Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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REFLEX VEHICLE HIRE LIMITED
COMPANY INFORMATION
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REFLEX VEHICLE HIRE LIMITED
CONTENTS
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group trades under the Reflex brand, the principal activity being the supply to commercial customers of light commercial vehicles and passenger cars on a flexible basis from one week to up to four years, as well as the sale of used vehicles at the end of the vehicles' rental life.
During 2023, the Group benefitted from a continued strong demand for its services and a fleet value in excess of £60 million. Vehicle sales performance by value per vehicle sold remained firm during 2023 in a market that continued to be driven by comparatively low levels of new vehicle availability, the high cost of new vehicles and firm demand for vehicles across the UK economy.
Core hire operation profitability was negatively affected by strong inflation affecting operating costs, staff costs and the resulting increase in floating interest rate exposure. Robust action has been taken to address the inflationary environment by increasing hire rates, de-risking from certain customers, reducing staff expenses and operating costs. On 12 May 2023 the Company purchased the entire issued share capital of Hireway Rentals Limited, acquiring approximately 900 light commercial vehicles with a value in excess of £13 million rented to commercial customer contracts as well as 2 rental sites in Scotland and the North West of England. Hire sales increased to £30,964,559 driven by good utilisation and a continuing programme of hire rate improvements. Total turnover increased by £4,362,211 to £56,229,291, up 8.4% on 2022 (2022: £51,867,080) due to strong vehicle sales performance. Exceptional Items comprised the costs associated with the purchase of Hireway Vehicle Rentals Limited and shareholder-related matters. The Hireway acquisition contributed to increased administration costs. Cash flows generated from operating activities increased to £37,100,508 (2022: £32,085,710) from operating profit of £4,822,491.
2023 performance resulted in revenue growth and cash generation. The Reflex team continues to develop their processes and analytical skills in order to become a firmly data driven operation, making decisions that benefit customers and builds core margins.
The Group has installed a new software system during 2023: Microsoft Dynamics 365. This standardised software system is designed to drive the Company’s data management and analysis capacity to industry-leading standards as the Company continues to build a fully digital operational and strategic capability. During 2022, the Company was recognised as a national leader in Environmental, Social and Governance (ESG), winning the Lloyds Bank British Business 2022 ESG Champion of the Year Award in November 2022. The Company has capitalised on this achievement, securing its own low-risk ESG rating during 2023. The Board expresses their appreciation to all employees for their commitment to and hard work in achieving these results and for their tireless efforts to target steadily increasing margins. The directors have considered certain matters in relation to going concern as set out in Note 2.3.
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The principal risks and uncertainties facing the Group are:
Economic environment The Group’s customers operate across a broad range of sectors, within which the demand for the Light Commercial Vehicle flexible rental product is strong. The Group operates solely within the UK. Inflation of input costs, particularly new vehicle prices, has been strong. The Group has responded by adopting a cautious approach to the purchase of new vehicles to avoid unduly inflating the overall fleet book cost. Competitive risk The Group competes in a mature open market environment. Prospective customers select vehicle providers based upon a combination of factors including price, quality of service and reputation. The Group constantly monitors price and service in comparison to customer and industry feedback. Customer retention remains strong. Asset holding risk The Group limits risk from fluctuations in the residual values of vehicles in the market by purchasing vehicles with significant manufacturer and dealer discounts; and a rolling review of useful economic lives and residual values. Asset utilisation is monitored daily to ensure that unnecessary vehicle holding costs are minimised and the number of vehicle purchases are under constant review. Funding risk The Group’s Balance Sheet is strong, with equity value in the vehicle fleet which can be realised at any time through accelerated fleet sales. Funding is provided by mainstream lenders at competitive rates of interest.
