The directors present the strategic report for the year ended 31 December 2024.
The principal activity of the group is the design, manufacture and sale of cars for motorsport competition entry together with associated on-event support, parts supply and rebuild services.
The group also holds a number of investment properties.
Group turnover totalled £64.8m (2023: £58.8m) with a reported operating profit of £9.5m.
The M-Sport Ford World Rally Team participated in all thirteen rounds of the FIA World Rally Championship (WRC) with Adrien Fourmaux securing five podium finishes behind the wheel of the Ford Puma Hybrid Rally1. In a continued commitment to developing the next generation of rally talent, Grégoire Munster and Mārtiņš Sesks were also given an opportunity to drive the top-specification world rally car.
Success continued in the lower formulas with notable achievements across the UK and Ireland where the Ford Fiesta Rally2 secured the Irish Tarmac Championship, BTRDA Gold Star, Motorsport UK English Championship and the Motorsport UK Asphalt Championship. The Rally2 and Rally1 predecessors also continued to yield success on a global stage, with the Fiesta R5 and RS WRC taking our customers to championship success in Turkey, Slovakia, Canada and Iceland.
M-Sport Poland also continued to develop a clear route into the sport with the continuation of the FIA Junior WRC Championship and the newly formed ERC Fiesta Rally3 Trophy. Each championship utilised the ever-popular Ford Fiesta Rally3 and strengthened the company’s commitment to future generations by discovering and developing future rallying talent.
The UK based rally raid team completed its first Dakar Rally at the start of the year, learning much about the complexities of the legendary event before embarking on a year-long program of testing and development in the evolution of the new Ford Raptor T1+ ahead of next year’s entry.
The Group's operations expose it to a variety of financial risks that include the effects of credit risk, liquidity risk, currency risk and interest rate risk.
The Group has a risk management programme in place which seeks to limit the adverse effects on financial performance by monitoring levels of debt finance and related finance costs.
Given the size of the Group, the directors have not delegated the responsibility of monitoring financial risk to a subcommittee of the board. The policies set by the board of directors are implemented by the company’s finance department.
The Group manages currency risk by matching same-currency customer receipts to supplier payments where possible. Additional requirements are covered by a combination of spot and forward transactions on the currency markets.
More than half of the group’s debt is lent on a fixed rate. The group does not use derivative financial instruments to manage interest rate costs and no hedge accounting is applied.
The Group operates principally in the motorsport sector which is regulated by the FIA. Changes in the regulations can result in additional costs to the company for its products to remain approved. The company liaises closely with industry regulators to manage this risk.
As directors of the Group, we have and continue to act in a way that we consider, in good faith, to be most likely to promote the continuing success of the company for the benefit of its members, and in doing so had regard, amongst other matters, to the:
likely consequences of any decisions in the long term;
interests of the Group’s employees;
need to foster the Group’s business relationships with suppliers, customers and others;
impact of the Group’s operations on the community and the environment;
desirability of the Group maintaining a reputation for high standards of business conduct; and
need to act fairly between members of the wider Group.
The following are some examples as to how we have had regard to the matters set out within sections 172(1)(a)-(f) when discharging our section 172 duties:
Our key strategic objective remains to build a sustainable business, for the benefit of current and future generations, whether that is in the form of employees, customers, suppliers, the community and environment. For this to be achieved, our management of the company involves us taking both decisions for the present and future benefit of the business. We work within the business on a daily basis, so key internal and external relationships are maintained directly, and employees, suppliers and customers have appropriate access to us. We also ensure there is a wider understanding of the company’s key strategic objectives, through distilling the key messages through our management teams within the business.
The Group’s employees are critical to the continued success of the business and it is key we effectively engage with them. Examples of how we do this include:
Offering employees the opportunity for further professional and career development through relevant training courses and qualifications;
Having appropriate private channels of communication in place that employees are comfortable using.
Our core aspiration is to develop our continuous improvement plans across the company promoting a strong and sustainable business. We cannot achieve this without having strong relationships with both our suppliers and customers. We foster these business relationships through utilising some of the following practices:
Maintaining strong relationships through regular contact with our key suppliers;
Encouraging our customers and suppliers to raise any issues or concerns they have over their relationship with the company; and
Offering dedicated points of contact within our team to promote the building of long-term business relationships with our customers.
We are committed to supporting the communities that we work in and being environmentally responsible. To this end, the company has formal policies regarding Corporate Social Responsibility and the Environment.
We are also committed to conducting our business in an ethical manner, in accordance with the formal policy laid out by the company. This policy encapsulates our commitment to ensure the highest standard of ethical conduct in the way we conduct business.
These principles are integrated into the Group’s business culture and the way we operate.
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 13.
