REGISTERED NUMBER: 01143172 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
FOR |
FAROL HOLDINGS LIMITED |
REGISTERED NUMBER: 01143172 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
FOR |
FAROL HOLDINGS LIMITED |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 6 |
Statement of Directors' Responsibilities | 9 |
Report of the Independent Auditors | 10 |
Consolidated Income Statement | 13 |
Consolidated Other Comprehensive Income | 14 |
Consolidated Statement of Financial Position | 15 |
Company Statement of Financial Position | 16 |
Consolidated Statement of Changes in Equity | 17 |
Company Statement of Changes in Equity | 18 |
Consolidated Statement of Cash Flows | 19 |
Notes to the Consolidated Statement of Cash Flows | 20 |
Notes to the Consolidated Financial Statements | 22 |
FAROL HOLDINGS LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: | David Barr BSc FCA |
AUDITORS: |
Chartered Accountants |
and Statutory Auditors |
Winchester |
Hampshire |
SO23 9HJ |
BANKERS: | Lloyds Bank Plc |
The Atrium |
Davidson House |
Forbury Square |
Reading |
RG1 3EU |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
The directors present their strategic report of the company and the group for the year ended 31st January 2024. |
Review of the business |
Turnover for the year has increased 5.28% to £191m from £181m. Gross profit has strengthened slightly to 12.40% from 12.19% due to the increase in aftersales profitability. Net profit before tax has contracted down to £4.7m against £6.7m with margins at 2.45% and 3.72% respectively. |
Shareholders' Funds have increased to £27,682,988 (2023: £24,403,781) and we are therefore well placed to make continued investment in future. |
Funding |
The group banks with Lloyds Bank Plc. We have kept within our facilities during the year. |
John Deere and other core brands |
Our major supplier, John Deere, has a strong product portfolio and continues to have the largest market share both in the UK and globally. Thanks to a strong, prestigious brand portfolio which include Kramer, Kuhn, Bailey Trailers, Yanmar and Bomford, we continue to supply a broad range of quality innovative products and enjoy excellent market share. |
John Deere and other core brands set us product targets and business objectives. We are pleased to confirm we continue to exceed these targets and meet their business objectives. We are grateful for their continued support. We recognise that ongoing success is dependent upon retaining these good relationships with key suppliers. |
Key performance indicators |
The directors use KPIs to measure monthly performance against previous periods and budget. The management reviews each depot's contribution for each division of the business. The business divisions are segregated between agricultural, golf and turf, construction, tyres, transport and financial services. Each division is split by department for sales (wholegoods), parts and service. The KPIs utilised are revenue, gross margin, absorption, operating profit and cashflow. |
The directors also use 'non-financial' performance indicators such as the number of wholegood units sold and market share, engaged hectares, labour recovery rates, parts stock turn and machine down percentages. In addition a Customer Satisfaction Index is monitored monthly. |
Principal risks and uncertainties |
Taking risks is all part of entrepreneurial activity and its assessment is inherent in our culture. The principal risks and corresponding controls identified are as follows:- |
Business strategy |
The directors recognise the importance of having a strong business strategy. The strategic risk of business options is reviewed by the board, with a view to providing long term growth. The key areas of focus are: |
* Growth through additional John Deere Areas of Responsibility and Diversification |
* Market share |
* Engaged Hectares |
* Customer Experience |
* Staff Satisfaction |
People |
The group employs 327 staff who are critical to the success of the business. The Board invests in the appraisal, training and development of all staff. Remuneration and benefits are regularly reviewed. |
As with all businesses the group is dependant upon a number of key employees for the sales activity and management functions. The company recognises this risk by careful long-term planning. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
Health and safety |
The Board recognises that health and safety in the work place is paramount and it is therefore taken very seriously. The directors believe that they have all the necessary policies and procedures in place to safeguard the health, safety and welfare of its staff and anyone affected by our work activities. We employ a full time Chartered Health and Safety Practitioner as the Group H&S Manager who follows the HSE "Leading health and safety at work" INDG417 as their management system. |
Economic and market risks |
The group's market demand is affected by economic cycles and sector specific factors (such as commodity prices for farmers, or membership renewals for golf clubs). By operating in a range of business sectors the company is able to mitigate the risk of severe drops in demand in any one market. It also seeks to maintain a strong balance sheet and takes a long term view in building customer and supplier relationships, both of which help it cope with short term economic shocks. |
Competitor Risk |
The group operates in a competitive market which is influenced by price pressures and competitors attempting to increase market share. To reduce this risk, we concentrate on promoting industry leading customer service whilst operating in a diverse range of markets with a wide range of franchises. |
Business continuity |
A major disaster such as flood, loss of power or IT crash could impact on the ability of the business to trade. The board is aware of such risks and has plans in place should one depot suffer such a crisis, to enable the business as a whole to continue. |
Financial risk management objectives and policies |
