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Registered number: 04165918









HEXAGON LEASING LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2024

 
HEXAGON LEASING LIMITED
 
 
COMPANY INFORMATION


Directors
M Fletcher 
A Granger 
P Jacques 




Company secretary
K Pearson



Registered number
04165918



Registered office
Ryknield House

Alrewas

Burton Upon Trent

DE13 7AB




Independent auditors
PKF Smith Cooper Audit Limited
Statutory Auditors

Cornerblock

2 Cornwall St

Birmingham

B3 2DX





 
HEXAGON LEASING LIMITED
 

CONTENTS



Page
Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditors' Report
6 - 9
Statement of Comprehensive Income
10
Balance Sheet
11
Statement of Changes in Equity
12
Statement of Cash Flows
13
Analysis of Net Debt
14
Notes to the Financial Statements
15 - 32


 
HEXAGON LEASING LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

Business review
 
The directors present their strategic report for the year ended 31 January 2024.
During the year, the business has continued to build infrastructure by relocating and consolidating all activities to new premises in Alrewas, near Burton-upon-Trent, allowing head office, operations, rental and vehicle storage to be sited in one location. Whilst this increases overheads in the year, the benefits of operating from one site have provided an overall increase in service levels and operational efficiencies for both the company and its clients.
Throughout the year, the business has paid particular attention to the utilisation and asset value management of the fleet. Unsettled market conditions within all aspects of the commercial vehicles sector reported in the previous year continue to provide very challenging circumstances during the last twelve months across all asset classes, especially (but not limited to) vehicles bought pre-Covid. 
To ensure carrying values are aligned with the prevailing depressed market, the Board has applied a rigorous write down policy, which has not only led to additional depreciation charges in excess of £3m on a like-for-like basis in the year compared to the previous year but an impairment provision against off balance sheet finance commitments during the 12 months from the balance sheet date for vehicles funded on undisclosed and disclosed agreements with clients has been established.
Trading out of older fleet assets is critical to addressing the impact of this on fleet profile and to guarantee the fleet evolves appropriately during the period, managing maintenance profile and desirability for our client base. These actions have led to vehicle disposal volumes reaching an all-time high in the period, which has generated £6.9m of proceeds from the sale of 647 assets (2023; £3.3m from 224 assets). 
As a consequence of the prevailing conditions in the used commercial vehicle markets, between the company’s writing down policy of assets, the impairment provision provided for in the period of £1.1m and the values of used vehicles achieved, the combined effect on the trading results, compared to 2023, is an increment of more than £3.2m charged to the P&L in the year.
The Board expects the adverse conditions to continue across the sector throughout FY 2024-25 until the cycle of asset availability reaches an equilibrium with market demand across new and used requirements.
The cost of maintaining fleet assets has suffered a significant increase during the period. Inflationary pressures have led to higher parts and labour costs, with the former seeing hourly labour rates outstripping the rate of inflation due to reduced availability of qualified technicians. In conjunction with asset age profile of the business’s fleet the requirement to provide for future maintenance spend has prompted the management to increase the provision for maintenance to £1.5m at the year-end; an increase on the previous year of more than £0.9m.
The implementation of new accounting software (Certinia), which fully integrates and compliments the business’s fleet management systems will enable improvements of in-service fleet maintenance and deliver cost control, coordination and actual expenditure levels whilst continuing to improve fleet availability for the business’s clients. Further value is expected to be driven from the enhanced IT platform that has been established during the period as capabilities drive process changes and enhancements in management information both internally and to clients.
Product and client strategies have remained a long-term key objective for the Board, bringing changes that have resulted in lowering customer default costs and adding diversity both to the profile of the fleet, the client base and funding solutions for fleet assets. The Board is targeting further progress in this area, which will enable the business to readily support its existing client base and enable the company to reach a wider array of high-quality customer.

Page 1

 
HEXAGON LEASING LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

 
The Board has confidence in the strategies it has employed and implemented during the period. Alongside the management team, the Board believes that the company has built a solid platform to navigate the difficulties facing the sector, whilst building processes and structure that will serve to underline the capabilities of the company as it moves beyond the current uncertainties to ensure the company continues its drive towards sustainable and robust growth.
The year-on-year movement in Profit Before Tax of £1.2m in 2023 to a loss of £4.2m for 2024, sits within the £3.2m of movements in asset valuation, both on- and off-balance sheet and the allowance of £0.9m made within the trading results for future maintenance spend across the fleet as detailed above.

