B G Automotive Limited |
Strategic Report |
for the year ended 30 November 2023 |
|
|
The company increased turnover by 36% to £50 million. |
|
The gross profit margin was higher at 36% (2022: 32.6%). |
|
After taxation, a profit of £3.5 million is retained to fund further growth in turnover. |
|
The company continues to add to and update its range of products, staying abreast of developments within the automotive industry. |
|
The export market represents 58% of the company's turnover, recognised by holding the King's Award for Enterprise - International Trade. |
|
There continue to be risks and challenges in the post Brexit economy and global conflicts, especially currency exchange fluctuations and logistical complexities. Assurance has been given to key export customers that trading relationships will be shielded from adverse effects of Brexit. |
|
The company has a strong financial base with net assets of approximately £16 million. |
|
Statement by the directors regarding their duties under Section 172 of the UK Companies Act 2006 |
|
The company's directors consider that they have acted to promote the long term success of the company, for the benefit of its shareholders, whilst serving the interests of its stakeholders and the environment. |
|
Long Term decisions |
|
The directors are responsible for determining the long term strategy of the company. They communicate with the company's key employees as appropriate, and take into consideration matters such as market conditions, product development and financial resources. As a private company, the company can look to long term growth rather than short term results. |
|
Employees |
|
The success of the company is dependent upon the commitment and loyalty of its employees. Health, safety and welfare of our employees is one of the main considerations in the way the company manages its business. We provide safe and pleasant working areas and encourage staff to develop skills necessary to their roles in the company. We embrace diversity within our workforce. |
|
Business relationships |
|
First class customer service is key to the continued growth of the company's business. Our wide range of products and services involves a large number of customers and buying groups with individual requirements. Satisfying those requirements in a speedy, professional and friendly way is important to us. |
|
We aim to treat our suppliers fairly and with respect. We look to create lasting and mutually beneficial relationships built on trust and reliability. |
|
Community and the environment |
|
The company seeks to engender a neighbourly relationship with the local communities. |
|
As a manufacturing and distribution company, we are very aware of the impact of our business on the environment and act responsibly with regards to usage of energy, efficient transportation of goods and recycling of waste and packaging. The effect upon the environment is considered when placing changes within the business practices. |
|
Standards of business conduct |
|
The success and growth of the company's activities is testament to the way we have interacted over many decades with our customers, suppliers, employees and legislative agencies. In our opinion, businesses such as ours cannot prosper in the long term without maintaining the high standards of conduct expected of us by the community. |
|
Shareholders |
|
BG Automotive Limited is an independent business with a small number of shareholders, who are committed to ensuring the ongoing profitability and growth of the company for the future. |
|
|
|
|
This report was approved by the board on 5 August 2024 and signed on its behalf. |
|
|
|
|
C Cameron |
Director |
|
|
Basis of 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. |
|
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 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. |
|
Matters on which we are required to report by exception |
|
Leasehold improvements |
12.5% straight line basis |
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
|
|
|
|
|
|
|
