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COMPANY REGISTRATION NUMBER: 02171434
Laguna Motor Cycles Limited
Financial Statements
31 December 2023
Laguna Motor Cycles Limited
Financial Statements
Year ended 31 December 2023
Contents
Page
Strategic report
1
Director's report
2
Independent auditor's report to the members
4
Statement of income and retained earnings
8
Statement of financial position
9
Statement of cash flows
10
Notes to the financial statements
11
Laguna Motor Cycles Limited
Strategic Report
Year ended 31 December 2023
The principal activity of the company during the year was that of Motorcycle Retailers.
Business Review The volume of bikes sales remained reasonably consistent through the trading year. We relocated some our operations across to a new site, which caused a temporary dip in numbers for a few months but returned to expected volumes in Q4. Shortage of availability of new and used stock experienced in previous years has now stopped, causing in some instances excess numbers, which tend to drive down profit margins. The increase in interest rates has impacted both retail sales and increased our operational costs, we expect this to continue into next year. There continues to be a strong demand for 125cc scooter and learner bikes partially caused by the upturn in the number of food delivery operations in the area. There is also still a strong demand for motorcycle training with full order books. Although market conditions continue to be highly competitive the company has built an excellent reputation within the industry and benefits from loyal customers. With bikes being sold over five sites in Kent and with considerable capital having been expended on updating the sites the directors have seen steady turnover even though the margins have become tighter.
Key Performance Indicators Turnover £23,294,096 (2022 - £20,403,906) Gross Profit £4,386,921 (2022 - £4,278,944) Gross Profit Margin 18.83% (2022 - 20.97%) Stock Holding Days 144.46 (2022 - 139.74)
Future Plans The directors continually review the financial and commercial risks the company is potentially exposed to. Where these risks are significant the directors will take appropriate actions to mitigate these risks. The directors are optimistic in respect of future performance of the company and confident that the company will remain profitable.
This report was approved by the board of directors on 31 January 2025 and signed on behalf of the board by:
Mr A V Pearce
Director
Registered office:
Laguna Motorcycles
Hart Street
Maidstone
Kent
ME16 8RA
Laguna Motor Cycles Limited
Director's Report
Year ended 31 December 2023
The director presents his report and the financial statements of the company for the year ended 31 December 2023 .
Director
The director who served the company during the year was as follows:
Mr A V Pearce
Dividends
Particulars of dividends paid are detailed in note 10 to the financial statements.
Disclosure of information in the strategic report
The Directors have prepared a Strategic Report in accordance with the Companies Act 2006.
Director's responsibilities statement
The director is responsible for preparing the strategic report, director's report and the financial statements in accordance with applicable law and regulations. Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the director is required to: - select suitable accounting policies and then apply them consistently; - make 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 31 January 2025 and signed on behalf of the board by:
Mr A V Pearce
Director
Registered office:
Laguna Motorcycles
Hart Street
Maidstone
Kent
ME16 8RA
Laguna Motor Cycles Limited
Independent Auditor's Report to the Members of Laguna Motor Cycles Limited
Year ended 31 December 2023
Opinion
We have audited the financial statements of Laguna Motor Cycles Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 December 2023 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The director is responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of director's remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of the director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered; the nature of the industry, control environment and business performance with particular reference to the Company's remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets. We also consider the results of our enquiries of management and the Audit Committee, relating to their own identification and assessment of the risks of irregularities and possible related fraud. This includes reviewing available documentation on their policies and procedures and performing tests of controls to evidence their effectiveness. Throughout the audit testing we are considering the incentives that may exist within the organisation for fraud. Key areas include timing of recognising income around the year end, posting of unusual journals and manipulating the Company's performance measures to meet remuneration targets and bank covenants. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We ensure we have an understanding of the relevant laws and regulations and remain alert to possible non-compliance throughout the audit. Despite proper planning and audit work in accordance with auditing standards there are inherent limitations and unavoidable risk that we may not detect some irregularities and material misstatements in the financial statements. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 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.
