The directors present the strategic report for the year ended 30 June 2024.
Company Overview:
Proximo is the UK’s leading provider of specialist vehicles, enabling major fleets and insurance providers to source the right temporary replacement vehicles and ensure their customers stay mobile and operational. Since its formation in 2003, Proximo has grown into a nationwide “One Stop Shop,” offering replacement vehicles, bespoke claims management, legal support services, and vehicle repairs. The company’s strategic focus on the accessible vehicle market underscores its commitment to bridging the ‘transport accessibility gap’ for customers with disabilities.
Proximo operates the largest replacement fleet of adapted and wheelchair-accessible vehicles (WAVs) in the UK, supported by over 300 skilled colleagues. Over the years, the Group has developed deep technological and operational capabilities to meet the highly complex and unique needs of disabled customers. Award-winning customer service is backed by advanced digital tools, robust data analytics, and real-time reporting systems. These investments ensure that we consistently deliver industry-leading solutions.
Our advanced logistics framework supports same-day delivery of accessible vehicles across the UK, with a dedicated team of over 100 specialist drivers and branch operatives. This infrastructure reflects our commitment to keeping customers mobile, irrespective of their unique needs.
Proximo’s customer-centric culture remains at the core of its operations. The company holds the prestigious ICS ServiceMark Accreditation, a testament to its dedication to exceptional service. To further enhance customer experience, Proximo has balanced a digital-first approach with personalised advisor interactions, ensuring tailored solutions for every client. Notably, we have invested heavily in proprietary technology designed to address the complex requirements of our diverse customer base. This ongoing innovation is complemented by an inclusive workplace culture that empowers our people to excel and contribute meaningfully to our mission.
Proximo achieved strong growth over the past 12 months, driven by robust demand in the wheelchair-accessible and adapted vehicle markets. In FY23, we secured new clients and established a highly collaborative partnership with a leading UK insurance provider, further cementing our leadership position.
Our repair management division (CVS) also performed exceptionally well in FY24, supported by strategic partnerships with fleet operators and insurers. Our expertise in electric vehicle (EV) repair management has allowed us to meet rising industry demand and strengthen our position as a market leader in this area.
Customer satisfaction remains a cornerstone of our success, reflected in our Trustpilot rating of 4.9/5 and Google review score of 4.5/5. These results highlight the exceptional service, honesty, and respect we provide to our customers.
Following a period of post-COVID financial preservation, the continued growth of the business has enabled us to make key investments in our people and infrastructure. We are undertaking office refurbishments, enhancing our branch network, and reviewing reward packages to ensure we retain our multi-award-winning status and remain an employer of choice. These investments reaffirm our commitment to fostering an inclusive and dynamic workplace while maintaining industry-leading standards.
Our technology strategy remains central to our operations. We continue to invest in cutting-edge tools, including AI-driven text and speech analytics, to enhance customer interactions. Our telephony systems set industry benchmarks, answering 98% of calls with over 80% answered within 20 seconds. Improved complaint handling and ongoing training ensure we stay responsive to customer needs.
Looking forward, we are committed to advancing our technological capabilities to address the complex and evolving requirements of our disabled customer base. By combining innovative technology, infrastructure enhancements, and a focus on our people, we aim to lead the market in accessibility solutions and maintain our reputation for excellence.
We regularly monitor the key risks to the business, with a focus on managing sustained growth over the months ahead whilst maintaining excellent delivery with a clear focus on our customer.
The principal risks identified which could have a material adverse effect on implementing the Company strategy are:
Economic environment risks
The business continues to monitor the volume and diversity of the UK transport network and understand its impact on our business demands. Our volume forecasting model collates a wide range of qualitative and quantitative data and accurately predicts volume outcomes across the business, consistently operating within a very low margin of error.