Taxation |
|
A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
|
|
Provisions |
|
Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
Leased assets |
|
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
|
|
Pensions |
|
Contributions to defined contribution plans are expensed in the period to which they relate. |
|
2 |
Analysis of turnover |
2023 |
|
2022 |
% |
% |
|
By geographical market: |
|
UK |
42 |
|
41 |
|
Europe and rest of world |
58 |
|
59 |
|
|
|
|
|
|
100 |
|
100 |
|
|
|
|
|
|
|
|
|
|
3 |
Operating profit |
2023 |
|
2022 |
£ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
126,531 |
|
110,170 |
|
Operating lease rentals - land and buildings |
1,047,522 |
|
864,377 |
|
Auditors' remuneration for audit services |
14,000 |
|
12,000 |
|
Auditors' remuneration for other services |
800 |
|
800 |
|
Key management personnel compensation (including directors' emoluments) |
|
4,709,828 |
|
3,646,683 |
|
|
|
|
|
|
|
|
|
4 |
Directors' emoluments |
2023 |
|
2022 |
£ |
£ |
|
|
Emoluments |
4,538,133 |
|
3,494,867 |
|
Company contributions to defined contribution pension plans |
3,300 |
|
17,940 |
|
|
|
|
|
|
4,541,433 |
|
3,516,931 |
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
|
Emoluments |
2,246,000 |
|
2,046,000 |
|
|
|
|
|
|
|
|
|
|
|
Number of directors to whom retirement benefits accrued: |
2023 |
|
2022 |
Number |
Number |
|
|
Defined contribution plans |
2 |
|
2 |
|
|
|
|
|
|
|
|
|
5 |
Staff costs |
2023 |
|
2022 |
£ |
£ |
|
|
Wages and salaries |
8,065,457 |
|
6,231,524 |
|
Social security costs |
639,981 |
|
429,375 |
|
Other pension costs |
105,816 |
|
86,996 |
|
|
|
|
|
|
8,811,254 |
|
6,747,895 |
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Directors |
5 |
|
5 |
|
Warehouse |
89 |
|
82 |
|
Administration |
45 |
|
40 |
|
|
|
|
|
|
139 |
|
127 |
|
|
|
|
|
|
|
|
|
6 |
Interest payable |
2023 |
|
2022 |
£ |
£ |
|
|
Other interest |
5,354 |
|
- |
|
|
|
|
|
|
|
|
|
7 |
Taxation |
2023 |
|
2022 |
£ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
1,071,074 |
|
257,097 |
|
Adjustments in respect of previous periods |
34,670 |
|
- |
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
(6,935) |
|
45,710 |
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
1,098,809 |
|
302,807 |
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
Profit on ordinary activities before tax |
4,571,606 |
|
1,515,642 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
23% |
|
19% |
|
£ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
1,051,469 |
|
287,972 |
|
|
Effects of: |
|
Capital allowances |
12,381 |
|
(3,095) |
|
Research and development relief |
34,959 |
|
- |
|
Stamp duty land tax and associated costs of |
|
property lease expensed |
- |
|
17,930 |
|
Current taxation |
1,098,809 |
|
302,807 |
|
|
|
|
|
|
|
|
|
|
8 |
Tangible fixed assets |
|
|
Leasehold improvements |
|
Computers, plant and motor vehicles |
|
Fixtures and fittings |
|
Total |
|
|
At cost |
|
At cost |
|
At cost |
£ |
£ |
£ |
£ |
|
Cost |
|
At 1 December 2022 |
164,040 |
|
851,089 |
|
67,810 |
|
1,082,939 |
|
Additions |
- |
|
97,240 |
|
- |
|
97,240 |
|
Disposals |
(99,833) |
|
(53,786) |
|
- |
|
(153,619) |
|
At 30 November 2023 |
64,207 |
|
894,543 |
|
67,810 |
|
1,026,560 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 December 2022 |
53,600 |
|
393,868 |
|
67,810 |
|
515,278 |
|
Charge for the year |
20,505 |
|
106,026 |
|
- |
|
126,531 |
|
On disposals |
(62,229) |
|
(47,704) |
|
- |
|
(109,933) |
|
At 30 November 2023 |
11,876 |
|
452,190 |
|
67,810 |
|
531,876 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 30 November 2023 |
52,331 |
|
442,353 |
|
- |
|
494,684 |
|
At 30 November 2022 |
110,440 |
|
457,221 |
|
- |
|
567,661 |
|
|
|
|
|
|
|
|
|
|
9 |
Stocks |
2023 |
|
2022 |
£ |
£ |
|
|
Finished goods and goods for resale |
11,102,696 |
|
8,387,243 |
|
|
|
|
|
|
|
|
|
|
10 |
Debtors |
2023 |
|
2022 |
£ |
£ |
|
|
Trade debtors |
12,992,329 |
|
9,880,569 |
|
Prepayments and accrued income |
153,793 |
|
84,261 |
|
Deposits paid to suppliers |
337,520 |
|
308,259 |
|
|
|
|
