REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 31 December 2023 |
for |
Islington Trowbridge Limited |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 31 December 2023 |
for |
Islington Trowbridge Limited |
Islington Trowbridge Limited (Registered number: 01423648) |
Contents of the Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Statement of Comprehensive Income | 8 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
Islington Trowbridge Limited |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
Islington Trowbridge Limited (Registered number: 01423648) |
Strategic Report |
for the Year Ended 31 December 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
The principal activity of the group in the year was the operation of retail motor franchised dealerships, incorporating vehicle sales, servicing, and original manufacturer parts sales. |
REVIEW OF BUSINESS |
The results for the Company show turnover for the year up 5.3% to £45.09m (2022: £42.83m) with circa 2,000 retail vehicles sold, resulting in a post-tax profit of £149,276 (2022: £391,595) recorded. |
The Company, established in 1979, is highly regarded by its significant client base and holds sales agreements for Ford, Transit, MG and Suzuki. Authorised repairer (service and parts supply) agreements are held for Ford, Transit, MG, Suzuki, Citroen and Peugeot. In June 2023, the Directors made the decision to withdraw from new sales agreements with Stellantis resulting in the removal of the Citroen sales brand from the multi-franchised showroom in Trowbridge and the closure of the Vauxhall dealership in Chippenham. |
With increasing BEV (Battery Electric Vehicles) availability, manufacturers are attempting to reduce the total cost of ownership to align with equivalent ICE (Internal Combustion Engine) in an attempt to overcome the ownership obstacles of range anxiety and the lack of a reliable charging network. However, this has had a significant impact on the used values of BEV products, especially ex-demonstrators, thereby increasing the franchise operating costs with higher levels of depreciation. |
Customer retention continues to be a challenge, increased operating costs have resulted in higher labour charges, encouraging owners of older and higher mileage vehicles to seek cheaper independent operators with the only benefit to the business being the increase in parts sales. To address this, the business has introduced a new fix-now-pay-later scheme to enable customers to spread the cost of repairs over a fixed-term interest-free period. Service plan sales remain a critical component to customer retention. |
During the year the total new car market in the UK was up 17.9%, to 1.9 million while BEV sales remained static at 2022 levels of 16.5% (315,000 units). |
Despite the decision to reduce the number of franchise partners for new vehicle sales that the business represents; the directors are of the view that increased focus will result in an improved market share and optimise the financial performance of the remaining brands, improving the R.O.S in the mid to long term future. Used vehicle values have been extremely volatile requiring daily reviews to maintain competitiveness whilst used vehicle quality stock procurement continues to be a challenge. |
POST BALANCE SHEET EVENT |
In July 2024 actions were taken to consolidate group management operations to address increasing franchise operating costs and further improve performance. The introduction of a new open banking process has resulted in significant savings in card charges. Manufacturers have adopted a "push" approach to sales resulting in the need for increased storage facilities. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The recruitment of skilled staff, especially trained technicians, remains a principal challenge in the industry for 2023. The Company continues to work with its franchise partners on apprentice and trainee recruitment. The Company currently employs four technical apprentices and two sales trainees. Meanwhile, the vehicle manufacturers seem to be debating the advantages of moving to an agency model, which will see sales conducted directly online, removing the opportunity for dealers to benefit from the sale of value added products and potentially, part exchange vehicles. The manufacturers also continue to review their network strategy to improve market share per dealer and reduce franchise costs by encouraging economies of scale with larger dealer groups. |
The group's principal financial instruments involve borrowings, trade debtors and creditors. Liquidity risk is managed by the group ensuring that sufficient liquidity is maintained by means of cash and bank facilities to meet the foreseeable needs of the business. |
Credit risk arises from the group's trade debtors and, to control this, limits are based on a combination of payment history and third-party credit references. Any outstanding accounts are monitored regularly based upon ageing and collection history. |
The success of the business is reliant on consumer spending and new car availability. An economic downturn, resulting in a reduction of consumer spending power, will have a direct impact on turnover and profits achieved by the Company. In response to this risk, management aim to keep abreast of economic conditions and, in cases of severe economic downturn, marketing and pricing strategies are modified to reflect any new market conditions. With any downturn in new stock availability, the Directors have sufficient knowledge and experience to increase used car sales in mitigation. |
Islington Trowbridge Limited (Registered number: 01423648) |
Strategic Report |
for the Year Ended 31 December 2023 |
FUTURE OUTLOOK |
