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COMPANY REGISTRATION NUMBER:
SC287764
A M Phillip Trucktech Limited |
|
A M Phillip Trucktech Limited |
|
Year ended 31 December 2023
Officers and professional advisers |
1 |
|
|
Directors' responsibilities statement |
6 |
|
|
Independent auditor's report to the members |
7 |
|
|
Statement of income and retained earnings |
11 |
|
|
Statement of financial position |
12 |
|
|
Notes to the financial statements |
13 |
|
|
A M Phillip Trucktech Limited |
|
Officers and Professional Advisers |
|
The board of directors |
G K Phillip |
|
T S Hally |
|
A Cormack |
|
A M Phillip |
|
G W Phillip |
|
R A McWilliam |
|
|
Company secretary |
A M Phillip |
|
|
Registered office |
Muiryfaulds |
|
Forfar |
|
DD8 1XP |
|
|
Auditor |
FourM Limited |
|
Chartered Accountants & Statutory Auditor |
|
Stannergate House |
|
41 Dundee Road West |
|
Broughty Ferry |
|
Dundee |
|
DD5 1NB |
|
|
Bankers |
The Royal Bank of Scotland PLC |
|
3 High Street |
|
Dundee |
|
DD1 9LY |
|
|
Solicitors |
MacHardy Alexander & Whyte, W.S. |
|
71 Castle Street |
|
Forfar |
|
Angus |
|
DD8 3AG |
|
|
A M Phillip Trucktech Limited |
|
Year ended 31 December 2023
The directors present their Strategic Report for the year ended 31 December 2023.
Principal activities and review of the business
The principal operational activities of A.M. Phillip Trucktech Limited ("the company") continues to be the sale of new and used vans, trucks and minibuses, combined with the associated provision of a vast range of support services including parts supply/delivery and maintenance/servicing of new and used vehicles. The company's turnover increased by 15% to £72.9m (2022 - £63.4m) and the company has recorded an operating profit of £1,616,394 compared with an operating profit of £1,368,196 in 2022. The first 6 months of 2023 started in the same vein as 2022 with sales and profitability margins within expected targets. During the second half of the year the business incurred significant losses due to excess stock sitting on the balance sheet and the associated stocking interest charges. These costs rose from £440K to £1.38M. The cost-of-living crisis has also had a major impact on the business during the year; A M Phillip Trucktech is heavily reliant on a highly skilled workforce for which demand increased. As a result, the business was forced into significant pay increases throughout the year in order to maintain productivity in the workshops. Vehicle sales orders increased in 2023 by 6.5% on 2022, especially given the focus required to bring stock levels down throughout the year. Unit levels invoiced increased 19% largely contributing to the overall increase in turnover. The increase in volume saw profit per unit sacrificed which fell around £200 per vehicle on average. After sales growth continued with parts turnover up 23.8% and operating profits up 20.7%. The Distrago parts line taken on towards the end of 2022 has had a dramatic impact on turnover as it has been rolled out across the group. Turnover is anticipated to increase further in this line. Workshop activities were busier with more hours sold but recovery rates did not increase in line with salary increases which hit operating profits. Manufacturers started to recognise the warranty rates were low in in comparison to salary costs and put in place increases later in the year and also announced further increases for the start of 2024.
Principal risks and uncertainties
Liquidity Risk The company aims to mitigate liquidity risk by managing cash generated by its operations and having access to adequate working capital borrowing facilities. Cash resources are formally monitored weekly to ensure funds are always available to meet company requirements. Credit Risk The company undertakes periodic assessments of its external debtors in order to ensure that credit is not extended if there is any likelihood of default. The amount of exposure to individual customers is subject to a limit, and this is reviewed regularly by the credit control department and reporting to the directors in order to minimise any bad debts. Interest Rate Risk The company may make use of bank borrowings to finance its operations during peak trading periods. Due to current cash resources, the directors do not deem it necessary at this time to hedge against interest rate fluctuations. FINANCIAL PERFORMANCE INDICATORS The company measures its ongoing performance at every activity level against annual budgets, manufacturer composite information and certain key performance indicators, including working capital controls. These are reviewed at monthly management meetings at each depot.
