REGISTERED NUMBER: 00721312 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
for |
Pentagon Investments Limited |
REGISTERED NUMBER: 00721312 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
for |
Pentagon Investments Limited |
Pentagon Investments Limited (Registered number: 00721312) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Consolidated Profit and Loss Account | 9 |
Consolidated Balance Sheet | 10 |
Company Balance Sheet | 11 |
Consolidated Statement of Changes in Equity | 12 |
Company Statement of Changes in Equity | 13 |
Consolidated Cash Flow Statement | 14 |
Notes to the Consolidated Financial Statements | 15 |
Pentagon Investments Limited |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Chartered Accountants |
The Mills |
Canal Street |
Derby |
DE1 2RJ |
BANKERS: | Bank of Scotland |
33 Old Broad Street |
London |
BX2 1LB |
SOLICITORS: |
Castle Meadow Road |
Nottingham |
NG2 1BJ |
Pentagon Investments Limited (Registered number: 00721312) |
Group Strategic Report |
for the Year Ended 31 December 2023 |
The group comprises the holding company, Pentagon Investments Limited, and the four trading subsidiaries, Mertrux Limited, Lawrence Vehicles Limited, Pentagon Vehicle Rentals Limited, and Meadow Group Services Limited. |
Financial Overview |
Profit on ordinary activities before taxation was £10.9m (2022: £8.6m). The group has seen an increase in turnover of £76.0m, which was to be expected following a good year of trade with back orders being fulfilled. Mertrux Limited saw an increase in turnover of £33.2m, and Lawrence saw an increase of £43.8m. |
Financial Performance |
Staff costs have increased by 13% due to an increase in salaries and the number of employees. Overall, the group plans to expand. |
Pentagon Investments Limited owns certain properties occupied by its subsidiaries. Third party rental income remains consistent year on year. |
Mertrux Limited operates a truck, van and used car retailing business with its associated trades. It holds four Mercedes Benz and Mitsubishi points of representation in the East Midlands. The main business activity remains the sale of commercial vehicles to national and local businesses. Truck and van sales in terms of units have increased by 2% for trucks and 58% for vans. The overall result for the company is an increase in turnover of £33.2m. Gross profit margin has slightly decreased in this competitive market by 0.8% to 6.9%. |
Lawrence Vehicles Limited retails heavy trucks with its associated activities via a DAF franchise. The company has two main branches, one in Lancashire and the other based in Lothian. The company also has one parts depot. Turnover in the year increased by 20.0%. Gross profit has marginally increased by 0.7% to 4.8%. This company remains a key performer in the group. |
Pentagon Vehicle Rentals Limited is a vehicle rental company focusing on the light van and commercial vehicle market. Turnover increased in the year by 73.8% the gross profit margin has increased by 35.5% to 51.7%. |
Meadow Group Services Limited provides the central management and support services for the group. The majority of turnover relates to management fees for work performed for group companies. The company also offers financing and insured warranty products for its customers as an agent and is registered with the Financial Conduct Authority. |
Principal Risks and Uncertainties |
The management of the business and the nature of the group's strategy are subject to a number of risks. |
The directors feel that the principal risk is that of not achieving turnover and the group closely monitors this. There is also the risk of gross profit reduction and cost increases against anticipated performance. The group operates within an industry where margins are low and therefore to be profitable, high volume sales need to occur. This again is closely monitored by the directors with any necessary action undertaken. |
SECTION 172(1) STATEMENT |
The directors consider, both individually and together, that they have acted in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2023. |
ENGAGEMENT WITH EMPLOYEES |
Within the bounds of confidentiality, staff at all levels are kept fully informed of matters that affect the progress of the company and group and are of interest to them as employees. |
Disabled persons are given full and fair consideration for all types of vacancy. If an existing employee becomes disabled, such steps as are practical and reasonable are taken to retain him/her in employment. Where appropriate, assistance with rehabilitation and suitable training are given. Disabled persons have equal opportunities for training, career development and promotion, except insofar as such opportunities are constrained by the practical limitations of their disability. |
