Company registration number 04262056 (England and Wales)
MICHAEL JEFFERY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2024
MICHAEL JEFFERY LIMITED
COMPANY INFORMATION
DIRECTOR
Mr M F Jeffery
COMPANY NUMBER
04262056
REGISTERED OFFICE
Ponthir Road Service Station
Ponthir Road
Caerleon
Newport
NP18 3XL
AUDITOR
Kilsby & Williams LLP
Cedar House
Hazell Drive
Newport
South Wales
NP10 8FY
MICHAEL JEFFERY LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12 - 13
Statement of changes in equity
14
Statement of cash flows
15 - 16
Notes to the financial statements
17 - 31
MICHAEL JEFFERY LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 JUNE 2024
- 1 -
PRINCIPAL ACTIVITIES

The company operates out of its premises in Ponthir South Wales and Hereford in the West of England. Selling new and used cars and providing repairs and servicing.

REVIEW OF THE BUSINESS

The directors believe the key business indicators in this market are turnover, gross margin and profit before tax. The performance of the company was as follows:

2024

2022

Turnover (£'000)

57,966

35,769

Gross Profit (%)

5.67

6

Profit/(Loss) before taxation (£'000)

84

(57)

 

Despite the challenging economic conditions over the past few years, the company has managed to maintain its strong position in the market place. The directors are cautiously optimistic that, provided the UK economy continues to improve, the company will still be profitable next year.

PRINCIPAL RISKS AND UNCERTAINTIES

The company is reliant on the car market and therefore any change to the level of activity is likely to affect results. Electric change over remains particularly difficult particularly in Wales.

During 2025, the principal issues have been the pure cost of operation, money costs, energy and staff represent particular problems.

There are a number of risks that could harm the profitability of the business. The director actively manages the company on a day-to-day basis and takes active measures to ensure these risks are understood and minimized.

DEVELOPMENT AND PERFORMANCE

We will continue to focus on our retail used car sales and the opportunities that the Renault and Dacia franchises bring.

On behalf of the board

Mr M F Jeffery
Director
30 June 2025
MICHAEL JEFFERY LIMITED
DIRECTOR'S REPORT
FOR THE PERIOD ENDED 30 JUNE 2024
- 2 -

The director presents his annual report and financial statements for the period ended 30 June 2024.

RESULTS AND DIVIDENDS

The results for the period are set out on page 10.

Particulars of recommended dividends are detailed in note 10 to the financial statements.

DIRECTOR

The director who held office during the period and up to the date of signature of the financial statements was as follows:

Mr M F Jeffery
STATEMENT OF DIRECTOR'S RESPONSIBILITIES

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

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

In preparing these financial statements, the director is required to:

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT OF DISCLOSURE TO AUDITOR

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

MICHAEL JEFFERY LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 3 -
GOING CONCERN

The financial statements are prepared on the going concern basis. The director has reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the director is aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern. The company had generated a profit of £30,893 (2022: loss of £56,900) and had a net assets of £1,034,248 (2022: £1,207,355) at the period ended 30 June 2024. Current liabilities include an overdraft facility of £1.9m. The company has successfully agreed a renewal of its £1.9m overdraft facility at improved rates, now extended until June 2026. Additionally, the director plans to personally sell a commercial property, with the proceeds from the sale earmarked for partially settling the company's overdraft.

At the date of signing the financial statements, updated forecasts have been prepared which shows the company having sufficient headroom to meet its liabilities as and when they fall due for a period of 12 months from the date of signing. This is dependent upon the revised banking facilities noted above. The commercial property sale is with solicitors, at the date of signing the financial statements.

The director is confident that the support of the company's bankers will continue and the company will be able to continue trading and have sufficient funds to discharge its obligations as and when they become payable. Therefore, the director is satisfied that the company is a going concern based on post year end trading. The financial statements have therefore been prepared on a going concern basis.

MEDIUM-SIZED COMPANIES EXEMPTION

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr M F Jeffery
Director
30 June 2025
MICHAEL JEFFERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICHAEL JEFFERY LIMITED
- 4 -

Qualified opinion

We have audited the financial statements of Michael Jeffery Limited (the 'company') for the period ended 30 June 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

Basis for Qualified Opinion

The Company’s parts stock are carried in the balance sheet at £466,883. We were unable to obtain sufficient appropriate audit evidence regarding the valuation, recoverability and existence of parts stock, due to the company not maintaining adequate stock records and the yearend shortened, which resulted in no physical stock count being performed. Consequently, we were unable to satisfy by alternative means whether any adjustments were necessary in respect of stock balances, cost of sales and related disclosures in the financial statements.

