Company registration number 06597500 (England and Wales)
LEIGHTON VANS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
LEIGHTON VANS LIMITED
COMPANY INFORMATION
Director
M G Leighton
Company number
06597500
Registered office
Unit 1
Dodds Close
Rotherham
South Yorkshire
S60 1BX
Auditor
Cooper Parry Group Limited
St James Building
79 Oxford Street
Manchester
M1 6HT
LEIGHTON VANS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
LEIGHTON VANS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -
The director presents the strategic report for the year ended 31 January 2024.
Review of the business
The year ended January 2024 saw the economic environment continue to provide challenging conditions for businesses and consumers. Whilst inflation fell from the high of 10.4% at the start of our reporting period to 3.2% at close, the business has seen continued and sustained pressure from all suppliers to increase costs, which consequently have impacted on margins. In addition the Bank of England’s decision to increase base rate to 5.25% has led to higher costs in the business, where possible management have mitigated this increase by challenging lending margins and moving to cheaper facilities. Both these factors have impacted on customers both in terms of available funds to spend, confidence and the cost of obtaining credit, ensuring the retail environment continues to be challenging.
In the context of the economic factors the management are pleased to report an increase in turnover to £24.8M. This growth was driven across all income channels, new vehicles, used vehicles, parts sales and upgrade sales.
As the supply of new vehicles started to increase, we saw an increase in revenue from those sales as turnover increased from £3M in prior year to £11M in this period, however as volume increased vehicle margin reduced. As expected, used vehicles fell back from turnover of £11M in the prior year to a still healthy £7M in this period, but in common with new vehicles margins fell. In both cases the reduced margins were due to an increase in supply in the market, reduced customer confidence.
The parts element of our business had another strong year with revenue growing 16% to £5.7M for the full year. As new vehicles came back into the market this helped with that increase but in addition pro-active marketing, competitive pricing and a constantly improving offering also drove the increase. Due to all the known factors margins were impacted in the business, the only positive being the sharp reduction in container costs. The year also extensive development work in new product ensuring that as new vehicles come to market the business will have a highly competitive range of products guaranteeing the future of the business.
After what has been a challenging year the management are pleased with the progress of the business, growing not only revenue, but customers, product and infrastructure leaving the business well placed for the coming year.
Principal risks and uncertainties
The management of the business and the nature of the company's strategy are subject to a number of risks. The directors have set out below the principal risks facing the business.
Manufacturers supply of new and improved products
The company is reliant on new vehicle products from its manufacturer partner. This exposes the company to risks in a number of areas as the company is dependent on its manufacturer / supplier in respect of:
availability of new vehicle products
quality of new vehicle products
pricing of new vehicle products
The directors are confident that future new products from its manufacturer / supplier will continue to be competitively priced and high quality and therefore consider that this "manufacturer risk" is minimal. It is, in any case, mitigated by the other core business areas of the company, including used vehicle sales, parts sales and service work.
Used vehicle price variation
Used vehicle prices can decline significantly. As a significant proportion of the business comprises used vehicle sales, these declines can have a material impact on the business. The impact of declines in used vehicle prices can result in reduced profits on sales and also write-downs in the value of used vehicle stock.
Competition
The company competes with other franchised vehicle dealerships, independent used vehicle sellers, private buyers and sellers, internet-based dealers, independent service and repair shops and vehicle manufacturers who have entered the retail market. The company competes for the sale of new and used vehicles, the performance of warranty repairs, non-warranty repairs, routine maintenance business and for the provision of spare parts. The principal competitive factors in service and parts sales are price, familiarity with a manufacturer's brands and models and the quality of customer service.
LEIGHTON VANS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
Company, people and reputation
The company has invested heavily in its people and its reputation over a number of years. It is therefore reliant on these individuals to a degree in delivering the company result and reinforcing the underlying company brand. The company undertakes a regular review of remuneration and packages to ensure that it attracts and retains the best people.
Economic Downturn
The success of the business is reliant on consumer spending. An economic downturn, resulting in the reduction of consumer spending power will have a direct impact on the income achieved by the company.
In response to this risk senior management aim to keep abreast of economic conditions. In cases of severe economic downturn marketing and pricing strategies are modified to reflect the new market conditions.
M G Leighton
Director
31 October 2024
LEIGHTON VANS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
The director presents his annual report and financial statements for the year ended 31 January 2024.
Principal activities
The principal activity of the company continued to be that of a motor dealer operating sales, service, parts and supply of ancillary products.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £341,550. The director does not recommend payment of a further dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
M G Leighton
Financial instruments
The company uses various financial instruments which include bank, financial institution and stock loans, cash and various items such as trade debtors and trade creditors that arise directly from operations. The main purpose of these financial instruments is to raise finance for the company’s operations. Their existence exposes the company to a number of financial risks.
