Company registration number 02270866 (England and Wales)
Vic Young (South Shields) Limited
Annual Report and Financial Statements
for the Year Ended 30 November 2023
Vic Young (South Shields) Limited
Company Information
Directors
Mr V W Young
Mrs A R Young
Secretary
Mrs A R Young
Company number
02270866
Registered office
Newcastle Road
South Shields
Tyne and Wear
NE34 9QE
Auditor
Charlton & Co
Saville Chambers
4 Saville Street
South Shields
Tyne & Wear
NE33 2PR
Vic Young (South Shields) Limited
Contents
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
Vic Young (South Shields) Limited
Strategic Report
for the Year Ended 30 November 2023
- 1 -
The directors present the strategic report for the year ended 30 November 2023.
Review of the business
The company has had a solid year, although profitability has been affected by a number of external factors as detailed below. Turnover was 7.7% lower than the previous year at £19,896,345, with turnover derived from the car sales department decreasing by 10.9% to £15,133,592. The gross profit margin was higher than last year at 14.96%, up from 14.25% in the prior year.
Profits before tax decreased by £288,181 to £131,943. The majority of the fall relates to increased wage costs, although the effects of the energy price shock continued to be felt in the early part of the year.
This was the fourth full year of the company being solely a main dealer for MG. The number of new units sold remained consistent with last year at 162 units, compared to 160 units previously. Elsewhere, the number of other units sold decreased by 26, of which 5 were used vehicles, 29 were vehicles that were sold to trade, offset by an increase of 8 wheelchair access vehicles. Overall, the company sold 1,054 vehicles during the year, down slightly from 1,078 in the prior year. Whilst the number of units sold has decreased, the profit per vehicle sold has increased by approximately 8% helping to maintain the level of profits in the car sales department so that even though turnover has fallen by 11% in the department, gross profit has risen by 5%.
Sales of other departments have increased by 4.6% to £4,762,753, of which the majority of the increase was attributable to higher sales in the parts department, although the increase was driven by increased activity in both the workshop and bodyshop departments.
The company’s balance sheet remains strong, with net assets decreasing slightly from 2022 to stand at £8,449,566, a decrease of 0.3%. Cash balances have shown a small rise of£7,530, but the cash generated from operations has mainly been used to fund asset purchases, including the construction of a new workshop for the bodybuilding conversions department and the installation of solar panels at the company's premises. The company’s liquidity ratio (current assets divided by current liabilities) has fallen from 3.15 in the prior year to 2.59, as the company was taking advantage of an MG demo vehicle funding scheme which meant that trade creditors were higher than normal at the year end.
Principal risks and uncertainties
The principal risk to the company would be the loss of franchise status as a motor dealer with all brands simultaneously as this could have a significant impact on the car sales, workshop and parts departments. To counteract this, the company has a diversified range of services that are not all dependant upon one brand.
Future developments
The directors have no plans to significantly alter the nature of the company's operations in the near future.
Mr V W Young
Director
29 November 2024
Vic Young (South Shields) Limited
Directors' Report
for the Year Ended 30 November 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 November 2023.
Principal activities
The principal activity of the company continued to be that of the sale of new and used cars and related accessories.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £132,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr V W Young
Mrs A R Young
Financial instruments
Treasury operations and financial instruments
The company had no derivative financial instruments and was not involved in hedging activities of any kind. It only used basic financial instruments during the year, such as trade debtors and trade creditors arising directly from its operations; and bank overdrafts, the main purpose of which was to raise finance for the company’s operations.
The company has no financial risk management objectives and, consequently, no policies., but it is still exposed to liquidity risk and credit risk.
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Credit risk
The company's activities expose it to normal levels of credit risk. To counter this, trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary. The company has set policies on when debts will be referred to debt collection agencies or pursued via solicitors.
Research and development
Via the company's bodybuilding department, the company is working on developing a range of electric commercial vehicles for Nissan based on the e-NV200.
Post reporting date events
Subsequent to the year end, the company has ceased to be a main dealer for the retail of MG vehicles, although it remains an MG service centre.