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Section S172 (1) Statement
During the year, the directors have had regard to the matters set out in S172 (1) (a) to (f) of the Companies Act 2006 whilst performing their duties. Whilst making decisions the directors ensure that they have acted in good faith, in a way they believe would promote the success of the Group for the benefit of its members as a whole. Specifically, the directors have considered the following:- a. The likely consequences of any decision in the long term; b. The interests of the Group's employees; c. The need to foster the Group's business relationships with suppliers, customers and others; d. The impact of the Group's operations on the community and the environment; e. The desirability of the Group maintaining a reputation for high standards of business conduct; and f. The need to act fairly between members of the Group. S172 (1) (a) The likely consequences of any decision in the long term The directors understand the business and the environment in which it operates. This is key to understanding the likely consequences of any long term decisions. There is a clear plan for profit improvements and thereafter growth which ensures the Group will continue to provide quality vehicles, satisfying customer and shareholder needs, amongst other stakeholders. Continually improving environmental performance and operating methods are integral and fundamental parts of the business strategy. The Group will continue to invest in equipment, vehicles and I.T. and plans to continue to do so over the next 12 months to ensure that it can meet the demands from our customers. The replacement and additions to our vehicle fleet and a new software system have been committed to. 5172 (1) (b) The interests of the Group's employees The directors recognise that the employees are key to the business and its success. What makes the Group different is its approach to relationships, which extends past the expected customer focus, to all employees. Staff retention is a testament to this and the Group's culture. Employee welfare and wellbeing is of utmost importance. The directors ensure all employees work in a safe and healthy environment. The directors regularly engage with employees through internal communication methods. When making decisions, the directors consider which course of action best delivers the Group strategy in the long term, taking into consideration all stakeholders of the Group, including the employees. Further investments are continuing to enhance and improve the quality of the environment our staff work within, and Reflex’s ESG programme has been recognised by its peers as industry leading. S172 (1) (c) The need to foster the Group's business relationships with suppliers, customers and others The directors recognise that building relationships with suppliers and customers is key to the success of the business. The Group's objective is to become a key supply partner, delivering the same quality vehicles each time. The directors recognise that working with suppliers and customers is also key to ensuring the impact to the environment is minimised. S172 (1) (d) The impact of the Group's operations on the community and the environment The directors recognise the importance of minimising the impact of the Group's operations on the community and environment, and this is core to its business strategy. The Group and the directors wholly support, and where possible exceed, the requirements of current environmental legislation and codes of practice. It is the aim to minimise waste and water usage in buildings, vehicles and processes in order to conserve supplies and minimise consumption of natural resources. The Group and the directors actively promote recycling both
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
internally and amongst customers and suppliers. Environmental policies are reviewed periodically in consultation with staff and customers.
S172 (1) (e) The desirability of the Group maintaining a reputation for high standards of business conduct The directors are committed to improving quality and reducing any environmental impact, as noted above. This ensures that the Group's reputation within the local community is maintained. It is the aim of Reflex Vehicle Hire Limited to achieve sustained profitable growth, by providing cost effective vehicles for hire and purchase, maintaining a high level of customer satisfaction which enhances the Group's reputation with its customers and suppliers. S172 (1) (f) The need to act fairly between members of the Group When making decisions, the directors consider which course of action best delivers the Group strategy in the long term, taking into consideration all stakeholders of the Group. Examples of this are noted above where the directors consider all stakeholders when deciding which strategic decisions to take. Environmental