REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
FOR |
PREMIER AUTOMOTIVE LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MAY 2024 |
FOR |
PREMIER AUTOMOTIVE LIMITED |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 May 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Statement of Comprehensive Income | 10 |
Balance Sheet | 11 |
Statement of Changes in Equity | 12 |
Cash Flow Statement | 13 |
Notes to the Cash Flow Statement | 14 |
Notes to the Financial Statements | 15 |
PREMIER AUTOMOTIVE LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 May 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
Statutory Auditors |
3 Mellor Road |
Cheadle Hulme |
Cheadle |
Cheshire |
SK8 5AT |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
STRATEGIC REPORT |
for the Year Ended 31 May 2024 |
The directors present their strategic report for the year ended 31 May 2024. |
The Financial year to May 2024 proved to be a year that produced different challenges that required several adjustments to be made as the year progressed. |
The first 6 months were tracking fully in line with expectations but the second half produced numerous factors that were to have a material effect on profits. |
The exceptional depreciation of car values, initiated by global EV price realignments in the Autumn, caused a knock on effect on all used cars, but especially the EV and PHEV models we were strongly invested in. This in turn reduced pcp renewal opportunities because of lower collateral in customers part exchanges to facilitate their next car. |
Used cars margins were also reduced as a result in the first part of 2024, and in April the Company took a decision to make an extraordinary special write down of both used car stocks and the extensive Rental fleet to facilitate normalised margin opportunity moving forward. |
This period was also adversely affected by weaker general demand in the UK car market. Continued long new car lead times that created a large forward order bank of cars that were not going to arrive for delivery within the accounting period. |
Unusual and varied staffing issues also had an adverse influence on service capacity and performance for the later period, this has now settled down and previous levels are expected to return. |
In preparation to return to a more profitable performance several actions were implemented in the closing months. These included a change to the Dealer Management System for all the sites, investing in Pinewood DMS for each site. |
At the same time recruitment provided increased sales management and service technicians. Some positions were re- aligned and process adjusted to improve efficiencies and customer offering. The sales and service team positions are now fulfilled and set to make the most of every opportunity. |
Credit is due to the way all the team responded to the challenges of the period, their adoption of the new process, and integration of our new team members. |
Sales for the year increased by 6.7% to £53m, however gross margins were not reflective of this improvement in that time. Overheads and interest costs rose and efficiencies in both these areas are being implemented. Gross profit dropped from 11.06% to 8.49% due to the circumstances outlined above. |
We look forward to the next year with a new product being launched and an enthusiastic team of people to take full advantage of every area of the business. |
FINANCIAL KEY PERFORMANCE INDICATORS |
The directors believe that the KPIs outlined below provide an overview as to how the Company is performing against principal key objectives to enable it to achieve the directors' long-term strategic vision. The KPIs encompass business performance as well as financial indicators taking consideration of the interests of all stakeholders. |
- Turnover £53.4m (2023: £50.0m) |
- Gross Profit £4.5m (2023: £5.5m) |
- Net Profit (Loss) £-0.03m (2023: £1.1m) |
The directors do not believe that there are any non-financial KPIs that are significant to the understanding of the company's performance. |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
STRATEGIC REPORT |
for the Year Ended 31 May 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
A number of factors remained in place, including uncertainties in consumer confidence created by the ongoing conflict in Ukraine and the national economy. Used cars in general are seeing substantial value reductions, alongside stronger devaluations of used electric car models. Higher than recently experienced Interest rates are affecting operating costs, and could also subdue car sales. |
The directors meet on a regular basis where the risks and uncertainties facing the Company are discussed and appropriate actions taken to mitigate any impact on the Company's performance. |
Legislative and Regulatory Risk |
The Company operates in an industry which is regulated by the Financial Conduct Authority. Failure to comply with relevant laws and regulations could lead to a loss of reputation, revenues or ability to operate. The directors therefore see compliance with laws and regulations as a key business risk. To mitigate this risk, the directors continue to invest in the training of staff, monitor for changes in laws and regulations and identify and action improvements in processes and controls. |
ON BEHALF OF THE BOARD: |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 May 2024 |
The directors present their report with the financial statements of the company for the year ended 31 May 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of motor vehicle sales, servicing and repairs. |
DIVIDENDS |
During the year ordinary interim dividends of £636,000 (2023: £676,500) were paid. The directors do not recommend payment of a final dividend. |