Auditor
The auditor, Charlton & Co, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Vic Young (South Shields) Limited
Directors' Report (continued)
for the Year Ended 30 November 2023
- 3 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the review of the business, a description of the principal risks and uncertainties facing the business and an indication of likely future developments have been included in the strategic report.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr V W Young
Director
29 November 2024
Vic Young (South Shields) Limited
Independent Auditor's Report
to the Members of Vic Young (South Shields) Limited
- 4 -
Opinion
We have audited the financial statements of Vic Young (South Shields) Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 November 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Vic Young (South Shields) Limited
Independent Auditor's Report (continued)
to the Members of Vic Young (South Shields) Limited
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We have obtained an understanding of the legal and regulatory frameworks that are applicable to the company and consider the most significant are those that relate to the reporting framework (FRS102, the Companies Act 2006 and UK tax legislation). We have also considered the opportunities and incentives that exist within the company for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to revenue recognition, with a particular risk in relation to completeness, and the potential for management to manipulate financial performance by the processing of manual adjustments or through significant or one-off unusual transactions.
Audit procedures performed by the engagement team included:
Enquiries of management and those charged with governance about their own consideration of known or suspected incidences of non-compliance with laws and regulations and fraud;
Reviewing the appropriateness of the company's accounting policies;
Reviewing the import of data into the accounting software;
Detailed transactional testing and analytical procedures with regard to the recognition of revenue;
Testing the appropriateness of journal entries and other manual adjustments;
Reviewing large or unusual transactions.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one arising as a result of error, as fraud may involve deliberate concealment by, for example, forgery, intentional misrepresentation, or through collusion.
Vic Young (South Shields) Limited
Independent Auditor's Report (continued)
to the Members of Vic Young (South Shields) Limited
- 6 -
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.
Mark Charlton FCA
Senior Statutory Auditor
For and on behalf of Charlton & Co
29 November 2024
Chartered Accountants
Statutory Auditor
Saville Chambers
4 Saville Street
South Shields
Tyne & Wear
NE33 2PR
Vic Young (South Shields) Limited
Statement of Comprehensive Income
for the Year Ended 30 November 2023
- 7 -
2023
2022
Notes
£
£
Turnover
2
19,896,345
21,545,445
Cost of sales
(16,919,757)
(18,477,242)
Gross profit
2,976,588
3,068,203
Administrative expenses
(2,938,446)
(2,684,796)
Other operating income
5,283
15,495
Operating profit
3
43,425
398,902
Interest receivable and similar income
6
89,025
84,680
Interest payable and similar expenses
7
(507)
(63,458)
Profit before taxation
131,943
420,124
Tax on profit
8
(26,915)
(177,735)
Profit for the financial year
105,028
242,389
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Vic Young (South Shields) Limited
Balance Sheet
as at 30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
4,645,826
4,580,745
Current assets
Stocks
11
3,684,798
3,063,600
Debtors
12
3,084,505
3,104,225
Cash at bank and in hand
417,715
410,185
7,187,018
6,578,010
Creditors: amounts falling due within one year
13
(2,768,204)
(2,087,357)
Net current assets
4,418,814
4,490,653
Total assets less current liabilities
9,064,640
9,071,398
Provisions for liabilities
Deferred tax liability
14
615,074
(594,860)
(615,074)
(594,860)
Net assets
8,449,566
8,476,538
Capital and reserves
Called up share capital
16
20,000
20,000
Revaluation reserve
17
95,986
95,986
Profit and loss reserves
17
8,333,580
8,360,552
Total equity
8,449,566
8,476,538
The financial statements were approved by the board of directors and authorised for issue on 29 November 2024 and are signed on its behalf by:
Mr V W Young
Director
Company Registration No. 02270866
Vic Young (South Shields) Limited
Statement of Changes in Equity
for the Year Ended 30 November 2023
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
20,000
95,986
8,250,163
8,366,149
Year ended 30 November 2022:
Profit and total comprehensive income
-
-
242,389
242,389
Dividends
9
-
-
(132,000)
(132,000)
Balance at 30 November 2022
20,000
95,986
8,360,552
8,476,538
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
105,028
105,028
Dividends
9
-
-
(132,000)
(132,000)
Balance at 30 November 2023
20,000
95,986
8,333,580
8,449,566
Vic Young (South Shields) Limited
Statement of Cash Flows
for the Year Ended 30 November 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
720,398
383,801
Interest paid
(507)
(63,458)
Income taxes paid
(23,556)
(88,128)
Net cash inflow from operating activities
696,335
232,215
Investing activities
Purchase of tangible fixed assets
(2,990,460)
(2,846,665)
Proceeds from disposal of tangible fixed assets
2,344,630
2,015,273
Interest received
89,025
84,680
Net cash used in investing activities
(556,805)
(746,712)
Financing activities
Payment of finance leases obligations
(20,328)
Dividends paid
(132,000)
(132,000)
Net cash used in financing activities
(132,000)
(152,328)
Net increase/(decrease) in cash and cash equivalents
7,530
(666,825)
Cash and cash equivalents at beginning of year
410,185
1,077,010
Cash and cash equivalents at end of year
417,715
410,185
Vic Young (South Shields) Limited
Notes to the Financial Statements
for the Year Ended 30 November 2023
- 11 -
1
Accounting policies
Company information
Vic Young (South Shields) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Newcastle Road, South Shields, Tyne and Wear, NE34 9QE.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents the total invoice value, excluding value added tax, of sales made during the year.