The main risks arising from the company’s financial instruments are liquidity risk, interest rate risk and credit risk. The directors review and agree policies for managing each of these risks which are summarised below.
Liquidity risk
The company seeks to manage risk by ensuring sufficient liquidity is available to meet foreseeable needs to invest cash assets safely and profitably.
The company's policy throughout the year has been to achieve this objective through the day to day involvement of management in business decisions rather than through setting maximum or minimum liquidity ratios.
Interest rate risk
The company finances its operations through a mixture of bank and other external borrowings. The company's exposure to interest rate fluctuations on its borrowings is managed by the use of fixed and floating facilities. The balance sheet includes trade debtors and creditors which do not attract interest and are therefore subject to fair value interest rate risk.
Foreign currency risk
The business purchases foreign currency in order to import products from around the world, primarily in US Dollars. We have access to a full range of FX solutions which are used as management deem appropriate.
Credit risk
The company's principal financial assets are cash and trade debtors. The credit risk associated with cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk therefore arises from its trade debtors.
In order to manage credit risk, the directors set credit limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the finance director on a regular basis in conjunction with debt ageing and collection history.
LEIGHTON VANS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
Auditor
The audit business of UHY Hacker Young Manchester LLP was acquired by Cooper Parry Group Limited on 30 September 2024. UHY Hacker Young Manchester LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place. The auditor, Cooper Parry Group Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
M G Leighton
Director
31 October 2024
LEIGHTON VANS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEIGHTON VANS LIMITED
- 5 -
Opinion
We have audited the financial statements of Leighton Vans Limited (the 'company') for the year ended 31 January 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 January 2024 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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
LEIGHTON VANS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEIGHTON VANS LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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 director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
Extent to which the audit was considered capable of detecting irregularities including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:
the nature of the industry and sector, control environment and business performance
any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance,
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team and involving relevant internal specialists, including tax, and industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: valuation of used vehicle stocks and recognition of supplier incentives. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
LEIGHTON VANS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEIGHTON VANS LIMITED (CONTINUED)
- 7 -
We also obtained an understanding of the legal and regulatory frameworks the company operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. These included the company's FCA regulatory requirements.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management and those charged with governance concerning actual and potential litigation claims;
in addressing the risk of fraud through inappropriate valuation of used vehicle inventory, assessing net realisable value of stock items sold after the year end was above cost or assessing their value with reference to third party data sources if unsold.
in addressing the risk of fraud through inappropriate recording of supplier incentives, ensuring amounts recorded as due were then subsequently acknowledged as such by the supplier;
in assessing the risk of fraud through management override of controls, testing the appropriateness of journal entries and assessing whether judgements made in making accounting estimates are indicative of potential bias.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities 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.
Ian McMahon FCCA FMAAT
Senior Statutory Auditor
For and on behalf of Cooper Parry Group Limited
31 October 2024
Statutory Auditor
St James Building
79 Oxford Street
Manchester
M1 6HT
LEIGHTON VANS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
24,784,380
20,511,165
Cost of sales
(20,558,755)
(16,250,130)
Gross profit
4,225,625
4,261,035
Administrative expenses
(3,312,739)
(3,219,796)
Other operating income
158,765
253,408
Operating profit
4
1,071,651
1,294,647
Interest payable and similar expenses
7
(303,715)
(271,250)
Profit before taxation
767,936
1,023,397
Tax on profit
8
(49,492)
37,009
Profit for the financial year
718,444
1,060,406
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LEIGHTON VANS LIMITED
BALANCE SHEET
AS AT 31 JANUARY 2024
31 January 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
62,555
51,990
Tangible assets
11
1,080,244
1,386,895
Investments
12
211,591
1,354,390
1,438,885
Current assets
Stocks
13
8,337,789
4,831,514
Debtors
14
1,601,725
671,457
Cash at bank and in hand
315,898
780,711
10,255,412
6,283,682
Creditors: amounts falling due within one year
15
(7,535,587)
(3,654,472)
Net current assets
2,719,825
2,629,210
Total assets less current liabilities
4,074,215
4,068,095
Creditors: amounts falling due after more than one year
16
(100,392)
(520,658)
Provisions for liabilities
Deferred tax liability
18
190,219
140,727
(190,219)
(140,727)
Net assets
3,783,604
3,406,710
Capital and reserves
Called up share capital
21
10
10
Profit and loss reserves
3,783,594
3,406,700
Total equity
3,783,604
3,406,710
The financial statements were approved and signed by the director and authorised for issue on 31 October 2024
M G Leighton
Director
Company registration number 06597500 (England and Wales)
LEIGHTON VANS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 February 2022
10
2,449,294
2,449,304
Year ended 31 January 2023:
Profit and total comprehensive income
-
1,060,406
1,060,406
Dividends
9
-
(103,000)
(103,000)
Balance at 31 January 2023
10
3,406,700
3,406,710
Year ended 31 January 2024:
Profit and total comprehensive income
-
718,444
718,444
Dividends
9
-
(341,550)
(341,550)
Balance at 31 January 2024
10
3,783,594
3,783,604
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
1
Accounting policies
Company information
Leighton Vans Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1, Dodds Close, Rotherham, South Yorkshire, S60 1BX.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
Leighton Vans Limited is a wholly owned subsidiary of Zamax Enterprises Limited and the results of Leighton Vans Limited are included in the consolidated financial statements of Zamax Enterprises Limited which are available from Unit 1 Dodds Close, Rotherham, South Yorkshire, United Kingdom, S60 1BX.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
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.
