Company Registration No. 00594639 (England and Wales)
LAWRENCES GARAGES (LONDON) LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MAY 2023
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
LAWRENCES GARAGES (LONDON) LIMITED
CONTENTS
Page
Company information
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
9
Balance sheet
11 - 12
Statement of changes in equity
11
Notes to the financial statements
14 - 30
Detailed profit and loss account
LAWRENCES GARAGES (LONDON) LIMITED
COMPANY INFORMATION
Directors
A B Lawrence
B Lawrence
S C Lawrence
Secretary
K R Lawrence
Registered office
Meadow Barn
Drury Square
Beeston
Norfolk
PE32 2NA
Accountants
CALM Accounting
Chartered Certified Accountants
Low Cottage
10 Low Cross
Whittlesey
PE29 6XY
Auditors
TC Group
Brightfield Business Hub
Bakewell Road
Orton Southgate
Peterborough
Cambridgeshire
PE2 6XU
LAWRENCES GARAGES (LONDON) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

The directors present the strategic report for the year ended 31 May 2023.

Principal Activity
The principal activity of the company is that of garage forecourt sales.
Fair review of the business

Before I report on the Company, I would like to express my deepest thanks to all of the directors, management, and staff of our enterprise. They all continue to do a tremendous job and their dedication, enthusiasm and loyalty have been humbling and are integral to our success.

 

I would also like to thank our customers and business partners for the relationships which in many cases span many years. These are crucial to our success, and we value them very highly.

 

Most years trading conditions are challenging but I believe it is fair to say that although these persevere, yet we have thrived with these trials.

I am pleased to report that during the year ended May 2023, Lawrences Garages (London) Ltd experienced some mixed trading, especially in the fuel category, but ensured a profit before tax increase of over 100% from last year’s figure.

Each site made a positive profit contribution and played its part in our development and with strategic developments; Lawrences ensured an excellent return for its shareholders.

 

Harleston Service Station continues to exceed expectations with robust returns generating a very welcome increase in net profits compared to the previous year.

 

Sheringham Service Station continues to experience shop competition from local sources, but we are still delighted with the positive effect it has had our returns. Although fuel sales have not recovered from pre-COVID figures, attention to maximizing that margin combined with the increase in shop and valeting sales has ensured healthy net profits.

 

Sholing Service Station’s new store has been nominated for awards and is a quality retail experience. Although, net profit is flat compared with last year, its yield is exemplary.

 

Beccles, our new store continues to increase sales and provides interesting lessons in convenience retail.

 

Our tenants continue to contribute fully.

 

Clearly, there are risks and uncertainties in any business but our profit in a difficult environment was still robust, especially as we have experienced continued difficult times especially in fuel sales. However, the efforts of all have been extremely beneficial.

 

We anticipate continuing the direct operation of the remainder of the sites. We believe that this will be a very difficult year as conditions continue to be prejudicial to trade, but we believe that we are in good shape for the taxing times ahead. We hope that a number of strategic investments in the existing estate will provide further returns for the company.

 

LAWRENCES GARAGES (LONDON) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
The company's key financial and other performance indicators during the year were as follows:


                                     Unit         2023           2022
Turnover     £     28,269,852    22,440,850
Gross profit margin    %              9                         6
Profit before tax    £      1,805,672             899,674

The business' principle financial instruments comprise bank balances, bank overdrafts, trade debtors, trade creditors, loans to the business and finance lease agreements. The main purpose of these instruments is to finance the business' operations.

 

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest. All of the business' cash balances are held in such a way that achieves a competitive rate of interest.

 

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

 

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

 

Loans comprise loans from the directors and from financial institutions. The interest rate on loans from financial instruments is variable, but the monthly repayments are fixed. The business managed the liquidity risk by ensuring that there are sufficient funds to meet the payments.

On behalf of the board

A B Lawrence
Director
14 February 2024
LAWRENCES GARAGES (LONDON) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 May 2023.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

 

A B Lawrence
B Lawrence
S C Lawrence
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
A B Lawrence
Director
14 February 2024
LAWRENCES GARAGES (LONDON) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the 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 these financial statements, the directors are required to:

 

 

The directors are 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. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

LAWRENCES GARAGES (LONDON) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LAWRENCES GARAGES (LONDON) LIMITED
- 5 -
Opinion

We have audited the financial statements of Lawrences Garages (London) Limited (the 'company') for the year ended 31 May 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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.

 

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.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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 in this regard.

LAWRENCES GARAGES (LONDON) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LAWRENCES GARAGES (LONDON) LIMITED
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors 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.

