Company registration number 09244414 (England and Wales)
SOPER OF LINCOLN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SOPER OF LINCOLN LIMITED
COMPANY INFORMATION
Directors
Mr A Tullie
Mrs A Tullie
(Appointed 18 September 2024)
Secretary
Mrs A Tullie
Company number
09244414
Registered office
166 College Road
Harrow
Middlesex
HA1 1RA
Auditors
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
Business address
Roman Way
South Hykeham
Lincoln
LN6 9UH
SOPER OF LINCOLN LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 24
SOPER OF LINCOLN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
S.172 statement
The information provided below is intended to explain how the directors have considered the company’s key stakeholders and the broader matters set out in s.172 (1) (a) to (f) of the companies Act 2006 when performing their duties to promote the success of the company.
Company culture
The company's culture focuses on the importance of strong financial and operational risk management controls and ensuring it complies with all applicable laws, regulations and ethical principles. The directors regularly assess the fulfilment of this culture at the operational level by requesting, receiving & analysing reports at various business levels ensuring improvements are made where necessary. By protecting the reputation and economic viability of the company, the directors believe that enhancing this culture is in long term benefit of the company and interest of its stakeholders.
Long term Strategy
The company’s long term strategy is to grow revenues and increase profits, this being done by providing high levels of customer service to customers whilst managing financial, operational, regulatory and legal risks and increasing efficiency at all levels. To achieve these objectives, the directors consider it is essential to maintain adequate financial resources via both internal operational mechanisms and access to external funding to maintain stakeholder confidence at all times, to invest in information technology, to conduct a policy to promote exemplary customer services and to ensure staff are professionally trained.
Stakeholder relationships
The company’s stakeholders are BMW, employees, suppliers, and shareholders. The directors understand that exceptional customer service can only be consistently delivered by attracting, motivating, training and retaining the very best team members. The company operates a franchised motor dealership. Without franchises, the company would not be able to source new car stock or perform service warranty repairs. Maintaining an excellent working relationship with our franchise partners is critical to the success of the company and is fostered by both the directors and employees within the company. The relationship with and an interest of all of the stakeholders are uppermost in the director’s mind when making decision to promote the company.
Community and environment
In the decision making, the directors always have regard to the impact of the company's operations in the local community and environment. The company does whatever it can with its resources to promote better community relations and foster good environmental credentials and is challenged to make a commitment to local charities and community initiatives.
Fair review of the business
The results for the year and the financial position at the year end were considered satisfactory by the directors who expect similar results in the foreseeable future.
Principal risks and uncertainties
The management of the business and the execution of the company's strategies are subject to risk, the key risk being the competition in the market place.
SOPER OF LINCOLN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Financial risk management
The company's principal financial instruments comprise bank balances, bank overdrafts, trade creditors, trade debtors and balances due from group and associated companies and individuals. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's trading activities.
The company's approach to managing risks applicable to the financial instruments concerned is shown below.
In respect of bank balances and overdrafts the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts and loans.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due within agreed credit terms.
In respect of balances due from group and associated companies, the directors are aware of the individual companies' finance requirements and had determined that these will only be repaid, in whole or in part, when sufficient funds are available.
Key performance indicators
The key financial performance indicators during the year are as follows: |
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Earnings before interest, tax, depreciation and amortisation (EBITDA) | | | | |
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Gross profit margin
The company's gross profit margin has fallen from 11.36% last year to 10.99% this year, due to continued pressure on margins as it is a highly competitive market.
EBITDA
The directors view EBITDA as a percentage of sales as a key performance indicator for the business and this is reviewed regularly. The EBITDA is a more comparable measure of the performance of the business which shows that the EBITDA percentage of sales is 2.21% (2022: 2.96%).
Non-financial key performance indicators
The directors also consider the following non-financial KPI's to have a positive impact and bearing on the future prospects of the business in relation to the year ended 31 December 2023.
SOPER OF LINCOLN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Future developments
The company has implemented extensive energy savings projects including Solar PV, LED lighting and BMS Systems. The company has reduced its CO2 production by 75% with these initiatives and more are planned.
The company has further continued its digital journey by removing 90% of all paper transactions, saving costs, increasing productivity and employee satisfaction, removing archiving requirements and ensuring secure data storage.
In 2024 the management has begun to get the company ready for the agency sales model which will bring changes to the business, the focus remains on how the company can leverage the cost savings of this future trading model.
