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COMPANY REGISTRATION NUMBER: SC173818
Richard Lawson (Autoecosse) Limited
Filleted Unaudited Financial Statements
30 September 2023
Richard Lawson (Autoecosse) Limited
Statement of Financial Position
30 September 2023
2023
2022
Note
£
£
£
Fixed assets
Tangible assets
5
149,864
182,160
Current assets
Stocks
2,131,515
1,976,575
Debtors
6
477,472
517,438
Cash at bank and in hand
19,760
8,827
------------
------------
2,628,747
2,502,840
Creditors: amounts falling due within one year
7
1,872,517
1,902,842
------------
------------
Net current assets
756,230
599,998
---------
---------
Total assets less current liabilities
906,094
782,158
Creditors: amounts falling due after more than one year
8
281,286
220,254
---------
---------
Net assets
624,808
561,904
---------
---------
Richard Lawson (Autoecosse) Limited
Statement of Financial Position (continued)
30 September 2023
2023
2022
Note
£
£
£
Capital and reserves
Called up share capital
10
1,350,000
1,350,000
Profit and loss account
( 725,192)
( 788,096)
------------
------------
Shareholders funds
624,808
561,904
------------
------------
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
In accordance with section 444 of the Companies Act 2006, the statement of income and retained earnings has not been delivered.
For the year ending 30 September 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Director's responsibilities:
- The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476 ;
- The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements .
These financial statements were approved by the board of directors and authorised for issue on 31 October 2024 , and are signed on behalf of the board by:
Mr R. H. Lawson
Director
Company registration number: SC173818
Richard Lawson (Autoecosse) Limited
Notes to the Financial Statements
Year ended 30 September 2023
1. General information
The company is a private company limited by shares, registered in Scotland. The address of the registered office is High Street, Burrelton, Perthshire, PH13 9NX.
2. Statement of compliance
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The company made a profit for the year to 30 September 2023 of £62,904 (2022 - loss for the year of £147,795) and at 30 September 2023 it had shareholders funds of £624,808 (2022 - funds of £561,904). The director is satisfied that, in the year to 30 September 2023, the company performed satisfactorily by focusing on marketing pre owned cars and light commercial and pick-ups. The new car franchise structure in the UK is now clearly under the control of the large multi brand dealer groups so any opportunity for smaller dealer operators is very limited. The benefits of a used vehicle sales operation result in lower operating costs and the ability to establish a stock mix that reflects consumer and business demand. The marketing of used vehicles can now be undertaken on a pan UK basis by online interaction with a prospective customer whereby the sales transaction can be progressed to a conclusion as they have received sufficient information to reach a balanced decision to purchase the vehicle of their choice. Equally we welcome customers to our dealership to view our extensive stock and the quality of our preparation standards where they can inspect vehicles at their leisure. However the used car market continues to experience change with one of the big disruptors that had planned to revolutionise the used car industry ceasing trading in the past year despite massive marketing and sponsorship costs. This showed this new business model was not a success and that the sale and marketing of used vehicles would continue to be dominated by a dealer network albeit using internet based solutions to reach their prospective market. Whilst some consumers are comfortable with a remote and impersonal buying process the vast majority still wish to interact with a dealer and establish a personal relationship. However consumers are now comfortable with researching their choice of car across the UK and dealers need to adapt to providing the information the customer is looking for and to create confidence with the customer. The company continues to respond to these market dynamics with regular upgrades of their web-site that provides significant vehicle data including 40 plus photographs and a video on each vehicle that is on offer. The web-site information is complemented with a wide range of social media marketing campaigns with our main marketing done on on-line platforms. The company's website facilitates various additional features that included Part Exchange valuations and appraisals, and Finance options. All of these features allow prospective customers to progress their interest in the comfort of their home or office. In relation to the sourcing of used vehicles, there has been significant management focus and activity using up to date market analysis information to secure stock vehicles that best reflect the current trends in consumer demand for specific brands and models. The director is satisfied that the rationalisation of the business operations in the past year has reduced the operating costs but still allowed turnover to increase resulting in profitable trading. Further overhead efficiencies are planned in 2024 which will yield further benefits and margin opportunity. The director is assured that the benefits of the changes made and described above will allow the company to continue trading in a profitable manner and establish positive cash flows from trading activities. The director considers that, after making appropriate enquiries, he has reasonable expectation that the company will have adequate financial resources from its trading operations, as well as from the continuation of bank lending and trade facilities from the company's main bank and its main trade finance funders, to meet its financial obligations as they fall due for the foreseeable future. For this reason, the director considers that the going concern basis continues to be an appropriate basis for preparing the financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
The turnover represents the invoiced amounts for the sale and servicing of motor vehicles, stated net of value added tax.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Tenants Improvements
-
10%, 20% and 50% Straight line
Office Equipment
-
10%, 20% and 33.33% Straight line
Motor Vehicles
-
20% and 33.33% Straight line
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell, excluding VAT. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided.