FUTURE DEVELOPMENTS |
During summer 2023 the company purchased land between the Rochdale Kia and Rochdale Suzuki sites expanding the combined site to over two acres, and providing additional customer parking, car storage, and additional sales display areas. Also creating land capacity to allow for future building development. The property and land behind this area was later purchased, site cleared of the buildings and secured and left vacant available also for future projects. Efforts continue in shifting all personnel, attitudes and actions towards zero emission vehicle sales and expertise. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 June 2023 to the date of this report. |
FINANCIAL INSTRUMENTS, OBJECTIVES AND POLICIES |
The Company's financial instruments comprise cash, trade debtors and creditors, loans and borrowings and certain other debtors and accruals all of which arise from its operations. |
The main risks associated with these financial assets and liabilities are credit risk and liquidity and cash flow risk. The directors review and agree policies for managing each of these risks and they are outlined below. The policies are consistent with those from the prior year. |
The company does not use derivative financial instruments. |
Credit risk |
The Companys credit risk is primarily associated with its trade debtors. The amounts presented in the balance sheet are net of allowances for doubtful debts where applicable. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. The directors monitor credit risk but consider that the company has minimal exposure. |
Liquidity and cash flow risk |
Liquidity and cash flow risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The directors aim to mitigate liquidity risk and cash flow risk by managing working capital and, as a result, they continue to closely monitor the Company's working capital requirements. To ensure that the company has adequate working capital, including to be able to purchase stock of vehicles. the Company utilises a mixture of short and long-term finance. Interest bearing assets and liabilities are held at fixed rates to ensure certainty of cash flows. |
REVIEW OF BUSINESS |
A review of the business and its principal risks and uncertainties is set out in the Strategic Report on pages 2 - 3 of these financial statements. |
The profit (loss) for the year, after taxation, amounted to £-28,219 (2023: £1,074,200). |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 May 2024 |
GOING CONCERN |
The directors continue to monitor the geo-political situation in Ukraine and the impact of rising inflation and interest rates affecting the global and UK economy. The impact of the situation in Ukraine has impacted global supply chains for vehicle manufacturers, particularly those in Europe, but the Company has been less affected by this as the majority of its stock comes from Korea. The directors prepare detailed management information and meet regularly to monitor and discuss the Company's performance. The current trading results for 2025 show an improvement on the same period for 2024 which is expected to lead to a return to profitability and the directors believe that this, together with the investment made in the Company's trading premises, means the company is well placed to mitigate any risks that may present themselves. |
The directors have assessed the appropriateness of the going concern concept in relation to these financial statements and consider that the accounts should be prepared on a going concern basis. This conclusion has been reached based upon the Company having access to sufficient funds to be able to meet its liabilities and obligations as they fall due tor at least twelve months from approving these financial statements. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), 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 and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Moss & Williamson Limited, will be proposed for re-appointment in accordance with section 485 of the Companies Act 2006.. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PREMIER AUTOMOTIVE LIMITED |
Opinion |
We have audited the financial statements of Premier Automotive Limited (the 'company') for the year ended 31 May 2024 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, 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 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 May 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PREMIER AUTOMOTIVE LIMITED |
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 Report of the Directors. |
We have nothing to report in respect of the following matters where 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 Statement of Directors' Responsibilities set out on page five, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PREMIER AUTOMOTIVE LIMITED |
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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
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 the audit was considered capable of detecting irregularities including fraud is detailed below: |
As a part of our audit in accordance with United Kingdom Generally Accepted Accounting Practice; and requirements of the Companies Act 2006 we exercise professional judgement and maintain professional scepticism throughout the audit. Based on our understanding and accumulated knowledge of the Company and the sector in which it operates we considered the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud and whether such actions or non-compliance might have a material impact on the financial statements. These included but were not limited to those that relate to the form and content of the financial statements, such as the accounting policies, United Kingdom Generally Accepted Accounting Practice, the UK Companies Act 2006, compliance with FCA regulations and those that relate to the payment of employees. All team members were briefed to ensure they were aware of any relevant regulations in relation to their work. |
