Company registration number 04203848 (England and Wales)
MEADENS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
MEADENS LIMITED
COMPANY INFORMATION
Directors
Peter Sexton
Tom Sexton
Jack Sexton
Susan Sexton
Secretary
Susan Sexton
Company number
04203848
Registered office
53 Kent Road
Southsea
Hampshire
PO5 3HU
Auditor
Sumer Audit
53 Kent Road
Southsea
Hampshire
United Kingdom
PO5 3HU
Business address
69 Somerford Road
Dorset
Christchurch
BH23 3QA
Bankers
NatWest
130 Commercial Road
Portsmouth
Hampshire
PO1 1ES
MEADENS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Statement of cash flows
9
Notes to the financial statements
10 - 23
MEADENS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The company's principal activity is that of motor retailer. The company sells new and used vehicles and services and repairs vehicles. At 31 December 2023 the company operated Skoda new and used franchises from two locations and was an approved service facility for Mitsubishi customers.
The results for the year are set out in the profit and loss account on page 7.
The turnover for the year was £28,765,941, an increase of nearly 40% over the previous year's turnover of £20,705,956. The profit for the financial year after tax was £141,231 (2022 - £330,041).
The financial position of the company is set out in the balance sheet on page 8.
The net assets of the company were £1,682,090 (2022 - £1,825,859).
Principal risks and uncertainties
The main risk to the company is that of fluctuations in general economic conditions. This risk is partly mitigated by the sale of both new and used cars and aftersales services. Specific risks include the impact of interest rate rises, environmental concerns and legislation, the loss of key personnel and exchange rate fluctuations. The board of directors have met to consider these risks and uncertainties and will continue to actively monitor them on an ongoing basis.
Future developments
The directors anticipate the business environment will be challenging and competitive. They believe that the company is in a good financial position to deal with the challenges moving forward.
A new site in Christchurch was acquired at the end of 2021 with refurbishment work taking place during 2022 and 2023. Trading from the site commenced in 2023.
Financial instruments
The company has a normal sector level of exposure to price, credit, liquidity and cash flow risks arising from trading activities. The company does not enter into any hedging transactions.
Peter Sexton
Director
26 September 2024
MEADENS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company was that of motor trader.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £285,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Peter Sexton
Tom Sexton
Jack Sexton
Susan Sexton
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 auditor, Sumer Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risks and uncertainties.
Statement of disclosure to auditor
So far as the directors are aware, there is no relevant audit information of which the company's auditor are unaware. Additionally, the directors 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 auditors are aware of that information.
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
Peter Sexton
Director
26 September 2024
MEADENS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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.
MEADENS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MEADENS LIMITED
- 4 -
Opinion
We have audited the financial statements of Meadens Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet, 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.
MEADENS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MEADENS LIMITED
- 5 -
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.
MEADENS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MEADENS LIMITED
- 6 -
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: employment law, and compliance with the UK Companies Act.
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management, about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reading correspondence with regulators;
Challenging assumptions and judgements made by management in their significant accounting estimates; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
Peter Reading (Senior Statutory Auditor)
For and on behalf of Sumer Audit
26 September 2024
Chartered Accountants
Statutory Auditor
Southsea
Sumer Audit is the trading name of Sumer Auditco Limited
MEADENS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
28,765,941
20,705,956
Cost of sales
(27,196,197)
(19,350,503)
Gross profit
1,569,744
1,355,453
Administrative expenses
(1,090,895)
(796,439)
Other operating income
9,167
Operating profit
4
488,016
559,014
Interest payable and similar expenses
7
(231,041)
(116,936)
Profit before taxation
256,975
442,078
Tax on profit
8
(115,744)
(112,037)
Profit for the financial year
141,231
330,041
Retained earnings brought forward
1,558,730
1,520,689
Dividends
9
(285,000)
(292,000)
Retained earnings carried forward
1,414,961
1,558,730
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MEADENS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,713,000
1,857,807
Current assets
Stocks
12
3,239,988
2,526,382
Debtors
13
421,901
298,485
Cash at bank and in hand
243,160
503,775
3,905,049
3,328,642
Creditors: amounts falling due within one year
14
(4,586,500)
(3,218,666)
Net current (liabilities)/assets
(681,451)
109,976
Total assets less current liabilities
3,031,549
1,967,783
Creditors: amounts falling due after more than one year
15
(1,045,714)
Provisions for liabilities
Deferred tax liability
18
303,745
141,924
(303,745)
(141,924)
Net assets
1,682,090
1,825,859
Capital and reserves
Called up share capital
21
14,385
14,385
Share premium account
121,468
121,468
Capital redemption reserve
131,276
131,276
Profit and loss reserves
1,414,961
1,558,730
Total equity
1,682,090
1,825,859
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:
Peter Sexton
Director
Company registration number 04203848 (England and Wales)
MEADENS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
690,237
554,426
Interest paid
(231,041)
(116,936)
Income taxes paid
(46,077)
(215,381)
Net cash inflow from operating activities
413,119
222,109
Investing activities
Purchase of tangible fixed assets
(2,758,361)
(935,113)
Proceeds from disposal of tangible fixed assets
570,009
386,310
Net cash used in investing activities
(2,188,352)
(548,803)
Financing activities
Proceeds from borrowing
477,064
25,810
Proceeds from new bank loans
1,200,000
Repayment of bank loans
(67,842)
Net finance lease advances
115,396
284,671
Dividends paid
(210,000)
(210,000)
Net cash generated from financing activities
1,514,618
100,481
Net decrease in cash and cash equivalents
(260,615)
(226,213)
Cash and cash equivalents at beginning of year
503,775
729,988
Cash and cash equivalents at end of year
243,160
503,775
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Meadens Limited is a private company limited by shares incorporated in England and Wales. The registered office is 53 Kent Road, Southsea, Hampshire, PO5 3HU.