Principal risks and uncertainties
 
The key business risks and uncertainties that the company considers important relate to the loss of large contracts and potential customer default, particularly in relation to vehicles held on the company's own balance sheet.
The company works hard to maintain a close working relationship with its customers, so that the highest service levels can be attained. Contract prices, both for existing and potential new customers are reviewed on a regular basis to maintain competitiveness.
The company attempts to mitigate the risk of customer defaults by the use of advanced monthly payment contracts. The funding structures that the company employs also helps to reduce the risk of customer default as some contracts are handled on a "disclosed" basis and some others are on an "undisclosed agency" (UDA) basis where the default risk is held by the funder. 
The appropriate accounting policy for such disclosed and undisclosed funding arrangements has been adopted to reflect the contractual arrangements of such arrangements, falling between the end user of the vehicles and the funder, which has resulted in such transactions now being treated as ‘off balance sheet’.
Investments in tangible fixed assets are mainly financed through hire purchase and finance lease agreements, using both fixed and variable interest rates, which allows the management of interest rate risks whilst providing a flexible approach to fleet reduction without termination penalties should the need arise.
The board continues to apply a rigorous approach to fleet depreciation; writing vehicles down to expected future residual values over the course of the useful life of the assets to reflect the ever changing assessment of future used vehicle markets. 
Constant monitoring of cash flow and business forecasts provides the information to ensure that sufficient liquidity is available to meet obligations as they fall due.

Employee involvement and environmental considerations
 
The company involves its employees in its objectives, plans and performance on a regular basis. The company is an equal-opportunities employer and does not discriminate in the recruitment or promotion of staff.
Hexagon Leasing Limited recognises the importance of its environmental responsibilities and attempts to minimise the environmental impacts of its business processes. One of the key ways in which this is addressed is in choosing fuel-efficient vehicles and ensuring these are maintained to a high standard. The average age of the vehicle fleet is also relatively young which has a beneficial effect on carbon dioxide emissions for our customers. In addition, the company has adopted an electric vehicle policy for all company cars used within the business.

Page 2

 
HEXAGON LEASING LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Political donations and Research and development
 
No donations were made to political parties during the year.
The company has no requirement to undertake specific research and development activities.

Future developments

Relocating all activities to new premises during the year has marked a significant milestone in the business’s progress and will facilitate operational excellence across all business disciplines. 
The introduction of fully integrated accounting software will provide a platform from which the business can attain greater operational efficiencies and value for the business’s clients. Continuous development of IT infrastructure is an ongoing theme in supporting strategic direction.
The board anticipates that the hangover affecting the sector, particularly in supply chain and the used vehicle market will persist during the subsequent trading period but the developments will form part of a strategy that will enable the business to trade through to more 'usual' market conditions.


This report was approved by the board on 31 January 2025 and signed on its behalf.



P Jacques
Director

Page 3

 
HEXAGON LEASING LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The directors present their report and the financial statements for the year ended 31 January 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the company in the year under review was that of the leasing and sale of commercial vehicles. 

Results and dividends

The loss for the year, after taxation, amounted to £4,499,517 (2023 - profit £1,237,873).

No dividends will be distributed for the year ended 31 January 2024. 

Directors

The directors who served during the year were:

A Ellison (resigned 13 December 2024)
M Fletcher 
A Granger 
P Jacques 

Page 4

 
HEXAGON LEASING LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsPKF Smith Cooper Audit Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 31 January 2025 and signed on its behalf.
 





P Jacques
Director

Page 5

 
HEXAGON LEASING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEXAGON LEASING LIMITED
 

Opinion


We have audited the financial statements of Hexagon Leasing Limited (the 'Company') for the year ended 31 January 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.


Page 6

 
HEXAGON LEASING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEXAGON LEASING LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the 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.


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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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.


Page 7

 
HEXAGON LEASING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEXAGON LEASING LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.


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:

Based on our understanding of the Company and industry, key laws and regulations that we identified included:

Companies Act;
Tax Legislation; and
Health and Safety and Employment Legislation.

We identified that the principle risk of fraud or non compliance with laws and regulations related to:

Management bias in respect of accounting estimates and judgements made;
Management override of controls; and
Posting of unusual journals or transactions.

We focused on those areas that could give rise to a material misstatement in the Company’s financial statements. Our procedures included, but were not limited to:

Enquiry of management and those charged with governance around actual and potential litigation and claims including instances of non compliance with laws and regulations and fraud;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance
with applicable laws and regulations; and
Performing audit work over the risk of management override of controls, including testing of journal entries
and other adjustments for appropriateness, evaluating the business rationale of significant transactions
outside the normal course of business and reviewing accounting estimates for bias. In particular, depreciation and residual value of fleet assets.

