Below is an extract from an email reply from Twilight publishing, answering some of my inane questions. They were great and got back to me next day.
I hope others will find this info useful.
Many thanks to Twilight for letting me post this. (Yes I did ask them foor permission!)

Dear David,
Thank you for your submission, it has been added to the pile to be read
as soon as possible.
Your questions....
1. Yes, we will publish childrens ebooks.
2. We will publish illustrated books, childrens or otherwise.
3. At this time we are only in a position to provide cover pages for
ebooks we publish. However, we are looking at employing an artist as
soon as we are confident this company can afford one. So while we accept
illustrations for in text content, for the time being they will have to
be provided by the author. Perhaps you know of a friend or relative who
fancies themselves as an artist?
4. We ask that the manuscript you submit is the final version. We can
edit it ourselves (again at no charge) however, we consult with the
author on all changes to the manuscript.
5. Yes, we will consider childrens poetry for publication.
6. Gore and swear words are acceptable in manuscripts provided it is not
too offensive. I personally like blood and guts and swearing, so your
chances will be based on the quality of the work.

If you have any further questions, please do not hesitate to ask, and
yes, you may post this email to wherever you feel is appropriate.

Regards

Damien Nash

Manager

Twilight Publishing