Pentagon Investments Limited (Registered number: 00721312) |
Group Strategic Report |
for the Year Ended 31 December 2023 |
ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS |
The directors have had regard to the need to foster the company's business relationships with suppliers, |
customers and others. |
ON BEHALF OF THE BOARD: |
6 September 2024 |
Pentagon Investments Limited (Registered number: 00721312) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 December 2023. |
PRINCIPAL ACTIVITIES |
The principal activities of the group in the year under review were those of retail truck, van and car dealers and their allied trades. |
The holding company is responsible for the co-ordination of the activities of the group, its overall financial control and its future development. |
DIVIDENDS |
Interim dividends per share were paid during the year as follows: |
Ordinary £1 | - | £98.5627 | - 31 December 2023 |
Ordinary B1 £1 | - | £793.3333 | - 31 December 2023 |
Ordinary B2 £1 | - | £804.5686 | - 31 December 2023 |
Ordinary B3 £1 | - | £813.7255 | - 31 December 2023 |
Ordinary B4 £1 | - | £809.8039 | - 31 December 2023 |
The total distribution of dividends for the year ended 31 December 2023 will be £ 6,168,930 . |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
The group’s financial assets and liabilities consist of trade debtors and creditors, cash balances, bank loans and overdrafts and stocking loans. |
The directors manage the group’s exposure to financial risk by researching the credit worthiness of customers and by seeking advice from the group’s providers of finance and its other external financial advisers. |
The group does not trade in foreign currencies. |
The group does not trade speculatively in derivatives or similar instruments. |
STREAMLINED ENERGY AND CARBON REPORTING |
This section includes our mandatory reporting of energy and greenhouse gas emissions for the period 1 January 2023 to 31 December 2023, pursuant to the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, implementing the government's Streamlined Energy and Carbon Reporting (SECR) policy. |
Our methodology to calculate our greenhouse gas emissions is based on the 'Environmental Reporting Guidelines January 2019, using the appropriate factors from the UK Government GHG Conversion Factors for Company Reporting (2023). |
We report using a financial control approach to define our organisational boundary. We have reported all material emission sources required by the regulations for which we deem ourselves to be responsible and have maintained records of all source data and calculations. |
During the reporting period, the steady increase in the number of electric and hybrid vehicles on fleet has continued where operational needs allow. A substantial increase in the use of Biodiesel as a proportion of the total diesel usage has resulted in a significant drop in the emissions resulting from this Scope. The table below includes total energy consumption (reported as kWh) and greenhouse gas emissions for the sources required by the regulations, along with our intensity ratio. |
Pentagon Investments Limited (Registered number: 00721312) |
Report of the Directors |
for the Year Ended 31 December 2023 |
01/01/2023 - 31/12/2023 |
01/01/2022 - 31/12/2022 |
Total Energy Consumption - Used for Emissions Calculation (kWh) | 8,636,058 | 7,743,415 |
Gas Combustion Emissions, Scope 1 (tCO2e) | 535.64 | 483.99 |
Propane Emissions, Scope 1 (tCO2e) | 2.8 | 1.1 |
Purchased Electricity Emissions, Scope 2 (tCO2e) | 257.76 | 233.98 |
Vehicle Fuel Combustion Emissions, Scope 1 (tCO2e) | 708.87 | 764.84 |
Vehicle Fuel Combustion Emissions, Scope 3 (tCO2e) | 0 | 0 |
Total Gross Reported Emissions (tCO2e) | 1,505.07 | 1,483.91 |
Turnover (£m) | 392.78 | 316.77 |
Intensity Ratio: Turnover (tCO2e / £m) | 3.83 | 4.68 |
There are no specific energy efficiency measures planned for the next financial year although the increase in electric/hybrid vehicles will continue as this sector of the market continues to evolve. |
DISCLOSURE IN THE STRATEGIC REPORT |
The matters required to be disclosed under SI (2008) 410 Sch 7 relating to employees are contained within the Group Strategic Report as applicable in accordance with s414C(11) of the Companies Act 2006. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group 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 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Pentagon Investments Limited |
Opinion |
We have audited the financial statements of Pentagon Investments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Pentagon Investments Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
