REG - MHA PLC - Full Year Results
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RNS Number : 2539V MHA PLC 14 August 2025
14 August 2025
MHA plc
("MHA", the "Company" and together with its subsidiaries the "Group")
Full Year Results
Strong performance, successful IPO and clear momentum
MHA (AIM: MHA), a leading professional services provider of audit and
assurance, tax, accountancy and advisory services, announces the full-year
combined results of its operating entities for the year ended 31 March 2025
("FY25"). This was the accounting period ending immediately prior to the
Company's IPO on 15 April 2025 and the results are presented on the same basis
as the historical information set out in the Company's AIM Admission Document,
adjusted where stated below.
Financial highlights
· Revenue up 45% to £224.2m (FY24: £154m), with recurring fees representing
c.87% of total revenue (FY24: 87%)
· Adjusted EBITDA(1) up 32% to c.£41.1m from £31m in FY24 (adjusted for
post-IPO partner remuneration)
· Adjusted Profit before tax(2) up 31% to c.£36.3m from £27.7m in FY24
(adjusted for post-IPO partner remuneration)
· Net cash of £17.7m at 31 March 2025 (FY24: £26.0m), further bolstered by the
net IPO proceeds post-period
· Cash conversion of c.91% from pre-tax profit, adjusted for a non-cash bargain
purchase, to operating cash flow (FY24: 89%)
Operational highlights
· Admission to trading on AIM in April 2025 (post-period), raising approximately
£98m gross and significantly increasing profile with clients, potential
clients and future M&A targets
· Successful integration of firms acquired in the UK and Ireland in FY24 and
FY25
· Growth achieved across all sectors and service lines
· Completed acquisition of Baker Tilly South-East Europe ("BTSEE") in August
2025 (post-period), expanding presence into Cyprus, Greece and South-East
Europe
Current trading and outlook
· Strong start to FY26 with trading on track to meet market expectations for the
full year(3)
· Demand for high‑quality advisory services continues to rise, despite wider
market volatility
· Structural trends such as increasing regulatory complexity continue to support
the Group's model
Rakesh Shaunak, Chief Executive Officer of MHA, commented:
"These results reflect a year of strong progress for MHA, capped shortly after
the period end by our successful IPO - a landmark moment for the firm.
Admission was the culmination of detailed planning and considered
decision-making, and has given us an ideal platform: long-term investors
alongside our partners, the resources to invest with discipline and the
enhanced profile to accelerate our growth.
"Performance in FY25 was strong across the board, with growth in every sector
and service line and excellent cash generation. Since Admission, we have acted
decisively and with purpose - exploring focused investments in technology and
talent, enhancing our market position and completing our first major
international acquisition.
"Trading remains in line with market expectations for FY26. While market
conditions remain demanding, the trends driving our profession are firmly in
our favour. With a clear strategy, a strong balance sheet and an exceptional
team, I am confident that we are well placed to deliver on the commitments we
set out at IPO and to build a business of even greater scale and quality in
the years ahead."
(1) Adjusted EBITDA reflects the application of the new plc remuneration
structure (i.e. after partner remuneration) to the historical results to
provide a comparable post-IPO basis of earnings. EBITDA is stated on a
combined basis for the Group's operating entities prior to partner
remuneration under the historical LLP structure, consistent with the
presentation in the Company's AIM Admission Document was £ 84.8m in FY 25, a
36% increase over £61.6m achieved in FY24.
( )
(2) Adjusted Profit before tax reflects the application of the new plc
remuneration structure (i.e. after partner remuneration) to the historical
results, and excluding a gain on bargain purchase, to provide a comparable
post-IPO basis of earnings. Profit before tax presented on pre-reorganisation
basis, after depreciation and amortisation but before partner remuneration in
FY25 was £85.9 a 47.8% increase on £58.1 achieved in FY24.
(3) The Group believes current market expectations for FY26 to be revenue of
£240.0m and adjusted EBITDA of £42.2m.
Analyst and retail investor presentations
Management will host an in-person analyst presentation at 9:30 a.m. today. Any
analyst wishing to attend is invited to register by emailing
mha@almastrategic.com (mailto:mha@almastrategic.com) .
Management will also host a live investor presentation, open to all existing
and potential shareholders, on Friday 15 August at 2.30 p.m. via the Engage
Investor platform. Register here
(https://www.engageinvestor.com/event/6878ac2647c6751abefb9292) .
Contacts
MHA www.mha.co.uk (http://www.mha.co.uk)
Rakesh Shaunak, Chief Executive Officer via Alma
Steven Moore, Chief Financial Officer
Cavendish Capital Markets Limited (Nominated Adviser & Broker) +44 (0)20 7220 0500
Stephen Keys, Callum Davidson, Katy Birkin (Corporate Finance)
Michael Johnson (Sales)
Tim Redfern, Sunila de Silva (ECM)
Alma Strategic Communications mha@almastrategic.com (mailto:mha@almastrategic.com)
Andrew Jaques, Josh Royston, David Ison, Sarah Peters +44 (0)20 3405 0205
About MHA
Founded in 1869, MHA is a leading professional services provider of audit and
assurance, tax, accountancy and advisory services, based in the UK with an
international presence.
Following the acquisition of Baker Tilly South-East Europe on 10 August 2025,
MHA now employs more than 2,300 people and has 153 Partners across its network
of 30 offices, in the UK, Ireland, South-East Europe and the Cayman Islands.
MHA is the representative of the Baker Tilly International ("BTI") network in
the UK. Ireland, Cyprus, Greece, Romania, Bulgaria and Moldova.
Chief Executive Officer's Statement
Landmark IPO setting the stage for long-term growth
I am delighted and honoured to present to you the maiden results for our
underlying business following our Admission to the AIM market on April
15, where we raised gross proceeds of approximately £98m, the largest AIM
IPO of 2025 and the largest in the Professional Services sector for five
years. This is an impressive journey for MHA as a leading professional
services provider of audit and assurance, tax, accountancy and advisory
services that can trace its roots to the 1860s, but which has its focus very
much on the 2030s.
Our IPO was at least two years in the making, following early discussions with
the London Stock Exchange about the potential benefits of long-term investors
who might buy into our vision of growth, take a supportive position as we
continue to deliver on our business model, and wouldn't seek to direct or
manage our affairs. This was seen as being in stark contrast to a private
equity approach where investment horizons are typically short-term and
prospective returns likely to be unevenly spread. Having evaluated all
options, we are confident that we have chosen the right path for MHA, with the
IPO also allowing everyone in the firm the opportunity to participate in our
expected future growth. The establishment of an Employee Benefit Trust is an
example of the inclusive approach we promote across the Group.
When the Board and our advisers were in the final stages of completing the IPO
fundraising in April, the US president unveiled his placard of reciprocal
tariffs that sent shock waves through global markets. We could easily have
done what many other companies in our position did and defer the IPO due to
the uncertainty. However, we and our core investors see the IPO as the first
step on a journey of expansion and exactly where you start from is much less
important than where you plan to go. As a result, the equity partners of MHA
approved the changes needed to proceed with the offering, which was exactly
the right thing to do for the business, our people and our clients.
Due to the timing of the IPO, the results we are presenting cover the year
ended 31 March 2025 and reflect the combined audited results of the trading
entities for the year prepared on the same basis as the historical financial
information presented in the Company's AIM Admission Document. The Company's
first consolidated unaudited results will cover the six months ended 30
September 2025 and the first post-IPO audited results will be for the year
ending 31 March 2026.
Market dynamics creating clear opportunities
The market trends highlighted at IPO remain firmly in our favour. The UK audit
and accounting market is estimated to generate revenue of £8.8bn in FY25 and
has increased at a CAGR of approximately 5.0% since FY20, with the Big Four's
share forecast to slowly reduce, creating opportunities for ambitious
challenger firms. Heightened regulatory focus, rising client expectations and
a shortage of skills are prompting businesses to look beyond the Big Four for
high-quality, multi-service advisers.
We believe these dynamics are structural, not cyclical, and will continue to
drive demand for firms with scale, breadth and sector expertise. MHA is well
positioned to benefit, and we see a clear runway for growth as we strengthen
our market position through investment, talent and carefully targeted
acquisitions.
Strong financial performance
Our combined results for the year ended 31 March 2025 reflect revenue of
£224.2m (FY24: £154m), an increase of 45.5%, of which approximately 38% of
the total growth was organic. Reported partnership profit before tax was
£85.9m (FY24: £58.2m), an increase of 47.6%.
Our operating margins remained resilient during the year despite this growth
and cash conversion, adjusting for the gain on a bargain purchase, was 91%
(FY24: 89%). The adjusted EBITDA of the business, with partner remuneration
calculated on the basis that it applies in our post-IPO structure, would have
been £41.1m (FY24: £31m), an increase of 32.6%.
Overall, this was a tremendous result for a business that was continuing to
grow organically and by way of acquisition during the year while managing to
plan and ultimately deliver a successful IPO, which we expect to underpin our
future growth strategy.
Broad-based growth across sectors and services
We saw growth in every business sector during the year, with Retail, Consumer
& Hospitality, Real Estate & Construction, Financial Services and
Automotive &Transport, being particularly strong, and in each service line
across the firm.
Our growth has been based upon, and will continue to be driven by, favourable
market drivers linked to increasing and more complex regulation and extended
compliance and oversight requirements in many industries. We believe fewer
accounting firms have the resources, and partners the appetite, to service
larger clients in a more challenging regulatory world, and others are not
equipped to service the demands of emerging international clients.
Our recurring revenue rate of approximately 87% (FY24: 87%), reflects the
success of our highly focused and market facing business sector approach,
effective cross selling strategies, the adoption and development of enhanced
technology and AI in driving efficiencies and quality, and most of all the
efforts and quality of an exceptional team of staff and partners, without whom
our success would not have been possible.
Executing a disciplined M&A strategy
We completed the acquisition of BTSEE on 10 August 2025, with consideration of
approximately €24m (including cash and share consideration). The acquisition
of BTSEE, part of the Baker Tilly International network, extends MHA's
geographic footprint into Cyprus, Greece and South-East Europe, and complement
our existing service lines. As I said at completion, I am delighted to welcome
our new colleagues into the MHA family and look forward to working together
with them as one firm.
M&A remains a key part of our growth strategy. The IPO has given us a
stronger platform to pursue selective, high-quality acquisitions that extend
our geographic reach, deepen our sector expertise and add complementary
services. The UK accountancy and advisory market remains highly fragmented,
and we continue to assess opportunities, both domestically and
internationally, that fit our culture and enhance long-term value for
shareholders.