matters The Company will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The Company has complied with all applicable legislation and regulations. The Companies Act 2006 (Strategic Report and Directors' Report) Regulation 2018 requires Reflex Vehicle Hire Limited to disclose annual UK energy consumption and Greenhouse Gas emissions from SECR regulated sources. Consumption (kWh) and Greenhouse Gas emissions (KgCO2e) totals Scope 1 consumption and emissions relate to direct combustion of natural gas, and fuels utilised for transportation operations, such as company vehicle fleets, and grey fleet. Scope 2 consumption and emissions relate to indirect emissions relating to the consumption of purchased electricity in day-to-day business operations. Totals The total consumption (kWh) figures for energy supplies reportable by Reflex Vehicle Hire Limited are as follows: Grid-supplied electricity (Scope 2) - 226,205 kWh (2022: 176,567 kWh) Gas (Scope 1) - 311,772 kWh (2022: 262,414 kWh) Transportation (Scope 1) - 3,116,488 kWh (2022: 4,336,273 kWh) Total 3,654,465 kWh (2022: 4,777,276 kWh) The total emissions (kgCO2e) figures for energy supplies reportable by Reflex Vehicle Hire Limited are as follows: Grid-supplied electricity (Scope 2) - 53,060 kgCO2e (2022: 41,165 kgCO2e) Gas (Scope 1) - 57,319 kgCO2e (2022: 48,245 kgCO2e) Transportation (Scope 1) - 736,369 kgCO2e (2022: 1,025,441 kgCO2e) Total 846,748 kgCO2e (2022: 1,114,851 kgCO2e) The analysis of this data shows that there was a rise in bought electricity and gas in the period between January to December 2023 over the previous year. Reflex Vehicle Hire Limited purchased Hireway Vehicle Rentals in this period and gained two further sites along with circa 900 vehicles.
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The analysis also shows a large improvement and reduction of their direct transportation kWh and kgCO2e despite the additional vehicles purchased May 2023. This can be contributed to the investment Reflex Vehicle Hire has made in its employee training, review of its process’s and working more efficiently as a business.
Intensity Metric Intensity metrics based on turnover and full time employee have been calculated, results of this analysis is as follows: kgCO2e / £m – 15,121 kgCO2e (2022: 21,636) kgCO2e / full time employee 5,760 (2022: 7,432) Energy Efficiency Improvements Reflex Vehicle Hire Limited are committed to year-on-year improvements in their operational energy efficiency. This is assisted with maintaining their ISO 9001 accreditation year on year. During this period, Reflex undertook the following energy efficiency activities listed during the assessment period. Reporting methodology Scope 1 and 2 consumption and CO2e emissions data has been calculated in line with the 2019 UK Government environmental reporting guidance. The following Emissions Factor Databases consistent with the 2019 UK Government environmental reporting guidance have been used, utilising the current published kWh gross calorific value (CV) and kgCO2e relevant for reporting January to December 2023 Sustainability and Net Zero Targets Reflex Vehicle Hire Limited’s sustainability and Net Zero Target’s policy is based on the following key principles:-
∙To ensure sustainability plays a ket rold in our business decision making.
∙To fully engage our staff in promoting, executing and improving our policy.
∙To engage, encourage and work with local charity and community groups.
∙To promote to all customers and suppliers and to encourage them to adopt sound sustainable management practices.
∙To achieve Net Zero by 2050.
Areas of Action and Practical Steps
1. Travel – Reflex Vehicle Hire will,
∙Actively encourage staff to cycle, wlak or use public transport to get to work, and suppliers and customer meetings, where it is practical and cost effective.
∙Avoid travelling to clients and supplier meetings when other alternative methods are available and practical such as email, telephone and video call.
∙Where meetings are necessary, all attempts will be made to plan similar meetings in the same location to prevent multiple journeys.
∙Car sharing to meetings will be encouraged.
∙Make allowances for staff to work from home where and when appropriate.
∙Manage and record all business mileage and emissions.
∙Use EV Vehicles for local collection and deliveries.
2. Sales and Purchasing – Reflex Vehicle Hire Limited will,
∙Monitor record and reduce the purchase of all office consumables including paper and identify other opportunities to reduce office waste.
∙Recycle office paper, plastics, cardboard, ink cartridges and other office equipment.
∙Aim to reduce the office energy consumption by purchasing energy efficient equipment, energy saving labels and by good housekeeping.
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
∙Purchase electricity from a supplier committed to investing in renewable energy sources.