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries, management bias in accounting estimates and improper revenue recognition. Our audit procedures included, but were not limited to: |
- Agreement of the financial statement disclosures to underlying supporting documentation; |
- Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to revenue recognition, useful life of fixed assets, fair value of property assets and completeness of accruals and provisions; |
- Revenue year end cut-off procedures; |
- Identifying and testing journal entries, in particular any journal entries posted with specific unusual narrative, manual journals to revenue and cash, and review of journals posted to least used accounts; |
- Discussions with management; including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; |
- Obtaining an understanding of how the Company is complying with its legal and regulatory frameworks by making enquiries with management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of legal correspondence received and interactions with regulators such as the FCA.. |
- Obtaining 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 Company's internal control. |
- Evaluating 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. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PREMIER AUTOMOTIVE LIMITED |
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 Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditors |
3 Mellor Road |
Cheadle Hulme |
Cheadle |
Cheshire |
SK8 5AT |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
STATEMENT OF COMPREHENSIVE |
INCOME |
for the Year Ended 31 May 2024 |
2024 | 2023 |
Notes | £ | £ |
TURNOVER | 4 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT | 6 |
Interest receivable and similar income |
530,694 | 1,610,190 |
Interest payable and similar expenses | 8 | ( |
) | ( |
) |
(LOSS)/PROFIT BEFORE TAXATION | ( |
) |
Tax on (loss)/profit | 9 | ( |
) |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR |
( |
) |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
BALANCE SHEET |
31 May 2024 |
2024 | 2023 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
CURRENT ASSETS |
Stocks | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 20 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Revaluation reserve | 22 |
Retained earnings | 22 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 May 2024 |
Called up |
share | Retained | Revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 June 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 31 May 2023 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive loss | - | ( |
) | ( |
) |
Balance at 31 May 2024 |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
CASH FLOW STATEMENT |
for the Year Ended 31 May 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) | ( |
) |
Amount introduced by directors | - | 15,269 |
Amount withdrawn by directors | (20,357 | ) | (969 | ) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
1,442,357 |
Cash and cash equivalents at end of year |
2 |
694,136 |
1,240,502 |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE CASH FLOW STATEMENT |
for the Year Ended 31 May 2024 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
(Loss)/profit before taxation | ( |
) |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) |
Finance costs | 565,633 | 263,020 |
Finance income | (4,945 | ) | - |
666,178 | 1,741,611 |
Increase in stocks | ( |
) | ( |
) |
Increase in trade and other debtors | ( |
) | ( |
) |
Increase in trade and other creditors |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 May 2024 |
31.5.24 | 1.6.23 |
£ | £ |
Cash and cash equivalents | 694,136 | 1,240,502 |
Year ended 31 May 2023 |
31.5.23 | 1.6.22 |
£ | £ |
Cash and cash equivalents | 1,240,502 | 1,442,357 |
3. | ANALYSIS OF CHANGES IN NET FUNDS/(DEBT) |
At 1.6.23 | Cash flow | At 31.5.24 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 1,240,502 | (546,366 | ) | 694,136 |
1,240,502 | ( |
) | 694,136 |
Debt |
Debts falling due within 1 year | (197,646 | ) | 63,255 | (134,391 | ) |
Debts falling due after 1 year | (374,691 | ) | (1,335,284 | ) | (1,709,975 | ) |
(572,337 | ) | (1,272,029 | ) | (1,844,366 | ) |
Total | 668,165 | (1,818,395 | ) | (1,150,230 | ) |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 May 2024 |
1. | STATUTORY INFORMATION |
Premier Automotive Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | STATEMENT OF COMPLIANCE |
3. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Significant judgements and estimates |
The Company's directors make estimates and assumptions about the future. These estimates and assumptions impact recognised assets and liabilities, as well as revenue and expenses and other disclosures. These estimates are based on historical experience and on various assumptions considered reasonable under the prevailing conditions. The actual outcome may diverge from these estimates if other assumptions are made, or other conditions arise. The estimates and assumptions that may have a significant effect on the carrying amounts of assets and liabilities within the financial year include: |
Tangible assets and intangible assets are recognised at cost, less accumulated depreciation, amortisation and any impairments. Amortisation and depreciation take place over the estimated useful life of each asset, until the assessed residual value of the asset is reached. |