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.
At 31 December 2023 the company owed the directors £963,823. This amount is included within Creditors: amounts falling due within one year. The directors will only withdraw all or part of these balances to the extent that funds are available.
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.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets - goodwill
Goodwill is stated at cost less accumulated amortisation.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold buildings
Over 50 years
Short leasehold land and buildings
Over the term of the lease
Plant and machinery
20% Straight line and over the term of the lease
Fixtures, fittings & equipment
20% Straight line
Computer equipment
33 1/3% Straight line
Motor vehicles
3% Straight line per month
Freehold land and assets in the course of construction are not depreciated.
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
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.
1.6
Impairment of fixed assets
At each reporting period 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
1.7
Stocks
Stocks, including consignment 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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, 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 initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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.
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.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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
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 and deferred tax.
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
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. 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.
1.12
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
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
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.
The key estimates and assumptions applicable to the financial statements include
1. The useful economic lives of non current assets, and
2. Assessment of of the fair value of used vehicle stock.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
New and used car sales
27,461,060
19,395,535
Aftersales
1,271,074
1,273,806
Other trading income
33,807
36,615
28,765,941
20,705,956
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
22,875
17,205
Depreciation of owned tangible fixed assets
376,318
206,298
Depreciation of tangible fixed assets held under finance leases
37,646
17,943
Profit on disposal of tangible fixed assets
(80,805)
(77,627)
Operating lease charges
223,760
208,081
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
16
16
Aftersales
24
24
Administration
7
7
Total
47
47
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,263,601
1,036,229
Social security costs
88,751
96,681
Pension costs
26,361
21,802
1,378,713
1,154,712
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
50,673
46,823
Company pension contributions to defined contribution schemes
1,021
863
51,694
47,686
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
48,866
-
Other interest on financial liabilities
37,125
30,000
85,991
30,000
Other finance costs:
Interest on stocking loans, finance leases and hire purchase contracts
145,050
86,874
Other interest
62
231,041
116,936
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(46,077)
46,077
Deferred tax
Origination and reversal of timing differences
161,821
65,960
Total tax charge
115,744
112,037
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
256,975
442,078
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
64,244
83,995
Tax effect of expenses that are not deductible in determining taxable profit
509
Adjustments in respect of prior years
8,069
Effect of change in corporation tax rate
14,551
Depreciation on assets not qualifying for tax allowances
29,547
5,076
Enhanced allowances
(957)
(2,511)
Land remediation relief
(219)
(2,451)
Increase in rate of deferred tax
34,061
Allowances on assets under construction
(6,133)
Taxation charge for the year
115,744
112,037
9
Dividends
2023
2022
£
£
Final paid
285,000
292,000
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
290,000
Amortisation and impairment
At 1 January 2023 and 31 December 2023
290,000
Carrying amount
At 31 December 2023
At 31 December 2022
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Tangible fixed assets
Freehold buildings
Short leasehold land and buildings
Assets under construction
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
£
Cost
At 1 January 2023
413,656
533,260
230,584
882,126
220,419
84,998
719,873
3,084,916
Additions
1,338,574
761,175
39,112
20,761
598,739
2,758,361
Disposals
(599,735)
(599,735)
Transfers
198,310
(230,584)
32,274
At 31 December 2023
413,656
2,070,144
1,675,575
259,531
105,759
718,877
5,243,542
Depreciation and impairment
At 1 January 2023
5,458
268,549
586,660
197,190
81,987
87,265
1,227,109
Depreciation charged in the year
3,119
115,071
146,427
14,968
6,016
128,363
413,964
Eliminated in respect of disposals
(110,531)
(110,531)
At 31 December 2023
8,577
383,620
733,087
212,158
88,003
105,097
1,530,542
Carrying amount
At 31 December 2023
405,079
1,686,524
942,488
47,373
17,756
613,780
3,713,000
At 31 December 2022
408,198
264,711
230,584
295,466
23,229
3,011
632,608
1,857,807
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 19 -
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
396,165
287,126
12
Stocks
2023
2022
£
£
New and used cars
2,853,083
2,318,601
Consignment vehicles
264,133
110,196
Vehicle parts and other stocks
122,772
97,585
3,239,988
2,526,382
The company holds consignment vehicle stock although legal title remains with the supplier. The consignment stock bears interest at a commercial rate until it is sold or until title passes to the company, after the end of the consignment period of 180 days, when the stock is invoiced.