The directors aim to minimise the financial risk to the company and manage this as follows: |
Interest rate risk |
The group has hire purchase and finance lease debts for the purchase of stock and assets. These are at fixed interest rates from their inception and so no risk of interest rate increases arises. In addition the group has a bank loan and overdraft facility together with loans from its directors which are tied to the bank base rate. |
Credit risk |
The group monitors and checks credit ratings of its customers closely and considers that this policy meets the objective of managing and minimising exposure to credit risk. |
Liquidity risk |
The group controls cashflow by careful budgeting which ensures liquidity is maintained. |
Currency risk |
The group carries out a proportion of its trade in Europe. The exposure to foreign currency risk is minimised by setting the majority of prices in a sterling equivalent and maintaining a minimum timeframe between invoicing and cash receipt. In addition the euro bank account is managed to enable purchases to be made efficiently. The group does not carry out any hedging activities. |
Group Values |
Employees of Farol are at the centre of our continued success and development, the business has a strategic aim of becoming an employer of choice: |
One Team |
By respecting each other and working together, Farol creates a highly rewarding environment. |
Winning Mindset |
Farol believes being reliable and consistent, by delivering the fundamentals well and with a forward-thinking mindset, we get results. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
Customer Partnership |
Through partnership with our customers, Farol provides added value and sustainability, using the latest technology, machine data, connectivity and consultation. |
Creatively Different |
At Farol we encourage, develop and support creativity to become outstanding leaders in our industry. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
GROUP STRATEGIC REPORT |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
SECTION 172(1) STATEMENT |
As the board at Farol group, we have a legal responsibility under section 172 of the Companies Act 2006 to act in a way we consider, in good faith, would be most likely to promote the group's success for the benefit of its members as a whole, and to have regard to the long-term effect of our decisions on the group and its stakeholders. This statement addresses the ways in which we as a board outwork this responsibility. |
Promoting the company's success for its members |
Farol was started by George Vellacott in 1976 and the group continues to be controlled and run by the Vellacott family. The group now employs over 327 staff and is a market leader in the agricultural and groundcare industries. For nearly half a century the group has provided employment, training and financial reward for its owners and employees. |
The group operates from seven depots covering various parts of the country and part of the group's strategy for growth includes the expansion of its dealer network. |
With thanks to a strong prestigious brand portfolio the group continues to explore possibilities and in doing so aims to maximise the group's ability to grow market share whilst returning value to the Vellacott family shareholders. |
The board makes strategic decisions based on long-term objectives and has invested significantly over the years to ensure that we can deliver high quality innovative products to our customers and provide excellent customer aftercare. |
Engaging with stakeholders |
Our key stakeholders, and the ways in which we engage with them, are as follows: |
Our employees |
We are one of the leading John Deere dealers in the UK with people at the heart of its strategy. We rely on a skilled team of product service advisors, technicians, agricultural engineers and a highly motivated sales force who are critical to the success of the business. We are renowned for our customer service which requires us to adapt to ever increasing demands for our products. This cannot be achieved without the dedication, expertise, skill and professionalism of the workforce. |
Recruitment and retention of staff is therefore considered very important and we engage with staff members by: |
- setting competitive remuneration packages and rewarding performance with bonuses at all levels; |
- carrying out regular appraisals of staff members; |
- providing training and career development support; |
- ensuring that staff members are present at management meetings and involved in decision making. |
Our customers |
Innovation is crucial to the continuing success of the business so that we can continue to offer customers the best quality products and service. A customer Satisfaction Index is monitored monthly to ensure good customer feedback. |
Our Community |
As a family-run group we have invested over the years in our local community and sponsor various events on an annual basis. We also make various charitable donations throughout the year as detailed in the directors report. |
ON BEHALF OF THE BOARD: |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
The directors present their report with the financial statements of the company and the group for the year ended 31st January 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of the sale of new and used farm machinery and golf and turf machinery as John Deere main dealers, together with their repair and servicing. In addition the group carries out the sale and repair of tyres to both customers of the principal activity and other retail customers. The principal activity of the company was that of property management, predominantly of properties occupied by the subsidiary company. |
DIVIDENDS |
Interim dividends per share were paid as follows: |
A Ordinary £1 shares | 91.97 | - 31st January 2024 |
B Ordinary £1 shares | 91.87 | - 31st January 2024 |
The directors recommend that no final dividends be paid. |
The total distribution of dividends for the year ended 31st January 2024 will be £ 428,907 . |
RESEARCH AND DEVELOPMENT |