|
|
13,483,642 |
|
10,273,089 |
|
|
|
|
|
|
|
|
|
|
11 |
Creditors: amounts falling due within one year |
2023 |
|
2022 |
£ |
£ |
|
|
Trade creditors |
3,495,634 |
|
4,154,082 |
|
Amounts owed to group undertakings and undertakings in which the company has a participating interest |
|
111,080 |
|
113,525 |
|
Corporation tax |
1,017,302 |
|
149,852 |
|
Other taxes and social security costs |
511,953 |
|
259,125 |
|
Amount owed to associated undertaking |
13,928 |
|
3,500 |
|
Accruals |
6,481,029 |
|
4,657,751 |
|
|
|
|
|
|
11,630,926 |
|
9,337,835 |
|
|
|
|
|
|
|
|
|
|
Debtor finance is secured on the company's trade debtors. |
|
|
12 |
Creditors: amounts falling due after one year |
2023 |
|
2022 |
£ |
£ |
|
|
Accruals |
686,050 |
|
629,684 |
|
|
|
|
|
|
|
|
|
|
13 |
Deferred taxation |
2023 |
|
2022 |
£ |
£ |
|
|
Accelerated capital allowances |
38,775 |
|
45,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
|
At 1 December |
45,710 |
|
- |
|
(Credited)/charged to the profit and loss account |
(6,935) |
|
45,710 |
|
|
At 30 November |
38,775 |
|
45,710 |
|
|
|
|
|
|
|
|
|
|
|
14 |
Share capital |
Nominal |
|
2023 |
|
2023 |
|
2022 |
value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
625,000 |
|
625,000 |
|
625,000 |
|
|
|
|
|
|
|
|
|
|
|
|
15 |
Profit and loss account |
2023 |
|
2022 |
£ |
£ |
|
|
At 1 December |
11,763,655 |
|
10,550,820 |
|
Profit for the financial year |
3,472,797 |
|
1,212,835 |
|
|
At 30 November |
15,236,452 |
|
11,763,655 |
|
|
|
|
|
|
|
|
|
|
|
16 |
Pension commitments |
|
|
The company contributes to defined contribution pension schemes on behalf of its employees. The assets of the schemes are held separately from those of the company in independently administered funds. The annual pension commitment under those schemes are for contributions of £105,816 (2022:£86,996). |
|
|
17 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases: |
|
|
|
|
|
|
|
Land and buildings |
|
Land and buildings |
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
Falling due: |
|
within one year |
685,980 |
|
1,204,792 |
|
within two to five years |
1,600,620 |
|
2,697,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,286,600 |
|
3,902,119 |
|
|
|
|
|
|
|
|
|
18 |
Contingent liabilities |
|
|
The company takes part in a group financial facility with the HSBC Bank which involves cross guarantees with all companies within the British Gaskets Group including the associated company B G Automotive Limited. Total group indebtedness at 30 November 2023, including that of B G Automotive Limited, was £ nil . |
|
|
19 |
Related party transactions |
|
|
The related parties are: |
|
a) 4BG Group Limited |
|
b) British Gaskets Limited |
|
c) British Seals and Rubber Mouldings Limited |
|
d) B G Packaging Limited |
|
e) Bovill & Boyd (Technical Mouldings) Limited |
|
f) Bovill & Boyd (Engineering) Limited |
|
|
|
|
|
|
2023 |
|
2022 |
£ |
£ |
|
During the year the company had the following transactions with: |
|
|
British Gaskets Limited (fellow subsidiary) |
|
- Amount due to British Gaskets Limited |
76,080 |
|
78,524 |
|
- Management charge from British Gaskets Limited |
120,000 |
|
119,975 |
|
|
British Seals and Rubber Mouldings Limited (fellow subsidiary) |
|
- Amount due to British Seals and Rubber Mouldings Limited |
35,000 |
|
35,000 |
|
|
B G Packaging (associated company) |
|
- Rent paid to B G Packaging Limited |
316,000 |
|
474,000 |
|
- Amount due to B G Packaging Limited |
13,928 |
|
3,500 |
|
20 |
Parent undertaking and controlling party |
|
|
The company is a subsidiary of 4BG Group Limited. |
|
|
The ultimate controlling party is R D Jones. |
|
21 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
22 |
Legal form of entity and country of incorporation |
|
|
B G Automotive Limited is a private company limited by shares and incorporated in England. |
|
23 |
Principal place of business |
|
|
The address of the company's principal place of business is: |
|
|
Metro Building |
|
Arkwright Road |
|
Groundwell Industrial Estate |
|
Swindon |
|
England |
|
SN25 5AB |