costs of new equipment
are deducted against the initial cost of the asset. Freehold land and buildings are measured using the revaluation
model, under which, assets are revalued to fair value annually as at 31 August by an external professional valuer.
Changes in fair value are recognised in other comprehensive income and added to, or deducted from, the
revaluation reserve except that a decrease in value exceeding the credit balance on the revaluation reserve, or a
reversal of such, is recognised in profit and loss. When disposing of an asset measured using the revaluation model,
any remaining balance in the revaluation reserve relating to the asset is transferred directly to retained earnings.
All other assets are measured at cost.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
35
Notes forming part of the accounts continued
2.3 Summary of significant accounting policies continued
e) Property, plant and equipment continued
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
Freehold land Not depreciated
Freehold buildings Depreciated over their useful life of either 50 or 100 years
Leasehold land & buildings Shorter of the length of the lease and the useful life of the property
Fixtures, fittings and equipment 25% - 33%
Assets under development are not depreciated until such time as the respective asset is brought into use for
educational purposes. Accumulated depreciation in respect of freehold land and buildings is eliminated against the
gross carrying amount of the property and the net amount is restated to the carrying amount at the time on which a
revaluation is carried out.
Depreciation is charged on freehold properties subject to revaluation. The portion of the charge not related to the
historic cost of the properties is transferred to retained earnings from the revaluation reserve.
The Directors review estimated useful lives and residual values annually and make provision for impairment if
considered appropriate.
f) Leases
The Group recognises right-of-use assets and corresponding lease liabilities on the date on which a leased asset
is made available to the Group, except for short term leases (defined as leases with a lease term of twelve months
or less) and low-value assets (defined as assets with an initial value of less than £50,000). For these leases, the
Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any lease modifications and re-measurement of lease liabilities. The cost of right-of-use
assets includes the present value of lease liabilities recognised, plus initial direct costs incurred, less any lease
payments made at or before the commencement date and less any lease incentives received. Unless the Group is
reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use
assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the lease term.
Right-of-use assets are subject to an annual review for indicators of impairment (see note 13).
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of
minimum lease payments to be made over the lease term. The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include
the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties
for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease
payments that do not depend on an index or a rate are recognised as an expense in the period on which the event
or condition that triggers the payment occurs.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
36
Notes forming part of the accounts continued
2.3 Summary of significant accounting policies continued
f) Leases continued
Lease liabilities continued
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a
change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be exercised and within the control of the Group as
lessee, less any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised
and if within the control of the Group as lessee.
Lease modifications
The carrying value of lease liabilities is adjusted when the variable element of future lease payments, which may
be inflation or market rent linked, is revised although the discount rate used remains unchanged. If the Group revises
its estimate of the lease term, for example because it re-assesses the probability of a break option being exercised,
the carrying value of the lease liability is adjusted to reflect the payments to be made over the revised lease term
but discounted at a revised discount rate. In both cases, an equivalent adjustment is made to the carrying value of
the respective right-of-use asset with the revised carrying amount being depreciated over the revised lease term
remaining.
Where a modification is made due to a reduction in the scope of a lease, the lease liability and right-of-use asset
are decreased by their relative amounts compared to the original lease, with any difference included within the
income statement.
Lease remeasurement for change in term
Where there is a change to the lease term, the lease liability is remeasured using a revised estimate of the resultant
cashflows using the current discount rate, with the right-of-use asset adjusted by the same amount (see note 21).
Lease remeasurement for change in index or discount rate affecting payments
Where there is a change in index or discount rate affecting payments, the lease liability is remeasured to reflect the
revised cashflows using the original discount rate, with the right-of-use asset adjusted by the same amount.
Acting as lessor and intermediate lessor
Where the Group acts as lessor, it determines at inception whether each lease is a finance lease or operating lease
by assessing whether the lease transfers substantially all of the risks and rewards incidental to ownership of the
underlying asset. If this is the case, then the lease is a finance lease; if not, it is an operating lease.
When the Group acts as an intermediate lessor, it accounts for its interests in the head lease and the sub-lease
separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from
the head lease, not with reference to the underlying asset. If the sub-lease constitutes an operating lease, the
payments receivable are recognised as income on a straight line basis over the term of the lease. If the sub-lease
constitutes a finance lease, on commencement of the lease the Group recognises the net investment in the lease.
This is measured by discounting the minimum lease payments receivable at the interest rate implicit in the lease.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
37
Notes forming part of the accounts continued
2.3 Summary of significant accounting policies continued
g) Investment property
Investment properties are those properties owned by the Group that are not occupied by any of the Group’s schools
and colleges. Investment properties are initially recognised at cost including transaction costs. Transfers are made
to or from investment property at carrying value if there is a change in use. Investment properties are subsequently
stated at fair value. Gains or losses arising from changes in fair values resulting from a change of use are included
in profit or loss. Fair values are determined annually by an external professional valuer. Provisions for impairment
are made if appropriate.
Rent receivable is recognised on a straight line basis over the period of the lease.
h) Financial instruments
Financial assets
Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value through
profit or loss or fair value through other comprehensive income (OCI). This classification depends on the asset’s
contractual cash flow characteristics and the Group’s business model for managing them. Amortised cost is the only
category applicable to the Group and is used if the business objective is to hold the asset to collect contractual cash
flows and the respective contractual terms provide specified dates for the payment of principal and interest. Financial
assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject
to impairment.
The Group recognises an allowance for expected credit losses for financial assets held at amortised cost based on
the difference between the contractual cash flows and the cash flows that the Group expects to receive incorporating
forward-looking information where available and relevant (see note 17).
The Group’s financial assets at amortised cost include cash and cash equivalents, trade and other receivables, rent
deposits and a loan to the ultimate parent company.
Financial liabilities
Financial liabilities are classified at initial recognition at fair value through profit or loss, loans and borrowings or as
payables. The Group’s financial liabilities include trade and other payables as well as loans and borrowings including
bank overdrafts, and share based payments. These are initially recognised at fair value and, in the case of loans
and borrowings and payables, net of directly attributable transaction costs. Loans and borrowings are subsequently
measured at amortised cost using the effective interest rate (EIR) method which ensures that the interest expense,
including amortisation of loan arrangement or similar fees, over the period to repayment is at a constant rate on the
balance of the liability carried on the statement of consolidated financial position. Share based payments are
subsequently measured at fair value at each reporting date. Financial liabilities are derecognised when the
obligation under the liability is discharged or cancelled or expires.
i) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and short-term deposits
with a maturity of three months or less. Cash and cash equivalents are assessed for expected credit losses in
accordance with the policy set out above.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
38
Notes forming part of the accounts continued
2.3 Summary of significant accounting policies continued
j) Pensions
The Group operates a group personal pension plan which is a defined contribution pension scheme. Contributions
payable for the year are charged in the income statement.
In addition, a small number of the Group’s employees are members of the Independent Schools’ Pension Scheme.
This scheme is also accounted for as a multi-employer defined contribution scheme (see note 26).
k) Share-based payments
The Group operates a cash incentive plan for certain employees. Awards made under this plan are also accounted
for as cash-settled share-based payments. A liability is recognised for such Awards at fair value, and these are
subsequently re-measured at fair value at each reporting date.
l) Foreign currencies
Transactions in foreign currencies are initially recorded at the respective currency spot rate. Monetary assets and
liabilities denominated in foreign currencies are translated at the currency spot rate at the reporting date. Differences
arising on settlement or translation of monetary items are recognised in profit or loss.
On consolidation, the assets and liabilities of foreign operations are translated into Sterling at the prevailing
exchange rate on the reporting date and the statements of profit or loss are translated at the average exchange rate
applicable during the reporting period. Exchange differences arising are recognised in other comprehensive income.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or
liability affected in future periods.
Key judgements
Recognition of deferred tax assets
The carrying value of properties owned by the Group is higher than the tax base cost. This represents a temporary
difference for deferred tax purposes and a subsequent deferred tax liability is recognised. IAS 12 provides that
deferred tax assets should be recognised in respect of unutilised losses where it is probable that taxable profits will
subsequently arise against which the losses can be utilised. The Directors have prepared and reviewed future
financial projections for the Group over a seven year period, being the period over which there is sufficient certainty
as to the expected utilisation of the losses. The Directors have also assessed unrealised capital gains which would
on realisation give rise to taxable gains against which the losses could be utilised. As a result, a deferred tax asset
has been recognised to the extent that losses are considered likely to be utilised (see note 10).
Lease contracts with break or renewal options
Several leases within the Group’s portfolio contain break or renewal options. Lease break options provide the Group
with considerable flexibility, in particular with regard to short and medium term demand for boarding accommodation
in the Group’s sixth form colleges. In considering whether a break option is likely to be exercised, the Group
considers a numbers of factors, including the expected future growth profile of the respective school or changes in
anticipated international student recruitment. None of the Group’s break options carry significant exit penalties other
than as a result of accelerating any end of lease dilapidations liabilities.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
39
Notes forming part of the accounts continued
3. Significant accounting judgements, estimates and assumptions continued
Key estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions and estimates on parameters
available when the Group financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising beyond the control of the
Group. Such changes are reflected in the assumptions when they occur.
