Company registration number 11960396 (England and Wales)
CHESHIRE 3 HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CHESHIRE 3 HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Mr S G Dykes
Mr I Hensall
Mr C A Hargreaves
Mr M A Robertson
Company number
11960396
Registered office
Unit 4 Lockheed Road
Burtonwood
Warrington
WA5 4AH
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
CHESHIRE 3 HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 11
Group statement of comprehensive income
12
Group statement of financial position
13
Company statement of financial position
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the financial statements
18 - 37
CHESHIRE 3 HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Review of the business

The principal activity of the company is that of a holding company.

 

Haydock Commercial Vehicles Limited

The principal activity of the trading subsidiary company, Haydock Commercial Vehicles Limited ('Haydock'), continues to be a Scania truck franchise dealer which provides truck sales and aftersales services for trucks and ancillary equipment within the heavy truck market.

 

In the year ended 31 December 2023, the turnover of Haydock 66.5% from £179m to £298m. New vehicle sales increased by 90% due to increased Scania fleet vehicle retail volumes.

 

The used vehicle market anticipated an increase in volume numbers for the year. The used vehicle department did not achieve its overall revenue target and the sales volume target.

 

Used vehicle sales increased by 0.7% on the prior year. The overall gross contribution decreased on prior year.

 

In aftersales there was an increase in both service and parts revenues, service sales increased by 9.6% and parts by 9.5% on the prior year along with a margin increase on the prior year.

 

The group recognises key performance indicators (KPI’s) as an integral part of monitoring the progress of the business. KPI’s are identified in the annual business plan and appropriate targets set. KPI targets are set for the Sales, service and parts operations which are closely monitored.

 

The increase in trade debtors is due to an increase in retail debtors at year end. The net assets have moved in line with profit and dividends in the year.

 

The increase in trade creditors is due to the increase in new vehicle stock at year end.

 

The group continues to make improvements to the properties to meet the dealer standards.

 

The cash balance remains strong at the year end. The group policy is to have internally generated cash and committed bank facilities to satisfy working capital requirements. Cash flow forecasts are prepared on a daily basis.

 

The management continue to monitor closely non-financial KPI’s including employee head count, staff turnover, technical training and all other Dealer Operating Standards. Management have reviewed these KPI’s and confirm that the group’s performance against these is satisfactory for the year.

Principal risks and uncertainties

The principal risk to the group is the reliance on a single manufacturer franchise for the majority of the business activities. The group has a franchise agreement with Scania Great Britain Limited. The commercial vehicle sector remains competitive both locally and nationally.

 

Credit risk is mitigated by the diversity and volume of different customers who operate across a wide range of industry sectors with no reliance on any one customer or sector. The group maintains contact with customers regularly reviews limits, terms and aged debtors. The group has credit insurance in place.

 

The group is considered an essential supplier to certain businesses in the logistics and transport sectors. We anticipate that there will be strong demand from these sectors, which are considered essential industries, and therefore demand within these industries has not been negatively impacted.

CHESHIRE 3 HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments

The group is continuing with investment in capital expenditure.

 

The new and used vehicle sales remain in a competitive market and the group’s objectives are to increase the volumes in both new and used vehicles. The aftersales forecasts are to optimise the margins through productivity and efficiencies. Activity levels and customer confidence remain strong and the group is always looking for market opportunities for growth.

Key performance indicators

The group’s key performance indicators are as follows:

 

 

2023

2022

 

 

 

Turnover

£298m

£179m

Operating profit

£8.6m

£8.4m

Profit after tax

£5.8m

£6.2m

 

CHESHIRE 3 HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
S172 Report

This section acts as the group’s Section 172 statement. In accordance with the Companies Act 2006. This section also constitutes with the group’s statements on engagement with, and having due regard and interest for our employees and other key stakeholders.

 

The principal aim of the group is to make sufficient profit from its trading operations to sustain its commercial viability, to finance its continued development and to undertake other activities consistent with its ultimate purpose. In setting out the strategic direction the directors, in carrying out their duties also take into account the principal risks facing the business.