Results for the year
The loss for the year, after taxation, amounted to £127,813 (2022 - profit of £728,688).
Development and performance of company's business over the year
The company continued with its principal activities based around the commercial vehicle sales and after sales services.
Position at the year end
The company's financial performance was challenging during the second half of 2023 although with the sales order book looking healthy and month-on-month order levels the directors are confident that this will lead to the sell-out of stock holding and return to first half profit levels seen in 2023 by Q4 2024.
Future developments
The company intends to continue to focus on its activities in the commercial motor vehicle industry throughout 2024 and into 2025 and beyond. Throughout 2023 the business faced issues with supply of vehicles requiring body builders support to complete vehicles ready for customer delivery. Manufacturers delivered vehicles in large numbers without any additional support on the finance costs leaving
A M Phillip Trucktech Limited
to absorb these interest costs whilst vehicles were completed. As there was an excess of stock throughout the UK these body builders were unable to process vehicles in a timely manner for our business compounding the stocking issue. Increasing interest rates further impacted the business in 2023. In 2024 there is an expectation that interest rates will start to slowly reduce and then accelerate in 2025. The introduction of a vehicle preparation centre has alleviated the workload on the existing workshops and an increase in higher value work is expected to be seen in 2024. Alongside this investment the business had an opportunity to acquire a local Ford Dealership, Forfar Motor Company Ltd, which has been added to the A M Phillip group. This business will form part of a long-term plan to form a standalone Ford Transit Centre site whilst the remaining area of the vehicle preparation site will be renovated into a new Head Office and Iveco site. Investment in these areas will be the primary goals of the business over the next 2 to 3 years. These sites will secure the business' future in the local area. Salary costs have levelled out during 2024, and recruitment has been only for essential purposes. The finance costs have started to reduce in 2024 in line with falling stock levels and additional support from manufacturers to assist in clearing stock. The focus remains on sell-out with stock order of vehicles kept to a minimum. Used vehicle sales have been impacted slightly by the shift in focus to new product and invoiced units is expected to be down for the first time in 4 years.
This report was approved by the board of directors on 17 September 2024 and signed on behalf of the board by:
Registered office: |
Muiryfaulds |
Forfar |
DD8 1XP |
|
A M Phillip Trucktech Limited |
|
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended
31 December 2023
.
Directors
The directors who served the company during the year were as follows:
G K Phillip |
|
T S Hally |
|
A Cormack |
|
A M Phillip |
|
G W Phillip |
|
R A McWilliam |
|
|
|
Dividends
The directors do not recommend the payment of a dividend.
Greenhouse gas emissions and energy consumption
|
Unit |
2023 |
2022 |
Emissions resulting from activities for which the company is responsible |
tCO2e |
360 |
343 |
|
|
---- |
---- |
Total emissions |
tCO2e |
360 |
343 |
Total energy consumption |
kWh |
1,842,475 |
1,754,738 |
|
|
------------ |
------------ |
|
|
|
|
Methodologies for energy and emissions calculations
The company commissioned a report from a consultant and that report uses the GHG Protocol Corporate Standard, which is internationally accepted as best practice, and applies the 2021 UK Governments Conversion Factors for Company Reporting to calculate the data provided here.
Principal measures taken to increase energy efficiency
Throughout 2023 A M Phillip has continued to look at methods to improve energy efficiency through various process changes and technological advances. These have included implementation of LED lighting where possible, energy monitoring sensors that will provide data to target savings along with changes to process that create efficiency, for example reviewing the parts delivery routes & loads. The company will look to monitor this using an intensity ratio based on their area of their depots (i.e. by square metres). However in this year and the comparative analysis has been done by employee headcount giving an intensity ratio of 2.05 tC02e annually per employee (2022: 2.15).
