Company registration number SC246050 (Scotland)
FARMER AUTOCARE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
FARMER AUTOCARE LIMITED
COMPANY INFORMATION
Directors
Sir Tom Farmer CVO CBE KCSG FRSE
A G Mulvenna
G J Dolan
C F McNeill
Secretary
A G Mulvenna
Company number
SC246050
Registered office
Thain House
226 Queensferry Road
Edinburgh
EH4 2BP
Auditor
MHA
Chartered Accountants
6 St Colme Street
Edinburgh
EH3 6AD
FARMER AUTOCARE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 25
FARMER AUTOCARE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The directors present their strategic report for the year ended 31 July 2024.
Fair review of the business
The principal activity of the group is the retail sale of tyres and automotive repairs.
The group profit before tax for the financial year was £2,939,483 (2023: £2,622,195) on sales of £20,685,403 (2023: £19,892,925). Group net assets as at 31 July 2024 were £10,798,509 (2023: £9,656,478).
Principle risks and uncertainties
The management of the business and execution of the strategy is subject to a number of risks.
Competition from both national and independent retailers, product availability and employee retention are key risks. All aspects of the business, including key risks are continually monitored and managed by the senior management team who continually update their knowledge and skills to minimise the impact of such risks on the performance of the business.
Key performance indicators
Financial and non-financial key performance indicators enable the senior management team to monitor the performance of the business. Sales, in terms of volume, mix and value, gross margin, employee costs, stock control and cash generation are all key performance indicators.
Financial risk management
The group seeks to actively manage and mitigate financial risks associated with the business.
Commodity prices
The industry is susceptible to changes in the cost and availability of raw materials feeding through to the purchase of tyres and automotive parts. The group expanded its warehousing capacity during the financial year to manage this risk. The group has no greater exposure to such risks than other comparable participants in the sector.
Credit risks
Most sales are paid at the point of sale before the release of goods or return of customer vehicles.
Liquidity and interest rates
The group retains sufficient cash resources to adequately fund its working capital requirements.
Employee care and development
The group places a high priority on the health and wellbeing of employees and the development of their knowledge and skills through appropriate training.
A G Mulvenna
Director
1 November 2024
FARMER AUTOCARE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 July 2024.
Principal activities
The principal activity of the company and group continued to be the retail sale of tyres and automotive repairs.
Results and dividends
The results for the year are set out on page 7.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Sir Tom Farmer CVO CBE KCSG FRSE
A G Mulvenna
G J Dolan
C F McNeill
Auditor
Geoghegans resigned as auditors following their merger with MHA on 1 February 2024, MHA were subsequently appointed as auditors. In accordance with the company's articles, a resolution proposing that MHA be reappointed as auditors of the company will be put at a General Meeting.
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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company 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 auditor of the company is aware of that information.
FARMER AUTOCARE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
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
A G Mulvenna
Director
1 November 2024
FARMER AUTOCARE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FARMER AUTOCARE LIMITED
- 4 -
Opinion
We have audited the financial statements of Farmer Autocare Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2024 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 group's and the parent company's affairs as at 31 July 2024 and of the group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
FARMER AUTOCARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FARMER AUTOCARE LIMITED
- 5 -
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.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
Matters on which we are required to report by exception
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent 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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
Enquiry of management and those charged with governance around actual and potential litigation and claims;
Enquiry of entity staff in compliance functions to identify any instances of non-compliance with laws and regulations;
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;
Reviewing minutes of meetings of those charged with governance;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
FARMER AUTOCARE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FARMER AUTOCARE LIMITED
- 6 -
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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.