Fair value measurement of freehold and investment property
Freehold land and buildings and investment properties are carried at fair value. Fair value measurement uses
observable market inputs wherever possible. Inputs used in the fair value measurement technique are categorised
as follows:
Level 1 - quoted prices in active markets for identical items.
Level 2 – other observable direct or indirect inputs.
Level 3 – unobservable inputs not derived from market data.
The assumptions underlying the fair value assessment are described in notes 12 and 15 respectively.
Impairment of goodwill and non-financial assets
Short-term operating losses in new schools and losses or reduced profits in recently relocated or otherwise
expanded schools and colleges may negatively impact fair value. However, the Group takes a long-term view when
making decisions to open new schools or to relocate or otherwise expand existing schools and colleges. A new
school typically fills with an annual pupil or student intake at the beginning of each academic year starting with the
youngest age group. A school educating pupils aged between 3 and 11, for example, will consequently take at least
eight years to fill. The Group consequently prepares financial projections covering periods of up to seven years
when considering the value in use of fixed assets which includes making long-term assumptions regarding future
pupil and student numbers, annual fee increases and cost inflation. This is longer than the default period of five
years detailed in IAS 36. Impairment exists when the carrying value of an asset or cash generating unit exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. A value in use
assessment is carried out annually for goodwill and for non-current assets if indicators of impairment are identified
(see note 12).
Discount rate used to calculate right-of-use assets and lease liabilities
The incremental borrowing rate for new leases is calculated by reference to the risk free rate for instruments of
similar tenures. Where lease modifications have occurred in the year, the incremental borrowing rate has been
adjusted to account for the change in risk free rate for instruments of similar tenures. There were three new leases
which commenced in the year ended 31 August 2022; rates of between 4.9% and 5.0% have been used as the
incremental borrowing rates, depending on the commencement date and length of term for each lease. If the
discount rate of these leases increased by 1%, it would reduce the total lease liability at 31 August 2022 by £1.0m.
If the discount rate of these leases decreased by 1%, it would increase the total lease liability at 31 August 2022 by
£1.1m.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
40
Notes forming part of the accounts continued
4.1 New standards and interpretations
There were no new standards adopted in the year to 31 August 2022.
Other new standards and interpretations
The Group early adopted Amendments to IFRS 16: Covid-19 related rent concessions in the year ended 31 August
2020, which provided relief for lessees accounting for rent concessions granted as a direct consequence of Covid-
19. It provides lessees with a potential exemption from the requirement to determine whether a Covid-19 related
rent concession was a lease modification. On 31 March 2021 the IASB extended the relief by one year to cover rent
concessions that reduce only lease payments due on or before 30 June 2022.
4.2 Standards issued but not yet effective
The IASB has not issued any new standards or amendments that are not yet effective and that are expected to
have a material effect on the Group.
5. Segmental information
The Group’s chief operating decision maker is the Board of Directors. Since all of the Group’s schools and colleges
have similar operational characteristics, the Board views the Group’s schools and colleges as a single portfolio.
Aggregation criteria have therefore been applied and consequently, no further detailed segmental analysis has been
included in these financial statements.
6. Revenue and operating expenses
Revenue, all of which derives from continuing operations, relates to the provision of educational services as
analysed below:
2022
2021
£000
£000
Product type:
Tuition fees 96,340 90,383
Accommodation income 13,531 9,861
Other ancillary fees 6,621 3,998
116,492
104,242
Timing of provision of service:
Over time 113,321 102,714
At a point in time 3,171 1,528
116,492
104,242
Geographical analysis:
UK
114,282
102,207
USA
2,210
2,020
Other
-
15
116,492
104,242
Deferred income (contract liability) balance of £32.6m as at 31 August 2021 (note 19) has all been recognised as
revenue in the year to 31 August 2022. Deferred income of £43.0m at 31 August 2022 is all expected to be
recognised as revenue in the year ending 31 August 2023.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
41
Notes forming part of the accounts continued
6. Revenue and operating expenses continued
Other operating income
2022
2021
£000
£000
Rental income
1,690
943
Operating expenses may be analysed as follows:
2022 2021
£000
£000
Staff and other direct costs
63,481
59,423
Other expenses
24,890
25,299
88,371
84,722
2022
2021
£000
£000
Operating expenses include:
Auditor’s remuneration – audit of the financial statements 126 105
Auditor’s remuneration – statutory audits of subsidiaries 126 153
Auditor’s remuneration – agreed upon procedures 12 12
7. Information regarding directors and employees
2022
2021
£000
£000
Wages and salaries
41,359
41,060
Social security costs
4,362
4,334
Other pension costs
3,316
3,222
49,037
48,616
The average number of employees during the years were as follows:
2022
2021
Number
Number
Directors
8
8
Head teachers
20
20
Teachers and tutors
718
734
Office administration
112
119
Others
188
189
1,046
1,070
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
42
Notes forming part of the accounts continued
7. Information regarding directors and employees continued
Key management personnel compensation
The Directors of the Company are considered to be key management personnel as they have responsibility for
planning, directing and controlling the activities of the Group:
2022
2021
£000
£000
Short-term employment benefits
1,452
1,396
Post-employment benefits (including pension contributions)
59
46
Employer's national insurance
201
175
1,712
1,617
Six Directors, defined as key management personnel in accordance with IFRS, accrued pension benefits under
defined contribution schemes in 2022 (2021: 6).
As at 31 August 2022, the Directors and their connected parties collectively held £12,000 (2021: £12,000) nominal
value of the Company’s secured sterling bonds and interest of £600 per annum (2021: £600) was receivable by
them thereon.
Information regarding the highest paid Director is as follows:
2022
2021
£000
£000
Remuneration including benefits
261
220
8. Finance costs
2022
2021
£000
£000
Interest on 5% secured sterling bonds 4,000 4,000
Amortisation of secured sterling bonds issue costs 335 220
Interest on loan to parent undertaking - 2,179
Interest charged on deep-discount bonds issued to parent undertakings 2,342 -
Bank and other interest 97 749
Interest on lease liabilities (note 21) 10,574 11,039
17,348
18,187
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
43
Notes forming part of the accounts continued
9. Finance income
2022
2021
£000
£000
Interest receivable from parent company (note 16)
1,327
1,595
Bank interest
56
78
Interest receivable on finance lease
114
-
Other interest receivable
55
311
1,552 1,984
10. Taxation
The major components of the tax charge for the year ended 31 August 2022 were:
2022
2021
restated*
£000
£000
Current tax:
Current tax charge
(1)
(1)
Amounts receivable for losses surrendered in prior period
686
-
Deferred tax:
Adjustment in relation to prior year accelerated capital allowances
(1,227)
-
Relating to origination and reversal of temporary differences
(1,305)
3,327
Tax (charge) / credit
(1,847)
3,326
Deferred tax on revaluation included in other comprehensive income
(3,005)
(9,272)
Tax charge reported in the Statement of Comprehensive Income (4,852) (5,946)
A reconciliation between the tax (charge) / credit and the product of accounting loss multiplied by the UK
corporation tax rate for the years ended 31 August 2022 and 2021 is as follows:
#
2022
2021
£000
£000
Loss before tax
(6,180)
(22,431)
At UK corporation tax rate of 19% (2021: 19%) 1,174 4,262
Movements in recognition of deferred tax assets
(1,041)
(925)
Adjustment in relation to prior year accelerated capital allowances
(1,286)
-
Expenses not deductible (1,124) (2,228)
Amounts receivable for losses surrendered in prior period 686 -
Effect of different rates of tax
(255)
2,174
Other tax adjustments
(1)
43
Tax (charge) / credit
(1,847) 3,326
* As restated, see note 29 for further information.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
44
Notes forming part of the accounts continued
10. Taxation continued
The Group surrendered tax losses to other members of the ultimate parent company’s group for a consideration of
£686,000. The Group has recognised this receivable as a credit to the tax charge with corresponding amounts
included in the loan to parent company (note 16).
Deferred tax
Consolidated
balance sheet
Consolidated statement
of changes in equity
2022
2021
restated*
2022
2021
restated*
£000
£000
£000
£000
Accelerated depreciation for tax purposes 3,058 3,278
(220) 804
Tax losses
4,403
5,680
(1,277) 2,503
Difference between carrying value of property and
tax base cost
(36,485) (33,480)
(3,005) (9,272)
Timing differences in relation to intra group leases (1,034) - (1,034) -
Other timing differences
100
101
(1) 19
Deferred tax
(29,958)
(24,421)
(5,537)
(5,946)
Reconciliation of net deferred tax liabilities 2022
2021
restated*
£000
£000
Opening balance as previously stated (24,421) (16,989)
Effect of prior year adjustment - (1,487)
Opening balance as restated (24,421) (18,476)
Recognised in profit and loss:
Tax (charge) / credit (2,532) 3,327
Recognised in other comprehensive income:
Revaluation of property (3,005) (9,272)
Closing balance (29,958) (24,421)
Deferred tax split between assets and liabilities:
Deferred tax assets
7,561
9,059
Deferred tax liabilities (37,519) (33,480)
Net deferred tax liabilities
(29,958)
(24,421)
* As restated, see note 29 for further information.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
45
Notes forming part of the accounts continued
10. Taxation continued
Deferred tax continued
The carrying value of properties owned by the Group is £145.9m (2021: £133.9m) higher than the tax base cost.