Disclosure of information in the strategic report
The company, in accordance with section 414C(11) of the Companies Act 2006, has chosen to include information regarding the principal risks and uncertainties facing the company and a fair review of the company's business in the directors' Strategic Report.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
-
so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on
17 September 2024
and signed on behalf of the board by:
Registered office: |
Muiryfaulds |
Forfar |
DD8 1XP |
|
A M Phillip Trucktech Limited |
|
Directors' Responsibilities Statement |
|
Year ended 31 December 2023
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
A M Phillip Trucktech Limited |
|
Independent Auditor's Report to the Members of
A M Phillip Trucktech Limited |
|
Year ended 31 December 2023
Opinion
We have audited the financial statements of A M Phillip Trucktech Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, statement of financial position 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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
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. 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: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 is 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. As part of an audit in accordance with the ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. 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 are procedures are capable of detecting irregularities, including fraud, is detailed below. In identifying and assessing the risk of material misstatement due to non-compliance with laws and regulations we have carried out the following: - Ensured that the engagement team have the appropriate competence, capabilities and skills to identify or recognise non-compliance with laws and regulations; - Identified the specific laws and regulations applicable to the entity through discussions with directors and management and through our own knowledge of the sector; - Focused on the laws and regulations we consider may have a direct effect on the financial statements, including FRS 102, the Companies Act 2006 and tax compliance legislation; - Reviewed the financial statement disclosures and tested these to supporting documentation to assess compliance with applicable laws and regulations; - Made enquiries of management; - Reviewed minutes of meetings of those charged with governance; and - Ensured the engagement team remained alert to instances of non-compliance throughout the audit. In identifying and assessing the risk of material misstatement due to irregularities, including fraud and how it may occur, the potential for management bias and the override of controls we have: - Obtained an understanding of the entity's operations, including the nature of its sources of revenue and of to understand the types of transactions, account balances, financial disclosures and business risks that may result in risk of material misstatement; - Vouched balances and reconciling items in key control account reconciliations to supporting documentation; - Carried out detailed testing, on a sample basis, to verify the completeness, existence and accuracy of transactions and balances; - Made enquiries of management as to where they consider there was a susceptibility to fraud, and their knowledge of any actual, suspected or alleged fraud; - Performed analytical procedures to identify any significant or unusual transactions; - Investigated the business rationale behind any significant or unusual transactions We did not identify any matters relating to non-compliance with laws and regulations, or relating to fraud. Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk of not detecting a material misstatement due to fraud is inherently more difficult than detecting those that result from error as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. In addition, the further removed any non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 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.
Karen Henderson MCIBS, BA(Hons), CA |
(Senior Statutory Auditor) |
|
For and on behalf of |
FourM Limited |
Chartered Accountants & Statutory Auditor |
Stannergate House |
41 Dundee Road West |
Broughty Ferry |
Dundee |
DD5 1NB |
|
17 September 2024
A M Phillip Trucktech Limited |
|
Statement of Income and Retained Earnings |
|
Year ended 31 December 2023
|
2023 |
2022 |
Note |
£ |
£ |
Turnover |
4 |
72,985,086 |
63,397,628 |
|
|
|
|
Cost of sales |
60,354,118 |
54,064,618 |
|
------------- |
------------- |
Gross profit |
12,630,968 |
9,333,010 |
|
|
|
Distribution costs |
4,534,711 |
3,390,640 |
Administrative expenses |
6,479,863 |
4,574,174 |
|
|
------------- |
------------ |
Operating profit |
5 |
1,616,394 |
1,368,196 |
|
|
|
|
Interest payable |
9 |
1,454,353 |
471,291 |
|
------------- |
------------ |
Profit before taxation |
162,041 |
896,905 |
|
|
|
|
Taxation on ordinary activities |
10 |
289,854 |
168,217 |
|
--------- |
--------- |
(Loss)/profit for the financial year and total comprehensive income |
(
127,813) |
728,688 |
|
--------- |
--------- |
|
|
|
|
Retained earnings at the start of the year |
1,354,043 |
625,355 |
|
------------ |
------------ |
Retained earnings at the end of the year |
1,226,230 |
1,354,043 |
|
------------ |
------------ |
|
|
|
All the activities of the company are from continuing operations.