It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non compliance with regulations. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements as we will be less likely to become aware of instances of non compliance. 

The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission and misrepresentation.




Page 8

 
HEXAGON LEASING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEXAGON LEASING LIMITED (CONTINUED)


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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.





Stephen Newman (Senior Statutory Auditor)
  
for and on behalf of
PKF Smith Cooper Audit Limited
 
Statutory Auditors
  
Cornerblock
2 Cornwall St
Birmingham
B3 2DX

31 January 2025
Page 9

 
HEXAGON LEASING LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024

2024
2023
Note
£
£

  

Turnover
 4 
34,025,194
34,616,512

Cost of sales (including exceptional costs of £2.95m (2023 - £nil) - see Note 5)
  
(32,622,461)
(27,824,058)

Gross profit
  
1,402,733
6,792,454

Administrative expenses
  
(3,872,476)
(3,594,413)

Operating (loss)/profit
 5 
(2,469,743)
3,198,041

Interest payable and similar expenses
 9 
(1,749,774)
(1,960,168)

(Loss)/profit before tax
  
(4,219,517)
1,237,873

Tax on (loss)/profit
 10 
(280,000)
-

(Loss)/profit for the financial year
  
(4,499,517)
1,237,873

  

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

The notes on pages 15 to 32 form part of these financial statements.

Page 10

 
HEXAGON LEASING LIMITED
REGISTERED NUMBER: 04165918

BALANCE SHEET
AS AT 31 JANUARY 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 11 
-
-

Tangible assets

 12 

32,923,595
35,106,198

Current assets
  

Stocks
 13 
140,765
408,459

Debtors: amounts falling due within one year
 14 
4,103,463
5,258,431

Cash at bank and in hand
 15 
943,780
1,673,927

  
5,188,008
7,340,817

Creditors: amounts falling due within one year
 16 
(24,672,937)
(26,173,161)

Net current liabilities
  
 
 
(19,484,929)
 
 
(18,832,344)

Total assets less current liabilities
  
13,438,666
16,273,854

Creditors: amounts falling due after more than one year
 17 
(7,563,342)
(7,942,229)

Provisions for liabilities
  

Other provisions
 20 
(2,596,178)
(552,962)

Net assets
  
3,279,146
7,778,663


Capital and reserves
  

Called up share capital 
 21 
2,000,000
2,000,000

Other reserves - Share based payment
 22 
-
237,601

Profit and loss account
 22 
1,279,146
5,541,062

  
3,279,146
7,778,663


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 January 2025.




P Jacques
Director

The notes on pages 15 to 32 form part of these financial statements.

Page 11

 
HEXAGON LEASING LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024


Called up share capital
Other reserves
Profit and loss account
Total equity

£
£
£
£


At 1 February 2022
2,000,000
192,601
4,303,189
6,495,790



Profit for the year
-
-
1,237,873
1,237,873

Movement in share based payment reserve
-
45,000
-
45,000



At 1 February 2023
2,000,000
237,601
5,541,062
7,778,663



Loss for the year
-
-
(4,499,517)
(4,499,517)

Transfer to profit and loss account
-
(237,601)
237,601
-


At 31 January 2024
2,000,000
-
1,279,146
3,279,146


The notes on pages 15 to 32 form part of these financial statements.

Page 12

 
HEXAGON LEASING LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024

As restated
2024
2023
£
£

Cash flows from operating activities

(Loss)/profit for the financial year
(4,499,517)
1,237,873

Adjustments for:

Depreciation of tangible assets
13,313,238
10,343,433

Loss/(profit) on disposal of tangible assets
394,288
(733,001)

Interest paid
1,749,774
1,960,168

Taxation charge
280,000
-

Decrease/(increase) in stocks
267,694
(277,099)

Decrease/(increase) in debtors
1,154,967
(273,108)

(Decrease)/increase in creditors
(4,109,639)
2,151,615

Increase in provisions
2,043,216
552,962

Share Based Payment
-
45,000

Net cash generated from operating activities

10,594,021
15,007,843


Cash flows from investing activities

Purchase of tangible fixed assets
(18,437,740)
(7,059,787)

Sale of tangible fixed assets
6,912,817
3,343,447

HP interest paid
(1,606,624)
(1,708,491)

Net cash from investing activities

(13,131,547)
(5,424,831)

Cash flows from financing activities

Repayment of loans
(531,608)
(1,066,124)

Repayment of/new finance leases
2,482,137
(8,739,604)

Interest paid
(143,150)
(251,677)

Net cash used in financing activities
1,807,379
(10,057,405)

Net (decrease) in cash and cash equivalents
(730,147)
(474,393)

Cash and cash equivalents at beginning of year
1,673,927
2,148,320

Cash and cash equivalents at the end of year
943,780
1,673,927


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
943,780
1,673,927


The notes on pages 15 to 32 form part of these financial statements.