Advancing our technology, AI, data and analytics capabilities
Our technology strategy is focused on data, analytics and the delivery of
meaningful insight. While we remain grounded in business fundamentals, we are
preparing proactively for an evolving future, with targeted investment to
support long-term growth. This includes secure, scalable platforms that
improve decision-making, client service and operational efficiency, with a
focus on mature SaaS solutions backed by strong governance and regulatory
compliance.
Artificial intelligence is playing an increasingly important role in the
evolution of our service model. We are taking a measured and responsible
approach, adopting technologies that meet our standards for cost, maturity and
suitability. Current initiatives include using automation in Personal and
Corporation Tax to streamline document processing and report generation, and
piloting tools such as ChatGPT Enterprise and Microsoft Co-Pilot to support
research, planning and drafting. Around 50% of our people now use AI or
automation tools, with 30% having received formal role-specific training.
In FY26, our biggest area of focus is data. We are investing in a modern
architecture that will unify reporting across finance, HR and client systems,
which in turn improves visibility, accuracy and agility in decision-making.
Enhancements to forecasting, performance management and profitability tracking
are already underway, and we are exploring the development of bespoke AI
tools, particularly within Tax, where structured data and repeatable processes
present clear opportunities.
A culture built around excellence and accountability
Following our acquisitions and expansion in FY25, our headcount in the UK,
Ireland, South-East Europe and Cayman is now more than 2,300 people across 30
offices with 153 partners.
Within the Group we have built a culture focused on providing exceptional
client service, empowering partners and employees to set the highest standards
and to take responsibility and ownership for the quality of services
delivered. In this way we encourage the development of our entire team and
recognise that for our clients MHA is a firm with strength, scope and depth,
not a group of individuals. This applies particularly for our international
clients and overseas transactions.
Commitment to ESG
The Group takes its ESG responsibilities seriously and continues to implement
and enhance measures appropriate for a business of its size and nature. The
Board also recognises the importance of strong corporate governance and is
committed to following the requirements of the QCA Code. We are confident in
the integrity of our internal controls and financial reporting procedures and
remain focussed on transparent engagement with all stakeholders through
regular communication and investor reviews.
We have a fundamental and strong ESG commitment across the Group. Adopted at
an early stage, we fully support the UK Government's ambitious plans to
reduce greenhouse gas emissions to net zero carbon ("net zero") by 2050. As a
Group, we are working to become a net zero organisation by 2030 - and by 2040
at the latest. Importantly, net zero, is only one component of our broader ESG
reporting frameworks.
We align under four distinct pillars representing our sustainability approach
as a firm, including our internal societal licence approach to operate, taking
the 'Social' element of ESG beyond standard in the profession:
· We voluntarily report under UK regulatory frameworks though a separate annual
sustainability report.
· We adopt highly robust audit, assurance and advisory services with
multi-jurisdictional ability to regulatorily report for our clients.
· We are leading our global network in assurance and best practice, including
bespoke SME development capabilities.
· We are working closely with regulators, policy makers and sectors to guide and
where appropriate, influence approach to sustainability.
Furthermore, we have invested in sustainability leadership and lead by
example, servicing our global clients under the message: Delivering a
Sustainable Tomorrow. Today.
Positive start to FY26 with confidence in outlook
The Group finished FY25 marginally ahead of market expectations, having raised
guidance following the trading update released on June 6 2025. This
performance was driven by a particularly strong Q4, robust cash generation and
increasing demand for our services. Despite broader market volatility, that
momentum has continued into the new financial year, with trading to date
consistent with market expectations for the full year
Our successful IPO has already delivered tangible benefits: a stronger balance
sheet; incentivised partners; greater profile with clients, acquisition
targets and the market generally; and the ability to invest in technology and
talent at greater pace.
The structural trends that shaped our IPO rationale - increasing regulatory
complexity, a shortage of skills, and rising demand for multi-service advisers
- remain firmly in our favour. With a high level of recurring and defensive
revenues and a proven growth model, MHA is well positioned to build further
scale and resilience. Our acquisition of BTSEE marks the next exciting stage
of our expansion into mainland Europe and is expected to be earnings accretive
from its first full year.
We also expect to benefit from the recently announced expansion of Baker Tilly
in the US and the increase in profile of the Baker Tilly network globally. As
the UK member firm, MHA is well placed to capitalise on the increased
visibility this brings, particularly in international markets and cross-border
referral activity.
Looking ahead, we are focused on sustaining strong organic growth, integrating
recent acquisitions and exploring further earnings accretive M&A. These
factors, together with our strong leadership team and supportive market
backdrop, give the Board confidence in delivering a successful FY26 and
creating long-term value, in line with our medium-term ambition of building a
£500m revenue business.
Chief Financial Officer's Review
Financial information
We are in the unusual position of having successfully completed our IPO almost
immediately after the year end so that the financial information presented
here reflects the combined results of the MHA group entities for the year
ended 31 March 2025, a period prior to the Company taking ownership of the
group entities as part of the pre-IPO restructuring. This treatment is
entirely consistent with the presentation of the historical financial
information presented in the Company's AIM Admission Document. Going forward,
this transaction will be treated as a group reconstruction for accounting
purposes, and we will effectively merger account the results of the corporate
entities from the date of the reorganisation. This treatment will be reflected
in the annual audited results for the year ending 31 March 2026, and the
unaudited interim results for the six months ending 30 September 2025. The
Company will separately publish and send to shareholders annual audited
accounts for the MHA group entities.
Revenue
The combined MHA revenue grew by 45% in the year to 31 March 2025 to £224.2m
through a mixture of organic and acquisitive growth, as set out in the revenue
bridge below:
Revenue bridge
FY24 £154.0m
Lost clients -£3.1m
Fee growth from existing clients £9.6m
New clients / wins:
Won in 23/24, billed FY24/25 £10.8m
Won in 24/25, billed FY24/25 £10.4m
Acquisitions:
MHA NW Audit, ABAS & Tax £25.2m
MHA NW Corporate Finance £2.8m
MHA NW Wealth £3.5m
Baker Tilly Ireland £4.7m
Scotland £6.3m
FY25 £224.2m
The Group has a long and proven record of successfully absorbing and
integrating acquisition targets and ensuring that financial controls and
disciplines are quickly aligned, and synergies and economies of scale
achieved. This approach continued successfully in FY25 with the integration of
acquisitions in the North West, Wales and Ireland.
Fees by service line
MHA does not account separately by service line within its management
accounts, other than by fees, and the table below illustrates the revenue by
principal service in FY24 and FY25. In the UK, the Group is managed on a
regional and national basis, with marketing and business development following
the industrial sector approach described below.
Service Line FY25 (£m) % of Total FY24 (£m) % of Total
Audit & Assurance 113.5 51% 80.6 53%
Tax 39.8 18% 29.6 20%
Advisory* 62.0 28% 37.4 25%
.
Wealth 8.1 3% 3.2 2%
*Accounting and Business Advisory Services
The year-on-year increase in advisory services reflects the growing demand
from our clients for specialist services, including corporate finance, and
restructuring and recovery.
Fees by sector
Our sector-led go-to-market strategy has been a major driver of revenue growth
over the past decade. This success reflects the deep sector knowledge and
experience of our staff and partners, which we consistently leverage in
conversations with clients and business introducers. We have 15 targeted
sectors:
Sector FY25 Billed (£m) % of Total Total Growth Organic Growth
Real Estate & Construction £26.4 13% 45% 13%
Retail, Consumer & Hospitality £26.2 12% 77% 21%
Financial Services £23.4 11% 26% 13%
Manufacturing & Engineering £20.7 10% 55% 29%
Professional Services £19.1 9% 41% 15%
Technology £16.7 8% 42% 21%
Not For Profit £12.3 6% 44% 14%
Health Care £11.1 5% 52% 11%
Automotive & Transport £10.1 5% 54% 31%
Private Individuals £10.0 5% 47% 5%
Energy, Natural Resources & Industrials £8.7 5% 31% 17%
Agriculture & Rural Business £5.3 3% 76% 31%
Media & Entertainment £3.4 2% 29% 21%
Logistics & Distribution £2.9 1% 64% 26%
Pharma & Life Sciences £2.7 1% 54% 53%
Profitability
Our reported results for FY25 necessarily reflect the cost structure and
business model of our former partnership model. During the year, the Group's
combined operating profit increased by 36.7% to £79.4m (FY24: £58.1m),
profit before tax increased by 47.6% to £85.9m (FY24: £58.1m), and
pre-partner remuneration EBITDA was £84.9m (FY24: £61.6m). Despite this
strong growth, operating margins were resilient at 35.7%, reflecting a small
reduction in the year (FY24: 37.7%) Client retention remains at high levels
with recurring income representing approximately 87% of revenue (FY24: 87%).
To provide a clear bridge between the pre and post-IPO capital structure of
the Group, we have restated the partnership based historical results for FY25
and FY24 to reflect the adjustment to charge partners' remuneration against
income, that now applies in the 'plc' model, thereby presenting an adjusted
EBITDA for FY25 of £41.1m (FY24: £31m), an increase of 33.7%, and an
adjusted profit before tax (excluding a gain on bargain purchase) of £36.3m
(FY24 £27.7m), an increase of 31%.
Working capital control
The Group's business model is highly cash generative and working capital is
closely controlled in terms of billing when converting work in progress into
debtors, and collection when converting debtors into cash. Lock-up at 31 March
2025 was 71 days (FY2024: 77 days). Over the year ended 31 March 2025, the
cash conversion rate, adjusting pre-tax profit for the gain on bargain
purchase, to operational cash flow was 91%.
The cash raised at IPO has and will be applied to:
· Finance acquisition and investment opportunities
· Release some partners' capital on an old money basis
· Allow technology investment to drive operational gearing
· Facilitate lateral hire/staff retention
The cash generated from MHA's strong terms of trade will be similarly
utilised.
Dividends
No dividends are applicable in respect of this pre-IPO trading period. The
first interim dividend is expected to be declared with the announcement of the
interim results for the six months to 30 September 2025.