A M Phillip Trucktech Limited |
|
Statement of Financial Position |
|
31 December 2023
Fixed assets
Tangible assets |
11 |
|
3,295,019 |
2,342,078 |
|
|
|
|
|
Current assets
Stocks |
12 |
26,463,389 |
|
27,225,095 |
Debtors |
13 |
5,294,732 |
|
4,474,369 |
Cash at bank and in hand |
4,751,158 |
|
6,531,632 |
|
------------- |
|
------------- |
|
36,509,279 |
|
38,231,096 |
|
|
|
|
|
Creditors: amounts falling due within one year |
14 |
36,343,244 |
|
37,729,106 |
|
------------- |
|
------------- |
Net current assets |
|
166,035 |
501,990 |
|
|
------------ |
------------ |
Total assets less current liabilities |
|
3,461,054 |
2,844,068 |
|
|
|
|
|
Creditors: amounts falling due after more than one year |
15 |
|
738,535 |
285,726 |
|
|
|
|
|
Provisions for liabilities |
17 |
|
487,039 |
195,049 |
|
|
------------ |
------------ |
Net assets |
|
2,235,480 |
2,363,293 |
|
|
------------ |
------------ |
|
|
|
|
|
Capital and reserves
Called up share capital |
20 |
|
9,250 |
9,250 |
Capital redemption reserve |
21 |
|
1,000,000 |
1,000,000 |
Profit and loss account |
21 |
|
1,226,230 |
1,354,043 |
|
|
------------ |
------------ |
Members funds |
|
2,235,480 |
2,363,293 |
|
|
------------ |
------------ |
|
|
|
|
|
These financial statements were approved by the
board of directors
and authorised for issue on
17 September 2024
, and are signed on behalf of the board by:
Company registration number:
SC287764
A M Phillip Trucktech Limited |
|
Notes to the Financial Statements |
|
Year ended 31 December 2023
1.
General information
The company is a private company limited by shares, registered in Scotland. The address of the registered office is Muiryfaulds, Forfar, DD8 1XP.
2.
Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3.
Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity. The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Going concern
The group forecasts and projections, taking account of reasonable changes in trading performance, indicate that the group plans to operate within cash generated from operations and funding streams in place. The directors confirm that, after making appropriate enquiries, they have reasonable expectation that the group and company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing these Financial Statements.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of A M Phillip Limited which can be obtained from the Scottish Registrar of Companies. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) No cash flow statement has been presented for the company.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: Stock In arriving at the valuation of the used vehicle stock it may be necessary for management to make an assessment of the carrying value of stock items and where applicable apply a provision to amend this carrying value to a more accurate level. These provisions are arrived at using management's knowledge and understanding of the business and the industry in which it operates, and mainly relate to potentially obsolete or old items where the cost may no longer be recoverable. Bad debts During the year and at the year end, management are required to determine whether any debts should be regarded as bad debts. This process is based on their knowledge of the business' customers as well as post year end information identifying prior period debts not recovered relating to the previous financial period. Accruals Management estimate requirements for accruals using post year end information and information available from detailed budgets. This identifies costs and income that are expected to be incurred or received for goods and services provided by and to other parties relating to the period reported on. Accruals are only written off when there is a reasonable expectation that these costs will not be invoiced in the future.
Revenue recognition
Turnover represents the invoiced amounts for the sale, repair and servicing of motor vehicles, stated net of value added tax.
Corporation tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
|
Tenants improvements |
- |
10% per annum on cost
|
|
Plant & Machinery |
- |
15% to 25% per annum on cost
|
|
Fixtures & Fittings |
- |
15% to 25% per annum on cost
|
|
Motor Vehicles |
- |
25% per annum on cost
|
|
|
|
|
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4.