Page 13

 
HEXAGON LEASING LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 JANUARY 2024





At 1 February 2023
Cash flows
New finance leases
At 31 January 2024
£

£

£

£

Cash at bank and in hand

1,673,927

(730,147)

-

943,780

Debt due after 1 year

(666,666)

444,444

-

(222,222)

Debt due within 1 year

(531,609)

87,164

-

(444,445)

Finance leases

(23,346,585)

14,477,132

(16,959,269)

(25,828,722)


(22,870,933)
14,278,593
(16,959,269)
(25,551,609)

The notes on pages 15 to 32 form part of these financial statements.

Page 14

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

1.


General information

Hexagon Leasing Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.
The financial statements are prepared in Sterling which is the functional currency of the company. The financial statements level of rounding is to the nearest £1.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The directors assess whether the use of going concern is appropriate i.e. whether there are any material uncertainties related to events or conditions that may cast significant doubt on the ability of the company to continue as a going concern. The directors make this assessment in respect of a period of at least one year from the date of the financial statements are approved.
At the date of approval, the market is appearing to be cautious until the impact of the recent change in UK government in the summer of 2024 is better understood. Committing to shorter term contractual arrangements are being favoured over longer term deals in excess of 12 months within logistics clients in particular. The company continues to work with asset finance providers to ensure there are sufficient asset funding solutions in place for an array of customer contractual preferences.

The financial statements are prepared on the going concern basis which assumes that the company will continue to trade. If the company is unable to continue to trade, adjustments would be required to reduce the value of assets to their recoverable amounts, to provide for any further liabilities that might arise and to analyse long term liabilities as current liabilities.



Page 15

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

  
2.3

Revenue and vehicle assets

Vehicle assets owned by the Company, including those financed on finance lease arrangements where the Company is the principal in the funding arrangement, are capitalised in fixed assets and depreciated to estimated residual values. The income arising from the rental of these vehicles is recognised in turnover over the course of the rental agreements with customers, together with income from related services, including fleet management and the maintenance, servicing and repairs of these vehicles. Vehicles provided to customers under the terms of agency agreements with finance companies, where the Company acts as an agent on behalf of the finance company, are not capitalised and turnover on these vehicles comprises of fleet management and the maintenance, servicing and repairs of these vehicles.
The residual values of vehicle assets are reviewed regularly and adjustments made as required through the depreciation charge in the Statement of Comprehensive Income.
The Company leases vehicles to customers on terms that oblige the customers to maintain vehicles to agreed standards. The Company makes provision for these costs (net of the value of costs actually incurred) based on its historical experience of actual costs incurred for each type of vehicle within its fleet. 

 
2.4

Pensions

Defined contribution pension plan

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the Statement of Comprehensive Income in the period to which they relate.

 
2.5

Taxation

Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 16

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

  
2.6

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

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.

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease.

  
2.7

Goodwill

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Motor vehicles
-
Over 3 - 5 years
Fixtures and fittings
-
Over 5 years
Computer equipment
-
Over 4 - 5 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.
 
 
2.9

Stocks

Stocks are stated at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

 
2.10

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 17

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.11

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

 
2.12

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

  
2.13

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of comprehensive income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

Page 18

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

2.Accounting policies (continued)

 
2.14

Financial instruments

Basic financial instruments are recognised at amortised cost with changes recognised in the Statement of Comprehensive Income.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Page 19

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for income and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgments (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Operating Lease Commitments

The company has entered into commercial leases to obtain the use of motor vehicles and equipment. The classification of such leases as operating or finance leases requires the company to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires the recognition of an asset and liability in the balance sheet.

The following are the company's key sources of estimation uncertainty:

Useful economic lives of tangible fixed assets

The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually and are amended when necessary to reflect current estimates. Consideration is given to current market conditions when assessing the residual values of the assets.

Share options

Estimating fair value for share option transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Group uses a trinomial model.