Combined consolidated statements of profit or loss and other comprehensive
income
Year ended Year ended
31 March 31 March
2025 2024
Note £'000 £'000
Revenue 4 224,151 154,037
Client expenses and disbursements (8,466) (4,625)
Net revenue 215,685 149,412
Other operating income 5 1,891 536
Administrative expenses (138,150) (91,841)
Profit from operations 9 79,426 58,107
Finance income 10 812 1,042
Finance expense 11 (1,294) (963)
Other gains/(losses) 12 6,928 (6)
Profit before tax 85,872 58,180
Taxation 13 (2,800) (1,855)
Profit for the period 83,072 56,325
Other comprehensive income:
Other comprehensive income
Exchange difference on retranslation of foreign operations (58) (21)
Total comprehensive income 83,014 56,304
Combined consolidated statements of financial position
As at As at
31 March 31 March
2025 2024
Note £'000 £'000
Assets
Current assets
Trade and other receivables 16 66,479 50,683
Lease receivable 20 355 341
Cash and cash equivalents 17 18,768 25,956
Total current assets 85,602 76,980
Non-current assets
Property, plant and equipment 14 4,846 2,593
Right-of-use assets 20 17,314 15,093
Intangible assets 15 23,733 16,306
Investments 9 9
Lease receivable 20 1,766 2,120
Deferred tax assets 21 38 5
Total non-current assets 47,706 36,126
Total assets 133,308 113,106
Liabilities
Current liabilities
Trade and other payables 18 29,434 24,217
Lease liabilities 20 3,238 2,886
Borrowings 19 66 20
Current tax liabilities 13 2,382 1,394
Total current liabilities 35,120 28,517
Non-current liabilities
Borrowings 19 1,084 90
Lease liabilities 20 16,439 14,785
Other provisions 26 5,257 4,252
Deferred consideration 18 1,832 2,045
Total non-current liabilities 24,612 21,172
Total liabilities 59,732 49,689
Net assets 73,576 63,417
Members' interests
Members capital classified as a liability 14,077 13,359
Other amounts classified as debt 40,975 34,706
Invested capital 18,524 15,352
Total members' interests 73,576 63,417
Combined consolidated statements of changes in members' interests
Members capital classified as a liability Other amounts classified as debt Members' interests
Invested capital
£'000 £'000 £'000 £'000
Balance at 1 April 2023 8,711 29,110 13,035 50,856
Profit for the year - 50,865 5,460 56,325
Other comprehensive loss - (21) - (21)
Amounts introduced by members 6,042 - - 6,042
Repayment of capital (1,394) (1,394)
Profits distributed to members - (44,718) - (44,718)
Movement in capital points between Combined Group entities - (530) - (530)
Issue of dividends(1) - - (3,143) (3,143)
Balance at 31 March 2024 13,359 34,706 15,352 63,417
Balance at 1 April 2024 13,359 34,706 15,352 63,417
Profit for the year - 75,920 7,152 83,072
Other comprehensive loss - (58) - (58)
Amounts introduced by members 718 - - 718
Acquisitions - 6,003 - 6,003
Acquisition of non-controlling interest (note 24) - (2,457) - (2,457)
Profits distributed to members - (74,709) - (74,709)
Movement in capital points between Combined Group entities - 1,570 - 1,570
Issue of dividends(1) - - (3,980) (3,980)
Balance at 31 March 2025 14,077 40,975 18,524 73,576
(1)Dividends were issued by MacIntyre Hudson Holdings Limited which is part of
the Combined Group.
Combined consolidated statements of cash flows
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Cash flows from operating activities
Profit before taxation 85,872 58,180
Adjustments for:
Depreciation of property, plant and equipment 888 641
Amortisation of intangible assets 1,130 195
Amortisation of right of use assets 3,411 2,692
Loss on disposal of property, plant and equipment 44 1
(Profit)/loss on disposal of right of use assets (86) 6
Gain on sale of investments (1,225) -
Gain on bargain purchase (6,843) -
Movement in provisions 150 1,560
Finance income (812) (1,042)
Finance costs 1,294 963
Net cash generated from operating activities before changes in working capital 83,823 63,196
Increase in contract assets (690) (213)
Increase in trade and other receivables (26,677) (10,101)
Increase in trade and other payables 14,489 235
Cash generated from operations 70,945 53,117
Tax paid (1,848) (1,276)
Net cash inflow from operating activities 69,097 51,841
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired 9 (3,875)
Purchase of intangible assets - (1)
Purchase of property, plant and equipment (2,028) (368)
Sale of capital points held 4,484 -
Investments in associates (1,370) (630)
Disposal of investments 93 -
Principal received from rental income 340 327
Interest received from rental income 94 107
Interest received 718 935
Net cash outflow from investing activities 2,340 (3,505)
Cash flows from financing activities
Payments to members (70,138) (45,515)
Capital invested by members 3,265 6,042
Capital withdrawn by members - (1,394)
Purchase of non-controlling interests (4,277) -
Equity dividends paid (3,980) (3,143)
Share buyback (93) -
Proceeds from borrowings 1,505 -
Repayments of borrowings (465) (3,165)
Interest paid (96) (121)
Principal paid on lease liability (3,155) (2,626)
Interest paid on lease liability (972) (771)
Other interest paid (110) -
Net cash outflow from financing activities (78,516) (50,693)
Net decrease in cash and cash equivalents (7,079) (2,357)
Cash and cash equivalents at beginning of the year 25,956 28,332
Effects of exchange rates on cash and cash equivalents (109) (19)
Cash and cash equivalents at end of year 18,768 25,956
The principal non-cash transactions comprise additions of right-of-use assets,
as detailed in note 20.
Notes to the combined financial statements
1. General information
MacIntyre Hudson LLP ("MHA") is a Limited Liability Partnership
("Partnership") registered in England and Wales, its registered number is
OC312313. MacIntyre Hudson Holdings Limited ("MHHL") is a private company
incorporated in England and Wales, its registered numbers is 03717255. The
registered address of both companies is The Pinnacle, 150 Midsummer Boulevard,
Milton Keynes, Buckinghamshire, MK9 1LZ, United Kingdom.
The combined financial statements for MHA do not constitute Statutory Accounts
and comprises the results of MacIntyre Hudson LLP, its subsidiary undertakings
and MacIntyre Hudson Holdings Limited and its subsidiary undertakings
(together, the "Combined Group") for the financial year ended 31 March 2025,
and the comparative financial year ended 31 March 2024.
The principal activity of the Combined Group is the provision of professional
services to clients.
2. Material accounting policy information
a. Basis of preparation
The financial statements provided for the Combined Group is for the following
entities in respect of the years ended 31 March 2025 and 31 March 2024 (or
where acquired during the period from a third party, from the date of
acquisition):
MacIntyre Hudson LLP MacIntyre Hudson Holdings Limited
MacIntyre Hudson Service Limited MHA Financial Solutions Limited
Blackfriars Tax Solutions LLP MacIntyre Hudson Limited
Cell MHA MHA Trustees Corporation
Meston Reid Limited MHA Tax Safe Limited
MHA Wealth Management Holdings Limited MacIntyre Hudson Corporate Finance Limited
MHA Caves Investment Management Limited MHA MacIntyre Consulting Limited
MHA Caves Wealth Limited MHA Limited
MHC Limited MHA MacIntyre Hudson Cayman Limited
Moore and Smalley LLP MacIntyre Hudson Ireland Limited
Baker Tilly Ireland Audit Limited
Baker Tilly Ireland GP Limited Baker Tilly Ireland Audit Limited
Baker Tilly Ireland Limited Partnership
The financial statements have been prepared in accordance with UK-adopted
international accounting standards ("IFRS"), except as detailed below, on a
going concern basis and under the historical cost convention. The financial
statements is presented in Pounds Sterling (£), and all values are rounded to
the nearest thousand (£'000), except when otherwise indicated.
The principal accounting policies adopted in the preparation of the financial
statements are set out below. These policies have been consistently applied to
all the periods presented.
Departures from IFRS
IFRS does not provide for the preparation of combined financial statements,
and accordingly in preparing the financial statements there have been some
departures from IFRS, as detailed below:
i) The financial statements are prepared on a combined basis and
therefore does not constitute a set of general-purpose financial statements
under paragraph 2 of IAS 1 and consequently the Combined Group does not make
an explicit and unreserved statement of compliance with IFRS as contemplated
by paragraph 16 of IAS 1; and
ii) The financial statements have not been prepared in accordance with
IAS 1 'Presentation of Financial Statements'. As the financial information is
prepared on a combined basis all capital and reserve balances, including
equity and debt, are merged into "members interests". This is further detailed
in the policies below.
In all other respects, IFRS has been applied.
b. Financial information layout and aggregation
The entities comprising the Combined Group do not include a single overall
holding company for the period under review and therefore do not form a legal
group for accounting purposes. However, all entities have been controlled by
common members throughout the period covered by the financial statements and
have therefore been aggregate throughout the period they had senior
decision-making management in common and the key decisions for each Combined
Group impacted the other. Entities which have been acquired by those entities
during the year from third parties have been treated as acquired and have been
consolidated in the financial information of the acquirer from the date of
acquisition.
c. New and amended standards and interpretations
The financial statements have been prepared in accordance with IFRSs. The
following IFRSs (including amendments thereto) and IFRIC interpretations have
been adopted:
· Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-Current;
· Amendments to IAS 1 Non-Current Liabilities with Covenants;
· Amendments to IFRS 16 Leases: Lease Liability in a Sale and
Leaseback; and
· Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements.
There are certain new standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Combined Group has decided not to adopt early. These
standards, amendments or interpretations are not expected to have a material
impact on the Combined Group.
d. Basis of consolidation
Entities under common control
The entities comprising the Combined Group do not form a legal group for
accounting purposes throughout the financial statements. However, all entities
have been controlled by common members throughout the years covered by the
financial statements and have therefore been treated as a combination of
entities under common control, with transactions between the entities treated
as if they were subsidiaries part of a legal group as detailed below.
Subsidiaries
Subsidiaries are all entities over which MHA has control. Control is achieved
when MHA is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee.
Generally, there is a presumption that a majority of voting rights results in
control. To support this presumption and when MHA has less than a majority of
the voting or similar rights of an investee, MHA considers all relevant facts
and circumstances in assessing whether it has power over an investee,
including:
• The contractual arrangement with the other vote
holders of the investee;
• Rights arising from other contractual arrangements;
and
• The Combined Group's voting rights and potential
voting rights.
MHA re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to MHA. They are deconsolidated from the date
that control ceases. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the financial
statements from the date MHA gains control until the date MHA ceases to
control the subsidiary.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with those used by
other members of the Combined Group.
All intragroup assets and liabilities, equity, income, expenses, and cash
flows relating to transactions between members of the Combined Group are
eliminated in full on consolidation.
Business combinations
The financial statements incorporate the results of business combinations
using the acquisition method of accounting in accordance with IFRS 3 Business
Combinations. The consideration transferred for the acquisition of a
subsidiary is the fair value of the assets transferred, the liabilities
incurred, and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of
the consideration transferred over the fair value of the Group's share of the
identifiable net assets acquired is recorded as goodwill. All transaction
related costs are expensed in the period they are incurred as operating
expenses. If the consideration is lower than the fair value of the net assets
of the subsidiary acquired, the difference is recognised in the income
statement. The results of acquired operations are included in the combined
statement of comprehensive income from the date on which control is obtained.
e. Revenue recognition
IFRS 15 "Revenue from Contracts with Customers" is a principle-based model of
recognising revenue from contracts with customers. It has a five-step model
that requires revenue to be recognised when control over goods and services
are transferred to the customer.