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 finances its activities with a combination of bank loans, finance leases, cash and short term deposits. Other financial assets and liabilities, such as trade debtors and trade creditors, arise directly from the group's operating activities. The group also enters into derivative transactions, including forward currency contracts. The purpose is to manage the interest rate and currency risks arising from the group's operations and its sources of finance.
Price risk
Price risk is the risk that changes in raw material prices have the potential to impact on the profitability of the group. The group does not consider that it is materially exposed to price risk.
Credit risk
Credit risk is the risk that one party of a financial instrument will cause a financial loss for the other party by failing to discharge its obligation. Group policies are aimed at minimising such losses and require customers to satisfy credit worthiness procedures prior to acceptance of contracts. The group does not consider that it is materially exposed to credit risk.
Cash flow and liquidity risk
Cash flow and liquidity risk is the risk that a group's available cash will not be sufficient to meet its financial obligations. The group actively manages is cash flow position including collection of debts and timely payment of creditors. This, coupled with the strong cash position of the group is deemed sufficient to minimise the group's exposure to cash flow and liquidity risk.
Foreign exchange risk
Foreign exchange risk refers to the potential for loss from exposure to foreign exchange rate fluctuations. Group policies are aimed at minimising this risk. The group does not consider that it is materially exposed to foreign exchange risk.
See disclosures in the Strategic Report in respect of the financial risk management of the group.
The group incurs significant research and development expenditure during the development of rally and other motorsport vehicles for competition entry.
All research and development expenditure is charged to the Group Profit and Loss Account in the period incurred. Expenditure incurred during the year amounted to £12,105,742 (2023 - £11,054,451).
The directors have identified customers, employees, suppliers, investors and government as being key stakeholders.
Customers
Importance: Understanding our customers' needs allows us to deliver relevant procedures and services, retain
customers, and attract new ones.
Ways to Engage: Account management relationships, regular communications and technical
updates, social media and website.
Stakeholders' Interests: Reliability and competitiveness of cars and parts, availability of replacement parts, availability of rebuild and on-event support services.
Outcomes in 2024: M-Sport Customers secured regional championships in the UK, Ireland, Turkey, Slovakia, Canada and Iceland.
Employees
Importance: Our staff are fundamental to our product and service delivery.
Ways to Engage: Recognition and reward, training, involvement in competition at national, regional and international levels.
Stakeholders' Interests: Career opportunities, pay and conditions, training and development.
Outcomes in 2024: Continuation of a dedicated work culture team with regular meetings to organise a variety of social events, competitions, and activities.
Suppliers
Importance: Suppliers provide the necessary products and services to ensure the business runs efficiently.
Ways to Engage: Regular meetings and other communication.
Stakeholders' Interests: Sales of product and services, improved product profile by association, prompt payment .
Outcomes in 2024: Increased purchases from suppliers to support key motorsport programs.
Investors
Importance: Investors expect capital growth on their investment.
Ways to Engage: Monthly reporting management accounts.
Stakeholders' Interests: Capital growth.
Outcomes in 2024: Group shareholders' funds increased by £8.8m.
Government
Importance: Policies and regulatory changes may provide opportunities or pose risks to our operations.
Ways to Engage: Submission of returns.
Stakeholders' Interests: Compliance with laws and regulations.
Outcomes in 2024: Tax returns submitted on time.
The rally raid team will debut the Ford Raptor T1+ at the 2025 Dakar Rally in January before contesting the full FIA World Rally Raid Championship. Work will commence on the development of the Ford Raptor T1+ Evo ahead of the 2026 Dakar Rally.
The rally team will continue their lengthy presence in the FIA World Rally Championship, running campaigns at the top level as well as contesting WRC2 with last year’s FIA Junior WRC Champion, Romet Jürgenson. The rally team will also contest the British and European Rally Championships.
This section includes our mandatory reporting of energy and greenhouse gas emissions for the period 1 January 2024 to 31 December 2024, pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, implementing the government’s Streamlined Energy and Carbon Reporting (SECR) policy.
Our methodology to calculate our greenhouse gas emissions is based on the 'Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance (March 2019)’, using DESNZ's 2023 and 2024 conversion factors as appropriate. In some cases, consumption has been extrapolated from available data or direct comparison made to a comparable period.
We report using a financial control approach to define our organisational boundary. We have reported all material emission sources required by the regulations for which we deem ourselves to be responsible and have maintained records of all source data and calculations.
During the reporting period, no energy efficiency actions have been taken. The table below includes total energy consumption (reported as kWh) and greenhouse gas emissions for the sources required by the regulations, along with our intensity ratio.