 

Stakeholders

Our key stakeholders are our employees who are at the heart of our purpose and work to service our customers. We are focused on responding to the needs of, and building long-term relationships with our customers. Other key stakeholders are the producers and suppliers of the goods we purchase from and the communities in which we operate.

 

Decision making

Key decisions are made by the board of directors and are presented at Board and executive meetings. Directors are briefed on any potential impacts and risks from our customers, employees and other stakeholders including our suppliers, the community and environment and how they are to be managed. The Directors take these factors into account before making a final decision which together they believe is in the best interests of the group and its employees.

 

Long-term sustainability

We aim to make sufficient profit to sustain the group’s commercial viability, with consideration to the needs of our customers, employees and other stakeholders and the community. This is to ensure we are conducting all our business relationships with integrity. The long term sustainability is key to the decision making especially in challenging times since the Coronavirus pandemic.

 

Employees

The talent and hard work of the people within the group is recognised as one of the business’s most valuable assets. Hearing employee’s opinions and ensuring they are taken into account in decision-making is crucial to the long term sustainability of the group. Directors engage with employees in many different ways, including regular dialogue, email updates and company newsletters.

 

Customers

The main focus of the business is to achieve excellent customer service. The feedback comes from regular communication with our customers. The franchise holder sets customer standards which are independently measured and reported to the franchise holder.

 

Producers and suppliers

We work closely with our producers of Scania trucks and supply chain. The main supplier being Scania the manufacturer of the truck we sell and the supplier of the truck parts we sell. Performance of the main supplier Scania are measured in all areas of their supply chain such as lead times on new trucks supplied to lead times of the replacement parts. Scania have measures to prevent modern slavery in its business and supply chains.

 

CHESHIRE 3 HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

On behalf of the board

Mr S G Dykes
Director
26 June 2024
CHESHIRE 3 HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

Principal activities

The principal activity of the company continued to be that of a holding company.

 

The principal activities of the group consist of the sale of commercial vehicles, the servicing of commercial vehicles and the sale of parts.

Results and dividends

The results for the year are set out on page 12.

Ordinary dividends were paid amounting to £4,750,000. The directors do not recommend payment of a further dividend.

Directors

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

Mr S G Dykes
Mr I Hensall
Mr G A Bumford
(Resigned 16 January 2023)
Mr C A Hargreaves
Mr M A Robertson
Qualifying third party indemnity provisions

The group has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Business relationships

In accordance with section 172 of the Companies Act, the group has a requirement to report on a need to foster the group's business relationships with suppliers, customers and others. The relationships are considered in the decision making of the group, the details of which are included in the strategic report.

Auditor

Following the merger of MHA Moore & Smalley with MHA, the company's independent auditor has now become MHA. The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

We measure and report on energy use and carbon emissions in compliance with SECR covering energy use and associated emissions relating to gas and electricity and other fuels with intensity ratio’s and information relating to energy efficiency actions. SECR reporting is implemented in the Companies (Directors report) and LLP Partnerships 2018 regulations.

2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
2,141,946
1,989,858
CHESHIRE 3 HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
217.73
190.53
- Fuel consumed for owned transport
50.82
58.46
268.55
248.99
Scope 2 - indirect emissions
- Electricity purchased
192.17
182.95
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
-
-
Total gross emissions
460.72
431.94
Intensity ratio
kgCO2e per square foot
4.49
4.51
Quantification and reporting methodology

Methodology was used in conjunction with government GHG reporting conversion factors.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per square foot.

Measures taken to improve energy efficiency

We are committed to responsible energy management and will practise energy efficiency throughout Cheshire 3 Holdings group, wherever it is cost effective. We recognise that the climate change is one of the most serious environmental challenges currently threatening the global community and we understand that we have a role to play in reducing greenhouse gas emissions. We will establish a strong focus on continuous improvements and initiatives regarding our processes and services to improve our energy performance.