Iain Binnie
For and on behalf of
1 November 2024
MHA
Chartered Accountants
Statutory Auditor
6 St Colme Street
Edinburgh
EH3 6AD
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
FARMER AUTOCARE LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 JULY 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
20,685,403
19,892,925
Cost of sales
(7,849,646)
(8,234,075)
Gross profit
12,835,757
11,658,850
Administrative expenses
(10,187,170)
(9,095,525)
Operating profit
4
2,648,587
2,563,325
Interest receivable and similar income
7
291,062
58,870
Interest payable and similar expenses
(166)
Profit before taxation
2,939,483
2,622,195
Tax on profit
8
(725,302)
(547,693)
Profit for the financial year
2,214,181
2,074,502
Profit for the financial year is attributable to:
- Owners of the parent company
2,214,181
1,905,577
- Non-controlling interests
-
168,925
2,214,181
2,074,502
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FARMER AUTOCARE LIMITED
GROUP BALANCE SHEET
AS AT 31 JULY 2024
31 July 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
2,005
5,013
Tangible assets
11
1,398,191
1,021,383
1,400,196
1,026,396
Current assets
Stocks
14
828,971
634,159
Debtors
15
1,112,961
1,087,314
Cash at bank and in hand
10,770,278
10,008,322
12,712,210
11,729,795
Creditors: amounts falling due within one year
16
(3,000,842)
(2,883,344)
Net current assets
9,711,368
8,846,451
Total assets less current liabilities
11,111,564
9,872,847
Provisions for liabilities
Deferred tax liability
17
(313,055)
(216,369)
(313,055)
(216,369)
Net assets
10,798,509
9,656,478
Capital and reserves
Called up share capital
19
2
2
Profit and loss reserves
10,798,507
9,244,548
Equity attributable to owners of the parent company
10,798,509
9,244,550
Non-controlling interests
-
411,928
10,798,509
9,656,478
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
The financial statements were approved by the board of directors and authorised for issue on 1 November 2024 and are signed on its behalf by:
01 November 2024
Sir Tom Farmer CVO CBE KCSG FRSE
A G Mulvenna
Director
Director
Company registration number SC246050 (Scotland)
FARMER AUTOCARE LIMITED
COMPANY BALANCE SHEET
AS AT 31 JULY 2024
31 July 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
2,005
5,013
Tangible assets
11
513,102
373,043
Investments
12
1,999,748
1,294,548
2,514,855
1,672,604
Current assets
Stocks
14
426,153
273,654
Debtors
15
596,027
555,848
Cash at bank and in hand
10,192,969
9,317,780
11,215,149
10,147,282
Creditors: amounts falling due within one year
16
(4,856,198)
(4,037,922)
Net current assets
6,358,951
6,109,360
Total assets less current liabilities
8,873,806
7,781,964
Provisions for liabilities
Deferred tax liability
17
(111,539)
(75,816)
(111,539)
(75,816)
Net assets
8,762,267
7,706,148
Capital and reserves
Called up share capital
19
2
2
Profit and loss reserves
8,762,265
7,706,146
Total equity
8,762,267
7,706,148
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,056,119 (2023 - £935,476 profit).
The financial statements were approved by the board of directors and authorised for issue on 1 November 2024 and are signed on its behalf by:
01 November 2024
Sir Tom Farmer CVO CBE KCSG FRSE
A G Mulvenna
Director
Director
Company registration number SC246050 (Scotland)
FARMER AUTOCARE LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
Balance at 1 August 2022
2
7,338,971
7,338,973
386,103
7,725,076
Year ended 31 July 2023:
Profit and total comprehensive income
-
1,905,577
1,905,577
168,925
2,074,502
Dividends
9
-
-
-
(143,100)
(143,100)
Balance at 31 July 2023
2
9,244,548
9,244,550
411,928
9,656,478
Year ended 31 July 2024:
Profit and total comprehensive income
-
2,214,181
2,214,181
-
2,214,181
Dividends
9
-
-
-
(213,500)
(213,500)
Purchase of shares in subsidiary from non-controlling interest
-
(858,650)
(858,650)
-
(858,650)
Release of non-controlling interest on purchase of shares in subsidiary
-
198,428
198,428
(198,428)
-
Balance at 31 July 2024
2
10,798,507
10,798,509
10,798,509
FARMER AUTOCARE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 August 2022
2
6,770,670
6,770,672
Year ended 31 July 2023:
Profit and total comprehensive income for the year
-
935,476
935,476
Balance at 31 July 2023
2
7,706,146
7,706,148
Year ended 31 July 2024:
Profit and total comprehensive income
-
1,056,119
1,056,119
Balance at 31 July 2024
2
8,762,265
8,762,267
FARMER AUTOCARE LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
2,804,126
3,085,126
Interest paid
(166)
Income taxes paid
(552,443)
(390,638)
Net cash inflow from operating activities
2,251,517
2,694,488
Investing activities
Purchase of tangible fixed assets
(708,473)
(496,989)
Proceeds on disposal of tangible fixed assets
-
1,300
Purchase of subsidiaries
(858,650)
-
Interest received
291,062
58,870
Net cash used in investing activities
(1,276,061)
(436,819)
Financing activities
Payment of finance leases obligations
-
(550)
Dividends paid to non-controlling interests
(213,500)
(143,100)
Net cash used in financing activities
(213,500)
(143,650)
Net increase in cash and cash equivalents
761,956
2,114,019
Cash and cash equivalents at beginning of year
10,008,322
7,894,303
Cash and cash equivalents at end of year
10,770,278
10,008,322
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 13 -
1
Accounting policies
Company information
Farmer Autocare Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Thain House, 226 Queensferry Road, Edinburgh, EH4 2BP.