Auditor's 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 auditor's 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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

LAWRENCES GARAGES (LONDON) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LAWRENCES GARAGES (LONDON) LIMITED
- 7 -

Our approach was as follows:

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

LAWRENCES GARAGES (LONDON) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LAWRENCES GARAGES (LONDON) LIMITED
- 8 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

John Grant (Senior Statutory Auditor)
For and on behalf of TC Group
14 February 2024
Office: Peterborough
LAWRENCES GARAGES (LONDON) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
28,269,852
22,440,850
Cost of sales
(25,691,796)
(21,088,800)
Gross profit
2,578,056
1,352,050
Administrative expenses
(1,059,818)
(1,536,131)
Other operating income
311,584
1,103,983
Operating profit
4
1,829,822
919,902
Interest receivable and similar income
7
7,787
3,404
Interest payable and similar expenses
8
(31,937)
(23,632)
Profit before taxation
1,805,672
899,674
Tax on profit
9
(523,393)
(160,605)
Profit for the financial year
1,282,279
739,069
LAWRENCES GARAGES (LONDON) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
2023
2022
£
£
Profit for the year
1,282,279
739,069
Other comprehensive income
Tax relating to other comprehensive income
(165,295)
-
0
Total comprehensive income for the year
1,116,984
739,069
LAWRENCES GARAGES (LONDON) LIMITED
BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
7,871,897
7,828,473
Investment properties
12
3,910,000
3,910,000
11,781,897
11,738,473
Current assets
Stocks
13
548,173
524,327
Debtors
14
552,065
481,214
Cash at bank and in hand
1,853,358
1,782,620
2,953,596
2,788,161
Creditors: amounts falling due within one year
15
(1,385,870)
(1,745,774)
Net current assets
1,567,726
1,042,387
Total assets less current liabilities
13,349,623
12,780,860
Creditors: amounts falling due after more than one year
16
(197,116)
(756,200)
Provisions for liabilities
Deferred tax liability
19
1,531,354
1,188,351
(1,531,354)
(1,188,351)
Net assets
11,621,153
10,836,309
Capital and reserves
Called up share capital
21
8,500
8,500
Revaluation reserve
2,589,623
2,754,918
Profit and loss reserves
9,023,030
8,072,891
Total equity
11,621,153
10,836,309
LAWRENCES GARAGES (LONDON) LIMITED
BALANCE SHEET (CONTINUED)
AS AT 31 MAY 2023
31 May 2023
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 14 February 2024 and are signed on its behalf by:
A B Lawrence
Director
Company Registration No. 00594639
LAWRENCES GARAGES (LONDON) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 June 2021
8,500
2,754,918
7,532,917
10,296,335
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
-
739,069
739,069
Dividends
10
-
-
(199,095)
(199,095)
Balance at 31 May 2022
8,500
2,754,918
8,072,891
10,836,309
Year ended 31 May 2023:
Profit for the year
-
-
1,282,279
1,282,279
Other comprehensive income:
Tax relating to other comprehensive income
-
(165,295)
-
0
(165,295)
Total comprehensive income for the year
-
0
(165,295)
1,282,279
1,116,984
Dividends
10
-
-
(332,140)
(332,140)
Balance at 31 May 2023
8,500
2,589,623
9,023,030
11,621,153
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 14 -
1
Accounting policies
Company information

Lawrences Garages (London) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Meadow Barn, Drury Square, Beeston, Norfolk, PE32 2NA.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

These financial statements have been prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

These financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving these financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing these financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or revaluation, net of depreciation and any impairment losses. Depreciation on additions to tangible fixed assets is charged from the month in which tangible fixed assets is acquired or capitalized while no depreciation is charged for the month in which the tangible fixed assets is disposed off / derecognized.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

 

Depreciation is recognised so as to write off the cost or revaluation of assets less their residual values over their useful lives on the following bases:

Freehold land
Not depreciated
Freehold property
2% straight line basis
Leasehold land
Not depreciated
Leasehold property
Straight line basis over 13 years
Plant and equipment
5% - 33% straight line basis
Motor vehicles
20% straight line basis

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 the profit and loss account.

1.5
Investment properties

Certain of the company's properties are held for long-term investment. Investment properties are accounted for in accordance with FRS 102, as follows:

 

No depreciation is provided in respect of investment properties and they are revalued when the management believes that there is a material difference in the carrying amount and fair value of investment property. The surplus or deficit on revaluation is transferred to the profit and loss account.

 

This treatment as regards the company's investment properties is a departure from the requirement of the Companies Act concerning the depreciation of fixed assets. However, these properties are not held for consumption but for investment and the directors consider that systematic annual depreciation would be inappropriate. The accounting policy adopted is therefore necessary for the financial statements to give a true and fair view. Depreciation or amortisation is only one of many factors reflected in the annual valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.

1.6
Impairment of fixed assets

At each reporting date, the company reviews the carrying amounts of its tangible assets 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). 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.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -

Recoverable amount is the higher of fair value less costs to sell and 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.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss account, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in the profit and loss account, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit or loss, are assessed for indicators of impairment at each reporting date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the profit and loss account.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -
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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in the profit and loss account in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 19 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, 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 and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 20 -
1.14
Foreign exchange

Transactions in currencies other than sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Gains and losses arising on translation in the period are included in the profit and loss account.