Freehold and long leasehold properties are initially recorded at cost but are subsequently accounted for under the revaluation model applying the Alternative Rules in company law with revaluations taking place with sufficient regularity. The directors utilise the services of expert valuers with the necessary qualifications and experience in valuing such assets to undertake the estimate of the market value of the assets in question and then monitor for impairment at each financial year end. |
The cost of inventory and associated provisions are considered regularly. When calculating the inventory provision, company management and the board of directors consider the nature and condition of the inventory, as well as applying assumptions around the anticipated saleability of vehicle stocks and spares. |
The directors make an estimate of the recoverable value of trade and other debtors. When assessing for impairment of trade and other debtors, management considers factors including the ageing profile of debtors and historical experience. |
There are no key assumptions concerning the future or other sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amount of assets or liabilities within the next financial year. |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
3. | ACCOUNTING POLICIES - continued |
Revenue recognition |
Turnover, which represents amounts derived from the provision of goods and services , is stated at invoice price, after trade discounts, other sales taxes and net of value added tax. This principally comprises of external vehicle sales in the company's capacity as a Kia, Suzuki and Isuzu dealer, as a retailer of used vehicles, parts, servicing and bodyshop sales. |
Vehicle and parts sales are recognised at the time of delivery to the customer. Service and bodyshop sales are recognised when the work is completed. Revenue also comprises commissions receivable for arranging vehicle financing and related insurance products. Commissions are based on agreed rates and income is recognised at the time of approval of the vehicle finance by the finance provider. |
Manufacturer bonuses are credited to cost of sales. Volume related and vehicle specific rebates from suppliers are credited to the carrying value of the inventory to which they relate. When the inventory is sold, the rebate amount is recognised in the income statement. |
Intangible assets - computer software |
Intangible fixed assets are initially recorded at cost and are subsequently measured at cost less accumulated amortisation and impairments. |
The useful lives of intangible fixed assets and amortisation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
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 with the loss being recorded in profit and loss.. Prior impairments are also reviewed for possible reversal at each reporting date. |
Capitalised software is amortised on a straight-line basis over a period of 4 years as determined by the directors in accordance with their estimate of its useful life, on an item by item basis. Additions to the existing software are amortised on the same basis. The costs of the annual updates are written off in the year of purchase. |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
3. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Freehold property | - |
Improvements to property | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
Tangible 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, |
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. |
Freehold and leasehold property assets are initially recorded at cost and are then subsequently accounted for under the revaluation model applying the Alternative Accounting Rules in company law. These assets are held at their fair value at the date of the revaluation with future revaluations being undertaken with sufficient regularity to ensure that the carrying value of the revalued asset does not differ materially from that which would be determined using fair value at the reporting date. Gains on revaluation are taken to a specific revaluation reserve in the equity section of the balance sheet and are reported as other comprehensive income. |
Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised in profit and loss. |
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. |
For the purposes of impairment testing, when it Is not possible to estimate the recoverable amount of an Individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
3. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
A review of the fair values of vehicle stocks is carried out on a regular basis. The market value is assessed with reference to external publications and the application of historical industry knowledge on the pricing of vehicles by reference to make and the specific model. It is possible that ultimate sales values may vary from those applied in valuing inventory. |
Consignment vehicles which due to the significant risks and responsibilities of ownership passing to the company are regarded effectively as being under the control of the company and are included within stocks on the balance sheet, although legal title has not passed to the company. The corresponding liability is included as new vehicle funding within trade creditors and is secured directly on these vehicles. |
Demonstrator vehicles are depreciated at 2% per month from the third month following delivery of the vehicle to the company. |
Volume related and vehicle specific rebates from suppliers are credited to the carrying value of the inventory to which they relate. When the inventory is sold, the rebate amount is recognised in the income statement. |