During FY24, the Group has seen a return to normality as the depressed supply of new vehicles and availability of components post-Covid returned to more normal levels. The Group now has the continued operational challenge of demand unwinding as market conditions normalise. In order to mitigate this risk, the Group will utilise its dynamic forecasting model to closely monitor hire starts and hire lengths and adapt its approach to fleet acquisitions and operational resources accordingly.
Whilst we have seen a continued reduction in inflation rates, this was not reflected in interest rates during the year, which in turn impacts the Group acquisition costs and borrowing rates. Linked to this, increases in the National Living Wage continues to put additional pressure on colleague retention across the sector and increased overheads. Proximo has mitigated against the negative impacts of this risk through focusing on being an employer of choice, with a best-in-class people culture and an inclusive and supportive approach to recruitment and retention.
Financial Risks
Liquidity risks
The company aims to manage liquidity risk by careful management of cash generated by its operations and negotiating terms with its key customers and suppliers. A key part of our strategy is financial efficiency, and our extensive business intelligence and forecasting tools enable the business to manage performance against forecasts. This enables pre-emptive action to variances from expectations in terms of profitability and the availability of working capital which is required to support our robust growth plans.
Interest rate risks
The company finances its operations through a mixture of retained profits and external borrowings. External borrowings are generally acquired for purchasing new vehicles to add to our fleet, which is a key part of our growth strategy. External finance is obtained at fixed interest rates to allow us to manage risk while accurately forecast profitability and cash impacts of funding.
Climate Risk
Climate change and sustainability are key issues for UK businesses, and specifically the UK Government regulation to stop production of petrol and diesel vehicles by 2035. This could impact the Group directly, through a reduction in our customers where an Electric Vehicle (EV) may not be practical or suit their mobility. We believe that no one should be left behind and while wheelchair users present a unique challenge to the EV market, we are dedicated to supporting our customers through the transition and ensuring they are at the forefront of the conversation with developing innovation. We have invested in growing our electric accessible vehicle fleet and are committed to working with our key partners to ensure that end customers have access to, and are fully informed about, the transition to electric.
During the year, the Group continued to implement its planned strategic initiatives:
Exploring and developing new business opportunities to bridge the transport accessibility gap.
Extending and adapting key contracts to give the business longevity and strength.
Expanding and managing a wide and stable client base whilst improving our brand strength through customer service excellence.
Developing unique product offerings and focusing on profitable areas of the business
Specific and structured staff training to further improve customer service and experience.
Improving team retention and engagement.
Creating Group synergies.
Increasing our quality fleet and maximising utilisation.
Managing costs of the business.
The directors review the business objectives regularly and communicate these with the senior leadership team to ensure the business is aligned on focus and direction.
The table below summarises the key performance metrics for 2024 and 2023 (£000):
| 2024 | 2023 |
Turnover | £38,997 | £36,055 |
Gross profit | £19,097 | £16,234 |
Profit after tax | £5,370 | £6,878 |
EBITDA | £13,234 | £11,760 |
Net assets | £10,000 | £12,671 |
For the period ended 30 June 2024, turnover increased by 8% over the 12 months. Gross profit of £19.1m was up over the 12 months in comparison to FY2023, with a gross margin percentage of 49%, representing a 4% increase. This was in line with the business’s expectations resulting from a continued focus on business efficiency to support increasing demands and a diversification of our client base.
The Groups net asset position decreased during the year to £10m. Retained profits generated from operating activities in the year were £5.4m. A key element of the Groups net assets is how we manage our capital expenditure. To maximise the return on investment, the vast majority of our fleet are financed over 5 years. The Groups policy is to retain vehicles of this nature over a period of up to 8 years, resulting in a reduction in capital outlay during the intervening years, reflected in the reduction of debt to asset ratio which reduced from 83% in 2023 to 81%.