Based on our understanding of the Group and industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the motor trade industry and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. Audit procedures performed by the engagement team included: |
- | Enquiry of management around actual and potential litigation and claims; |
- | Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; |
- | Reviewing minutes of meetings of those charged with governance; |
- | Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias. |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Pentagon Investments Limited |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
Chartered Accountants |
The Mills |
Canal Street |
Derby |
DE1 2RJ |
Pentagon Investments Limited (Registered number: 00721312) |
Consolidated |
Profit and Loss Account |
for the Year Ended 31 December 2023 |
2023 | 2022 |
as | restated |
Notes | £'000 | £'000 |
TURNOVER | 3 | 392,775 | 316,769 |
Cost of sales | 368,129 | 300,003 |
GROSS PROFIT | 24,646 | 16,766 |
Administrative expenses | 11,059 | 7,715 |
13,587 | 9,051 |
Other operating income | 255 | 525 |
OPERATING PROFIT | 5 | 13,842 | 9,576 |
Interest receivable and similar income | 6 | 310 | 76 |
14,152 | 9,652 |
Interest payable and similar expenses | 7 | 3,242 | 1,048 |
PROFIT BEFORE TAXATION | 10,910 | 8,604 |
Tax on profit | 8 | 2,851 | 1,644 |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
8,059 |
6,960 |
Prior year adjustment | 11 | (675 | ) |
TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT |
7,384 |
Profit attributable to: |
Owners of the parent | 8,059 | 6,960 |
Total comprehensive income attributable to: |
Owners of the parent | 7,384 | 6,960 |
Pentagon Investments Limited (Registered number: 00721312) |
Consolidated Balance Sheet |
31 December 2023 |
2023 | 2022 |
as restated |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Tangible assets | 12 | 25,453 | 23,508 |
Investments | 13 | - | - |
25,453 | 23,508 |
CURRENT ASSETS |
Stocks | 14 | 114,243 | 107,918 |
Debtors | 15 | 21,811 | 42,297 |
Cash at bank and in hand | 18,827 | 10,184 |
154,881 | 160,399 |
CREDITORS |
Amounts falling due within one year | 16 | 130,628 | 136,285 |
NET CURRENT ASSETS | 24,253 | 24,114 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
49,706 |
47,622 |
CREDITORS |
Amounts falling due after more than one year |
17 |
(1,321 |
) |
(1,190 |
) |
PROVISIONS FOR LIABILITIES | 20 | (468 | ) | (405 | ) |
NET ASSETS | 47,917 | 46,027 |
CAPITAL AND RESERVES |
Called up share capital | 21 | 51 | 51 |
Capital redemption reserve | 22 | 111 | 111 |
Retained earnings | 22 | 47,755 | 45,865 |
SHAREHOLDERS' FUNDS | 47,917 | 46,027 |
The financial statements were approved by the Board of Directors and authorised for issue on 6 September 2024 and were signed on its behalf by: |
Mrs H Marshall - Director |
I E Marshall - Director |
Pentagon Investments Limited (Registered number: 00721312) |
Company Balance Sheet |
31 December 2023 |
2023 | 2022 |
as restated |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT (LIABILITIES)/ASSETS | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 20 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Capital redemption reserve | 22 |
Retained earnings | 22 |
SHAREHOLDERS' FUNDS |
Company's profit/(loss) for the financial year |
631 |
(168 |
) |
The financial statements were approved by the Board of Directors and authorised for issue on |
Pentagon Investments Limited (Registered number: 00721312) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£'000 | £'000 | £'000 | £'000 |
Balance at 1 January 2022 | 51 | 41,546 | 111 | 41,708 |
Changes in equity |
Dividends | - | (2,641 | ) | - | (2,641 | ) |
Total comprehensive income | - | 7,635 | - | 7,635 |
Balance at 31 December 2022 | 51 | 46,540 | 111 | 46,702 |
Prior year adjustment | - | (675 | ) | - | (675 | ) |
As restated | 51 | 45,865 | 111 | 46,027 |
Changes in equity |
Dividends | - | (6,169 | ) | - | (6,169 | ) |
Total comprehensive income | - | 8,059 | - | 8,059 |
Balance at 31 December 2023 | 51 | 47,755 | 111 | 47,917 |
Pentagon Investments Limited (Registered number: 00721312) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£'000 | £'000 | £'000 | £'000 |
Balance at 1 January 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2023 |
Pentagon Investments Limited (Registered number: 00721312) |
Consolidated Cash Flow Statement |
for the Year Ended 31 December 2023 |
2023 | 2022 |
as | restated |
Notes | £'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 27 | 24,131 | 417 |
Interest paid | (3,183 | ) | (988 | ) |
Interest element of hire purchase payments paid |
(59 |
) |
(60 |
) |
Tax paid | (1,979 | ) | (1,447 | ) |