 

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

MICHAEL JEFFERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICHAEL JEFFERY LIMITED (CONTINUED)
- 5 -

Material uncertainty relating to going concern

We draw attention to Note 1.3 in the financial statements, which indicates that the company incurred a net profit of £30,893 (2022 - loss of £56,900) during the period ended 30 June 2024 and had an overdraft facility of £1.9m which was being utilised and due for renewal on 30 June 2025. As stated in Note 1.3, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the 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 conclnded that the directors' use ofthe going coneern basis of accounting in the preparation ofthe 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.

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

Opinions on other matters prescribed by the Companies Act 2006

In In our opinion, based on the work undertaken in the course of our audit:

MICHAEL JEFFERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICHAEL JEFFERY LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

 

The Companies Act 2006 requires us to report to you, in our opinion adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us.

In our opinion:

 

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of director

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

Auditor's responsibilities for the audit of the financial statements

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

MICHAEL JEFFERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICHAEL JEFFERY LIMITED (CONTINUED)
- 7 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
MICHAEL JEFFERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICHAEL JEFFERY LIMITED (CONTINUED)
- 8 -
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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.

MICHAEL JEFFERY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MICHAEL JEFFERY LIMITED (CONTINUED)
- 9 -

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.

Jonathan Harrhy
Senior Statutory Auditor
For and on behalf of
Kilsby & Williams LLP
Chartered accountants & statutory auditor
Cedar House
Hazell Drive
Newport
South Wales
NP10 8FY
30 June 2025
MICHAEL JEFFERY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 JUNE 2024
- 10 -
Period
Year
ended
ended
30 June
31 December
2024
2022
Notes
£
£
TURNOVER
3
57,966,703
35,769,066
Cost of sales
(54,678,880)
(33,625,724)
GROSS PROFIT
3,287,823
2,143,342
Administrative expenses
(3,050,672)
(2,337,499)
Other operating income
18,000
185,109
OPERATING PROFIT/(LOSS)
4
255,151
(9,048)
Interest payable and similar expenses
8
(171,341)
(41,058)
PROFIT/(LOSS) BEFORE TAXATION
83,810
(50,106)
Tax on profit/(loss)
9
(52,917)
(6,794)
PROFIT/(LOSS) FOR THE FINANCIAL PERIOD
30,893
(56,900)

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

MICHAEL JEFFERY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2024
- 11 -
Period
Year
ended
ended
30 June
31 December
2024
2022
£
£
PROFIT/(LOSS) FOR THE PERIOD
30,893
(56,900)
OTHER COMPREHENSIVE INCOME
-
-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
30,893
(56,900)
MICHAEL JEFFERY LIMITED
BALANCE SHEET
AS AT
30 JUNE 2024
30 June 2024
- 12 -
30 June 2024
31 December 2022
Notes
£
£
FIXED ASSETS
Goodwill
11
73,167
95,522
Other intangible assets
11
34,875
-
0
Total intangible assets
108,042
95,522
Tangible assets
12
639,215
635,700
747,257
731,222
CURRENT ASSETS
Stocks
13
3,463,500
3,323,375
Debtors
14
2,096,851
1,052,531
Cash at bank and in hand
1,474
7,402
5,561,825
4,383,308
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
15
(5,172,854)
(3,709,156)
NET CURRENT ASSETS
388,971
674,152
TOTAL ASSETS LESS CURRENT LIABILITIES
1,136,228
1,405,374
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
16
-
(106,328)
PROVISIONS FOR LIABILITIES
Deferred tax liability
18
(101,980)
(91,691)
NET ASSETS
1,034,248
1,207,355
CAPITAL AND RESERVES
Called up share capital
20
10,000
10,000
Capital contribution reserve
21
200,000
-
0
Profit and loss reserves
824,248
1,197,355
TOTAL EQUITY
1,034,248
1,207,355