The table below summarises the key performance indicators for 2024 and 2023:
| 2024 | 2023 |
Annualised sales growth | 8% | 30% |
Gross margin | 49% | 45% |
Net profit margin | 14% | 19% |
Return on capital employed (ROCE) | 99% | 78% |
Total fleet size | 1,685 | 1,251 |
Vehicle - debt to asset ratio | 81% | 83% |
Number of hire days | 444,576 | 468,584 |
Our key performance indicators explained:
Annualised sales growth is the annual increase in revenue as a percentage of revenue from the prior period.
Gross margin is gross profit as a percentage of revenue.
Net profit margin is the profit after tax as a percentage of revenue.
Return on capital employed is operating profit as a percentage of equity shareholders’ funds.
Total fleet size is calculated as the actual number of vehicles held at each year end.
Vehicle debt to asset ratio is calculated as total hire purchase liability at 30 June divided by the net book value of assets at the same date.
Number of hire starts is calculated from our Business Intelligence for all hires starting in the period.
To mitigate ongoing risks and bolster our foundation for sustained growth, we remain focused on prioritising operational and financial efficiencies. This approach aims to support our customer base and lay the groundwork for sustainable growth. A key strength of the Group is the ability to be agile and we are harnessing innovation to increase revenue and profitability and decrease customer concentration risk.
Relationships
We have reviewed the diversification of our overall portfolio and are focusing on enhancing the current contracts and relationships wherever possible alongside our new product offerings and are actively looking for synergies across the Group to elevate the level of service and product offerings to both new and existing customers.
ESG Overview
At Proximo Group, we place our customers at the core of everything we do, with a firm commitment to fostering a sustainable future for both our planet and communities. We understand the critical importance of Environmental, Social, and Governance (ESG) factors, not only for the well-being of our environment and society but also for the long-term growth and success of our business.
Environmental stewardship
As a forward thinking and responsible organisation, we acknowledge the substantial environmental impact of the logistics sector within our business. Environmental sustainability is a key component of our business strategy, and we are dedicated to taking proactive steps to reduce our carbon footprint. We are at the forefront of transitioning our fleet to electric vehicles, while challenges in engineering hinder the widespread production of electric WAVs, we are working closely with industry partners to overcome these barriers. Our objective is to align the Proximo fleet with customer needs while driving positive environmental change across the industry.
Social responsibility
At Proximo Group, we believe businesses have a crucial role in creating a positive social impact. As a mission-driven organisation, we understand that our long-term success relies on authentic relationships with our customers, who are central to our decision-making. Our commitment to social responsibility is reflected in fostering a safe, inclusive, and rewarding workplace, promoting diversity, engaging with local communities, and ensuring our customers remain central to all our choices.
As part of Proximo Group, we are dedicated to providing a world class service to underserved communities, particularly individuals with disabilities. By developing products and services that cater to these groups in the UK, we not only fulfil our societal responsibilities but also generate significant commercial value by working within communities largely overlooked by transport sectors. By prioritizing social responsibility, we strive to build a vibrant workplace culture that makes a meaningful contribution to the betterment of society.
We believe that robust governance is key to maintaining transparency, ethical conduct, and accountability throughout our operations. Our governance framework ensures compliance with laws and regulations, effective risk management, and strong partnerships. By upholding the highest ethical standards and fostering responsible decision-making, we aim to build lasting trust and confidence with our colleagues, customers, and partners.
Section 172 of the Companies Act 2006 requires a Director of the company to act in a certain way. Specifically, they must act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole:
The likely consequences of any decision in the long term
The interests of the company employees
The need to foster the company business relationships with suppliers, customers and others
The impact of the company's operations on the community and the environment
The desirability of the company maintaining a reputation for high standards of business conduct
The need to act fairly as between members of the company
The Directors confirm that in discharging their duties under section 172, they have had regard to the factors set out above.
The Directors of the company during the year are all based at the Groups Chester office. The Board of Directors meet frequently as the Groups leadership team, they review financial results on a monthly basis and have regular contact and open communications with all of the business pillar leadership teams. This gives the Directors regular direct contact regarding individual companies and business units and provides the Directors with the information required in order to drive the business to meet their target and growth ambitions.
