Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
COMPANY INFORMATION
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CMC CHESTERFIELD LIMITED
CONTENTS
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CMC CHESTERFIELD LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The financial statements show an increased turnover and a decrease in gross profit margin; these combined results together with controls on costs have resulted in a pre tax profit for the year of £1.05m, down on the previous year. The reduction in pre tax profits have in part been driven by fragile consumer confidence due to cost of living pressures and rising interest rates, which have led to reduced demand and an increase in available inventory throughout the market which in turn have impacted margin. The results were in line with expectations and was achieved through the hard work of our committed work force and the ongoing support of our stakeholders.
The directors monitor the Company's performance in a number of ways including key performance indicators.
Turnover has increased to £31.9m (2022: £29.3m) Gross profit margin has decreased to 18.5% (2022: 19.7%) Pre-tax profit for the year was £1.05m (2022: £1.3m) Turnover represents the value of goods supplied and delivered to customers in the year and measures sales growth or decline in value terms. The gross margin is calculated by dividing gross profit by turnover and measures the total profitability of product sales. Pre tax profit or loss is the profit or loss generated by the business from operations including finance income and finance costs before taxation. This indicator measures the overall profitability of the business for the year.
Consumer confidence
There is a risk whereby the Company's sales are reduced as its typical customers are adversely affected by a downturn in the economy. Efforts are made to ensure that our exposure to this threat is minimised by ensuring that the Company prices its stocks competitively and regularly reviews its product mix. Brexit The uncertainty around Brexit is a risk to the business. New bikes are imported from Europe, post Brexit the cost of new bikes could increase due to importation taxes etc, this coupled with reduced consumer confidence could impact sales. New bike sales represent 11% of the Company's total turnover. The Company continues to monitor the situation and works to develop the other revenue types within the business to help minimise the risk. COVID-19 The world continues to recover from the effects of COVID-19 and is a source of uncertainty for the business. In 2020 the business developed a resilience plan to mitigate the potential impact, the plan included store closures both temporarily and permanently, an organisational restructure and a full review of the cost base. The business traded ahead of plan in 2020, 2021, 2022, 2023 and has continued to do so into 2024. Performance is regularly reviewed against the turnaround plan with action being taken to improve results where necessary or where additional opportunities arise. Insurance risks The Company insures its business assets against insurable risks as it deems appropriate.
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CMC CHESTERFIELD LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Interest rates The business would be adversely affected by a large rise in interest rates as the Company currently has bank borrowings used to finance the business. The Company is confident that it will continue to operate comfortably within the covenants required by the bank and continues to repay the financing in accordance with the banking agreement. Going concern At 31 December 2023 the Company had net current assets amounting to £678,118 (2022: £68,269). This has improved year on year as a result of the Company reporting a profit before tax for the year ended 31 December 2023 of £1,0554,382 (2022: £1,306,916). The directors have prepared budgets for the next 12 months, based upon their expectation of realistic sales volume levels which show that the Company will continue to trade profitability and enable it to pay its debts as they fall due. In addition, should additional funding become necessary in the future then the directors are confident that this can be secured at the appropriate levels. Considering these expected future trading results and following receipt of confirmation from all of the ongoing key stakeholders of their continued support at the required levels, the directors have prepared the accounts on a going concern basis.
This report was approved by the board on 2 August 2024 and signed on its behalf.
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CMC CHESTERFIELD LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The profit for the year, after taxation, amounted to £796,728 (2022 - £1,355,032).
No dividends were paid during the year.
The directors who served during the year were:
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙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 transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
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CMC CHESTERFIELD LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The auditors, Shorts, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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CMC CHESTERFIELD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CMC CHESTERFIELD LIMITED
We have audited the financial statements of CMC Chesterfield Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, 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).
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 Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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.
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CMC CHESTERFIELD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CMC CHESTERFIELD LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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 or the Directors' Report.
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CMC CHESTERFIELD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CMC CHESTERFIELD LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities,
including fraud and non-compliance with laws and regulations, was as follows: • the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; • through discussions with the directors and other management and from our commercial knowledge and experience of the sectors that the Company operates in, we identified the laws and regulations applicable to the Company; and • focusing on the specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, we assessed the extent of compliance with those laws and regulations identified above through making enquiries of management and inspecting relevant correspondence. We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: • making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and • considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls, we: • performed analytical procedures to identify any unusual or unexpected relationships; • considered journal entries to identify unusual transactions; • assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and • investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: • agreeing financial statement disclosures to underlying supporting documentation; • reading the minutes of those charged with governance; • enquiring of management as to actual and potential litigation and claims; and • reviewing any correspondence with HMRC, relevant regulators and the Company's legal advisors.
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CMC CHESTERFIELD LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CMC CHESTERFIELD LIMITED (CONTINUED)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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 Auditors' 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 Auditors' 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
2 Ashgate Road
S40 4AA
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CMC CHESTERFIELD LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
REGISTERED NUMBER: 04330784
BALANCE SHEET
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 11 to 23 form part of these financial statements.
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CMC Chesterfield Limited is a private Company limited by shares, incorporated in England and Wales
(registered number: 04330784). Its registered office is Derwent Buildings, High Street, Clay Cross, Chesterfield, Derbyshire, S45 9DP. The principal activity of the Company is the sale of motorcycles, clothes, parts and accessories.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The Company's functional and presentational currency is pounds sterling.
The following principal accounting policies have been applied:
The directors have prepared budgets for the next 12 months, based upon their expectation of
realistic sales volume levels which show that the Company will continue to trade profitability and enable it to pay its debts as they fall due. In addition, should additional funding become necessary in the future then the directors are confident that this can be secured at the appropriate levels. Considering these expected future trading results and having received confirmation from all of the ongoing key stakeholders of their continued support at the required levels, the directors have prepared the accounts on a going concern basis.
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The Company only enters into basic financial instruments transactions that result in the recognition
of financial assets and liabilities such as bank and cash balances, trade and other accounts receivable and payable, loans from banks and other third parties and loans to and from related parties. Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at the transaction price and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have the greatest level of uncertainty are addressed below: (i) Stock provisioning When calculating the stock provision, management considers the nature and conditions of the inventory, as well as applying assumptions around saleability of stock. The carrying value of stock after making such a provision was £9,451,262 (2022: £9,317,238). (ii) Manchester site closure provisioning When calculating the Manchester site closure provision, management considers the potential future costs based on the previous costs incurred and the remaining term of the lease, as well as applying assumptions around the potential increases in these costs. The remaining provision for costs to be released in the year they relate to was £10,000 (2022: £456,174).
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Capital redemption reserve
Profit and loss account
distributable.
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CMC CHESTERFIELD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company operates a defined contributions benefit scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £72,153 (2022: £63,596). Contributions totalling £16,089 (2022: £15,172) were payable to the fund at the balance sheet date and are included in creditors.
The Company is included in audited consolidated accounts for a larger group which are drawn up by Rochma Holdings Limited.
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