1.15

Dividends

Dividend distribution to the company's shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

Investment properties are valued at fair market value. This is based on the opinion of the director at the year end but based on formal valuations prepared by an independent qualified valuer previously.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of goods
28,269,852
22,440,850
2023
2022
£
£
Other significant revenue
Interest income
7,787
3,404
Rent Receivable
273,751
267,806
Other operating income
37,833
738,055

In 2022, other operating income includes £710,000 of insurance proceeds which has been used to reinstate the Sholing site.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
18,810
16,830
Depreciation of owned tangible fixed assets
240,685
176,622
Loss on disposal of tangible fixed assets
1,550
180,727
Operating lease charges
65,143
99,814
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Site managers
13
8
Head office
4
4
Forecourt cashiers
48
46
Directors
3
3
Total
68
61

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,187,888
1,046,745
Social security costs
85,930
77,803
Pension costs
113,375
109,901
1,387,193
1,234,449
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
109,424
111,835
Company pension contributions to defined contribution schemes
82,787
82,282
192,211
194,117
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
7,787
3,404
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
30,662
20,635
Other finance costs:
Interest on finance leases and hire purchase contracts
1,275
2,997
31,937
23,632
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
345,685
132,915
Deferred tax
Origination and reversal of timing differences
177,708
27,690
Total tax charge
523,393
160,605
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
9
Taxation
(Continued)
- 23 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,805,672
899,674
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
343,078
170,938
Tax effect of expenses that are not deductible in determining taxable profit
11,119
9,604
Effect of change in corporation tax rate
152,834
-
0
Other timimg difference / non-reversing timing differences
-
273
Other permanent differences
16,362
(20,210)
Taxation charge for the year
523,393
160,605

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
165,295
-
10
Dividends
2023
2022
£
£
Final paid
332,140
199,095
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
11
Tangible fixed assets
Freehold land and buildings
Leasehold property
Other property, plant and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2022
6,824,938
250,000
1,706,544
154,522
8,936,004
Additions
-
0
-
0
241,659
52,300
293,959
Disposals
-
0
-
0
(13,205)
(30,995)
(44,200)
At 31 May 2023
6,824,938
250,000
1,934,998
175,827
9,185,763
Depreciation and impairment
At 1 June 2022
174,358
16,030
874,026
43,117
1,107,531
Depreciation charged in the year
51,849
19,236
143,884
25,716
240,685
Eliminated in respect of disposals
-
0
-
0
(13,153)
(21,197)
(34,350)
At 31 May 2023
226,207
35,266
1,004,757
47,636
1,313,866
Carrying amount
At 31 May 2023
6,598,731
214,734
930,241
128,191
7,871,897
At 31 May 2022
6,650,580
233,970
832,518
111,405
7,828,473

Freehold land and buildings

The gross book value of freehold land and buildings includes £3,152,259 (2022 - £3,152,259) of depreciable assets.

 

Leased assets

Included within the net book value of tangible is £21,536 (2022 - £106,875) in respect of assets held under finance leases and similar hire purchase contracts. Depreciation for the year on these assets was £6,624 (2022 - £29,495).

 

Revaluations

The freehold land & buildings class of fixed assets was revalued on 15 April 2018 by Christie & Co and on 12 October 2020 by Barber Wadlow who are both external to the company. The basis of this valuation was on an existing use basis. This class of asset has a current value of £6,598,731 (2022 - £6,660,550) and a carrying historical cost of £3,606,502 (2022 - £3,606,502). Historical cost includes the cost of assets that are yet to be revalued. The depreciation that would have been charged on historical cost to date is £279,956 (2022 - £247,676).    

 

Security pledged

The total net book value of the company's tangible fixed assets was pledged as security over the company's loans and borrowings at the end of the current and prior year.                                

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
12
Investment property
2023
£
Fair value
At 1 June 2022 and 31 May 2023
3,910,000

The directors have considered the market value of these investment properties and consider there to be no change at the year end. This class of assets has a current value of £3,910,000 (2022 - £3,910,000) and a carrying amount at historical cost of £2,920,673 (2022 - £2,920,673). The depreciation on this historical cost to date would be £627,806 (2022 - £619,417).                                

13
Stocks
2023
2022
£
£
Goods for resale
548,173
524,327

The total value of the company's stock was pledged as security over the company's loans and borrowings at the end of the current and prior year.

