The directors present the strategic report for the year ended 31 December 2024.
The results for the year which are set out in the profit and loss account show turnover of £155,448,033 (2023 - £143,898,383) and an operating profit of £1,943,311 (2023 - £2,320,337). On 31 December 2024 the group had net assets of £9,773,376 (2023 – £9,354,854). The directors consider the performance for the year and the financial position at the year-end to be satisfactory.
Despite an evolving motor retailing environment to include Government intervention on sales mix with enforced Electric Vehicle targeting leading to a declining market, the directors are pleased to report that the company saw improvements in various areas across its businesses.
In addition, the business had to navigate inflationary cost pressures, a continued high-interest rate environment and a mid-year General Election, which it did through the implementation of various strategic initiatives in order to streamline the business and promote operational efficiency.
Furthermore, the business continued to invest in its facilities by completing the refurbishment of its KIA sites in accordance with the new Global Store Concept corporate identity scheme, carrying out a substantial refurbishment of the tri-brand site in Bolton, and commencing the construction of a brand-new, purpose built, multi-million-pound KIA dealership on a 2-acre site in Boston.
Additionally the group grew its portfolio of franchise partners in order to retain market share within its established territories, adding Peugeot, KGM and new entrant, Omoda and Jaecoo. The relationship with Maxus was terminated at the end of the year.
The group’s key financial and other performance indicators during the year were as follows:
2024 2023
Gross margin 10.9% 10.5%
Operating profit/(loss) £1,943,311 £2,320,337
The management of the operations and the nature of the group’s strategy are subject to a number of risks. The directors have set out below the principal risks facing the business.
Manufacturers supply of new and improved vehicles
The group is reliant on new vehicle products from the manufacturer. This exposes the group to risks in a number of areas as the company is dependent on its manufacturer/suppliers in respect of availability of new vehicle products, quality of new vehicle products and the pricing of new vehicle products. This is particularly relevant given the growth in electric vehicle (EV) sales and the UK Government’s ZEV mandate with BEV targets increasing to 80% of vehicles from 2030.
The directors are confident that future new products from its manufacturer/suppliers will continue to be competitively priced and high quality and therefore consider that this “manufacturer risk” is minimal. The directors also mitigate this by maximizing the used vehicle operations and aftersales opportunities.
Economic downturn
The directors believe that the continued uncertainty around the current cost of living crisis could have a detrimental impact on consumer disposable incomes and the propensity to change vehicles, but are satisfied that the group is resilient, focused and well-funded, and customer demand for our product remains stable.
Furthermore, senior management aim to keep abreast of economic conditions and react accordingly. In cases of severe economic downturn, marketing and pricing strategies, and cost controls are modified to reflect the new market conditions.
Development and performance
The strategy remains as previous years to build on the current position established by the group, together with a strong manufacturer brand nationally. This strategy is based largely on well-established models within its range, and the development of new models yet to be launched, including electric and hybrid variants in line with the market trend.
Market Conditions
New battery EV sales growth is slowing resulting in the area of greatest volatility; given Government mandated targets are set to increase on manufacturer emission quotas there is risk the industry falls short of these targets with the threat of fines being imposed upon manufacturers for missing them. The current and future product ranges of the franchise, however, is well represented and demand for used vehicles remains good, so should allow the company to meet its market share requirements and retain margin. The wider economy, whilst improving remains uncertain, the directors believe the company’s reputation in the local market, its product range and high level of customer service is well placed to take advantage of economic growth as it returns.
FCA Compliance
The FCA carried out an investigation into the possible non-disclosure of commissions earnt from introducing finance to customers. The UK Supreme Court recently ruled that whilst car finance commissions were not inherently unlawful the way they were disclosed by dealers could still lead to an unfair relationship with the customer under the Consumer Credit Act. The FCA is now rolling out a compensation scheme for affected customers. We are regulated by the FCA and act as brokers to facilitate credit in relation to vehicle sales. The directors believe that the recourse will be to the finance companies and not the business and that the group has acted lawfully in relation to credit broking during this period.
The strategy remains as previous years to build on the current position established by the group, together with a strong manufacturer brand nationally. This strategy is based largely on well-established models within its range, and the development of new models yet to be launched, including electric and hybrid variants in line with the market trend.