Revenue is measured as the fair value of consideration received or receivable
for satisfying performance obligations in the contract. There is one single
performance obligation being the provision of professional services in
relation to a particular matter and the transaction price is therefore
allocated to this single performance obligation. Variable consideration is
included in revenue only to the extent that it is highly probable that a
significant reversal will not be required when the uncertainty associated with
the variable consideration is subsequently resolved.
This occurs as follows for the Combined Group's contract types:
· Time and materials contracts are recognised over time in the accounting period
when services are rendered as the Combined Group has an enforceable right to
payment for work performed to date under its client terms of engagement.
· Fixed-fee contracts are recognised over time, based on the actual service
provided to the end of the reporting period relative to total services to be
provided, generally assessed by reference to actual inputs of time and
expenses as a proportion of the total expected inputs, where the Combined
Group has an enforceable right to payment for performance completed to date
under its client terms of engagement. and there is an inability to redirect
the related contract asset for another purpose.
· Contingent fee contracts, over and above an agreed minimum fee, are recognised
at the point in time that the contingent event occurs, and the Combined Group
has become entitled to the revenue.
· Commissions and fees are earned for facilitating client transactions.
Commissions and fees are recognised at a point in time the associated service
has been completed which is generally the trade date of the transaction.
Revenue from contracts for the provision of professional services is
recognised by reference to stage of completion when the stage of completion,
costs incurred and costs to complete can be estimated reliably. The stage of
completion is calculated by comparing costs incurred, mainly in relation to
contractual hourly staff rates and materials, as a proportion of total costs.
Where the outcome cannot be estimated reliably, revenue is recognised only to
the extent of the expenses recognised that it is probable will be recovered.
Estimates of revenues, costs or extent of progress toward completion are
revised if circumstances change. Any resulting increases or decreases in
estimated revenues or costs are reflected in the Statement of Comprehensive
Income in the period in which the circumstances that give rise to the revision
become known by management.
Revenue includes appropriate amounts in respect of unbilled revenue to the
extent that the outcome of these contracts can be assessed with reasonable
certainty, which is included in contract assets. Contract assets are
reclassified as trade receivables when billed and the consideration has become
unconditional because only the passage of time is required before payment is
due. A contract liability is defined by an obligation to transfer goods or
services to a customer for which receipt of consideration has already
occurred, as the amount billed by the Combined Group never exceeds the revenue
recognised, therefore no contract liabilities are recognised.
The Combined Group does not adjust the transaction price for the time value of
money as it does not expect to have any contracts where the period between the
transfer of the promised services to the client and the payment by the client
exceeds one year.
f. Foreign currencies
The functional currency for each entity in the Combined Group is the currency
of the primary economic environment in which the entity operates. The
financial statements are presented in Pounds Sterling, which is the Combined
Group's presentational currency.
Transactions in currencies other than the functional currency of each entity
are recorded at the exchange rate on the date the transaction occurred.
Foreign exchange gains and losses resulting from the settlement of such
transactions, and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates, are recognised
in profit or loss.
For the purposes of preparing the financial statements, the assets and
liabilities of the Combined Group are expressed in Pounds Sterling using
exchange rates prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the period. Exchange differences
arising, if any, are classified as other comprehensive income and are
transferred to the Combined Group's translation reserve.
g. Other operating income
Other operating income represents all other income received by the Combined
Group. This primarily relates to commissions and compensation payments
received for historic business relationships which are not considered ongoing.
h. Employee benefits: pension obligations
The Combined Group operates a defined contribution plan for its employees. A
defined contribution plan is a pension plan under which the Combined Group
pays fixed contributions into a separate entity. Once the contributions have
been paid the Combined Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they
fall due. If contribution payments exceed the contribution due for service,
the excess is recognised as a prepayment.
i. Net finance expense
Finance income
Finance income comprises of interest received on bank balances and rental
income and is recognised in profit or loss when it is earned.
Finance costs
Finance costs comprise of interest payable on leases and other financial
liabilities which are expensed in the period in which they are incurred.
j. Taxation
The taxation payable on profits of MHA is the personal liability of the
Members during the year and accordingly, no provision is made in the financial
statements. Tax on profit or loss for the year comprises current tax for
subsidiary company undertakings of MHA and other companies within the Combined
Group.
Current tax
Current tax payable is based on the taxable profit for the year calculated
using tax rates that have been enacted or substantively enacted by the end of
the reporting period.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases and is accounted for using the balance sheet liability method.
Deferred tax is calculated at the tax rates that have been enacted or
substantively enacted and are expected to apply in the period when the
liability is settled, or the asset realised. Deferred tax is charged or
credited to the statement of comprehensive income, except when it relates to
items charged or credited directly to equity, in which case the deferred tax
is also dealt with in equity.
Deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised.
Judgement is applied in making assumptions about future taxable income,
recognition of deferred tax assets, as well as the anticipated timing of the
utilisation of the losses of the Combined Group.
k. Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes
expenditure that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the
manner intended by management.
Depreciation is calculated to write off the cost of items of property, plant
and equipment less their estimated residual values using the straight-line
method over their estimated useful lives and is generally recognised in profit
or loss. Land is not depreciated. Assets under construction are not
depreciated until they become available for use.
Depreciation is provided on the following basis:
- Leasehold improvements
Underlying lease up to maximum of 10 years
- Fixtures, fittings and equipment 3 to
5 years
The assets' residual values, useful lives and depreciation methods are
reviewed, and adjusted prospectively if appropriate, or if there is an
indication of a significant change since the last reporting date.
At each reporting period end date, management reviews the carrying amounts of
its property, plant and equipment to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss, if any.
l. Intangible assets
Goodwill
Goodwill represents the excess of consideration transferred and
non-controlling interest acquired over the fair value of identifiable net
assets acquired in a business combination. Goodwill on acquisitions of
subsidiaries is included in intangible assets. Goodwill is not amortised, but
it is tested for impairment annually, or more frequently if events or changes
in circumstances indicate that it might be impaired and is carried at cost
less accumulated impairment losses. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment
testing. The allocation is made to those cash-generating units or Groups of
cash-generating units that are expected to benefit from the business
combination in which the goodwill arose. The units or groups of units are
identified at the lowest level at which goodwill is monitored for internal
management purposes, being the operating segments (note 6).
Other intangible assets
Intangible assets are recognised at cost and are subsequently measured at cost
less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired in a business combination are identified and
recognised separately from goodwill where they satisfy the definition of an
intangible asset under IAS 38 Intangible Assets. Such assets are only
recognised if either:
· They are capable of being separated or divided from the company and
sold, transferred, licensed, rented or exchanged, either individually or
together with a related contract, identifiable asset or liability, regardless
of whether the company intends to do so; or
· They arise from contractual or other legal rights, regardless of
whether those rights are transferable or separable from the entity or from
other rights and obligations.
The cost of such intangible assets is the fair value at the acquisition date.
All intangible assets acquired through business combinations are amortised
over their estimated useful lives. The significant intangibles recognised by
the Group acquired in business combinations are customer relationships which
have been valued using the multiple period excess earnings method.
Intangible assets comprise customer relationships and software. Amortisation
is recognised so as to write off the cost of assets less their residual values
over their useful lives on the following basis:
- Customer
relationships
10 years
- Software
3 years
The estimated useful lives are based upon management's best estimate of the
expected life of the asset. Useful lives are reconsidered if circumstances
relating to the asset change or if there is an indication that the initial
estimate requires revision.
m. Impairment of non-financial assets
Assets that are subject to depreciation or amortisation are assessed at each
reporting date to determine whether there is any indication that the assets
are impaired. Where there is any indication that an asset may be impaired, the
carrying value of the asset or cash‑generating unit ("CGU") to which the
asset has been allocated is tested for impairment. An impairment loss is
recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset's (or
CGU's) fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (CGUs).
Non‑financial assets that have been previously impaired are reviewed at each
reporting date to assess whether there is any indication that the impairment
losses recognised in prior periods may no longer exist or may have decreased.
n. Leases
The Combined Group as a lessee
At inception of a contract, the Combined Group assesses whether a contract is,
or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an
identified asset, the Combined Group assesses whether: an identified
physically distinct asset can be identified; and the Combined Group has the
right to obtain substantially all of the economic benefits from the asset
throughout the period of use and has the ability to direct the use of the
asset over the lease term being able to restrict the usage of third parties as
applicable.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
- leases of low value assets; and
- leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
incremental borrowing rate on commencement of the lease is used. The
incremental borrowing rate is an appropriate measurement because it provides a
practical, reliable, and company specific estimate of the lease liability's
present value. It ensures compliance with IFRS 16 while allowing lessees to
apply a consistent approach across various lease agreements.
On initial recognition, the carrying value of the lease liability also
includes:
- amounts expected to be payable under any residual value guarantee;
and
- any penalties payable for terminating the lease, if the term of the
lease has been estimated on the basis of the termination option being
exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
- lease payments made at or before commencement of the lease;
- initial direct costs incurred; and
- the amount of any provision recognised where the Combined Group is
contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement, lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the lease or over the remaining
economic life of the asset if, rarely, this is judged to be shorter than the
lease term. When the Combined Group revises its estimate of the term of any
lease (because, for example, it re-assesses the probability of a lessee
extension or termination option being exercised), it adjusts the carrying
amount of the lease liability to reflect the payments to make over the revised
term, which are discounted at the same discount rate that applied on lease
commencement, in line with IFRS 16. An equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying amount
being amortised over the remaining (revised) lease term.
The Combined Group as a lessor
As a lessor the Combined Group classifies its leases as either operating or
finance leases.
The Combined Group assesses whether it transfers substantially all the risks
and rewards of ownership. Those assets that transfer substantially all the
risks and rewards are classified as finance leases. All of the Combined
Group's leases are classified as finance leases.
Amounts due from lessees under finance leases are recorded as receivables at
the amount of the Combined Group's net investment in the leases. Finance lease
income is allocated to accounting periods so as to reflect a constant periodic
rate of return on the Combined Group's net investment in the lease.
o. Cash and cash equivalents
Cash and cash equivalents are financial assets and include cash at bank and in
hand and short term highly liquid deposits which are subject to an
insignificant risk of changes in value.
p. Financial assets
Financial assets comprise trade and other receivables and cash and cash
equivalents and are all held at amortised cost.