Mr A Tullie
Director
24 September 2024
SOPER OF LINCOLN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activities of the company continued to be those of a BMW and MINI dealership selling new and used cars and supplier of parts and services.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £100,000. The directors do not recommend payment of a final dividend.
No preference dividends were paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A Tullie
Mrs A Tullie
(Appointed 18 September 2024)
Energy and carbon report
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
874,645
1,003,230
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
103.05
112.90
- Fuel consumed for owned transport
-
-
103.05
112.90
Scope 2 - indirect emissions
- Electricity purchased
64.77
89.64
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
-
-
Total gross emissions
167.82
202.54
Intensity ratio
Emission intensity ratio (tCO2e per £m Turnover)
1.74
2.2
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2021 UK Government’s Conversion Factors for Company Reporting.
SOPER OF LINCOLN LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £million turnover.
Measures taken to improve energy efficiency
The company has implemented extensive energy savings projects including Solar PV, LED lighting, BMS Systems. The company has reduced its CO2 production by 75% with these initiatives and more are planned.
Statement of directors' responsibilities
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 company and of 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 judgements 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.
Statement of disclosure to auditors
So far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as director in order to make himself aware of all relevant audit information and to establish that the company’s auditors are aware of that information.
On behalf of the board
Mr A Tullie
Director
24 September 2024
SOPER OF LINCOLN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SOPER OF LINCOLN LIMITED
- 6 -
Opinion
We have audited the financial statements of Soper of Lincoln Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
SOPER OF LINCOLN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOPER OF LINCOLN LIMITED
- 7 -
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 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 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the client partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify and recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors, key management personnel and from our commercial knowledge and experience of investment holdings and the automotive industry.
we focused on specific laws and regulations which we considered may have a direct effect on the financial statements or the operations of the company including the Companies Act 2006, current taxation legislation, data protection, anti-bribery and money laundering, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management;
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
SOPER OF LINCOLN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SOPER OF LINCOLN LIMITED
- 8 -
To address the risk of fraud through management bias and override of controls we have;
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the any accounting estimates were indicative of potential bias.
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.
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.
..................................................................
24 September 2024
Nirav Sheth (Senior Statutory Auditor)
For and on behalf of Charterhouse (Audit) Limited
Statutory Auditor
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
SOPER OF LINCOLN LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
95,980,840
95,980,048
Cost of sales
(85,436,454)
(85,075,720)
Gross profit
10,544,386
10,904,328
Distribution costs
(5,395,526)
(5,243,849)
Administrative expenses
(3,871,161)
(3,540,505)
Other operating income
30,724
35,310
Operating profit
4
1,308,423
2,155,284
Interest payable and similar expenses
8
(611,567)
(219,515)
Profit before taxation
696,856
1,935,769
Tax on profit
9
(464,718)
(100,563)
Profit for the financial year
232,138
1,835,206
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SOPER OF LINCOLN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
232,138
1,835,206
Other comprehensive income
-
-
Total comprehensive income for the year
232,138
1,835,206
SOPER OF LINCOLN LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
2,672,224
3,105,557
Tangible assets
12
1,281,166
827,124
3,953,390
3,932,681
Current assets
Stocks
13
9,855,241
9,706,170
Debtors
14
10,511,341
9,138,641
Cash at bank and in hand
20,549
19,052
20,387,131
18,863,863
Creditors: amounts falling due within one year
15
(15,816,191)
(14,404,352)
Net current assets
4,570,940
4,459,511
Net assets
8,524,330
8,392,192
Capital and reserves
Called up share capital
18
3,250,880
3,250,880
Profit and loss reserves
5,273,450
5,141,312
Total equity
8,524,330
8,392,192
The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
Mr A Tullie
Director
Company registration number 09244414 (England and Wales)
SOPER OF LINCOLN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
3,250,880
3,386,106
6,636,986
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,835,206
1,835,206
Dividends
10
-
(80,000)
(80,000)
Balance at 31 December 2022
3,250,880
5,141,312
8,392,192
Year ended 31 December 2023:
Profit and total comprehensive income
-
232,138
232,138
Dividends
10
-
(100,000)
(100,000)
Balance at 31 December 2023
3,250,880
5,273,450
8,524,330
SOPER OF LINCOLN LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
2,026,633
481,329
Interest paid
(611,567)
(219,515)
Income taxes paid
(396,814)
(396,184)
Net cash inflow/(outflow) from operating activities
1,018,252
(134,370)
Investing activities
Purchase of tangible fixed assets
(832,734)
(363,026)
Proceeds from disposal of tangible fixed assets
35,198
24,791
Net cash used in investing activities
(797,536)
(338,235)
Financing activities
Dividends paid
(100,000)
(80,000)
Net cash used in financing activities
(100,000)
(80,000)
Net increase/(decrease) in cash and cash equivalents
120,716
(552,605)
Cash and cash equivalents at beginning of year
(789,539)
(236,935)
Cash and cash equivalents at end of year
(668,823)
(789,539)
Relating to:
Cash at bank and in hand
20,549
19,052
Bank overdrafts included in creditors payable within one year
(689,372)
(808,591)
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information
Soper of Lincoln Limited is a private company limited by shares incorporated in England and Wales. The registered office is 166 College Road, Harrow, Middlesex, HA1 1RA. The principal place of business is Roman Way, South Hykeham, Lincoln, LN6 9UH.