 

We have implemented the improvement and policies below for the purpose of increasing the businesses energy efficiency in 2023:

 

Strategic report

The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the Directors' report. It has done so in respect of future developments and financial instruments.true

Statement of disclosure to auditor

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

CHESHIRE 3 HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
On behalf of the board
Mr S G Dykes
Director
26 June 2024
CHESHIRE 3 HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CHESHIRE 3 HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CHESHIRE 3 HOLDINGS LIMITED
- 9 -
Opinion

We have audited the financial statements of Cheshire 3 Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and 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 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.

CHESHIRE 3 HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHESHIRE 3 HOLDINGS LIMITED
- 10 -

Opinions on other matters prescribed by the Companies Act 2006

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

 

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

Matters on which we are required to report by exception

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:

CHESHIRE 3 HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CHESHIRE 3 HOLDINGS LIMITED
- 11 -

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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

Use of our report

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

Virginia Cooper FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
28 June 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
CHESHIRE 3 HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
Turnover
3
297,957,931
178,964,237
Cost of sales
(275,399,714)
(157,301,544)
Gross profit
22,558,217
21,662,693
Administrative expenses
(13,968,887)
(13,254,492)
Operating profit
4
8,589,330
8,408,201
Interest receivable and similar income
8
59,156
1,485
Interest payable and similar expenses
9
(883,833)
(635,939)
Profit before taxation
7,764,653
7,773,747
Tax on profit
10
(1,984,671)
(1,602,217)
Profit for the financial year
25
5,779,982
6,171,530
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
CHESHIRE 3 HOLDINGS LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
12
3,854,540
4,227,452
Tangible assets
13
7,872,889
7,833,844
11,727,429
12,061,296
Current assets
Stocks
16
75,641,620
34,339,631
Debtors
17
15,008,813
8,903,614
Cash at bank and in hand
9,245,807
10,926,149
99,896,240
54,169,394
Creditors: amounts falling due within one year
18
(91,676,185)
(44,574,727)
Net current assets
8,220,055
9,594,667
Total assets less current liabilities
19,947,484
21,655,963
Creditors: amounts falling due after more than one year
19
(2,177,709)
(4,072,623)
Provisions for liabilities
Provisions
21
294,177
294,177
Deferred tax liability
22
611,123
572,220
(905,300)
(866,397)
Net assets
16,864,475
16,716,943
Capital and reserves
Called up share capital
24
390
412
Capital redemption reserve
25
22
-
0
Other reserves
25
3,322,524
3,322,524
Profit and loss reserves
25
13,541,539
13,394,007
Total equity
16,864,475
16,716,943
The financial statements were approved by the board of directors and authorised for issue on 26 June 2024 and are signed on its behalf by:
26 June 2024
Mr S G Dykes
Director
Company registration number 11960396 (England and Wales)
CHESHIRE 3 HOLDINGS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 14 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
4,865,638
5,044,279
Investments
14
26,167,107
26,167,107
31,032,745
31,211,386
Current assets
Debtors
17
2
-
0
Cash at bank and in hand
2,023
-
0
2,025
-
0
Creditors: amounts falling due within one year
18
(44,828)
(620,148)
Net current liabilities
(42,803)
(620,148)
Total assets less current liabilities
30,989,942
30,591,238
Creditors: amounts falling due after more than one year
19
(6,889,878)
(5,537,235)
Provisions for liabilities
Deferred tax liability
22
251,598
249,475
(251,598)
(249,475)
Net assets
23,848,466
24,804,528
Capital and reserves
Called up share capital
24
390
412
Capital redemption reserve
25
22
-
0
Other reserves
25
3,322,524
3,322,524
Profit and loss reserves
25
20,525,530
21,481,592
Total equity
23,848,466
24,804,528

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes as it prepares group accounts. The company’s profit for the year was £4,676,389 (2022 - £5,283,115 profit).