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally
through the provision of goods and services to customers (e.g. trade
receivables) but also incorporate other types of financial assets where the
objective is to hold their assets in order to collect contractual cash flows
and the contractual cash flows are solely payments of the principal and
interest. They are initially recognised at fair value plus transaction costs
that are directly attributable to their acquisition or issue and are
subsequently carried at amortised cost using the effective interest rate
method, less provision for impairment.
Impairment provisions for trade and other receivables are recognised based on
the simplified approach within IFRS 9 using the lifetime expected credit
losses ("ECL") method. During this process the probability of the non-payment
of the receivables is assessed. This probability is then multiplied by the
amount of the expected loss arising from default to determine the lifetime ECL
for the receivables. For trade and other receivables, which are reported net,
such provisions are recorded in a separate provision account with the loss
being recognised within administrative expenses in the statement of
comprehensive income. On confirmation that the trade or other receivable will
not be collectable, the gross carrying value of the asset is written off
against the associated provision.
q. Financial liabilities
All financial liabilities are recognised in the statement of financial
position when the Combined Group becomes a party to the contractual provision
of the instrument.
Financial liabilities measured at amortised cost
The Combined Group's financial liabilities measured at amortised cost comprise
trade payables and other payables, lease liabilities and bank and other
borrowings.
These financial liabilities are initially measured at fair value net of any
transaction costs directly attributable to the issue of the instrument and are
subsequently measured at amortised cost using the effective interest rate
method.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees and points paid or received
that form an integral part of the effective interest rate, transaction costs
and other premiums or discounts) through the expected life of the financial
liability to the amortised cost of a financial liability.
r. Members' interests
Members' interests contains both elements of equity, being invested capital,
and liabilities, being members' interests detailed as members capital
classified as a liability and other amounts classified as debt, due to the
combination of the two separate Groups, as detailed in Note 2a, being a
departure from IFRS.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of a company after deducting all of its liabilities. Equity instruments
issued are recorded at the proceeds received net of direct issue costs.
Members' capital and other liabilities
Non-designated members receive an agreed percentage profit share with the
remaining profits for each period being allocated between members in
accordance with the rights set out in the partnership agreement. It is
therefore considered that a contractual liability exists under IAS 32
'Financial Instruments: Presentation' in respect of the Group's profits, and
these amounts are recognised as a liability in the statement of financial
position. These amounts are included within the total profit or loss in each
year presented and are not shown as an expense due to the profit or loss being
for a combination of entities.
A monthly amount is paid to members during the year based upon an estimate of
profit for the year with additional distributions dependent on the
availability of funds. Amounts are typically retained in respect of members'
estimated tax liabilities and released to members when the liability falls
due.
Fixed capital is maintained which designated members contribute to in
proportion to their investment. Capital can only be withdrawn with a reduction
in investment or upon ceasing to be a member except where there is a return of
capital to all members in proportion to their investment in the LLP. There is
no opportunity for appreciation of the capital contributed.
s. Provisions
A provision is recognised in the statement of financial position when the
Combined Group has a present legal or constructive obligation as a result of a
past event, that can be reliably measured, and it is probable that an outflow
of economic benefits will be required to settle the obligation. Provisions are
recognised at the best estimate of the amount required to settle the
obligation at the reporting date.
3. Critical accounting estimates and judgements
In the application of the accounting policies, which are described in note 2,
the designated members of MHA are required to make judgements, estimates and
assumptions which affect reported income, expenses, assets, liabilities and
disclosure of contingent assets and liabilities. The estimates and associated
assumptions are based on historical experience, expectations of future events
and other factors that are believed to be reasonable under the circumstances.
Actual results in the future could differ from such estimates. The estimates
and underlying assumptions are reviewed on an on-going basis. Revisions to
accounting estimates are recognised in the period in which the revision is
made.
Fair value of capital points and gain on bargain purchase
The fair value of the financial liabilities for capital points and the
beneficial interest is consistent with, and only trivially different from the
nominal amounts payable. That is because the liabilities have no contractual
interest rate applicable and are also contractually repayable within a period
of about 6 months or less.
The element of the allocated capital points relating to post-retirement
payments of capital value and profit-related payments per capital point, which
may crystallize for good leavers, is conditional on future service by the
former owners/partners and hence is not part of the business combination
transactions as per IFRS 3:52. This has resulted in a gain on bargain purchase
on the acquisition of Moore and Smalley LLP on 1 April 2025 as detailed in
note 22.
4. Revenue
The Combined Group generates revenue primarily from professional services
provided to clients. There are no customers that make up more than 10% of
revenue in the years ended 31 March 2025, and 31 March 2024.
Geographical reporting Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
United Kingdom 212,455 149,448
Ireland 6,202 -
Cayman Islands 5,493 4,589
224,151 154,037
5. Other operating income
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Other income 1,891 536
1,891 536
Other income includes commissions and compensation payments received.
6. Segmental reporting
The Chief Operating Decision Maker ("CODM") has been identified as the Board
of MHA and that of MHHL, which comprise the same individuals. The CODM reviews
the Combined Group's internal reporting in order to assess performance and
allocate resources. The CODM has determined that there is one operating
segment being the provision of professional services. Information about
geographical revenue is disclosed in note 4.
7. Employee benefit expenses
Employee benefit expenses (excluding members) comprise:
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Wages and salaries 75,951 47,846
Social security costs 7,246 3,994
Other pension costs 6,680 3,931
Other staff costs 25 -
89,902 55,771
8. Members' share of profits
Profits are shared amongst members in accordance with profit sharing
arrangements. Members are required to make their own provision for pensions
from their profit shares.
Year ended Year ended
31 March 31 March
2025 2024
No. No.
Average number of members 147 97
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Remuneration of highest paid member 2,374 2,004
Average profit per member 565 581
9. Operating profit
Operating profit is stated after charging:
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Depreciation of property, plant and equipment 888 641
Amortisation of intangibles 1,131 195
Amortisation of right-of-use assets 3,411 2,692
Loss on disposal of property, plant and equipment 74 1
Loss on disposal of right-of-use assets 44 6
Expected credit losses 756 623
Exchange losses 132 68
10. Finance income
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Lease receivable interest 94 107
Bank interest receivable 718 935
812 1,042
11. Finance expense
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Interest on bank loans 96 121
Interest on lease liabilities 972 771
Interest on lease dilapidations 116 71
Other interest paid 110 -
1,294 963
12. Other gains/ (losses)
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Gain on bargain purchase 6,843 -
Gain/(loss) on disposal of lease 85 (6)
6,928 (6)
13. Taxation
Income tax payable on the profits of MHA and other partnerships consolidated
within the Combined Group is solely the personal liability of the individual
members of those partnerships and consequently is not dealt with in the
financial statements. Corporation tax is charged on the profits of the
companies within the Combined Group.
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Analysis of credit in the year
UK tax for the current year 2,828 1,883
Adjustments in respect of previous periods - 13
Total current tax 2,828 1,896
Deferred tax
Origination and reversal of temporary differences (28) (41)
Total deferred tax (28) (41)
Total taxation expense 2,800 1,855
Factors affecting tax charge for the year
The standard rate of corporation tax in the UK as at 31 March 2025 was 25% (31
March 2024: 25%). The UK rate of corporation tax increased to 25% from the
first of April 2023 on profits over £250,000. The differences are explained
below:
Year ended 31 March Year ended 31 March
2025 2024
£'000 £'000
Profit before tax 85,872 58,180
Tax at the Combined Group's weighted average tax rate of 25% (2024: 25%) 21,468 14,545
Adjustment for profits taxed outside of Combined Group (18,387) (12,779)
Expenses not deductible for tax purposes (287) 94
Adjustments in respect of prior periods - 13
Short term timing differences (28) (41)
Utilisation of tax losses 34 21
Fixed asset temporary differences - 2
Total taxation 2,800 1,855
Year ended Year ended
31 March 31 March
2025 2024
£'000 £'000
Corporation tax liability 2,382 1,394
2,382 1,394
14. Property, plant and equipment
Leasehold improvements Fixtures and fittings IT equipment Motor vehicles Assets under construction Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
1 April 2023 4,014 2,179 5 - - 6,198
Additions 158 85 - - 8 251
Additions - acquisitions - 117 - - - 117
Disposals (192) (542) - - - (734)
At 31 March 2024 3,980 1,839 5 - 8 5,832
Depreciation
1 April 2023 1,730 1,596 5 - - 3,331
Charge for the year 402 239 - - - 641
Disposals (192) (541) - - - (733)
At 31 March 2024 1,940 1,294 5 - - 3,239
Net book value
At 31 March 2024 2,040 545 - - 8 2,593
Cost
1 April 2024 3,980 1,839 5 - 8 5,832
Additions 866 1,105 - 44 13 2,028
Additions - acquisitions 1,105 23 - 29 - 1,157
Transfers - 8 - - (8) -
Disposals (313) (317) - (46) - (676)
At 31 March 2023 5,638 2,658 5 27 13 8,341
Depreciation
1 April 2024 1,940 1,294 5 - - 3,239
Charge for the year 570 313 - 5 - 888
Disposals (313) (299) - (20) - (632)
At 31 March 2025 2,197 1,308 5 (15) - 3,495
Net book value
At 31 March 2025 3,441 1,350 - 42 13 4,846
Depreciation charge is recognised in administrative expenses in profit or
loss.
15. Intangible assets
Goodwill Customer relationships Software Total
£'000 £'000 £'000 £'000
Cost
1 April 2023 8,307 708 256 9,271
Additions - - 1 1
Additions - acquisitions 3,985 3,524 - 7,509
At 31 March 2024 12,292 4,232 257 16,781
Amortisation
1 April 2023 - 36 244 280
Charge for the year - 187 8 195
At 31 March 2024 - 223 252 475
Net book value
At 31 March 2024 12,292 4,009 5 16,306
Cost
1 April 2024 12,292 4,232 257 16,781
Additions - acquisitions 1,263 7,295 - 8,558
At 31 March 2025 13,555 11,527 257 25,339
Amortisation
1 April 2024 - 223 252 475
Charge for the year - 1,126 5 1,131
At 31 March 2025 - 1,349 257 1,606
Net book value
At 31 March 2025 13,555 10,178 - 23,733
Amortisation charge on software is recognised in administrative expenses in
the profit or loss account
Goodwill
Goodwill arising on the acquisition of a business in the period relates to the
acquisition of Roberts Nathan LP and was calculated as the fair value of
initial consideration paid less the fair value of identifiable assets at the
date of acquisition (see Note 22).
Goodwill impairment review
Goodwill is allocated to one single cash-generating unit ("CGU") throughout
the financial being Professional Services.