This represents a temporary difference for deferred tax purposes and a subsequent deferred tax liability of £36.5m
(2021: £33.5m as restated) is recognised.
In addition, at 31 August 2022, the Group had tax losses of £17.6m (2021: £22.9m) that are available indefinitely
for offset against future taxable profits of the companies in which the losses arose. The tax value of these losses is
£4.4m, all of which have been recognised (2021: £5.7m, all of which recognised).
At 31 August 2022, the Group had unrecognised deferred tax assets in respect of unutilised losses and depreciation
in excess of capital allowances and losses of £4.4m (2021: £1.2m) which have not been recognised because, in
the opinion of the Directors and based on a review of projected taxable profits in the next five to seven years, it is
not sufficiently certain that taxable profits will arise against which to offset them.
Change in Corporation Tax rate
In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase
to 25%. The Finance Bill was substantively enacted on 24 May 2021 and therefore the deferred tax liabilities have
been recognised using a rate of 25% (2021: calculated using 25%).
11. Intangible assets
Goodwill
Other
Total
£000
£000
£000
Cost
At 1 September 2020 and at 31 August 2021 and 2022
7,923
32
7,955
Amortisation and impairment
At 1 September 2020
5,717
-
5,717
Amortisation for the year ended 31 August 2021
-
32
32
At 31 August 2021 and 31 August 2022
5,717
32
5,749
Net book value
At 31 August 2021 and 31 August 2022
2,206
-
2,206
At 1 September 2020
2,206
32
2,238
Goodwill has been allocated, for impairment testing, to cash generating units (schools or colleges or groups of
schools and colleges) that benefit from the synergies of the combination. Of the net book value of £2,206,000 at 31
August 2022, £1,808,000 relates to a portfolio of schools and colleges acquired in 2002. The recoverable value of
this goodwill is subject to annual impairment review based on the fair value or the value in use of the relevant cash
generating units. The remaining £398,000 of goodwill relates to cash generating units occupying freehold land and
buildings which were subject to revaluation during the year (see note 12).
Key assumptions used in fair value calculations
The key assumptions used in the Group’s value in use calculations are set out in note 12.
Sensitivity to changes in assumptions
The Group’s approach to sensitising its value in use calculations and the outcome of this are also set out in note
12.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
46
Notes forming part of the accounts continued
12. Property, plant and equipment
Freehold
land and
buildings
Long leasehold
land and
buildings
Leasehold
improvements
Fixtures
and
equipment
Total
£000
£000
£000
£000
£000
Cost or valuation
At 1 September 2020
178,108
13,148
52,580
43,029
286,865
Additions
739
6
1,185
1,520
3,450
Revaluation
8,213
-
-
-
8,213
Foreign exchange movements - - (195) (19) (214)
At 31 August 2021 187,060 13,154 53,570 44,530 298,314
Additions 1,187 - 603 2,165 3,955
Revaluation 13,532 - - - 13,532
Foreign exchange movements - - 1,121 122 1,243
At 31 August 2022 201,779 13,154 55,294 46,817 317,044
Depreciation and impairment
At 1 September 2020
11,893
1,404 17,709 36,364 67,370
Depreciation charge for the year 1,614 271 2,590 3,394 7,869
Impairment - - 3,785 - 3,785
Revaluation (426) - - - (426)
Foreign exchange movements - - (9) (12) (21)
At 31 August 2021 13,081 1,675 24,075 39,746 78,577
Depreciation charge for the year 1,731 282 2,739 2,634 7,386
Impairment - 1,950 50 - 2,000
Reversal of previous impairment - - (560) (25) (585)
Revaluation (256) - - - (256)
Foreign exchange movements - - 773 83 856
At 31 August 2022
14,556
3,907
27,077
42,438
87,978
Net book value
At 31 August 2022 187,223 9,247 28,217 4,379 229,066
At 31 August 2021
173,979
11,479
29,495
4,784
219,737
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
47
Notes forming part of the accounts continued
12. Property, plant and equipment continued
Security portfolio
Of the freehold land and buildings with a carrying value of £187.2m, £168.0m (2021: £155.4m) are subject to a first
charge to secure the Company’s deep-discount bonds issued to its parent companies. This carrying value is on a
fully equipped trading entity basis and so includes the value of the schools operating in those properties. The
charges provided to secure the deep-discount bonds issued to parent companies relate to the freehold land and
buildings which are held in separate subsidiary property companies and which were valued by an external
professional valuer subject to the internal leases with the Group’s main operating company, at £93.8m as at 31
August 2022 (2021: £90.2m).
The Group’s main operating company, Alpha Plus Group Limited, leases the buildings referred to in the paragraph
above from a number of the Group’s property companies. Its leasehold interests in those properties are subject to
a first charge to secure the Company’s secured sterling bonds and those interests had an effective carrying value
of £74.2m (2021: £65.2m) at 31 August 2022, being the difference between the Group value of £168.0m (2021:
£155.4m) and the security value of £93.8m (2021: £90.2m) referred to in the paragraph above.
In addition to the above, as at 31 August 2021, freehold land and buildings with a carrying value of £18.6m were
subject to a first charge to secure the Company’s secured sterling bonds. These charges were released during the
year ended 31 August 2022.
The total carrying value of assets securing the Company’s secured sterling bonds is £135.1m (2021: £143.8m)
represented by the £74.2m referred to above together with £8.7m, (2021: £8.9m) relating to the fair value of a long
leasehold property (see below) and £52.2m, relating to the fair value of right-of-use assets (2021: £51.0m; see
note 13).
Long leasehold land and buildings relate to two properties which the Group leases which had 980 years and 105
years respectively unexpired as at 31 August 2022. These may be distinguished from shorter leases included within
right-of-use assets (note 13) as the annual rent in both cases is a peppercorn. The figures included in the table
above represent the cost of improvements to these two buildings and accumulated depreciation thereon. One of
the long leasehold properties, with a book value of £8.7m (2021: £8.9m), is subject to a first charge to secure the
Company’s secured sterling bonds.
Fair value of freehold land and buildings
The fair value of freehold land and buildings is a level 3 recurring fair value measurement. The valuation techniques
and significant unobservable inputs used in determining fair values as well as the inter-relationship between key
unobservable inputs and fair value are as follows:
Valuation approach
Key unobservable
inputs
Relationship between
unobservable inputs and fair
value
Fair value is determined using discounted cash
flow techniques having regard to comparable
evidence of other transactions and, in the case
of underperforming schools, to vacant
possession values.
Discount rate (9% to
14%).
The higher the discount rate the
lower the present value of
discounted cash flows.
Exit yield / yield in
perpetuity (7.0% to
13.5%).
The higher the discount rate the
lower the present value of
discounted cash flows.
Increase in pupil
numbers (management
view).
Lower rate of growth reduces fair
value.
Annual tuition fee
increases 3.5% to 6.0%
(management view).
Lower rate of growth reduces fair
value.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
48
Notes forming part of the accounts continued
12. Property, plant and equipment continued
The fair value of two schools’ freehold land and buildings, The Falcons School for Girls and The Falcons Pre-
Preparatory School Chiswick, were assessed to be less than carrying value and a loss on revaluation of £0.1m has
been recognised accordingly as at 31 August 2022. Additionally, the fair value of two schools’ freehold land and
buildings (Hilden Grange Preparatory School and Falcons Prep Richmond) were assessed to be greater than their
carrying values, and accordingly the partial reversal of £0.3m of a previous impairment provision was recognised
as at 31 August 2022.
For the year ended 31 August 2022, a gain of £17.8m was recognised in other comprehensive income relating to
the freehold land and buildings of four schools (Wetherby School, Pembridge Hall School, The Minors Nursery and
Davenport Lodge School). Additionally, a loss on revaluation of £4.3m was recognised in other comprehensive
income relating to the freehold land and buildings of one school (St Anthony’s School for Boys). In the previous
year, a revaluation gain of £8.2m was recognised in other comprehensive income relating to the freehold land and
buildings of five schools (Wetherby School, Pembridge Hall School, The Minors Nursery, Davenport Lodge School
and St Anthony’s School for Boys).
The net book value of freehold land and buildings as measured on a historic cost basis at 31 August 2022 was
£73.3m (2021: £72.9m).
Impairment review for non-current assets
For the purpose of impairment testing, each of the Group’s schools and colleges is treated as a cash generating
unit. In accordance with IAS 36 Impairment of assets, an impairment provision is recognised if the carrying value is
higher than the recoverable amount. Recoverable amount is the greater of fair value less costs of disposal and
value in use.
Key assumptions used in value in use calculations
The key assumptions for the Group’s value in use calculations are projected pupil/student numbers, annual fees
per pupil/student and weighted average cost of capital (WACC). The Group prepares financial projections for
periods of up to seven years reflecting the period over which short term operational changes such as increases or
decreases in a school’s operational capacity can directly impact future cash flows. Earnings beyond this period are
extrapolated using a long term growth rate of 2% per annum (2021: 2%) with a terminal year multiple of 13.66 then
applied (2021: 14.57). These cash flows are then discounted at a pre-tax rate of 10.0% (2021: 10.1%) per annum
which represents the Group’s WACC. The WACC and long term growth rates are determined by management and
take account of data from professional valuers and other external sources, including comparable companies
operating within the education sector.