That cost is recognised as Directors remuneration, together with a corresponding increase in equity, over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the Statement of Comprehensive Income for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company's best estimate of the number of equity instruments that will ultimately vest.
Maintenance provisions
The Company’s lease arrangements with some customers include a requirement for the Company to maintain the customers’ vehicles, the cost of which is uncertain. Management make provision for these costs based on its actual experience of costs incurred, which is monitored for all vehicles.  
 

Page 20

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Hire of vehicles and related maintenance services
34,025,194
34,616,512


All turnover arose within the United Kingdom.


5.


Operating profit/(loss)

The operating profit/(loss) is stated after charging:

2024
2023
£
£

(Profit)/loss on disposal of fixed assets
394,288
(548,516)

Share based payment
-
45,000

Depreciation
13,313,238
10,343,433

Operating profit is stated after charging £2.95m (2023 £nil) in relation to management’s assessment of vehicle residual values, together with additional provisions for maintenance costs and future lease settlement obligations (see Note 20). 


6.


Auditors' remuneration

2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements

20,000
20,000

Fees payable to the Company's auditor and its associates in respect of:

All other services
4,000
4,000

Page 21

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£
£

Wages and salaries
1,891,963
1,924,779

Social security costs
225,460
196,006

Cost of defined contribution scheme
146,278
45,326

2,263,701
2,166,111


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Fitters
2
5



Administration
10
19



Operations
38
26

50
50


8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
202,684
128,954

Company contributions to defined contribution pension schemes
36,062
1,315

238,746
130,269


During the year retirement benefits were accruing to 3 directors (2023 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £103,550.

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £12,500.

During the year, the company paid £37,500 (2023 - £60,000) to a related party for director services.

Page 22

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

9.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
143,150
123,056

Other loan interest payable
-
128,621

Finance leases and hire purchase contracts
1,606,624
1,708,491

1,749,774
1,960,168


10.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
280,000
-


Total current tax
280,000
-

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
280,000
-
Page 23

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
 
10.Taxation (continued)


Factors affecting tax charge for the year and future periods

The tax assessed for the year is higher than (2023 - lower than) the standard rate of corporation tax in the UK of 24% (2023 - 19%). The differences are explained below: 

2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(4,219,517)
1,237,873


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 24% (2023 - 19%)
(1,012,684)
235,196

Effects of:


Expenses not deductible for tax purposes
38,247
44,642

Depreciation for year in excess of capital allowances
1,484,892
427,164

Utilisation of tax losses
(230,455)
(707,002)

Total tax charge for the year
280,000
-

Page 24

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

11.


Intangible assets




Goodwill

£



Cost


At 1 February 2023
494,744



At 31 January 2024

494,744



Amortisation


At 1 February 2023
494,744



At 31 January 2024

494,744



Net book value



At 31 January 2024
-



At 31 January 2023
-



Page 25

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

12.


Tangible fixed assets





Motor vehicles
Other fixed assets
Total

£
£
£



Cost 


At 1 February 2023
72,227,073
597,135
72,824,208


Additions
18,285,625
152,115
18,437,740


Disposals
(27,609,504)
-
(27,609,504)



At 31 January 2024

62,903,194
749,250
63,652,444



Depreciation


At 1 February 2023
37,274,005
444,005
37,718,010


Charge for the year
13,248,454
64,784
13,313,238


Disposals
(20,302,399)
-
(20,302,399)



At 31 January 2024

30,220,060
508,789
30,728,849



Net book value



At 31 January 2024
32,683,134
240,461
32,923,595



At 31 January 2023
34,953,068
153,130
35,106,198

Included in the total net book value of Motor vehicles is £28,378,039 (2023: £28,683,097) in respect of assets held under finance lease and hire purchase contracts. Depreciation charged for the year on these assets  was £8,469,186 (2023: £7,740,041).


13.


Stocks

2024
2023
£
£

Finished goods and goods for resale
140,765
408,459


Page 26

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

14.


Debtors

2024
2023
£
£


Trade debtors
3,013,900
4,560,804

Other debtors
209,651
29,997

Prepayments and accrued income
879,912
667,630

4,103,463
5,258,431


Trade debtors are stated net of a bad debt provision totalling £760,045 (2023: £274,372).
Included in other debtors are amounts of £29,997 (2023: £29,997) due from a director of the business. The amounts due are interest free and hold no conditions.


15.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
943,780
1,673,927



16.