Turnover
Turnover arises from:
|
2023 |
2022 |
|
£ |
£ |
Turnover derived in the UK |
72,985,086 |
63,397,628 |
|
------------- |
------------- |
|
|
|
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5.
Operating profit
Operating profit or loss is stated after charging/crediting:
|
2023 |
2022 |
|
£ |
£ |
Depreciation of tangible assets |
619,207 |
424,108 |
Gains on disposal of tangible assets |
(
189,959) |
(
64,438) |
Impairment of trade debtors |
(1,459) |
16,490 |
|
--------- |
--------- |
|
|
|
6.
Auditor's remuneration
|
2023 |
2022 |
|
£ |
£ |
Fees payable for the audit of the financial statements |
26,500 |
23,000 |
|
-------- |
-------- |
|
|
|
7.
Particulars of employees
The average number of persons employed by the company during the year, including the directors, amounted to:
|
2023 |
2022 |
|
No. |
No. |
Administrative staff |
34 |
37 |
Number of sales and service staff |
142 |
123 |
|
---- |
---- |
|
176 |
160 |
|
---- |
---- |
|
|
|
The aggregate payroll costs incurred during the year, relating to the above, were:
|
2023 |
2022 |
|
£ |
£ |
Wages and salaries |
6,266,529 |
5,363,623 |
Social security costs |
570,016 |
514,082 |
Staff pension costs |
152,635 |
127,969 |
|
------------ |
------------ |
|
6,989,180 |
6,005,674 |
|
------------ |
------------ |
|
|
|
8.
Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
|
2023 |
2022 |
|
£ |
£ |
Remuneration |
248,237 |
235,539 |
Company contributions to defined contribution pension plans |
15,344 |
12,245 |
|
--------- |
--------- |
|
263,581 |
247,784 |
|
--------- |
--------- |
|
|
|
The number of directors who accrued benefits under company pension plans was as follows:
|
2023 |
2022 |
|
No. |
No. |
Defined contribution plans |
3 |
3 |
|
---- |
---- |
|
|
|
Remuneration of the highest paid director in respect of qualifying services:
|
2023 |
2022 |
|
£ |
£ |
Aggregate remuneration |
99,229 |
92,239 |
Company contributions to defined contribution pension plans |
5,827 |
2,738 |
|
--------- |
-------- |
|
105,056 |
94,977 |
|
--------- |
-------- |
|
|
|
There is no distinction between directors and key management personnel.
9.
Interest payable
|
2023 |
2022 |
|
£ |
£ |
Interest on obligations under finance leases and hire purchase contracts |
50,588 |
23,852 |
Other interest payable and similar charges |
1,403,765 |
447,439 |
|
------------ |
--------- |
|
1,454,353 |
471,291 |
|
------------ |
--------- |
|
|
|
10.
Taxation on ordinary activities
Major components of tax expense
Current tax:
UK current tax expense |
– |
21,569 |
Adjustments in respect of prior periods |
(
2,136) |
– |
|
------- |
-------- |
Total current tax |
(
2,136) |
21,569 |
|
------- |
-------- |
|
|
|
Deferred tax:
Origination and reversal of timing differences |
291,990 |
146,648 |
|
--------- |
--------- |
Taxation on ordinary activities |
289,854 |
168,217 |
|
--------- |
--------- |
|
|
|
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is higher than (2022: lower than) the
standard rate of corporation tax in the UK
of
25
% (2022:
19
%).
|
2023 |
2022 |
|
£ |
£ |
Profit on ordinary activities before taxation |
162,041 |
896,905 |
|
--------- |
--------- |
Profit on ordinary activities by rate of tax |
40,510 |
170,412 |
Adjustment to tax charge in respect of prior periods |
(
2,136) |
– |
Effect of expenses not deductible for tax purposes |
3,891 |
1,278 |
Effect of capital allowances and depreciation |
(
2,356) |
(
3,473) |
Unused tax losses |
249,945 |
– |
|
--------- |
--------- |
Tax on profit |
289,854 |
168,217 |
|
--------- |
--------- |
|
|
|
11.
