Company registration number 05191342 (England and Wales)
AGILITY UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
AGILITY UK LIMITED
COMPANY INFORMATION
Directors
Mr K N Townsend
Mr R Matthews
Ms J Stevenson
Mr R L Walsh
(Appointed 1 June 2024)
Company number
05191342
Registered office
Meridian House
Saxon Business Park
Stoke Prior
Bromsgrove
Worcestershire
B60 4AD
Auditor
Ormerod Rutter Limited
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
AGILITY UK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
AGILITY UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Business Review
The Company’s primary business is the provision of vehicle funding and associated fleet management services. The Company operates a continuous improvement culture to deliver its strategic objectives, and the directors are delighted with the financial performance of the Company.
The industry has adapted to, and is recovering from, the effects of the pandemic, semiconductor shortage and the war in Ukraine but faces further uncertainty with regards to Net Zero and ZEV Mandate and in particular the impact on future residual values. The Company has established rigorous protocols to reduce any negative exposure, and the directors believe the business is well placed to deal with the changing market conditions.
The business implemented a new operating system in 2022. The system will provide many long term efficiency gains as we look to strategically position ourselves for the changing conditions of the market. The system changeover created several issues in terms of data migration and system configuration. Some of these issues have taken a time to be rectified, but I am pleased to report that these issues have now been resolved. However, as a direct consequence of these issues, the 2022 financial result have been re-stated showing an increase in profit of £626k for the year ended December 2022. Further details are provided in note 27 to the financial statements.
Principal Risks and Uncertainties
From the perspective of the Company, the principal risks and uncertainties are integrated within the principal risks of the Group and are not managed separately.
Financial Risk Management Policies and Procedures
The financial risks of the Company are managed centrally by the Group's finance department.
The company’s operations expose it to a number of financial risks that include credit risk, liquidity risk, interest rate cash flow risk and residual value risk. The company has established a framework for managing these risks.
Credit risk
The company is exposed to credit risk primarily in respect of its trade receivables and financial assets. Trade receivables are stated net of any provision for estimated doubtful receivables. Exposure to credit risk in respect of trade receivables is mitigated by the company’s policy of only granting credit to customers after an appropriate evaluation of credit risk. The company also utilises undisclosed agency agreements to minimise the effect of customer default.
Liquidity risk
The company actively manages its working capital requirements to ensure it has sufficient funds for its operations. The requirement for medium to long term liquidity is reviewed by the Group finance department based on the company’s forecast requirements.
Interest rate cash flow risk
The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets consist of short term deposits and cash balances, all of which earn interest at variable rates. The company has a policy of maintaining short term deposits and cash balances at a level sufficient to fund its operations. The directors will revisit the appropriateness of this policy should the company’s operations or cash balances change in size or nature.
Residual value risk
The company is exposed to fluctuations inherent within the UK used car market. Residual values are set as part of our established policies and are subject to regular management review. As the residual values set are based on predictions, there is an inherent risk that the residual value mat not be ultimately realised.
Policy and practice on payment of creditors
As a general policy, the company is responsible for agreeing terms and conditions with each supplier separately. We see our suppliers as a key part of our supply chain and retain good relationships with our key suppliers.
AGILITY UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future Developments
The company has proactively worked to increase the ratio of Light Commercial Vehicles to Passenger Cars as part of its long-term strategy to focus on essential, business use/job need vehicles. With new customer acquisitions being at an all-time high, coupled with strong customer retention levels the outlook for the Company remains positive.
Key Performance Indicators
The Group monitors progress by reference to several KPI’s. Certain of these measures are commercially sensitive and hence are not reported here.
Mr K N Townsend
Director
26 September 2024
AGILITY UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of vehicle leasing and fleet management.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,663,281. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr K N Townsend
Mr R Matthews
Ms J Stevenson
Mr R L Walsh
(Appointed 1 June 2024)
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Auditor
The auditors, Ormerod Rutter Limited, will be proposed for re-appointment in accordance with Section 487(2) of the Companies Act 2006.
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;
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 auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
AGILITY UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr K N Townsend
Director
26 September 2024
AGILITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF AGILITY UK LIMITED
- 5 -
Opinion
We have audited the financial statements of Agility UK Limited (the 'company') for the year ended 31 December 2023 which comprise 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.
AGILITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF AGILITY UK LIMITED (CONTINUED)
- 6 -
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.