These value in use calculations have identified one school, St Anthony’s School for Girls, where the carrying value
was higher than the value in use. A £2.0m impairment has been recognised accordingly, of which £1.9m has been
charged to long leasehold assets and £0.1m to leasehold improvements. Impairment provisions totalling £7.2m in
the year to 31 August 2021 related to Wetherby-Pembridge School.
Additionally, the value in use calculations have identified one school, Portland Place School, where the value in use
exceeded the carrying value. A £1.0m reversal of previous impairment charges has been recognised accordingly,
of which £0.6m has been credited to leasehold improvements and £0.4m to right-of-use assets (see note 13).
Sensitivity to changes in assumptions
The value in use calculations are sensitive to changes in the discount rate, pupil/student number growth and annual
fee increase assumptions although any reduction in pupil/student numbers would be partially mitigated by reduced
personnel and other direct costs. Each value in use calculation has been sensitised assuming a 5% reduction in
annual contribution, defined as revenue less personnel and other direct costs, as this is considered reasonably
possible. All else being equal, an additional impairment charge of £0.5m would be required on this basis. Each
value in use calculation has also been sensitised by using a pre-tax discount rate of 12.0%. All else being equal, an
additional impairment charge of £1.3m would be required on this basis.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
49
Notes forming part of the accounts continued
13. Right-of-use assets
Land and
buildings
Fixtures and
equipment
Total
£000
£000
£000
Cost
At 1 September 2020 226,044 1,116 227,160
Additions 1,695 - 1,695
Foreign exchange movements (571) - (571)
Lease modification (9,866) - (9,866)
Lease remeasurement (9,560) - (9,560)
At 1 September 2021
207,742
1,116
208,858
Additions
4,237
-
4,237
Foreign exchange movements
845
-
845
Lease modification
752
-
752
Lease remeasurement
4,031
-
4,031
At 31 August 2022
217,607
1,116
218,723
Depreciation
At 1 September 2020
15,356
896
16,252
Foreign exchange movements
(27)
-
(27)
Depreciation charge
12,398
66
12,464
Impairment
3,405
-
3,405
At 1 September 2021 31,132 962 32,094
Foreign exchange movements 910 - 910
Depreciation charge 11,911 154 12,065
Reversal of previous impairment (415) - (415)
At 31 August 2022
43,538
1,116
44,654
Net book value
At 31 August 2022
174,069
-
174,069
At 1 September 2021
176,610
154
176,764
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
50
Notes forming part of the accounts continued
13. Right-of-use assets continued
The Group leases a number of buildings in the UK for its school operations and its Head Office. The Wetherby-
Pembridge school building in New York also occupies leased premises. In order to provide security of tenure
regarding its school buildings, the Group usually seeks to negotiate lease extensions or lease renewals if the
unexpired lease term is less than 10 years. The Group takes a varied approach to student boarding accommodation
with both long and short term lease commitments in order to provide flexibility to respond to changing student
numbers Most of the Group’s leases are subject to periodic rent reviews which may be fixed increments, related
to market values, or determined by reference to an inflation index such as RPI (see note 21).
Right-of-use assets are subject to an annual impairment review. In the year to 31 August 2022, no impairment
charge has been recognised but there has been a reversal of previous impairment charges of £1.0m in respect of
Portland Place School, of which £0.4m was credited to right-of-use assets and £0.6m was credited to property, plant
and equipment.
Right-of-use assets in respect of land and buildings with a carrying value of £52.2m (2021: £51.0m) are subject to
a first charge to secure the Company’s secured sterling bonds (see note 20).
14. Finance lease receivable
2022
2021
£000
£000
Current 961 -
Non-current 1,992 -
2,953 -
On 29 October 2021, the Group entered into an overriding lease with DV4 Properties Fulham Co. Limited, a
subsidiary of DV4 Limited, in respect of a building at 49 Hugon Road, Fulham, London SW6 and in doing so became
landlord to the occupational tenant, Thomas’s London Day Schools (Thomas’s Fulham). The initial rent payable on
the overriding lease of £1,093,000 per annum is equal to the rent receivable by the occupational tenant. The lease
expires in 2025. The overriding lease has been presented as a lease liability, with the sub-lease recognised as a
finance lease receivable. The Group recognised interest income on the lease receivable of £114,000 for the year
to 31 August 2022 (2021: £nil).
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to
be received after the reporting date.
2022
2021
£000
£000
Less than one year
1,093
-
One to two years
1,093
-
Two to three years
1,018
-
Total undiscounted lease receivable
3,204
-
Unearned finance income
(251)
-
Net investment in the lease
2,953
-
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
51
Notes forming part of the accounts continued
15. Investment property
£000
At 1 September 2020 4,292
Revaluation (92)
At 31 August 2021 and 31 August 2022 4,200
Investment property at 31 August 2022 represented a residential property in Hampstead, London NW3.
The investment property is held at fair value based on an external valuation performed by a professional valuer.
The investment property is valued using a comparative market methodology with certain unobservable inputs. The
significant unobservable input used in the valuation is the value per square foot. The value per square foot was
determined by reference to comparative market transactions of a similar specification in the geographical region of
3 Arkwright Road. The fair value reflects a capital value of £945 per square foot (2021: £945). A 3% increase or
decrease would result in a £0.1m increase or decrease in the value of this property.
The value of the property as measured on a historic cost basis is £4.292m.
2022
2021
£000
£000
Rental income derived from investment properties
43
29
There are no restrictions in respect of the Group’s ability to sell its investment property and the Group has no
contractual obligations to develop or maintain its investment property.
16. Financial assets
2022
2021
£000
£000
Loan to parent company
20,244
19,436
Deposits receivable
4,524
3,826
24,768
23,262
Current
1,001
943
Non-current
23,767
22,319
24,768
23,262
As at 31 August 2021, the Company had advanced loans totalling £18,800,000 to the ultimate parent company. A
further £886,000 was advanced to the ultimate parent company during the year ended 31 August 2022, comprising
£200,000 cash and £686,000 consideration for tax losses surrendered. The outstanding loans of £19,686,000 have
a long-stop repayment date of 31 March 2024. The ultimate parent company has agreed to repay these amounts
upon receipt of a request from the Company, however the Company is not currently forecasting to make any such
requests within the next twelve months and so the balance has been presented as a non-current asset. Interest of
7% per annum is receivable by the Company in respect of this loan and the figures in the table above include
£558,000 (2021: £636,000) of accrued interest, presented as a current asset. Further information regarding the
Group’s assessment of the recoverability of the loan to the parent company is given in note 25.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
52
Notes forming part of the accounts continued
16. Financial assets continued
Deposits receivable at 31 August 2022 included £3,631,000 (2021: £3,376,000) representing the fair value of
US$4.5m (2021: $5.0m) deposited with the Group’s bankers as security for the issuance of a standby letter of credit
to the landlord of premises the Group has leased in New York.
Of this US$4.5m, US$2.0m is repayable to the Group in four annual instalments of $0.5m commencing on 1 June
2023, with the balance of $2.5m being repayable at the end of the expected lease term. The current amount
receivable at 31 August 2022 is therefore $0.5m, with a non-current balance receivable of $4.0m. Non-current
deposits receivable also include £428,000 (2021: £428,000) in respect of premises at Hannah House, Manchester
Street, London W1 which is repayable in February 2027, £424,000 (2021: £nil) in respect of premises at Bryanston
Square and Bryanston Mews, London W1H, which is repayable in January 2040, and £22,000 (2021: £22,000) in
respect of the premises at Oxford Gardens, London W10.
17. Trade and other receivables
2022
2021
£000
£000
Trade receivables
580
294
Other receivables 1,082 243
Prepayments
2,922
2,299
4,584
2,836
As at 31 August 2022, specific loss provisions totalling £433,000 (2021: £554,000) had been made. An expected
credit loss provision of £100,000 (2021: £100,000) had been made against all other trade receivables based on a
review of credit losses from previous years and adjusting for forward-looking information, including the future
performance forecast for the Group. An assessment of default by risk category is as follows:
Current
30-60
days past
due
60-90
days past
due
Over 90
days past
due
Total
£000
£000
£000
£000
£000
31 August 2022
Gross carrying amount
112
405
44
552
1,113
Specific provisions
-
-
-
(433)
(433)
Carrying value after specific provisions 112 405 44 119 680
Expected loss rate
1%
0%
0%
83%
Loss provision
(1)
-
-
(99)
(100)
31 August 2021
Gross carrying amount 107 160 44 637 948
Specific provisions - - - (554) (554)
Carrying value after specific provisions
107
160
44
83
394
Expected loss rate 12% 17% 23% 60%
Loss provision (13) (27) (10) (50) (100)
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
53
Notes forming part of the accounts continued
17. Trade and other receivables continued
Of the £1,082,000 other receivables balance at 31 August 2022 (2021: £243,000), £822,000 was received on 19
October 2022. There were no other individually material balances in either the current or prior year.
The expected credit loss provision has remained the same during the year. Movements in the specific provision are
shown below:
£000
At 1 September 2020
670
Charge for the year
232
Debts written off in the year
(38)
Unused amounts released
(210)
At 31 August 2021
654
Charge for the year
324
Debts written off in the year
(197)
Unused amounts released
(248)
At 31 August 2022
533
Further the information about the Group’s credit risk exposures is included in note 25. Trade and other receivables
are non-interest bearing.