The group is currently undertaking research and development to improve both its customer offerings and internal performance of its operational activities which is recognised as an expense in the period in which it is incurred. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1st February 2023 to the date of this report. |
POLITICAL DONATIONS AND EXPENDITURE |
The group made charitable donations of £52,570 (2023 - £70,383) and did not incur any political expenditure during the year. |
GOING CONCERN |
The directors have prepared a forecast up to January 2028. The results to date show that the group is ahead of forecast with the agricultural industry continuing to show a willingness to invest in the John Deere brand. The directors expect improved profitability levels for the foreseeable future and as such adopt the going concern assumptions in preparing the financial statements. |
GROUP'S POLICY ON PAYMENT OF CREDITORS |
The group makes purchases from suppliers according to the terms and conditions agreed in advance between the two parties. Payments are made to suppliers when the goods or services have been received and the terms and conditions met. |
DISABLED PERSONS |
Applications for employment by disabled persons are always considered fully, having taken into account the specific role and aptitude of the applicant concerned. In the event that employees become disabled during their employment then every effort is made to facilitate their role within the business. The group policy is that training, career development and promotion will be equally available to all employees regardless of disability. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
EMPLOYEE INVOLVEMENT |
The group ensures there is active employee participation within the business. During the year, the policy of providing employees with information, including that relating to the economic and financial factors affecting the performance of the group, has been continued. |
Regular meetings are held between management and employees to allow the free flow of information and ideas. |
ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS |
Our engagement with suppliers, customers and others are detailed within the strategic report on pages 2 to 4. |
STREAMLINED ENERGY AND CARBON REPORTING |
Farol have 327 employees spread across 7 sites in Oxfordshire, Leicestershire, Berkshire, West Sussex, Nottingham and Ashbourne. |
All results have been compiled using data from supplier invoices and external reports, we have also used the Conversion factors index to calculate all conversions from kWh to kgCO2e for the relevant energy sources. |
UK Greenhouse gas emissions and energy use data for the period 1st February 2023 to 31st January 2024 |
31.01.24 |
31.01.23 |
Energy consumption used to calculate emissions (kwh) | 9,614,733 | 7,632,611 |
Energy consumption break down (kwh) |
Gas | 107,159 | 161,741 |
Electricity | 577,419 | 473,925 |
Transport fuel | 8,930,156 | 6,996,944 |
Scope 1 emissions in metric tonnes CO2e |
Gas consumption | 20.68 | 30.69 |
Owned Transport | 2,113.70 | 1,656.27 |
Total Scope 1 | 2,134.37 | 1,686.96 |
Scope 2 emissions in metric tonnes CO2e |
Purchased electricity | 122.60 | 100.63 |
Total Scope 2 | 122.60 | 100.63 |
Total gross emissions in metric tonnes CO2e | 2,256.98 | 1,787.59 |
Intensity ratio tonne CO2e per million £ sales revenue | 11.94 | 9.51 |
Intensity ratio tonne CO2e per employee | 6.90 | 5.84 |
Intensity measurement |
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee and per million £ of sales revenue. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
Measures taken to improve energy efficiency and the environment |
Farol is committed to sound environmental management, sustainability and working towards net zero as per our Net Zero Management Statement. New electronic environmental report form introduced 2023 for staff to report any environmental spillage, contamination immediately to the Group H&S Manager. We participate in the supply chain scope 3 reporting requirements when requested. |
Newest Ashbourne Depot has fuel grid supplied electricity, and a recently installed workshop waste oil burner to recycle waste engine oil. Looking to install a waste oil burner at our Newark Depot to reduce energy consumption from the air source heat pump and recycle their waste oil. |
2023 Fleet Management Plan included replacement of less efficient older vehicles with a mixture of fuel, electric and hybrid vehicles. Driver behaviour reports run which has improved driving and fuel efficiency. Purchasing policy for the motor fleet considers energy consumption/emissions. We are LGV fleet LEZ compliant and meet ULEZ emissions standards. |
All depots: significant further investment in LED lighting and PIR lighting control. Conducting regular maintenance of HVAC Systems. |
All depots: auditing waste streams to remove any POP's (Persistent organic pollutants) and increase reuse and recycling. New Waste Electrical and Electronic Equipment recycling (WEEE) process. |
Having a full-time in-house JD trained Farol Technical Instructor has reduced amount of training in Nottingham and external travel to courses. |
We continue to participate in the supply chain scope 3 reporting requirements when asked by suppliers and customers. |
HR Director project to draw up a Sustainability and Carbon Reduction Plan in accordance with PPN 06/2 and fully update the Environmental Policy in accordance with net zero. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Martin and Company Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | 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 keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FAROL HOLDINGS LIMITED |
Opinion |
We have audited the financial statements of Farol Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31st January 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31st January 2024 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent 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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