∙Review the life cycle of all products bought and sold and the environmental aspects and potential impacts associated with the manufacture, use and disposal of the product.
∙Use couriers that are making efforts to combat CO2 emissions or who carbon trade.
3. Carbon Foot Print
Reflex Vehicle Hire Limited will endeavour to find the most cost effective and sustainable solution for our clients, whilst maintaining our high levels of service and working practices. This can be achieved by using local labour and suppliers/manufacturers. Reflex Vehicle Hire Limited is dedicated to working with our customers to reduce their carbon footprint and assisting with the purchasing of electric vehicles available to rent for their fleet. 4. Energy Reflex Vehicle Hire Limited are committed to reducing its energy output by monitoring its Gas, Electric and Water usage and looking at ways that it can more energy efficient such as replacing old equipment for new energy efficient alternatives. Reflex have also looked to gain green renewable energy contracts where possible and available. Reflex Vehicle Hire will look in the future to incorporate renewable options to its sites including solar panels, solar lighting, wind energy and reusable water solutions. 5. Land Fill As technology improves Reflex Vehicle Hire are actively encouraging our clients to choose, and our suppliers to provide, alternative materials for banner and graphic printing. With biodegradable and recycled materials and water based ink technology, we are on the way to replacing PVC’s and other long life substrates. Reflex Vehicle Hire endeavours to work with waste partners to avoid waste produced from our sites going to Landfill and having a high proportion of waste being recycled. 6. Supporting Charities and the Local Community Reflex Vehicle Hire Limited appreciate the importance of charity organisations within the local community. Where possible, Reflex Vehicle Hire Limited will support them by offering products and services at cost, on loan, or free of charge at our discretion. In return, we may ask the charity or organisation to add a link to our web site from their site. 7. Suppliers and Other Stakeholders As part of our ethical and sustainability strategy Reflex Vehicle Hire Limited have regular dialogue with our suppliers and other stakeholders to ensure that they are making attempts to replicate our own working practices. This can include requests to change product materials from existing to those that are more environmentally friendly, recyclable or sustainable. Where suppliers are importing products, we request proof of province to ensure that human rights have not been breached. Reflex Vehicle Hire Limited work closely with our suppliers and encourage “business partnerships” rather than traditional customer supplier relationships. 8. Net Zero Target Reflex Vehicle Hire Limited is committed to making its business Net Zero by the year 2050 as set out by the UK Government. Reflex Vehicle Hire Limited has already started its journey to Net Zero by reducing its operational
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REFLEX VEHICLE HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Scope 1 and Scope 2 carbon by 36% since 2020 by implementing items described above. Reflex Vehicle Hire Limited will look to continue its journey to becoming Net Zero and implementing alternative
Overview Reflex Vehicle Hire Limited remain committed to driving for a better more sustainable future to better the environment and world for years to come. Reflex understands its responsibility to lowering its CO2 intensity year on year to achieve its goal of being a Net Zero business. Reflex Vehicle Hire Limited are committed to working with our customers, suppliers, employees, and the wider community to support the delivery of a meaningful enterprise and see Reflex Vehicle Hire Limited having a key role as a provider to complete fleet solutions to ensure our customers are well equipped to understand how the world will move in an electrified environment. Our organisation understands we must all do our part to impact the greater good of this planet
This report was approved by the board and signed on its behalf.
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REFLEX VEHICLE HIRE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The profit for the year, after taxation, amounted to £1,429,632 (2022:£2,437,898).
The Directors paid a dividend of £310,480 during 2023 in respect of the 2023 financial year (2022: £500,000).
The directors who served during the year were:
The Group is focused on continuing to establish a broad base of customers in order to diversify its customer base. The Group's product, the supply of flexible rental solutions across a range of light commercial vehicles and passenger cars, offers customers the opportunity to release capital from their commercial fleets to fund their core businesses.
Our aim remains to work closely with our customers at all times, ensuring their vehicle supply is secure, well maintained and tailored to ensure maximum value for money.