The financial statements were approved by the board of directors and authorised for issue on 26 June 2024 and are signed on its behalf by:
26 June 2024
Mr S G Dykes
Director
Company registration number 11960396 (England and Wales)
CHESHIRE 3 HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Capital redemption reserve
Merger reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
412
-
0
3,322,524
7,222,477
10,545,413
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
-
6,171,530
6,171,530
Balance at 31 December 2022
412
-
0
3,322,524
13,394,007
16,716,943
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
5,779,982
5,779,982
Dividends
11
-
-
-
(4,750,000)
(4,750,000)
Own shares acquired
-
-
-
(882,450)
(882,450)
Redemption of shares
24
(22)
22
-
-
-
0
Balance at 31 December 2023
390
22
3,322,524
13,541,539
16,864,475
CHESHIRE 3 HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Capital redemption reserve
Merger reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
412
-
0
3,322,524
16,198,476
19,521,412
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
5,283,116
5,283,116
Balance at 31 December 2022
412
-
0
3,322,524
21,481,592
24,804,528
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
4,676,388
4,676,388
Dividends
11
-
-
-
(4,750,000)
(4,750,000)
Own shares acquired
-
-
-
(882,450)
(882,450)
Redemption of shares
24
(22)
22
-
-
-
0
Balance at 31 December 2023
390
22
3,322,524
20,525,530
23,848,466
CHESHIRE 3 HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
10,041,984
7,149,846
Interest paid
(883,833)
(635,939)
Income taxes paid
(2,103,903)
(1,216,605)
Net cash inflow from operating activities
7,054,248
5,297,302
Investing activities
Purchase of tangible fixed assets
(924,370)
(640,841)
Proceeds from disposal of tangible fixed assets
196,450
52,624
Interest received
59,156
1,485
Net cash used in investing activities
(668,764)
(586,732)
Financing activities
Purchase of own shares
(882,450)
-
0
Repayment of borrowings
-
(2,134,124)
Repayment of bank loans
(2,432,690)
(576,924)
Dividends paid to equity shareholders
(4,750,000)
-
0
Net cash used in financing activities
(8,065,140)
(2,711,048)
Net (decrease)/increase in cash and cash equivalents
(1,679,656)
1,999,522
Cash and cash equivalents at beginning of year
10,925,463
8,925,941
Cash and cash equivalents at end of year
9,245,807
10,925,463
Relating to:
Cash at bank and in hand
9,245,807
10,926,149
Bank overdrafts included in creditors payable within one year
-
(686)
CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
1
Accounting policies
Company information

Cheshire 3 Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of Cheshire 3 Holdings Limited and all of its subsidiaries.

 

The company's and the group's principal activities and nature of its operations are disclosed in the Directors' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006, including the provisions of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008.

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

 

The financial statements of the company are consolidated in these group financial statements.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.2
Basis of consolidation

The consolidated financial statements incorporate those of Cheshire 3 Holdings Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

 

Any non-controlling interest in the acquiree is recognised at the non-controlling interest’s share of the acquiree’s net identifiable assets, liabilities and provisions for contingent liabilities recognised at the acquisition date.

 

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.3
Going concern

In determining the appropriateness of the going concern assessment the directors have taken into account the following matters:

 

 

The future financial position and the results of operations, the business remains profitable. Given the financial strength of the group, the varied nature of industries we sell to, and with continued focus on credit risk and cost control, the Board are confident that there will be no impact the going concern status of the group, and therefore have prepared the financial statements on a going concern basis.

 

The directors have prepared forecasts for Haydock Commercial Vehicles Limited (the main trading entity of the group), for the period of at least 12 months from the signing of these financial statements, which demonstrate that the company and group can continue to operate within its available financial resources. The group continues to rely on strong, long term relationships with Scania and its bankers.