Non-financial key performance indicators are new and used vehicle units, and retail service hours sold, which were:
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| 2024 |
| 2023 |
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New units |
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| 2,757 |
| 2,824 |
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Used units |
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| 5,516 |
| 5,025 |
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Retail Service Hours |
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| 44,229 |
| 44,314 | |
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Property Investments held |
| 3 |
| 2 | ||
In 2018 the Companies (Miscellaneous Reporting) Regulations introduced a requirement for companies to publish a statement describing how the directors have had regard to the matters set out in section 172(1)(a) to (f) of the Companies Act 2006.
Section 172(1)(a) to (f) requires each director to act in a way he or she considered would be most likely promote the success of the group for the benefit of its members as a whole, with regard to the following matters:
a. The likely consequences of any decision in the long term.
The group's Board of Directors bring a wide range of experience which is collectively responsible for promoting the long-term success of the group. The directors actively promote the group purpose through active roles within each operation and through management of the portfolio of investments.
The directors actively promote the group purpose of ‘driving excellence’ in everything it does, along with a family-like ethos and a strong focus on its core values in driving excellence for its customers, employees and stakeholders
b. The interest of the group’s employees.
The management team encourage engagement from its employees via its intranet and social media channels. In driving excellence for its employees, the group encourages its employees to actively pursue opportunities for personal development and career progression with their support; promote a culture of inclusion and diversity; reward success and have the ability to make a difference.
The group undertakes an annual awards evening to celebrate and recognize exceptional employee performances. In addition, it undertakes various activities and operates forums and surveys to foster participation in group events, invite opinions, questions, and ideas
The directors recently carried out a group wide employee satisfaction survey using Net Promoter Score (NPS) scoring metrics, which showed a positive result year on year.
c. The need to foster the group’s business relationships with suppliers, customers and others.
The directors consider that its relationships with stakeholders key to the business’s success, ensuring that all business relationships are based upon trust and conducted in a professional manner.
Suppliers are paid regularly through a process of statement reconciliation and monthly BACS payments in accordance with terms.
The directors have published all statutory documents on the company website, including details of policies regarding Data Protection and Modern Slavery.
Driving Excellence is actively promoted throughout the business, with a strong focus around its core values relating to its customers, employees and stakeholders.
Customers are surveyed throughout all areas of the business, with reports shared weekly with the customer care and management team, so that any concerns can be identified and rectified immediately when they arise.
Employees throughout the businesses are rewarded for providing great customer service, and results show an overall customer satisfaction rate of around 98%.
d. The impact of the group’s operations on the community and the environment.
The group actively seeks to support the communities that are local to the trading operations. During the year examples would be the sponsorship of local sporting teams, donations to local charitable events, and allowing employee engagement to spend time working for local good causes and events.
The group is committed to continuing a green programme converting aged and high energy use equipment, such as heating and LED lighting.
In addition, the directors are extremely pleased to have achieved ‘best in class’ energy credentials at the group’s new KIA development in Boston.
e. The desirability of the group maintaining a reputation for high standards of business conduct
The group actively promotes its core values of driving excellence for its customers (through its expertise, integrity and family like care), its colleagues (through respect, collaboration and opportunity), and its stakeholders (through professionalism and consistent performance). Demonstration of any of the core values is actively encouraged and recognised by management.
As part of the formal induction process, every new starter is walked through the core values by the Group Managing Director.
The directors are proud to have multiple award-winning businesses within the group, judged by both its peers and its customers.
f. The need to act fairly as between members of the group
As a board of directors, our intention is to behave responsibly towards all our stakeholders and treat them fairly and equally, so they too may benefit from the success of our business. All key stakeholders meet on a regular basis to ensure shareholder views are fairly represented in key decisions.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group uses various financial instruments which include bank, financial institution and stock loans, cash and various items such as trade debtors and trade creditors that arise directly from operations. The main purpose of these financial instruments is to raise finance for the groups operations. Their existence exposes the group to a number of financial risks.
The main risks arising from the groups financial instruments are liquidity risk, interest rate risk and credit risk. The directors review and agree policies for managing each of these risks which are summarised below.
The group seeks to manage risk by ensuring sufficient liquidity is available to meet foreseeable needs to invest cash assets safely and profitably.
