Company registration number 05020857 (England and Wales)
QUEST MOTOR GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
QUEST MOTOR GROUP LIMITED
COMPANY INFORMATION
Directors
W R Woods
(Appointed 30 November 2023)
J Barlow
(Appointed 30 November 2023)
M Phillips
(Appointed 30 November 2023)
A J Wakeford
(Appointed 30 November 2023)
Secretary
W R Woods
Company number
05020857
Registered office
3 John Macadam Way
St. Leonards-On-Sea
East Sussex
England
TN37 7SQ
Auditor
Cooper Parry Group Limited
St James Building
79 Oxford Street
Manchester
M1 6HT
QUEST MOTOR GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
QUEST MOTOR GROUP LIMITED
STRATEGIC REPORT true
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
In the year to 31 May 2024, the company was acquired by St.Leonards Motors Limited on 30 November 2023, which meant there was a focus on integrating the company into the parent during the final six months.
The company continues to be a brand partner with Suzuki, and offer a large range of used vehicles to the local and wider market, with a focus on all makes servicing, repairs, MOT’s, the Hunter 4-wheel alignment and ADAS workshop bay, through our Bosch Service Centre.
With Suzuki being the only new vehicle brand after the termination of the Maxus brand in June 2023, there continues to be a focus on increasing our Suzuki market share.
Increasing costs in all areas of the business are having an impact on profitability, with only a small percentage of the increased costs being able to be passed onto customers due to the concern that increasing prices would result in a decrease in business, due to the “cost of living” pressures on households.
Strategy
The Senior Management team continue to focus on:
Ensuring succession and continuation of the business under the ownership of a company with the same family values to ensure the customer service focus continues and the retention of the workforce.
Integration into the wider group after the acquisition to identify economies of scale to reduce operating costs.
Increasing used vehicle volumes and profit per unit.
A marketing strategy with continued focus on increasing all makes servicing, repairs and MOTs through our Bosch Service Centre.
Continuing to grow the Suzuki market share with a focus on all business and retail channels.
Vehicle Sales
The company increased its new vehicle sales from 119 in 2023 to 146, with used vehicle sales showing a reduction from 1,171 in 2023 to 1,071 in 2024.
Service hours
With a focus on our all makes servicing offering, the level of service hours sold showed an increase from 17,935 hours in 2023 to 18,417 hours in 2024.
Parts sales
The level of parts sales has continued to increase year on year from £1.432m in 2023 to £1.500m in 2024, due to the increase in servicing hours and an increased focus on trade parts.
Capital expenditure
The dealership is fully compliant with the current Suzuki corporate identity requirements.
Future developments
Quest Motor Group will continue to trade as it currently does, at the same time as integrating with the policies, processes and systems of the parent group, St.Leonards Motors Limited, to this extent the directors have also taken the decision to transfer the trade and assets of Quest to St.Leonards Motors Limited, which is planned to be effective from November 2024. It also has an important role to play within the wider group regarding increasing our used vehicle volumes and profitability, including being a further multi-franchised outlet, in a new area of opportunity, to capitalise on all our internal retail part exchanges.
Principal risks and uncertainties
The management of the business and the nature of the company's strategy are subject to a number of risks. The directors have set out below the principal risks facing the business.
QUEST MOTOR GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Manufacturers supply of new and improved products
The company is reliant on new vehicle products from its manufacturer partner. This exposes the company to risks in a number of areas as the company is dependent on its manufacturer / supplier in respect of:
availability of new vehicle products
quality of new vehicle products
pricing of new vehicle products
availability of replacement parts
The directors are confident that future new products from its manufacturer / supplier will continue to be competitively priced and high quality and therefore consider that this "manufacturer risk" is minimal. It is, in any case, mitigated by the other core business areas of the company, including used vehicle sales, parts sales and service work.
Used vehicle price variation
Used vehicle prices can decline significantly. As a significant proportion of the business comprises used vehicle sales, these declines can have a material impact on the business. The impact of declines in used vehicle prices can result in reduced profits on sales and also write-downs in the value of used vehicle stock.
Competition
The company competes with other franchised vehicle dealerships, independent used vehicle sellers, private buyers and sellers, internet-based dealers, independent service and repair shops and vehicle manufacturers who have entered the retail market. The company competes for the sale of new and used vehicles, the performance of warranty repairs, non-warranty repairs, routine maintenance business and for the provision of spare parts. The principal competitive factors in service and parts sales are price, familiarity with a manufacturer's brands and models and the quality of customer service.