Steven Sutton
(Senior Statutory Auditor)
For and on behalf of
Burgess Hodgson LLP
Chartered accountants & statutory auditor
Camburgh House
27 New Dover Road
Canterbury
Kent
CT1 3DN
14 February 2025
Laguna Motor Cycles Limited
Statement of Income and Retained Earnings
Year ended 31 December 2023
2023
2022
Note
£
£
Turnover
4
23,294,096
20,403,906
Cost of sales
18,907,175
16,124,962
-------------
-------------
Gross profit
4,386,921
4,278,944
Administrative expenses
4,188,040
3,720,153
------------
------------
Operating profit
5
198,881
558,791
Interest payable and similar expenses
8
420,486
162,435
------------
------------
(Loss)/profit before taxation
( 221,605)
396,356
Tax on (loss)/profit
9
55,980
88,972
---------
---------
(Loss)/profit for the financial year and total comprehensive income
( 277,585)
307,384
---------
---------
Dividends paid and payable
10
( 25,000)
( 50,000)
Retained earnings at the start of the year
3,507,110
3,249,726
------------
------------
Retained earnings at the end of the year
3,204,525
3,507,110
------------
------------
All the activities of the company are from continuing operations.
Laguna Motor Cycles Limited
Statement of Financial Position
31 December 2023
2023
2022
Note
£
£
£
Fixed assets
Tangible assets
11
5,324,021
5,052,681
Current assets
Stocks
12
7,692,606
7,162,806
Debtors
13
507,753
302,719
Cash at bank and in hand
8,070
23,845
------------
------------
8,208,429
7,489,370
Creditors: amounts falling due within one year
15
8,377,365
7,173,911
------------
------------
Net current (liabilities)/assets
( 168,936)
315,459
------------
------------
Total assets less current liabilities
5,155,085
5,368,140
Creditors: amounts falling due after more than one year
16
1,876,052
1,842,502
Provisions
Taxation including deferred tax
18
74,408
18,428
------------
------------
Net assets
3,204,625
3,507,210
------------
------------
Capital and reserves
Called up share capital
21
100
100
Profit and loss account
22
3,204,525
3,507,110
------------
------------
Shareholders funds
3,204,625
3,507,210
------------
------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 31 January 2025 , and are signed on behalf of the board by:
Mr A V Pearce
Director
Company registration number: 02171434
Laguna Motor Cycles Limited
Statement of Cash Flows
Year ended 31 December 2023
2023
2022
Note
£
£
Cash flows from operating activities
(Loss)/profit for the financial year
( 277,585)
307,384
Adjustments for:
Depreciation of tangible assets
213,867
196,231
Interest payable and similar expenses
420,486
162,435
Gains on disposal of tangible assets
( 5,535)
Tax on (loss)/profit
55,980
88,972
Accrued income
( 111,212)
Changes in:
Stocks
( 529,800)
( 2,584,132)
Trade and other debtors
( 205,034)
( 198,272)
Trade and other creditors
846,160
2,190,317
---------
------------
Cash generated from operations
407,327
162,935
Interest paid
( 420,486)
( 162,435)
Tax paid
( 34,245)
( 21,999)
---------
---------
Net cash used in operating activities
( 47,404)
( 21,499)
---------
---------
Cash flows from investing activities
Purchase of tangible assets
( 486,292)
( 1,701,629)
Proceeds from sale of tangible assets
6,620
---------
------------
Net cash used in investing activities
( 479,672)
( 1,701,629)
---------
------------
Cash flows from financing activities
Proceeds from borrowings
162,477
1,179,401
Payments of finance lease liabilities
208,469
( 4,729)
Dividends paid
( 25,000)
( 50,000)
---------
------------
Net cash from financing activities
345,946
1,124,672
---------
------------
Net decrease in cash and cash equivalents
( 181,130)
( 598,456)
Cash and cash equivalents at beginning of year
(181,153)
417,303
---------
---------
Cash and cash equivalents at end of year
14
( 362,283)
( 181,153)
---------
---------
Laguna Motor Cycles Limited
Notes to the Financial Statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Laguna Motorcycles, Hart Street, Maidstone, Kent, ME16 8RA.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The director is aware that the company is in breach of financial covenants in respect of banking loans. The director notes that there continues to be a good relationship with the bank, who continued to finance the company despite the breached covenants, and therefore believe the company is a going concern and has prepared the accounts on this basis.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property (land not depreciated)