The directors of the business continue to focus on achieving budgets for growth with increased used vehicle sales, consistent achievement of franchise new vehicle targets and the sales of value-added products. The implementation of a new dealer management system has proven to be an invaluable management tool offering the business "live" status reports and daily objectives. Growth in electric vehicle sales is a key strategy for 2024 and beyond in the lead-up to the ZEV mandate in 2030. |
KEY PERFORMANCE INDICATORS |
The Company operates a daily KPI dashboard to ensure "live" and dynamic financial information to enable the proactive management of the business. |
The key performance indicators are given below: |
2023 | 2022 |
Turnover (£) | 45,091,244 | 42,827,940 |
Gross Profit (£) | 2,246,186 | 2,190,333 |
Net profit/(loss) after tax (£) | 149,276 | 391,554 |
Gross profit (%) | 4.98 | 5.11 |
Net profit/(loss) (%) | 0.33 | 0.91 |
RESEARCH AND DEVELOPMENT |
To further improve the performance of the business, and in addition to the introduction of the aforementioned dealer management system (DMS) in February 2023, Islington are currently researching the market for reputable software that will provide a bespoke performance dashboard, which will integrate with the new DMS. This will enable Islington to create a tailored set of daily key performance indicators directly from the "live" position. This feature will improve management controls and enable the business to react swiftly to any areas that are underperforming whilst maximizing opportunities. |
Islington continues to be committed to lowering its carbon footprint with the potential introduction of solar panels (STC) and additional charge points for electric vehicles. |
ON BEHALF OF THE BOARD: |
Director |
19 September 2024 |
Islington Trowbridge Limited (Registered number: 01423648) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES |
The company holds or issues financial instruments in order to achieve three main objectives, being: |
a) to finance its operations; |
b) to manage its exposure to interest risks arising from its operations and from its sources of finance; and |
c) for trading purposes. |
In addition, various financial instruments (e.g., trade debtors, trade creditors, accruals and prepayments) arise directly from the company's operations. |
DISCLOSURE IN THE STRATEGIC REPORT |
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors report. It has done so in respect of the future developments of the company. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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; |
- | 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Islington Trowbridge Limited |
Opinion |
We have audited the financial statements of Islington Trowbridge Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
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. |
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors 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 Report of the Directors. |
We have nothing to report in respect of the following matters where 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. |
Report of the Independent Auditors to the Members of |
Islington Trowbridge Limited |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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. |
Auditors' 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 a Report of the Auditors 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: |
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery, employment law and company legislation, and we considered the extent to which non-compliance might have a material effect on the financial statements of the Company. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation legislation. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, and management bias in accounting estimates and judgemental areas of the financial statements. Audit procedures performed by the audit engagement team included: |
- Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud; |
- Understanding of management's internal controls designed to prevent and detect irregularities, and fraud; |
- Reviewing the Company's legal costs to check for non-compliance with laws and regulations and fraud; |
- Reviewing Board of Directors minutes; |
- Review of tax compliance with the involvement of our tax specialists in the audit; |
- Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing of expenses; |
- Testing transactions entered into outside of the normal course of the Company's business; and |
- Identifying and testing journal entries, in particular any journal entries with fraud characteristics such as journals with round numbers. |
There are inherent limitations in the audit procedures described above and the further removed 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. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Islington Trowbridge Limited |
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 a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditor |
Chartered Accountants |
County Gate |
County Way |
Trowbridge |
Wiltshire |
BA14 7FJ |
Islington Trowbridge Limited (Registered number: 01423648) |
Statement of Comprehensive |
Income |
for the Year Ended 31 December 2023 |
2023 | 2023 | 2023 |
Continuing | Discontinued | Total |
Notes | £ | £ | £ |
TURNOVER |
Cost of sales | ( |
) | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) | ( |
) |
OPERATING PROFIT/(LOSS) | 4 | ( |
) |
Loss on sale of operations | 5 | ( |
) | ( |
) |
446,852 | (174,136 | ) | 272,716 |
Interest receivable and similar income |
Interest payable and similar expenses | 6 | ( |
) | ( |
) | ( |
) |
PROFIT/(LOSS) BEFORE TAXATION | ( |
) |
Tax on profit/(loss) | 7 | ( |
) | ( |
) |
