Dace Motor Company Limited
Annual report and financial statements
For the year ended 31 May 2024
Dace Motor Company Limited
Company information
Director
Mr S F Dace
Secretary
Mrs S Dace
Company number
04765928
Registered office
Greg Street
Reddish
Stockport
Cheshire
England
SK5 7BS
Auditor
DJH Audit Limited
St George's House
56 Peter Street
Manchester
M2 3NQ
Dace Motor Company Limited
Contents
Page
Strategic report
1 - 2
Director's report
3 - 5
Independent auditor's report
6 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
Dace Motor Company Limited
Strategic report
For the year ended 31 May 2024
- 1 -
The director presents the strategic report for the year ended 31 May 2024.
Review of business
The trading result for the year, and financial position are considered to be satisfactory by the director.
Turnover has increased 3.3% in the year compared to 2023 as a result of an increase in the number of vehicles sold though we have seen a reduction in the average value. Gross profit has remained steady at 9.82% compared with 9.85% in 2023.
The focus to invest in the company’s infrastructure continues with expenditure on the trading premises and vehicle inventory.
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 director has set out below the principal risks facing the business.
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 company 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.
General business and economic conditions
The profitability of the business is influenced by the economic environment in the United Kingdom and could be adversely affected by a worsening of general economic conditions. Factors such as unemployment levels, consumer confidence, the level of discretionary spending and cost of credit could significantly affect the market for the sale of used vehicles.
Used vehicle price variation
Used vehicle prices can decline significantly. As our business comprises used vehicle sales, these declines can have a material impact on our business. The impact of declines in used vehicle prices can result in reduced profits on sales and reductions in the value of used vehicle stock.
Competition
We compete with other independent used vehicle sellers, franchised vehicle dealerships, private buyers and sellers, internet based dealers, and vehicle manufacturers who have entered the retail market. We compete for the sale of used vehicles. The principal competitive factors are price and the quality of customer service.
Key performance indicators
Key performance indicators are considered to be turnover and the level of available funds within the business.
In assessing the above key performance indicators, the following data and ratios are used:
2024 2023
Units sold 5,901 4,571
Stock turn 52.2 days 48.0 days
Dace Motor Company Limited
Strategic report (continued)
For the year ended 31 May 2024
- 2 -
Mr S F Dace
Director
26 February 2025
Dace Motor Company Limited
Director's report
For the year ended 31 May 2024
- 3 -
The director presents his 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 used cars and light motor vehicles
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £586,000. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr S F Dace
Financial instruments
The company uses a number of financial instruments which include loans, cash, and other various items such as trade debtors and trade creditors which arise directly from its operations.
The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below.
The main risks arising from the company's financial instruments are categorised as liquidity risk, credit risk and cash-flow risk. The director reviews and agrees policies for managing each of these risks and they are summarised below. These policies are consistent with those from the previous year.
The company does not use derivative financial instruments.
Liquidity risk
Overdraft facilities amount to £4m of available funding. The director believes that funds available to the company are above operating requirements.
The director assesses 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 need of the business.
Interest rate risk
The company finances its operations through bank borrowings. The company's exposure to interest rate fluctuations on its borrowings is managed by the use of fixed and floating facilities. The Statement of Financial Position includes trade debtors and 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.
Despite recent increases in the Bank of England base rate, the director considers interest rate risk to be low.
Dace Motor Company Limited
Director's 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 director has implemented processes to ensure receipt of cleared funds for vehicle sales before the vehicle is released.
Other trade debtors are large financial institutions that make payments within agreed credit terms and hence credit risk is minimised.
Cash flow risk
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 director monitors the working capital requirement and is able to assess the commercial rationale against the costs of raising capital through the company's bankers.
Post reporting date events
Information relating to events since the end of the year is given in the notes to the financial statements.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
Dace Motor Company Limited
Director's report (continued)
For the year ended 31 May 2024
- 5 -
On behalf of the board
Mr S F Dace
Director
26 February 2025
Dace Motor Company Limited
Independent auditor's report
To the members of Dace Motor Company Limited
- 6 -
Opinion
We have audited the financial statements of Dace Motor Company Limited (the 'company') for the year ended 31 May 2024 which comprise the income statement, the statement of comprehensive income, the statement of financial position, 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 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 profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information 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.
Dace Motor Company Limited
Independent auditor's report (continued)
To the members of Dace Motor Company Limited
- 7 -
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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In preparation for our audit we identified areas of laws and regulations which we considered could have a material effect on the financial statements. This information was obtained via discussions with management and from our general commercial and sector experience. The directors also provide us with written representation of all the key and fundamental industry specific laws and regulations with they are required to adhere to. These were then communicated to the whole of the audit team at our audit planning meeting.