Net cash from operating activities | 18,910 | (2,078 | ) |
Cash flows from investing activities |
Purchase of tangible fixed assets | (6,404 | ) | (3,250 | ) |
Sale of tangible fixed assets | 1,371 | 1,030 |
Sale of investment property | - | 444 |
Interest received | 310 | 76 |
Net cash from investing activities | (4,723 | ) | (1,700 | ) |
Cash flows from financing activities |
New loans in year | 1,223 | - |
Capital repayments in year | (598 | ) | (1,054 | ) |
Equity dividends paid | (6,169 | ) | (2,641 | ) |
Net cash from financing activities | (5,544 | ) | (3,695 | ) |
Increase/(decrease) in cash and cash equivalents | 8,643 | (7,473 | ) |
Cash and cash equivalents at beginning of year |
28 |
10,184 |
17,657 |
Cash and cash equivalents at end of year |
28 |
18,827 |
10,184 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Pentagon Investments Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Consolidation |
The consolidated accounts incorporate the accounts of Pentagon Investments Limited and all of its subsidiary undertakings. The acquisition method of accounting has been adopted. |
Goodwill arising on consolidation was written off against reserves on acquisition. This will be charged to the profit and loss account on disposal of the business to which it relates. |
In the company's financial statements, investments in subsidiary undertakings are stated at cost less amounts written off. |
Turnover |
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to third party and group customers during the year. Turnover is recognised when the group has transferred the significant risks and rewards of ownership to the buyer and it is probable that the group will receive the agreed upon payment. |
Tangible fixed assets |
Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment loss. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Depreciation is provided on all fixed assets, with the exception of loose tools, to write off the cost less the estimated residual value in annual instalments over their estimated useful lives as follows :- |
Assets in the course of construction | - not provided |
Freehold property | - 2% straight line on cost or revaluation |
Short leasehold | - over the period of the lease |
Plant and machinery | - 15% on cost |
Fixtures, fittings, tools and equipment | - 10% to 20% on cost |
Motor vehicles and equipment | - 15% to 50% on cost |
Computer equipment | - 25% on cost |
Vehicles are written off systematically on a straight line basis by reference to their estimated residual value at proposed date of disposal over a range of 2 to 8 years. Loose tools are accounted for on a renewals basis. |
Freehold land is not depreciated. |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within 'cost of sales' and 'administrative expenses' in the profit and loss account. |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Investment property |
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for slow moving and obsolete items. In the case of work in progress, cost includes direct labour. Cost represents the invoiced cost of materials, parts and vehicles on an average cost basis. |
At each reporting date, stock is assessed for impairment. If impaired, the carrying amount is reduced and the impairment loss is recognised immediately in the profit and loss account. |
Vehicles held on consignment are included within stocks in the Balance Sheet when the terms of the consignment agreement and normal commercial practice indicate that the group enjoys the principal benefit equivalent to owning the stock, being the ability to sell it, and carries the principal risks of ownership which are the cost of stockholding, safekeeping and some risks of obsolescence. When these criteria are not met, consignment stocks are not accounted for in the Balance Sheet but disclosed in the notes to the financial statements. |
Deferred tax |
Deferred tax arises from timing differences that are differences between taxable total profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. |
A deferred tax asset is recognised only when it is more likely than not that there will be suitable taxable profits from which the future reversal of underlying timing differences and losses can be deducted. |
Provision is made at current rates for taxation deferred in respect of all material timing differences. |
Fixed asset investments |
Fixed asset investments are valued at cost less provisions for permanent diminution in valuations. |
Hire purchase and leasing commitments payable |
Assets obtained under hire purchase contracts are capitalised in the Balance Sheet and are depreciated over their estimated useful lives. |
