Company No:
Contents
DIRECTORS | A Buttle |
D Jennings | |
H Jones | |
T Leathes | |
A Martin | |
D Rimer |
REGISTERED OFFICE | International House |
24 Holborn Viaduct | |
London | |
EC1A 2BN | |
United Kingdom |
COMPANY NUMBER | 10285711 (England and Wales) |
AUDITOR | PricewaterhouseCoopers LLP |
3 Forbury Place | |
23 Forbury Road | |
Reading | |
RG1 3JH | |
United Kingdom |
The directors present their Strategic Report for the financial year ended 31 December 2022.
REVIEW OF THE BUSINESS
The principal activity of the Company is an online used car marketplace connecting consumers selling their car directly with the Company’s network of more than 5,000 verified car dealers in an online platform, matching each seller with the dealer who most wants to buy their car.
Motorway helps car sellers secure a great price online, in as little as 24 hours, with their car collected from home for free, while supporting our car dealer partners to easily acquire the best used car stock.
The Company continued to expand its operations during the year with a focus on driving growth across the business, building brand awareness, and the development of new technology innovations to further streamline the Motorway experience for car sellers and dealers.
The performance of the business is assessed using revenue, gross profit, operating loss, and other non-financial and operational metrics. Actual results are regularly compared to forecasts and material variances are investigated with appropriate actions taken to ensure that the plans are met as approved by the Board.
Despite a challenging macroeconomic environment, with the energy crisis and rising cost of living throughout the UK, the Company achieved impressive results.
Sales more than doubled year on year with a Gross Merchandise Value (GMV) in excess of £1.7bn in 2022. This generated revenue of £41.2m, up 107% on prior year (2021: £19.9m), and gross profit of £35.9m (2021: £17.2m) at a gross margin of 87% (2021: 86%).
Following a Series C investment round in November 2021, administrative expenses in 2022 increased to £79.5m (2021: £29.7m) as the Company invested in accelerating the business and its market penetration. This included headcount expansion across key departments and significant marketing activity to increase brand awareness and engagement from sellers and dealers on the platform. As a result, operating losses increased in line with the Company’s investment plans to £43.6m in 2022 (2021: £12.5m). Administrative expenses include a non-cash adjustment for share-based payments on share options granted to employees with an expense recognised of £5.1m (2021: £1.3m) during the year. Excluding the adjustment for this expense the operating loss was £38.5m (2021: £11.3m). The Company made a statutory loss after tax for the financial year of £42.5m (2021: £12.3m).
The Company had net assets of £94.1m (2021: £123.8m) and significant cash reserves of £88.0m (2021: £120.6m) at the year end.
The Company issued 2,057 Ordinary shares, 17,566 Growth ordinary shares, and 12,673 Series C preference shares of £0.00001 each following the Series C investment round and a new share option scheme for employees in the year.
PRINCIPAL RISKS AND UNCERTAINTIES
The operations of the Company expose it to a number of financial risks including cash flow risk, credit risk and liquidity risk.
The use of financial derivatives is governed by the Company's policies approved by the board of directors. The Company does not use derivative financial instruments for speculative purposes.
*Cash flow risk*
The Company's activities expose it primarily to the financial risks of changes in interest rates. Interest bearing assets and liabilities are held at fixed rate to ensure certainty of cash flows.
*Credit risk*
The Company's principal financial assets are cash at the bank, trade debtors and other receivables.
The Company's credit risk is primarily attributable to its trade debtors which is managed with robust processes for accounts receivable. The amounts presented in the Balance Sheet are net of allowances for doubtful trade debtors. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The Company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
*Liquidity risk*
The Company has significant cash reserves and access to finance, if required, to cover ongoing operations and future developments, and seeks to mitigate liquidity risk through management of these.
FUTURE DEVELOPMENTS
Motorway is continuing to invest in and significantly grow its principal activities and market share in the next financial year, along with launching new services and innovations to benefit its consumer and car dealer customers. The directors expect to demonstrate continued growth in both top-line revenue and unit economics in the forthcoming financial year.
On 17 July 2023, the Company acquired 100% of the shares in Total Car Check Ltd, one of the UK’s leading vehicle data providers. The acquisition adds further capabilities to the Company’s existing platform, as well as additional talent and expertise as Motorway continues in its mission to build a better car market for tomorrow.
Since the year end, the Company has issued 1,295,511 ordinary shares of £0.0000001 each at par. This includes 989,854 ordinary shares issued as part of the consideration for Total Car Check Ltd.
Approved by the Board of Directors and signed on its behalf by:
T Leathes
Director |
The directors present their annual report on the affairs of the Company, together with the audited financial statements and auditors’ report, for the financial year ended 31 December 2022.
PRINCIPAL ACTIVITIES
**MATTERS COVERED IN THE STRATEGIC REPORT**
See the Strategic Report for review of the business, future developments and principal risks and uncertainties, including Financial Risk Management Objectives and Policies.
GOING CONCERN
DIRECTORS
The directors, who served during the financial year and up to the date of signing the financial statements except as noted, were as follows:
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(Resigned 18 May 2023) |
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(Appointed 18 May 2023) |
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DIRECTORS' INDEMNITIES
POLITICAL CONTRIBUTIONS
The Company made no political contributions in the year (2021: £Nil).
DISABLED EMPLOYEES
EMPLOYEE CONSULTATION
**DIVIDENDS**
There were no dividends paid in the year (2021: £Nil) and the directors do not recommend payment of a final dividend (2021: £Nil).
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law).
Under company law, directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are required to:
• Select suitable accounting policies and then apply them consistently;
• State whether applicable United Kingdom Accounting Standards, comprising FRS 102 have been followed, subject to any material departures disclosed and explained in the financial statements;
• Make judgements and accounting estimates that are reasonable and prudent; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.
AUDITOR
Each of the persons who is a director at the date of approval of this report confirms that:
* So far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
* The director has taken all the steps that they ought to have taken as a director in order to make themself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
PricewaterhouseCoopers LLP were appointed as auditors in the year. A resolution to reappoint PricewaterhouseCoopers LLP as auditors will be proposed at the forthcoming Annual General Meeting.
Approved by the Board of Directors and signed on its behalf by:
T Leathes
Director |
Report on the audit of the financial statements
In our opinion, Motorway Online Ltd’s financial statements:
* give a true and fair view of the state of the Company's affairs as at 31 December 2022 and of its loss and cash flows for the year then ended;
* have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and
* have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the Statement of Financial Position as at 31 December 2022; the Statement of Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
*Independence*
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors' Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
*Strategic Report and Directors' Report*
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors' Report for the year ended 31 December 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic Report and Directors' Report.
*Responsibilities of the directors for the financial statements*
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
*Auditors' responsibilities for the audit of the financial statements*
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to Companies Act 2006 and UK tax legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting manual journal entries to manipulate financial perfomance. Audit procedures performed by the engagement team included:
* Enquiry of management and those charged with governance around any actual or suspected instances of non-compliance with laws and regulation or fraud;
* Obtaining an understanding of the entities policies and procedures on compliance with laws and regulations;
* Reviewing minutes of meetings of those charged with governance;
* Performing procedures to address the risk of management override of controls, including testing journal entries and other adjustments for appropriateness, in particular testing a sample of journals posted with unusual account combinations;
* Reviewing financial statement disclosures and testing these through to supporting documentation to assess compliance with applicable laws and regulations;
* Designing audit procedures to incorporate unpredictability around the nature, timing and extent of our testing; and
* Assessing accounting estimates within the financial statements, and substantively testing those with a material risk to the financial statements.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of our report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
**Companies Act 2006 exception reporting**
Under the Companies Act 2006 we are required to report to you if, in our opinion:
* we have not obtained all the information and explanations we require for our audit; or
* adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
* certain disclosures of directors’ remuneration specified by law are not made; or
* the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
**Other matter**
The financial statements for the year end 31 December 2021, forming the corresponding figures of the financial statements for the year ended 31 December 2022, are unaudited.
For and on behalf of
Chartered Accountants and Statutory Auditor
23 Forbury Road
Reading
RG1 3JH
United Kingdom
Note | 2022 | 2021 | ||
£'000 | £'000 | |||
Restated - note 3 | ||||
Turnover | 4 |
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Cost of sales | (
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Gross profit |
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Administrative expenses | (
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Operating loss | (
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Finance income/(costs) (net) | 5 |
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Loss before taxation | 6 | (
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Tax on loss | 10 |
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Loss for the financial year | (
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Other comprehensive income | 0 | 0 | ||
Total comprehensive loss | (
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The notes on pages 17 to 33 form an integral part of these financial statements.
Note | 2022 | 2021 | ||
£'000 | £'000 | |||
Restated - note 3 | ||||
Fixed assets | ||||
Intangible assets | 12 |
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Tangible assets | 13 |
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Investments | 14 |
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1,632 | 230 | |||
Current assets | ||||
Debtors | ||||
- due within one year | 15 |
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- due after more than one year | 15 |
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Cash at bank and in hand | 16 |
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97,030 | 125,451 | |||
Creditors: amounts falling due within one year | 17 | (
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Net current assets | 92,460 | 123,619 | ||
Total assets less current liabilities | 94,092 | 123,849 | ||
Net assets | 94,092 | 123,849 | ||
Capital and reserves | 19 | |||
Called-up share capital |
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Share premium account |
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Other reserves |
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Profit and loss account | (
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Total shareholders' funds | 94,092 | 123,849 |
The financial statements of Motorway Online Ltd (registered number:
T Leathes
Director |
Called-up share capital | Share premium account | Other reserves | Profit and loss account | Total | |||||
£'000 | £'000 | £'000 | £'000 | £'000 | |||||
At 01 January 2021 (as previously stated) | 0 | 13,320 | 0 | ( 10,398) | 2,922 | ||||
Prior year adjustment (note 3) | 0 | 0 | 749 | ( 749) | 0 | ||||
At 01 January 2021 (as restated) |
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Loss for the financial year |
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Total comprehensive loss |
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Issue of share capital |
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Credit to equity for equity settled share-based payment |
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At 31 December 2021 |
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At 01 January 2022 (as previously stated) | 0 | 145,269 | 0 | ( 21,420) | 123,849 | ||||
Prior year adjustment (note 3) | 0 | 0 | 2,020 | ( 2,020) | 0 | ||||
At 01 January 2022 (as restated) |
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Loss for the financial year |
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Total comprehensive loss |
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Issue of share capital |
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Credit to equity for equity settled share-based payment |
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At 31 December 2022 |
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Other reserves relate to a share based payment reserve.
Prior year loss for the financial year includes £11,022k as previously stated and £1,271k restatement adjustment. Refer to note 3 for further details.
The notes on pages 17 to 33 form an integral part of these financial statements.
2022 | 2021 | ||
£'000 | £'000 | ||
Restated - note 3 | |||
Net cash flows from operating activities (note 21) | (
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Cash flows from investing activities | |||
Interest received |
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Purchase of intangible assets | (
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Purchase of tangible assets | (1,785) | (260) | |
Net cash flows from investing activities | (
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Cash flows from financing activities | |||
Proceeds on issue of shares |
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Interest paid | 0 | (316) | |
Net cash flows from financing activities |
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Net (decrease)/increase in cash and cash equivalents | (
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Cash and cash equivalents at beginning of year |
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Cash and cash equivalents at end of year |
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Reconciliation to cash at bank and in hand: | |||
Cash at bank and in hand at end of year |
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Cash and cash equivalents at end of year |
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Other reserve above relates to share based payment reserve.
The notes on pages 17 to 33 form an integral part of these financial statements.
The principal accounting policies are summarised below. They have all been applied consistently throughout the financial year and to the preceding financial year, unless otherwise stated.
Motorway Online Ltd (the Company) is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office is International House, 24 Holborn Viaduct, London, EC1A 2BN, United Kingdom.
The principal activities are set out in the Strategic Report.
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 (FRS 102) applicable in the UK and Republic of Ireland issued by the Financial Reporting Council and the requirements of the Companies Act 2006.
The Company has applied section 11 and 12 of FRS 102 in respect of the recognition and measurement of financial instruments.
The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £'000.
The directors have assessed the Balance Sheet and likely future cash flows at the date of approving these financial statements. During the preceding financial year end, the Company has raised significant levels of additional investment, which further improved the Company’s cash reserves. Based on this level of funding available, the forecasted rate of cash burn and the management of working capital, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and to meet its financial obligations as they fall due for at least 12 months from the date of signing these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The Company has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts on the basis that its only subsidiary is excluded from consolidation. The subsidiary is dormant and under section 405 of the Companies Act its inclusion is not material for the purpose of giving a true and fair view. The financial statements present information about the Company as an individual entity and not about its group.
Exchange differences are recognised in the Profit and Loss Account in the period in which they arise.
Commission turnover is stated net of VAT, rebates and trade discounts and is recognised when a deal is agreed between the seller and buyer which is when the significant risks and rewards are considered to have been transferred and the service is complete.
Transportation turnover is stated net of VAT, rebates and trade discounts and is recognised on delivery of the vehicle which is when the significant risks and rewards are considered to have been transferred.
Where payments are received from customers in advance of services provided, the amounts are recorded as deferred income and included as part of creditors due within one year. Where payments are received from customers in arrears of services provided, the amounts are recorded as accrued income and included as part of debtors.
Defined contribution schemes
The Company operates a defined contribution scheme. The amount charged to the Profit and Loss Account in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either creditors or debtors in the Balance Sheet.
Equity-settled share-based payment transactions are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.
Fair value is measured by use of an appropriate pricing model which is considered by management to be the most appropriate method of valuation. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
Current tax is provided at amounts expected to be paid (or recoverable) using the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
*Deferred tax*
Deferred tax arises as a result of including items of income and expenditure in taxation computations in periods different from those in which they are included in the Company's financial statements. Deferred tax is provided in full on timing differences which result in an obligation to pay more or less tax at a future date, at the average tax rates that are expected to apply when the timing differences reverse, based on current tax rates and laws. Deferred tax assets and liabilities are not discounted.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Website costs |
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Fixtures and fittings |
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Office equipment |
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Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
The Company as lessee
Assets, other than those measured at fair value, are assessed for indicators of impairment at each Statement of Financial Position date. If there is objective evidence of impairment, an impairment loss is recognised in the Statement of Comprehensive Income as described below.
Non-financial assets
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). The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, or the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Investments
Investments in non-convertible preference shares and non-puttable ordinary or preference shares (where shares are publicly traded or their fair value is reliably measurable) are measured at fair value with changes in fair value recognised through the Statement of Comprehensive Income. Where fair value cannot be measured reliably, investments are measured at cost less impairment.
Investments in subsidiaries and associates are measured at cost less impairment. For investments in subsidiaries acquired for consideration including the issue of shares qualifying for relief from the recognition of share premium, cost is measured by reference to the nominal value of the shares issued plus fair value of other consideration. Any premium is ignored.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the Statement of Financial Position date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimate is revised if the revision affects only that financial year, or in the financial year of the revision and future financial years if the revision affects both current and future financial years.
The directors do not consider that any critical judgements have been made in the application of the Company's accounting policies and no key sources of estimation uncertainty have been identified that have a significant risk of causing a material misstatement to the carrying amount of assets and liabilities within the financial year.
The results of the comparative year and the opening profit and loss account have been restated in order to recognise share based payments expenses on share options granted between 2018 and 2021, which were previously not recognised in error.
The restatement has led to an opening balance adjustment of £749,000 to the other reserves balance, which relates to the share based payment equity reserve, as at 1 January 2021 and a corresponding increase of £749,000 in the profit and loss account as at 1 January 2021 as noted in the table below.
The restatement has led to an increase of £1,271,000 in administrative expenses in the comparative year and a corresponding increase of £1,271,000 in the other reserves as noted in the table below.
As previously reported | Adjustment | As restated | ||||
Year ended 31 December 2021 | £'000 | £'000 | £'000 | |||
Profit and loss account as at 1 January 2021 | (10,398) | (749) | (11,147) | |||
Other reserve - share based payment reserve as at 1 January 2021 | 0 | 749 | 749 | |||
Administrative expenses for the year ended 31 December 2021 | 28,437 | 1,271 | 29,708 | |||
Loss for the year ended 31 December 2021 | (11,022) | (1,271) | (12,293) | |||
Profit and loss account as at 31 December 2021 | (21,420) | (2,020) | (23,440) | |||
Other reserve - share based payment reserve as at 31 December 2021 | 0 | 2,020 | 2,020 |
Turnover represents the fair value of services provided to customers during the financial year excluding value added tax.
Turnover is wholly attributable to the principal activity of the Company and arises solely within the United Kingdom.
An analysis of the Company's turnover is as follows:
2022 | 2021 | ||
£'000 | £'000 | ||
Rendering of services |
|
|
2022 | 2021 | ||
£'000 | £'000 | ||
Interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
|
(
|
|
162 | (315) |
Interest receivable and similar income
2022 | 2021 | ||
£'000 | £'000 | ||
Bank interest |
|
|
Loss before taxation is stated after charging/(crediting):
2022 | 2021 | ||
£'000 | £'000 | ||
Depreciation of tangible fixed assets (note 13) |
|
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|
Amortisation of intangible assets (note 12) |
|
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Foreign exchange losses |
|
|
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Bad debt expense |
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|
|
Operating lease payments recognised as an expense |
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Share-based payments charge |
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Fees payable to the Company’s auditor and its associates for the audit of the Company's annual financial statements was £155,000 (2021: £nil). The Company was not audited in the prior year.
Fees were payable to the Company’s auditor and its associates for the other non-audit services was £15,000 (2021: £nil).
2022 | 2021 | ||
Number | Number | ||
The average monthly number of employees (including directors) was: | 318 | 164 | |
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|
Their aggregate remuneration comprised:
2022 | 2021 | ||
£'000 | £'000 | ||
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Other compensation costs | |||
Pension cost |
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|
Share-based payments cost | 5,101 | 1,271 | |
24,536 | 11,183 |
2022 | 2021 | ||
£'000 | £'000 | ||
Directors' emoluments |
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Remuneration of the highest paid director
The highest paid director received emoluments of £180,000 (2021: £173,000) and company pension contributions in respect of the highest paid director was £Nil (2021: £Nil).
2022 | 2021 | ||
£'000 | £'000 | ||
Current tax on loss | |||
UK corporation tax | (
|
(
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|
Total current tax | (
|
(
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|
Total tax on loss | (
|
(
|
The credit for the year can be reconciled to the profit per the income statement as follows:
2022 | 2021 | ||
£'000 | £'000 | ||
Loss before taxation | (43,405) | (12,862) | |
Tax on loss at standard UK corporation tax rate of 19.00% (2021: 19.00%) | (
|
(
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Effects of: | |||
- Expenses not deductible for tax purposes |
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- Change in unrecognised deferred tax assets |
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|
- Adjustments in respect of prior years | (
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- Research and development tax credit | 0 | (569) | |
Total tax credit for year | (865) | (569) |
The 2021 figures above are restated. Refer to note 3 for further details.
At 31 December 2022 unrecognised deferred tax assets in relation to taxable losses carried forwards amounted to £13,438,000 (2021: £5,070,000).
Equity-settled share-based payment schemes
Options are exercisable at a price equal to the estimated fair value of the Company’s shares on the date of grant. The vesting period is four years. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the employee leaves the Company before the options vest.
Details of the share options outstanding during the financial year are as follows:
2022 | 2021 | ||||
---|---|---|---|---|---|
Weighted Average | Weighted Average | ||||
Number of share options | Average exercise price (£) | Number of share options | Average exercise price (£) | ||
Outstanding at beginning of period |
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Granted during the period |
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Forfeited during the period | (
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(
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|
Exercised during the period | (
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(
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Outstanding at the end of the period |
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Exercisable at the end of the period |
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All options have a nominal exercise price of £0.00001.
The fair value of the share options at the grant date was calculated using the Monte Carlo model, which is considered to be the most appropriate generally accepted valuation method of measuring fair value.
The Company recognised total expenses of £5,101,000 and £1,271,000 related to equity-settled share-based payment transactions in 2022 and 2021 respectively.
Website costs | Total | ||
£'000 | £'000 | ||
Cost | |||
At 01 January 2022 |
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Additions |
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At 31 December 2022 |
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Accumulated amortisation | |||
At 01 January 2022 |
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Charge for the financial year |
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At 31 December 2022 |
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Net book value | |||
At 31 December 2022 |
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At 31 December 2021 |
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Fixtures and fittings | Office equipment | Total | |||
£'000 | £'000 | £'000 | |||
Cost | |||||
At 01 January 2022 |
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Additions |
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Disposals | (
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(
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(
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||
At 31 December 2022 |
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Accumulated depreciation | |||||
At 01 January 2022 |
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Charge for the financial year |
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Disposals | (
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(
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(
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||
At 31 December 2022 |
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Net book value | |||||
At 31 December 2022 |
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At 31 December 2021 |
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Investments in subsidiaries
2022 | |
£'000 | |
Cost | |
At 01 January 2022 |
|
At 31 December 2022 |
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Provisions for impairment | |
At 01 January 2022 |
|
At 31 December 2022 |
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Carrying value at 31 December 2022 |
|
Carrying value at 31 December 2021 |
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Investments in shares
Name of entity | Registered office | Nature of business | Class of shares |
Ownership 31.12.2022 |
Ownership 31.12.2021 |
|
International House, 24 Holborn Viaduct, London, England, EC1A 2BN | Dormant |
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2022 | 2021 | ||
£'000 | £'000 | ||
Debtors: amounts falling due within one year | |||
Trade debtors |
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Corporation tax |
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Other debtors |
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Prepayments and accrued income |
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Debtors: amounts falling due after more than one year | |||
Other debtors |
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2022 | 2021 | ||
£'000 | £'000 | ||
Cash at bank and in hand |
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Cash at bank and in hand include cash and savings deposits held at call with banks where the balance is accessible within three months or less.