Customers are the heart of the Proximo Group, and customer service and satisfaction levels are a key area of focus for the company. The company and its directors are committed to continuous improvement with its best in class service through training and development of its employees, a clear strategic focus and a shared passion to serve the communities in which they operate.
The company also has regard to the local community and the sector that they serve in all of its activities and acknowledges its role as an employer in the local area.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 14.
Interim dividends of £nil (2023 - £60,000) were paid during the period.
The directors recommend that no final dividend will be paid.
The total distribution of dividends for the year ended 30 June 2024 will be £nil (2023 - £60,000).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
DJH Audit Limited were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
The group report on its emissions, energy consumption or energy efficiency activities as follows:
To allow for accurate and representative data to include with our Carbon Reporting and wider carbon footprint monitoring, strategic procedures continue to determine appropriate calculations for data disclosure. The following methodologies were used to ensure verifiable data was obtained where reasonably practicable:
Electricity, Gas and Water: Meter reading data for office and branch locations were obtained directly from the supplier, accessed from invoices provided.
Fleet Vehicles: Consumption is calculated from vehicle mileage records for fleet vehicles. Mileage covered is converted to kwh data using recognised conversion factors, which then allows a carbon conversion factor per kwh to be applied.
Fuel: Fuel usage within the branch network is obtained directly from supplier invoices who detail the number of litres used. This data is then converted to convert to carbon footprint.
The chosen intensity measurement ratio is total gross emissions in kgCO2e per £1 of revenue.
The company is committed to sustainable practices that minimise our impact, protect and enhance the environment and create a positive legacy for future generations. We proactively work with our colleagues, clients, supply chain and interested parties to ensure our environmental expectations are managed in that everyone working with us will:
Identify and control environmental risks through effective measures in a sustainable manner;
Provide leadership and ensure effective communication and awareness on environmental matters;
Encourage, promote and adopt environmental best practices across our operations.
Comply with all applicable legal requirements and continually seek new improved initiatives; and
Remain focused on technological innovations and change management to assist in meeting or exceeding the requirements.
We aim to achieve continual improvement through:
Effective leadership, consistent management reviews, leadership engagement and objective and target reviews;
Being conscious of the environment both within and out with our immediate operational areas, proactively preventing pollution and maintaining preparedness for emergency situations;
Providing support and training to our employees and supply chain to encourage and achieve best practice; and
Promoting efficient use of resources by developing a plan to introduce more hybrid and electric vehicles into the fleet.
We bring this policy to the attention of our employees, all businesses within the Group, our supply chain and other interested parties, as collectively their support and professionalism is essential in making it truly effective.
We have a plan to move towards alternative energy suppliers that can offer 100% renewable energy and we have also increased recycling facilities at each of our sites.
We have systematically adopted the Groups working attitude and behaviour to allow for a more sustainable working pattern, in line with reducing our energy usage as a company. These adjustments include; reduce our business travel facilitated through virtual communication, flexible working, such as remote working from home has been encouraged to increase production whilst reducing emissions.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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.
We have audited the financial statements of Proximo Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
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' report 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.
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the group through discussions with directors and other management;
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including legislation such as the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;
- we assessed the extent of compliance with the laws and regulations through making enquiries of management and reviewing legal and professional fee invoices.
We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries posted during the period and at the period end to identify unusual transactions;
- investigated the rationale behind significant or unusual transactions; and
- performed walkthrough tests on major transaction cycles.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- enquiring of management as to actual and potential litigation and claims;
- reviewing correspondence with HMRC;
- reviewing legal and professional fees incurred during the period to identify any potential indications of non-compliance with laws and regulations.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £5,316,842 (2023 - £408,249 loss).
Proximo Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Park House, Chantry Court, Sovereign Way, Chester, Cheshire, CH1 4QN.