Financial instruments |
The Company only enters Into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditor and, loans from banks. |
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 Rows 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 ban 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 amortized 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 assets 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 reporting date. |
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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. |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
3. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Debtors |
Short-term debtors are measured at transaction price, less any impairment. |
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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
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. |
4. | TURNOVER |
The turnover and loss (2023 - profit) before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
2024 | 2023 |
£ | £ |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
4. | TURNOVER - continued |
All turnover was to customers based in the UK. |
5. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2024 | 2023 |
Administration and sales | 40 | 42 |
Service and maintenance | 33 | 30 |
The directors of the company are also the key management and therefore the disclosure below meets the requirement to disclose the remuneration of key management. |
2024 | 2023 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2024 | 2023 |
£ | £ |
Emoluments etc |
Company pension contributions on behalf of the highest paid director were £1,321 [2023 - £1,321). |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Hire of plant and machinery |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
7. | AUDITORS' REMUNERATION |
2024 | 2023 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's financial statements |
12,500 |
11,330 |
In addition to the audit fees disclosed above, non-audit fees paid to the auditors in relation to production of statutory financial statements, taxation, financial advisory and company secretarial services amounted to £7,930 [2023 - £7,480]. |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2024 | 2023 |
£ | £ |
Stocking interest |
Other Interest |
Mortgage |
9. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the loss for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax | ( |
) |
Deferred tax | ( |
) |
Tax on (loss)/profit | ( |
) |
UK corporation tax has been charged at 25% (2023 - 20%). |
Reconciliation of total tax (credit)/charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
(Loss)/profit before tax | ( |
) |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of |
( |
) |
Effects of: |
Capital allowances in excess of depreciation | - | ( |
) |
Depreciation in excess of capital allowances | - |
Deferred tax movements | ( |
) |
Total tax (credit)/charge | (6,720 | ) | 272,970 |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
9. | TAXATION - continued |
Factors that may affect future tax charges |
The company has capital losses of £373,643 (2023: £373,643) available to use against future gains. There is no expiry date for these losses. |
An increase in the main corporation tax rate, to 25%, came in from 1 April 2023. This was from the previously enacted 19%, announced at the budget on 3 March 2021, and substantively enacted on 24 May 2021. The deferred tax balance at the year end has been calculated based on the rate substantively enacted as at that date. |
10. | DIVIDENDS |
2024 | 2023 |
£ | £ |
Interim |
11. | INTANGIBLE FIXED ASSETS |
Computer |
software |
£ |
COST |
At 1 June 2023 |
and 31 May 2024 |
AMORTISATION |
At 1 June 2023 |
and 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
12. | TANGIBLE FIXED ASSETS |
Improvements |
Freehold | Long | to | Plant and |
property | leasehold | property | machinery |
£ | £ | £ | £ |
COST OR VALUATION |
At 1 June 2023 |
Additions |
At 31 May 2024 |
DEPRECIATION |
At 1 June 2023 |
Charge for year |
At 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
12. | TANGIBLE FIXED ASSETS - continued |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST OR VALUATION |
At 1 June 2023 |
Additions |
At 31 May 2024 |
DEPRECIATION |
At 1 June 2023 |
Charge for year |
At 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 31 May 2023 |
Included in cost or valuation of land and buildings is freehold land of £ 2,071,520 (2023 - £ 62,667 ) which is not depreciated. |
Cost or valuation at 31 May 2024 is represented by: |
Improvements |
Freehold | Long | to | Plant and |
property | leasehold | property | machinery |
£ | £ | £ | £ |
Valuation in 2022 | 1,270,000 | 2,550,000 | - | - |
Cost | 2,045,403 | 51,215 | 61,000 | 457,511 |
3,315,403 | 2,601,215 | 61,000 | 457,511 |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
Valuation in 2022 | - | - | - | 3,820,000 |
Cost | 609,274 | 200,133 | 45,003 | 3,469,539 |
609,274 | 200,133 | 45,003 | 7,289,539 |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
12. | TANGIBLE FIXED ASSETS - continued |
If freehold/leasehold properties had not been revalued they would have been included at the following historical cost: |
2024 | 2023 |
£ | £ |
Cost | 3,954,816 | 1,945,963 |
Aggregate depreciation | 270,079 | 270,079 |
Value of land in freehold land and buildings | 2,071,520 | 62,667 |
The land and buildings were revalued by an independent Chartered Valuation Surveyors, Impey & Company Limited in November 2022 to £3.82m. The valuation was carried out in accordance with the RICS Valuation - Global Standards January 2020, as prepared by the Royal Institution of Chartered Surveyors. |