14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
49,934
34,687
Other debtors
387,404
186,369
Prepayments and accrued income
114,727
260,158
552,065
481,214
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 26 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
19,231
126,456
Obligations under finance leases
18
3,031
24,147
Trade creditors
712,455
1,130,926
Corporation tax
345,685
132,970
Other taxation and social security
167,995
66,077
Other creditors
5,632
13,646
Accruals and deferred income
131,841
251,552
1,385,870
1,745,774
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
197,116
753,297
Obligations under finance leases
18
-
0
2,903
197,116
756,200
17
Loans and overdrafts
2023
2022
£
£
Bank loans
216,347
879,753
Payable within one year
19,231
126,456
Payable after one year
197,116
753,297
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
17
Loans and overdrafts
(Continued)
- 27 -

Bank borrowings at the year end are secured against land and buildings that are held by the company.

 

Bank loans have been secured on the following:

 

A fixed charge to Barclays Bank plc over Harleston Service Station, 52 London Road, Harleston, Norfolk (created 09/11/98)

 

A fixed charge to Barclays Bank plc over Sheringham Service Station, Weybourne Road, Sheringham, Norfolk (created 19/11/98)

 

A fixed charge to Barclays Bank plc over Firs Service Station, 162 Cromer Road, Norwich, NR6 6XA (created 17/01/02)

 

A fixed charge to Barclays Bank plc over Averills Service Station, 3 Fakenham Road, Drayton, Norwich, NR8 6PI (created 27/03/08)

 

A fixed charge to Barclays Bank plc over BP Sholing Service Station, 420 Bursledon Road, Sholing, Southampton, SO19 8NG (created 09/02/16)

 

A deed of charge to Barclays Bank plc over all deposits in the company's Barclays business premium account 60067245 (created 13/04/93)

 

A debenture in favour of Barclays Bank plc with a fixed and floating charge over the undertakings and all property and assets present and future including goodwill, book debts, uncalled capital buildings, fixtures and fixed plant and machinery (created 21/06/91)

18
Finance leases
The total of future minimum lease payments is as follows:
2023
2022
£
£
Not later than one year
3,031
24,147
Later than one year and not later than five years
-
0
2,903
3,031
27,050

Finance lease liabilities are secured against the assets to which they relate.

LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 28 -
19
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
278,019
188,953
Revaluations
688,730
570,299
Investment property
564,605
429,099
1,531,354
1,188,351
2023
Movements in the year:
£
Liability at 1 June 2022
1,188,351
Charge to profit or loss
177,708
Charge to other comprehensive income
165,295
Liability at 31 May 2023
1,531,354
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
113,375
109,901

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

21
Share capital
Allotted, called up and fully paid shares
2023
2023
2022
2022
No.
£
No.
£
Ordinary shares of £1 each
8,500
8,500
8,500
8,500
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 29 -
22
Reserves

Share capital

Represents the nominal value of shares issued by the company at the year end.

Revaluation reserve

Includes all cumulative surpluses on the revaluation of land and buildings.

Profit and loss account

Includes all current and prior period retained profits and losses at the balance sheet date as well as cumulative unrealised gains and losses of assets held for investment at fair value.

 

23
Operating lease commitments

The total of future minimum lease payments is as follows:

2023
2022
£
£
Not later than one year
1,278
52,300
Later than one year and not later than five years
-
0
1,278
1,278
53,578

The amount of non-cancellable operating lease payments recognised as an expense during the year was £65,143 (2022 - £68,344)

Operating leases - lessor
The total of future minimum lease payments is as follows:
2023
2022
£
£
Not later than one year
265,000
265,000
Later than one year and not later than five years
1,060,000
1,060,000
Later than five years
-
0
265,000
1,325,000
1,590,000
Operating lease income relates to rents receivable on the Investment Properties. The lessees have the option to use a break clause on 30/05/2028
LAWRENCES GARAGES (LONDON) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 30 -
24
Related party transactions

Summary of transactions with key management

Lawrences Garages (London) Limited paid rent to key management of £7,800 (2022 - £6,000) in the period. Lawrences Garages (London) Limited loaned £nil (2022 - £4,100) to key management during the period. Interest of £472 (2022 - £328) was charged on these loans. Repayments of £2,488 (2022 - £3,538) were made in the year. At the balance sheet date the amount due from key management was £21,464 (2022 - £23,830).                                

Summary of transactions with parent

The company has taken advantages of exemptions available within FRS 102 to not disclose transactions with the parent company. At the year end there was no balance due between the company and the parent.    

 

Summary of transactions with entities with joint control or significant interest

During the period expenses amounting to £nil (2022 - £2,264) were made by the company from Entities with Joint Control or Significant Influence. Interest of £3,381 (2022 - £2,934) was charged on these loans. At the balance sheet date the amount due from Entities with Joint Control or Significant Influence was £153,670 (2022 - £149,616).                            

25
Control

The company's parent is LGL Energy Limited, incorporated in England & Wales. The ultimate controlling party is considered to be the directors by virtue of their combined share holding. There is no one ultimate controlling party.

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