The group's policy throughout the year has been to achieve this objective through the day to day involvement of management in business decisions rather than through setting maximum or minimum liquidity ratios.
The group finances its operations through a mixture of bank and other external borrowings. The group's exposure to interest rate fluctuations on its borrowings is managed by the use of fixed and floating facilities. The balance sheet includes trade debtors and creditors which do not attract interest and are therefore subject to fair value interest rate risk.
The group policy throughout the year has been to achieve its objective of managing interest rate risk through day to day involvement of management in business decisions rather than through setting maximum or minimum levels for the level of fixed interest rate borrowings.
The group's principal financial assets are cash and trade debtors. The credit risk associated with cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk therefore arises from its trade debtors.
In order to manage credit risk, the directors set credit limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the finance director on a regular basis in conjunction with debt ageing and collection history.
The group's policy is to consult and discuss with employees, through staff committees and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The directors took the decision to terminate its relationship with Maxus and replaced the franchise with a second Omoda & Jaecoo site, adding further scale to a brand with very strong prospects. The directors are looking forward to welcoming new and existing customers to these improved facilities and adding further value to our Drayton Motors and Wilson & Co brands. The previous used car brand of Autohub now operates as a Head Office function for the Group.
The directors continue to actively assess new opportunities that meet the medium-to-long-term strategic objectives of the business. With a strong focus on sustainable growth and expansion in both current and new markets, the business will continue to nurture its relationships with existing brand partners and new partners, including new entrants into the UK marketplace.
In addition, it will continue to re-invest in its current facilities to ensure they deliver a great experience for both employees and customers.
The new purpose-built facility in Boston is on track to be completed in 2025, boasting ‘best in class’ sustainability factors, with a forecast EPC rating of A. Getting as close to ‘net zero’ as possible was a key objective for the directors during the design phase of the development, providing not only a great place to work for its employees, but also one that is committed to a cleaner future.
The audit business of UHY Hacker Young Manchester LLP was acquired by Cooper Parry Group Limited on 30 September 2024. UHY Hacker Young Manchester LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place.
The auditors, Cooper Parry Group Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2024 UK Government’s Conversion Factors for Company Reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m turnover, the recommended ratio for the sector.
We have invested in LED lighting installations where possible and continue to upgrade facilities with LED and sensors where feasible.
We continue to monitor our consumption of electricity and gas through the use of half hourly meter reads under a 3rd party energy management programme.
We have invested in EV charge points during the year and have changed our demonstrator vehicle fleet from ICE to EV, reducing our fuel consumed for owned transport whilst serving increased customer demand.
We recycle our dry waste where possible with our carefully selected suppliers, and carefully select 3rd parties to recycle our hazardous waste collections.
We continue to phase out and replace the gas combustion warm air blowers with electric sourced air conditioning units monitored and temperature controlled across the group where possible.
We have audited the financial statements of RJTK Investments Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Extent to which the audit was considered capable of detecting irregularities including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:
the nature of the industry and sector, control environment and business performance
any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance,
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team and involving relevant internal specialists, including tax, and industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: valuation of used vehicle stocks and recognition of supplier incentives. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks the company and group operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. These included the company's and group's FCA regulatory requirements.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management and those charged with governance concerning actual and potential litigation claims;
in addressing the risk of fraud through inappropriate valuation of used vehicle inventory, assessing net realisable value of stock items sold after the year end was above cost or assessing their value with reference to third party data sources if unsold;
in addressing the risk of fraud through inappropriate recording of supplier incentives, ensuring amounts recorded as due were then subsequently acknowledged as such by the supplier;
in assessing the risk of fraud through management override of controls, testing the appropriateness of journal entries and assessing whether judgements made in making accounting estimates are indicative of potential bias.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,084,201 (2023 - £123,168 profit).
RJTK Investments Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Hewitts Avenue, Hewitts Circus, Humberston, Grimsby, Lincolnshire, DN36 4SE.
The group consists of RJTK Investments Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ : Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company RJTK Investments Ltd together with all entities controlled by the parent company (its subsidiaries.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Sales of motor vehicles, parts and accessories are recognised on the earlier of full payment by, or delivery date to, the customer. Any other manufacturer income in relation to achieving targets is recognised on an accrual basis. Servicing revenue is recognised on the completion of the agreed work.