Company, people and reputation
The company has invested heavily in its people and its reputation over a number of years. It is therefore reliant on these individuals to a degree in delivering the group result and reinforcing the underlying company brand. The company undertakes a regular review of remuneration and packages to ensure that it attracts and retains the best people.
Economic Downturn
The success of the business is reliant on consumer spending. An economic downturn, resulting in the reduction of consumer spending power will have a direct impact on the income achieved by the group. In response to this risk senior management aim to keep abreast of economic conditions. In cases of severe economic downturn marketing and pricing strategies are modified to reflect the new market conditions.
M Phillips
Director
26 February 2025
QUEST MOTOR GROUP LIMITED
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 the purchasing, selling and repairing of motor vehicles and other ancillary services.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £1,870,444. 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:
R J Gozzett
(Resigned 30 November 2023)
M J Gozzett
(Resigned 30 November 2023)
W R Woods
(Appointed 30 November 2023)
J Barlow
(Appointed 30 November 2023)
M Phillips
(Appointed 30 November 2023)
A J Wakeford
(Appointed 30 November 2023)
Financial instruments
Financial risk management policies and objectives
The company uses various financial instruments; these include cash and various items, such as trade debtors and trade creditors, that arise directly from its operations.
The main risks arising from the financial instruments are interest rate risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks which are summarised below.
The use of financial derivatives is governed by the company's policies approved by the directors. The company does not use derivative financial instruments for speculative purposes.
Liquidity risk
The directors believe that the funds available to the company are above operating requirements.
The board of directors assess the need for liquidity within the business with reference to the funding cycle most appropriate to the trading performance and the short term cash flow of the business.
Interest rate risk
The company finances its operation through a mixture of bank and other external borrowings. The company's exposure to interest rate fluctuations on its borrowings is managed by the use of fixed and floating facilities. The balance sheet includes trade debtors and trade creditors which do not attract interest.
The company policy throughout the year has been to achieve its objective of managing interest rate risk through day to day involvement of management in business decisions rather than through setting maximum or minimum levels for the level of fixed interest rate borrowings.
QUEST MOTOR GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
Credit risk
The company's principal financial assets are cash and trade debtors. The credit risk associated with the cash is minimal. The principal credit risk therefore arises from its trade debtors.
In order to manage credit risk, the directors have implemented processes to ensure receipt of cleared funds for vehicle sales before the vehicle is released.
Other trade debtors require approved credit in advance which is supported by references and payment is required within the company's credit terms and hence credit risk is minimised.
Cash flow
The company's activities primarily expose it to the financial risks of changes in its working capital, brought about by the seasonality of the industry and the stock holding requirements.
The board of directors monitor the working capital requirement and are able to assess the commercial rationale against the costs of raising capital through company's bankers and primary funding providers.
The security offered by fixed rate / term deposits are assessed against their potential rewards.
Auditor
The audit business of UHY Hacker Young Manchester LLP was acquired by Cooper Parry Group Limited on 30 September 2024. UHY Hacker Young Manchester LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place. The auditor, Cooper Parry Group Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
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.
QUEST MOTOR GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 5 -
On behalf of the board
M Phillips
Director
26 February 2025
QUEST MOTOR GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF QUEST MOTOR GROUP LIMITED
- 6 -
Opinion
We have audited the financial statements of Quest Motor Group Limited (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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
• the information given in the strategic report and the directors' truereport for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
QUEST MOTOR GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF QUEST MOTOR GROUP LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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.
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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team and involving relevant internal specialists, including tax, and industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: valuation of used vehicle stocks and recognition of supplier incentives. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
QUEST MOTOR GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF QUEST MOTOR GROUP LIMITED
- 8 -
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management and those charged with governance concerning actual and potential litigation claims;
in addressing the risk of fraud through inappropriate valuation of used vehicle inventory, assessing net realisable value of stock items sold after the year end was above cost or assessing their value with reference to third party data sources if unsold;
in addressing the risk of fraud through inappropriate recording of supplier incentives, ensuring amounts recorded as due were then subsequently acknowledged as such by the supplier;
in assessing the risk of fraud through management override of controls, testing the appropriateness of journal entries and assessing whether judgements made in making accounting estimates are indicative of potential bias.