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.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover being that of the operation of a motor dealership, is the amount derived from the provision of goods and services falling within the company's ordinary activities after deduction of trade discounts and value added tax and includes commissions receivable.
Sales of motor vehicles, parts and accessories are recognised on the earlier of full payment or delivery to the customer. Income from service and body shop work is recognised on the completion of the agreed work.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of incorporated businesses 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.
1.5
Tangible fixed assets
Tangible fixed assets are measured at cost, 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:
Plant and equipment
12.5% to 50% on cost
Office furniture, fixtures and fittings
25% to 33% on cost
Company vehicles
15% to 25% on cost
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 credited or charged to profit or loss.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.6
Impairment of fixed assets
At each reporting end date, the company 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).
1.7
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. Stock consists of motor vehicles unsold at the year end.
Consignment stocks held at the balance sheet date by BMW (UK) Limited are not included in the company's financial statements as explained in Note 13 to the accounts.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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 measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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. Financial liabilities are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
1.10
Equity instruments
Equity instruments issued by the company 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 company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
The Redeemable Preference shares are classified as equity in accordance with Section 22 (liabilities and equity) as they are redeemable at the option of the issuer and do not carry a right to a return.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
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.
Establishing useful economic lives for depreciation and amortisation purposes of fixed assets
The annual depreciation and amortisation charges depend primarily on the estimated useful economic lives of each type of asset and estimated residual values. The directors regularly review these asset useful lives and changes them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation and amortisation charges for the period. Detail of the useful economic lives is included in the accounting policies.
Inventory provision
The company sells vehicles that are subject to changing market demands. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management consider the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods. See Note 13 for the net carrying value of stock and associated provision.
3
Turnover and other revenue
The total turnover of the company has been derived from its principal activity wholly undertaken in the United Kingdom.
2023
2022
£
£
Turnover analysed by class of business
Sale of vehicles, parts and services
91,063,919
90,752,454
Commissions receivable
4,916,921
5,227,594
95,980,840
95,980,048
2023
2022
£
£
Other revenue
Grants received
-
2,023
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(2,023)
Depreciation of owned tangible fixed assets
378,091
255,411
Profit on disposal of tangible fixed assets
(34,597)
(2,758)
Amortisation of intangible assets
433,333
433,333
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditors and associates:
£
£
For audit services
Audit of the financial statements of the company
32,065
29,150
For other services
All other non-audit services
5,545
6,350
6
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
Selling, servicing and parts
90
96
Administration
16
14
Total
106
110
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,218,038
4,047,631
Pension costs
18,155
22,699
4,236,193
4,070,330
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
10,000
9,500
Key management personnel of the company consists of its directors only.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
3,765
-
Other interest on financial liabilities
591,541
219,515
595,306
219,515
Other finance costs:
Other interest
16,261
611,567
219,515
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
207,961
100,563
Adjustments in respect of prior periods
256,757
Total current tax
464,718
100,563
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
696,856
1,935,769
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
174,214
367,796
Tax effect of income not taxable in determining taxable profit
(524)
Adjustments in respect of prior years
256,757
Effect of change in corporation tax rate
(13,081)
Group relief
(54,738)
(300,897)
Depreciation
94,523
48,528
Amortisation
108,333
82,333
Capital allowances
(92,640)
(96,673)
(Profit)/Loss on sale of fixed assets
(8,650)
Taxation charge for the year
464,718
100,563
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Dividends
2023
2022
£
£
Interim paid
100,000
80,000
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
6,500,000
Amortisation and impairment
At 1 January 2023
3,394,443
Amortisation charged for the year
433,333
At 31 December 2023
3,827,776
Carrying amount
At 31 December 2023
2,672,224
At 31 December 2022
3,105,557
12
Tangible fixed assets
Plant and equipment
Office furniture, fixtures and fittings
Company vehicles
Total
£
£
£
£
Cost
At 1 January 2023
1,254,712
821,721
122,163
2,198,596
Additions
83,904
86,945
661,885
832,734
Disposals
(698)
(698)
At 31 December 2023
1,338,616
907,968
784,048
3,030,632
Depreciation and impairment
At 1 January 2023
610,697
667,247
93,528
1,371,472
Depreciation charged in the year
142,837
73,759
161,495
378,091
Eliminated in respect of disposals
(97)
(97)
At 31 December 2023
753,534
740,909
255,023
1,749,466
Carrying amount
At 31 December 2023
585,082
167,059
529,025
1,281,166
At 31 December 2022
644,015
154,474
28,635
827,124
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
9,855,241
9,706,170
Stock is stated after provisions for impairment of £439,417 (2022: £343,696).