The interest element of these obligations is charged to the profit and loss account on a basis which gives a constant periodic rate of interest, on the outstanding hire purchase liability. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to the profit and loss account as incurred. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations. The contributions are recognised as an expense when they fall due. Amounts not paid are shown in accruals in the Balance Sheet. The assets of the plan are held separately from the group in independently administered funds. |
Hire purchase and finance lease receivables |
The net investment in assets held by third parties under hire purchase contracts and finance leases in which a residual interest is retained, is accounted for as a current asset within Debtors. Revenue is recognised on a straight line basis over the term of the contract and is included within Turnover. |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Operating lease receivables |
Where the company or its subsidiaries enters into a lease as lessor which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as an operating lease. The asset is recorded in the Balance Sheet as a tangible fixed asset and is depreciated over its estimated useful life or the term of the lease, whichever is shorter. Revenue is recognised on a straight line basis over the term of the contract and is included within Turnover. |
Judgements in applying accounting policies and key sources of estimation |
In the application of the group's accounting policies the directors are required to make judgement estimates and assumptions about the carrying amounts of the group's assets and liabilities. These are based on historical experience and other factors that are considered relevant and are reviewed on a regular basis and recognised in the period in which the estimate is revised. Actual results may differ from these estimates. |
The following are the critical judgements and where relevant the key sources of estimation uncertainty: |
Tangible fixed assets are depreciated over their useful economic lives taking in to account their residual values where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing the asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken in to account. Residual values consider such things as future market conditions, the remaining life of the asset and projected disposal values. |
The recoverability of debtors is assessed on the likelihood and circumstances of the particular cost. |
The value of stock is assessed for impairment. In re-assessing the stock value, factors such as slow movement and obsolescence are taken in to account. |
As regards to the fair value of the properties held for investment purposes, the directors have considered the portfolio on an aggregate basis given the tenants, rental including any receivable, and capital growth potential in the foreseeable future. |
3. | TURNOVER |
Turnover is wholly attributable to the principal activities of the group and is generated principally within the United Kingdom. |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Wages and salaries | 17,824 | 15,556 |
Social security costs | 1,838 | 1,781 |
Other pension costs | 1,045 | 984 |
20,707 | 18,321 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
4. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
2023 | 2022 |
as | restated |
Staff and office | 139 | 138 |
Production and sales | 240 | 224 |
2023 | 2022 |
as | restated |
£ | £ |
Directors' remuneration | 892,913 | 786,353 |
Directors' pension contributions to money purchase schemes | 50,162 | 49,691 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 3 | 3 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
as | restated |
£ | £ |
Emoluments etc | 722,972 | 620,147 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Depreciation - owned assets | 2,668 | 2,218 |
Depreciation - assets on hire purchase contracts | 634 | 881 |
Profit on disposal of fixed assets | (214 | ) | (175 | ) |
Auditors' remuneration | 100 | 130 |
Auditors' remuneration - accountancy and taxation compliance | 13 | 13 |
Auditors' remuneration - other | 7 | 7 |
Rentals received from vehicle operating leases | (6,593 | ) | (3,780 | ) |
Rents received - other | (1,042 | ) | (892 | ) |
Operating lease rentals | 912 | 912 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
6. | INTEREST RECEIVABLE AND SIMILAR INCOME |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Interest on deposits and loans | 242 | 71 |
Interest received | 68 | 5 |
310 | 76 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Interest on taxation | 11 | - |
Stocking loan interest | 3,172 | 988 |
Hire purchase | 59 | 60 |
3,242 | 1,048 |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Current tax: |
