The Directors present the Strategic report for Nextgear Capital UK Limited and its subsidiaries ('the Group') for the year ended 31 December 2024.
The Group continued developing and growing as a vehicle stock funding business during the year.
The UK new car market saw a second consecutive year of growth, however the growth is not without challenges in the industry, as mandated electric vehicle sales continue to require manufacturers to create demand for electric vehicles, but the demand is not materialising. Fleet vehicles drove the growth primarily, and private sales fell. The Society of Motor Manufacturers and Traders (SMMT) reported 2.0m of new car registrations in 2024, up 2.6% on 2023. Used car transactions grew by 5.5% year over year to 7.6m transactions, The Auto Trader Retail Price Index reported year-to-date used car values dropping 4.1% year-on-year in December 2024.
In addition to industry conditions, the UK Bank of England borrowing rate remains an important factor impacting Group performance. The year began with a UK interest rate of 5.25%, falling to 4.75% by December as inflationary pressures eased.
The Group overall observed an increase in units funded, but a slight decline in average vehicle values funded, year-on-year overall, reflecting the above industry trends. The Group also observed an increase in units settled across the year, however closed the year broadly in line with prior year in terms of net funded units overall.
The Group experienced further inflationary pressure on overheads, particularly labour costs. Restructuring costs were incurred as efforts were made to restructure teams aligning to a more efficient operating model.
Bad debt remained a key focus. Monitoring customers for risk flags and performing regular audits remained key activities undertaken to manage its portfolio. The cost of these activities increase with higher activity levels. Continued challenges in the industry saw overall bad debt costs increase, with a few larger scale events in the year. Further details are presented in note 2, Key Judgements and Estimates.
Profit is deemed satisfactory, albeit the Directors continue to identify ways to improve turnover and profitability in future periods, and anticipate a number of one-off costs in the year to not recur in future periods. Refer to key performance indicators below for detailed performance analysis.
Key performance indicators include Turnover, Operating profit and Operating profit margin, defined as ratio of Operating profit to Turnover, expressed as a percentage.
Turnover increased 3.2%, £0.9m to £28.4m (2023: £27.6m), reflecting increased fee income from curtailments, daily holding charges, and on boarding fees for new customers.
Operating profit retracted overall, 16.6%, £2.6m, generating £13.1m (2023: £15.7m). The decline was in contrast with improved turnover, due to a number of cost challenges. Bad debt costs increased £2.3m to £5.6m (2023: £3.3m) due to increased default events in year. Additionally, inflationary pressures, coupled with heightened operational activities, resulted in increases to core overheads such as rent, rate and salaries. A level of one-off costs were incurred in respect of structural team changes in year.
With these challenges, overall operating profit margin fell to 46% from 57%. Interest charges fell in year by £1.1m to £5.9m (2023: £7.0m) due to decreases in interest rates, resulting in £7.2m Profit before tax (2023: £9.5m).
A non-financial key performance indicator to the business is units funded, representing the number of vehicles the business provided funding for. This increased by 4.4% year on year. Units settled is also monitored, and this increased by 6.3% year on year. Both KPIs combined provides an indication that the business grew in volume terms during the year.
Automotive industry
The Group relies on activity levels in the used car market in the UK. New vehicle production levels have steadily recovered since the impact of the pandemic and Ukraine conflict. SMMT recorded a further year of growth in new car production, with a shift towards fleet and EVs. Used car transactions also increase year-on-year.
Increases in industry activity implies an increased likelihood of demand for forecourt lending. Increasing industry activity can also contribute to more competitive behaviour, which can drive up the risk of defaults, due to dealers taking higher risks, and more new entrants to the market.
Management reviews industry trends and expectations of new and used vehicle volumes, building assumptions into forecasts and forming strategy. Management remain confident of an industry recovery in the medium terms and apply this assumption in developing a strategic response than generates the best return for the business.
Macroeconomic conditions
Economic conditions impact consumer demand for vehicles, used and new. High inflation reduces household disposable income leading to delays in vehicle replacement and less demand for valuation and sale services. Reduced demand leads to dealers holding less stock in anticipation of reduced sales, and less stock for the consumer, which reduces the likelihood of sales. Less demand for vehicles may also reduce demand for vehicle funding and could lead to increased credit risk.