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 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. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FAROL HOLDINGS LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
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: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page nine, 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 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 group's and the parent 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 group or the parent 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
We obtained an understanding of the legal and regulatory framework applicable to the company via discussions with the directors and our previous knowledge of the company. This identified that the most significant laws and regulations relate to the form and content of the financial statements such as the UK Companies Act 2006 and Financial Reporting Standard 102. The company complies with these laws and regulations by using appropriately qualified professionals to prepare the financial statements. |
As part of our planning process we assessed susceptibility of the company's financial statements to material misstatements, including how fraud might occur by making an assessment of the key risks. The key risks identified in respect of Farol Holdings Limited and its subsidiaries are revenue recognition and the impact of performance targets on influencing management override, payroll and misappropriation of stock by staff members. Risks also arise from accounting estimates made by the directors which include provision for bad debts, stock provisions, depreciation policy and valuation of freehold property. The directors confirmed no actual, suspected or alleged cases of fraud. |
Based on this assessment we designed our audit procedures to address these key risk areas with an emphasis on testing sales and stock cut off and those areas susceptible to management override including testing manual journals, testing of payroll records, attendance at the year end stock take and making enquiries of management. We also assessed the reasonableness of bad debt and stock provisions made, depreciation rates used and property valuations used. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
FAROL HOLDINGS LIMITED |
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 a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants |
and Statutory Auditors |
Winchester |
Hampshire |
SO23 9HJ |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
CONSOLIDATED INCOME STATEMENT |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ |
TURNOVER | 4 | 190,638,855 | 181,068,743 |
Cost of sales | 166,993,021 | 158,989,840 |
GROSS PROFIT | 23,645,834 | 22,078,903 |
Administrative expenses | 16,855,074 | 14,377,261 |
6,790,760 | 7,701,642 |
Other operating income | 96,124 | 78,639 |
OPERATING PROFIT | 6 | 6,886,884 | 7,780,281 |
Impairment loss on freehold property | 7 | (71,766 | ) | - |
Loss on disposal of freehold |
property | 7 | - | 2,033 |
6,815,118 | 7,782,314 |
Interest receivable and similar income | 119,810 | 61,012 |
6,934,928 | 7,843,326 |
Interest payable and similar expenses | 8 | 2,255,872 | 1,090,142 |
PROFIT BEFORE TAXATION | 4,679,056 | 6,753,184 |
Tax on profit | 9 | 1,039,295 | 1,496,156 |
PROFIT FOR THE FINANCIAL YEAR |
Profit attributable to: |
Owners of the parent | 3,639,761 | 5,257,028 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
CONSOLIDATED OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ |
PROFIT FOR THE YEAR | 3,639,761 | 5,257,028 |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
3,639,761 |
5,257,028 |
Total comprehensive income attributable to: |
Owners of the parent | 3,639,761 | 5,257,028 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
31ST JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 12 | 28,332,574 | 23,314,649 |
Investments | 13 | - | - |
28,332,574 | 23,314,649 |
CURRENT ASSETS |
Stocks | 14 | 65,471,638 | 50,311,525 |
Debtors | 15 | 16,063,904 | 18,024,864 |
Cash at bank and in hand | 2,602,853 | 4,584,853 |
84,138,395 | 72,921,242 |
CREDITORS |
Amounts falling due within one year | 16 | 68,331,961 | 57,038,324 |
NET CURRENT ASSETS | 15,806,434 | 15,882,918 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
44,139,008 |
39,197,567 |
CREDITORS |
Amounts falling due after more than one year |
17 |
(13,344,480 |
) |
(11,928,284 |
) |
PROVISIONS FOR LIABILITIES | 21 | (3,111,540 | ) | (2,865,502 | ) |
NET ASSETS | 27,682,988 | 24,403,781 |
CAPITAL AND RESERVES |
Called up share capital | 22 | 4,666 | 4,666 |
Share premium | 23 | 14,980 | 14,980 |
Revaluation reserve | 23 | 2,808,588 | 2,740,235 |
Capital redemption reserve | 23 | 14,274 | 14,274 |
Retained earnings | 23 | 24,840,480 | 21,629,626 |
SHAREHOLDERS' FUNDS | 27,682,988 | 24,403,781 |
The financial statements were approved by the Board of Directors and authorised for issue on 26th April 2024 and were signed on its behalf by: |
Mr M E Vellacott - Director |
Mr B T Vellacott - Director |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
COMPANY STATEMENT OF FINANCIAL POSITION |
31ST JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
17 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 21 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 22 |
Revaluation reserve | 23 |
Capital redemption reserve | 23 |
Retained earnings | 23 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 672,113 | 2,460,140 |
The financial statements were approved by the Board of Directors and authorised for issue on |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£ | £ | £ |
Balance at 1st February 2022 | 4,666 | 18,166,691 | 14,980 |
Changes in equity |
Dividends | - | (1,794,093 | ) | - |
Total comprehensive income | - | 5,257,028 | - |
Balance at 31st January 2023 | 4,666 | 21,629,626 | 14,980 |
Changes in equity |
Dividends | - | (428,907 | ) | - |
Total comprehensive income | - | 3,639,761 | - |
Balance at 31st January 2024 | 4,666 | 24,840,480 | 14,980 |