Following initial recognition, goodwill is subject to impairment reviews, at
least annually, and measurement at cost less accumulated impairment losses.
Any impairment is recognised immediately in the consolidated statement of
comprehensive income and is not subsequently reversed.
Key assumptions used in value in use calculation
The key assumptions for the value in use calculation are those regarding:
· number of years of cash flows used and forecast growth rate;
· discount rate; and
· terminal growth rate.
No impairment is indicated for the CGU using the value in use calculation.
Number of years of cash flows used and forecast growth rate
The recoverable amount of the CGU is based on a value in use calculation using
specific cash flow projections over a five-year period and a terminal growth
rate thereafter. The budget for the following financial year forms the basis
for the cash flow projections for the CGU. The cashflow projections for the
four years subsequent to the forecast year reflect a modest growth rate of
2% .
Discount rate
The Combined Group's pre-tax weighted average cost of capital has been used to
calculate a discount rate of 14.51% for Professional Services. This reflects
current market assessments of the time value of money for the period under
review and the risks specific to the Combined Group and company acquired.
Terminal growth rate
An appropriate terminal growth rate is selected, based on the designated
members expectations of growth beyond the five-year period. The terminal
growth rate used is[2%.
Sensitivity to changes in assumptions
With regard to the value in use assumptions, the designated members believe
that reasonable possible changes in any of the above key assumptions would not
cause the carrying value of the unit to exceed its recoverable amount.
16. Trade and other receivables
31 March 31 March
2025 2024
£'000 £'000
Trade receivables 46,899 36,744
Contract assets 8,124 7,435
Other receivables 5,927 2,173
Prepayments 5,523 4,325
Current tax assets 6 6
66,479 50,683
Other receivables include amounts receivable from insurers in relation to
professional indemnity claims.
Information about the Combined Group's exposure to credit and market risks,
and impairment losses for trade receivables is included in Note 23.
17. Cash and cash equivalents
31 March 31 March
2025 2024
£'000 £'000
Cash at bank 18,768 25,956
18,768 25,956
18. Trade and other payables
31 March 31 March
2025 2024
£'000 £'000
Amounts falling due within one year
Trade payables 2,423 3,645
Other payables 8,923 7,519
Social security and other taxation 6,791 4,879
Accruals 9,676 5,046
Deferred consideration 1,621 3,128
29,434 24,217
Amounts falling due after one year
Deferred consideration 1,832 2,045
1,832 2,045
19. Borrowings
31 March 31 March
2025 2024
£'000 £'000
Current
Bank loans 66 20
66 20
Non-current
Bank loans 1,084 90
1,084 90
Total borrowings 1,150 110
A maturity analysis of the Combined Group's borrowings is shown below:
31 March 31 March
2025 2024
£'000 £'000
Less than 1 year 66 20
Later than 1 year and less than 5 years 1,084 90
Later than 5 years - -
1,150 110
Bank loans include a loan with an interest rate of 1% above the UK base rate
and is repayable on the date of retirement of certain partners of MHA. In the
absence of any contrary information the anticipated retirement date for
partners of MHA is 65.
Bank loans also include a loan entered into during the year with an interest
rate of 1.75% above the UK base rate repayable 5 years after the first
drawdown of the loan.
Bank loans are measured at amortised cost using the effective interest rate
method.
20. Leases
The Combined Group as a lessee
Nature of leasing activities
31 March 31 March
2025 2024
No. No.
Number of active leases 26 25
Extension, termination, and break options
The Combined Group negotiates extension, termination, or break clauses in its
leases. In determining the lease term, management considers all facts and
circumstances that create an economic incentive to exercise an extension
option or not exercise a termination option. A lease includes all
non-cancellable periods and periods covered by options to extend or terminate
the lease if it is reasonably certain that these options will be exercised. On
a case-by-case basis, the Combined Group will consider whether the absence of
a break clause would expose the Combined Group to excessive risk. Typically,
factors considered in deciding to negotiate a break clause include:
- the length of the lease term;
- the economic stability of the environment in which the
property is located; and
- whether the location represents a new area of operations
for the Combined Group.
As at 31 March 2025, materially all leases were reasonably certain to end on
the exit date of the lease, with no extension or termination clauses being
executed. As such there are no additional future cash outflows to which the
Combined Group is potentially exposed that are not reflected in the
measurement of lease liabilities, as detailed in this Note.
Incremental borrowing rate
The Combined Group has adopted a rate with a range of 3.40% - 8.55% as its
incremental borrowing rate, being the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain an asset of similar value
to the right-of-use asset in a similar economic environment with similar
terms, security and conditions. This rate is used to reflect the risk premium
over the borrowing cost of the Combined Group measured by reference to the
Combined Group's facilities.
Short term or low value lease expense
31 March 31 March
2025 2024
£'000 £'000
Short-term and low value lease expense 412 385
Right-of-use assets
Leasehold property Equipment Total
£'000 £'000 £'000
Cost
1 April 2023 18,353 771 19,124
Additions 3,049 23 3,072
Disposals (550) - (550)
At 31 March 2024 20,852 794 21,646
Amortisation
1 April 2023 4,110 233 4,343
Charge for the year 2,500 192 2,692
Disposals (482) - (482)
At 31 March 2024 6,128 425 6,553
Net book value
At 31 March 2024 14,724 369 15,093
Cost
1 April 2024 20,852 794 21,646
Additions - acquisitions 1,971 53 2,024
Additions 3,485 123 3,608
Disposals (422) (83) (505)
At 31 March 2025 25,886 887 26,773
Depreciation
1 April 2024 6,128 425 6,553
Charge for the year 3,181 230 3,411
Disposals (422) (83) (505)
At 31 March 2025 8,887 572 9,459
Net book value
At 31 March 2025 16,999 315 17,314
Lease liabilities
Leasehold property Equipment Total
£'000 £'000 £'000
1 April 2023 17,208 527 17,735
Additions 2,600 23 2,623
Interest expense 750 21 771
Lease payments (3,190) (206) (3,396)
Disposals (62) - (62)
At 31 March 2024 17,306 365 17,671
1 April 2024 17,306 365 17,671
Additions arising on acquisition 1,736 50 1,786
Additions 3,225 150 3,375
Interest expense 948 24 972
Lease payments (3,879) (248) (4,127)
At 31 March 2025 19,336 341 19,677
31 March 31 March
2025 2024
£'000 £'000
Current 3,238 2,886
Non-current 16,439 14,785
Total lease liabilities 19,677 17,671
Reconciliation of minimum lease payments and present value
31 March 31 March
2025 2024
£'000 £'000
Within 1 year 3,978 3,599
Later than 1 year and less than 5 years 14,660 12,176
After 5 years 4,635 4,478
Total including interest cash flows 23,273 20,253
Less: interest cash flows (3,596) (2,582)
Total principal cash flows 19,677 17,671
The Combined Group as a lessor
The Combined Group sublets leased properties which are accounted for as
finance leases.
Lease receivable
Leasehold property
£'000
1 April 2023 2,788
Interest income 107
Lease payments received (434)
At 31 March 2024 2,461
1 April 2024 2,461
Interest income 94
Lease payments received (434)
At 31 March 2025 2,121
Reconciliation of minimum lease payments and present value
31 March 31 March
2025 2024
£'000 £'000
Within 1 year 434 434
Later than 1 year and less than 5 years 1,735 1,735
After 5 years 204 637
Total including interest cash flows 2,373 2,806
Less: interest cash flows (252) (345)
Total principal cash flows 2,121 2,461
21. Deferred tax
31 March 31 March
2025 2024
£'000 £'000
Deferred tax
Opening balance 5 (37)
Credited to income statement 33 42
Net deferred tax asset 38 5
Deferred tax liabilities comprise accelerated capital allowances on property
plant and equipment and deferred tax on customer relationships acquired on
acquisition.
Deferred tax assets relate to short-term timing differences.
Deferred tax assets and liabilities are presented separately when there is no
legally enforceable right to offset balances.
22. Investment in subsidiaries and associates
MHA directly owns the entire issued and fully paid ordinary share capital of
its subsidiary undertakings.
The subsidiary undertakings are presented below:
Subsidiaries and partnerships linked to the Combined Group Country of Principal activity Holding Proportion of ordinary shares held at each year end
incorporation
Direct Indirect
MacIntyre Hudson Service Limited England & Wales Dormant Ordinary shares 100%
Blackfriars Tax Solutions LLP England & Wales Provision of tax services Capital 99%
Cell MHA Guernsey Provision of insurance services Insurance shares 100%*
Meston Reid Limited Scotland Dormant Ordinary shares 100%
Moore and Smalley LLP England & Wales Provision of professional services Ordinary shares 100%**
MacIntyre Hudson Ireland Limited Ireland Provision of professional services Ordinary shares 100%**
Baker Tilly Ireland GP Limited Ireland Provision of professional services Ordinary shares 100%**
*MacIntyre Hudson LLP owns 100 insurance shares in White Rock Insurance
Company PCC Limited which entitles it to 100% ownership and control of "Cell
MHA" that is managed by trustees on behalf of MacIntyre Hudson LLP.
**These entities were acquired during the year ended 31 March 2025.
Associates and partnerships linked to the Combined Group Country of Principal activity Holding Proportion of ordinary shares held at each year end
incorporation
Direct Indirect
MacIntyre Hudson Holdings Limited(1) England & Wales Holding company A Ordinary shares Nil
Baker Tilly Global Tax Solutions Limited Ireland Development of multinational client opportunities Ordinary shares 12.5%
MacIntyre Hudson Advisory Services LLP England & Wales Provision of training services Capital 25%
(1)MacIntyre Hudson Holdings Limited ("MHHL") is an associate of MHA
throughout the financial period as MHA's shareholding does not give it control
over MHHL, however, MHHL is under common control by MHA's capital members and
therefore the financial statements consolidate the results of MHA and
subsidiaries and MHHL and subsidiaries on a combined basis.
The additional entities listed below are subsidiaries of MHHL whereby MHA does
not directly own any of the share capital throughout the periods presented:
MHHL subsidiaries under common control of the Combined Group Country of Principal activity
Incorporation
MacIntyre Hudson Corporate Finance Limited Corporate finance
MHA Financial Solutions Limited England & Wales Asset financing
MacIntyre Hudson Limited England & Wales Provision of debt factoring services
MHA MacIntyre Hudson Consulting Limited England & Wales Consultancy
MHA Tax Safe Limited England & Wales Provision of tax services
MHA Wealth Management Holdings Limited England & Wales Holding company
MHA Caves Investment Management Limited England & Wales Holding company
MHA Caves Wealth Limited England & Wales Provision of financial services
MHA Trustees Corporation Limited England & Wales Non trading
The registered office of the above entities is The Pinnacle, 150 Midsummer
Boulevard, Milton Keynes, Buckinghamshire, MK9 1LZ, United Kingdom.