UK corporation tax | 2,412 | 1,371 |
Adjustment re prior year | 376 | - |
Total current tax | 2,788 | 1,371 |
Deferred tax | 63 | 273 |
Tax on profit | 2,851 | 1,644 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
8. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Profit before tax | 10,910 | 8,604 |
Profit multiplied by the standard rate of corporation tax in the UK of 23.520 % (2022 - 19 %) |
2,566 |
1,635 |
Effects of: |
Expenses not deductible for tax purposes | 53 | 87 |
Capital allowances in excess of depreciation | (236 | ) | (386 | ) |
Prior year adjustment | 376 | - |
Short term timing differences | 29 | 35 |
Deferred tax adjustment | 63 | 273 |
Total tax charge | 2,851 | 1,644 |
9. | INDIVIDUAL PROFIT AND LOSS ACCOUNT |
As permitted by Section 408 of the Companies Act 2006, the Profit and Loss Account of the parent company is not presented as part of these financial statements. |
10. | DIVIDENDS |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Ordinary shares of £1 each |
Interim | 4,526 | 2,641 |
Ordinary B1 shares of £1 each |
Interim | 405 | - |
Ordinary B2 shares of £1 each |
Interim | 410 | - |
Ordinary B3 shares of £1 each |
Interim | 415 | - |
Ordinary B4 shares of £1 each |
Interim | 413 | - |
6,169 | 2,641 |
11. | PRIOR YEAR ADJUSTMENT |
Turnover in the subsidiary, Lawrence Vehicles Limited, has previously been recognised upon invoice of vehicles. Further to a review of sales terms and conditions, it was identified that turnover should be recognised upon delivery of vehicles. In the year to 31 December 2022, an adjustment has been made to decrease turnover by £11.0m, increase closing stock by £21.6m, increase opening stock by £10.8m, increase deferred income by £25.1m and increase accrued income by £2.8m. Opening retained earnings at 01 January 2022 have been amended by £425,000. |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
12. | TANGIBLE FIXED ASSETS |
Group |
Assets in |
the |
Freehold | Short | course of |
property | leasehold | construction |
£'000 | £'000 | £'000 |
COST OR VALUATION |
At 1 January 2023 | 16,444 | 10 | 18 |
Additions | - | - | - |
Disposals | - | - | - |
At 31 December 2023 | 16,444 | 10 | 18 |
DEPRECIATION |
At 1 January 2023 | 2,687 | - | - |
Charge for year | 247 | - | - |
Eliminated on disposal | - | - | - |
At 31 December 2023 | 2,934 | - | - |
NET BOOK VALUE |
At 31 December 2023 | 13,510 | 10 | 18 |
At 31 December 2022 | 13,757 | 10 | 18 |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£'000 | £'000 | £'000 | £'000 |
COST OR VALUATION |
At 1 January 2023 | 2,398 | 19,183 | 23 | 38,076 |
Additions | 14 | 6,390 | - | 6,404 |
Disposals | - | (4,313 | ) | - | (4,313 | ) |
At 31 December 2023 | 2,412 | 21,260 | 23 | 40,167 |
DEPRECIATION |
At 1 January 2023 | 1,703 | 10,166 | 12 | 14,568 |
Charge for year | 152 | 2,897 | 6 | 3,302 |
Eliminated on disposal | - | (3,156 | ) | - | (3,156 | ) |
At 31 December 2023 | 1,855 | 9,907 | 18 | 14,714 |
NET BOOK VALUE |
At 31 December 2023 | 557 | 11,353 | 5 | 25,453 |
At 31 December 2022 | 695 | 9,017 | 11 | 23,508 |
Motor vehicles with a cost of £16,276,517 (2022 - £14,936,813) and accumulated depreciation of £6,823,778 (2022 - £6,969,831) are utilised by a subsidiary for leasing activities. Depreciation for the year on these assets was £2,344,862 (2022 - £2,311,813). |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
12. | TANGIBLE FIXED ASSETS - continued |
Group |
Cost or valuation at 31 December 2023 is represented by: |
Assets in |
the |
Freehold | Short | course of |
property | leasehold | construction |
£'000 | £'000 | £'000 |
Valuation in 1996 | 3,286 | - | - |
Cost | 13,158 | 10 | 18 |
16,444 | 10 | 18 |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£'000 | £'000 | £'000 | £'000 |
Valuation in 1996 | - | - | - | 3,286 |
Cost | 2,412 | 21,260 | 23 | 36,881 |
2,412 | 21,260 | 23 | 40,167 |
Freehold property was revalued to reflect its open market value at 31 March 1996. The valuations were undertaken by Wilson Orridge, Chartered Surveyors, in accordance with the RICS Appraisal and Valuation Manual. The valuation for the remaining properties held is lower than their historical cost. There is consequently no difference between the aggregate depreciation above and that calculated on an historical cost basis. Under the transitional provisions of Financial Reporting Standard number 102 the directors have frozen these valuations at the 31 March 1996 values. The amount of freehold land included above which has not been depreciated is £4,542,000 (2022 - £4,542,000). |
The net book value of tangible fixed assets includes £2,635,196 (2022 - £2,175,311) in respect of assets held under hire purchase contracts. |
Company |
Assets in |
the |