 

Haydock Commercial Vehicles Limited has confirmed it intends on provide financial assistance to enable Cheshire 3 Holdings Limited to meet their liabilities to third parties as and when they fall due and that no demand for repayment will be made in respect of intercompany amounts owing to Haydock Commercial Vehicles Limited until at least 12 months from date of signing the financial statements for the year ended 31 December 2023. Additionally the directors have confirmed that Haydock Commercial Vehicles Limited has the financial resources and capacity to meet these demands as and when they fall due.

 

The directors have concluded that, at the time of preparing these financial statements that the group has adequate financial resources to continue in operational existence for at least 12 months from the date of signing these financial statements. The directors therefore continue to adopt the going concern basis in preparing these financial statements.

1.4
Turnover

Turnover is derived from the provision of goods and services to customers during the period. Turnover is shown net of value added tax.

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

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years.

 

Amortisation is recognised within administrative expenses.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Freehold land and buildings
25 years straight line
Leasehold improvements
5% - 10% straight line
Plant and equipment
20% reducing balance/20% - 33.33% straight line
Motor vehicles
25% straight line

Assets in the course of construction are not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.7
Fixed asset investments

In the separate accounts of the company, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets, are treated as a revaluation loss. All other impairment losses are recognised in profit or loss.

 

Any impairment loss recognised for goodwill is not reversed. For fixed assets other than goodwill, recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in profit or loss or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset’s revised carrying amount (less any residual value) over its remaining useful life

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
1.9
Stocks

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

 

Consignment vehicles are regarded as being effectively under the control of the group and are included within inventories on the balance sheet as the group has the significant risks and rewards of ownership even though legal title has not yet passed. The corresponding liability is included in trade creditors

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

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

1.11
Financial instruments

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

 

Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method.

Impairment of financial assets

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

 

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

 

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

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Interest expense is recognised on the basis of the effective interest method and is included in interest payable and other similar expenses.

1.12
Equity instruments

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

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. Current tax assets are recognised when tax paid exceeds the tax payable.

 

Current and deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.

 

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.

Current tax

Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date.

 

Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

1.14
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.15
Employee benefits

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

 

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

 

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

1.16
Retirement benefits

For defined contribution schemes the amount charged to profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either other creditors or other debtors.

1.17
Leases

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

1.18

Repairs and maintenance contracts

Amounts received on all repair and maintenance agreements, are accumulated in a vehicle maintenance account on the balance sheet, with relevant costs being set against the income incurred. Where a contract shows an actual or foreseeable deficit at the end of a financial year which is not expected to reverse, the additional costs are recognised and charged to the profit or loss. Except for the above, where contracts will continue beyond the end of the financial year, the balance is carried forward to the following year and any remaining amounts are released to profit or loss at the end of the contract.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Categorisation of leases

In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the group as lessee.

Repairs and maintenance contracts

Management make judgements on an annual basis as to whether a contract is expected to generate a deficit and if so additional costs are recognised and written off to profit or loss.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful life of fixed assets

In making decisions regarding the depreciation of fixed assets, management must estimate the useful life of said assets to the business. A change in estimate would result in a change in the depreciation charged to profit or loss in each year. The net book value of fixed assets at the year end was £7,872,889 (2022 - £7,833,844). Depreciation charged during the year was £754,583 (2022 - £752,435).

Provisions against stock

Used vehicle stocks are written down to their estimated market values which is deemed a key area of estimation by the directors. The carrying value of used vehicle stock at the year end is estimated to be £4,554,564 (2022 - £5,405,468) stated after provisions of £1,321,836 (2022 - £1,426,358).

Dilapidations provisions

A provision for dilapidations is recognised when the group has an obligation to restore leased property to its original condition upon expiry of the lease, and the amount of the restoration costs can be reliably estimated. The directors deem this to be a key area of estimation. At the year end the provision is estimated to be £294,177 (2022 - £294,177).