-
2 - 5% straight line
Plant & machinery
-
25% reducing balance
Fixtures & fittings
-
25% reducing balance
Motor vehicles
-
25% straight line
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses. Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment. If an arrangement constitutes a finance transaction, it is measured at present value.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2023
2022
£
£
Sale of goods
21,607,290
18,677,999
Rendering of services
1,133,002
1,573,583
Commissions
553,804
152,324
-------------
-------------
23,294,096
20,403,906
-------------
-------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Operating profit
Operating profit or loss is stated after charging/crediting:
2023
2022
£
£
Depreciation of tangible assets
213,867
196,231
Gains on disposal of tangible assets
( 5,535)
Foreign exchange differences
4
---------
---------
6. Staff costs
The average number of persons employed by the company during the year, including the director, amounted to:
2023
2022
No.
No.
Administrative staff
6
6
Management staff
10
10
Number of other staff
93
80
----
----
109
96
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
£
£
Wages and salaries
2,587,420
2,449,283
Other pension costs
50,412
40,664
------------
------------
2,637,832
2,489,947
------------
------------
7. Director's remuneration
The director's aggregate remuneration in respect of qualifying services was:
2023
2022
£
£
Remuneration
60,000
60,000
--------
--------
8. Interest payable and similar expenses
2023
2022
£
£
Interest on banks loans and overdrafts
262,185
100,282
Interest on obligations under finance leases and hire purchase contracts
1,204
2,039
Other interest payable and similar charges
157,097
60,114
---------
---------
420,486
162,435
---------
---------
9. Tax on (loss)/profit
Major components of tax expense
2023
2022
£
£
Current tax:
UK current tax expense
97,099
Deferred tax:
Origination and reversal of timing differences
55,980
( 8,127)
--------
--------
Tax on (loss)/profit
55,980
88,972
--------
--------
Reconciliation of tax expense
The tax assessed on the (loss)/profit on ordinary activities for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 19 % (2022: 19 %).
2023
2022
£
£
(Loss)/profit on ordinary activities before taxation
( 221,605)
396,356
---------
---------
(Loss)/profit on ordinary activities by rate of tax
( 52,745)
75,308
Effect of expenses not deductible for tax purposes
14,173
26,965
Effect of capital allowances and depreciation
( 38,572)
( 13,301)
Effect of different UK tax rates on some earnings
133,124
---------
---------
Tax on (loss)/profit
55,980
88,972
---------
---------
10. Dividends
2023
2022
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
50,000
----
--------
11. Tangible assets
Land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
5,874,354
227,682
886,137
181,506
7,169,679
Additions
143,816
17,578
26,727
298,171
486,292
Disposals
( 8,125)
( 8,125)
------------
---------
---------
---------
------------
At 31 December 2023
6,018,170
245,260
912,864
471,552
7,647,846
------------
---------
---------
---------
------------
Depreciation
At 1 January 2023
1,000,199
211,861
755,226
149,712
2,116,998
Charge for the year
99,369
7,245
38,352
68,901
213,867
Disposals
( 7,040)
( 7,040)
------------
---------
---------
---------
------------
At 31 December 2023
1,099,568
219,106
793,578
211,573
2,323,825
------------
---------
---------
---------
------------
Carrying amount
At 31 December 2023
4,918,602
26,154
119,286
259,979
5,324,021
------------
---------
---------
---------
------------
At 31 December 2022
4,874,155
15,821
130,911
31,794
5,052,681
------------
---------
---------
---------
------------
Within land and buildings is land not being depreciated with a net book value equal to cost of £1,750,000 (2022: £1,750,000).