18. Cash and cash equivalents
2022 2021
£000 £000
Cash at bank and in hand 19,025 9,625
Short term deposits 430 -
19,455
9,625
Cash at bank earns interest at floating rates based on bank deposit rates. The short term deposit had a maturity
date of 6 September 2022.
19. Trade and other payables
2022 2021
£000
£000
Current
Trade payables 1,578 1,203
Other payables 14,669 14,822
Social security and other taxes 1,187 1,117
Accruals
2,382
2,893
Deferred income 43,033 32,577
62,849 52,612
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
54
Notes forming part of the accounts continued
19. Trade and other payables continued
Terms and conditions of the above financial liabilities:
Trade payables are non-interest bearing and are normally settled in accordance with the supplier’s terms of
business.
Current other payables are primarily pupil and student deposits which are non-interest bearing. These are
usually either offset against final term school fees or are returned when the student leaves the school or college.
20. Loans and borrowings
2022 2021
£000
£000
Current loans and borrowings
5% secured sterling bonds
1,666
1,666
Loan from parent company
975
1,148
2,641
2,814
Non-current loans and borrowings
5% secured sterling bonds
79,633
79,298
Deep-discount bonds issued to parent undertakings
50,442
-
Loan from parent company
-
48,100
130,075 127,398
The Company issued £80m 5% secured sterling bonds on 31 March 2016. The current amount shown above of
£1,666,000 (2021: £1,666,000) represents accrued interest. The non-current amount is net of unamortised issue
costs of £367,000 (2021: £702,000) which are being amortised over the eight year life of the bonds. Interest on the
5% secured sterling bonds is payable twice a year, on 30 September and 31 March and the bonds mature on 31
March 2024.
The secured sterling bonds are secured by way of a first legal mortgage over a portfolio of assets held by certain of
the Company’s subsidiaries and other related companies. The portfolio is subject to annual external professional
valuation and the Company is obligated to ensure that the value of the security portfolio is not less than 1.5 times
the principal amount of the bonds in issue. Additional properties can be added to the security portfolio in the event
of a shortfall. During the year ended 31 August 2022, three additional leasehold properties were added to the
security portfolio and eight freehold properties and one leasehold property were removed. At the most recent
valuation date, 31 August 2022, for the purpose of testing compliance with the Group’s secured sterling bonds, the
security portfolio was valued at £146.9m (2021: £151.5m) which is 1.84 times (2021: 1.89 times) the principal
amount of the bonds in issue.
On 8 December 2021, the Company resolved to issue deep-discount bonds to its parent companies and to use the
proceeds to refinance the £48.1m 4.5% loans from parent companies, in addition to accrued interest of £0.2m, with
effect from 2 August 2021. The deep-discount bonds have a subscription price of £48.1m, nominal value of £55.3m
and a redemption date of 4 December 2024. The remaining current balance on the loans from parent companies of
£975,000 represents accrued interest.
In addition to the £80m nominal value of issued 5% secured sterling bonds, a further £50m of 5% secured sterling
bonds are held on behalf of the Company by Deutsche Bank AG who were appointed as Retained Bond Custodian.
Since these bonds have not been issued outside the Group, these are not recognised as a liability as at the year-
end.
At 31 August 2022, the Group had £5.0m (2021: £5.0m) of undrawn committed borrowing facilities.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
55
Notes forming part of the accounts continued
20. Loans and borrowings continued
Movements in loans and borrowings are summarised below:
5% secured
sterling bonds
Deep discount
bonds
Loan from
parent company
Total
£000
£000
£000
£000
At 1 September 2020
80,744
-
48,363
129,107
Cash Flows
New loan drawn
-
-
6,500
6,500
Loans repaid
-
-
(6,700)
(6,700)
Interest paid (4,000) - (1,094)
(5,094)
Non-cash movements
Interest accruing in the year 4,000 - 2,179
6,179
Amortisation of issue costs
220
-
-
220
At 31 August 2021
80,964
-
49,248
130,212
At 1 September 2021
80,964 - 49,248 130,212
Cash Flows
Interest paid
(4,000)
-
-
(4,000)
Non-cash movements
Loan refinancing - redemption of
loan and issue of deep discount
bonds
- 48,100 (48,100) -
Accrued interest transferred to deep-
discount bonds
- 173 (173) -
Interest accruing in the year
4,000
2,169
-
6,169
Amortisation of issue costs 335 - -
335
At 31 August 2022
81,299
50,442
975
132,716
21. Lease liabilities
2022
2021
£000
£000
Current 11,712 9,818
Non-current 193,526 191,978
205,238 201,796
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
56
Notes forming part of the accounts continued
21. Lease liabilities continued
Movements in lease liabilities is summarised below:
2022
2021
£000
£000
Brought forward
201,796
228,704
Cash flows
Payment of lease liabilities - interest
(10,574)
(11,039)
Payment of lease liabilities - principal
(10,164)
(8,056)
Non-cash movements
Lease modifications
752
(10,444)
Additions in the year
7,672
1,695
Lease remeasurement
4,031
(9,560)
Interest accruing in the year
10,574
11,039
Foreign exchange translation differences
1,151
(543)
Carried forward 205,238 201,796
The lease modification of £0.8m in the year to 31 August 2022 related to the extension in the scope and term of a
lease for college boarding accommodation. The remeasurement of £4.0m in the year to 31 August 2022 related to
several leases which were subject to rent reviews completed during the year. Rent reviews resulted in revised rents
which were either index-linked or in line with market values.
The lease modification of £10.4m in the year to 31 August 2021 related to the reduction in the scope of a lease for
college boarding accommodation. The re-measurement of £9.6m that year reflected a re-assessment by
management that a lease break for one of the schools 10 years prior to the lease expiry date would be reasonably
certain to be exercised, following a reduction in the school’s projected financial performance versus the prior year.
An analysis of the maturity profile of the Group’s undiscounted future lease liabilities is included in note 25. Right of
use assets movement reconciliation is included in note 13.
The total undiscounted future lease liabilities of £309.5m (2021: £312.3m) could potentially be reduced by £68.9m
(2021: £69.1m) if the Group decided to exercise all break options at the earliest opportunity. Total undiscounted
lease liabilities would increase by £22.0m (2021: £18.9m) if break options which have been assumed to be exercised
were not exercised.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
57
Notes forming part of the accounts continued
21. Lease liabilities continued
The Group’s property leases are subject to periodic rent reviews which may be fixed, inflation-linked or market
based or a combination thereof. Of the total lease liabilities disclosed above, rent review provisions apply as follows:
2022
2021
No rent increments
1%
1%
Fixed rent increments 15% 15%
Inflation-linked increments
5%
11%
Fixed and inflation-linked increments
51%
47%
Market rent based increments 21% 20%
Fixed and market rent based increments
7%
6%
100%
100%
The following have been included in operating expenses:
2022
2021
£000
£000
Short term lease expenses 2,168 2,606
Low value lease expenses 70 81
Variable lease credits - (129)
Variable lease credits in the year ended 31 August 2021 related to rent deferral arrangements agreed with
landlords in response to the Covid-19 pandemic.
Operating leases with tenants
The Group sub-leases two properties at 21-23 Pembridge Villas, London W2 and 7 Castle Square, London SE17
respectively. Both properties are also included within right-of-use assets. The future minimum rental receivable
are as follows:
Land and buildings
2022
2021
£000
£000
Not later than one year 692 644
After one year but not more than five years 2,769 2,575
After five years 1,620 2,145
5,081
5,364
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
58
Notes forming part of the accounts continued
22. Share capital
2022
2021
£000
£000
5,000 Ordinary Shares of £1 each - issued and fully paid
5
5
45,000 Ordinary Shares of £1 each - issued and 25p paid
11
11
1 Preference Share of £1
-
-
16
16
The Ordinary Shares entitle the holder to one vote for each share held. The Preference Share, which carries no
voting rights, entitles the holder to be paid out of the surplus assets of the Company arising on a return of assets
in a liquidation, a reduction of capital or otherwise, in priority to the holders of the Ordinary Shares.
23. Related party disclosures
Balances and transactions between the Company and its wholly owned subsidiaries have been eliminated on
consolidation and so are not disclosed in this note. Information regarding key management personnel is provided
in note 7.
The Directors consider DV4 Limited, a company registered in the British Virgin Islands, to be the ultimate parent
company and controlling party of the Group. The immediate parent company is DV4 Holdings Alpha Plus Co.
Limited, a company registered in the British Virgin Islands.
As at 31 August 2022, the Company had advanced loans totalling £19.7m (2021: £18.8m) to the ultimate parent
company. These loans have a long-stop repayment date of 31 March 2024, but the parent company has agreed to
repay these amounts upon receipt of a request from the Company. Interest of 7% per annum is receivable by the
Company in respect of these loans.
As at 31 August 2021, the Company had outstanding 4.5% term loans payable to its parent companies totalling
£48.1m plus £1,148,000 accrued interest, repayable on 4 December 2024. On 8 December 2021, the Company
resolved to issue deep-discount bonds to its parent companies and to use the proceeds to refinance the £48.1m
4.5% loans from parent companies, with effect from 2 August 2021. The deep-discount bonds have a subscription
price of £48.1m, nominal value of £55.3m and a redemption date of 4 December 2024. As at 31 August 2022,
£975,000 accrued interest remains unpaid in relation to the 4.5% term loans.