Based on our understanding of the company, we identified the principal risks of non-compliance with laws and regulations including those that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, and the extent to which non-compliance might have a material effect on the financial statements. Audit procedures performed included discussions with management, review of board meeting minutes, testing of journals, designing and performing audit procedures and challenging assumptions and judgements made by management in relation to accounting estimates.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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 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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
AGILITY UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF AGILITY UK LIMITED (CONTINUED)
- 7 -
Peter Ormerod FCA
Senior Statutory Auditor
For and on behalf of Ormerod Rutter Limited
26 September 2024
Chartered Accountants
Statutory Auditor
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
AGILITY UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
12,059,221
11,830,726
Cost of sales
(8,372,935)
(8,180,401)
Gross profit
3,686,286
3,650,325
Administrative expenses
(1,291,185)
(1,382,363)
Other operating income
575
Operating profit
4
2,395,101
2,268,537
Interest receivable and similar income
6
19,679
1,990
Interest payable and similar expenses
7
(5,224)
(2,683)
Profit before taxation
2,409,556
2,267,844
Tax on profit
8
(440,435)
(385,578)
Profit for the financial year
1,969,121
1,882,266
The profit and loss account has been prepared on the basis that all operations are continuing operations.
AGILITY UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
10
40,796
47,140
Tangible assets
11
9,847,036
10,101,987
Investments
12
1
1
9,887,833
10,149,128
Current assets
Stocks
14
241,651
630,400
Debtors falling due after more than one year
15
1,702,579
1,580,402
Debtors falling due within one year
15
3,861,729
4,253,215
Cash at bank and in hand
878,075
969,372
6,684,034
7,433,389
Creditors: amounts falling due within one year
16
(6,135,048)
(7,542,986)
Net current assets/(liabilities)
548,986
(109,597)
Total assets less current liabilities
10,436,819
10,039,531
Creditors: amounts falling due after more than one year
17
(6,063,511)
(5,862,303)
Provisions for liabilities
Deferred tax liability
20
303,115
412,875
(303,115)
(412,875)
Net assets
4,070,193
3,764,353
Capital and reserves
Called up share capital
22
125
125
Profit and loss reserves
23
4,070,068
3,764,228
Total equity
4,070,193
3,764,353
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 26 September 2024 and are signed on its behalf by:
Mr K N Townsend
Director
Company registration number 05191342 (England and Wales)
AGILITY UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
125
3,050,962
3,051,087
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,882,266
1,882,266
Dividends
9
-
(1,169,000)
(1,169,000)
Balance at 31 December 2022
125
3,764,228
3,764,353
Year ended 31 December 2023:
Profit and total comprehensive income
-
1,969,121
1,969,121
Dividends
9
-
(1,663,281)
(1,663,281)
Balance at 31 December 2023
125
4,070,068
4,070,193
AGILITY UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
5,672,751
5,508,330
Interest paid
(5,224)
(2,683)
Income taxes paid
(609,636)
(200,729)
Net cash inflow from operating activities
5,057,891
5,304,918
Investing activities
Purchase of intangible assets
(12,927)
Purchase of tangible fixed assets
(1,103,906)
(2,132,618)
Proceeds from disposal of tangible fixed assets
1,669,539
1,826,319
Interest received
19,679
1,990
Net cash generated from/(used in) investing activities
572,385
(304,309)
Financing activities
Repayment of borrowings
(131,782)
(732,982)
Payment of finance leases obligations
(3,926,510)
(2,870,272)
Dividends paid
(1,663,281)
(1,169,000)
Net cash used in financing activities
(5,721,573)
(4,772,254)
Net (decrease)/increase in cash and cash equivalents
(91,297)
228,355
Cash and cash equivalents at beginning of year
969,372
741,017
Cash and cash equivalents at end of year
878,075
969,372
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Agility UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Meridian House, Saxon Business Park, Stoke Prior, Bromsgrove, Worcestershire, United Kingdom, B60 4AD.
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
These financial statements have been drawn up on the going concern basis. If the going concern basis were not appropriate, adjustments would have been made to reduce assets to recoverable amounts, to provide for any further liabilities that might arise, and to re-classify fixed assets as current assets and long term liabilities as current liabilities.true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Turnover for undisclosed agency vehicles is recognised on a commission basis.
Turnover for the year is derived from ordinary activities and represents the following income streams:
a) Rentals receivable under operating lease contracts income is recognised on a consistent basis over the lease term of the contracts, excluding value added tax.
b) Maintenance income - Income is recognised on a consistent basis over the term of the contracts, excluding value added tax.
c) Vehicle disposal income - Income is accounted for at the point in time when the vehicle is sold.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
33% on cost
Development costs
33% on cost
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
The lower of 25% straight line or the lease term
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.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The company's share of the net assets of LLPs in which it is a member is shown as fixed asset investments. Any income arising from such investments is recognised in income at the date the income is receivable.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to sell.