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Vehicle sales
258,470,006
142,924,390
Service and parts sales
39,487,925
36,039,847
297,957,931
178,964,237
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
294,554,431
175,049,087
Rest of the world
3,403,500
3,915,150
297,957,931
178,964,237
2023
2022
£
£
Other revenue
Interest income
59,156
1,485
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
754,583
752,435
Profit on disposal of tangible fixed assets
(65,708)
(7,264)
Amortisation of intangible assets
372,912
372,912
Operating lease charges
588,327
601,675
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
22,000
20,000
Audit of the financial statements of the company's subsidiaries
13,250
12,000
35,250
32,000
For other services
All other non-audit services
9,000
7,400
CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Management
18
19
-
-
Admin, service and distribution
216
220
-
-
Total
234
239
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
10,775,879
10,639,989
-
0
-
0
Social security costs
1,145,954
1,176,627
-
-
Pension costs
430,262
372,471
-
0
-
0
12,352,095
12,189,087
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
637,144
1,068,162
Company pension contributions to defined contribution schemes
39,968
44,907
677,112
1,113,069

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 4).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
233,087
316,380
Company pension contributions to defined contribution schemes
27,855
27,855
CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
59,156
1,485
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
93,078
102,697
Other interest on financial liabilities
790,755
533,242
Total finance costs
883,833
635,939
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,945,768
1,603,902
Adjustments in respect of prior periods
-
0
5,561
Total current tax
1,945,768
1,609,463
Deferred tax
Origination and reversal of timing differences
36,600
(5,508)
Changes in tax rates
2,303
(1,738)
Total deferred tax
38,903
(7,246)
Total tax charge
1,984,671
1,602,217

Corporation tax is calculated at 23.52% (2022 - 19.00%) of the estimated assessable profit for the year. In the 3 March 2021 Budget it was announced that the UK tax rate will increase to 25% from 1 April 2023 and this rate was substantively enacted on 24 May 2021. Deferred tax balances at the year-end have been measured at 25% (2022 - 25%).

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 29 -

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

2023
2022
£
£
Profit before taxation
7,764,653
7,773,747
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,826,289
1,477,012
Tax effect of expenses that are not deductible in determining taxable profit
116,260
99,275
Effect of change in corporation tax rate
2,303
(1,738)
Under/(over) provided in prior years
-
0
5,561
Timing differences in respect of tangible fixed assets
39,819
22,107
Taxation charge
1,984,671
1,602,217
11
Dividends
2023
2022
Recognised as distributions to equity holders:
£
£
Final paid
4,750,000
-
12
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
5,593,676
Amortisation and impairment
At 1 January 2023
1,366,224
Amortisation charged for the year
372,912
At 31 December 2023
1,739,136
Carrying amount
At 31 December 2023
3,854,540
At 31 December 2022
4,227,452
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
13
Tangible fixed assets
Group
Freehold land and buildings
Leasehold improvements
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
4,250,000
3,264,806
1,295,152
1,159,551
9,969,509
Additions
-
0
361,816
137,778
424,776
924,370
Disposals
-
0
-
0
(206,329)
(398,906)
(605,235)
At 31 December 2023
4,250,000
3,626,622
1,226,601
1,185,421
10,288,644
Depreciation and impairment
At 1 January 2023
521,704
277,456
764,351
572,154
2,135,665
Depreciation charged in the year
171,685
125,296
180,909
276,693
754,583
Eliminated in respect of disposals
-
0
-
0
(185,991)
(288,502)
(474,493)
At 31 December 2023
693,389
402,752
759,269
560,345
2,415,755
Carrying amount
At 31 December 2023
3,556,611
3,223,870
467,332
625,076
7,872,889
At 31 December 2022
3,728,296
2,987,350
530,801
587,397
7,833,844
Company
Freehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
5,666,835
159,977
5,826,812
Depreciation and impairment
At 1 January 2023
629,512
153,021
782,533
Depreciation charged in the year
171,685
6,956
178,641
At 31 December 2023
801,197
159,977
961,174
Carrying amount
At 31 December 2023
4,865,638
-
0
4,865,638
At 31 December 2022
5,037,323
6,956
5,044,279
14
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
26,167,107
26,167,107
CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Fixed asset investments
(Continued)
- 31 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
26,167,107
Carrying amount
At 31 December 2023
26,167,107
At 31 December 2022
26,167,107
15
Subsidiary