The group consists of Proximo Holdings Limited and all of its subsidiaries.
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.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures; and
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Proximo Holdings Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover is derived from the company's ordinary activities including the provision of claims management services, vehicle hire, legal support and insurance products.
Hire income and claim management services
Turnover derived from claims management services, which includes the provision of replacement vehicle hire, is accounted for as a single provision of services ending at the point of settlement by the customer's insurance provider.
Turnover also includes an appropriate proportion of estimated recoverable income in respect of claims management and vehicle hires in progress at the year end and is valued at the fair value of the consideration receivable.
Where the stage of completion and costs to complete cannot be measured reliably, revenue is recognised to the extent of costs incurred. This is calculated based on directly attributable costs and a proportion of other costs. The total cost is calculated and restricted to the amount recoverable for each case.
Claims made as part of the claims management process are, by their nature, subject to dispute by the relevant insurance companies involved. An assessment is made in relation to the potential recovery in relation to unsettled claims at the year end and the results of the assessment are taken into account when valuing the amounts recoverable upon contracts.
Turnover from the hire of vehicles is recognised on a straight line basis over the hire period and is recognised at the agreed daily rates.
Other turnover from claim management services, such as referral fees, fees for engineer reports and other claims management services, is recognised at the point the revenue can be measured reliably. This is normally when the referral has generated income for the third party and a purchase invoice has been generated by the third party, or when the service has been performed.
Commission
Where an agency relationship exists between the company, the customer and a third party, the company recognises in income the amount of the commission earned. The amounts collected on behalf of the third party are not shown as revenue of the company.
Commission is recognised at the point the revenue can be measured reliably which is normally when the referral has generated income for the third party and a purchase invoice has been generated by the third party.
Insurance policy sales
Turnover derived from the provision of insurance products is recognised upon sale of the insurance policy.
Provision of legal services
Many of the legal cases are operated on the basis of No Win - No Fee conditional fee arrangements and the company attempts to resolve claims within the MOJ Pre-Action Protocol where possible.
The service provided to the client is accounted for as a single provision of services ending at the point of settlement by a third party.
In some cases, the company is entitled to milestone bills from a third party insurer under the MOJ Protocol or fixed fees for cases outside of the protocol. In other cases, fees may be calculated as a specified percentage of damaged awarded under a claim.
Where milestone bills apply under the MOJ portal, revenue is recognised at the point that the obligation to a milestone bill has been met. For fixed recoverable costs outside the portal revenue is recognised when the case has settled.
Where fees are calculated as a percentage of damages, the revenue is recognised at the point that the damages have been agreed as this is when the occurrence or non-occurrence of a future event, not within the control of the company, has been concluded. No income is recognised on cases where the settlement has not been agreed.
Where an interim payment has been made on a case, income is recognised to the extent that the company has earned the right to the income.
On 30 June 2024, the company sold the subsidiary that provided legal services. These results are included as discontinued operations.
Disbursements
The company acts as an agent with respect to disbursements falling due throughout a claim. Disbursements are only recognised when it is assessed that a reimbursement will be received from the client or on their behalf. The disbursements paid on behalf of a client are recognised as an asset unless it is determined that the amount is not recoverable.
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 recognised in the income statement.
Motor vehicles held are used to generate hire income.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, borrowings, and loans from fellow group companies, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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 leased asset are consumed.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the entity recognises expenses for the related costs for which the grants are intended to compensate.
Government grants in relation to assets are deferred and amortised in line with the economic life of the asset for which the grant was received.
Client money
Client bank account balances and the matching liabilities are excluded from the balance sheet on the basis that economic benefits or resources resulting from these assets and liabilities will not flow to or from the company. Details of these amounts are shown in Note 30 to the financial statements.
In the application of the group’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.
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.
Management review both amounts and estimate the recoverability by segregating different types of contracts and reviewing historic recoveries to determine an appropriate percentage recovery rate. This is applied to each contract type.