Sales of motor vehicles, parts and accessories are recognised on the earlier of full payment by, or delivery date to, the customer. Any other manufacturer income in relation to achieving targets is recognised on an accrual basis. Servicing revenue is recognised on the completion of the agreed work.
Turnover from commission's receivable is recognised when the amount can be reliably measured and it is probable that the company will receive the consideration.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 12 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Other
5-20 years straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
2-20% straight line
Plant and machinery
20-33% straight line
Fixtures and fittings
20-33% straight line
Computers
20-33% straight line
Motor vehicles
25-50% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8
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.
1.9
Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 13 -
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.
1.10
Cash and cash equivalents
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.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
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.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Assets held under hire purchase are capitalised in the Statement of Financial Position. Those held under hire purchase contracts are depreciated over their estimated useful lives. The interest element of these obligations is charged to the Statement of Comprehensive Income over the relevant period. The capital element of the future payments is treated as a liability in the Statement of Financial Position.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock valuation
Stock valuation is regularly monitored against age profile and market demand. Management use a number of market tools during the appraisal process. The directors maintain oversight of ageing stock profiles and a monthly review of any provision required is performed.
Useful lives of tangible and intangible fixed assets
The annual depreciation/amortisation charge for tangible and intangible assets is sensitive to changes in the estimated useful economic lives of the assets so these are re-assessed annually and amended when necessary to reflect current estimates. See the accounting policies note for the useful economic lives for each class of assets.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
23,634,826
19,624,214
Rendering of services
1,149,554
874,104
Commissions receivable
-
12,847
24,784,380
20,511,165
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(5,428)
(8,817)
Fees payable to the company's auditor for the audit of the company's financial statements
11,500
9,000
Depreciation of owned tangible fixed assets
426,340
435,283
Profit on disposal of tangible fixed assets
(86,711)
(27,261)
Amortisation of intangible assets
29,044
15,950
Operating lease charges
186,000
187,598
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
1
1
Finance
3
2
Marketing
4
2
Sales and aftersales
33
27
Total
41
32
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,251,963
1,134,855
Social security costs
121,181
25,880
Pension costs
24,285
21,498
1,397,429
1,182,233
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
9,553
9,161
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
32,673
12,720
Interest on finance leases and hire purchase contracts
25,530
36,858
Stocking loan interest
245,512
221,672
303,715
271,250
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
226,673
Adjustments in respect of prior periods
(238,805)
Total current tax
(12,132)
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
8
Taxation
2024
2023
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
49,492
(38,300)
Adjustment in respect of prior periods
13,423
Total deferred tax
49,492
(24,877)
Total tax charge/(credit)
49,492
(37,009)
The actual charge/(credit) 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:
2024
2023
£
£
Profit before taxation
767,936
1,023,397
Expected tax charge based on the standard rate of corporation tax in the UK of 24.03% (2023: 19.00%)
184,535
194,445
Tax effect of expenses that are not deductible in determining taxable profit
1,333
1,525
Adjustments in respect of prior years
24,703
(213,469)
Group relief
(162,034)
Depreciation on assets not qualifying for tax allowances
(926)
620
Deferred tax adjustments in respect of prior years
13,423
Prior year adjustment impact
(25,336)
Remeasurement of deferred tax for changes in tax rates
941
(12,742)
Intangibles TWDV adjustments
(8,638)
Amounts (charged)/credited directly to STRGL
118
Movement in deferred tax not recognised
822
14,795
Super-deduction expenditure adjustments
(1,632)
Taxation charge/(credit) for the year
49,492
(37,009)
9
Dividends
2024
2023
£
£
Final paid
341,550
103,000
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
10
Intangible fixed assets
Goodwill
Other
Total
£
£
£
Cost
At 1 February 2023
35,000
96,476
131,476
Additions
31,469
31,469