Dace Motor Company Limited
Independent auditor's report (continued)
To the members of Dace Motor Company Limited
- 8 -
As a vehicle retail company, non-compliance with health & safety and employment law, tax and other financial regulations were assessed to be most relevant. Our audit procedures to identify non-compliance with laws and regulations in these areas consisted of:
- Enquiries with management;
- Inspection of regulatory records, inspection reports, submissions, and other correspondence;
- Challenges to management assumptions and judgements in relation to accounting estimates.
Despite appropriate planning and performing our work in accordance with International Auditing Standards, there are always inherent limitations that non-compliance is not detected. Non-compliance with laws and regulations is often further removed from the events and transactions reflected in the financial statements and material misstatements due to fraud can be deliberately concealed from auditors, for example through misrepresentation, forgery or 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.
Susan Redmond FCA
Senior Statutory Auditor
For and on behalf of DJH Audit Limited
27 February 2025
St George's House
56 Peter Street
Manchester
M2 3NQ
Dace Motor Company Limited
Income statement
For the year ended 31 May 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
67,999,243
65,837,498
Cost of sales
(61,320,651)
(59,350,805)
Gross profit
6,678,592
6,486,693
Administrative expenses
(5,629,407)
(5,248,556)
Operating profit
4
1,049,185
1,238,137
Interest payable and similar expenses
7
(479,273)
(211,566)
Profit before taxation
569,912
1,026,571
Tax on profit
8
(171,882)
(279,288)
Profit for the financial year
398,030
747,283
The income statement has been prepared on the basis that all operations are continuing operations.
Dace Motor Company Limited
Statement of comprehensive income
For the year ended 31 May 2024
- 10 -
2024
2023
£
£
Profit for the year
398,030
747,283
Other comprehensive income
-
-
Total comprehensive income for the year
398,030
747,283
Dace Motor Company Limited
Statement of financial position
As at 31 May 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
6,751,790
6,597,966
Current assets
Stocks
12
8,492,976
7,952,891
Debtors
13
516,821
367,280
Cash at bank and in hand
264
264
9,010,061
8,320,435
Creditors: amounts falling due within one year
14
(7,310,426)
(8,772,628)
Net current assets/(liabilities)
1,699,635
(452,193)
Total assets less current liabilities
8,451,425
6,145,773
Creditors: amounts falling due after more than one year
15
(2,876,257)
(380,797)
Provisions for liabilities
Deferred tax liability
18
264,675
266,513
(264,675)
(266,513)
Net assets
5,310,493
5,498,463
Capital and reserves
Called up share capital
20
2
2
Profit and loss reserves
5,310,491
5,498,461
Total equity
5,310,493
5,498,463
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 26 February 2025
Mr S F Dace
Director
Company registration number 04765928 (England and Wales)
Dace Motor Company Limited
Statement of changes in equity
For the year ended 31 May 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2022
2
5,352,178
5,352,180
Year ended 31 May 2023:
Profit and total comprehensive income
-
747,283
747,283
Dividends
9
-
(601,000)
(601,000)
Balance at 31 May 2023
2
5,498,461
5,498,463
Year ended 31 May 2024:
Profit and total comprehensive income
-
398,030
398,030
Dividends
9
-
(586,000)
(586,000)
Balance at 31 May 2024
2
5,310,491
5,310,493
Dace Motor Company Limited
Statement of cash flows
For the year ended 31 May 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,429,440
2,262,268
Interest paid
(479,273)
(211,566)
Income taxes paid
(60,000)
(188,500)
Net cash inflow from operating activities
890,167
1,862,202
Investing activities
Purchase of tangible fixed assets
(410,181)
(4,101,604)
Net cash used in investing activities
(410,181)
(4,101,604)
Financing activities
Repayment of borrowings
(2,000,000)
-
New loans in year
2,800,000
3,000,000
Repayment of bank loans
(224,384)
(153,306)
Amounts withdrawn by directors
(442,398)
(516,360)
Dividends paid
(141,000)
(141,000)
Net cash (used in)/generated from financing activities
(7,782)
2,189,334
Net increase/(decrease) in cash and cash equivalents
472,204
(50,068)
Cash and cash equivalents at beginning of year
(2,782,391)
(2,732,323)
Cash and cash equivalents at end of year
(2,310,187)
(2,782,391)
Relating to:
Cash at bank and in hand
264
264
Bank overdrafts included in creditors payable within one year
(2,310,451)
(2,782,655)
Dace Motor Company Limited
Notes to the financial statements
For the year ended 31 May 2024
- 14 -
1
Accounting policies
Company information
Dace Motor Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is Greg Street, Reddish, Stockport, Cheshire, England, SK5 7BS.
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 company has adopted the changes to FRS 102 following the triennial review of the standard in December 2017. In the Financial Statements, this adoption has not affected reported profit or net assets, but certain disclosures only.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover from the sale of goods is recognised in the Statement of Comprehensive Income, net of discounts and VAT, when the significant risks and rewards of ownership have been transferred to the buyer, In general this occurs when vehicles or parts have been supplied or when a service has been completed.
Commission income is accounted for on a receivable basis.
1.4
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2003, has been fully amortised over its estimated useful life of ten years.
1.5
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 land and buildings
2% on cost
Improvements to property
10% on cost/ 2% on cost
Plant and equipment
15% on reducing balance
Fixtures and fittings
33% on cost
Computers
33% on cost
Motor Vehicles
20% on cost
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
- 15 -
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.
1.6
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income. Reversals of impairment losses are also recognised in the Statement of Comprehensive Income.
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 only has basic financial instruments which are measured at amortised cost.
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.
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
- 16 -
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
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 income statement 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 income statement, 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.
1.10
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.
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
1
Accounting policies
(Continued)
- 17 -
1.11
Retirement benefits
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payments obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the company in independently administered funds.
1.12
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.
1.13
Short term debtors are measured at transaction price less any impairment.
1.14
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured at amortised cost.
1.15
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at a board meeting.
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Stock valuation
Stock valuation is regularly monitored against age profile and market demand. Management use a number of market tools during the appraisal process such as CAP valuation guide. The director maintains oversight of ageing stock profiles and a monthly review of any provision required is performed.
Property, plant and equipment assets
Property, plant and equipment are reviewed for impairment if events or circumstances indicate that the carrying value may not be recoverable. When an impairment review is carried out the recoverable value is determined based on value in use calculations which require estimates to be made of future cash flows.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
66,001,532
63,831,338
Commissions received
1,997,711
2,006,160
67,999,243
65,837,498
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,268
9,951
Depreciation of owned tangible fixed assets
256,357
175,899
Operating lease charges
16,012
14,567
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 19 -
5
Employees
2024
2023
Number
Number
Staff
94
95
Directors
1
1
Total
95
96
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,184,925
3,043,189
Social security costs
312,650
306,731
Pension costs
86,126
98,586
3,583,701
3,448,506
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
22,569
22,298
Company pension contributions to defined contribution schemes
3,846
3,846
26,415
26,144
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
429,269
192,446
Other interest on financial liabilities
50,012
16,671
479,281
209,117
Other finance costs:
Other interest
(8)
2,449
479,273
211,566
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 20 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
169,161
54,768
Adjustments in respect of prior periods
4,559
Total current tax
173,720
54,768
Deferred tax
Origination and reversal of timing differences
(1,838)
224,520
Total tax charge
171,882
279,288
The main rate of corporation tax for the financial year 2024 was 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
569,912
1,026,571
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
142,478
256,643
Tax effect of expenses that are not deductible in determining taxable profit
(1,379)
2,782
Adjustments in respect of prior years
4,559
Effect of change in corporation tax rate
(13,683)
Permanent capital allowances in excess of depreciation
(1,838)
Depreciation on assets not qualifying for tax allowances
28,537
34,021
Revenue in capital
(475)
(475)
Taxation charge for the year
171,882
279,288
9
Dividends
2024
2023
2024
2023
Per share
Per share
Total
Total
£
£
£
£
Ordinary shares
Interim paid
293,000
300,500
586,000
601,000
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 21 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 June 2023 and 31 May 2024
700,000
Amortisation and impairment
At 1 June 2023 and 31 May 2024
700,000
Carrying amount
At 31 May 2024
At 31 May 2023
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 22 -
11
Tangible fixed assets
Freehold land and buildings
Improvements to property
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Motor Vehicles
Total
£
£
£
£
£
£
£
£
Cost
At 1 June 2023
2,065,509
899,387
4,442,326
197,637
161,568
65,155
147,874
7,979,456
Additions
2,256
328,601
3,026
33,138
18,360
25,300
410,681
Disposals
(500)
(500)
Transfers
4,770,927
(4,770,927)
At 31 May 2024
2,065,509
5,672,570
200,663
194,706
83,515
172,674
8,389,637
Depreciation and impairment
At 1 June 2023
228,378
716,424
137,898
150,534
53,776
94,480
1,381,490
Depreciation charged in the year
41,310
158,353
9,196
15,084
11,301
21,113
256,357
At 31 May 2024
269,688
874,777
147,094
165,618
65,077
115,593
1,637,847
Carrying amount
At 31 May 2024
1,795,821
4,797,793
53,569
29,088
18,438
57,081
6,751,790
At 31 May 2023
1,837,131
182,963
4,442,326
59,739
11,034
11,379
53,394
6,597,966
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 23 -
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
8,492,976
7,952,891
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
445,819
307,911
Other debtors
3,359
5,215
Prepayments and accrued income
67,643
54,154
516,821
367,280
No impairment loss movements have been recognised against trade debtors in the current or previous year.
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
2,495,251
4,887,300
Other borrowings
16
1,000,000
1,000,000
Trade creditors
2,322,566
1,600,462
Corporation tax
168,480
54,768
Other taxation and social security
361,374
204,015
Other creditors
467,882
590,868
Accruals and deferred income
494,873
435,215
7,310,426
8,772,628
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
2,876,257
380,797
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 24 -
16
Loans and overdrafts
2024
2023
£
£
Bank loans
3,061,057
2,485,442
Bank overdrafts
2,310,451
2,782,655
Other loans
1,000,000
1,000,000
6,371,508
6,268,097
Payable within one year
3,495,251
5,887,300
Payable after one year
2,876,257
380,797
A bank loan with the amount outstanding at the year end of £NIL (2023: £22,645) is due for full repayment by May 2024. During the period up to redemption it will bear interest 2.65% over the bank of England base rate.
A bank loan with the amount outstanding at the year end of £63,201 (2023: £84,675) is due for full repayment by October 2026. During the period up to redemption it will bear interest 1.96% over the bank of England base rate.
A bank loan with the amount outstanding at the year end of £317,460 (2023: £378,112) is due for full repayment by October 2028. During the period up to redemption it will bear interest 1.91% over the bank of England base rate.
A bank loan with the amount outstanding at the year end of £NIL (2023: £2,000,000) is due for full repayment by June 2023. During the period up to redemption it will bear interest 2.32% over the bank of England base rate.
A bank loan with the amount outstanding at the year end of £2,680,396 (2023: £NIL) is due for full repayment by August 2038. During the period up to redemption it will bear interest 2.32% over the bank of England base rate.
17
Secured debts
The bank overdraft and loans are secured by a debenture comprising fixed and floating charges over all the assets and undertakings of the company, including present and future freehold and leasehold property, book and other debts, chattels, goodwill and unpaid capital.
They are also secured by:
A First Legal Mortgage over the freehold properties of the company at 309 Manchester Road, Stockport, Delta House, Greg Street, Reddish, Stockport, Unit 14B Gregory Way, Reddish, 718 Liverpool Road, Eccles and the Tyre Yard, Greg Street, Reddish, Stockport.
A First Legal Mortgage over the freehold land of S F Dace known as land and buildings lying to the East of Greg Street, Reddish, Stockport.
A First Legal Mortgage over the freehold land of S F Dace known as Bays 1, 2, 3 & 4 Lyon Way, Greg Street, Reddish, Stockport.
A First Legal Mortgage over the freehold land of S F Dace known as 417-429 Buxton Road, Stockport, Cheshire.
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 25 -
18
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
269,300
274,763
Short term timing differences
(4,625)
(8,250)
264,675
266,513
2024
Movements in the year:
£
Liability at 1 June 2023
266,513
Credit to profit or loss
(1,838)
Liability at 31 May 2024
264,675
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.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
86,126
98,586
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.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 26 -
21
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
56,249
190,247
22
Related party disclosures
During the year rental payments were made to the director totaling £65,400 (2023: £65,400). In addition to this, the director also sold a car £48,000 (2023 : NIL) to the company
During the year £490,398 (2023: £637,512) was advanced to the director and £445,000 (2023: £581,150) was repaid during the year. As at the year end an amount of £6,675 (2023: £4,073) was owed to the director in relation to the director's loan account. The director's loan account is interest free and repayable on demand.
23
Ultimate controlling party
The company was controlled throughout this and the previous year by the director S F Dace, who owns 100% of the issued share capital within the company.
24
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
398,030
747,283
Adjustments for:
Taxation charged
171,882
279,288
Finance costs
479,273
211,566
Depreciation and impairment of tangible fixed assets
256,357
175,899
Movements in working capital:
Increase in stocks
(540,085)
(384,605)
(Increase)/decrease in debtors
(149,541)
190,275
Increase in creditors
813,524
1,042,562
Cash generated from operations
1,429,440
2,262,268
Dace Motor Company Limited
Notes to the financial statements (continued)
For the year ended 31 May 2024
- 27 -
25
Analysis of changes in net debt
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
264
-
264
Bank overdrafts
(2,782,655)
472,204
(2,310,451)
(2,782,391)
472,204
(2,310,187)
Borrowings excluding overdrafts
(3,485,442)
(575,615)
(4,061,057)
(6,267,833)
(103,411)
(6,371,244)
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