PROFIT/(LOSS) FOR THE FINANCIAL YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Islington Trowbridge Limited (Registered number: 01423648) |
Statement of Comprehensive |
Income |
for the Year Ended 31 December 2023 |
2022 | 2022 | 2022 |
Continuing | Discontinued | Total |
Notes | £ | £ | £ |
TURNOVER |
Cost of sales | ( |
) | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) | ( |
) |
512,955 | (59,025 | ) | 453,930 |
Other operating income |
OPERATING PROFIT/(LOSS) | 4 | ( |
) |
Interest payable and similar expenses | 6 | ( |
) | ( |
) | ( |
) |
PROFIT/(LOSS) BEFORE TAXATION | ( |
) |
Tax on profit/(loss) | 7 | ( |
) | ( |
) |
PROFIT/(LOSS) FOR THE FINANCIAL YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Islington Trowbridge Limited (Registered number: 01423648) |
Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 8 |
CURRENT ASSETS |
Stocks | 9 |
Debtors | 10 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 11 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 14 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Retained earnings | 16 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Islington Trowbridge Limited (Registered number: 01423648) |
Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2023 |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Islington Trowbridge Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 33.7. |
Turnover |
Turnover represents net invoiced sales of new vehicles, used vehicles, vehicle parts and vehicle servicing, excluding value added tax. Turnover is measured at the fair value of the consideration received or receivable and is reduced for customer returns, rebates or other similar allowances. Volume bonuses receivable from vehicle manufacturers are not included in turnover. These bonuses are treated as a discount against vehicle purchases. |
Revenue from the sale of goods is recognised when all of the following conditions are satisfied: |
- the company has transferred to the buyer the significant risks and rewards of ownership of the goods; |
- the company retains neither continuing managerial involvement to the degree associated with ownership nor effective control over the goods sold; |
- the amount of revenue can be measured reliable it is probable that the economic benefits associated with the transaction can be measured reliably. |
Parts sales are recognised at point of sale or delivery of goods to the customer. Servicing and bodyshop sales are recognised on completion of all work, and handover to the customer. |
Tangible fixed assets |
Short leasehold | - |
Plant and machinery | - |
Fixtures and fittings | - |
Land and buildings held and used in the company's own activities for production and supply of goods or for administrative purposes are stated in the balance sheet at their historical cost. Freehold land is not depreciated. |
Impairment of assets |
At each reporting date, the company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that any items of property, plant and equipment have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the statement of comprehensive income. |
If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately through the statement of comprehensive income.. |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
When stocks are sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of stocks recognised as an expense in the period in which the reversal occurs. |
Consignment vehicles are regarded as being under the control of the company when the significant risks and responsibilities of ownership are deemed to have passed to the company. These values are included within stocks on the balance sheet, although legal title has not passed to the company. The corresponding liability is included within trade creditors and is secured directly on these vehicles. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account. |
Provisions |
Provisions are recognised when the company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense. |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Critical accounting judgements and key sources of estimation uncertainty |
In the application of the company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below: |
Trade and other debtors - The allowance for doubtful accounts involves elements of management judgement and review of individual receivables based on individual customer creditworthiness, current economic trends and analysis of historical bad debts on a portfolio basis. |
Stock provisions - Significant estimates are involved in the determination of stock provisions. Management exercise significant judgement in determining whether costs are recoverable on a vehicle by vehicle basis. A provision is made where a loss can be reliably estimated. |
Depreciation - assets are depreciated over their useful economic lives as estimated by management. This initial estimate of an asset's useful economic life, although informed by management's analysis of previous asset lives, can have a significant impact on the overall depreciation charge for the year. |
3. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Sales, parts and servicing staff | 91 | 84 |
Administrative staff | 6 | 5 |
Management staff | 5 | 5 |
The directors of the company are considered to be its key management personnel. Accordingly, the total remuneration of the directors is the total remuneration of the company's key management personnel. |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
Pension contributions to money purchase schemes |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
4. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets |
Auditors' remuneration |
Government grant income | ( |
) |
Operating lease expense |
5. | EXCEPTIONAL ITEMS |