We also obtained an understanding of the legal and regulatory frameworks the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. These included the company's FCA regulatory requirements.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Ian McMahon FCCA FMAAT
Senior Statutory Auditor
26 February 2025
For and on behalf of Cooper Parry Group Limited
Statutory Auditor
St James Building
79 Oxford Street
Manchester
M1 6HT
QUEST MOTOR GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
20,590,325
22,737,416
Cost of sales
(19,493,567)
(21,527,270)
Gross profit
1,096,758
1,210,146
Administrative expenses
(1,209,433)
(1,112,495)
Other operating income
35,756
19,349
Operating (loss)/profit
4
(76,919)
117,000
Interest receivable and similar income
6
5,833
2,587
Interest payable and similar expenses
7
(623)
(Loss)/profit before taxation
(71,086)
118,964
Tax on (loss)/profit
8
16,579
(21,298)
(Loss)/profit for the financial year
(54,507)
97,666
The profit and loss account has been prepared on the basis that all operations are continuing operations.
QUEST MOTOR GROUP LIMITED
BALANCE SHEET
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
378,105
424,528
Current assets
Stocks
11
2,757,906
3,402,263
Debtors
12
288,478
1,683,714
Cash at bank and in hand
566,440
485,487
3,612,824
5,571,464
Creditors: amounts falling due within one year
13
(3,563,363)
(3,626,920)
Net current assets
49,461
1,944,544
Total assets less current liabilities
427,566
2,369,072
Provisions for liabilities
Deferred tax liability
14
74,845
91,400
(74,845)
(91,400)
Net assets
352,721
2,277,672
Capital and reserves
Called up share capital
16
50,024
50,024
Share premium account
17
456
456
Profit and loss reserves
18
302,241
2,227,192
Total equity
352,721
2,277,672
The financial statements were approved by the board of directors and authorised for issue on 26 February 2025 and are signed on its behalf by:
W R Woods
Director
Company registration number 05020857 (England and Wales)
QUEST MOTOR GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 June 2022
50,024
456
2,129,526
2,180,006
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
97,666
97,666
Balance at 31 May 2023
50,024
456
2,227,192
2,277,672
Year ended 31 May 2024:
Loss and total comprehensive income
-
-
(54,507)
(54,507)
Dividends
9
-
-
(1,870,444)
(1,870,444)
Balance at 31 May 2024
50,024
456
302,241
352,721
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
1
Accounting policies
Company information
Quest Motor Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3 John Macadam Way, St. Leonards-On-Sea, East Sussex, England, TN37 7SQ.
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. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosurestrue;
• Section 33 ‘Related Party Disclosures’true: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of St Leonards Motors (Holdings) Limited. These consolidated financial statements are available from its registered office, 3 John Macadam Way, St. Leonards-On-Sea, England, TN37 7SQ.
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, this notwithstanding the decision to transfer the trade and assets of the company within the group after the year end, does not require any modification to the values as reported at the balance sheet date.
1.3
Turnover
Turnover represents amounts derived from the provision of goods and services which fall within the company’s ordinary activities after deduction of trade discounts and Value Added Tax.
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and VAT.
Sales of motor vehicles, parts and accessories are recognised when the significant risks and rewards of ownership have been transferred to the buyer. In general this occurs when vehicles or parts are delivered to the customer and title has passed. Servicing sales are recognised on completion of the agreed work.
Commission income is accounted for on a receivable basis.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -
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:
Plant and machinery
10% - 20% straight line
Fixtures and fittings
5% - 20% straight line
Computer equipment
33% straight line
Motor vehicles
25% reducing balance
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.
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).
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
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.
Consignment stock
Consignment vehicles which bear considerably more of the risks and responsibilities of ownership are regarded effectively as being under the control of the company and, in accordance with FRS102 are included in stocks on the balance sheet, although legal title has not passed to the company. The corresponding liability is included within trade creditors and is secured directly on these vehicles.
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’ of FRS 102 to all of its financial instruments. true
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.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
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.
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.
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.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
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.
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.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 16 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Consignment stock
Interest-bearing consignment vehicles are regarded as being effectively under the control of the company and are included within stock in the balance sheet as the company has the significant risks and rewards of ownership even though legal title has not yet passed. If the vehicles are not sold in the consignment period, the company has the obligation to purchase. The corresponding liability is included in manufacturers’ vehicle stocking loans.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives of the assets so these are re-assessed annually and amended when necessary to reflect current estimates. See the accounting policies note for the useful economic lives for each class of assets.
Stock valuation
Stock valuation is regularly monitored against age profile and market demand. Management use a number of market tools during the appraisal process including CAP valuation guides. The director maintains oversight of ageing stock profiles and a monthly review of any provision required is performed.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sales of goods
18,605,790
20,650,224
Rendering of services
1,785,445
1,830,652
Commissions
199,090
256,540
20,590,325
22,737,416
All turnover arose within the UK.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
20,000
19,500
Depreciation of owned tangible fixed assets
64,356
57,308
(Profit)/loss on disposal of tangible fixed assets
(750)
3,821
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Aftersales
16
17
Sales
8
16
Administrative and management
22
13
Total
46
46
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,645,144
1,496,058
Social security costs
161,976
159,462
Pension costs
29,871
25,224
1,836,991
1,680,744
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
5,833
2,587
7
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
-
623
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
916
Adjustments in respect of prior periods
(24)
(3,875)
Total current tax
(24)
(2,959)
Deferred tax
Origination and reversal of timing differences
(16,572)
24,257
Adjustment in respect of prior periods
17
Total deferred tax
(16,555)
24,257
Total tax (credit)/charge
(16,579)
21,298
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(71,086)
118,964
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(17,772)
22,603
Tax effect of expenses that are not deductible in determining taxable profit
25
164
Tax effect of utilisation of tax losses not previously recognised
1,175
Adjustments in respect of prior years
(24)
(3,875)
Effect of change in corporation tax rate
5,151
Other permanent differences
(5,541)
Deferred tax adjustments in respect of prior years
17
Movement in deferred tax not recognised
2,796
Taxation (credit)/charge for the year
(16,579)
21,298
9
Dividends
2024
2023
£
£
Interim paid
1,870,444
The full amount was paid to former owners Gozzett Holdings Limited before the company was acquired by St.Leonards Motors Limited.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
10
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2023
402,171
465,573
45,511
15,296
928,551
Additions
4,989
8,990
4,232
18,211
Disposals
(15,296)
(15,296)
At 31 May 2024
407,160
474,563
49,743
931,466
Depreciation and impairment
At 1 June 2023
173,915
273,517
41,573
15,018
504,023
Depreciation charged in the year
31,572
31,343
1,441
64,356
Eliminated in respect of disposals
(15,018)
(15,018)
At 31 May 2024
205,487
304,860
43,014
553,361
Carrying amount
At 31 May 2024
201,673
169,703
6,729
378,105
At 31 May 2023
228,256
192,056
3,938
278
424,528
11
Stocks
2024
2023
£
£
Work in progress
10,668
10,457
Vehicle and parts stock
2,747,238
3,391,806
2,757,906
3,402,263
Included in vehicle stock is £592,106 (2023: £99,120) in relation to consignment stock.
During the year an impairment reversal of £65,156 (2023: £104,439) was recognised against stock.
All vehicle stock is pledged as security for the company's vehicle funding and bank facilities.
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
54,735
87,491
Corporation tax recoverable
24
Amounts owed by group undertakings
1,465,021
Other debtors
5,854
37,563
Prepayments and accrued income
227,865
93,639
288,478
1,683,714
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
3,076,542
3,169,482
Amounts owed to group undertakings
32,128
Corporation tax
916
Other taxation and social security
85,728
35,316
Other creditors
250,544
322,370
Accruals and deferred income
118,421
98,836
3,563,363
3,626,920
Vehicle creditors included within trade creditors are secured directly on the vehicles to which they relate. Secured amounts as at 31 May 2024 totalled £2,138,012 (2023: £2,883,169).
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
80,144
91,940
Tax losses
(4,839)
-
Short term timing differences
(460)
(540)
74,845
91,400
2024
Movements in the year:
£
Liability at 1 June 2023
91,400
Credit to profit or loss
(16,555)
Liability at 31 May 2024
74,845
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
29,871
25,224
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.
QUEST MOTOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
A Ordinary shares of £1 each
13
13
13
13
B Ordinary shares of £1 each
11
11
11
11
50,024
50,024
50,024
50,024
Ordinary shares have voting rights and are entitled to dividends declared on the class of share.
A and B ordinary shares have no voting rights but are entitled to dividends declared on the class of share.
17
Share premium account
The share premium account includes any premiums received on the issue of share capital.
18
Profit and loss reserves
The profit and loss reserve includes all current and prior period retained profits and losses, less dividends paid.
19
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
221,582
15,815
Between two and five years
824,000
5,089
In over five years
1,956,366
3,001,948
20,904
20
Ultimate controlling party
On 30 November 2023, Gozzett Holdings Limited sold 100% of its issued share capital to St.Leonards Motors Limited, which is a company incorporated in England and Wales. From this date, St. Leonards Motors (Holdings) Limited is considered the ultimate controlling party by virtue of its 100% share holdings in St. Leonards Motors Limited.
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