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REFLEX VEHICLE HIRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The financial statements show consolidated net current liabilities of £24,533,974 (2022: £20,675,507) of which £19,542,349 are net obligations under long-term hire purchase contracts due within one year (2022: £18,178,313).
The Group's Hire Purchase debt is matched to individual specific vehicles, with the repayment profile matched to the available weekly market hire rate and the eventual resale value ultimately expected in the used vehicle market. Should a vehicle become under-utilised for any reason, there is the ability to sell and use the proceeds to settle the attributable hire purchase balance or release cash into the business in respect of vehicles not subject to hire purchase. The Group's bankers provide working capital facilities for trading and a term loan facility for the Hireway acquisition and hire purchase in respect of vehicles together with other financial providers. During 2023 cash flows remained sufficient to meet the Company’s liabilities. During 2024 cash flows were adversely affected by significant input cost inflation and new operating and accounts system technology costs. The new system caused a loss of control over the completeness of vehicle hire purchase settlements on sale identified by internal audits and manual checks in later 2024. The Group took action to review prices with certain customers, reduce headcount and rationalised operating costs to reduce pressure on cash flows to support addressing the outstanding settlements. The Group granted a Chattels Mortgage in January 2025 to its Bankers to support an agreed repayment profile for the settlement arrears which is underway although the vehicle sales market was unusually quiet for approximately 10 weeks from mid-December 2024 leading to a short-fall in budgeted net vehicle sales proceeds. Additionally, as at March 2025 the group has a number of other overdue creditors with whom they are in the process of agreeing repayment plans. The Group is engaged in a strategy of reducing the fleet size to release the strong equity in the relevant vehicles alongside further hire price increases and significant cost-cutting measures to drive cash flows and position the business correctly during 2025. The directors acknowledges that, due to other matters as set forth in Note 2.3, there is material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern. The directors are confident that the implementation of a new business plan will ensure this matter is resolved and believe that it remains appropriate to prepare the financial statements on a going concern basis.
The Group attaches considerable importance to ensuring that all its employees are provided with information concerning them as employees. The Group's current size allows this to take place by direct discussion and face to face meetings. As the Group grows it will develop information and consultation processes to continue to meet its employee and communication goals.
How we engage with our employees is also covered in the Strategic Report on page 3.
How we engage with our customers and suppliers is covered in the Strategic Report on page 3.
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REFLEX VEHICLE HIRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company's greenhouse gas emissions and energy consumption for the year are covered in our Strategic Report on pages 5 and 6.
The business review, principal risks and uncertainties, key performance indicators and financial risk management objectives and policies are included in the Strategic Report.
On 20 January 2025 HSBC Equipment Finance (UK) Limited registered a Chattels and Mortgage charge against a specific list of vehicles.
There have been no other significant post balance sheet events.
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REFLEX VEHICLE HIRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006. MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
This report was approved by the board and signed on its behalf.
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REFLEX VEHICLE HIRE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REFLEX VEHICLE HIRE LIMITED
We have audited the financial statements of Reflex Vehicle Hire Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and the related notes, 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).
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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
We draw attention to Note 2.3 in the financial statements, which indicates that the Group's ability to continue as a going concern is dependent on the continued support of funders and other creditors, agreeing to suitable repayment plans, and the continued supply and sale of vehicles to generate cash flow. As stated in Note 2.3, these events or conditions, along with the other matters as set forth in the note, indicate that a material uncertainty exists that may cast significant doubt on the Group's and the Parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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REFLEX VEHICLE HIRE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REFLEX VEHICLE HIRE LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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REFLEX VEHICLE HIRE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REFLEX VEHICLE HIRE LIMITED (CONTINUED)
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
• Enquiry of management and those charged with governance around actual, potential or suspected litigation, claims, non-compliance with applicable laws and regulations and fraud. • Enquiry of entity staff in tax and compliance functions and external advisors to identify any instances of non-compliance with laws and regulations. • Performing audit work over the risk of management override, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias. • Reviewing the financial statements disclosures and testing these to supporting documentation to assess compliance with applicable laws and regulations. • Discussions amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud. • Reviewing minutes of meetings of those charged with governance.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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REFLEX VEHICLE HIRE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF REFLEX VEHICLE HIRE LIMITED (CONTINUED)
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.