2023 | 2022 |
£ | £ |
Loss on sale of operations | ( |
) |
On 1st August 2023, the Vauxhall franchise closed for both sales and services contracts. The loss on disposal of operation was recognised in respect of the impairment of stock, loss on disposal of fixed assets and redundancy costs incurred. |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Stocking loan interest |
Interest on corporation tax |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax |
Tax on profit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Deferred tax charge / (income | 10,203 | 13,414 |
Structures and building allowance | (310 | ) | (371 | ) |
adjustment |
Total tax charge | 59,464 | 103,796 |
The main UK corporation tax rate increased from 19% to 25% as of 1 April 2023. The rate of 23.521% used is calculated by prorating the rates of 19% and 25% over the period 1 January 2023 - 31 December 2023. |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
8. | TANGIBLE FIXED ASSETS |
Fixtures |
Short | Plant and | and |
leasehold | machinery | fittings | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
9. | STOCKS |
2023 | 2022 |
£ | £ |
Stocks |
2023 | 2022 |
£ | £ |
Stock recognised in cost of sales during the year as an expense was | 39,686,133 | 37,570,952 |
An impairment loss / (reversal) recognised in cost of sales against stock during the year | 57,303 | 19,190 |
Included within the above stocks are vehicles held under a consignment agreement with a total cost of £360,621 (2022: £326,921). The main terms of the agreement are that no deposit is required and that the vehicles can be held for a normal period of up to 210 days (120 days interest free). There is no right of return for the consignment vehicles. |
10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Prepayments and accrued income |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
VAT | 417,163 | 262,310 |
Other creditors |
Directors' current accounts | 28,752 | 33,437 |
Accruals and deferred income |
12. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
13. | FINANCIAL INSTRUMENTS |
The carrying value of the company's financial assets and liabilities are summarised by category below: |
2023 | 2022 |
£ | £ |
Financial Assets |
Measured at undiscounted amount receivable |
- Trade and other debtors and accrued income | 830,549 | 784,697 |
- Cash at bank and at hand | 1,068,962 | 1,306,538 |
1,899,421 | 2,091,276 |
Financial liabilities |
Measured at undiscounted amount payable |
- Trade and other creditors | (8,333,025 | ) | (8,939,173 | ) |
(8,333,025 | ) | (8,939,173 | ) |
Exposure to foreign currency, credit, liquidity and cash flow interest rate risks arises in the normal course of the company's business. These risks are limited by the company's financial management policies and practices described below. |
Foreign currency risk |
The company has limited exposure to foreign currency risk. Substantially all of the company's sales and purchases are denominated in sterling. |
Credit risk and market risk |
The company is at risk from its customers defaulting in making payments for goods that have been supplied to them. The company mitigates this risk by performing credit searches on all customers to whom credit terms are offered. |
Liquidity risk |
The directors have ultimate responsibility for liquidity risk management in maintaining adequate reserves, banking facilities and reserve borrowing facilities. They do this by continuously monitoring forecast and actual cash flows and ensuring cash reserves are sufficient to meet ongoing liabilities. |
Cash flow interest rate risk |
The company is exposed to interest rate risk through the impact of rate changes on interest-bearing assets. The company's policy is to obtain the most favourable interest rates available for its assets. |
The company has no significant interest-bearing liabilities. |
The company does not use any derivative instruments to reduce its economic exposure to changes in interest rates. |
14. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax | 99,962 | 89,759 |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Provided during year |
Balance at 31 December 2023 |
Deferred tax relates to accelerated capital allowances. |
Islington Trowbridge Limited (Registered number: 01423648) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | £1 | 10,000 | 10,000 |
16. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Profit for the year |
At 31 December 2023 |
Retained earnings - includes all current and prior period retained profits and losses. |
17. | ULTIMATE PARENT COMPANY |
The company is a wholly owned subsidiary of Doric Developments (Bath) Limited, a company incorporated in the United Kingdom which is also the ultimate parent undertaking. |
18. | RELATED PARTY DISCLOSURES |
Ashford Homes (South Western) Limited |
A fellow subsidiary company of Doric Developments (Bath) Limited |
The transactions with Ashford Homes (South Western) Limited which is not 100% owned consisted of: |
Purchases of £2,581 (2022: £13,166); |
Sales of £6,913 (2022: £2,978); |
A balance of £55 (2022: £503) is included within debtors at the year end. |
Cabot Trustees Limited |
During the year, rent of £350,788 (2022: £356,753) was paid to Cabot Trustees Limited, a pension fund of which Dr R D Timbrell-Whittle and Mrs S A Timbrell-Whittle are beneficiaries. |
A balance of £87,625 (2022: £93,458) is included within trade creditors at the year end. |
2023 | 2022 |
£ | £ |
Purchases by related parties from the company |
19. | ULTIMATE CONTROLLING PARTY |
The company is controlled by Dr R D Timbrell-Whittle and Mrs S A Timbrell-Whittle by virtue of their combined 100% shareholding of the issued share capital of the ultimate parent undertaking Doric Developments (Bath) Limited. |