23. Business combinations
The Combined Group made a number of acquisitions throughout the year ended 31
March 2025, as detailed below.
Moore and Smalley LLP
On 1 April 2024, MacIntyre Hudson LLP completed the acquisition of the trade
and assets of Moore and Smalley LLP for total consideration of £6,003k.
The principal reason for the acquisition was to enhance the services offered
to existing clients of both firms, while expanding MHA's offering in the UK in
line with the Group's growth strategy.
Given that following the acquisition, certain Moore and Smalley LLP operations
were merged with MacIntyre Hudson LLP operations, disclosure of the
contribution of the acquired business to the Group's revenues and profit in
the period from 1 April 2024 to 31 March 2025 has been deemed impractical by
management, as those revenue streams and customers cannot be disaggregated
specifically to Moore and Smalley LLP and or identified since the date they
merged with MacIntyre Hudson LLP, and were billed as MacIntyre Hudson LLP from
this date.
The following table summarises the fair value of assets acquired, and
liabilities assumed at the acquisition date:
Fair value £'000
Assets
Intangible asset - customer relationships 6,921
Property, plant and equipment 719
Right of use assets 2,024
Work in progress 331
Cash 1,175
Trade and other receivables 8,944
Liabilities
Trade and other payables (5,129)
Lease liabilities and provisions (2,151)
Total fair value 12,834
Consideration 6,003
Gain on bargain purchase (6,831)
The fair values include recognition of intangible assets related to Moore and
Smalley LLP customer relationships of £6,921k, which will be amortised over
10 years on a straight-line basis. The gain on bargain purchase of £6,831k is
primarily as a result of the consideration being equal to that of the
financial net assets acquired. The gain on bargain purchase of £6,831k is
disclosed within the statement of comprehensive income.
Purchase consideration £'000
Equity 6,003
Total consideration 6,003
The net cash sum expended on acquisition in the year ended 31 March 2025 is as
follows:
Analysis of cash flows on acquisition £'000
Cash acquired at acquisition 1,175
Net cash outflow on acquisition 1,175
On 3 April 2024 MHA LLP advanced loans to the former designated members of the
Moore and Smalley Group of £1,504,000. The transactions are recognised
separately from the business combination as they were agreed in separate
negotiations and included in separate legal arrangements. The loans are
repayable in quarterly instalments over a term of 10 years and are measured at
amortised cost. Note 11 provides additional information on one of the
constituent loans to a related party of the Combined Group.
Roberts Nathan LP
On 1 July 2024, MacIntyre Hudson LLP completed the acquisition of the trade
and assets of Roberts Nathan LP for total consideration of £1,968k.
The principal reason for the acquisition was to combine Roberts Nathan LP's
extensive local expertise with a strong international presence, significantly
enhancing the firm's capability to offer a more comprehensive range of
services and sector expertise and serve a broader client base in Ireland and
globally.
Given the assets of Roberts Nathan LP were transferred to MHA on acquisition
and the information on Roberts Nathan LP as a standalone business is not
available, disclosure of the contribution of the acquired business to the
Group's revenues and profit in the period from 1 April 2024 to 31 March 2025
has been deemed impractical by management.
The following table summarises the fair value of assets acquired, and
liabilities assumed at the acquisition date, the presentation is detailed in
both €'s and £'s reflecting both the transactions' original currency and
the Combined Group's reporting currency:
Fair value £'000 Fair value €'000
Assets
Intangible asset - Customer relationships 374 450
Property, plant and equipment 408 490
Trade and other receivables 10 12
Liabilities
Work in progress (2) (3)
Trade and other payables (89) (104)
Total fair value 701 845
Consideration 1,968 2,363
Goodwill 1,267 1,518
The fair values include recognition of intangible assets related to Roberts
Nathan LP customer relationships of £374k, which will be amortised over 10
years and 9 months on a straight-line basis. The goodwill of £1,267k
comprises the potential value of new customers as well as the value of the
workforce in place, which are not separately recognised. Acquisition costs
totalled £77k and are accounted for within the statement of comprehensive
income.
Purchase consideration £'000 €'000
Cash 1,179 1,418
Deferred consideration - cash 460 550
Net asset payment 331 398
Work in progress payment (2) (3)
Total consideration 1,968 2,363
The net cash sum expended on acquisition in the year ended 31 March 2025 is as
follows:
Analysis of cash flows on acquisition £'000 €'000
Cash paid as consideration on acquisition (1,179) (1,418)
Net cash outflow on acquisition (1,179) (1,418)
Roberts Nathan Financial Services Limited
On 1 September 2024, MacIntyre Hudson LLP completed the acquisition of 80% of
the trade and assets of Roberts Nathan Financial Services Limited for total
consideration of £(12)k.
The principal reason for the acquisition was to enhance the services offered
to existing clients, while expanding MHA's offering in Ireland in line with
the Group's growth strategy.
Given the assets of Roberts Nathan Financial Services Limited were transferred
to MHA on acquisition and the information on Roberts Nathan Financial Services
Limited as a standalone business is not available, disclosure of the
contribution of the acquired business to the Group's revenues and profit in
the period from 1 September 2024 to 31 March 2025 has been deemed impractical
by management. Similarly, disclosure of the revenue and profit of Roberts
Nathan Financial Services Limited would have contributed if the acquisition
had occurred on 1 April 2024 is also deemed impractical.
The following table summarises the fair value of assets acquired, and
liabilities assumed at the acquisition date, the presentation is detailed in
both €'s and £'s reflecting both the transactions' original currency and
the Combined Group's reporting currency:
Fair value £'000 Fair value €'000
Assets
Property, plant and equipment 31 36
Trade and other receivables 37 44
Cash 1 1
Liabilities
Trade and other payables (13) (16)
Borrowings (56) (65)
Total fair value - -
NCI - 20% (3) (4)
Consideration (12) (15)
Gain on bargain purchase (15) (19)
The fair values include recognition of intangible assets related to Roberts
Nathan Financial Services Limited customer relationships of £Nil. The
negative goodwill of £15k is primarily as a result of the negative
consideration calculated. MHA has elected to measure the non-controlling
interest of 20% using the partial goodwill method. The negative goodwill of
£15k is disclosed within the statement of comprehensive income.
Purchase consideration £'000 €'000
Cash 21 25
Net asset payment (33) (40)
Total consideration (12) (15)
The net cash sum expended on acquisition in the year ended 31 March 2025 is as
follows:
Analysis of cash flows on acquisition £'000 €'000
Cash consideration received due to net negative consideration 12 15
Cash acquired at acquisition 1 1
Net cash inflow on acquisition 13 16
24. Transactions with owners
On 17 October 2024, MHA exercised a call option to acquire the remaining
35,484 shares in MHA Caves Investment Management Limited ("Caves") for cash
consideration of £4,277k, reducing the non-controlling interest in Caves from
49% to 0%. The difference between MHA's existing share of the net assets of
Caves at the date of the acquisition date and the consideration paid has been
adjusted through equity as a transaction with owners, given MHA already
controlled Caves following the acquisition of 51% of Caves on 31 March 2022.
Details of the transaction with owners adjusted through equity are included
below:
£'000
MHA's share of net assets in Caves 1,820
Consideration 4,277
Transaction with owners - adjusted through equity 2,457
25. Financial instruments
Financial assets
Financial assets measured at amortised cost comprise trade receivables, other
receivables and cash. It does not include contract assets or prepayments.
31 March 31 March
2025 2024
£'000 £'000
Trade receivables 46,899 36,744
Other receivables 5,927 2,173
Cash and cash equivalents 18,768 25,956
71,594 64,873
Financial liabilities
Financial liabilities measured at amortised cost comprise trade and other
payables, and borrowings. It does not include taxation and social security.
31 March 31 March
2025 2024
£'000 £'000
Trade payables 2,423 3,645
Other payables 8,923 7,519
Accruals 9,676 5,046
Deferred consideration 3,453 5,173
Bank loans 1,150 110
25,625 21,493
Fair value of financial assets and liabilities approximates to their carrying
value.
The above excludes member's capital and other member's interest classified as
liabilities. The below table reconciles members interests, whereby the members
capital is due after more than one year, and all other members interest are
due within one year:
Members liabilities 31 March 31 March
2025 2024
£'000 £'000
Current
Other amounts classified as debt 40,975 34,706
40,975 34,706
Non-current
Members capital classified as a liability 14,077 13,359
14,077 13,359
55,052 48,065
Financial risk management
The Combined Group is exposed through its operation to the following financial
risks: credit risk, liquidity risk and market risk. MHA's designated members
have overall responsibility for the establishment and oversight of the
Combined Group's risk management framework. The Combined Group's risk
management policies are established to identify and analyse the risks faced by
the Combined Group, to set appropriate risk limits and controls and to monitor
risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Combined
Group's activities. The Combined Group, through its training and management
standards and procedures, aims to maintain a disciplined and constructive
control environment in which all employees understand their roles and
obligations.
The Combined Group finances its operations through a mixture of debt finance,
cash and liquid resources and various items such as trade debtors and trade
payables which arise directly from the Combined Group's operations.
Credit risk
Credit risk is the risk of financial loss to the Combined Group if a customer
or counterparty to a financial instrument fails to meet its contractual
obligations, of which the risk is assessed and managed in accordance with IFRS
9. Credit risk arises principally from the Combined Group's receivables from
customers and from cash balances held at banks. To minimise the Combined
Group's credit risk on receivables from customers, the Combined Group
endeavours only to deal with clients which are demonstrably creditworthy and
this, together with the aggregate financial exposure, is continuously
monitored. The process for monitoring creditworthiness includes a thorough
assessment of credit risk, incorporating historical and forward-looking
information. The Combined Group mitigates credit risk arising on cash balances
held at banks by using only reputable financial institutions with a high
credit rating, in line with IFRS 9 requirements. The maximum exposure to
credit risk is the carrying value of its financial receivables, trade and
other receivables and cash and cash equivalents as disclosed in the notes to
the financial statements.
The receivables' age analysis is evaluated on a regular basis for potential
doubtful debts, considering historic, current and forward-looking information,
to estimate ECLs accurately. Impairments to trade receivables have been made
in each of the years detailed in the financial statements.
The exposure to credit risk for trade receivables by geographic region was as
follows:
31 March 31 March
2025 2024
£'000 £'000
United Kingdom 46,615 36,144
Cayman Islands 284 600
46,899 36,744
The following table provides information about the exposure to credit risk and
ECLs for trade receivables and contract assets from individual customers.