Stock with a total value of £2,485,298 (2022: £2,289,041) is held at the balance sheet date on consignment from BMW (UK) Limited. Consignment stock is held until the point of sale at which time the company becomes liable to BMW (UK) Limited. Consignment stock is not included in the financial statements.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,811,018
3,574,732
Amounts owed by group undertakings
5,937,384
5,167,077
Other debtors
117,468
62,564
Prepayments and accrued income
645,471
334,268
10,511,341
9,138,641
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
689,372
808,591
Trade creditors
8,857,847
9,229,436
Amounts owed to group undertakings
818,398
895,374
Corporation tax
174,520
106,616
Other taxation and social security
173,044
119,894
Other creditors
4,508,378
3,149,199
Accruals and deferred income
594,632
95,242
15,816,191
14,404,352
Included in trade creditors and other creditors are amounts of £896,079 (2022: £301,300) and £4,508,233 (2022: £3,141,502) respectively owing to BMW Financial Services (GB) Limited which are secured against vehicle stock.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
689,372
808,591
Payable within one year
689,372
808,591
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
18,155
22,699
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
880
880
880
880
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Redemable Preference shares of £1 each
3,250,000
3,250,000
3,250,000
3,250,000
Preference shares classified as equity
3,250,000
3,250,000
Total equity share capital
3,250,880
3,250,880
Full details of the rights attached to each class of shares including the right to income and distributions and the rights in respect to a return of capital on liquidation, winding up or otherwise is shown in the company's statutory records and in particular its statement of capital.
19
Guarantees and securities
Bank overdrafts are secured by a fixed and floating charge on all assets of the company. There is also an unlimited cross guarantee between the company and fellow group companies.
20
Related party transactions
As at the balance sheet date, there is an amount included in other creditors of £17 (2022: £107) due to Digital Vehicle Solutions Limited, a company in which A Tullie is a director.
During the year, the company made purchases from Digital Vehicle Solutions Limited, a company in which A Tullie is a director, amounting to £5,016 (2022: £5,016).
During the year, the company made purchases from Key 2 Lease Limited, a company in which A Tullie is a director, amounting to £27,561 (2022: £25,973).
21
Ultimate controlling party
The company's ultimate parent company is Aliom Holdings Limited and the results of Soper of Lincoln Limited are included in the consolidated financial statements of Aliom Holdings Limited which are available from 166 College Road, Harrow, Middlesex, HA1 1RA.
SOPER OF LINCOLN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
22
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
232,138
1,835,206
Adjustments for:
Taxation charged
464,718
100,563
Finance costs
611,567
219,515
Gain on disposal of tangible fixed assets
(34,597)
(2,758)
Amortisation and impairment of intangible assets
433,333
433,333
Depreciation and impairment of tangible fixed assets
378,091
255,411
Movements in working capital:
Increase in stocks
(149,071)
(463,826)
Increase in debtors
(1,372,700)
(1,869,339)
Increase/(decrease) in creditors
1,463,154
(26,776)
Cash generated from operations
2,026,633
481,329
23
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
19,052
1,497
20,549
Bank overdrafts
(808,591)
119,219
(689,372)
(789,539)
120,716
(668,823)
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