On 29 October 2021, the Group entered into an overriding lease with DV4 Properties Fulham Co. Limited, a
subsidiary of DV4 Limited, in respect of a building at 49 Hugon Road, Fulham, London SW6 and in doing so became
landlord to the occupational tenant, Thomas’s London Day Schools (Thomas’s Fulham). The initial rent payable
on the overriding lease of £1,093,000 per annum is equal to the rent receivable by the occupational tenant. The
lease expires in 2025. The overriding lease has been presented as a finance lease receivable. The Group
recognised interest income on the lease receivable of £114,000 for the year to 31 August 2022 (2021: £nil).
The Group has an overriding lease with DV4 Properties (Pembridge Villas) Limited in respect of premises at 21-23
Pembridge Villas, London W11 adjacent to freehold premises owned by the Group at 19 Pembridge Villas occupied
by Wetherby School. The premises are sublet to a third party under a lease which is due to expire in 2029. Rent
receivable from the sub-tenant in the year to 31 August 2022 of £652,000 (2021: £640,000) has been included in
other operating income (note 6). The same amount was payable under the overriding lease. DV4 Properties
(Pembridge Villas) Limited subsequently sold the freehold interest to a third party landlord.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
59
Notes forming part of the accounts continued
23. Related party disclosures continued
The Group has an agreement for lease with DV4 Eadon Co. Limited, a subsidiary of DV4 Limited, in respect of
premises at Elephant 1, 7 Castle Square, London SE17. On the same date, the Group signed an agreement for
sub-lease with a third party to operate a crèche in those premises. The superior lease was signed in December
2020 but the sub-lease was yet to be completed as at 31 August 2022. These financial statements represent the
smallest and largest group of which the Company is a member and for which consolidated statements are publicly
available.
24. Commitments and contingencies
Capital commitments
At 31 August 2022, the Group had no committed capital expenditure (2021: £nil).
Contingent liabilities
Four (2021: 4) employees were members of the Independent Schools’ Pension Scheme, a multi-employer defined
benefit scheme. The Group has been notified by the trustee of this scheme that, as at 30 September 2021 (the most
recent date for which information is available) in the event of the Group withdrawing from the scheme, an amount
of £417,000 (30 September 2020: £523,000) would be payable into this scheme.
25. Financial risk management objectives and policies
The Group is exposed to a variety of business risks. A register of all key risks is maintained and regularly reviewed
by the Directors. This register records an assessment of the likelihood of the risk having a negative impact on the
business as well as the potential significance of such an event. Mitigating actions are also recorded and monitored
by the Board.
Interest rate risk
Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Group’s principal financial liabilities comprise secured sterling bonds which mature in March
2024 and deep-discount bonds issued to parent companies which mature in December 2024. Since the interest
rate on these bonds is fixed, the Group is not exposed to any significant interest rate risk.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign currency exchange rates. The Group’s exposure to foreign current risk primarily relates to the
Group’s school in New York, however this is mitigated by matching receipts and payments in local currency. The
Group has not hedged its exposure to movements in the US Dollar to Sterling exchange rate.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities primarily from
outstanding trade receivables and to a lesser extent from rent deposits and from the loan advanced to the ultimate
parent company.
Trade receivables
The Group considers the credit risk in respect to trade receivables to be low, as the vast majority of the Group’s
revenues, whilst recognised over time (note 6) are payable in advance. Specific loss provision is made for those
receivables where collection is considered uncertain either as a result of information regarding the financial
circumstances of the payer or the geographic location of the payer if outside the United Kingdom. The Group adopts
the IFRS 9 simplified approach to determine expected credit losses from remaining trade receivables using a lifetime
expected credit loss allowance. Expected credit losses as a proportion of debts is based on credit loss experience
in the preceding year but adjusted for current and forward looking information where significant, for example UK
GDP data.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
60
Notes forming part of the accounts continued
25. Financial risk management objectives and policies continued
Trade receivables are written off when there is no reasonable expectation of recovery which may be evidenced by
no payments being received in a one year period. Further information regarding trade receivables that are neither
past due nor impaired is given in note 17.
Loan to parent company
At 31 August 2022, the Company had loaned £19.7m to the ultimate parent company (2021: £18.8m). Although
repayment is not due until March 2024, the ultimate parent company has agreed to repay these amounts upon
receipt of a request from the Company (see note 16 to the financial statements) and to provide further financial
support if required. The Board is satisfied that the parent company has sufficient liquidity to make such repayments
should the need arise and hence has concluded that the debt is fully recoverable and that, consequently no provision
for non-recoverability is required.
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Group’s Head Office finance
department. Any surplus funds are held in current accounts or short term deposits with approved counterparties,
usually UK clearing banks.
The Directors regularly review surplus funds held and seek to minimise the concentration of risks and therefore
mitigate financial loss through any potential counterparty’s failure.
The Group’s maximum exposure to credit risk for the components of the balance sheet at 31 August 2022 and 2021
is the carrying amount of financial assets held at amortised cost in the fair value table below.
Liquidity risk
The Group manages liquidity risk by maintaining adequate reserves and banking facilities and by continuously
monitoring regularly updated cash flow forecasts. The Group has assessed the risk of having insufficient financial
resources and has concluded it to be low (as further explained in note 2.1 “Going Concern”).
Details of undrawn committed borrowing facilities are set out in note 20.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments:
< 3
months
3-12
months
1-2 years 2-5 years
>5
years
Total
£000
£000
£000
£000
£000
£000
At 31 August 2022
5% secured sterling bonds
2,000
2,000
84,000
-
-
88,000
Deep-discount bonds
-
-
-
55,341
-
55,341
Loan from parent company
975
-
-
-
-
975
Lease liabilities
5,919
14,824
21,362
58,370
209,073
309,548
Trade and other payables
and accruals
4,722 13,907 - - - 18,629
Total
13,616
30,731
105,362
113,711
209,073
472,493
At 31 August 2021
5% secured sterling bonds
2,000
2,000
4,000
84,000
-
92,000
Loan from parent company
2,136
1,632
2,176
51,062
-
57,006
Lease liabilities
5,293
13,191
18,635
55,631
219,572
312,322
Trade and other payables
and accruals
4,856 14,062 - - - 18,918
Total
14,285
30,885
24,811
190,693
219,572
480,246
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
61
Notes forming part of the accounts continued
25. Financial risk management objectives and policies continued
Capital management
Capital includes net debt and equity attributable to the equity holders of the parent. The Group includes within net
debt, interest and non-interest bearing loans and borrowings less cash and cash equivalents.
2022
2021
restated*
£000
£000
5% secured sterling bonds
81,299
80,964
Deep-discount bonds
50,442
-
Loan from parent company
975
49,248
Lease liabilities
205,238
201,796
Less: cash and cash equivalents
(19,455)
(9,625)
Net debt
318,499
322,383
Equity
30,540
29,589
Total capital
349,039
351,972
*As restated to reflect the impact of a prior year adjustment to deferred tax, see note 29 for further information.
In common with many other businesses owned by private investment companies, the majority of the Group’s capital
comprises parent company and third part debt instruments rather than equity. The Directors consult with
representatives of the Group’s ultimate owners to consider any changes to the capital structure that may be
considered appropriate from time to time but also specifically in advance of the maturity of material debt instruments
in order to assess the appropriate redemption or refinancing options that may be available.
Fair values
A comparison by class of the carrying amounts and fair value of the Group’s financial instruments is set out below:
Fair value
Carrying amount
2022
2021
2022
2021
£000
£000
£000
£000
Financial assets held at amortised cost
Trade and other receivables
1,662
537
1,662
537
Loan to parent company
20,244
19,436
20,244
19,436
Deposits receivable
4,524
3,826
4,524
3,826
Finance lease receivable
2,953
-
2,953
-
Cash and cash equivalents
19,455
9,625
19,455
9,625
Total
48,838
33,424
48,838
33,424
Financial liabilities held at amortised cost
Trade and other payables and accruals
18,629
18,918
18,629
18,918
5% secured sterling bonds
80,066
81,986
81,299
80,964
Deep-discount bonds
50,442
-
50,442
-
Loan from parent company
975
49,248
975
49,248
Lease liabilities
205,238
201,796
205,238
201,796
Total
355,350
351,948
356,583
350,926
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
62
Notes forming part of the accounts continued
25. Financial risk management objectives and policies continued
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced sale. The following methods and
assumptions were used to estimate the fair values:
Cash and short-term deposits, trade receivables, trade payables and other current assets and
liabilities approximate to their carrying amounts largely due to the short-term maturities of the
instruments.
The fair value of borrowings is evaluated, in the case of the secured sterling bonds, by reference to
listed prices and, otherwise, by discounting expected future cash flows at prevailing market rates for
instruments with substantially the same terms and characteristics.
26. Pensions and other post-employment benefit plans
The Group operates a defined contribution pension scheme (the Alpha Plus Group Personal Pension Plan
(“GPPP”)) into which all new employees are automatically enrolled.
The Group is looking to further improve pension provision for all employees. An increase in the minimum employer
contribution to the GPPP from 6% to 7% was implemented with effect from 1 September 2022. A previous increase
from 5% to 6% was implemented with effect from 1 September 2021.