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
137,107
88,807
Corporation tax recoverable
46,077
Other debtors
31,853
24,343
Prepayments and accrued income
206,864
185,335
421,901
298,485
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
86,444
Obligations under finance leases
17
489,726
374,330
Other borrowings
16
2,293,483
1,816,419
Trade creditors
236,285
331,099
Corporation tax
46,077
Other taxation and social security
29,591
20,715
Deferred income
19
30,615
33,297
Other creditors
1,257,838
507,247
Accruals and deferred income
162,518
89,482
4,586,500
3,218,666
Other creditors includes £264,133 (2022: £110,196) in respect of consignment stock.
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
1,045,714
Amounts included above which fall due after five years are as follows:
Payable by instalments
629,793
-
16
Loans and overdrafts
2023
2022
£
£
Bank loans
1,132,158
Other loans
2,293,483
1,816,419
3,425,641
1,816,419
Payable within one year
2,379,927
1,816,419
Payable after one year
1,045,714
The company has granted general charges over all of the company's assets to secure funding from Volkswagen Financial Services (UK) Limited and Volkswagen Bank Gmbh. Amounts owed at the year end comprised used vehicle funding £1,767,148 (2022: £1,676,408).
The company has granted a first legal charge over the freehold property and associated assets and fixed and floating charges over all the property and undertakings of the company to secure the loan from NatWest Bank Plc.
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Loans and overdrafts
(Continued)
- 21 -
The NatWest Loan is repayable over ten years and interest is charged at 3.35%pa over the Bank Base Rate.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
489,726
374,330
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 less than six months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
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
354,984
150,248
Tax losses
(43,585)
-
Skoda deferred grant
(7,654)
(8,324)
303,745
141,924
2023
Movements in the year:
£
Liability at 1 January 2023
141,924
Charge to profit or loss
161,821
Liability at 31 December 2023
303,745
The deferred tax asset of £44,531 in respect of tax losses is expected to reverse within 12 months as taxable profits will be generated in this period. It is not possible to estimate any further future reversals.
19
Deferred income
2023
2022
£
£
Arising from Retailer support grant
30,615
33,297
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Deferred income
(Continued)
- 22 -
Retailer support has been provided by Skoda UK to assist with the upgrading of the Brockenhurst dealership. This has been spent on fixtures, fittings, plant and machinery and will be released in line with the depreciation of those assets over the coming years.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
26,361
21,802
The company participates in an auto enrolment 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. The company contributes a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the company with respect to the scheme is to make the specified contributions.
21
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
Ordinary A shares of £1 each
3,741
3,741
Ordinary B shares of £1 each
3,741
3,741
Ordinary C shares of £1 each
2,301
2,301
Ordinary D shares of £1 each
2,301
2,301
Ordinary E shares of £1 each
2,301
2,301
14,385
14,385
The ordinary shares carry no right to fixed income and rank equally for any capital distribution on winding up.
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
212,467
212,467
Between two and five years
775,687
804,154
In over five years
914,667
1,098,667
1,902,821
2,115,288
MEADENS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
23
Related party transactions
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Key management personnel
963,823
374,197
Balances totalling £963,823 are due to the directors of the company at the year end, of which £485,000 (2022: £200,000) bears interest at 15% per annum. All balances are repayable on demand.
24
Ultimate controlling party
Peter Sexton, a director, is the ultimate controlling party.
25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
141,231
330,041
Adjustments for:
Taxation charged
115,744
112,037
Finance costs
231,041
116,936
Gain on disposal of tangible fixed assets
(80,805)
(77,627)
Depreciation and impairment of tangible fixed assets
413,964
224,241
Movements in working capital:
(Increase)/decrease in stocks
(713,606)
299,535
Increase in debtors
(77,339)
(128,849)
Increase/(decrease) in creditors
662,689
(289,207)
Decrease in deferred income
(2,682)
(32,681)
Cash generated from operations
690,237
554,426
26
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
503,775
(260,615)
243,160
Borrowings excluding overdrafts
(1,816,419)
(1,609,222)
(3,425,641)
Obligations under finance leases
(374,330)
(115,396)
(489,726)
(1,686,974)
(1,985,233)
(3,672,207)
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