Capital |
Revaluation | redemption | Total |
reserve | reserve | equity |
£ | £ | £ |
Balance at 1st February 2022 | 3,017,530 | 14,274 | 21,218,141 |
Changes in equity |
Dividends | - | - | (1,794,093 | ) |
Total comprehensive income | - | - | 5,257,028 |
Deferred tax arising from |
revaluation of land and |
buildings | (277,295 | ) | - | (277,295 | ) |
Balance at 31st January 2023 | 2,740,235 | 14,274 | 24,403,781 |
Changes in equity |
Dividends | - | - | (428,907 | ) |
Total comprehensive income | - | - | 3,639,761 |
Deferred tax arising from |
revaluation of land and |
buildings | 68,353 | - | 68,353 |
Balance at 31st January 2024 | 2,808,588 | 14,274 | 27,682,988 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
Called up | Capital |
share | Retained | Revaluation | redemption | Total |
capital | earnings | reserve | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1st February 2022 |
Changes in equity |
Dividends | - | (1,794,093 | ) | - | - | ( |
) |
Total comprehensive income | - |
Deferred tax arising from |
revaluation of land and |
buildings | - | - | (277,295 | ) | - | (277,295 | ) |
Balance at 31st January 2023 |
Changes in equity |
Dividends | - | (428,907 | ) | - | - | ( |
) |
Total comprehensive income | - |
Deferred tax arising from |
revaluation of land and |
buildings | - | - | 68,353 | - | 68,353 |
Balance at 31st January 2024 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
CONSOLIDATED STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 4,156,172 | 5,736,084 |
Interest paid | (1,937,456 | ) | (857,047 | ) |
Interest element of hire purchase payments paid |
(318,416 |
) |
(233,095 |
) |
Tax paid | (907,662 | ) | (384,094 | ) |
Net cash from operating activities | 992,638 | 4,261,848 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (723,313 | ) | (1,753,645 | ) |
Sale of tangible fixed assets | 305,099 | 179,946 |
Interest received | 119,810 | 61,012 |
Net cash from investing activities | (298,404 | ) | (1,512,687 | ) |
Cash flows from financing activities |
New loans in year | - | 7,570,000 |
Loan repayments in year | (554,734 | ) | - |
Capital repayments in year | (1,072,210 | ) | (7,499,484 | ) |
Amount introduced by directors | 691,508 | 2,609,676 |
Amount withdrawn by directors | (1,311,891 | ) | (1,636,029 | ) |
Equity dividends paid | (428,907 | ) | (1,794,093 | ) |
Net cash from financing activities | (2,676,234 | ) | (749,930 | ) |
(Decrease)/increase in cash and cash equivalents | (1,982,000 | ) | 1,999,231 |
Cash and cash equivalents at beginning of year |
2 |
4,584,853 |
2,585,622 |
Cash and cash equivalents at end of year | 2 | 2,602,853 | 4,584,853 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
Profit before taxation | 4,679,056 | 6,753,184 |
Depreciation charges | 2,542,850 | 2,060,879 |
Profit on disposal of fixed assets | (230,080 | ) | (130,491 | ) |
(Increase)/decrease in fleet hire stock | (1,852,988 | ) | 3,734,987 |
Finance costs | 2,255,872 | 1,090,142 |
Finance income | (119,810 | ) | (61,012 | ) |
7,274,900 | 13,447,689 |
Increase in stocks | (15,160,113 | ) | (8,446,495 | ) |
Decrease/(increase) in trade and other debtors | 2,174,175 | (4,179,442 | ) |
Increase in trade and other creditors | 9,867,210 | 4,914,332 |
Cash generated from operations | 4,156,172 | 5,736,084 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31st January 2024 |
31.1.24 | 1.2.23 |
£ | £ |
Cash and cash equivalents | 2,602,853 | 4,584,853 |
Year ended 31st January 2023 |
31.1.23 | 1.2.22 |
£ | £ |
Cash and cash equivalents | 4,584,853 | 2,585,622 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1.2.23 | Cash flow | At 31.1.24 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 4,584,853 | (1,982,000 | ) | 2,602,853 |
4,584,853 | (1,982,000 | ) | 2,602,853 |
Debt |
Finance leases | (8,010,085 | ) | (3,987,284 | ) | (11,997,369 | ) |
Debts falling due within 1 year | (3,554,733 | ) | - | (3,554,733 | ) |
Debts falling due after 1 year | (7,024,672 | ) | 554,734 | (6,469,938 | ) |
(18,589,490 | ) | (3,432,550 | ) | (22,022,040 | ) |
Total | (14,004,637 | ) | (5,414,550 | ) | (19,419,187 | ) |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
1. | STATUTORY INFORMATION |
Farol Holdings Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The consolidated financial statements incorporate the results of Farol Holdings Limited and all its subsidiary undertakings as at 31st January 2024 using the acquisition method of accounting. The parent company has taken advantage of section 408 of the Companies Act 2006 and has not included its own Profit and Loss Account in these financial statements. |
Turnover |
Turnover represents net invoiced sales of goods and services, excluding value added tax. |
Tangible fixed assets |
Hire fleet | - |
Improvements to property | - |
Plant and machinery | - |
Motor vehicles | - |
Computer equipment | - |
Freehold Property |
Freehold property is shown at most recent valuation. Depreciation is not provided on freehold property as the directors consider that the value of the freehold property has not changed materially since the last valuation and the assets are maintained at a level to make any depreciation charge unnecessary. |
Assets on hire are transferred into fixed assets at the lower of cost or net realisable value when they are expected to be on hire for greater than 6 months. |
Stocks |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Financial instruments |
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 entity after deducting all of its financial liabilities. |
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability. |
Leased assets |
Assets held under finance lease and hire purchase contracts are capitalised in the Balance Sheet and depreciated over their expected useful lives. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the Profit and Loss Account over the period of the lease. |
All other leases are regarded as operating and the payments made under them are charged to the Profit and Loss Account on a straight line basis over the lease term. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