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

MICHAEL JEFFERY LIMITED
BALANCE SHEET (CONTINUED)
AS AT
30 JUNE 2024
30 June 2024
- 13 -
The financial statements were approved and signed by the director and authorised for issue on 30 June 2025
Mr M F Jeffery
Director
Company registration number 04262056 (England and Wales)
MICHAEL JEFFERY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2024
- 14 -
Share capital
Capital contribution reserve
Profit and loss reserves
Total
Notes
£
£
£
£
BALANCE AT 1 JANUARY 2022
10,000
-
0
1,456,255
1,466,255
YEAR ENDED 31 DECEMBER 2022:
Loss and total comprehensive income
-
-
(56,900)
(56,900)
Dividends
10
-
-
(202,000)
(202,000)
BALANCE AT 31 DECEMBER 2022
10,000
-
0
1,197,355
1,207,355
PERIOD ENDED 30 JUNE 2024:
Profit and total comprehensive income
-
-
30,893
30,893
Capital contribution
20
-
0
200,000
-
200,000
Dividends
10
-
-
(404,000)
(404,000)
BALANCE AT 30 JUNE 2024
10,000
200,000
824,248
1,034,248
MICHAEL JEFFERY LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2024
- 15 -
2024
2022
Notes
£
£
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) for the period after tax
30,893
(56,900)
Adjustments for:
Taxation charged
52,917
6,794
Finance costs
171,341
41,058
Loss/(gain) on disposal of tangible fixed assets
18,495
(5,213)
Amortisation and impairment of intangible assets
28,509
14,903
Depreciation and impairment of tangible fixed assets
153,258
141,744
Movements in working capital:
(Increase)/decrease in stocks
(140,125)
213,797
Increase in debtors
(593,534)
(603,795)
Increase/(decrease) in creditors
538,488
(197,952)
Cash generated from/(absorbed by) operations
260,242
(445,564)
Interest paid
(171,341)
(41,058)
Income taxes refunded
46,884
1,844
Net cash inflow/(outflow) from operating activities
135,785
(484,778)
INVESTING ACTIVITIES
Purchase of intangible assets
(41,029)
-
0
Purchase of tangible fixed assets
(85,268)
(147,341)
Proceeds from disposal of tangible fixed assets
-
0
10,551
Movement in directors loan account
(417,484)
(222,083)
Net cash used in investing activities
(543,781)
(358,873)
FINANCING ACTIVITIES
Shareholder capital contribution
200,000
-
0
Repayment of bank loans
(111,469)
178,162
Movement on stocking loan
465,036
406,521
Dividends paid
(404,000)
(202,000)
Net cash generated from financing activities
149,567
382,683
MICHAEL JEFFERY LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
2024
2022
Notes
£
£
- 16 -
NET DECREASE IN CASH AND CASH EQUIVALENTS
(258,429)
(460,968)
Cash and cash equivalents at beginning of period
(1,348,603)
(887,635)
CASH AND CASH EQUIVALENTS AT END OF PERIOD
(1,607,032)
(1,348,603)
RELATING TO:
Cash at bank and in hand
1,474
7,402
Bank overdrafts included in creditors payable within one year
(1,608,506)
(1,356,005)
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2024
- 17 -
1
ACCOUNTING POLICIES
Company information

Michael Jeffery Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ponthir Road Service Station, Ponthir Road, Caerleon, Newport, NP18 3XL.

1.1
Reporting period

The financial statements are for a period of 18 months ended 30 June 2024 (2022: 12 month period ended 31 December 2022). The extending of the period was to align with manufacturers reporting deadlines. As a result of the extended year end, the comparative amounts presented in the financial statements are not entirely comparable.

1.2
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.3
Going concern

The financial statements are prepared on the going concern basis. The director has reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the director is aware of certain material uncertainties which may cause doubt on the company's ability to continue as a going concern. The company had generated a profit of £30,893 (2022: loss of £56,900) and had a net assets of £1,034,248 (2022: £1,207,355) at the period ended 30 June 2024. Current liabilities include an overdraft facility of £1.9m. The company has successfully agreed a renewal of its £1.9m overdraft facility at improved rates, now extended until June 2026. Additionally, the director plans to personally sell a commercial property, with the proceeds from the sale earmarked for partially settling the company's overdraft.true

At the date of signing the financial statements, updated forecasts have been prepared which shows the company having sufficient headroom to meet its liabilities as and when they fall due for a period of 12 months from the date of signing. This is dependent upon the revised banking facilities noted above. The commercial property sale is with solicitors, at the date of signing the financial statements.

The director is confident that the support of the company's bankers will continue and the company will be able to continue trading and have sufficient funds to discharge its obligations as and when they become payable. Therefore, the director is satisfied that the company is a going concern based on post year end trading. The financial statements have therefore been prepared on a going concern basis.

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
ACCOUNTING POLICIES
(Continued)
- 18 -
1.4
Turnover

The turnover shown in the profit and loss account is derived from ordinary activities and represents amounts chargeable in respect of the sale and repair of motor vehicles and the sale of vehicle parts in the financial year, exclusive of Value Added Tax.

1.5
Intangible fixed assets - goodwill

Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business.

Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

Goodwill 5 - 10% straight line

1.6
Intangible fixed assets other than goodwill

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

Computer software costs
10% straight line

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

1.7
Tangible fixed assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
ACCOUNTING POLICIES
(Continued)
- 19 -

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

Leasehold land and buildings
6.7%-10% Straight Line
Plant and equipment
20% Straight Line
Fixtures and fittings
33% Straight Line
Motor vehicles
33% Straight Line
1.8
Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.