4. Employee numbers
The average number of persons employed by the company during the year amounted to 21 (2022: 25 ).
5. Tangible assets
Tenants improvements
Office Equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 October 2022
112,840
184,654
141,289
438,783
Additions
7,670
34,636
42,306
Disposals
( 17,917)
( 17,917)
---------
---------
---------
---------
At 30 September 2023
112,840
192,324
158,008
463,172
---------
---------
---------
---------
Depreciation
At 1 October 2022
94,698
138,629
23,296
256,623
Charge for the year
10,091
19,164
32,506
61,761
Disposals
( 5,076)
( 5,076)
---------
---------
---------
---------
At 30 September 2023
104,789
157,793
50,726
313,308
---------
---------
---------
---------
Carrying amount
At 30 September 2023
8,051
34,531
107,282
149,864
---------
---------
---------
---------
At 30 September 2022
18,142
46,025
117,993
182,160
---------
---------
---------
---------
Finance leases and hire purchase contracts
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 30 September 2023
106,807
---------
At 30 September 2022
115,404
---------
6. Debtors
2023
2022
£
£
Trade debtors
150,239
129,846
Amounts owed by associated companies
73,567
Other debtors
327,233
314,025
---------
---------
477,472
517,438
---------
---------
7. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
114,770
181,106
Trade creditors
474,808
314,853
Amounts owed to associated companies
47,623
Accruals and deferred income
27,821
25,897
Social security and other taxes
344,967
362,027
Obligations under finance leases and hire purchase contracts
30,124
28,270
Other creditors
832,404
990,689
------------
------------
1,872,517
1,902,842
------------
------------
Included in Other creditors above are amounts due to funders in respect of new and used car funding amounting to £812,476 (2022 - £936.587). This funding is secured against the corresponding stock units.
Funding amounts received from vehicle stock funding providers reflect the full invoice value of the vehicles purchased for stock, including the VAT element of the invoice, while the vehicles are held in stock at their cost excluding VAT. The vehicle funding is mainly settled on the sale of the corresponding stock vehicle or after 6 months, whichever event comes first, with part settlements made of 5% after 90, 120 and 150 days to certain funders.
8. Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
164,733
157,219
Obligations under finance leases and hire purchase contracts
30,994
44,301
Director loan accounts
85,559
Other creditors
18,734
---------
---------
281,286
220,254
---------
---------
Bank loans and the bank overdraft are secured by way of a floating charge over the assets of the company. In addition, the director, Mr R. H. Lawson , has provided a personal guarantee amounting to £200,000 (2022 - £200,000).
9. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 9,140 (2022: £ 6,482 ).
10. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
1,250,000
1,250,000
1,250,000
1,250,000
Preference shares of £ 1 each
100,000
100,000
100,000
100,000
------------
------------
------------
------------
1,350,000
1,350,000
1,350,000
1,350,000
------------
------------
------------
------------
The Ordinary and Preference shares have the same rights and rank pari passu in a winding up.
11. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
68,218
68,218
Later than 1 year and not later than 5 years
52,417
120,635
---------
---------
120,635
188,853
---------
---------
12. Director's advances, credits and guarantees
Mr R H Lawson has a loan account with a balance due from the company (2022 - due to the company). During the year, Mr R. H. Lawson made cash advances to the company, paid company liabilities on behalf of the company and transferred personally owned assets to the company all at market value. Additionally, during the year, the company made cash repayments to the director, paid amounts on his behalf and provided goods and services to Mr R. H. Lawson or businesses operated by him personally on commercial terms. The value of these transactions with Mr R H Lawson has been adjusted against the loan account. Following all of these transactions, at the year end, the company was due to pay Mr R. H. Lawson £85,559 (2022 - Mr R. H. Lawson was due to pay the company £58,430).
13. Related party transactions
The company was under the control of Mr R.H. Lawson throughout the current and previous period. Mr R.H. Lawson is the company's managing director and sole shareholder. During the year, the company provided and obtained goods and services, and recharged costs to other business entities in which Mr R.H. Lawson has an interest. All transactions were done at arms length and on commercial terms.