Management monitors new and used car transactions data from industry bodies, internally monitors the data and trends, and engages with customers. Internal sales data such as pricing and valuation trends is tracked. Monitoring future volume levels informs strategy, including product and cost base management.
High inflation impacts costs. The Group continuously reviews processes to identify efficiency and cost savings. Persistently high levels of inflation inevitably intensifies pressure on prices and unavoidable fee increases become increasingly necessary to remain profitable, but this must be balanced with remaining competitive. Inflation also impact interest rates, which impacts cost of borrowing, for the Group.
Competitive risk
Competitive pressure is a continuing risk for the Group, potentially resulting in loss of market share. The Group manages this risk by striving for high-quality customer service, continued investment into products and systems, and obtaining and retaining customers through strong relationship management.
For Financial risk management information please refer to the directors report on page 4.
Approved by the Board of Directors and signed on behalf of the board
The Directors present their Annual report and financial statements for the year ended 31 December 2024.
The Group has a branch as defined in section 1046 (3) of the Companies Act, outside of the United Kingdom, based in the Republic of Ireland.
The results for the year are set out on page 11.
No ordinary dividends were paid (2023: £nil). 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:
Treasury operations are subject to overarching policies designed to mitigate financial risk to sufficiently acceptable levels. Treasury operations and credit risk are centrally managed in the UK and Europe, along with treasury affairs in related company Manheim Global Management UK Limited and its subsidiaries. Financing is made available from a fellow Cox group company and the Group is part of central management of cash flows across the UK & Europe. A £10m overdraft facility is part of the cash pooling arrangement provided by Barclays and is repayable on demand.
The Group operates on a securitised lending basis and holds positive cash reserves. The risk of insufficient funds occurring is deemed low given the availability of cash reserves and security in the event of defaults. There is limited exposure to exchange rates risk as the majority of operations are UK based. Interest rate risk is deemed low as loans are repayable on demand and attract a low margin of interest on an acceptable benchmark rate.
The Group operates a securitised stock funding facility with Royal Bank of Canada available until 5 June 2026 and more than 12 months from the date of signing this Annual report.
There are no events after the balance sheet reporting date that impact the financial statements at 31 December 2024.
The Directors intend to continue to identify and implement operational efficiencies, improve profitability and ultimately will continue to grow market share and customer base.
The auditor, Deloitte LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
In their assessment of going concern for Nextgear Capital UK Limited and its subsidiaries ('NGC'), the Directors have considered:
the current capital structure and liquidity of the Group and the ability of the Group to continue to service its creditors as they fall due from the cash and on-demand deposits held alongside available committed facilities;
the cash flow forecasts prepared for the period to 31 July 2026;
the principal risks facing the Group and its systems of risk mitigation and controls.
The ultimate parent company of the Group is Cox Enterprises Incorporated ('CAI') which in turn is the ultimate parent company of fellow UK subsidiary, Manheim Global Management UK Limited ('MGMUK').
MGMUK operates a centralised treasury function for all UK based CAI subsidiaries, including NGC. This means cash balances are pooled daily into a central account held at Barclays Bank Plc, with a facility limit of £10.0m repayable on demand. In line with intercompany agreements, NGC is able to draw down on the facility as required. MGMUK is funded via long-term capital on share premiums issued.
NGC operates a securitisation facility provided by the Royal Bank of Canada, providing funding facilities of up to £150.0m with a sub limit of €72.0m (c. £62.6m) for Euro currency borrowing, expiring on 5 June 2026. The facility is utilised to operate the NGC business model. Management additionally obtained a letter of support from parent company Cox Enterprises, Inc. covering a period until renewal of the facility, whereby it will ensure the Company meets its liabilities as they fall due. Management performed an assessment of the ability of Cox Enterprises, Inc. to provide the letter of support and concluded it to be reliable.
In assessment of the cash flow forecasts for NGC, the Directors note:
NGC maintains positive cash positions throughout the period under assessment with a steady increase forecast over the term, peaking in January 2026.
Intercompany positions with MGMUK remain low level and below £10.0m and generally remain a debtor.
No utilisation of Group funding is required across the term of the model.
Largely, cash flows are driven by turnover built into the forecasts, offset by cost control, maintaining a suitable margin throughout the term.
The securitisation facility is drawn from during the term in line with volumes, but utilisation remains within limits.