2. | ACCOUNTING POLICIES - continued |
Revenue recognition |
The group derives revenue from the following sources: (i) sale of new and used machinery, (ii) repair and servicing of machinery, (iii) sale of parts and tyres, (iv) transport services and (v) hire income. |
The group recognises revenue from the sale of wholegoods when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on despatch 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. |
Turnover from hire agreements is recognised on a straight line basis over the course of the agreement. |
Turnover from repair and servicing work is recognised on completion of the respective job. |
Transport services revenue is recognised upon completion of the work carried out. |
Turnover in respect of the sale of parts and tyres this is at the point of sale. |
Rent and commission receivable are recognised in the period to which they relate. |
Deferred revenue represents payments for products and service elements received in advance that do not qualify to be recognised as revenue under the group's revenue recognition policy. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Estimates and underlying assumptions are reviewed on an ongoing basis. |
(a) Provisions against receivables |
Using information available up to the date the financial statements have been approved, the Directors make judgments based on experience regarding the level of provision required to account for potentially non-collectible receivables. |
(b) Stock provision |
The percentage used in the stock provision is reviewed by the Directors based on their knowledge and experience within the market that they operate in. During the year the percentages applied have been updated to reflect the current market.The overall change in this estimate has resulted in a £691K increase in the stock provision. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2024 | 2023 |
£ | £ |
Haulage | 11,942 | 14,240 |
Wholegoods sales | 151,775,914 | 147,963,796 |
Plant sales | 5,281,983 | 4,770,030 |
Installations | 10,238 | 285,477 |
Repairs and Servicing | 27,048,816 | 21,149,268 |
Online | 1,803,783 | 2,000,598 |
Asset finance | 96,555 | 104,952 |
Tyres | 4,575,292 | 4,746,050 |
Rental income | 34,332 | 34,332 |
190,638,855 | 181,068,743 |
An analysis of turnover by geographical market is given below: |
2024 | 2023 |
£ | £ |
United Kingdom | 175,643,131 | 164,927,592 |
Europe | 14,995,724 | 16,141,151 |
190,638,855 | 181,068,743 |
5. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries | 13,769,537 | 11,819,251 |
Social security costs | 1,458,619 | 1,307,645 |
Other pension costs | 355,949 | 286,097 |
15,584,105 | 13,412,993 |
The average number of employees during the year was as follows: |
2024 | 2023 |
Sales and marketing | 53 | 52 |
Service | 115 | 107 |
Parts and warehousing | 37 | 32 |
Tyres | 14 | 17 |
Technology | 12 | 7 |
Distribution and logistics | 8 | 7 |
Management and administration | 88 | 72 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
5. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees by undertakings that were proportionately consolidated during the year was 327 (2023 - 294 ) . |
2024 | 2023 |
£ | £ |
Directors' remuneration | 290,839 | 24,300 |
Directors' pension contributions to money purchase schemes | 12,188 | 11,625 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 2 | 2 |
Information regarding the highest paid director for the year ended 31st January 2024 is as follows: |
2024 |
£ |
Emoluments etc | 156,634 |
Pension contributions to money purchase schemes | 6,771 |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Depreciation - owned assets | 2,471,086 | 2,060,879 |
Profit on disposal of fixed assets | (230,080 | ) | (130,491 | ) |
Auditors' remuneration | 40,350 | 32,800 |
Foreign exchange differences | 8,004 | (26,935 | ) |
Hire of plant and machinery | 279,809 | 481,883 |
Other operating leases | 330,773 | 333,510 |
Auditors' remuneration relating to taxation and all other services | 10,825 | 10,430 |
Government grants | (5,000 | ) | (4,500 | ) |
7. | EXCEPTIONAL ITEMS |
2024 | 2023 |
£ | £ |
Impairment loss on freehold property | (71,766 | ) | - |
Loss on disposal of freehold |
property | - | 2,033 |
(71,766 | ) | 2,033 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Bank interest | 194,106 | 103,120 |
Bank loan interest | 1,024,774 | 405,445 |
Other interest payable | 718,576 | 348,482 |
Hire purchase | 318,416 | 233,095 |
2,255,872 | 1,090,142 |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax | 730,562 | 794,156 |
Corporation tax - prior year | (5,658 | ) | (222,643 | ) |
Total current tax | 724,904 | 571,513 |
Deferred tax | 314,391 | 924,643 |
Tax on profit | 1,039,295 | 1,496,156 |
UK corporation tax has been charged at 25 % (2023 - 19 %). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
Profit before tax | 4,679,056 | 6,753,184 |
Profit multiplied by the standard rate of corporation tax in the UK of 25 % (2023 - 19 %) |
1,169,764 |
1,283,105 |
Effects of: |
Expenses not deductible for tax purposes | 16,804 | (6,847 | ) |
Capital allowances in excess of depreciation | (430,109 | ) | (499,307 | ) |
Adjustments to tax charge in respect of previous periods | (5,658 | ) | (222,643 | ) |
Leased asset repayments | 4,334 | 2,425 |
Deferred tax | 314,391 | 924,643 |
Under/over provision | 4,123 | 14,780 |
Effect of changes in tax rates | (34,354 | ) | - |
Total tax charge | 1,039,295 | 1,496,156 |
The current year tax and deferred tax have been calculated at 25%. For 2023, the current tax charge was |
calculated at 19%, with 25% being the deferred tax rate. |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
10. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
11. | DIVIDENDS |
2024 | 2023 |
£ | £ |
A Ordinary shares of £1 each |
Interim | 214,574 | 266,593 |
B Ordinary shares of £1 each |
Interim | 214,333 | 1,527,500 |
428,907 | 1,794,093 |
12. | TANGIBLE FIXED ASSETS |
Group |
Improveme |
Freehold | Hire | to |
property | fleet | property |
£ | £ | £ |
COST OR VALUATION |