Freehold | Short | course of |
property | leasehold | construction | Totals |
£'000 | £'000 | £'000 | £'000 |
COST OR VALUATION |
At 1 January 2023 |
and 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
12. | TANGIBLE FIXED ASSETS - continued |
Company |
Freehold property was revalued to reflect its open market value at 31 March 1996. The valuations were undertaken by Wilson Orridge, Chartered Surveyors, in accordance with the RICS Appraisal and Valuation Manual. The valuation for the remaining properties held is lower than their historical cost. There is consequently no difference between the aggregate depreciation above and that calculated on an historical cost basis. Under the transitional provisions of Financial Reporting Standard number 102 the directors have frozen these valuations at the 31 March 1996 values. The amount of freehold land included above which has not been depreciated is £4,542,000 (2022 - £4,542,000). |
Cost or valuation at 31 December 2023 is represented by: |
Assets in |
the |
Freehold | Short | course of |
property | leasehold | construction | Totals |
£'000 | £'000 | £'000 | £'000 |
Valuation in 1996 | 3,286 | - | - | 3,286 |
Cost | 13,158 | 10 | 18 | 13,186 |
16,444 | 10 | 18 | 16,472 |
13. | FIXED ASSET INVESTMENTS |
Company |
Unlisted |
investments |
£'000 |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Investment in Subsidiary | Undertakings |
At the balance sheet date, the company had the following wholly owned subsidiaries all of which are involved in the motor trade except Toptrux (Nottingham) Limited, Truck Parts 4 U Limited and Central Vanz & Trux Limited which are dormant companies. All are included in these consolidated financial statements:- |
Class of share |
Mertrux Limited | Ordinary |
Lawrence Vehicles Limited | Ordinary |
Pentagon Vehicle Rentals Limited | Ordinary |
Meadow Group Services Limited | Ordinary |
Central Vanz & Trux Limited | Ordinary |
Toptrux (Nottingham) Limited | Ordinary |
Truck Parts 4 U Limited | Ordinary |
The registered offices of the undertakings are that of the parent. |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
14. | STOCKS |
Group |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Vehicles and parts for resale | 78,938 | 92,153 |
Consignment stock | 35,305 | 15,765 |
114,243 | 107,918 |
15. | DEBTORS |
Group | Company |
2023 | 2022 | 2023 | 2022 |
as restated |
as restated |
£'000 | £'000 | £'000 | £'000 |
Amounts falling due within one year: |
Trade debtors | 18,745 | 31,535 |
Other debtors | 2,306 | 6,202 |
Amounts due from group undertakings | - | - | 7,289 | 5,390 |
Prepayments and accrued income | 760 | 4,560 |
21,811 | 42,297 |
Amounts falling due after more than one | year: |
Deferred tax asset | - | - | 29 | - |
Aggregate amounts | 21,811 | 42,297 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
as restated |
as restated |
£'000 | £'000 | £'000 | £'000 |
Hire purchase contracts (see note 18) | 1,452 | 958 |
Trade creditors | 58,225 | 86,703 |
Tax | 1,504 | 695 |
Social security and other taxes | 3,860 | 716 |
Other creditors | 5,388 | 3,301 |
Consignment stock | 35,305 | 15,765 | - | - |
Amounts due to group undertakings | - | - | 8,812 | 4,634 |
Accruals and deferred income | 24,894 | 28,147 |
130,628 | 136,285 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Hire purchase contracts (see note 18) | 1,321 | 1,190 |
18. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Net obligations repayable: |
Within one year | 1,452 | 958 |
Between one and five years | 1,321 | 1,190 |
2,773 | 2,148 |
Group |
Non-cancellable | operating leases |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Within one year | 277 | 289 |
Between one and five years | 284 | 60 |
561 | 349 |
Company |
Non-cancellable | operating leases |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Within one year |
Between one and five years |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
18. | LEASING AGREEMENTS - continued |
Minimum lease income falls due as follows: |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£'000 | £'000 | £'000 | £'000 |
Within one year | 3,594 | 3,303 | 120 | 120 |
Between one and five years | 6,182 | 4,541 | - | - |
In more than five years | - | 31 | - | - |
9,776 | 7,875 | 120 | 120 |
19. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Hire purchase contracts | 2,773 | 2,148 |
Consignment stock | 35,205 | 15,765 |
37,978 | 17,913 |
Vehicles subject to hire purchase agreements are secured by charges to their respective finance companies in accordance with normal practice. |
Consignment stock is secured by way of a floating charge over the company's stock. |
20. | PROVISIONS FOR LIABILITIES |
Group | Company |
2023 | 2022 | 2023 | 2022 |
as restated |