Vehicle sales are recognised when customers take possession of the vehicles. Sales of goods and services are recognised at the point of invoice. Leasing income is recognised on a straight line basis over the lease term.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
not depreciated
Long leasehold land and buildings
straight line over the life of the lease
Plant and machinery
25% reducing balance
Motor vehicles
25% reducing balance
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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
1
Accounting policies
(continued)
- 12 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.7
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
1
Accounting policies
(continued)
- 13 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
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.
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
1
Accounting policies
(continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
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.
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
1
Accounting policies
(continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
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.
2
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Vehicle sales
15,133,592
16,994,037
Servicing, bodyshop and bodybuilding sales
2,189,580
2,154,669
Parts sales
1,026,170
793,714
Leasing income
1,547,003
1,603,025
19,896,345
21,545,445
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
2
Turnover and other revenue
(continued)
- 16 -
2023
2022
£
£
Other revenue
Interest income
89,025
84,680
3
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
28,000
24,000
Depreciation of owned tangible fixed assets
580,749
512,047
Operating lease charges
66,000
66,000
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Car Sales
12
15
Administration
16
16
Workshop, Bodyshop and Bodybuilding
28
26
Parts
2
2
Hire
2
3
Other
4
4
Total
66
68
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,775,981
1,685,212
Social security costs
164,422
158,097
Pension costs
97,899
33,748
2,038,302
1,877,057
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 17 -
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
102,010
97,865
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
89,025
84,680
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
309
-
Other interest on financial liabilities
56,250
309
56,250
Other finance costs:
Interest on finance leases and hire purchase contracts
-
6,101
Other interest
198
1,107
507
63,458
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
11,680
Adjustments in respect of prior periods
6,701
(2,218)
Total current tax
6,701
9,462
Deferred tax
Origination and reversal of timing differences
20,214
33,562
Changes in tax rates
134,711
Total deferred tax
20,214
168,273
Total tax charge
26,915
177,735
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
8
Taxation
(continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
131,943
420,124
Expected tax charge based on the standard rate of corporation tax in the UK of 23.00% (2022: 19.00%)
30,347
79,824
Tax effect of expenses that are not deductible in determining taxable profit
23,637
29,883
Unutilised tax losses carried forward
3,006
Adjustments in respect of prior years
6,701
(2,218)
Permanent capital allowances in excess of depreciation
(33,974)
(32,203)
Depreciation on assets not qualifying for tax allowances
9,588
7,117
Other permanent differences
(14,007)
(47,435)
Deferred tax adjustments in respect of prior years
134,712
Difference in tax rates used for deferred tax
1,617
8,055
Taxation charge for the year
26,915
177,735
9
Dividends
2023
2022
£
£
Interim paid
132,000
132,000
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 19 -
10
Tangible fixed assets
Freehold land and buildings
Long leasehold land and buildings
Assets under construction
Plant and machinery
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 December 2022
149,692
936,504
105,324
699,442
5,640,550
7,531,512
Additions
250,466
56,852
2,683,142
2,990,460
Disposals
(2,844,596)
(2,844,596)
At 30 November 2023
149,692
936,504
355,790
756,294
5,479,096
7,677,376
Depreciation and impairment
At 1 December 2022
527,872
604,362
1,818,533
2,950,767
Depreciation charged in the year
61,246
28,665
490,838
580,749
Eliminated in respect of disposals
(499,966)
(499,966)
At 30 November 2023
589,118
633,027
1,809,405
3,031,550
Carrying amount
At 30 November 2023
149,692
347,386
355,790
123,267
3,669,691
4,645,826
At 30 November 2022
149,692
408,632
105,324
95,080
3,822,017
4,580,745
The leasehold property was revalued to £265,000 on an open market basis on 27th February 1990. The company has adopted the transitional provisions of Financial Reporting Standard 102 and treated this revaluation as deemed cost.