Rental income is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Investments in subsidiaries are measured at cost less accumulated impairment.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Under supply agreements with vehicle manufacturers, a number of subsidiary companies within the group have access to consignment stock during a consignment period. Where the nature of these supply agreements transfers the risks and rewards to the group, which in substance gives the group control over the stock during the consignment period and liabilities in respect of holding costs, the group recognises these stocks on the balance sheet, together with the corresponding liability. Consignment stock has been included within the financial statements of £5,174,414 (2023 - £4,554,711).
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
In determining the net realisable value of stock, management takes into account the most reliable evidence available at the dates the estimates are made. The group’s core business is continuously subject to technology changes which may cause stock obsolescence. Moreover, future realisation of the carrying amounts of stock is affected by price changes in different market segments. Both aspects are considered key sources of estimation uncertainty and may cause significant adjustments to the group stock within the next financial reporting period.
The group estimates the useful lives of property, plant and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets.
Based on management's assessment as at 31 December 2024, there is no change in estimated useful lives of those assets during the year. Actual results, however, may vary due to changes in estimates brought about by changes in factors mentioned above.
All turnover arose within the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 3).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The fair value of the investment properties has been arrived at by the Directors based on previous valuations carried out by independent valuers, who are not connected with the group. The valuations were made on an open market value basis by reference to market evidence of transaction prices for similar properties.
The directors deem this to be the fair value of the investment properties.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Stock to the value of £12,166,525 (2023 - £10,401,375) is pledged as security for the company's liabilities by virtue of a debenture over all the assets of the group.
Included within stock are consigned vehicles to the sum of £5,174,414 (2023 - £4,554,711). The corresponding liability is included within trade creditors.
Included within trade creditors is vehicle funding amounting to £12,166,525 (2023 - £10,401,375) which is secured over the vehicles to which it relates.
Obligations under finance leases are secured against the assets to which they relate.
Included within other borrowings is the current portion of a loan from Hyundai Capital UK Limited, amounting to £188,258 (2023: £234,565), and is repayable within 5 years with interest charged at 3.80% above base.
Included within other borrowings is the current portion of a loan amounting to £62,768 (2023: £79,964), and is repayable within 5 years, loan is secured over the assets to which it relates.
Obligations under finance leases are secured against the assets to which they relate.
The bank loans and overdrafts are secured by way of a debenture held over all assets of the group, together with a first legal charge over the group's freehold property.
The bank loan is repayable in equal instalments with interest charged on a floating basis with a minimum margin of 2.1%.
Finance lease payments represent rentals payable by the company or group for certain items of plant and equipment & Fixtures and Fittings. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions totalling £52,884 (2023 - £51,959) were payable to the fund at the reporting date.
Includes all current and prior period retained profits and losses, less dividends paid.
The company has entered into a joint agreement with the following companies to guarantee the liabilities of the RJTK Investments Limited Group with Barclays Bank plc:
Wilson & Co. (Motor Sales) Limited
Wilson & Co (KIA) Limited
S. Cropley Limited
Automotive Hub Limited
WCO Properties Limited
At the year-end, the total drawn bank facilities for the group headed up by RJTK Investments Limited were as follows:
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| 2024 |
| 2023 |
|
|
|
|
|
|
|
|
| £ |
| £ |
Loans and overdrafts |
|
|
|
|
|
|
|
| 4,999,999 |
| 5,400,000 |
The company is party to a cross guarantee arrangement with its related subsidiary undertakings in respect of Lombard vehicle stocking loans. The total amounts drawn across the group at 31 December 2024 were £8,947,433 (2023 - £9,192,313).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Amounts contracted for but not provided in the financial statements:
The group has a commitment at the reporting date totalling £226,416 (2023: £358,678) to repurchase vehicles from CBS, at agreed values. The group makes provisions for any vehicles it expects market value to be below repurchase commitment.
At the reporting date legal title had passed to CBS and the group does not have the risks and responsibilities of ownership.
During the year Wilson & Co (Motor Sales) Limited, a subsidiary company, paid Lord Corporate Associates Limited, a company owned and controlled by F Lord, a director of RJTK Investments Ltd, £18,600 (2023 - £18,600) for management services.