At 1st February 2023 | 14,378,287 | 7,208,033 | 254,985 |
Additions | 111,548 | 62,200 | 7,034 |
Disposals | - | - | - |
Transfers from stock | - | 8,473,568 | - |
Transfers to stock | - | (3,267,575 | ) | - |
At 31st January 2024 | 14,489,835 | 12,476,226 | 262,019 |
DEPRECIATION |
At 1st February 2023 | 1,296,786 | 606,688 | 134,146 |
Charge for year | - | 1,051,359 | 42,428 |
Eliminated on disposal | - | - | - |
Impairments | 71,766 | - | - |
Transfers to stock | - | (475,644 | ) | - |
At 31st January 2024 | 1,368,552 | 1,182,403 | 176,574 |
NET BOOK VALUE |
At 31st January 2024 | 13,121,283 | 11,293,823 | 85,445 |
At 31st January 2023 | 13,081,501 | 6,601,345 | 120,839 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
12. | TANGIBLE FIXED ASSETS - continued |
Group |
Plant and | Motor | Computer |
machinery | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST OR VALUATION |
At 1st February 2023 | 1,142,547 | 6,493,896 | 510,864 | 29,988,612 |
Additions | 414,654 | 1,323,452 | 35,271 | 1,954,159 |
Disposals | (168,390 | ) | (603,202 | ) | (130,685 | ) | (902,277 | ) |
Transfers from stock | - | - | - | 8,473,568 |
Transfers to stock | - | - | - | (3,267,575 | ) |
At 31st January 2024 | 1,388,811 | 7,214,146 | 415,450 | 36,246,487 |
DEPRECIATION |
At 1st February 2023 | 685,055 | 3,720,420 | 230,868 | 6,673,963 |
Charge for year | 229,117 | 1,063,077 | 85,105 | 2,471,086 |
Eliminated on disposal | (137,156 | ) | (559,417 | ) | (130,685 | ) | (827,258 | ) |
Impairments | - | - | - | 71,766 |
Transfers to stock | - | - | - | (475,644 | ) |
At 31st January 2024 | 777,016 | 4,224,080 | 185,288 | 7,913,913 |
NET BOOK VALUE |
At 31st January 2024 | 611,795 | 2,990,066 | 230,162 | 28,332,574 |
At 31st January 2023 | 457,492 | 2,773,476 | 279,996 | 23,314,649 |
Included in cost or valuation of land and buildings is freehold land of £4,365,789 (2023 - £4,365,789) which is not depreciated. |
The net book value of fixed assets of £28,332,574 (2023: £23,314,649) includes an amount of £13,345,300 (2023: £8,769,928) in respect of assets held under hire purchase and finance lease contracts. The depreciation charge for the year in respect of these assets amounted to £1,944,165 (2023: £1,106,365). |
Cost or valuation at 31st January 2024 is represented by: |
Improveme |
Freehold | Hire | to |
property | fleet | property |
£ | £ | £ |
Valuation in 2014 | 479,006 | - | - |
Valuation in 2016 | 613,257 | - | - |
Valuation in 2021 | 2,332,267 | - | - |
Cost | 11,065,305 | 12,476,226 | 262,019 |
14,489,835 | 12,476,226 | 262,019 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
12. | TANGIBLE FIXED ASSETS - continued |
Group |
Plant and | Motor | Computer |
machinery | vehicles | equipment | Totals |
£ | £ | £ | £ |
Valuation in 2014 | - | - | - | 479,006 |
Valuation in 2016 | - | - | - | 613,257 |
Valuation in 2021 | - | - | - | 2,332,267 |
Cost | 1,388,811 | 7,214,146 | 415,450 | 32,821,957 |
1,388,811 | 7,214,146 | 415,450 | 36,246,487 |
If freehold land and buildings had not been revalued they would have been included at the following historical cost: |
2024 | 2023 |
£ | £ |
Cost | 10,953,757 | 10,953,757 |
Value of land in freehold land and buildings | 4,365,789 | 4,365,789 |
Freehold land and buildings were valued on an open market basis on 31st January 2021 and subsequent addition on 2nd February 2022 by Savills. |
Company |
Improvements |
Freehold | to | Plant and |
property | property | machinery | Totals |
£ | £ | £ | £ |
COST OR VALUATION |
At 1st February 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31st January 2024 |
DEPRECIATION |
At 1st February 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
Impairments |
At 31st January 2024 |
NET BOOK VALUE |
At 31st January 2024 |
At 31st January 2023 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
12. | TANGIBLE FIXED ASSETS - continued |
Company |
Included in cost or valuation of land and buildings is freehold land of £ 4,365,789 (2023 - £ 4,365,789 ) which is not depreciated. |
Cost or valuation at 31st January 2024 is represented by: |
Improvements |
Freehold | to |
property | property | Totals |
£ | £ | £ |
Valuation in 2014 | 479,006 | - | 479,006 |
Valuation in 2016 | 613,257 | - | 613,257 |
Valuation in 2021 | 2,332,267 | - | 2,332,267 |
Cost | 11,065,305 | 10,960 | 11,076,265 |
14,489,835 | 10,960 | 14,500,795 |
Investment property was valued on an open market basis on 31st January 2021 and subsequent addition on 2nd February 2022 by Savills. |
13. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertaking |
£ |
COST |
At 1st February 2023 |
and 31st January 2024 |
NET BOOK VALUE |
At 31st January 2024 |
At 31st January 2023 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
13. | FIXED ASSET INVESTMENTS - continued |
The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Subsidiaries |
Registered office: Rycote Lane Farm, Milton Common, Oxfordshire, UK OX9 2NZ |
Nature of business: |
% |
Class of shares: | holding |
2024 | 2023 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
Registered office: Thame Mead Farm, Long Crendon Road, Thame, UK OX9 3SG |
Nature of business: |
% |
Class of shares: | holding |
2024 | 2023 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
14. | STOCKS |
Group |
2024 | 2023 |
£ | £ |
New & secondhand machinery | 58,717,966 | 44,230,982 |
Spare parts | 5,579,932 | 4,713,244 |
Tyres | 809,419 | 956,527 |
Work-in-progress | 364,321 | 410,772 |
65,471,638 | 50,311,525 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Trade debtors | 10,929,456 | 11,509,004 |
Amounts owed by group undertakings | - | - |
Other debtors | 778,300 | 788,147 |
Tax | 238,555 | 25,341 |
VAT | - | 100,843 |
Prepayments and accrued income | 4,117,593 | 5,601,529 |
16,063,904 | 18,024,864 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 18) | 3,554,733 | 3,554,733 |
Hire purchase contracts (see note 19) | 5,122,827 | 3,106,473 |
Trade creditors | 42,961,508 | 32,118,393 |
Amounts owed to group undertakings | - | - |
Tax | 104,254 | 73,798 |
Social security and other taxes | 329,222 | 305,103 |