12. Stocks
2023
2022
£
£
Finished goods and goods for resale
7,692,606
7,162,806
------------
------------
13. Debtors
2023
2022
£
£
Trade debtors
269,062
115,787
Prepayments and accrued income
212,038
120,273
Other debtors
26,653
66,659
---------
---------
507,753
302,719
---------
---------
14. Cash and cash equivalents
Cash and cash equivalents comprise the following:
2023
2022
£
£
Cash at bank and in hand
8,070
23,845
Bank overdrafts
( 370,353)
( 204,998)
---------
---------
( 362,283)
( 181,153)
---------
---------
15. Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans and overdrafts
601,843
552,382
Trade creditors
4,575,556
4,583,477
Accruals and deferred income
108,049
219,261
Corporation tax
227,258
261,503
Social security and other taxes
909,355
120,771
Obligations under finance leases and hire purchase contracts
61,901
Director loan accounts
822,416
431,027
Other creditors
83,321
99,551
Stock financing loans
987,666
905,939
------------
------------
8,377,365
7,173,911
------------
------------
The bank overdraft and loans are secured by a floating charge over all moveable plant, machinery, implements, utensils, furniture and equipment and an assignment of the goodwill and connection of any business together with the full benefit of all licences. It is also secured by a specific equitable charge over all freehold and leasehold properties and/or the proceeds of sale thereof, fixed and floating charges over the undertaking and all property and assets present and future, including goodwill, book debts and the benefits of any licences.
The stock financing and trade creditors relating to stock unsold at the year end have first charge, secured by a fixed charge over the bike stock to which the funding relates. At the year end this amounted to £4,917,392 (2022: £4,844,654).
The hire purchase obligations are secured by fixed charges over the assets they have been used to finance.
16. Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
1,729,484
1,842,502
Obligations under finance leases and hire purchase contracts
146,568
------------
------------
1,876,052
1,842,502
------------
------------
The bank overdraft and loans are secured by a floating charge over all moveable plant, machinery, implements, utensils, furniture and equipment and an assignment of the goodwill and connection of any business together with the full benefit of all licences. It is also secured by a specific equitable charge over all freehold and leasehold properties and/or the proceeds of sale thereof, fixed and floating charges over the undertaking and all property and assets present and future, including goodwill, book debts and the benefits of any licences. The hire purchase obligations are secured by fixed charges over the assets they have been used to finance.
17. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Not later than 1 year
61,901
Later than 1 year and not later than 5 years
146,568
---------
----
208,469
---------
----
18. Provisions
Deferred tax (note 19)
£
At 1 January 2023
18,428
Additions
55,980
--------
At 31 December 2023
74,408
--------
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 18)
74,408
18,428
--------
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
74,408
18,428
--------
--------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 50,412 (2022: £ 40,664 ).
21. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 1 each
100
100
100
100
----
----
----
----
22. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
23. Analysis of changes in net debt
At 1 Jan 2023
Cash flows
At 31 Dec 2023
£
£
£
Cash at bank and in hand
23,845
(15,775)
8,070
Bank overdrafts
(204,998)
(165,355)
(370,353)
Debt due within one year
(778,411)
(337,396)
(1,115,807)
Debt due after one year
(1,842,502)
(33,550)
(1,876,052)
------------
---------
------------
( 2,802,066)
( 552,076)
( 3,354,142)
------------
---------
------------
24. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
34,000
34,000
Later than 1 year and not later than 5 years
116,167
136,000
Later than 5 years
14,167
---------
---------
150,167
184,167
---------
---------
25. Related party transactions
At the year-end the company owed Mr A Pearce £822,416 (2022: £431,027) in the form of an interest free loan. The director and his wife have given HSBC Bank Plc a personal guarantee of £350,000 (2022: £350,000) in relation to the bank loan. During both the current and previous year the company rented its head office from Mr A Pearce for no charge.
26. Controlling party
The company was under the control of Mr A Pearce throughout the current and previous year.