Transfers
8,140
8,140
At 31 January 2024
35,000
136,085
171,085
Amortisation and impairment
At 1 February 2023
35,000
44,486
79,486
Amortisation charged for the year
29,044
29,044
At 31 January 2024
35,000
73,530
108,530
Carrying amount
At 31 January 2024
62,555
62,555
At 31 January 2023
51,990
51,990
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 20 -
11
Tangible fixed assets
Leasehold land and buildings
Assets under construction
Plant and machinery
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 February 2023
435,576
98,092
1,153,531
97,803
33,579
465,739
2,284,320
Additions
60,600
52,674
157,386
14,645
29,067
117,131
431,503
Disposals
(429,770)
(429,770)
Transfers
(95,092)
77,455
9,497
(8,140)
At 31 January 2024
496,176
55,674
1,388,372
121,945
62,646
153,100
2,277,913
Depreciation and impairment
At 1 February 2023
139,995
527,901
74,130
21,602
133,797
897,425
Depreciation charged in the year
67,171
298,490
12,731
11,906
36,042
426,340
Eliminated in respect of disposals
(126,096)
(126,096)
At 31 January 2024
207,166
826,391
86,861
33,508
43,743
1,197,669
Carrying amount
At 31 January 2024
289,010
55,674
561,981
35,084
29,138
109,357
1,080,244
At 31 January 2023
295,581
98,092
625,630
23,673
11,977
331,942
1,386,895
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 21 -
12
Fixed asset investments
2024
2023
£
£
Loans
211,591
Movements in fixed asset investments
Loans
£
Cost or valuation
At 1 February 2023
-
Additions
211,591
At 31 January 2024
211,591
Carrying amount
At 31 January 2024
211,591
At 31 January 2023
Included within investments are invoices of amounts advanced to Leighton Vans B.V. and Leighton Vans Australia Pty Ltd, net of impairments.
13
Stocks
2024
2023
£
£
Parts stock
1,614,877
1,068,567
Work in progress
348,746
192,498
Vehicle stock
6,374,166
3,570,449
8,337,789
4,831,514
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
584,013
466,963
Amounts owed by group undertakings
542,548
Other debtors
406,578
95,451
Prepayments and accrued income
68,586
109,043
1,601,725
671,457
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
17
556,680
323,529
Obligations under finance leases
19
36,846
174,900
Trade creditors
5,725,974
2,550,433
Amounts owed to group undertakings
611,291
269,065
Corporation tax
202,046
68,486
Other taxation and social security
36,190
88,011
Other creditors
22,249
92,703
Accruals and deferred income
344,311
87,345
7,535,587
3,654,472
The vehicle funding creditor amounting to £4,910,068 (2023: £1,921,760) included within trade creditors is secured directly over the vehicles to which it relates.
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
242,647
Obligations under finance leases
19
100,392
278,011
100,392
520,658
17
Loans and overdrafts
2024
2023
£
£
Bank loans
556,680
566,176
Payable within one year
556,680
323,529
Payable after one year
242,647
The bank overdraft and loans are secured by a fixed charge over the property of the company together with a fixed and floating charge over all the assets of the company.
The first bank loan, amounting to £242,647 (2023: £566,176), is a loan underwritten by the Coronavirus Business Interruption Loan Scheme in which the UK Government has offered to cover the first 12 months of interest payments under the UK Government's Business Interruption Payment (BIP). In addition to this, no repayments had to made over the first 12 months. After this period, the loan is to be repaid in equal monthly instalments of £29,961 until October 2024. Interest is charged at 3.00% above the bank base rate.
The second bank loan, amounting to £314,033 (2022: £nil) bears interest at a rate of 3.30% above the bank base rate and is due to be repaid by November 2024.
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 23 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
190,659
141,652
Short term timing differences
(440)
(925)
190,219
140,727
2024
Movements in the year:
£
Liability at 1 February 2023
140,727
Charge to profit or loss
49,492
Liability at 31 January 2024
190,219
19
Hire purchase contracts
2024
2023
Future minimum lease payments due under hire purchase contracts:
£
£
Within one year
36,846
174,900
In two to five years
100,392
278,011
137,238
452,911
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
24,285
21,498
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10
10
10
10
LEIGHTON VANS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 24 -
22
Related party transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the Group.
At year end a balance of £17,411 (2023: £nil) was owed by a related party by virtue of common directorship.
23
Directors' transactions
Included within debtors due within one year are directors' loan accounts totalling £38,057 (2023: £95,451).
24
Ultimate controlling party
Zamax Enterprises Limited is the immediate and ultimate controlling entity. The controlling party is M G Leighton by virtue of his majority shareholding in Zamax Enterprises Limited.
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