for and on behalf of Leicester, United Kingdom Date: MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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REFLEX VEHICLE HIRE LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 16
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REFLEX VEHICLE HIRE LIMITED
REGISTERED NUMBER: 07813062
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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REFLEX VEHICLE HIRE LIMITED
REGISTERED NUMBER: 07813062
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 26 to 51 form part of these financial statements.
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REFLEX VEHICLE HIRE LIMITED
REGISTERED NUMBER: 07813062
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
Page 19
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REFLEX VEHICLE HIRE LIMITED
REGISTERED NUMBER: 07813062
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 26 to 51 form part of these financial statements.
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REFLEX VEHICLE HIRE LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 21
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REFLEX VEHICLE HIRE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 22
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REFLEX VEHICLE HIRE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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REFLEX VEHICLE HIRE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 24
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REFLEX VEHICLE HIRE LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 25
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Reflex Vehicle Hire Limited is a private company, limited by shares, incorporated in England & Wales, registered number 07813062. The registered office address is 22 Belton Road West, Loughborough, LE11 5TR.
Principal activity The principal activity of the company during the year continued to be that of the supply to commercial customers of a fleet of over 5,100 light commercial vehicles and passenger cars on a flexible basis from one week to up to four years, as well as the sale of used vehicles at the end of the vehicles' rental life.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements.
The Company's functional and presentation currency is British Pound Sterling (£).
Reflex Vehicle Hire Limited purchased Hireway Rentals Limited on 12 May 2023, the financial statements for the year to 31 December 2023 are consolidated. The comparative financial statements for the year ended 31 December 2022 are for the individual entity.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 26
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The financial statements show consolidated net current liabilities of £24,533,974 (2022: £20,675,507) of which £19,542,349 are net obligations under long-term hire purchase contracts due within one year (2022: £18,178,313).
The Group's Hire Purchase debt is matched to individual specific vehicles, with the repayment profile matched to the available weekly market hire rate and the eventual resale value ultimately expected in the used vehicle market. Should a vehicle become under-utilised for any reason, there is the ability to sell and use the proceeds to settle the attributable hire purchase balance or release cash into the business in respect of vehicles not subject to hire purchase. The Group's bankers provide working capital facilities for trading and a term loan facility for the Hireway acquisition and hire purchase in respect of vehicles together with other financial providers. During 2023, cash flows remained sufficient to meet the Company’s liabilities. During 2024, cash flows were adversely affected by significant input cost inflation and new operating and accounts system technology costs. The new system caused a loss of control over the completeness of vehicle hire purchase settlements on sale identified by internal audits and manual checks in later 2024. The Group took action to review prices with certain customers, reduce headcount and rationalised operating costs to reduce pressure on cash flows to support addressing the outstanding settlements. The Group granted a Chattels Mortgage in January 2025 to its Bankers to support an agreed repayment profile for the settlement arrears which is underway although the vehicle sales market was unusually quiet for approximately 10 weeks from mid-December 2024 leading to a short-fall in budgeted net vehicle sales proceeds. As at March 2025 the group has a number of other creditors with whom they are in the process of agreeing repayment plans. The Group is engaged in a strategy of reducing the fleet size to release the strong equity in the relevant vehicles alongside further hire price increases and significant cost-cutting measures to drive cash flows and position the business correctly during 2025. The directors have prepared detailed monthly cash flow forecasts to June 2026, giving consideration to the varying risks and opportunities presented to the Group and Company and have carried out sensitivity analysis under various scenarios. The resultant analysis of the cashflow forecast shows that sufficient cash headroom is shown in the most reasonably foreseeable scenarios although this is dependent upon a number of factors including suitable repayment plans being agreed with a number of other creditors, suppliers continuing to supply on normal credit terms, funders remaining supportive and cash being realised in line with the anticipated sale of vehicles as forecast to meet repayment plans agreed. The cashflow is being monitored on a daily basis and the bank is supportive of the actions being taken by the directors. Based on the forecasts prepared the directors have concluded there is a reasonable expectation that the company will be able to continue in operation for the foreseeable future and for a period of not less than 12 months from the approval of the Financial Statements and accordingly, the Financial Statements are prepared on a going concern basis. The Directors acknowledge that the circumstances detailed above give rise to a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.