For a specific type of hire where the stage of completion and costs to complete cannot be measured reliably, revenue is recognised to the extent of cost incurred. This is calculated based on directly attributable costs and a proportion of other costs. The total cost is calculated and restricted to the amount recoverable for each case.
Management review the useful economic lives of depreciable assets at each reporting date as to allocate the cost of assets, less their residual value, over their estimated useful lives. Uncertainties in these estimates relate to the actual life of the tangible fixed assets.
All of the group's turnover arose in the United Kingdom for both the current and previous year.
Government grants for CBIL and BIP are included which related to interest free periods.
Government grant income of £480 in 30 June 2024 year end (2023 - £11,850) comprises of deferred grant release in relation to the grant for installation of electric vehicle charge points.
There are no unfulfilled conditions or other contingencies attached to the grant income.
The exceptional item relates to strategic consultancy and planning.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
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:
The company disposed of its entire shareholding in Proximo Legal Services Limited, a wholly owned subsidiary, on 30 June 2024. The results of Proximo Legal Services are therefore disclosed separately as discontinued operations.
Included in administrative expenses of the discontinued operations is an intercompany loan write on of £1,002,213.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 30 June 2024 are as follows:
During the year the group has sold its investment in Proximo Legal Services Limited.
The hire purchase contracts relate to motor vehicles which are subsequently included in fixed assets. The motor vehicles are hired out to customers to generate hire income for the business.
The majority of the contracts include a small option to purchase fee at the end of the contract. Interest is charge on the hire purchase contracts at varying rates.
Group
Mr C J Bird, director and shareholder of the ultimate parent company, Proximo Holdings Limited, has provided a legal charge over personal property for the benefit of National Westminster Bank PLC to secure the Proximo Limited banking facilities. This charge was satisfied on 7 February 2024.
Ms G Von Doneck, a director of Proximo Holdings Limited, provided a legal charge over personal property to National Westminster Bank PLC to secure the Proximo Limited banking facilities. This charge was satisfied on 7 February 2024.
On 26 March 2024, HSBC UK Bank PLC registered a fixed and floating charge over all assets and undertakings of the Group.
Hire purchase contracts of £25,460,486 (2023 - £14,316,704) are secured on the assets to which they relate. Hire purchase contracts are repayable between 2 and 4 years at an interest rate of 11% on average.
Other loans consist of:
- A loanback of £60,765 (2023 - £118,887) - secured against the shares in Proximo Limited. The loan is repayable over 5 years at an interest rate of 1.75% per annum. The loan matures in December 2024.
- Insurance loan of £832,241 (2023 - £1,180,114) - secured against the professional indemnity insurance. The assigning finance provider has the rights to sums from relevant policies and the right to cancel such policies in the event of a default. The insurance loan is repayable over 10 months at an average interest rate of 12% per annum.
- The remaining other loan is a Shawbrook loan of £5,600,000 (2023- £nil) in Proximo Limited, the funds were subsequently lent to Proximo Holdings Limited to assist with the buyback of shares in the holding company. The loan is repayable over 5 years at an interest rate of 5.35% plus the higher of Term SONIA or 0.25% per annum. The loan matures in February 2029.
Company
Hire purchase contracts of £25,390,004 (2023 - £14,209,132) are secured on the assets to which they relate.
On 26 March 2024, HSBC UK Bank PLC registered a fixed and floating charge over all assets and undertakings of the Company.
On 2 February 2024, Shawbrook Bank Limited registered a fixed and floating charge over all property and undertakings of the Company.
Mr C J Bird, a director and shareholder has provided a legal charge over personal property for the benefit of National Westminster Bank PLC to secure the Proximo Limited banking facilities. This charge was satisfied on 7 February 2024.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax balance relates to depreciation in excess of capital allowances.