1.9
Cash and cash equivalents

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

1.10
Financial instruments

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 entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

Other financial assets

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

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
ACCOUNTING POLICIES
(Continued)
- 20 -
Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Other financial liabilities

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

 

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

Derecognition of financial liabilities

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

1.11
Taxation

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
1
ACCOUNTING POLICIES
(Continued)
- 21 -
Current tax

Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

1.12
Leases

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

1.13
Government grants

Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.

Government grants are recognised using the accrual model and the performance model.

Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.

Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.

Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 22 -
2
JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Provisions

Provisions are included against stock value. These provisions require management's best estimate based on historical experience and current knowledge of the trading difficulties of customers.

Useful economic life of tangible fixed assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

3
TURNOVER AND OTHER REVENUE
2024
2022
£
£
Turnover analysed by class of business
Sale of vehicles
50,246,337
30,447,989
Sales of parts and servicing
6,985,011
4,263,804
Other income
735,355
1,057,273
57,966,703
35,769,066
2024
2022
£
£
Other revenue
Grants received
-
8,000
Other operating income
398,045
177,109
Rent receivable
18,000
-
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 23 -
4
OPERATING PROFIT/(LOSS)
2024
2022
Operating profit/(loss) for the period is stated after charging/(crediting):
£
£
Government grants
-
(8,000)
Fees payable to the company's auditor for the audit of the company's financial statements
25,000
12,000
Depreciation of owned tangible fixed assets
153,258
141,744
Loss/(profit) on disposal of tangible fixed assets
18,495
(5,213)
Amortisation of intangible assets
28,509
14,903
Impairment of trade debtors
(17,408)
28,357
Operating lease charges
155,792
153,100
5
AUDITOR'S REMUNERATION
2024
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
25,000
12,000
6
EMPLOYEES

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

2024
2022
Number
Number
Production staff
74
68
Administrative staff
14
10
Total
88
78
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
6
EMPLOYEES
(Continued)
- 24 -

Their aggregate remuneration comprised:

2024
2022
£
£
Wages and salaries
4,018,134
2,698,310
Social security costs
373,876
255,613
Pension costs
81,415
53,348
4,473,425
3,007,271
7
DIRECTOR'S REMUNERATION
2024
2022
£
£
Remuneration for qualifying services
37,809
17,014
8
INTEREST PAYABLE AND SIMILAR EXPENSES
2024
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
171,241
41,058
Other finance costs:
Other interest
100
-
0
171,341
41,058
9
TAXATION
2024
2022
£
£
Current tax
UK corporation tax on profits for the current period
43,724
-
0
Adjustments in respect of prior periods
(1,097)
-
0
Total current tax
42,627
-
0
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
9
TAXATION
2024
2022
£
£
(Continued)
- 25 -
Deferred tax
Origination and reversal of timing differences
10,290
6,794
Total tax charge
52,917
6,794

The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:

2024
2022
£
£
Profit/(loss) before taxation
83,810
(50,106)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
20,953
(9,520)
Tax effect of expenses that are not deductible in determining taxable profit
5,614
(3,215)
Gains not taxable
-
0
9,520
Adjustments in respect of prior years
5,641
-
0
Effect of change in corporation tax rate
-
0
9,520
Permanent capital allowances in excess of depreciation
-
0
18,739
Non-qualifying profit/loss on disposal
3,217
-
0
Effect of different UK tax rates on some earnings
(2,161)
(22,042)
Super deduction
-
0
3,792
Non-Qualifying fixed assets
19,653
-
0
Taxation charge for the period
52,917
6,794
10
DIVIDENDS
2024
2022
£
£
Final paid
404,000
202,000
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 26 -
11
INTANGIBLE FIXED ASSETS
Goodwill
Computer software costs
Total
£
£
£
Cost
At 1 January 2023
241,786
-
0
241,786
Additions
-
0
41,029
41,029
At 30 June 2024
241,786
41,029
282,815
Amortisation and impairment
At 1 January 2023
146,264
-
0
146,264
Amortisation charged for the period
22,355
6,154
28,509
At 30 June 2024
168,619
6,154
174,773
Carrying amount
At 30 June 2024
73,167
34,875
108,042
At 31 December 2022
95,522
-
0
95,522
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 27 -
12
TANGIBLE FIXED ASSETS
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
1,013,630
424,451
62,512
60,741
1,561,334
Additions
75,513
95,647
4,108
-
0
175,268
Disposals
(22,945)
(47,505)
-
0
-
0
(70,450)
At 30 June 2024
1,066,198
472,593
66,620
60,741
1,666,152
Depreciation and impairment
At 1 January 2023
478,930
348,025
62,512
36,167
925,634
Depreciation charged in the period
91,776
44,561
799
16,122
153,258
Eliminated in respect of disposals
(7,510)
(44,445)
-
0
-
0
(51,955)
At 30 June 2024
563,196
348,141
63,311
52,289
1,026,937
Carrying amount
At 30 June 2024
503,002
124,452
3,309
8,452
639,215
At 31 December 2022
534,700
76,426
-
0
24,574
635,700
13
STOCKS
2024
2022
£
£
Finished goods and goods for resale
3,463,500
3,323,375