Page 27
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Turnover is measured at the fair value of the consideration received or receivable in respect of the hire of vehicles, sale of used vehicles and supply of related goods or services in the normal course of business, net of value added tax and discounts.
Turnover from vehicle hire is recognised evenly over the hire period. Turnover from sales of other related goods and services is recognised at the point at which the goods or services are provided. Turnover from sales of used vehicles is recognised at the point of sale, which is usually represented by the point at which the customer takes possession of the vehicle. Used vehicles are recognised as stock at the point of sale as they are held for hire up until this point.
Assets held under hire purchase contracts are capitalised in the Balance Sheet and are depreciated over their useful lives. The corresponding hire purchase obligation is capitalised in the Balance Sheet as a liability. The interest element of the rental obligation is charged to the Profit and Loss Account over the year of the lease and represents a constant proportion of the balance of capital repayments outstanding.
Rentals paid under operating leases are charged to income on a straight-line basis over the lease term.
All interest-bearing loans and borrowings which are basic financial instruments are initially recognised at the present value of cash payable to the bank (including interest). After initial recognition they are measured at amortised cost using the effective interest rate method, less impairment. The effective interest rate amortisation is included in finance revenue in the Profit and Loss Account.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to Profit and Loss Account at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Profit and Loss Account in the same period as the related expenditure.
Page 28
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Page 29
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
The residual values and depreciation rates have been determined with the anticipation that the net book values at the point the vehicles are sold is in line with open market values for those vehicles.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Profit and Loss Account.
Page 30
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at transaction price, net of transaction costs, and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a
Page 31
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date. Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Useful economic life and residual valaue of tangible fixed assets Depreciation is charged on a straight-line basis to an estimated residual value using depreciation rates which reflect the useful economic life of between 3 and 5 years. These rates have been set to align net book value with estimated market value at the point at which vehicles are transferred to vehicle sales stock. Trade Debtors Trade debtors consist of amounts due from customers. An allowance for doubtful debts is maintained for estimated losses resulting from the inability of the Company's customers to make required payments. The allowance is based on the Company's regular assessment of the credit worthiness and financial conditions of its customers.
Page 33
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 34
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 35
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 36
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
Page 37
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
From 1 April 2023, the Corporation Tax main rate increased to 25% for profits over £250,000. A small profits rate has also been introduced for profits of £50,000 or less, charging Corporation Tax at 19%. Profits between £50,000 and £250,000 will be taxed at the main rate reduced by a marginal relief
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements. The profit after tax of the parent Company for the year was £
Page 38
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 39
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.Intangible assets (continued)
Page 40
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 41
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
17.Tangible fixed assets (continued)
Page 42
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
17.Tangible fixed assets (continued)
Page 43
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 44
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 45
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 46
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 47
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 48
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 49
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
28.Business combinations (continued)
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £111,618 (2022: £123,446). Contributions totalling £43,690 (2022: £51,140) were payable to the fund at the balance sheet date.
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REFLEX VEHICLE HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
At the year end
The director had an interest free loan during the year that is repayable on demand.
84.9% of the issued Ordinary share capital of the Company is held by
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