In addition, four (2021: 4) employees were members of the Independent Schools’ Pension Scheme which is also a
multi-employer defined benefit scheme. Detailed analysis of the Group’s share of the assets and liabilities of the
scheme is unavailable as the scheme is a multi-employer scheme, but the Group has been notified by the trustee
of this scheme that, as at 30 September 2021 (the most recent date for which information has been provided by the
scheme’s trustees), in the event of the Group withdrawing from the scheme, an amount of £417,000 (30 September
2020: £523,000) would be payable into this scheme. Estimated employer contributions to this scheme in the year
ending 31 August 2022 total £24,000 (2021: £24,000).
27. Long term incentive plan – share-based payments
The Group established a Cash Incentive Plan in May 2017 under which “Awards” may be made to eligible
employees. An Award represents the right to receive a cash payment based upon the increase in the enterprise
value of the Group between the date the Award is granted and the date of an Exit event. Awards will automatically
lapse if the Award Holder ceases to be employed by the Group.
As at 31 August 2022, 7 Awards had been granted with an aggregate value equal to 2.1% of the increase in the
enterprise value of the Group (2021: 7). Since there is no immediate prospect of an Exit event, no liability has been
recognised as at 31 August 2022.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
63
Notes forming part of the accounts continued
28. Operating cash flow
2022
2021
£000
£000
Loss before tax (6,180) (22,431)
Adjustments to reconcile loss before tax to cash generated from operations:
Foreign exchange translation differences
(1,302)
140
Depreciation of property, plant and equipment (note 12) 7,386 7,869
Amortisation of intangible assets (note 11) - 32
Depreciation of right-of-use assets (note 13) 12,065 12,464
Net revaluation movements (notes 12 to 13) (256) (334)
Impairment and reversal of previous impairment losses (notes 12 to 13) 1,000 7,190
Lease modification - (530)
Finance income (note 9) (1,552) (1,984)
Finance costs (note 8) 17,348 18,187
(Increase) / decrease in trade and other receivables (1,748) 621
Increase in trade and other payables 10,066 2,916
Income tax paid (1) (1)
Cash generated from operations
36,826
24,139
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
64
Notes forming part of the accounts continued
29. Prior year adjustment
The carrying value of properties owned by the Group is higher than the tax base cost which represents a temporary
difference for deferred tax purposes and a corresponding deferred tax liability. The Group’s immediate parent
company has certain tax losses and has confirmed in writing to the Directors its intention to surrender such losses
to the Group to reduce the taxable profits that would arise from the future disposal of these properties. On this
basis, in previous years the deferred tax liability relating to the Group’s owned properties was reduced to the extent
of the losses made available by the immediate parent.
The Directors continue to believe that the Group would utilise the parent’s tax losses if the properties were to be
disposed in the future, supported by the parent company’s written confirmation of its intention. However, the
Directors have reflected on whether it is appropriate under the relevant accounting standards to recognise the future
benefit of these tax losses, and concluded that it is not. For this reason, the financial statements have been restated
as shown in the following tables.
Extract from Group balance sheet as at 31 August 2020
As
previously
stated
Adjustment
As restated
£000
£000
£000
Total assets
475,845
-
475,845
Total current liabilities
60,228
-
60,228
Non-current liabilities
Loans and borrowings
127,378
-
127,378
Lease liabilities
219,903
-
219,903
Deferred tax liabilities
16,989
1,487
18,476
Total non-current liabilities
364,270
1,487
365,757
Net assets
51,347
(1,487)
49,860
Equity
Share capital
16
-
16
Revaluation reserve
75,109
(1,487)
73,622
Foreign currency translation reserve
(46)
-
(46)
Retained earnings
(23,732)
-
(23,732)
Total equity
51,347
(1,487)
49,860
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
65
Notes forming part of the accounts continued
29. Prior year adjustment continued
Extract from Group statement of comprehensive income for the year to 31 August 2021
As
previously
stated
Adjustment
As restated
£000
£000
£000
Loss for the year
(19,105)
-
(19,105)
Other comprehensive income / (deficit)
Other comprehensive income / (loss) that will not be
reclassified to profit or loss in subsequent periods:
Gain on property revaluation
8,213
-
8,213
Deferred tax relating to property revaluation
(8,684)
(588)
(9,272)
Other comprehensive loss that may be reclassified to profit
or loss in subsequent periods (net of tax):
Exchange losses on translation of foreign operations
(107)
-
(107)
Total comprehensive deficit for the year
(19,683)
(588)
(20,271)
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
66
Notes forming part of the accounts continued
29. Prior year adjustment continued
Extract from Group balance sheet as at 31 August 2021
As
previously
stated
Adjustment
As restated
£000
£000
£000
Total assets
438,630
-
438,630
Total current liabilities
65,244
-
65,244
Non-current liabilities
Loans and borrowings
127,398
-
127,398
Lease liabilities
191,978
-
191,978
Deferred tax liabilities
22,346
2,075
24,421
Total non-current liabilities
341,722
2,075
343,797
Net assets
31,664
(2,075)
29,589
Equity
Share capital
16
-
16
Revaluation reserve
74,001
(2,075)
71,926
Foreign currency translation reserve
(153)
-
(153)
Retained earnings
(42,200)
-
(42,200)
Total equity
31,664
(2,075)
29,589
30. Subsequent events
On 3 October 2022 the Company loaned £5.2m to its ultimate parent company DV4 Limited, on the same terms
as its £19.7m loan due on 31 March 2024 which attracts interest at a rate of 7%.
On 11 November 2022 Mr B Creegan was appointed to the Audit Committee.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
67
Alpha Plus Holdings plc
Company Financial Statements
31 August 2022
Company Registration No. 04418776
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
68
Company balance sheet
as at 31 August 2022
2022
2021
Notes
£000
£000
Fixed assets
Investments 4 24,058 24,058
Deferred tax assets 5 964 1,239
25,022
25,297
Current assets
Debtors 6 166,797 159,803
Cash and cash equivalents
27 143
166,824
159,946
Creditors: amounts falling due within one year
7
(67,247)
(60,854)
Net current assets
99,577
99,092
Total assets less current liabilities
124,599
124,389
Creditors: amounts falling due after more than one
year
8 (130,075) (127,398)
Net liabilities
(5,476)
(3,009)
Equity attributable to equity shareholders
Share capital 9 16 16
Retained losses
(5,492) (3,025)
Total equity
(5,476)
(3,009)
The Company’s loss for year was £2,467,000 (2021: loss of £1,902,000).
The notes on pages 70 to 76 form part of these financial statements.
The financial statements were approved by the Board and authorised for issue on 7 December 2022.
J E B Bowden
Chief Financial Officer
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
69
Company statement of changes in equity
for the year ended 31 August 2022
Issued
share
capital
Retained
losses
Total equity
£000
£000
£000
At 31 August 2020
16
(1,123)
(1,107)
Loss and total comprehensive deficit for the year
-
(1,902)
(1,902)
At 31 August 2021
16
(3,025)
(3,009)
Loss and total comprehensive deficit for the year
-
(2,467)
(2,467)
At 31 August 2022
16
(5,492)
(5,476)
The notes on pages 70 to 76 form part of these financial statements.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
70
Notes forming part of the accounts
1. Basis of preparation
The parent company financial statements of Alpha Plus Holdings plc (the Company) are presented as required by
the Companies Act 2006 and were approved for issue on 7 December 2022. These financial statements are
prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in
accordance with applicable accounting standards.
The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91-99 of IFRS 13: Fair Value Measurement;
the requirements of paragraphs 10(d) and 134-136 of IAS 1: Presentation of Financial Statements;
the requirements of IAS 7: Statement of Cash Flows;
the requirements of paragraphs 30-31 of IAS 8: Accounting Policies, Changes in Accounting Estimates and
Errors;
the requirements in IAS 24: Related Party Disclosures to disclose related party transactions entered into
between members of a group provided that any subsidiary which is party to the transaction is wholly owned
by such a member; and
the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36: Impairment of Assets.
The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and
have not presented an income statement or statement of comprehensive income for the Company. The loss for the
period is disclosed in the balance sheet.
Consistent accounting policies and presentation have been used in both years presented in the financial statements.
Going concern
See note 2.1 to the Group financial statements for details of the Company’s going concern assessment.
2.1 Summary of significant accounting policies
a) Investments
Investments in subsidiaries are shown at cost less provision for impairment. A review for indicators of
impairment is completed at least annually and a value in use assessment is carried out if it is considered
that the fair value of an asset may not support its carrying cost. Impairment exists when the carrying value
of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less
costs of disposal and its value in use.
b) Interest bearing loans and borrowings
Obligations for loans and borrowings, including loans to and from subsidiary companies, are recognised
when the Group becomes party to the related contracts and are measured initially at the fair value of
consideration received less directly attributable transaction costs. After initial recognition, interest bearing
loans and borrowings are subsequently measured at amortised cost using the effective interest method.
See note 2.3 to the Group financial statements for details of other significant accounting policies.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
71
Notes forming part of the accounts continued
2.2 Significant accounting judgements, estimates and assumptions
The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability
affected in future periods.
