Company registration number 03380439 (England and Wales)
ALAN KERR LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
ALAN KERR LTD
COMPANY INFORMATION
Directors
Mr A Kerr
Mrs J Kerr
Mrs H Magnani
Mr I Magnani
Mr S Kerr
Secretary
Mrs H Magnani
Company number
03380439
Registered office
Patrick House
Blythe Way
Yalberton Industrial Estate
Paignton
Devon
TQ4 7QP
Auditor
Blackwell Bate Ltd
Brunel Court
122 Fore Street
Saltash
Cornwall
PL12 6JW
ALAN KERR LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
ALAN KERR LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -

The directors present the strategic report for the year ended 31 May 2024.

Review of the business

The directors are pleased to report another year of record turnover for the year ended 31 May 2024. However the year has seen increases in the costs of good sold which has seen a reduction in the gross profit and overall net profits achieved by the company.

 

The marked increase in demand experienced following the 2020/21 global pandemic has started to wane following a return to more normal times and travel routes have reopened. This has led to a more competitive market with the sector for selling motorhomes and consequently the company has experienced a return to margins seen before the pandemic.

 

The balance sheet position at the year end remains strong and the company remains well placed to meet the demands of the year to 31 May 2025 which is expected to show some slowdown in activity reflecting the general economic environment across the country.

 

Overall the directors are satisfied with the company's performance for the year.

Principal risks and uncertainties

Business environment

The management of the business and execution of the company's strategy are subject to a number of risks such as the competitive market place, general UK economic performance and reliance on manufacturers These risks are reviewed by the directors and where appropriate monitored and mitigated by suitable processes.

 

Since the pandemic the company has experienced a significant increase in sales and overall profitability. However, the directors are aware that in the current economic environment where the effects of the cost of living, conflict in Ukraine and lingering impacts of both Brexit and the pandemic that because motorhomes are seen as a luxury expenditure that require considerable investment and commitment, customer numbers are likely to reduce and consequently sales fall.

 

Inventory control

The directors review the levels, ageing and valuation of stocks regularly. This control ensures that availability and choice for customers is maintained.

 

Financial control

The company's operations expose it to a variety of financial risks that include credit risk, liquidity risk, currency risk and interest rate risk. The company has in place procedures to ensure that these risks are monitored. The company has good relationships in place with its bankers and funders and continues to meet all its obligations and requirements on a timely basis to ensure no breaches occur.

Key performance indicators

The 2024 financial year saw the following in brief:

1. An increase of 2.1% in turnover compared to 2023.

2. A reduction in gross margin from 7.1% in 2023 to 5.7% this year.

3. A reduction in administrative expenses of £74,876.

4. A reduction in profit before tax from £776,350 in 2023 to £53,107 in 2024.

5. An decrease in net current assets from £895,417 to £783,911

6. An increase in net assets of £751,808.

 

In addition to the above financial data, the directors believe that non-financial data suggests that the company is on track to maintain its stated objectives. In particular, factors such as employee retention and customer satisfaction remain positive.

 

ALAN KERR LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -

On behalf of the board

Mr A Kerr
Director
8 October 2024
ALAN KERR LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -

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

Principal activities

The principal activity of the company continued to be that of the sale of motorhomes and associated parts and service.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr A Kerr
Mrs J Kerr
Mrs H Magnani
Mr I Magnani
Mr S Kerr
Mr S Jones
(Resigned 30 June 2023)
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr A Kerr
Director
8 October 2024
ALAN KERR LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

ALAN KERR LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ALAN KERR LTD
- 5 -

Qualified opinion

We have audited the financial statements of Alan Kerr Ltd (the 'company') for the year ended 31 May 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of our report the financial statements:

Basis for qualified opinion

The financial statements for the year ended 31 May 2022 were unaudited. We were not appointed as auditor of the company until after 31 May 2022 and thus did not observe the counting of physical stocks at that date. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 31 May 2022, which are included within cost of sales as opening stock of the comparative year at £7,110,751, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary.

 

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 qualified 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

As described in the basis for qualified section of our report, the financial statements for the year ended 31 May 2022 were unaudited and we were unable to satisfy ourselves concerning the inventory quantities of £7,110,751 held at 31 May 2022 and forming opening stock within cost of sales in the comparative year ending 31 May 2023. We have concluded that where the other information refers to the stock balance or related balances such as cost of sales, it may be materially misstated for the same reason.

ALAN KERR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALAN KERR LTD
- 6 -

Basis for qualified opinion on other matters prescribed by the Companies Act 2006

The prior year financial statements were unaudited; we were not appointed as auditor of the company until after 31 May 2022 and thus did not observe the counting of physical stocks at that date. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 31 May 2022, which are included within cost of sales as opening stock for the comparative year at £7,110,751, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary. In addition, were any adjustment to the inventory balance to be required, the strategic report would also need to be amended.

 

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

Except for the matter descried in the basis for qualified opinion section of our report, in the light of the knowledge

and understanding of the company and its environment obtained in the course of the audit, we have not identified

material misstatements in the strategic report or the directors' report.