Tangible assets
|
Tenants improvements |
Plant and machinery |
Fixtures and fittings |
Motor vehicles |
Assets in the course of construction |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
Cost |
|
|
|
|
|
|
At 1 Jan 2023 |
– |
1,125,209 |
566,318 |
1,372,293 |
976,994 |
4,040,814 |
Additions |
– |
410,662 |
14,403 |
1,270,544 |
1,165,951 |
2,861,560 |
Disposals |
– |
– |
– |
(
539,858) |
(
1,039,378) |
(
1,579,236) |
Transfers |
983,600 |
– |
– |
– |
(
983,600)
|
– |
|
--------- |
------------ |
--------- |
------------ |
------------ |
------------ |
At 31 Dec 2023 |
983,600 |
1,535,871 |
580,721 |
2,102,979 |
119,967 |
5,323,138 |
|
--------- |
------------ |
--------- |
------------ |
------------ |
------------ |
Depreciation |
|
|
|
|
|
|
At 1 Jan 2023 |
– |
797,244 |
359,465 |
542,027 |
– |
1,698,736 |
Charge for the year |
65,231 |
115,167 |
59,500 |
379,309 |
– |
619,207 |
Disposals |
– |
– |
– |
(
289,824) |
– |
(
289,824) |
|
--------- |
------------ |
--------- |
------------ |
------------ |
------------ |
At 31 Dec 2023 |
65,231 |
912,411 |
418,965 |
631,512 |
– |
2,028,119 |
|
--------- |
------------ |
--------- |
------------ |
------------ |
------------ |
Carrying amount |
|
|
|
|
|
|
At 31 Dec 2023 |
918,369 |
623,460 |
161,756 |
1,471,467 |
119,967 |
3,295,019 |
|
--------- |
------------ |
--------- |
------------ |
------------ |
------------ |
At 31 Dec 2022 |
– |
327,965 |
206,853 |
830,266 |
976,994 |
2,342,078 |
|
--------- |
------------ |
--------- |
------------ |
------------ |
------------ |
|
|
|
|
|
|
|
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
|
Plant and machinery |
Motor vehicles |
Total |
|
£ |
£ |
£ |
At 31 December 2023 |
– |
1,117,478 |
1,117,478 |
|
---- |
------------ |
------------ |
At 31 December 2022 |
16,800 |
702,395 |
719,195 |
|
-------- |
------------ |
------------ |
|
|
|
|
12.
Stocks
|
2023 |
2022 |
|
£ |
£ |
Vehicles & equipment |
23,979,593 |
25,179,117 |
Work in progress |
746,864 |
517,739 |
Parts |
1,736,932 |
1,528,239 |
|
------------- |
------------- |
|
26,463,389 |
27,225,095 |
|
------------- |
------------- |
|
|
|
Vehicles and equipment exclude items on consignment from manufacturers, where title passes at the earlier of the date of sale or 90 to 120 days from date of consignment. After an initial interest free period, finance stocking charges are charged on all vehicle consignment stock.
13.
Debtors
|
2023 |
2022 |
|
£ |
£ |
Trade debtors |
4,101,047 |
2,979,212 |
Other debtors |
1,193,685 |
1,495,157 |
|
------------ |
------------ |
|
5,294,732 |
4,474,369 |
|
------------ |
------------ |
|
|
|
14.
Creditors:
amounts falling due within one year
|
2023 |
2022 |
|
£ |
£ |
Trade creditors |
24,899,509 |
27,272,868 |
Amounts owed to group undertakings |
6,292,906 |
8,289,137 |
Accruals and deferred income |
1,397,454 |
685,935 |
Corporation tax |
– |
21,569 |
Social security and other taxes |
1,083,739 |
238,420 |
Obligations under finance leases and hire purchase contracts |
510,323 |
334,883 |
Other creditors |
2,159,313 |
886,294 |
|
------------- |
------------- |
|
36,343,244 |
37,729,106 |
|
------------- |
------------- |
|
|
|
Included in Trade creditors are amounts due to FCE Bank plc and Iveco Limited in respect of stock purchases which are secured by bonds and floating charges over the whole property and undertaking, as well as a security over certain new vehicles stocks. The amounts due to FCE Bank plc and Iveco Limited respectively, at the year end date were £4,100,700 (2022 - £10,828,858) and £14,236,165 (2022 - £9,919,469).
