CONSORT HEALTHCARE (EDINBURGH ROYAL INFIRMARY) HOLDINGS LIMITED

• ⚠

  Material uncertainty over going concern

  The Group has been in dispute with its client NHS Lothian ("NHSL") regarding performance scores for the period December 2020 onwards. The scores for the period December 2020 - June 2021 were referred to adjudication through the Dispute Resolution Procedure included within the Project Agreement. Following the adjudicators decision, the Group incurred 42 deficiency points for the 7-month period December 2020 to June 2021. The scores for the period July - November 2021 remain under discussion with NHSL and have yet to be agreed, however, following correspondence with NHSL, the Group has accepted that the threshold for a Serious Issue Event under the Project Agreement of 48 deficiency points incurred in a rolling 12-month period was breached in a previous year. Under the provisions of this Serious Issue Event, NHSL has the option to terminate the contract. The contract with NHSL is the sole contract that the Group has to generate revenue. The Group remains actively engaged with NHSL to try and agree resolutions that do not involve the early termination of the contract. Commercial dialogue remains ongoing, with all parties currently working towards agreement of a potential settlement position. As noted in the Loan Facilities Agreement with the Group's lenders there was also an Event of Default as the Group incurred 48 or more deficiency points in a 12-month period. Under an Event of Default the lenders have the option to require repayment of the outstanding debt. As a result, the Senior Debt has been presented as a current liability as the lenders had the right to recall this at the balance sheet date. There are currently insufficient funds to repay the debt and no alternative financing in place should this arise. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern and, therefore, that they may be unable to realise their assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern. The Group is actively engaged with both NHSL and its lenders currently to sign an agreement to waive off the right to demand repayment which is expected to be signed in August 2025. The Group and Company are of the opinion that they will be able to continue in operational existence until the end of the concession in 2027, Therefore the directors believe adopting the going concern basis of accounting remains appropriate.

Values shown as filed in the company's annual accounts. — indicates the figure wasn't present under that line item in that period. About these numbers

Margins divide P&L lines by turnover. Gearing is liabilities over total assets. Current ratio is current assets over creditors falling due within one year. Interest cover is operating profit over absolute finance costs. Sector-distribution context coming next.

Accounting basis

FRS 102

Reporting scope

Consolidated group

Auditor

PricewaterhouseCoopers LLP

Audit opinion

Unqualified (clean)

Going concern

Material uncertainty disclosed

“The Group has been in dispute with its client NHS Lothian ("NHSL") regarding performance scores for the period December 2020 onwards. The scores for the period December 2020 - June 2021 were referred to adjudication through the Dispute Resolution Procedure included within the Project Agreement. Following the adjudicators decision, the Group incurred 42 deficiency points for the 7-month period December 2020 to June 2021. The scores for the period July - November 2021 remain under discussion with NHSL and have yet to be agreed, however, following correspondence with NHSL, the Group has accepted that the threshold for a Serious Issue Event under the Project Agreement of 48 deficiency points incurred in a rolling 12-month period was breached in a previous year. Under the provisions of this Serious Issue Event, NHSL has the option to terminate the contract. The contract with NHSL is the sole contract that the Group has to generate revenue. The Group remains actively engaged with NHSL to try and agree resolutions that do not involve the early termination of the contract. Commercial dialogue remains ongoing, with all parties currently working towards agreement of a potential settlement position. As noted in the Loan Facilities Agreement with the Group's lenders there was also an Event of Default as the Group incurred 48 or more deficiency points in a 12-month period. Under an Event of Default the lenders have the option to require repayment of the outstanding debt. As a result, the Senior Debt has been presented as a current liability as the lenders had the right to recall this at the balance sheet date. There are currently insufficient funds to repay the debt and no alternative financing in place should this arise. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group's and Company's ability to continue as a going concern and, therefore, that they may be unable to realise their assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern. The Group is actively engaged with both NHSL and its lenders currently to sign an agreement to waive off the right to demand repayment which is expected to be signed in August 2025. The Group and Company are of the opinion that they will be able to continue in operational existence until the end of the concession in 2027, Therefore the directors believe adopting the going concern basis of accounting remains appropriate.”

Group structure

1. CONSORT HEALTHCARE (EDINBURGH ROYAL INFIRMARY) HOLDINGS LIMITED · parent
   1. Consort Healthcare (Edinburgh Royal Infirmary) Investments Limited 100% · Edinburgh, EH1 2EN
   2. Consort Healthcare (Edinburgh Royal Infirmary) Finance Limited 100% · Edinburgh, EH1 2EN
   3. Consort Healthcare (Edinburgh Royal Infirmary) Limited 100% · Edinburgh, EH1 2EN

Significant events

• “The Group has breached its loan covenants, which is an Event of Default, and breached the Serious Issue Event threshold under the Project Agreement, however, the directors continue to seek resolution of this event.”

Auditor, going-concern and subsidiary information is drawn from the narrative of the latest annual accounts. About these numbers

Filings

3

last 12 months

Capital events

0

last 24 months

Officers appointed

0

last 12 months

Officers resigned

1

last 12 months

Direct counts from the register. No score, no rating — see the Filing timeline for the underlying events.

• Turnover

  -28.7%

  £23,462,458 → £16,718,256

• Cash

  -22%

  £52,941,572 → £41,287,634

• Net assets

  -10.1%

  £14,318,168 → £12,865,926

• Employees

  —

  Not reported

• Operating profit

  -324.8%

  £4,003,737 → -£9,001,378

• Profit before tax

  -122.2%

  £11,701,976 → -£2,595,499

Each % is (latest − prior) ÷ |prior| for the line item as filed. The comparison is only shown when the latest and prior accounts cover broadly equal-length periods — short or long stubs (typical around incorporation or a year-end change) are suppressed rather than misrepresented. Lines a company doesn't report are omitted. About these numbers