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Equal Care Co-op - OFFER CLOSED

Financial performance

Equal Care Co-op is aiming to raise £300,000 in its 2019 Community Share Offer. This is to finance two main tasks; the development of the two newly established circles of care and support in Calderdale; and the development of the technology that will empower the givers and receivers of care and support to be in control and linked across the platform.

Revenue Model

Equal Care Co-op will use a mixed trading model, using the commission basis adopted by other platforms, supporting people funding their own care and people receiving Local Authority direct payments and Continuing Health Care Payments from the NHS. Commission will be on a per hour basis and start at 15%.

By taking ongoing responsibility for the care and support offered and giving regulated provision, they will move beyond this to engage directly with commissioning opportunities offered by local authorities and the NHS. Equal Care Co-op want to offer a genuine alternative to the privately-run for-profit social care providers that currently dominate the market.

This includes:

  • ‘Individual Service Funds’ and other forms of managed personal budget which requires a tendering process
  • Block contracted home and community social care services covering a fairly broad range of service types and ensuring we support a mix of ages and experiences of different conditions e.g. domiciliary care provision, floating support contracts, time-banking project, peer support and befriending services
  • Framework Agreements with local authorities to respond to spot purchasing contracts for individual care and support
  • Any Qualified Provider agreements with NHS community based services
  • Private contracts with other care providers requiring emergency / agency staff

For these contracts they will set aside a small surplus charge to re-invest in the co-operative. Equal Care Co-op expect to become fully sustainable by 2022.

Share offer

Equal Care Co-op are looking to raise up to £500,000 and have minimum and maximum, and optimum targets.  Below are forecasts for Equal Care Co-ops optimum target.  To see forecasts at minimum and maximum raises, read the full share offer document.

These forcasts use 'forward-looking statements' which are provided to allow potential investors the opportunity to understand management’s beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment.

These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements.

Optimum Target Cash Flow

On reaching £300,000 Equal Care Co-op would be able to launch into product development in earnest whilst simultaneously building the trading side of the co-operative. They may still be able to bring in loan capital to fund their development too, conditional on them being able to afford it whilst meeting the planned returns to investors.

Cash Flow
2019
2020
2021
2022
2023
2024
2025
Revenue from trading £14,610 £77,474 £601,918 £1,154,357 £1,764,833 £2,456,657 £2,958,690
Direct costs (£62,354) (£226,162) (£420,979) (£558,859) (£749,481) (£980,165) (£1,103,742)
Net Cash from trading (£176,543) (£352,727) (£352,727) £52,738 £442,893 £894,131 £1,272,588
Grant Income £83,000 £150,000 £150,000
Taxation (75,713)
Net cash from operations (£93,543) (£202,727) (£157,041) £52,738 £442,893 £894,131 £1,272,588
Community Share Issue £300,000 £300,000
Loan / Share Interest (£9,000) (£18,000) (£15,642) (£13,902)
Dividends (£154,826) (£470,495)
Withdrawals and Repayments (£48,723) (£65,835) (£48,586)
Net cash from financing activities £300,000 £300,000 (£9,000) (£66,723) (£236,303) (£532,983)
Opening cash £25,000 £231,457 £28,729 £171,688 £215,426 £591,596 £1,249,424
Closing Cash £231,457 £28,729 £171,688 £215,426 £591,596 £1,249,424 £1,913,317

 Note

  • Forward-looking statements are merely unaudited projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these projections will be achieved.

Tax Relief

The 2019 share offer has Advance Assurance from HMRC that it qualifies for Seed Enterprise Investment Scheme Tax Relief. That means investors will be able to claim tax reliefs on the value of their investment:

  • 50% of their income tax liability for the current or previous tax year (you choose which one to claim it against)
  • 50% relief of Capital Gains Tax on any capital gains used to invest into the share issue

So, if you invested £500, you would be eligible to reduce your tax bill by £250. If you used a capital gain to make the investment, you’d also reduce your capital gain tax liability on it from £140 to £70, giving a combined tax benefit of £320.

In order to benefit from the tax relief, you must be a UK income and/or capital gains tax payer with tax due to pay equal or greater than the amount of relief you’re seeking.

Equal Care Co-op would be likely to apply for the tax relief certificates in summer 2019, and send them to investors shortly after that. The tax relief can be applied to the year you choose – either the year the investment was made, or the previous tax year.

If you pay tax via PAYE, you send the certificate to the tax office that processes your employer’s payroll tax collection, and if you do selfassessment, you claim the relief when completing your tax return (unless you want to backdate it for a tax year you’ve already filed a return for, in which case you have to contact HMRC directly).

SEIS investment is only available the first £150,000 of investment from individuals (i.e. excluding organisational investment). Individual investments after the first £150,000 will be eligible for Enterprise Investment Scheme relief at 30% of the total invested, but note that there is no capital gains tax relief with EIS.

As a condition of being able to offer the relief, no investment can be withdrawn for at least three years after the date of the investment, and Equal Care will therefore not be in a position to consider withdrawal requests until 2022 at the earliest, and their financial projections are built around this withdrawal starting the following year, in 2023.

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