as restated |
£'000 | £'000 | £'000 | £'000 |
Deferred taxation - |
accelerated capital allowances | 468 | 405 | - | 12 |
468 | 405 | - | 12 |
Group |
Deferred |
tax |
£'000 |
Balance at 1 January 2023 | 405 |
Provided during year | 63 |
Balance at 31 December 2023 | 468 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
20. | PROVISIONS FOR LIABILITIES - continued |
Company |
Deferred |
tax |
£'000 |
Balance at 1 January 2023 |
Utilised during year | ( |
) |
Balance at 31 December 2023 |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal value: | 2022 | 2021 |
£ | £ |
45,920 | Ordinary | £1 | 45,920 | 45,920 |
510 | Ordinary B1 | £1 | 510 | 510 |
510 | Ordinary B2 | £1 | 510 | 510 |
510 | Ordinary B3 | £1 | 510 | 510 |
510 | Ordinary B4 | £1 | 510 | 510 |
510 | Ordinary B5 | £1 | 510 | 510 |
510 | Ordinary B6 | £1 | 510 | 510 |
510 | Ordinary B7 | £1 | 510 | 510 |
510 | Ordinary B8 | £1 | 510 | 510 |
510 | Ordinary B9 | £1 | 510 | 510 |
510 | Ordinary B10 | £1 | 510 | 510 |
51,020 | 51,020 |
22. | RESERVES |
Group |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£'000 | £'000 | £'000 |
At 1 January 2023 | 46,540 | 111 | 46,651 |
Prior year adjustment | (675 | ) | (675 | ) |
45,865 | 45,976 |
Profit for the year | 8,059 | 8,059 |
Dividends | (6,169 | ) | (6,169 | ) |
At 31 December 2023 | 47,755 | 111 | 47,866 |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
22. | RESERVES - continued |
Company |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£'000 | £'000 | £'000 |
At 1 January 2023 | 16,087 |
Profit for the year |
Dividends | ( |
) | ( |
) |
At 31 December 2023 | 10,549 |
23. | OTHER FINANCIAL COMMITMENTS |
The company has given a guarantee to the Bank of Scotland covering the liabilities due to the bank of whatever nature relating to Pentagon Investments Limited and its subsidiaries. In addition, the bank holds a debenture conferring fixed and floating charges to secure all monies from time to time owed by the company to the bank. At the balance sheet date, the net liability was £Nil (2022 - £Nil). |
24. | RELATED PARTY DISCLOSURES |
During the year, the dividends were paid by the company to the beneficiaries of the family trusts. |
The directors and shareholders maintain current accounts with the company. At the balance sheet date, the balances owed to/from such persons included in other creditors were £1,998,386 (2022 - £736,281) and in other debtors were £Nil (2022 - £728,853). The balances are interest free and repayable on demand. |
Pentagon Investments Limited leases land and buildings from a Retirement Benefit Scheme of which Pentagon Investments Limited is the principal employer. Directors and other family members are members of the scheme. The land and buildings are occupied by subsidiaries, which accounts for the rent due of £217,000 (2022 - £217,000) and are paid directly to the scheme. At the balance sheet date £Nil (2022 - £Nil) was owed to the pension scheme. During 2012, Pentagon Investments Limited advanced a loan of £1,050,000 to the pension scheme. The loan was due for repayment on 27 May 2022 under an agreement signed in February 2017, and has been received during the year. Interest was charged on this loan at a rate of 3.25% above Lloyds Bank base rate. |
25. | ULTIMATE CONTROLLING PARTY |
Mrs H Marshall is the group's ultimate controlling party. |
26. | EMPLOYEE BENEFITS |
Included in the notes to the financial statements are payments to the defined contribution pension scheme. |
Pentagon Investments Limited (Registered number: 00721312) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
27. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
as | restated |
£'000 | £'000 |
Profit before taxation | 10,910 | 8,604 |
Depreciation charges | 3,302 | 3,099 |
Profit on disposal of fixed assets | (214 | ) | (186 | ) |
Finance costs | 3,242 | 1,048 |
Finance income | (310 | ) | (76 | ) |
16,930 | 12,489 |
Increase in stocks | (6,325 | ) | (50,689 | ) |
Decrease/(increase) in trade and other debtors | 20,486 | (13,327 | ) |
(Decrease)/increase in trade and other creditors | (6,960 | ) | 51,944 |
Cash generated from operations | 24,131 | 417 |
28. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£'000 | £'000 |
Cash and cash equivalents | 18,827 | 10,184 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
as restated |
£'000 | £'000 |
Cash and cash equivalents | 10,184 | 17,657 |
29. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.1.23 | Cash flow | At 31.12.23 |
£'000 | £'000 | £'000 |
Net cash |
Cash at bank and in hand | 10,184 | 8,643 | 18,827 |
10,184 | 8,643 | 18,827 |
Debt |
Finance leases | (2,148 | ) | (625 | ) | (2,773 | ) |
(2,148 | ) | (625 | ) | (2,773 | ) |
Total | 8,036 | 8,018 | 16,054 |