The group consists of Farmer Autocare Limited and all of its subsidiaries.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2
Basis of consolidation
The consolidated financial statements incorporate those of Farmer Autocare Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 July 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -
1.4
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
20% straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
10-20% straight line
Plant and machinery
10-33% straight line
Fixtures, fittings and equipment
10-33% straight line
Motor vehicles
20-33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
The carrying value of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
1.7
Fixed asset investments
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit and loss. The cost of investments are also reduced to reflect the distribution of pre-acquisition reserves.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8
Stocks
Stock is held at the lower of cost and net realisable value.
1.9
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.
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
1.10
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
Debtors
Debtors with no stated interest rate or are receivable within one year are measured at transaction price. Any losses arising from impairment are recognised in the profit and loss account.
Creditors
Creditors with no stated interest rate and payable within one year are recorded at transaction price.
1.11
Equity instruments
Equity instruments issued by the group 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 group.
1.12
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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 leased asset are consumed.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful life of tangible assets
The company sets depreciation rates which reasonably reflect the probably economic life of an asset. The directors regularly review the policies for appropriateness. The directors also review of impairment when trigger events occur or annual as appropriate.
3
Turnover
The total turnover for the year has been derived from the group's principal activity wholly undertaken in the United Kingdom.
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 17 -
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Fees payable to the group's auditor for the audit of the group's financial statements
8,600
7,150
Depreciation of owned tangible fixed assets
331,665
262,536
Profit on disposal of tangible fixed assets
-
(1,300)
Amortisation of intangible assets
3,008
3,008
Operating lease charges
1,132,178
1,083,926
5
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
178
166
73
67
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
5,883,802
5,281,255
2,475,510
2,264,071
Social security costs
564,873
512,831
244,391
217,213
Pension costs
123,217
101,509
57,185
40,427
6,571,892
5,895,595
2,777,086
2,521,711
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
249,750
273,000
Company pension contributions to defined contribution schemes
5,094
2,641
254,844
275,641
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
6
Directors' remuneration
(Continued)
- 18 -
During the previous year the company established a share options scheme which could enable eligible employees to subscribe for shares in certain circumstances in the future. Share options were issued to three of the directors during the year for a total of 27,270 shares. These options are exercisable when certain conditions are met, and none of those conditions have been met at the year end. The directors have elected to give no further disclosures regarding the precise terms and conditions of the scheme as being commercially confidential.
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
100,388
107,321
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
291,062
58,870
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
638,578
488,310
Adjustments in respect of prior periods
(9,962)
(4,759)
Total current tax
628,616
483,551
Deferred tax
Origination and reversal of timing differences
96,686
64,142
Total tax charge
725,302
547,693
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
8
Taxation
(Continued)
- 19 -
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:
2024
2023
£
£
Profit before taxation
2,939,483
2,622,195
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.00%)
734,871
550,661
Tax effect of expenses that are not deductible in determining taxable profit
250
1,177
Fixed asset timing differences
(3,285)
Under/(over) provided in prior years
(9,962)
(4,759)
Adjust deferred tax to closing rate
143
3,899
Taxation charge
725,302
547,693
9
Dividends
2024
2023
£
£
Paid to non-controlling interests
213,500
143,100
10
Intangible fixed assets
Group
Software
£
Cost
At 1 August 2023 and 31 July 2024
20,053
Amortisation and impairment
At 1 August 2023
15,040
Amortisation charged for the year
3,008
At 31 July 2024
18,048
Carrying amount
At 31 July 2024
2,005
At 31 July 2023
5,013
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
10
Intangible fixed assets
(Continued)
- 20 -
Company
Software
£
Cost
At 1 August 2023 and 31 July 2024
20,053
Amortisation and impairment