Details of the company's subsidiary at 31 December 2023 are as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Haydock Commercial Vehicles Limited
1
Sale of commercial vehicles
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
The registered office of the above subsidiary overtakings is Unit 4, Lockheed Road, Burtonwood, Warrington, WA5 4AH.
16
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
New vehicles
68,450,088
26,401,039
-
-
Used vehicles
4,576,775
5,405,468
-
-
Parts
2,614,757
2,533,124
-
0
-
0
75,641,620
34,339,631
-
-

Included within stock is a provision for slow moving and obsolete stock of £1,433,728 (2022 - £1,522,814), the movement in the year of £89,084 (2022 - £564,301) relates to the utilisation of the provision of £597,490 (2022 - £390,333) and additional provisions of £508,406 (2022 - £954,634).

 

New vehicle stock is held on consignment with a corresponding credit included within trade creditors. The creditors are secured over the related vehicles.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
17
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
7,158,933
6,987,554
-
0
-
0
Other debtors
7,264,877
1,360,389
2
-
0
Prepayments and accrued income
585,003
555,671
-
0
-
0
15,008,813
8,903,614
2
-

Trade debtors are stated after provision for bad and doubtful debts of £52,544 (2022 - £55,977).

18
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
-
0
577,610
-
0
577,610
Trade creditors
83,837,620
38,071,748
-
0
-
0
Corporation tax payable
945,767
1,103,902
44,828
34,038
Other taxation and social security
416,100
502,917
-
-
Other creditors
6,387,159
3,777,313
-
0
-
0
Accruals and deferred income
89,539
541,237
-
0
8,500
91,676,185
44,574,727
44,828
620,148

Trade creditors relating to used vehicles of £53,400 (2022 - £14,466) are secured against the stocks to which they relate.

19
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
20
-
0
1,855,766
-
0
1,855,766
Amounts owed to group undertakings
-
0
-
0
6,889,878
3,681,469
Other creditors
2,177,709
2,216,857
-
0
-
0
2,177,709
4,072,623
6,889,878
5,537,235

Group creditors are interest free and repayable with 13 months notice.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
20
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
-
0
2,432,690
-
0
2,432,690
Bank overdrafts
-
0
686
-
0
686
-
2,433,376
-
2,433,376
Payable within one year
-
0
577,610
-
0
577,610
Payable after one year
-
0
1,855,766
-
0
1,855,766

Bank loans were repaid in full during the year. Interest was charged at 2.25% above Bank of England base rate.

 

Bank loans and overdrafts were secured by fixed and floating charges over the assets of the company dated 1 October 2019 in favour of HSBC Bank Plc as at the previous reporting date. This charge was satisfied in full during the year.

21
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Dilapidations provision
294,177
294,177
-
-
Movements on provisions:
Dilapidations provision
Group
£
At 1 January 2023 and 31 December 2023
294,177

The dilapidations provision represents management's best estimate of the group's liability to put leasehold properties right at the end of the lease under lease contracts where repairs have been made to the space occupied, where this is a requirement of the lease agreement. This is expected to be utilised at the end of the lease contracts in place.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
22
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
636,479
593,571
Other timing differences
(25,356)
(21,351)
611,123
572,220
Liabilities
Liabilities
2023
2022
Company
£
£
Accelerated capital allowances
251,598
249,475
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
572,220
249,475
Charge to profit or loss
36,600
1,997
Effect of change in tax rate - profit or loss
2,303
126
Liability at 31 December 2023
611,123
251,598

The majority of the deferred tax liability above relates to accelerated capital allowances. It is expected to reverse over the useful lives of the assets to which it relates.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
430,262
372,471

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

 

There were outstanding contributions included in other creditors amounting to £53,954 at the end of the year (2022 - £49,219).

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
44
66
44
66
Ordinary B shares of £1 each
346
346
346
346
390
412
390
412

The company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings of the company.

 

On 16 January 2023, the company purchased 22 A Ordinary £1 shares from a director. The shares were subsequently cancelled.

25
Reserves
Capital redemption reserve

Par value of shares repurchased by the company.

Merger reserve

The acquisition of Cheshire 2 Holdings Limited was achieved by issuing equity shares in Cheshire 3 Holdings Limited as part of the consideration for the acquisition of 94.5% of the shares in Cheshire 2 Holdings Limited. The difference between the fair value and the nominal value of the shares issued was £3,222,524, and as this transaction met the requirements, management have chose to apply merger relief and £3,222,524 has been credited to reserves.

Profit and loss reserves

Cumulative profit and loss, net of distributions to owners.

26
Financial commitments, guarantees and contingent liabilities

There is a guarantee in favour of Driver & Vehicle Licensing Agency (DVLA) for £200,000 (2022 - £200,000).

 

There were fixed and floating charges over all assets of the group dated 1 October 2019 at the previous reporting date. This charge was satisfied in full during the year.

 

The group has given commitments to repurchase vehicles from customers. These commitments amount to £8,287,500 (2022 - £3,994,268) and may crystallise at various times within the next 5 years. The directors are confident of selling these vehicles as part of normal business activities at a value not significantly different from their repurchase price. An estimate of the exposure between the repurchase price and the market value at the buyback date of £Nil (2022 - £23,000) has been included in accruals.

CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
27
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
806,538
616,680
-
-
Between two and five years
2,832,965
1,837,398
-
-
In over five years
10,031,663
6,085,754
-
-
13,671,166
8,539,832
-
-
Lessor

The operating leases represent leases to the subsidiary company.

At the reporting end date the group had contracted with tenants for the following minimum lease payments:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
-
-
249,996
249,996
Between two and five years
-
-
999,984
999,984
In over five years
-
-
3,562,443
3,812,439
-
-
4,812,423
5,062,419
28
Controlling party

The director, Mr S G Dykes, is considered to be the controlling party, being the majority shareholder of the company.

29
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
1,026,566
1,241,740
CHESHIRE 3 HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
29
Related party transactions
(Continued)
- 37 -
Transactions with related parties

The total remuneration of close family members of members of key management personnel was £148,581 (2022 - £147,813).

 

During the year the group was charged rent of £483,040 (2022 - £483,040), consultancy of £120,000 (2022 - £185,000) and legal fees of £Nil (2022 - £2,055) to companies with common shareholders. The company made sales of £235,672 (2022 - £161,129) to entities with common shareholders. At the balance sheet date the amount owed by those entities was £Nil (2022 - £Nil).

 

During the previous year, loan note repayments totalling £2,235,256 were made to key management personnel. No interest was charged on these loan notes and no balances were outstanding at the current or previous reporting dates.

30
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
5,779,982
6,171,530
Adjustments for:
Taxation charged
1,984,671
1,602,217
Finance costs
883,833
635,939
Investment income
(59,156)
(1,485)
Gain on disposal of tangible fixed assets
(65,708)
(7,264)
Amortisation and impairment of intangible assets
372,912
372,912
Depreciation and impairment of tangible fixed assets
754,583
752,435
Movements in working capital:
Increase in stocks
(41,301,989)
(10,651,196)
Increase in debtors
(6,105,199)
(2,410,842)
Increase in creditors
47,798,055
10,685,600
Cash generated from operations
10,041,984
7,149,846
31
Analysis of changes in net funds - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
10,926,149
(1,680,342)
9,245,807
Bank overdrafts
(686)
686
-
0
10,925,463
(1,679,656)
9,245,807
Borrowings excluding overdrafts
(2,432,690)
2,432,690
-
8,492,773
753,034
9,245,807
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