1.9
Financial instruments
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
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.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.16
Interest in residual values
Where the company acts as an intermediary for lease transactions, the company has an obligation to repurchase the vehicles at lease termination at the agreed residual values inherent in the lease. The assets arising from the repurchase commitments (interest in residual values) are included within debtors due within one year or due after more than one year. See note 14 for further information on interest in residual values.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of the interest in residual values over its estimated selling price less costs to the complete and sell is recognised as an impairment loss in profit and loss account. Reversals of impairment losses are also recognised in profit or loss.
The corresponding liabilities arising under the repurchase commitments are disclosed as Obligations to purchase residual values within creditors due within year and creditors due after more than one year.
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.
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.
Depreciation
The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimate useful economic lives and residual values of the assets. The useful lives and residual values are reassessed annually. They are amended when necessary, to reflect current estimates.
Deferred tax
Deferred tax assets are only recognised to the extent to which it can be regarded as more likely than not that the company will generate sufficient future taxable profits from which the reversal of the underlying timing difference can be deducted.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Vehicle leasing and fleet management
12,059,221
11,830,726
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Other revenue
Interest income
19,679
1,990
Grants received
-
575
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(575)
Fees payable to the company's auditor for the audit of the company's financial statements
34,575
12,900
Depreciation of owned tangible fixed assets
2,803,393
2,904,770
Amortisation of intangible assets
19,271
6,029
Operating lease charges
8,801
14,879
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
12
14
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
351,178
417,068
Social security costs
37,569
37,694
Pension costs
18,152
(5,144)
406,899
449,618
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
19,679
1,990
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Interest receivable and similar income
(Continued)
- 18 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
19,679
1,990
7
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
5,224
2,683
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
557,643
432,178
Adjustments in respect of prior periods
(7,448)
46,111
Total current tax
550,195
478,289
Deferred tax
Origination and reversal of timing differences
(109,760)
(92,711)
Total tax charge
440,435
385,578
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
2,409,556
2,267,844
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
566,728
430,890
Tax effect of expenses that are not deductible in determining taxable profit
11,764
(13,127)
Adjustments in respect of prior years
(7,448)
46,111
Group relief
7,448
Capital allowances
(130,609)
(85,744)
Taxation charge for the year
440,435
385,578
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Dividends
2023
2022
£
£
Final paid
1,663,281
1,169,000
10
Intangible fixed assets
Goodwill
Software
Development costs
Total
£
£
£
£
Cost
At 1 January 2023
25,000
50,240
17,465
92,705
Additions
12,927
12,927
At 31 December 2023
25,000
63,167
17,465
105,632
Amortisation and impairment
At 1 January 2023
25,000
4,187
16,378
45,565
Amortisation charged for the year
18,184
1,087
19,271
At 31 December 2023
25,000
22,371
17,465
64,836
Carrying amount
At 31 December 2023
40,796
40,796
At 31 December 2022
46,053
1,087
47,140
11
Tangible fixed assets
Plant and equipment
£
Cost
At 1 January 2023
15,780,062
Additions
4,217,981
Disposals
(4,308,903)
At 31 December 2023
15,689,140
Depreciation and impairment
At 1 January 2023
5,678,075
Depreciation charged in the year
2,803,393
Eliminated in respect of disposals
(2,639,364)
At 31 December 2023
5,842,104
Carrying amount
At 31 December 2023
9,847,036
At 31 December 2022
10,101,987
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 20 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
7,763,826
8,291,866
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
1
1
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Specialist Van Leasing Limited
That of the parent
Dormant
Ordinary
100.00
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
241,651
630,400
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
421,005
504,413
Amounts owed by group undertakings
2,648,919
2,685,872
Other debtors
687,599
989,929
Prepayments and accrued income
104,206
73,001
3,861,729
4,253,215
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Debtors
(Continued)
- 21 -
2023
2022
Amounts falling due after more than one year:
£
£
Interest in residual values: amounts falling due after more than one year
1,702,579
1,580,402
Total debtors
5,564,308
5,833,617
Included within other debtors due within one year is £668,199 (2022: £922,158) of interest in residual values: amounts due within one year.
The corresponding liabilities to repurchase residual values are included within creditors (amounts due within one year and amounts due after more than one year).
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
19
2,593,817
3,485,283
Obligations to purchase residual values
18
668,199
922,158
Trade creditors
444,035
184,892
Corporation tax
335,381
394,822
Other taxation and social security
65,657
224,341
Other creditors
656,641
810,089
Accruals and deferred income
1,371,318
1,521,401
6,135,048
7,542,986
Amounts included within obligations to purchase residual values are secured against the assets to which they relate, as well as any monies due on lease agreements.
Amounts included with obligations under finance leases are secured against the assets to which they relate.