< 30 30-60 61-90 91-180 >180 Total
days days days days days £'000
As at 31 March 2024 £'000 £'000 £'000 £'000 £'000
Expected credit loss rate 0.1% 0.3% 2.5% 16.4% 91.7% 4.2%
Total gross carrying amount 24,852 7,993 2,303 1,894 1,332 38,374
Expected credit loss (19) (22) (58) (310) (1,221) (1,630)
Total 24,833 7,971 2,245 1,584 111 36,744
< 30 30-60 61-90 91-180 >180 Total
days days days days days £'000
As at 31 March 2025 £'000 £'000 £'000 £'000 £'000
Expected credit loss rate 0.1% 0.3% 0.8% 7.4% 93.3% 101.8%
Total gross carrying amount 30,974 9,513 4,047 2,479 2,272 49,285
Expected credit loss (24) (29) (31) (182) (2,120) (2,386)
Total 30,950 9,484 4,016 2,297 152 46,899
The Combined Group applies the IFRS 9 simplified approach to measuring
expected credit losses ("ECL") which uses a lifetime expected loss allowance
for all trade receivables. The Combined Group do not provide credit terms on
sales, all invoices issued by the Combined Group are payable upon
presentation. However, per management's assessment it is assumed that invoices
will be settled within 30 to 60 days. Given the preference for immediate
payment, a credit risk exposure at each period end, as a result of a
significant change in economic conditions, is unlikely. Therefore, management
have determined forward-looking economic scenarios are less significant in
determining an estimate of expected future losses. However, the Combined Group
still incorporates reasonable and supportable forward-looking information
alongside historical data and management knowledge in calculating the ECL
balance.
Liquidity risk
The Combined Group seeks to maintain sufficient cash balances. Management
reviews cash flow forecasts on a regular basis to determine whether the
Combined Group has sufficient cash reserves to meet future working capital
requirements and to take advantage of business opportunities.
A maturity analysis of the Combined Group's undiscounted cash flows arising
from financial liabilities is shown below:
31 March 31 March
2025 2024
£'000 £'000
Less than one year:
Trade and other payables 21,021 16,210
Bank loans 67 23
Deferred consideration 1,621 3,128
22,709 19,361
Later than 1 year and less than 5 years:
Bank loans 1,084 90
Deferred consideration 1,832 2,045
2,916 2,135
Later than 5 years:
Bank loans - -
Total including interest cash flows 25,625 21,496
Less: interest cash flows (1) (3)
Total principal cash flows 25,624 21,493
A maturity analysis of lease liabilities is included in note 19.
Market risk
Market risk is the risk that changes in market prices - e.g. foreign exchange
rates, interest rates and equity prices - will affect the Combined Group's
income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
Foreign exchange risk
The Combined Group is exposed to transactional foreign currency risk to the
extent that there is a mismatch between the currencies in which sales,
purchases, receivables and borrowings are denominated and the respective
functional currencies of Combined Group companies. The functional currencies
of the Combined Group companies are primarily Pounds Sterling (GBP) and US
Dollars (USD). The currencies in which these transactions are primarily
denominated are GBP, EUR and USD.
The Combined Group focuses on implementing natural hedging instruments by
matching the currencies of its sales and related purchases. So far, the
Combined Group does not make use of any financial hedging instruments.
The carrying amounts of the Combined Group's foreign currency denominated
monetary assets and monetary liabilities at the reporting date are as follows:
31 March 31 March
2025 2024
£'000 £'000
Net foreign currency financial assets/(liabilities):
EUR 2,115 431
USD 2,225 2,377
Other 24 (27)
4,364 2,781
A reasonably possible strengthening/(weakening) GBP against the Combined
Group's primary currencies at 31 March 2025 and 31 March 2024 would have
affected the measurement of financial instruments denominated in a foreign
currency and affected equity and profit or loss. Management assesses the
impact of the movement in foreign exchange to be immaterial to the Combined
Group given the net foreign currency assets and liabilities are immaterial.
Interest rate risk
The Combined Group aims to mitigate interest rate risk by entering into
fixed-rate instruments. The Combined Group does not use any financial hedging
instruments.
As at 31 March 2025, the Combined Group's current borrowings include a bank
loan with an interest rate of 1% over the Bank of England Base Rate, the
balance of borrowings being £66,000 as at 31 March 2025, this amount
represents the principal and accrued interest. No sensitivity analysis has
been performed as management assess the impact to be immaterial.
Bank loans also include a loan entered into during the year with an interest
rate of 1.75% above the UK base rate repayable 5 years after the first
drawdown of the loan, the balance being £1,060,000 as at 31 March 2025.
Capital Disclosures
The capital structure of the business consists of cash and cash equivalents,
debt and equity. Equity comprises members' interests and accumulated profits
and is equal to the amount shown as 'Invested capital' in the statement of
financial position. At 31 March 2025, debt comprised £1,150,000 which is set
out in further detail in note 18.
The Combined Group's current objectives when maintaining capital are to:
- safeguard the Combined Group's ability as a going concern so that it
can continue to pursue its growth plans;
- provide a reasonable expectation of future returns to shareholders;
and
- maintain adequate financial flexibility to preserve its ability to
meet financial obligations, both current and long term.
The Combined Group sets the amount of capital it requires in proportion to
risk. The Combined Group manages its capital structure and adjusts it in light
of changes in economic conditions and the risk characteristics of underlying
assets. To maintain or adjust the capital structure, the Combined Group may
issue new shares or sell assets to reduce debt.
During the years ended covered within the financial statements, the Combined
Group's business strategy remained unchanged.
26. Other provisions
31 March 31 March
2025 2024
£'000 £'000
Non-current
Lease liability dilapidations 2,432 1,777
Professional liability claims 2,825 2,475
5,257 4,252
The professional liability claims represent the estimated cost of defending
and concluding claims. The vast majority of cases are estimated to be settled
within three years and therefore discounting is not deemed to be material.
Lease dilapidation provisions Professional liability claims Total
£'000 £'000 £'000
At 1 April 2023 1,373 2,950 4,323
Additions 448 525 973
Interest expense 71 - 71
Payments (115) - (115)
Disposals - (1,000) (1,000)
At 31 March 2024 1,777 2,475 4,252
At 1 April 2024 1,777 2,475 4,252
Additions 260 925 1,185
Additions - acquisitions 365 - 365
Interest expense 116 - 116
Disposals (86) (575) (661)
At 31 March 2025 2,432 2,825 5,257
As part of the Combined Group's property leasing arrangements there is an
obligation to repair damages which occur during the life of the lease, such as
wear and tear. These costs have been charged in line with IFRS 16 Leases and
are included in the right-of-use assets. The provision is shown separately to
the lease obligation liability. The provision is expected to be utilised
between 2025 and 2039 when the leases terminate. Due to the significant number
of leased properties and the difficulties in predicting expenditure that will
be required on return of a property to the landlord many years into the
future, the dilapidations provision is considered an estimate. The provision
has been calculated using historical experience of actual expenditure incurred
on dilapidations and estimated lease termination dates.
27. Capital and contingencies
Capital and financial commitments
The Combined Group held no capital, financial and or other commitments at 31
March 2025: (2024: none).
28. Related party transactions
There were no material changes in key management personnel terms or related
party transactions, except for a loan of £195,000 was advanced to Mr Graham
Gordon, a member of MHA's Board on 3 April 2024. The loan is unsecured, bears
interest at a rate of 1.75% plus Bank of England base rate and is repayable
quarterly over a term of 10 years. The amount outstanding at 31 March 2025 was
£176,000.
Key management personnel
The Management Board of MHA are considered to be key management personnel in
the financial statements. Total compensation paid to key management personnel
in the year ended 31 March 2025 was £9,745,000 (2024: £7,703,000).
29. Ultimate controlling party
No one entity or individual has control over MHA.
30. Changes in liabilities from financing activities
1 April 2024 Financing cash flows Interest expense Other adjustments 31 March 2025
£'000 £'000 £'000 £'000 £'000
Bank loans 110 944 96 - 1,150
Lease liabilities 17,671 (4,127) 972 5,161 19,677
Total liabilities from financing activities 17,781 (3,183) 1,068 5,161 20,827
1 April 2023 Financing cash flows Interest expense Other adjustments 31 March 2024
£'000 £'000 £'000 £'000 £'000
Bank loans 3,275 (3,286) 121 - 110
Lease liabilities 17,735 (3,397) 771 2,562 17,671
Total liabilities from financing activities 21,010 (6,683) 892 2,562 17,781
31. Events after the reporting period
The Combined Group initiated a reorganisation process in connection with the
Admission of the Company to the AIM Market on 15(th) April 2025 , the
Reorganisation was undertaken by the Company to allow and facilitate the
Company to become the ultimate holding company of the Group and to meet the
regulatory requirements in the jurisdictions in which the Group operates.
The Company announced on11 August 2025 that it had acquired Baker Tilly
South-East Europe, a leading professional services firm offering a
comprehensive range of services to clients in Cyprus, Greece and South-East
Europe, predominantly in audit, tax, advisory, legal and corporate services.
The Group identified BTSEE as an ideal fit for MHA, noting its strong
financial track record, growth potential, alignment of culture and
complementary services to MHA.
MHA will pay to the vendors of BTSEE, 90% of the initial €20m equity value
through an initial cash consideration of €5.4 million, plus €12.6 million
to be satisfied through the issue of 10,862,069 new ordinary shares in the
Company (the "Completion Consideration Shares"). The issue price of the
Consideration Shares is equal to the IPO issue price of £1.00 per share
Based off the Company's share price of 135.5p as at 8 August 2025, the value
of the Consideration Shares is approximately €17.1 million. The remaining
10% equity value is payable through additional new ordinary shares to be
issued in due course, which the vendors will contribute to the Company's
Employee Benefit Trust ("EBT") with such number of shares to be determined
following completion account adjustments, as detailed below.
A final balancing payment will be made to the vendors depending on net debt
and working capital adjustments based off completion accounts. The payment
will comprise a mix of cash and new ordinary shares in the Company. The
vendors will contribute 10% of the total consideration receivable by them to
the EBT in new ordinary shares. All consideration shares will be subject to
lock-in and clawback arrangements as apply to the shares acquired by the
existing MHA Partners on the IPO of the Company.
For the 12 months ended 31 December 2024, BTSEE generated sales of €19.4
million, adjusted EBITDA of €3.9 million and profit before tax of €2.5
million, after adjusting for partner remuneration. BTSEE's revenue has grown
over the past four years at a compound average growth rate of 9% per annum.
At 31 December 2024, BTSEE had net assets of approximately €1 million.
.
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