13. | STOCKS |
2024 | 2023 |
£ | £ |
Vehicle Stock |
Parts Stock and WIP |
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Trade debtors |
Directors' current accounts | 5,231 | - |
Tax |
Prepayments & Accrued Income |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Trade creditors |
Tax |
Social security and other taxes |
VAT | 517,733 | 497,594 |
Other creditors |
Directors' current accounts | 1,143 | 16,269 |
Accruals & Deferred Income |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2024 | 2023 |
£ | £ |
Bank loans (see note 17) |
17. | LOANS |
An analysis of the maturity of loans is given below: |
2024 | 2023 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
Amounts falling due in more than five years: |
Repayable by instalments |
Bank loans more 5 yr by instal | 1,193,209 | 119,755 |
The company has a loan with the Bank of Scotland. The loan is over a 15 year period to June 2030. The first 10 years have a fixed rate of interest of 5.14%, which will then be renegotiated on review in June 2025.. The loan is repayable by monthly instalments. |
The company has a KIA dealer development loan with Hyundai Capital. The loan is over a 2 year period to July 2024 at a fixed rate of interest of 3.2% above the base rate. The loan is repayable by monthly instalments. |
The company took out a loan in the year with the Bank of Scotland. The loan is over a 15 year period to July 2038. The loan has a fixed rate of interest of 7.89% and is repayable by monthly installments. |
18. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2024 | 2023 |
£ | £ |
Within one year |
Between one and five years |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
19. | SECURED DEBTS |
The following secured debts are included within creditors: |
2024 | 2023 |
£ | £ |
Bank loans |
Vehicle financing loans | 8,255,315 | 5,411,005 |
The bank loans are secured by a debenture in favour of Bank of Scotland Plc, incorporating fixed and floating charges over all of the property and assets of the company both present and future |
The Hyundai vehicle financing loan is secured by fixed and floating charges in favour of Hyundai Capital UK Limited. The floating charge includes all the property and undertakings of the company. |
Funding loans from Suzuki and Isuzu are secured against the vehicles to which they relate. |
The vehicle funding loans are included within the trade creditor balance. |
20. | PROVISIONS FOR LIABILITIES |
2024 | 2023 |
£ | £ |
Deferred tax | 473,335 | 474,455 |
Deferred |
tax |
£ |
Balance at 1 June 2023 |
Credit to Statement of Comprehensive Income during year | ( |
) |
Balance at 31 May 2024 |
The deferred tax provision relates to accelerate capital allowances of £154,914 (2023: £156,034) and taxable temporary timing differences of £318,421 (2023: £318,421). |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
22. | RESERVES |
Retained | Revaluation |
earnings | reserve | Totals |
£ | £ | £ |
At 1 June 2023 | 5,727,726 |
Deficit for the year | ( |
) | ( |
) |
Dividends | ( |
) | ( |
) |
At 31 May 2024 | 5,063,507 |
Retained earnings |
Includes all current and prior period retained profits and losses. |
Revaluation reserve |
Includes all the accounting adjustments made regarding the carrying value of certain property, plant and equipment included in fixed assets. It is shown net of any associated deferred corporation tax that would be due if the revalued assets were to be sold. This reserve is not distributable to the owners of the business. |
23. | PENSION COMMITMENTS |
At the year end the company had outstanding pension contributions of £3,814 (2023: £107). |
24. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to directors subsisted during the years ended 31 May 2024 and 31 May 2023: |
2024 | 2023 |
£ | £ |
Balance outstanding at start of year | ( |
) | ( |
) |
Amounts advanced |
Amounts repaid | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | ( |
) | ( |
) |
Balance outstanding at start of year | ( |
) | ( |
) |
Amounts advanced |
Amounts repaid | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | ( |
) | ( |
) |
PREMIER AUTOMOTIVE LIMITED (REGISTERED NUMBER: 02706646) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 May 2024 |
24. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES - continued |
Balance outstanding at start of year | ( |
) | ( |
) |
Amounts advanced |
Amounts repaid | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | ( |
) | ( |
) |
Balance outstanding at start of year | ( |
) |
Amounts advanced |
Amounts repaid | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | ( |
) |
The information disclosed in the directors advances and credits is in an aggregated form. Where applicable, loans to a director are unsecured, interest free and repayable on demand. |
25. | RELATED PARTY DISCLOSURES |
The company paid rent for the use of trading premises to the directors' pension scheme of £96,000 (2023: £66,000). |
During the year the company paid dividends to the directors of £636,000 (2023: £676,500). |
Bank of Scotland PLC hold, as security against borrowings, a legal mortgage over Fund and Life policies covering the lives of D J Bird, N P Bird and L J Bird. |
Kia Finance hold personal guarantees from D J Bird, N P Bird and L J Bird in relation to vehicle financing arrangements. |
The directors have confirmed that all related party transactions have been undertaken at arm's length. |
26. | ULTIMATE CONTROLLING PARTY |
Control of the company is vested in N P Bird, D J Bird and L J Bird, by virtue of their beneficial interest in the whole of the issued share capital of the company. |