VAT | 418,748 | - |
Other creditors | 213,386 | 288,851 |
Directors' current accounts | 2,546,365 | 3,166,748 |
Accruals and deferred income | 5,379,497 | 10,742,037 |
Stocking loans | 7,701,421 | 3,682,188 |
68,331,961 | 57,038,324 |
Stock loans of £7,701,421 (2023: £3,682,188) are secured on the assets to which they relate and are repayable at various dates within the coming year. |
Included in accruals is unpaid pension liabilities of £74,470 (2023: £63,517). |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Bank loans (see note 18) | 6,469,938 | 7,024,672 |
Hire purchase contracts (see note 19) | 6,874,542 | 4,903,612 |
13,344,480 | 11,928,284 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
18. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 3,554,733 | 3,554,733 |
Amounts falling due between one and two | years: |
Bank loans - 1-2 years | 554,733 | 554,733 |
Amounts falling due between two and five | years: |
Bank loans - 2-5 years | 1,104,600 | 1,104,600 |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loans more 5 yr by instal | 4,810,605 | 5,365,339 | 4,810,605 | 5,365,339 |
The first term loan is repayable in 60 consecutive monthly instalments (in respect of principal only). The first 59 instalments shall be in the amount of £39,278 and the final instalment shall be an amount equal to the amount outstanding on the final repayment date and interest is charged at 1.75% above BofE Base Rate. |
The second term loan is repayable in 60 consecutive monthly instalments. The first 59 instalments shall be in the amount of £7,000 and the final instalment shall be an amount equal to the amount outstanding on the final repayment date and interest is charged at 1.9% above BofE Base Rate. |
19. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2024 | 2023 |
£ | £ |
Net obligations repayable: |
Within one year | 5,122,827 | 3,106,473 |
Between one and five years | 6,874,542 | 4,903,612 |
11,997,369 | 8,010,085 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
19. | LEASING AGREEMENTS - continued |
Group |
Non-cancellable operating | leases |
2024 | 2023 |
£ | £ |
Within one year | 1,430,138 | 1,380,338 |
Between one and five years | 253,333 | 413,333 |
1,683,471 | 1,793,671 |
20. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Bank loans | 10,024,671 | 10,579,405 |
Hire purchase contracts | 11,997,369 | 8,010,085 | - | - |
Stocking loans | 7,701,421 | 3,682,188 | - | - |
29,723,461 | 22,271,678 |
The bank loan and overdraft facility are secured by mortgage debentures from Farol Holdings Limited and Farol Limited, a cross guarantee between Farol Holdings Limited and Farol Limited and a first legal charge over the freehold property. |
Hire purchase liabilities are secured on the assets to which they relate. |
21. | PROVISIONS FOR LIABILITIES |
Group | Company |
2024 | 2023 | 2024 | 2023 |
£ | £ | £ | £ |
Deferred tax | 3,111,540 | 2,865,502 | 508,915 | 469,787 |
Group |
Deferred |
tax |
£ |
Balance at 1st February 2023 | 2,865,502 |
Provided during year | 246,038 |
Balance at 31st January 2024 | 3,111,540 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
21. | PROVISIONS FOR LIABILITIES - continued |
Company |
Deferred |
tax |
£ |
Balance at 1st February 2023 |
Provided during year |
Balance at 31st January 2024 |
22. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
A Ordinary | £1 | 2,333 | 2,333 |
B Ordinary | £1 | 2,333 | 2,333 |
4,666 | 4,666 |
The rights of all shares rank pari passu with the exception of being able to vote varying dividend levels in each class. |
23. | RESERVES |
Group |
Capital |
Retained | Share | Revaluation | redemption |
earnings | premium | reserve | reserve | Totals |
£ | £ | £ | £ | £ |
At 1st February 2023 | 21,629,626 | 14,980 | 2,740,235 | 14,274 | 24,399,115 |
Profit for the year | 3,639,761 | 3,639,761 |
Dividends | (428,907 | ) | (428,907 | ) |
Deferred tax arising from |
revaluation of land and |
buildings | - | - | 68,353 | - | 68,353 |
At 31st January 2024 | 24,840,480 | 14,980 | 2,808,588 | 14,274 | 27,678,322 |
FAROL HOLDINGS LIMITED (REGISTERED NUMBER: 01143172) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31ST JANUARY 2024 |
23. | RESERVES - continued |
Company |
Capital |
Retained | Revaluation | redemption |
earnings | reserve | reserve | Totals |
£ | £ | £ | £ |
At 1st February 2023 | 3,584,350 | 2,740,235 | 11,334 | 6,335,919 |
Profit for the year | 672,113 | 672,113 |
Dividends | (428,907 | ) | (428,907 | ) |
Deferred tax arising from |
revaluation of land and |
buildings | - | 68,353 | - | 68,353 |
At 31st January 2024 | 3,827,556 | 2,808,588 | 11,334 | 6,647,478 |
24. | CAPITAL COMMITMENTS |
2024 | 2023 |
£ | £ |
Contracted but not provided for in the |
financial statements | 400,000 | - |
25. | OFF-BALANCE SHEET ARRANGEMENTS |
Some customers take contract hire agreements out directly with independent finance providers and at that point the risks and rewards of ownership pass to the customer therefore no asset or liability is recognised in the balance sheet in respect of these vehicles. At the end of the contract hire period, the Company is committed to buy the vehicles directly from the finance provider at the end of the contract hire period. At the year end the Company was committed to purchase vehicles to the value of £12.3m (2023 - £9.9m) which equates to the anticipated residual values of the stock. |
26. | RELATED PARTY DISCLOSURES |
The group has an unlimited cross guarantee with John Deere Limited. In addition a cross guarantee is in place with Lloyds Bank Plc with regard to the overdraft facility which is supported by a first legal charge over the company's property. |
Key management personnel of the entity or its parent (in the aggregate) |
2024 | 2023 |
£ | £ |
Interest charges | 152,186 | 120,048 |
Amount due to related party | 2,546,365 | 3,166,748 |
Other related parties |
2024 | 2023 |
£ | £ |
Amount due to related party | 213,381 | 288,851 |
During the year, a total of key management personnel compensation of £ 825,501 (2023 - £ 494,076 ) was paid. |