Mandatory SECR Reporting Figures | 2024 | 2023 |
Total Energy Consumption – Used for Emissions Calculation (kWh) | 5,628,861 | 5,082,580 |
|
|
|
Gas & Oil Combustion Emissions, Scope 1 (tCO2e) | 208 | 244 |
Purchased Electricity Emissions, Scope 2 (tCO2e) | 301 | 253 |
Vehicle Fuel Combustion Emissions, Scope 1 (tCO2e) | 767 | 668 |
Vehicle Fuel Combustion Emissions, Scope 3 (tCO2e) | 0.8 | 0.4 |
|
|
|
Total Gross Reported Emissions (tCO2e) | 1,277 | 1,166 |
|
|
|
Turnover (£m) | 64.8 | 58.8 |
|
|
|
Intensity Ratio: Turnover (tCO2e / £m) | 19.7 | 19.8 |
To reflect our energy generation, dual reporting for scope 2 electricity emissions has been calculated. This utilises emission factors in line with the market-based scope 2 data hierarchy, from the ‘GHG Protocol Scope 2 Guidance’. The majority of market-based emission factors do not incorporate non-CO2 emissions, figures impacted by this have been identified with *.
Additional Dual Reporting SECR Figures | 2024 | 2023 |
Total Energy Consumption – Used for Emissions Calculation (kWh) | 5,628,861 | 5,082,580 |
|
|
|
Gas & Oil Combustion Emissions, Scope 1 (tCO2e) | 208 | 244 |
Purchased Electricity Emissions, Scope 2 (tCO2e) (Market-based) | 430* | 202* |
Vehicle Fuel Combustion Emissions, Scope 1 (tCO2e) | 767 | 668 |
Vehicle Fuel Combustion Emissions, Scope 3 (tCO2e) | 0.8 | 0.4 |
|
|
|
Total Gross Reported Emissions (tCO2e) | 1,406* | 1,114* |
|
|
|
Turnover (£m) | 64.8 | 58.8 |
|
|
|
Intensity Ratio: Turnover (tCO2e / £m) (Market-based) | 21.7 | 18.9 |
We have audited the financial statements of M-Sport Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, 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.
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.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company, focusing 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 most relevant frameworks we identified include:
Companies Act 2006;
Health and Safety;
Employment Law (including the Working Time Directive);
FIA Regulations;
UK Corporate Tax Legislation; and
UK Generally Accepted Accounting Practice
We gained an understanding of how the group and the parent company are complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns and board meeting minutes.
We assessed the susceptibility of the group’s and parent company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
Management override of controls
Revenue Recognition
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;
Performing audit work procedures over the occurrence and cut-off of non-contract revenue including reconciling sales to cash remittances, evidence of cash received and the sales ledger as well as performing appropriate sales cut-off procedures;
Performing audit work procedures over the accuracy and cut-off of contract based revenue, agreeing revenue recognised within the year to cash receipt and signed contracts to ensure accuracy of income recognised and that the income was cut-off correctly;
Completion of appropriate checklists and use of our experience to assess the group’s and parent company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed 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 are to become aware of it.
This report is made solely to the parent 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 parent 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 parent company and the parent 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 £2,066,037 (2023 - £2,559,073 profit).
M-Sport Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Dovenby Hall, Dovenby, Cockermouth, Cumbria, CA13 0PN.
The group consists of M-Sport Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and some tangible assets 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’ and Section 12 ‘Other Financial Instrument Issues: 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; and
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel and disclosure of related party transactions with members of the same group that are wholly owned.
The consolidated group financial statements consist of the financial statements of the parent company M-Sport 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.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover is split into three categories: Rally income, Services income and Royalty income. Rally income is recognised in line with the world rally race schedule events. Service income is recognised once the service has been provided to the customer and Royalty income is recognised on a receivable basis.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Freehold land is not depreciated.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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 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 and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the 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.
Rental income from operating leases 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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
The group has made an assumption of writing down the value of stock on items in which they expect the cost to exceed the net realisable value before it is fully sold/utilised. This assumption has involved reviewing the historic sales patterns and expected sales in future years.
A stock provision of value of £18,184,559 (2023: £16,257,777) is held across the group at year end.
The carrying value of the investment property and freehold property is subject to review of the market value of the properties by the directors. The value is assessed on an annual basis by the directors. Any changes in the market value of the properties is realised in the profit and loss account for the investment property and revaluation reserve for the freehold property.
Total investment property of value of £14,109,007 (2023: £13,799,007) is held across the group at year end.
The average monthly number of persons (including directors) employed by the group during the year was:
Their aggregate remuneration comprised:
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:
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
Group
Included within the net book value of land and buildings is £30,442,675 (2023 - £29,841,330) in respect of freehold land and buildings.
The fair value of the company's freehold property was revalued on 31 December 2024 by an independent valuer. The directors are satisfied that there have been no changes in the period since this valuation which would materially alter the valuation.