Included within stock is a provision of £21,000 (2022 - £50,408), this relates to parts stock.

14
DEBTORS
2024
2022
Amounts falling due within one year:
£
£
Trade debtors
620,734
335,671
Other debtors
1,395,053
584,678
Prepayments and accrued income
81,064
132,182
2,096,851
1,052,531
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
14
DEBTORS
(Continued)
- 28 -

Included within other debtors is a director's loan balance of £709,824 (2022 - £382,340).

 

Included within trade debtors is a bad debt provision of £5,000 (2022 - £22,408).

15
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024
2022
Notes
£
£
Bank loans and overdrafts
17
1,675,199
1,427,839
Trade creditors
860,424
264,571
Corporation tax
282,293
69,479
Other taxation and social security
192,544
131,403
Other creditors
2,143,689
1,759,438
Accruals and deferred income
18,705
56,426
5,172,854
3,709,156

The above includes secured creditors of £3,723,922 (2022 - £3,011,526).

The trade loans are secured over the assets to which they relate. The bank overdraft is secured by a fixed and floating charge over all current and future assets of the company.

16
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2024
2022
Notes
£
£
Bank loans and overdrafts
17
-
0
106,328

The above includes secured creditors of £Nil (2022 - £106,328).

Security over the bank loan borrowings of the company is as follows:- debenture and guarantee from

the company:

- legal mortgage on the freehold property at Ponthir

- legal mortgage on the freehold property at Hereford

- legal mortgage on the freehold property at Caerleon

The director owns the land and buildings at these sites personally.

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 29 -
17
LOANS AND OVERDRAFTS
2024
2022
£
£
Bank loans
66,693
178,162
Bank overdrafts
1,608,506
1,356,005
1,675,199
1,534,167
Payable within one year
1,675,199
1,427,839
Payable after one year
-
0
106,328
18
DEFERRED TAXATION

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

Liabilities
Liabilities
2024
2022
Balances:
£
£
Accelerated capital allowances
101,980
91,691
2024
Movements in the period:
£
Liability at 1 January 2023
91,691
Charge to profit or loss
10,289
Liability at 30 June 2024
101,980
There were no deferred tax movements in the period.

The net deferred tax liability is expected to decrease post year end. This relates to the origination of new timing differences on tangible fixed assets.

 

MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 30 -
19
RETIREMENT BENEFIT SCHEMES
2024
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
81,415
53,348

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

20
SHARE CAPITAL
2024
2022
2024
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
10,000
10,000
10,000
10,000
21
CAPITAL CONTRIBUTION RESERVE

In the period ended 30 June 2024, the company received a capital contribution of £200,000 from its shareholder. This amount was recognized as part of the company’s share capital and was used to fund general operational activities and strengthen the company’s capital base.

22
OPERATING LEASE COMMITMENTS
As lessee

 

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2022
£
£
Within 1 year
-
0
2,671
Years 2-5
-
0
4,073
-
0
6,744
MICHAEL JEFFERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2024
- 31 -
23
RELATED PARTY TRANSACTIONS
Transactions with related parties

The company was under the control of Mr M Jeffery, the director and shareholder.

Commercial rent of £98,461 (2022 - £138,000) was paid by the company to the director Mr M Jeffery in the year.

The director has provided personal guarantees on the companies borrowings.

24
DIRECTORS' TRANSACTIONS
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Mr M F Jeffery - Loan
-
382,340
1,192,652
(865,167)
709,825
382,340
1,192,652
(865,167)
709,825
25
ANALYSIS OF CHANGES IN NET DEBT
1 January 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
7,402
(5,928)
1,474
Bank overdrafts
(1,356,005)
(252,501)
(1,608,506)
(1,348,603)
(258,429)
(1,607,032)
Borrowings excluding overdrafts
(178,162)
111,469
(66,693)
(1,526,765)
(146,960)
(1,673,725)
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