At 1 August 2023
15,040
Amortisation charged for the year
3,008
At 31 July 2024
18,048
Carrying amount
At 31 July 2024
2,005
At 31 July 2023
5,013
11
Tangible fixed assets
Group
Leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 August 2023
161,416
2,561,361
776,673
61,339
3,560,789
Additions
246,085
462,388
708,473
At 31 July 2024
161,416
2,807,446
1,239,061
61,339
4,269,262
Depreciation and impairment
At 1 August 2023
119,989
1,931,391
461,764
26,262
2,539,406
Depreciation charged in the year
7,190
177,440
131,580
15,455
331,665
At 31 July 2024
127,179
2,108,831
593,344
41,717
2,871,071
Carrying amount
At 31 July 2024
34,237
698,615
645,717
19,622
1,398,191
At 31 July 2023
41,427
629,970
314,909
35,077
1,021,383
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
11
Tangible fixed assets
(Continued)
- 21 -
Company
Leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 August 2023
71,902
788,066
468,320
26,930
1,355,218
Additions
55,329
211,099
266,428
At 31 July 2024
71,902
843,395
679,419
26,930
1,621,646
Depreciation and impairment
At 1 August 2023
30,475
610,530
335,264
5,906
982,175
Depreciation charged in the year
7,190
55,482
58,345
5,352
126,369
At 31 July 2024
37,665
666,012
393,609
11,258
1,108,544
Carrying amount
At 31 July 2024
34,237
177,383
285,810
15,672
513,102
At 31 July 2023
41,427
177,536
133,056
21,024
373,043
12
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
13
1,999,748
1,294,548
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 August 2023
1,294,548
Additions
858,650
Dividend from pre-acquisition reserves
(153,450)
At 31 July 2024
1,999,748
Carrying amount
At 31 July 2024
1,999,748
At 31 July 2023
1,294,548
13
Subsidiaries
Details of the company's subsidiaries at 31 July 2024 are as follows:
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
13
Subsidiaries
(Continued)
- 22 -
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Farmer Autocare North Limited
1
Retail sale of tyres
Ordinary
100.00
Pat McGinley Autocare Limited
1
Retail sale of tyres
Ordinary
100.00
Farmer Autocare West Limited
1
Retail sale of tyres
Ordinary
100.00
Willie McLernon Autocare Limited
1
Dormant
Ordinary
100.00
Registered office addresses (all UK unless otherwise indicated):
1
Thain House, 226 Queensferry Road, Edinburgh, EH4 2BP
14
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
828,971
634,159
426,153
273,654
15
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
284,044
450,161
107,901
217,686
Other debtors
199,611
61,151
199,567
59,573
Prepayments and accrued income
629,306
576,002
288,559
278,589
1,112,961
1,087,314
596,027
555,848
16
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade creditors
1,786,337
1,806,696
1,026,523
877,706
Amounts due to subsidiary undertakings
3,334,670
2,723,620
Corporation tax payable
329,358
253,185
121,187
78,275
Other taxation and social security
582,155
569,233
177,085
220,351
Other creditors
30,246
28,411
12,457
14,472
Accruals and deferred income
272,746
225,819
184,276
123,498
3,000,842
2,883,344
4,856,198
4,037,922
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 23 -
17
Deferred taxation
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
313,055
216,369
Liabilities
Liabilities
2024
2023
Company
£
£
Accelerated capital allowances
111,539
75,816
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 August 2023
216,369
75,816
Charge to profit or loss
96,686
35,723
Liability at 31 July 2024
313,055
111,539
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
123,217
101,509
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
19
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.001p each
200,000
200,000
2
2
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
20
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
1,145,812
532,155
579,120
532,155
Between two and five years
1,112,421
150,930
338,810
150,930
In over five years
461,864
-
-
-
2,720,097
683,085
917,930
683,085
21
Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Sale of goods
Purchase of services
2024
2023
2024
2023
£
£
£
£
Group
Connected companies
-
-
223,735
236,843
Directors and parties connected to directors
-
-
776,400
776,400
Company
Subsidiay undertakings
-
493,850
-
444
Directors and parties connected to directors
-
-
574,135
574,373
FARMER AUTOCARE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 25 -
22
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
2,214,181
2,074,502
Adjustments for:
Taxation charged
725,302
547,693
Finance costs
166
Investment income
(291,062)
(58,870)
Gain on disposal of tangible fixed assets
-
(1,300)
Amortisation and impairment of intangible assets
3,008
3,008
Depreciation and impairment of tangible fixed assets
331,665
262,536
Movements in working capital:
(Increase)/decrease in stocks
(194,812)
96,223
(Increase) in debtors
(25,647)
(165,011)
Increase in creditors
41,325
326,345
Cash generated from operations
2,804,126
3,085,126
23
Analysis of changes in net debt - group
2024
£
Opening net funds
Cash and cash equivalents
10,008,322
Changes in net debt arising from:
Cash flows of the entity
761,956
Closing net funds as analysed below
10,770,278
Closing net funds
Cash and cash equivalents
10,770,278
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