Key judgements
Recognition of deferred tax assets - IAS 12 provides that deferred tax assets should be recognised in respect of
unutilised losses where it is probable that taxable profits will subsequently arise against which the losses can be
utilised. The Directors have prepared and reviewed future financial projections for the Company and hence have
recognised a deferred tax asset to the extent that losses are considered likely to be utilised over a seven year period
(see note 5).
Key estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Company based its assumptions and estimates on parameters
available when the financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising beyond the control of the
Company. Such changes are reflected in the assumptions when they occur.
Recoverability of debt due from parent company and other Group companies – the Directors have reviewed
the liquidity and financial position of the parent company. Debts from other Group companies have been reviewed
by reference to the market values of the underlying assets held within those companies (see note 6).
3. Information regarding Directors and employees
The Company had no employees in the current or previous year. The Directors of the Company received
emoluments in respect of their services to the Company from subsidiary undertaking, Alpha Plus Group Limited.
Further information is provided in note 7 to the Group financial statements.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
72
Notes forming part of the accounts continued
4. Investments
Subsidiary
undertakings
£000
Cost and net book value
1 September 2020, 31 August 2021 and at 31 August 2022
24,058
Impairment review
An impairment review of investments in subsidiary companies is carried out on an annual basis. The investment in
subsidiaries figure above almost entirely relates to the Company’s investments in Alpha Plus Group Limited and
Alpha Plus Education Limited both of which had net asset values well in excess of the book value of the Company’s
investment as at 31 August 2022. The Directors have therefore concluded that no indicators of impairment existed
as at either 31 August 2022 or 31 August 2021.
Subsidiary companies
The Company directly held ordinary share capital of the following subsidiaries as at 31 August 2022 and 31 August
2021:
Name of company
Country of
registration
Nature of business
Proportion
held
Alpha Plus Group Limited
England & Wales
Education
100%
Alpha Plus Education Limited
England & Wales
Dormant
100%
Alpha Plus Developments Limited
England & Wales
Investment company
100%
Alpha Plus Group LLC
Delaware, USA
Investment company
100%
Alpha Plus (BVI) Limited
British Virgin Islands
Holding company
100%
Alpha Plus Properties Limited
England & Wales
Holding company
100%
West London Arts School Limited
England & Wales
Non trading
100%
Alpha Plus Developments Limited is the limited partner, and holds a 99.99% economic interest, in Alpha Plus US
LP, which is a New York State registered limited partnership which owns and operates Wetherby-Pembridge School,
New York.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
73
Notes forming part of the accounts continued
4. Investments continued
As at 31 August 2021, the Company also held indirectly ordinary share capital of the following active companies:
Name of company
Country of registration
Nature of business
Proportion held
10-11 Pembridge Square Limited
England & Wales
Property Investment
100%
18 Pembridge Square Limited
England & Wales
Property Investment
100%
19 Pembridge Villas Limited
England & Wales
Property Investment
100%
1 Arkwright Road Limited
England & Wales
Property Investment
100%
90 Fitzjohns Avenue Limited
England & Wales
Property Investment
100%
62 Dry Hill Park Road Tonbridge Limited
England & Wales
Property Investment
100%
21 Davenport Road Coventry Limited
England & Wales
Property Investment
100%
2 Burnaby Gardens Limited
England & Wales
Property Investment
100%
41 Kew Foot Road Limited
England & Wales
Property Investment
100%
7 Woodborough Road Limited
England & Wales
Property Investment
100%
11 Woodborough Road Limited
England & Wales
Property Investment
100%
22 Woodborough Road Limited
England & Wales
Property Investment
100%
24 Woodborough Road Limited
England & Wales
Property Investment
100%
5-7 Cheapside Manchester Limited
England & Wales
Property Investment
100%
Alpha Plus Holdings Asia Limited
Hong Kong
Non trading
100%
As at 31 August 2022, in addition to the above, the Company held indirectly ordinary share capital of the following
active companies:
Name of company
Country of registration
Nature of business
Proportion held
Abbey DLD Colleges Limited
England & Wales
Non trading
100%
Portland Place School Limited
England & Wales
Non trading
100%
Falcons Schools Limited
England & Wales
Non trading
100%
All of the direct and indirect subsidiary companies listed above which are registered in England & Wales have their
registered office addresses at 50 Queen Anne Street, London W1G 8HJ.
The registered office address of Alpha Plus Group LLC is Suite 400, 2711 Centerville Road, Wilmington, Delaware
19808, United States of America.
The registered office address of Alpha Plus (BVI) Limited is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola,
VG 1110, British Virgin Islands.
The registered office of Alpha Plus Holdings Asia Limited is 13/F Gloucester Tower, The Landmark, 15 Queen’s
Road, Central, Hong Kong.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
74
Notes forming part of the accounts continued
5. Deferred tax
2022
2021
£000
£000
Unutilised tax losses
964
1,239
Reflected in the balance sheet as follows:
Deferred tax assets
964
1,239
Reconciliation of net deferred tax assets
2022
2021
£000
£000
Opening balance
1,239
1,020
Tax (charge) / credit recognised during the year
(275)
219
Closing balance
964
1,239
At 31 August 2022, the Company had tax losses of £3.9m (2021: £5.3m) that are available indefinitely for offset
against future taxable profits of the Company. The tax value of these losses is £1.0m (2021: £1.2m), all of which
have been recognised (see also note 10 to the Group financial statements).
In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase
to 25%. The Finance Bill 2021 was substantively enacted on 24 May 2021 and therefore the deferred tax asset has
been recognised using a rate of 25% due to the expected timing of the loss utilisation falling after 1 April 2023 (2021:
calculated using 25%).
6. Debtors
2022
2021
£000
£000
Amounts owed by parent company
20,244
19,426
Amounts owed by Group companies
146,553
140,377
166,797
159,803
As at 31 August 2022, the Company had advanced loans totalling £19,686,000 (2021: £18,800,000) to the ultimate
parent company. The amounts shown above include accrued interest receivable of £558,000 (2021: £626,000).
See note 16 of the Group financial statements for further details.
Loans to Group companies are repayable on demand and carry interest at 5% per annum. The Directors have
reviewed the amounts due from Group companies by reference to the market value of the underlying assets held
by those companies and the estimated realisable value. Based on this review, an impairment of £nil (2021: £nil)
has been recognised. The recoverability of loans from Group companies is sensitive to changes in the market value
of the underlying assets held by those companies. A £5.0m reduction in the assumed sale proceeds of those assets,
net of purchaser’s costs, would result in an impairment charge of £3.5m.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
75
Notes forming part of the accounts continued
7. Creditors: amounts falling due within one year
2022
2021
£000
£000
5% secured sterling bonds
1,666
1,666
Amounts owed to parent companies
975
1,148
Amounts owed to other Group companies
64,606
58,040
67,247
60,854
Amounts owed to other Group companies are repayable on demand and bear interest at the rate of 5% per
annum.
8. Creditors: amounts falling due after more than one year
2022
2021
£000
£000
5% secured sterling bonds 79,633 79,298
Deep-discount bonds 50,442 -
Amounts owed to parent companies - 48,100
130,075
127,398
The Company issued £80m 5% secured sterling bonds on 31 March 2016. The non-current amount is net of
unamortised issue costs of £367,000 (2021: £702,000) which are being amortised over the eight year life of the
bonds. See note 20 of the Group financial statements for further details.
On 8 December 2021, the Company resolved to issue Deep Discount Bonds to its parent companies and to use the
proceeds to refinance the £48.1m 4.5% loans from parent companies, with effect from 2 August 2021. The Deep
Discount Bonds have a subscription price of £48.1m, nominal value of £55.3m and a redemption date of 4 December
2024.
Alpha Plus Holdings plc
Company Financial Statements - No. 04418776
76
Notes forming part of the accounts continued
9. Share capital
2022
2021
£000
£000
5,000 Ordinary Shares of £1 each - issued and fully paid
5
5
45,000 Ordinary Shares of £1 each - issued and 25p paid
11
11
1 Preference Share of £1
-
-
16
16
Ordinary Shares entitle the holder to one vote for each share held.
The Preference Share, which carries no voting rights, entitles the holder to be paid out of the surplus assets of the
Company arising on a return of assets in a liquidation, a reduction of capital or otherwise, in priority to the holders
of the Ordinary Shares.
10. Related party disclosures
The Company has taken advantage of the exemption not to disclose transactions with its wholly-owned subsidiaries.
The Company’s key management personnel are its Board of Directors each of whom is remunerated by one of the
Company’s subsidiary undertakings (see note 7 to the Group financial statements).
11. Auditor’s remuneration
The remuneration payable to the auditor in respect of the audit of the Company only financial statements amounted
to £6,000 (2021: £5,000). This is paid by Alpha Plus Group Limited on behalf of the Company.
12. Ultimate and immediate parent company and controlling party
The Directors consider DV4 Limited, a company registered in the British Virgin Islands, to be the ultimate parent
company and controlling party. This is the largest and smallest group into which the Company is consolidated.
The immediate parent company is DV4 Holdings Alpha Plus Co. Limited, a company registered in the British Virgin
Islands.
13. Subsequent events
On 3 October 2022 the Company loaned £5.2m to its ultimate parent company DV4 Limited, on the same terms
as its £19.7m loan due on 31 March 2024 which attracts interest at a rate of 7%.