The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Long leasehold land and buildings
2023
2022
£
£
Cost
1,196,315
945,849
Accumulated depreciation
(556,313)
(496,039)
Carrying value
640,002
449,810
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 20 -
11
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,684,798
3,063,600
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,279,872
1,073,791
Other debtors
458,633
451,678
Prepayments and accrued income
143,645
129,843
1,882,150
1,655,312
2023
2022
Amounts falling due after more than one year:
£
£
Trade debtors
800,757
982,299
Other debtors
401,598
466,614
1,202,355
1,448,913
Total debtors
3,084,505
3,104,225
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,720,605
1,146,943
Corporation tax
7,199
24,054
Other taxation and social security
180,616
9,081
Other creditors
696,416
729,041
Accruals and deferred income
163,368
178,238
2,768,204
2,087,357
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 21 -
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
459,088
425,599
Other timing differences
155,986
169,261
615,074
594,860
2023
Movements in the year:
£
Liability at 1 December 2022
594,860
Charge to profit or loss
20,214
Liability at 30 November 2023
615,074
Of the deferred tax liability above, £260,617 is expected to reverse in 12 months. Of this amount, £205,030 relates to capital allowances with the remainder relating to other timing differences.
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
97,899
33,748
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.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
20,000
20,000
20,000
20,000
The company's shares each carry full rights with regards to voting and distributions.
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 22 -
17
Reserves
Revaluation reserve
This reserve records the amount of any revaluation gains made on the revaluation of assets prior to the transition to FRS102.
Equity reserve
This reserve records retained earnings and accumulated losses.
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
25,750
4,750
Between two and five years
20,125
45,875
4,750
Lessor
The operating leases represent vehicles leased under contract hire to third parties. The leases are negotiated over terms of 1 to 5 years, with 3 years being the most common, and rentals are fixed for the whole of the contract length.
At the reporting end date the company had contracted with lessees for the following minimum lease payments:
2023
2022
£
£
Within one year
600,827
635,618
Between two and five years
719,466
755,052
1,320,293
1,390,670
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 23 -
19
Finance lease commitments
Lessor
The finance leases represent vehicles leased under finance leases to third parties. The leases are negotiated over terms of 1 to 5 years, with 4 years being the most common, and rentals are fixed for the whole of the contract length.
At the reporting end date the company had contracted with lessees for the following minimum lease payments (which equates to the gross investment in the leases):
2023
2022
£
£
Within one year
317,339
317,621
Between two and five years
520,681
632,001
838,020
949,622
20
Directors' transactions
Dividends totalling £105,534 (2022 - £105,534) were paid in the year in respect of shares held by the company's directors.
During the year the company paid rents of £9,000 to the directors Mr V W Young and Mrs A R Young. The company also had the use of other land owned by the directors, but this was rent free.
21
Ultimate controlling party
The company's ultimate controlling party is considered to be Mr V W Young, director and majority shareholder.
22
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
105,028
242,389
Adjustments for:
Taxation charged
26,915
177,735
Finance costs
507
63,458
Investment income
(89,025)
(84,680)
Depreciation and impairment of tangible fixed assets
580,749
512,047
Movements in working capital:
Increase in stocks
(621,198)
(728,719)
Decrease in debtors
19,720
50,028
Increase in creditors
697,702
151,543
Cash generated from operations
720,398
383,801
Vic Young (South Shields) Limited
Notes to the Financial Statements (continued)
for the Year Ended 30 November 2023
- 24 -
23
Analysis of changes in net funds
1 December 2022
Cash flows
30 November 2023
£
£
£
Cash at bank and in hand
410,185
7,530
417,715
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