Creditors: Amounts falling due within one year

2024
2023
£
£

Bank loans
444,445
531,609

Trade creditors
2,663,627
4,987,681

Corporation tax
279,999
-

Other taxation and social security
569,680
815,305

Obligations under finance lease and hire purchase contracts
18,487,602
16,071,022

Other creditors
466,448
797,571

Accruals and deferred income
1,761,136
2,969,973

24,672,937
26,173,161


Bank loans are secured by fixed and floating charges over the Company's assets.
The amounts due on hire purchase contracts and finance leases are secured on the assets concerned.

Page 27

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

17.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Bank loans
222,222
666,666

Net obligations under finance leases and hire purchase contracts
7,341,120
7,275,563

7,563,342
7,942,229


Bank loans are secured by fixed and floating charges over the Company's assets.
The amounts due on hire purchase contracts and finance leases are secured on the assets concerned.


18.


Loans


Analysis of the maturity of loans is given below:


2024
2023
£
£

Amounts falling due within one year

Bank loans
444,445
531,609

Amounts falling due 1-2 years

Bank loans
222,222
444,444

Amounts falling due 2-5 years

Bank loans
-
222,222


666,667
1,198,275


Page 28

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

19.


Financial instruments

2024
2023
£
£

Financial assets


Financial assets measured at fair value through the Statement of comprehensive income
943,780
1,673,927

Financial assets that are debt instruments measured at transaction price less impairment
3,223,551
4,590,801

4,167,331
6,264,728


Financial liabilities


Financial liabilities measured at transaction price
5,557,878
9,953,500


Financial assets measured at fair value through the Statement of comprehensive income comprise cash at bank and in hand.


Financial assets measured at transaction price less impairment comprise trade debtors and other debtors.


Financial liabilities measured at transaction price comprise bank loans, trade creditors, other creditors and accruals and deferred income.

Page 29

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

20.


Provisions





Maintenance provision
Impairment on future obligations
Total

£
£
£





At 1 February 2023
552,962
-
552,962


Charged to statement of comprehensive income
916,316
1,126,900
2,043,216



At 31 January 2024
1,469,278
1,126,900
2,596,178

The company adopts a policy of providing for expected vehicle maintenance costs in relation to its obligation to its customers to maintain vehicles to agreed standards. The provision has been calculated from historical experience of actual costs incurred for each type of vehicle within its fleet, net of actual costs incurred.
The company has future obligations to buy vehicles from funders who provide asset finance solutions to the company's customers for vehicles sourced by the company. Such situations predominantly arise where a vehicle is funded using a UDA (Undisclosed Agency) agreement. The management has evaluated these commitments on a vehicle-by-vehicle basis against the prevailing conditions in the used vehicle markets at year end and compared the amount payable by vehicle and the timing of such purchases against their market ‘intel’ to predict future achievable sales values for such assets. 
The obligations for twelve months from the balance sheet date have been reviewed and assessed under this process

Page 30

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

21.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



2,000,000 (2023 - 2,000,000) Ordinary shares of £1.00 each
2,000,000
2,000,000



22.


Reserves

Other reserves

Other reserves comprises the share based payment reserve, the cost of which is charged to the statement of comprehensive income as described in note 3.

Profit and loss account

This reserve records all current and prior period retained profits and losses.


23.


Contingent liabilities

The company has future obligations to buy vehicles from funders who provide asset finance solutions to the company's customers for vehicles sourced by the company. Such situations predominantly arise where a vehicle is funded using a UDA (Undisclosed Agency) agreement.
At 31 January 2024, this commitment amounted to £14,279,177  (2023 - £16,692,575). See note 20 for the expected loss to the company on this commitment. 


24.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amount to £146,278 (2023: £45,326). Contributions totaling £28,266 (2023: £6,835) were payable to the fund at the balance sheet date.


25.


Commitments under operating leases

At 31 January 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
91,764
-

Later than 1 year and not later than 5 years
266,850
-

358,614
-

Page 31

 
HEXAGON LEASING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

26.


Related party transactions

Key management remuneration is not disclosed as the directors are the only employees considered key management and disclosed separately.


2024
2023
£
£

Directors and related parties
Amounts owed/(due) to/from related parties
(29,997)
(29,997)
Interest accrued
-
64,763

Other related parties
Sales
891,321
653,164
Purchases
818,200
2,836,519
Amounts due from related parties
182,868
85,672
Amounts due to related parties
183,810
282,994

Amounts due from related parties are shown net of provisions of £71,806 (2023: £124,684).

 
Page 32