The fair value of the freehold property in the company's subsidiary, M Sport Poland Sp.z.o.o, was revalued by an independent valuer at 31 December 2024, by reference to movements in the Polish real estate price indices and valuations of similar properties. The directors are satisfied that there have been no changes in the period since this valuation which would materially alter the valuation.
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £26,529,940(2023 - £26,364,571).
Company
Included within the net book value of land and buildings is £25,207,376 (2023 - £25,776,097) in respect of freehold land and buildings.
The fair value of the company's freehold property was revalued on 31 December 2024 by an independent valuer. The directors are satisfied that there have been no changes in the period since this valuation which would materially alter the valuation.
Had this class of asset been measured on a historical cost basis, the carrying amount would have been £22,737,248 (2023 - £23,079,099).
Investment properties have been valued at fair value based on either valuations performed by independent qualified professional valuers or valuations made by directors on an open market value for existing use basis. Changes in fair value are recognised in the OCI.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Details of associates at 31 December 2024 are as follows:
The balance above is net of provisions of £18,184,559 (2023: £16,257,777).
Amounts owed by group undertakings in the parent company are repayable on demand. Interest is charged at 5% per annum.
Included within Corporation tax recoverable are non-current amounts of £588,676 (2023 - £685,247).
There are two government grants, both disclosed as liabilities on the balance sheet and no income has been recognised from either grant.
Grant 1: £1,192,602 from BEIS under the regional growth fund, "to help implement the project to build an evaluation centre and a test track facility". The conditions attached to this funding relate to employment targets. Specifically, to create 101 new jobs, safeguard 75 existing full-time jobs and safeguard 41 full-time construction jobs, which is not being met. As at the balance sheet date, a proportion of this is now due to be repaid within one year.
Grant 2: £979,316 from Cumbria County Council under the Local Enterprise Growth Deal programme to ensure that part of the evaluation centre facility is available for use by other companies on a commercial basis for R&D purposes. As at the balance sheet date, this is classified as falling due after more than one year.
The bank loan is subject to interest at 1.75% plus base rate per annum and is repayable over 5 years by monthly instalments, with the final instalment due December 2029. The bank loan is secured via a fixed and floating charge over the assets of the company and its subsidiary, M-Sport UK Limited.
The other loan is subject to interest at 2% per annum and all interest and capital is due for repayment in one instalment on 30 September 2027.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
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 £54,469 (2023 - £49,310) were payable to the scheme at the end of the year and are included in creditors.
The share capital account records the nominal value of shares issued. The ordinary shares carry equal voting rights and no right to fixed income.
The revaluation reserve comprises fair value gains or losses on freehold property recognised through other comprehensive income.
The profit and loss reserve includes all current and prior period retained profits and losses.
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 operating leases represent leases of investment properties to third parties. The leases are negotiated over terms of 6 months to 5 years.There are no options in place for either party to extend the lease terms.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Amounts contracted for but not provided in the financial statements:
During the year, the company made sales of £1,217,978 (2023: £2,410,810) to, purchases of £1,285,536 (2023: £1,830,116) and charged interest of £1,035,102 (2023: £965,758) to M-Sport UK Limited, a subsidiary of the company. At the balance sheet date, the company is owed £23,057,223 (2023: £20,582,225) by M-Sport UK Limited and is included within creditors.
During the year, the company made purchases of £nil (2023: £nil) relating to travel costs from Chapman Carter Travel Limited, an associate of the company. At the balance sheet date, there is a creditor of £nil (2023: £nil) relating to these purchases. The company also received dividends of £nil (2023: £27,428) and interest of £nil (2023: £10,463). At the balance sheet date, a balance of £nil (2023: £nil) is outstanding and included in debtors.
At the balance sheet date, a balance of £5,200,000 (2023: £5,200,000) is due to MEMW Management Limited, a company where M I Wilson, M J Wilson and E Wilson are also directors. Interest of £104,000 (2023: £104,767) was charged on the loan and at the year-end, £980,734 (2023: £876,734) of unpaid interest is included in accruals.
During the year, the company recharged expenses of £nil (2023: £nil) to MJW Adapt Limited, a company with common directors.
During the year, the company recharged costs of £61,719 (2023: £1,146), were recharged costs of £nil (2023: £nil) and charged rent of £nil (2023: nil) by M I Wilson, a director of the company. At the balance sheet date, £1,115 (2023: £1,019) is owed by M I Wilson and is included in debtors.
During the year, the company recharged costs of £64 (2023: £nil) and were recharged costs of £nil (2023: £nil) by M J Wilson, a director of the company. At the balance sheet date, £77 (2023: £nil) is owed by M J Wilson and is included in debtors.
During the year, the company recharged costs of £40 (2023: £nil) and were recharged costs of £nil (2023: £nil) by E Wilson, a director of the company. At the balance sheet date £nil (2023: £nil) is owed by E Wilson and is included in debtors.