2022 | 2021 | ||
£'000 | £'000 | ||
Trade creditors |
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Amounts owed to Group undertakings (note 22) |
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Other taxation and social security |
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VAT |
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Accruals |
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Other creditors |
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The carrying values of the Company’s financial assets and liabilities are summarised by category below:
2022 | 2021 | ||
£'000 | £'000 | ||
Financial assets | |||
Measured at undiscounted amount receivable | |||
- Trade debtors (note 15) |
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|
- Other debtors (note 15) |
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5,161 | 2,874 | ||
Financial liabilities | |||
Measured at undiscounted amount payable | |||
- Trade creditors (note 17) | (
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(
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|
- Other payables (note 17) | (
|
|
|
- Amounts owed to Group undertakings (note 17) | (
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(
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|
(1,587) | (660) |
2022 | 2021 | ||
£ | £ | ||
Allotted, called-up and fully-paid | |||
|
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4.47 | 4.27 | ||
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7.32 | 7.19 | ||
11.79 | 11.46 | ||
Presented as follows: | |||
Called-up share capital presented as equity | 12 | 11 |
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
The share based payment reserve represents the charge to profit or loss for services received in relation to equity settled share based payments not yet settled.
The Company issued 2,057 Ordinary shares, 17,566 Growth ordinary shares, and 12,673 Series C preference shares of £0.00001 each following the Series C investment round in November 2021 and a new share option scheme for employees in the year.
Commitments
Total future minimum lease payments under non-cancellable operating leases are as follows:
2022 | 2021 | ||
£'000 | £'000 | ||
within one year |
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|
between one and five years |
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|
|
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|
2022 | 2021 | ||
£'000 | £'000 | ||
Operating loss | (
|
(
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|
Adjustment for: | |||
Share-based payment expense |
|
|
|
Depreciation and amortisation |
|
|
|
Loss on sale of plant and equipment |
|
|
|
Operating cash flows before movement in working capital | (
|
(
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|
Increase in debtors | (
|
(
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|
Increase in creditors |
|
|
|
Cash generated by operations | (
|
(
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|
Income taxes received |
|
|
|
Net cash flows from operating activities | (
|
(
|
The 2021 figures above are restated. Refer to note 3 for further details.
Balance at 01 January 2022 | Cash flows | Balance at 31 December 2022 | |||
£'000 | £'000 | £'000 | |||
Cash at bank and in hand | 120,560 | ( 32,543) | 88,017 | ||
120,560 | ( 32,543) | 88,017 | |||
Net debt |
|
( 32,543) |
|
The Company has availed of the exemption provided in FRS 102 Section 33 Related Party Disclosures not to disclose transactions entered into with fellow group companies that are wholly owned within the group of companies of which the Company is a wholly owned member.
The directors of the Company are deemed to be the key management personnel of the Company and their remuneration is presented in note 9.
On 17 July 2023, the Company acquired 100% of the shares in Total Car Check Ltd. Total Car Check (“TCC”) is one of the UK’s leading vehicle data providers. TCC offers vehicle background checks to consumers, dealerships and third parties. This data enables consumers and dealerships to make better-informed pricing decisions, underpinned by a vehicle data guarantee.
The Company operates a defined contribution pension scheme for all qualifying employees. The total expense charged to the statement of comprehensive income in the year ended 31 December 2022 was £353,000 (2021: £130,000).
There is no individual ultimate controlling party.