All of the securities granted by the company are the subjects of a specific ranking agreement.
15.
Creditors:
amounts falling due after more than one year
|
2023 |
2022 |
|
£ |
£ |
Obligations under finance leases and hire purchase contracts |
738,535 |
285,726 |
|
--------- |
--------- |
|
|
|
16.
Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
|
2023 |
2022 |
|
£ |
£ |
Not later than 1 year |
525,379 |
354,273 |
Later than 1 year and not later than 5 years |
759,326 |
285,726 |
|
------------ |
--------- |
|
1,284,705 |
639,999 |
Less: future finance charges |
(
35,847) |
(
19,390) |
|
------------ |
--------- |
Present value of minimum lease payments |
1,248,858 |
620,609 |
|
------------ |
--------- |
|
|
|
17.
Provisions for liabilities
|
Deferred tax (note 18) |
|
£ |
At 1 January 2023 |
195,049 |
Charge against provision |
291,990 |
|
--------- |
At 31 December 2023 |
487,039 |
|
--------- |
|
|
18.
Deferred tax
The deferred tax included in the statement of financial position is as follows:
|
2023 |
2022 |
|
£ |
£ |
Included in provisions for liabilities (note 17) |
487,039 |
195,049 |
|
--------- |
--------- |
|
|
|
The deferred tax account consists of the tax effect of timing differences in respect of:
|
2023 |
2022 |
|
£ |
£ |
Unpaid remuneration |
(10,140)
|
(16,864)
|
Excess of depreciation over capital allowances |
497,179
|
211,913
|
|
--------- |
--------- |
|
487,039 |
195,049 |
|
--------- |
--------- |
|
|
|
19.
Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £
152,635
(2022: £
127,969
).
20.
Called up share capital
Issued, called up and fully paid
|
2023 |
2022 |
|
No. |
£ |
No. |
£ |
Ordinary shares of £ 0.01 each |
925,000 |
9,250 |
925,000 |
9,250 |
|
--------- |
------- |
--------- |
------- |
|
|
|
|
|
21.
Reserves
Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company. Profit and loss account - This reserve records retained earnings.
22.
Commitments under operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
|
2023 |
2022 |
|
£ |
£ |
Not later than 1 year |
144,000 |
– |
Later than 1 year and not later than 5 years |
576,000 |
– |
Later than 5 years |
648,000 |
– |
|
------------ |
---- |
|
1,368,000 |
– |
|
------------ |
---- |
|
|
|
23.
Contingencies
Along with the ultimate parent company, A.M. Phillip Limited, and a fellow subsidiary, Gammies Groundcare Ltd, the company has provided the group's bank with an unlimited inter company guarantee for all sums. The total amount due by A.M. Phillip Limited group to Royal Bank of Scotland plc at 31 December 2023 was £nil (2022 - £nil).
24.
Related party transactions
The company was under the control of its parent company, A.M. Phillip Limited, throughout the current and previous year. During the year, the company was charged for management services provided by its parent company. The total charges were £425,714 (2022 - £528,088). The company was also charged rent for the year of £188,250 (2022 - £186,600) by its parent company. At the year end, the company was due to pay an amount of £6,292,906 (2022 - £8,239,136) to group companies as a result of transactions undertaken in the normal course of trading. This amount has no set repayments terms and does not attract interest. During the year the company sold a completed asset which they had constructed to a related party, SGG Properties. The total sales price was £1,247,254 including VAT and at 31st December 2023 the company was still to receive £522,254, which is within trade debtors in the accounts.
25.
Controlling party
The ultimate parent company is A.M. Phillip Limited, a company registered in Scotland. The group accounts are available from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.