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
19
4,360,932
4,281,901
Obligations to purchase residual values
18
1,702,579
1,580,402
6,063,511
5,862,303
Amounts included within obligations to purchase residual values are secured against the assets to which they relate, as well as any monies due on lease agreements.
Amounts included with obligations under finance leases are secured against the assets to which they relate.
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Loans and overdrafts
2023
2022
£
£
Obligations to purchase residual values
2,370,778
2,502,560
Payable within one year
668,199
922,158
Payable after one year
1,702,579
1,580,402
19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
2,593,817
3,485,283
In two to five years
4,360,932
4,281,901
6,954,749
7,767,184
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
303,115
412,875
2023
Movements in the year:
£
Liability at 1 January 2023
412,875
Credit to profit or loss
(109,760)
Liability at 31 December 2023
303,115
The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
18,152
(5,144)
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.
Contributions payable to the fund at the year end were £2,367 (2023: £2,356).
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
94
94
91
91
Ordinary B of £1 each
31
31
34
34
125
125
125
125
Ordinary B shares have the same rights and rank pari passu in all respects to the Ordinary A shares.
23
Profit and loss reserves
The profit and loss account reserve represents cumulative profits and losses made by the company to date less any dividends declared.
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
2023
2022
£
£
Other related parties
8,349
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Other related parties
2,376
64,120
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Related party transactions
(Continued)
- 24 -
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Other related parties
-
5,085
Other information
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
25
Ultimate controlling party
The immediate parent company of Agility UK Limited is Agility Fleet Holdings Limited.
The ultimate parent company of Agility UK Limited is KNT Fleet Holdings Limited (formerly KNT Investments Limited).
The registered office of both Agility Fleet Holdings Limited and KNT Fleet Holdings Limited is Meridian House Saxon Business Park, Stoke Prior, Bromsgrove, Worcestershire, B60 4AD.
The ultimate controlling party is Mr K N Townsend by virtue of his majority shareholding in KNT Fleet Holdings Limited.
26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,969,121
1,882,266
Adjustments for:
Taxation charged
440,435
385,578
Finance costs
5,224
2,683
Investment income
(19,679)
(1,990)
Amortisation and impairment of intangible assets
19,271
6,029
Depreciation and impairment of tangible fixed assets
2,803,393
2,904,770
Movements in working capital:
Decrease in stocks
388,749
3,046,165
Decrease/(increase) in debtors
269,309
(2,506,561)
Decrease in creditors
(203,072)
(210,610)
Cash generated from operations
5,672,751
5,508,330
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
27
Analysis of changes in net debt
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
969,372
(91,297)
-
878,075
Borrowings excluding overdrafts
(2,502,560)
131,782
-
(2,370,778)
Obligations under finance leases
(7,767,184)
3,926,510
(3,114,075)
(6,954,749)
(9,300,372)
3,966,995
(3,114,075)
(8,447,452)
28
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Dec 2022
£
£
£
Current assets
Stocks
3,132,960
(2,502,560)
630,400
Debtors due after one year
-
1,580,402
1,580,402
Debtors due within one year
3,331,057
922,158
4,253,215
Creditors due within one year
Finance leases
(3,613,119)
127,836
(3,485,283)
Taxation
(500,186)
(118,977)
(619,163)
Creditors due after one year
Finance leases
(4,780,262)
498,361
(4,281,901)
Net assets
3,257,133
507,220
3,764,353
Capital and reserves
Profit and loss reserves
3,257,008
507,220
3,764,228
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 December 2022
£
£
£
Cost of sales
(8,806,598)
626,197
(8,180,401)
Taxation
(266,601)
(118,977)
(385,578)
Profit for the financial period
1,375,046
507,220
1,882,266
AGILITY UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
Prior period adjustment
(Continued)
- 26 -
Notes to reconciliation
Correction of error
During the year ended 31 December 2022, the company implemented a new vehicle management system that had an integrated finance system. Due to implementation issues, certain liability balances were duplicated in error.
The errors totalling £626,197 have been adjusted as a reduction in prior year cost of sales, with a £127,836 reduction in hire purchase liabilities due within one year and a £498,361 reduction in hire purchase liabilities due after more than one year. A corporation tax liability of £118,977 has been recognised on the profit generated.
Reclassification of interest in residual values
The company has obligations to repurchase residual values at lease termination on leases that have been assigned to third party funders. In prior years, the receivables were included within stock. The disclosure has been amended to reflect these amounts as receivables due within one year or due after more than one year to better reflect the nature of the arrangement with the funders.
The impact on the 2022 balance sheet has been to reduce stock by £2,502,560 and increase:
debtors: amounts due within one year by £922,158, and
debtors: amounts due after more than one year by £1,580,402.
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