Refer to the Principal risks and uncertainties section of the Strategic Report in this Annual Report and Financial Statements for details of the principal risks and uncertainties management considered when applying assumptions to the forecasts. Management deems the controls and mitigations sufficient to support the overall forecast model.
Overall, the Directors are satisfied that the Group retains sufficient committed funding and cash resources to meet its liabilities as they fall due to for at least 12 months from the date of signing this Annual Report and Financial Statements and therefore adopting the going concern assumption remains appropriate.
In our opinion the financial statements of NextGear Capital UK Limited (the ‘parent company’) and its subsidiaries (the ‘group’):
give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2024 and of the group’s profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
the group statement of comprehensive income;
the group and company balance sheets;
the group and company statements of changes in equity;
the group statement of cash flows; and
the related notes 1 to 23.
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
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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
As a result of performing the above, we identified the greatest potential for in the following area, and our procedures performed to address it are described below:
Trade receivables provision includes assumptions and methodology requiring significant management judgement and involves complex calculations, and therefore there is potential for management bias. In response, we:
involved our loan loss provision specialists to support our audit of the assumptions and methodology; and
reviewed level of historical and post year end write offs for contradictory evidence.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.
In addition to the above, our procedures to respond to the risks identified included the following:
reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
enquiring of management, external legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and
reading minutes of meetings of those charged with governance.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and of the parent company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 17 to 30 form part of these financial statements.
The notes on pages 17 to 30 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own statement of comprehensive income and related notes. The company’s profit for the year was £5,910,864 (2023 - £8,969,690 profit).
Nextgear Capital UK Limited (“the company”) is a private company limited by shares domiciled and incorporated in the United Kingdom under the Companies Act 2006 and registered in England and Wales. The registered office is Nextgear House, Kingsfield Court, Chester Business Park, Chester, United Kingdom, CH4 9RE.
The group consists of Nextgear Capital UK Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Nextgear Capital UK Limited together with all entities controlled by the parent company (its subsidiaries) and the Group’s share of its interests in joint ventures and associates.
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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the Directors have a reasonable expectation that the group has adequate resources to continue in operational existence at least 12 months from the date of signing the financial statements. Thus the Directors continue to adopt the going concern basis of accounting in preparing the financial statements. For further details on how management reached this conclusion, refer to the Directors Report.
Turnover is stated net of VAT and discounts and is recognised when the significant risks and rewards are considered to have transferred to the buyer. Turnover from the supply of services represents the value of services provided under contracts to the extent there is a right to consideration and is recorded at the fair value of the consideration received or receivable. Turnover is primarily generated from interest on funding lines and ad-hoc fees for various services related to stock funding activity.
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.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's 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 assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
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 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 Company has considered areas of judgement and sources of estimation uncertainty that have the most significant effect on the amounts recognised in the financial statements.
Management consider there to be no areas of judgement to the business.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Management judgement is required in determination of the level of provision for doubtful debts required to be held against its trade debtors.
There is uncertainty due to the estimated recoverability of trade debtors, due to the nature of the funding the Company provides to vehicle dealers at the more challenging end of the scale of credit worthiness. Whilst management endeavours to only agree funding subject to credit checks and financial assessments that would deem it recoverable, there will always be possibilities of exceptions resulting in debt write-offs. The provision represents managements best estimate of recoverability overall, along with any specific provisions required.
The value of trade debtors net of provision is included within note 12.
The Group makes provisions for the potential future losses resulting from dealers defaulting on the units held on their stocking plans.
Management reviews its portfolio of customer debtors for recoverability on a monthly basis. This includes reviewing trading behaviour and financial performance of customers to identify indicators of future cash flow challenges.
When assessing recoverability, customers are categorised based on numerous risk factors deemed to be a reliable predictor of future payment performance. Examples driving up risk scores include arrears positions and poor audit scores.
Provision percentages recognised are based on the various debtors categories. For example, debtors where a 'loss event' occurred, are categorised as 'forbearance' and a specific percentage based on knowledge of recoverability is applied to this category. Management have significant experience in risk management associated with defaults and delinquencies and the factors which impact the recoverability of each category of debtor. Additionally, management notes debtor recoverability as sensitive, as a single dealer default can result in a large change in required provision.