 

Arising solely from the limitation in scope of our work relating to the audit of stocks and the prior year financial

statements being unaudited, referred to above:

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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

ALAN KERR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALAN KERR LTD
- 7 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we 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.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, inlcluding the limitation in scope of our work relating to the audit of stocks and the prior year financial statements being unaudited whcih has been referred to above, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk 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.

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.

Graham Roberts FCA
Senior Statutory Auditor
For and on behalf of Blackwell Bate Ltd
14 October 2024
Chartered Accountants
Statutory Auditor
Brunel Court
122 Fore Street
Saltash
Cornwall
PL12 6JW
ALAN KERR LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
36,809,455
36,034,000
Cost of sales
(34,727,634)
(33,468,720)
Gross profit
2,081,821
2,565,280
Administrative expenses
(1,347,887)
(1,422,763)
Other operating income
750
2,554
Operating profit
4
734,684
1,145,071
Interest payable and similar expenses
7
(681,577)
(368,721)
Profit before taxation
53,107
776,350
Tax on profit
8
(8,405)
(164,770)
Profit for the financial year
44,702
611,580
Other comprehensive income
Revaluation of tangible fixed assets
712,606
-
0
Tax relating to other comprehensive income
(5,500)
-
0
Total comprehensive income for the year
751,808
611,580

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ALAN KERR LTD
BALANCE SHEET
AS AT
31 MAY 2024
31 May 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
2,552,798
1,836,928
Current assets
Stocks
11
13,808,648
9,283,134
Debtors
12
863,390
39,682
Cash at bank and in hand
29,738
222,620
14,701,776
9,545,436
Creditors: amounts falling due within one year
13
(13,917,865)
(8,650,019)
Net current assets
783,911
895,417
Total assets less current liabilities
3,336,709
2,732,345
Creditors: amounts falling due after more than one year
14
(507,730)
(660,674)
Provisions for liabilities
Deferred tax liability
16
22,000
16,500
(22,000)
(16,500)
Net assets
2,806,979
2,055,171
Capital and reserves
Called up share capital
18
1,000,000
1,000,000
Revaluation reserve
777,776
70,670
Profit and loss reserves
1,029,203
984,501
Total equity
2,806,979
2,055,171
The financial statements were approved by the board of directors and authorised for issue on 8 October 2024 and are signed on its behalf by:
Mr A Kerr
Director
Company Registration No. 03380439
ALAN KERR LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 June 2022
1,000,000
70,670
372,921
1,443,591
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
611,580
611,580
Balance at 31 May 2023
1,000,000
70,670
984,501
2,055,171
Year ended 31 May 2024:
Profit for the year
-
-
44,702
44,702
Other comprehensive income:
Revaluation of tangible fixed assets
-
712,606
-
712,606
Tax relating to other comprehensive income
-
(5,500)
-
0
(5,500)
Total comprehensive income for the year
-
707,106
44,702
751,808
Balance at 31 May 2024
1,000,000
777,776
1,029,203
2,806,979
ALAN KERR LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
369,884
509,481
Interest paid
(681,577)
(368,721)
Income taxes paid
(164,770)
(82,332)
Net cash (outflow)/inflow from operating activities
(476,463)
58,428
Investing activities
Purchase of tangible fixed assets
(11,795)
(42,870)
Repayment of loans
6,750
(6,750)
Net cash used in investing activities
(5,045)
(49,620)
Financing activities
Repayment of borrowings
(168,412)
(123,937)
Proceeds from new bank loans
300,000
-
0
Repayment of bank loans
(135,912)
(78,630)
Net cash used in financing activities
(4,324)
(202,567)
Net decrease in cash and cash equivalents
(485,832)
(193,759)
Cash and cash equivalents at beginning of year
222,620
416,379
Cash and cash equivalents at end of year
(263,212)
222,620
Relating to:
Cash at bank and in hand
29,738
222,620
Bank overdrafts included in creditors payable within one year
(292,950)
-
0
ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
1
Accounting policies
Company information

Alan Kerr Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Patrick House, Blythe Way, Yalberton Industrial Estate, Paignton, Devon, TQ4 7QP.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold buildings
over 50 years
Plant and equipment
10% on cost
Fixtures and fittings
10% and 20% on cost
Motor vehicles
20% on cost
ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -

Freehold land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Vehicle sales
35,738,253
35,176,558
Service sales
360,470
380,200
Parts sales
557,042
407,770
Commissions
153,690
69,472
36,809,455
36,034,000
ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
1,660
22,926
Fees payable to the company's auditor for the audit of the company's financial statements
12,500
1,500
Depreciation of owned tangible fixed assets
8,531
44,365
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Directors
5
6
Office and admin
4
3
Sales
10
12
Parts and service
28
31
Total
47
52

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,656,843
1,617,509
Social security costs
165,473
163,380
Pension costs
38,047
32,958
1,860,363
1,813,847
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
29,058
132,499

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
36,108
16,273
Other interest on financial liabilities
645,469
352,448
681,577
368,721
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
8,405
164,770

With effect from 1 April 2023 the main rate of corporation tax increased from 19% to 25%.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
53,107
776,350
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2023: 19.00%)
10,090
147,507
Tax effect of expenses that are not deductible in determining taxable profit
-
0
1,872
Effect of change in corporation tax rate
-
0
8,260
Permanent capital allowances in excess of depreciation
(1,685)
7,131
Taxation charge for the year
8,405
164,770

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2024
2023
£
£
Deferred tax arising on:
Revaluation of property
5,500
-
ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
9
Tangible fixed assets
Freehold buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 June 2023
2,092,864
161,865
33,575
6,094
2,294,398
Additions
-
0
-
0
11,795
-
0
11,795
Disposals
-
0
-
0
(4,751)
-
0
(4,751)
Revaluation
465,056
-
0
-
0
-
0
465,056
At 31 May 2024
2,557,920
161,865
40,619
6,094
2,766,498
Depreciation and impairment
At 1 June 2023
272,809
151,246
31,606
1,809
457,470
Depreciation charged in the year
1,453
2,521
3,207
1,350
8,531
Eliminated in respect of disposals
-
0
-
0
(4,751)
-
0
(4,751)
Revaluation
(247,550)
-
0
-
0
-
0
(247,550)
At 31 May 2024
26,712
153,767
30,062
3,159
213,700
Carrying amount
At 31 May 2024
2,531,208
8,098
10,557
2,935
2,552,798
At 31 May 2023
1,820,055
10,619
1,969
4,285
1,836,928

Land and buildings with a carrying amount of £2,485,000 were revalued at 25 June 2024 by Stratton Creber Commercial independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Freehold
2024
2023
£
£
Cost
2,000,500
2,000,500
Accumulated depreciation
(297,127)
(260,728)
Carrying value
1,703,373
1,739,772
10
Financial instruments
2024
2023
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
158,728
33,757
Carrying amount of financial liabilities
Measured at amortised cost
13,540,967
8,843,018
ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
11
Stocks
2024
2023
£
£
Raw materials and consumables
237,610
136,696
Finished goods and goods for resale
13,571,038
9,146,438
13,808,648
9,283,134

Vehicle stock held under consignment stocking arrangements which are deemed to be assets of the company are included on the balance sheet from the point of consignment. The corresponding liability to the funder is included within creditors. At the balance sheet date vehicle stocks of £10,739,733 (2023 £5,916,104) had been pledged as security against corresponding liabilities.

12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
106,519
27,007
Other debtors
-
0
6,750
Prepayments and accrued income
756,871
5,925
863,390
39,682
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
520,750
79,180
Trade creditors
4,724,541
3,485,305
Corporation tax
8,405
164,770
Other taxation and social security
876,223
302,905
Other creditors
7,740,165
4,591,691
Accruals and deferred income
47,781
26,168
13,917,865
8,650,019
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
214,021
198,553
Other borrowings
15
293,709
462,121
507,730
660,674
ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
15
Loans and overdrafts
2024
2023
£
£
Bank loans
441,821
277,733
Bank overdrafts
292,950
-
0
Other loans
293,709
462,121
1,028,480
739,854
Payable within one year
520,750
79,180
Payable after one year
507,730
660,674

The bank loans are secured on the company's freehold properties, an unlimited debenture incorporating a fixed and floating charges and a personal guarantee given by Mr A Kerr.

 

The bank loans are repayable by February 2026 and are repaid by monthly instalments. Interest is charged at 2.85% above base rate.

 

Vehicle funding facilities of £10,739,733 (2023 £5,916,104) are secured by a fixed charge over the vehicle stocks, the company goodwill, fixed assets, book debts, together with a floating charge over all the assets. Other vehicle funding facilities are secured by personal guarantees of Mr A Kerr.

16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Revaluations
22,000
16,500
2024
Movements in the year:
£
Liability at 1 June 2023
16,500
Charge to other comprehensive income
5,500
Liability at 31 May 2024
22,000

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

ALAN KERR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
38,047
32,958

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1,000,000
1,000,000
1,000,000
1,000,000
19
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
44,702
611,580
Adjustments for:
Taxation charged
8,405
164,770
Finance costs
681,577
368,721
Depreciation and impairment of tangible fixed assets
8,531
44,365
Movements in working capital:
Increase in stocks
(4,525,514)
(2,172,383)
(Increase)/decrease in debtors
(830,458)
143,395
Increase in creditors
4,982,641
1,361,396
Decrease in deferred income
-
(12,363)
Cash generated from operations
369,884
509,481
20
Analysis of changes in net debt
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
222,620
(192,882)
29,738
Bank overdrafts
-
0
(292,950)
(292,950)
222,620
(485,832)
(263,212)
Borrowings excluding overdrafts
(739,854)
4,324
(735,530)
(517,234)
(481,508)
(998,742)
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