Deferred income is included in the financial statements as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
On 7 February 2024 it was resolved that the 200 A, 200 B, 1 C and 1 D ordinary share of £1 each would be subdivided into 20,000 A, 20,000 B, 100 C and 100 D ordinary shares of 1p each.
During the year, the company redeemed 13,067 B ordinary shares of 1p each.
The Ordinary A and Ordinary B shares have full voting rights, the right to receive dividends and no right to participate in a distribution of capital, except on winding up.
Ordinary C and Ordinary D shares have no voting right, no rights to receive dividends and are entitled to capital on sale as set out in the company's articles.
Capital redemption reserve comprises the nominal value of the shares repurchased by the company. This is a non-distributable reserve.
Capital reserves are made up of ring-fenced reserves. This is a non-distributable reserve.
Retained earnings are made up of accumulated profits less accumulated losses and distributions. This is a distributable reserve.
On 30 June 2024 the group disposed of its 100% holding in Proximo Legal Services Limited for consideration of £100. Included in these financial statements are profits of £818,671 arising from the company's interests in Proximo Legal Services Limited up to the date of its disposal. At the date of disposal, Proximo Legal Services Limited had net assets of £180,934.
The profit of £818,671 in Proximo Legal Services Limited includes an intercompany write on of £1,002,213 in administrative expenses.
The group has capital commitments of £163,097 at the balance sheet date.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Company
Since the year end, fixed assets totalling £3,475,091 have been acquired.
The company has entered into finance leases in order to purchase these assets.
Since the year end, fixed assets totalling £621,490 have been disposed of.
Group
Since the year end, fixed assets totalling £3,475,091 have been acquired.
The group has entered into finance leases in order to purchase these assets.
Since the year end, fixed assets totalling £689,790 have been disposed of.
Pension scheme
A shareholder and director of the ultimate parent company is a beneficiary of the pension scheme. During the period the group paid rent and associated costs of £288,685 (2023 - £270,219) to the directors pension scheme.
At the year end the group owed £60,765 (2023 - £118,887) to a pension scheme. Interest charged on the loan was £2,958 (2023 - £5,611).
Key management personnel - balances
At the year end the group owed £79,276 (2023 - £116,169) to members of key management personnel, and was owed £1,423,486 (2023 - £59,473) by members of key management personnel. During the year, key management introduced £60,000 (2023 - £92,820) into the group and the group made payments to/paid expenditure on behalf of key management personnel of £1,419,754 (2023 - £651,875). Dividends were paid to key management personnel of £nil (2023 - £110,315). The loan is interest free and repayable on demand.
The group owed key management £nil (2023 - £334,889) in relation to debentures. Repayments were made during the year of £343,552 (2023 - £114,417) and interest was recognised of £8,663 (2023 - £27,220) in relation to the debenture. The loan accrues interest at 6% per annum which has not been accrued for. The loans are repayable over 5 years.
Related Party Balances
The company has transactions in the year with a related party that was a wholly owned subsidiary up to the date of its disposal. At the year end the company owed Proximo Holdings Limited the sum of £18,856 (2023 : £1,041,178) and owed Proximo Limited the sum of £212,703 (2023 : £94,165). The balances are included in other debtors in the current year and amounts owed by group undertakings in the 2023 year.
Key management personnel - Remuneration
During the year, a total of key management personnel compensation of £1,347,536 (2023 - £932,443) was paid.
Client monies held at the balance sheet date amounting to £nil (2023 - £386,874), along with the corresponding equal and opposite liability to clients, have been excluded from the balance sheet in accordance with the accounting policy for "Client money" set out in Note 1.
Major non-cash transactions
In the current year, the group entered into Hire purchase and finance lease agreements to the value of £18,380,827 (2023 - £8,666,340).
During the year the group has also re-financed £nil (2023 - £1,377,951) hire purchase obligations. This has had no effect on the overall hire purchase debt recognised in the balance sheet.
During the year the group has entered into loan agreements for insurance policies to the value of £1,217,740 (2023 - £1,162,499).