Management have reviewed the bad debt provision estimates and risk factor considerations in 2024. This has resulted in extending the period for assessment for bad debt and the provision for doubtful debt as a proportion of trade debtors reducing to 0.99% (2023: 1.6%). The general provision as a percentage of debtors reflects management assessment of risk indicators at the balance sheet date and historic experiences with debt recovery. Management notes an increase from 0.99% to 2.0% would lead to a change of £1.4m in provision for doubtful debt.
The average monthly number of persons (including directors) employed by the Group and Company during the year was:
Their aggregate remuneration comprised:
During the year, one Director has been remunerated specifically for their services as a Director of Nextgear Capital UK Limited, the amounts paid were £253k. The other directors were remunerated in total for their services across the Cox Automotive, Inc group of subsidiaries where directorships are held. It is not deemed practical therefore to allocate this between services provided to each company and group. No recharges have occurred for remuneration the Directors' received for their services in the current or prior year.
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:
Factors affecting tax charge in future years
The standard rate of UK Corporation Tax applied to reported profit is 25% (2023: 23.5% blended rate), being the rate substantively enacted in Finance Act 2020 on 24 May 2021 with effect from 1 April 2023. All deferred tax balances as at 31 December 2024 have been calculated at 25% (2023: 25%).
Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions the Company’s Ultimate Parent Entity (“UPE”), Cox Enterprises, Inc., operates, including the UK. The legislation will be effective for the UPE’s fiscal year beginning 1 January 2024. The UPE is in scope of the enacted or substantively enacted legislation and has assessed an immaterial impact as of 31 December 2024.
The UPE will disclose known or reasonably estimable information that helps users of financial statements to understand its exposure to Pillar Two corporation taxes in the UPE’s annual consolidated financial statements in which the Pillar Two legislation has been enacted or substantially enacted and will disclose separately corporation tax expense/credit related to Pillar Two corporation taxes when effective and applicable.
Due to the short-term nature of the financial assets included in this note they are held at undiscounted cost, are repayable on demand and are unsecured. The financial assets include trade debtors and amounts owed by group undertaking.
No interest is charged on the financial assets included in this note.
Due to the short-term nature of the financial liabilities included in this note they are held at undiscounted cost, are unsecured and are repayable on demand. Interest is charged on amounts due to group undertakings at a rate of 1.5% (2023: 1.5%).
Please see note 15 for more detail of the bank loan.
Bank loans and overdrafts include a variable funding notes securitisation facility with the Royal Bank of Canada. The facility is due to expire on 5 June 2026. At the end of the year £111.2m of £150m facility had been utilised. Interest is pegged to SONIA for Sterling borrowing and EURIBOR for Euro borrowing, plus a 2.0% margin.
Refer to note 15 for more details on the borrowing facilities.
The long-term loan balance relates to variable funding notes ('VFNs') issued by Royal Bank of Canada ('RBC') against a debt facility secured by fixed charges over the vehicles for which funding is obtained.
The maximum borrowing facility available to the Group is £150.0m with a sub limit of €72.0m (c. £62.6m) for Euro currency borrowing. The facility limits are currently split £128.5m Sterling currency and €24.7m (c. £21.1m) in Euro currency. Interest is pegged to SONIA for Sterling borrowing and EURIBOR for Euro borrowing, plus a 2.0% margin.
The facility expires on 5 June 2026.
There are concentration limits set for different categories of funding that must be followed to ensure lending remains within risk parameters set by the facility agreement. The facility has limits on default ratios over specific time frames in addition to typical trigger events that could result in a termination of the facility. There are specified limits per dealer on borrowing levels outlined in the overarching facility agreement.
The Group has access to a overdraft facility with a limit of £10.0m repayable on demand, provided by a fellow Cox undertaking, Cox Automotive Global Investments, Inc. At 31 December 2024, no draw downs had been made against this facility, nor do the Directors anticipate drawing down on this facility.
The Group also has access to the cash pooling arrangement with Manheim Global Management UK Limited, which has an overdraft limit of £10m. At 31 December 2024, no amounts were drawn down on this facility.
The following are the major deferred tax liabilities and assets recognised by the Group and Company, and movements thereon:
The deferred tax asset set out above is not expected to reverse within 12 months and predominately relates to the movement in the bad debt provision.
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.
At 31 December 2024, amounts payable for pension contributions were £673 (2023: £3,977).
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:
The remuneration of key management personnel is as follows.
The following amounts were outstanding at the reporting end date: