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COMPANY REGISTRATION NUMBER:
SC173818
Richard Lawson (Autoecosse) Limited |
|
Filleted Unaudited Financial Statements |
|
Richard Lawson (Autoecosse) Limited |
|
Statement of Financial Position |
|
30 September 2022
Fixed assets
Tangible assets |
5 |
|
182,160 |
96,540 |
|
|
|
|
|
Current assets
Stocks |
1,976,575 |
|
1,880,944 |
Debtors |
6 |
517,438 |
|
674,563 |
Cash at bank and in hand |
8,827 |
|
865 |
|
------------ |
|
------------ |
|
2,502,840 |
|
2,556,372 |
|
|
|
|
|
Creditors: amounts falling due within one year |
7 |
1,902,842 |
|
1,731,130 |
|
------------ |
|
------------ |
Net current assets |
|
599,998 |
825,242 |
|
|
--------- |
--------- |
Total assets less current liabilities |
|
782,158 |
921,782 |
|
|
|
|
|
Creditors: amounts falling due after more than one year |
8 |
|
220,254 |
212,083 |
|
|
--------- |
--------- |
Net assets |
|
561,904 |
709,699 |
|
|
--------- |
--------- |
|
|
|
|
|
Richard Lawson (Autoecosse) Limited |
|
Statement of Financial Position (continued) |
|
30 September 2022
Capital and reserves
Called up share capital |
10 |
|
1,350,000 |
1,350,000 |
Profit and loss account |
|
(
788,096) |
(
640,301) |
|
|
------------ |
------------ |
Shareholders funds |
|
561,904 |
709,699 |
|
|
------------ |
------------ |
|
|
|
|
|
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
In accordance with section 444 of the Companies Act 2006, the statement of comprehensive income has not been delivered.
For the year ending 30 September 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Director's responsibilities:
-
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
;
-
The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements
.
These financial statements were approved by the
board of directors
and authorised for issue on
31 October 2023
, and are signed on behalf of the board by:
Company registration number:
SC173818
Richard Lawson (Autoecosse) Limited |
|
Notes to the Financial Statements |
|
Year ended 30 September 2022
1.
General information
The company is a private company limited by shares, registered in Scotland. The address of the registered office is Kingsway East, Dundee, DD4 8ED.
2.
Statement of compliance
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis
. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company made a loss for the year to 30 September 2022 of £147,795 (2021 - profit for the year of £44,339), and at 30 September 2022 it had shareholders funds of £561,904 (2021 - funds of £709,699). The director is satisfied that, in the period to 30 September 2022, the company managed the transition from being a new car dealer to a used car operation reasonably well, despite the disappointing result for the year. Following the cessation of the Mitsubishi franchise in 2021, due to the large motor dealership groups dominating the desirable brands, management decided not to pursue a replacement new car franchise and decided instead to focus the company's main Dundee based business on used vehicles across a wide spectrum and establish a specialist Pick up and LCV centre at the company's Perthshire location. The used car market has undergone significant change in the past 2-3 years with consumers now generally researching possible purchases of a used car on-line in comparison to the traditional historical method of visiting various dealerships to view and select a car and then negotiating a transaction. This shift in the operations of the used car market required a new approach from dealers and also an understanding that the market-place was no longer restricted to a local geographical and that consumer enquiries could arise and be received on a national or UK-wide basis. The company responded to these market dynamics with an upgraded web-site that provides significant vehicle data including 40 plus photographs and a video on each vehicle that is on offer. The web-site information is complemented with a wide range of social media marketing campaigns with our main marketing done on on-line platforms. The company's website facilitates various additional features that included Part Exchange valuations and appraisals, and Finance options. All of these features allow prospective customers to progress their interest in the comfort of their home or office. the company has also invested a vehicle transporter to enhance the customer's experience by offering the facility to deliver a sold vehicle to any part of the UK. In relation to the sourcing of used vehicles, there has been significant management focus and activity using up to date market analysis information to secure stock vehicles that best reflect the current trends in consumer demand for specific brands and models. The director is satisfied that the significant changes made to modernise and improve the used vehicles sales operation is generating good sales volume and good gross profit margins, and that the company has an opportunity to reduce the traditional overheads of the sales operation and, thereby, retain a higher proportion of the gross margin. The Aftersales departments' financial performance during the year fell well short of expectations and this was mainly due to a shortage of skilled technicians. This shortage has occurred after the Covid period, with trained technicians seeming to leave the sector, and this resulted in lower labour and parts sales and a significant drop in gross margin in aftersales activities. In some periods during the year the company was operating with only a 50% staff level in aftersales however this has now been addressed with recent recruitment returning staffing levels to the company's optimal level. The director is assured that the benefits of the changes made and described above will return the company to profitable trading and positive cashflows from trading activities. The director considers that, after making appropriate enquiries, he has reasonable expectation that the company will have adequate financial resources from its trading operations, as well as from the continuation of bank lending and trade facilities from the company's main bank and its main trade finance funders, to meet its financial obligations as they fall due for the foreseeable future. For this reason, the director considers that the going concern basis continues to be an appropriate basis for preparing the financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
The turnover represents the invoiced amounts for the sale and servicing of motor vehicles, stated net of value added tax.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Tenants Improvements |
- |
10%, 20% and 50% Straight line |
|
Office Equipment |
- |
10%, 20% and 33.33% Straight line |
|
Motor Vehicles |
- |
20% and 33.33% Straight line |
|
|
|
|
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell, excluding VAT. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Government grants
Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided.
4.
Employee numbers
The average number of persons employed by the company during the year amounted to
25
(2021:
22
).
5.
Tangible assets
|
Tenants improvements |
Office Equipment |
Motor vehicles |
Total |
|
£ |
£ |
£ |
£ |
Cost |
|
|
|
|
At 1 October 2021 |
120,889 |
246,772 |
58,492 |
426,153 |
Additions |
1,682 |
20,387 |
111,622 |
133,691 |
Disposals |
(
9,731) |
(
82,505) |
(
28,825) |
(
121,061) |
|
--------- |
--------- |
--------- |
--------- |
At 30 September 2022 |
112,840 |
184,654 |
141,289 |
438,783 |
|
--------- |
--------- |
--------- |
--------- |
Depreciation |
|
|
|
|
At 1 October 2021 |
91,479 |
202,357 |
35,777 |
329,613 |
Charge for the year |
12,950 |
18,777 |
16,344 |
48,071 |
Disposals |
(
9,731) |
(
82,505) |
(
28,825) |
(
121,061) |
|
--------- |
--------- |
--------- |
--------- |
At 30 September 2022 |
94,698 |
138,629 |
23,296 |
256,623 |
|
--------- |
--------- |
--------- |
--------- |
Carrying amount |
|
|
|
|
At 30 September 2022 |
18,142 |
46,025 |
117,993 |
182,160 |
|
--------- |
--------- |
--------- |
--------- |
At 30 September 2021 |
29,410 |
44,415 |
22,715 |
96,540 |
|
--------- |
--------- |
--------- |
--------- |
|
|
|
|
|
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
|
Motor vehicles |
|
£ |
At 30 September 2022 |
115,404 |
|
--------- |
At 30 September 2021 |
17,319 |
|
--------- |
|
|
6.
Debtors
|
2022 |
2021 |
|
£ |
£ |
Trade debtors |
129,846 |
50,115 |
Amounts owed by associated companies |
73,567 |
285,955 |
Other debtors |
314,025 |
338,493 |
|
--------- |
--------- |
|
517,438 |
674,563 |
|
--------- |
--------- |
|
|
|
7.
Creditors:
amounts falling due within one year
|
2022 |
2021 |
|
£ |
£ |
Bank loans and overdrafts |
181,106 |
194,080 |
Trade creditors |
314,853 |
229,706 |
Accruals and deferred income |
25,897 |
14,278 |
Social security and other taxes |
362,027 |
341,531 |
Obligations under finance leases and hire purchase contracts |
28,270 |
5,029 |
Other creditors |
990,689 |
946,506 |
|
------------ |
------------ |
|
1,902,842 |
1,731,130 |
|
------------ |
------------ |
|
|
|
Included in Other creditors above are amounts due to funders in respect of new and used car funding amounting to £936,587 (2021 - £898,733). This funding is secured against the corresponding stock units.
Funding amounts received from vehicle stock funding providers reflect the full invoice value of the vehicles purchased for stock, including the VAT element of the invoice, while the vehicles are held in stock at their cost excluding VAT. The vehicle funding is mainly settled on the sale of the corresponding stock vehicle or after 6 months, whichever event comes first, with part settlements made of 5% after 90, 120 and 150 days to certain funders.
8.
Creditors:
amounts falling due after more than one year
|
2022 |
2021 |
|
£ |
£ |
Bank loans and overdrafts |
157,219 |
131,173 |
Obligations under finance leases and hire purchase contracts |
44,301 |
10,481 |
Other creditors |
18,734 |
70,429 |
|
--------- |
--------- |
|
220,254 |
212,083 |
|
--------- |
--------- |
|
|
|
Bank loans and the bank overdraft are secured by way of a floating charge over the assets of the company. In addition, the director,
Mr R. H. Lawson
, has provided a personal guarantee amounting to £200,000 (2021 - £200,000).
9.
Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
6,482
(2021: £
7,607
).
10.
Called up share capital
Issued, called up and fully paid
|
2022 |
2021 |
|
No. |
£ |
No. |
£ |
Ordinary shares of £ 1 each |
1,250,000 |
1,250,000 |
1,250,000 |
1,250,000 |
Preference shares of £ 1 each |
100,000 |
100,000 |
100,000 |
100,000 |
|
------------ |
------------ |
------------ |
------------ |
|
1,350,000 |
1,350,000 |
1,350,000 |
1,350,000 |
|
------------ |
------------ |
------------ |
------------ |
|
|
|
|
|
The Ordinary and Preference shares have the same rights and rank pari passu in a winding up.
11.
Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
2022 |
2021 |
|
£ |
£ |
Not later than 1 year |
68,218 |
69,980 |
Later than 1 year and not later than 5 years |
120,635 |
98,646 |
|
--------- |
--------- |
|
188,853 |
168,626 |
|
--------- |
--------- |
|
|
|
12.
Director's advances, credits and guarantees
Mr R H Lawson has a loan account with a balance due to the company (2021 - due to the company). During the year,
Mr R. H. Lawson
made cash advances to the company, paid company liabilities on behalf of the company and transferred personally owned assets to the company all at market value. Additionally, during the year, the company made cash repayments to the director, paid amounts on his behalf and provided goods and services to Mr R. H. Lawson
or businesses operated by him personally on commercial terms. The value of these transactions with Mr R H Lawson has been adjusted against the loan account. Following all of these transactions, at the year end, the amount due by Mr R H Lawson had been substantially reduced such that Mr R H Lawson was due to pay the company £58,430 (2021 - £194,543) and this amount is disclosed in the above note on Debtors.
13.
Related party transactions
The company was under the control of Mr R.H. Lawson throughout the current and previous period. Mr R.H. Lawson is the company's managing director and sole shareholder. During the year, the company provided and obtained goods and services, and recharged costs to other business entities in which Mr R.H. Lawson has an interest. All transactions were done at arms length and on commercial terms.