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Registered number:
FOR THE YEAR ENDED 31 AUGUST 2024
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LONDON HIRE LIMITED
COMPANY INFORMATION
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LONDON HIRE LIMITED
CONTENTS
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LONDON HIRE LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
The directors present their strategic report for the year ended 31 August 2024.
We continue to explore new opportunities in terms of new products and market places which represent low risk and have clear synergies to the existing business. The directors are pleased that the business is well structured to take advantage of these opportunities.
Key factors affecting the company's ability to deliver growth are the acquisition of vehicles at competitive prices despite a challenging marketplace, maximising disposal proceeds of end of life vehicles and the availability of funding for new vehicle acquisitions. Vehicle disposals remained low in the year as demand and unitisation levels remained high. The group is consistently evaluating opportunities in the supply chain to deliver improved products and services at competitive prices, and this continues to assist with the longer terms plans for growth. In respect of available funding the company utilises a panel of funders, manufacturer supported as well as commercial lenders, which not only assists with reducing the overall costs of finance in comparison to others but also reduces the risk of lenders exiting the market which had been a feature of the sector in the past few years. The group’s passenger services division expanded revenues in the year most notably in its regional operations. Taking advantage of low cost new electric vehicles the group has purchased a considerable number of these and operates them on longer home to school routes where the fuel savings, compared to ICE vehicles, is considerable. This approach has been welcomed by local authority customers as is a key distinguishing feature of its service offering compared to its local competitors. The directors are constantly reviewing their pricing structures which are predominantly predicated on interest and depreciation costs. During this financial year the group specifically reviewed the impact of its increased use of hire purchase and the impact that this has on the results and its depreciation rates. As the nature of the group’s rental income is via long term contracts to customers that is more in line with a straight line model we undertook an analysis of accounting for the interest cost on a straight line basis. The effect of this would be a positive adjustment to the profitability in the year of £450k however this could not be supported via the accounting regulations and has not been processed in these results. The review of the assets lives highlighted that more vehicles are now lasting longer and as such the directors are using the higher end of the useful economic life of 15 years versus a previous 10 years on more vehicles. The directors calculated that this had the effect of increasing the hire fleet net book value by £397k versus a 10 year policy. The Directors are of the opinion that this presents a much more true and fair view of the trading position of the group, especially given the rapid growth in assets for hire, longer lives of the assets and associated debt, incurred in the last few years. Further reviews are expected in the coming years to constantly refine this model and to ensure that pricing is correctly calculated.
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LONDON HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The group continues to review all elements of its operations and the impact of the UK's withdrawal from the European Union. Whilst there is the possibility of higher import duties on vehicles and parts this will be factored into the rental to the customers; most of the customers provide services which are a legal requirement and therefore not subject to cancellation. As a result, the directors still believe this not to be a significant risk.
The group continues to review of the financial impact of COVID-19. All customers affected by the pandemic are now operating in a similar fashion to pre pandemic levels. The group's services have been deemed an essential service, and local authorities will continue to pay for these services for the foreseeable future to ensure service continuity. The group's principal financial instruments comprise bank balances, bank overdrafts, trade creditors, advance rental income, trade debtors, loans and hire purchase finance. The main purpose for these instruments is to raise funds for the group's operations and to finance the group's operations. Due to the nature of the financial instruments used by the group there is no exposure to price risk. The group's approach to managing other risks applicable to the financial instruments concerned is shown below: In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest. The group has purchased assets under hire purchase and finance lease agreements. The interest rate on each agreement and the repayments are both fixed and variable. The group manages the liquidity risk by ensuring there are sufficient funds to meet the payments. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. Trade creditors and advance rentals liquidity risk is managed by ensuring sufficient funds are available to meet amounts should they fall due. All of the above ensure the group regularly monitors its own credit and cash flow risk, ensuring that it stays within its agreed banking facilities at all times.
The group's key financial and other performance indicators during the year were as follows:
- The group's turnover increased from £28,859,875 to £34,841,653 - The group's gross profit margin has increased from 24.1% to 26.5%
The group seeks to ensure that responsible business practice is fully integrated into the management of all of its operations and into the culture of all parts of its business. It believes that the consistent adoption of responsible business practice is essential for operational excellence, which in turn, ensures the delivery of its core objectives of sustained real growth in profitability.
The directors consider there are numerous non-financial performance indicators but none individually are key apart from vehicle utilisation which has been at 92% compared with 94% last year.
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LONDON HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The directors of the group, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised below:
A director of a company must act in the way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to: 1. The likely consequences of any decision in the long term 2. The interests of the company's employees 3. The need to foster the company's business relationships with suppliers, customers and others 4. The impact of the company's operations on the community and the environment 5. The desirability of the company maintaining a reputation for high standards of business conduct, and 6. The need to act fairly as between members of the company. Each director of the group is aware of their obligations on the above and can seek professional advice from an independent advisor as necessary. As a group with a highly skilled workforce the group's directors do invariably delegate day to day decision making to employees of the group. We make strategic decisions based on both long and short term objectives in particular our supply chain and relationships therein. At all times the board consider how the decisions they make support the company's visions and values and how they promote the success of London Hire Limited. The Board uses its regular meetings as a mechanism to address and meet its obligations under Section 172 of the Companies Act 2006 at which point the stakeholders of the group are discussed. In the directors' opinion the employees, finance providers and the customer base represent the key stakeholders and the means of engagement have been detailed below: Customers - Our employees and managers are constantly interacting with our customers to fulfil our customers' requirements. We focus on customer service and this enables us to meet the varying and ongoing demands of our customers. All of our staff uphold our key values as noted on our website and adhere to our trading protocols. Employees - We rely on our employees to ensure the group's high levels of service are maintained to our customers. We are renowned for our ability to meet our customers' demands within tight deadlines and this is only possibly through the hard work our employees put into job management. In this regard we provide a support network that they can rely upon, a remuneration package that rewards high performing individuals and ongoing training. Finance providers - The group has built and fostered relationships with a number of finance providers such that the group can purchase the necessary specialised vehicles to continue to grow the business. Regular meetings and discussions are held with these finance providers to ensure the group is meeting the requirements of the finance providers and to ensure the group is receiving the best value for money. The group also operates a zero-tolerance approach to modern slavery and human trafficking. The group is committed to acting ethically and with integrity in all of our business relations. We work closely with our business partners, suppliers and supply chains to ensure there is no place for modern slavery and human trafficking.
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LONDON HIRE LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
This report was approved by the board on 30 September 2025 and signed on its behalf.
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LONDON HIRE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
The directors present their report and the financial statements for the year ended 31 August 2024.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation and minority interests, amounted to £1,555,326 (2023 - £1,035,460).
During the year dividends of £180,000 (2023: £72,000) were voted.
The directors who served during the year were:
Since the year end the vehicle hire business is seeing continued revenue growth across its range of customers as has its passenger transport subsidiary, London Hire Community Services Limited. Orders and inquiries for new product lines, in particular electric vehicles, remain strong.
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LONDON HIRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The group does not follow any specified code or standard on payment practice. However, it is the group's policy to negotiate terms with its suppliers and to ensure that they are aware of the terms of payment when business is agreed. Every effort is made to adhere to these terms and payment is made when it can be confirmed that goods and/or services have been provided in accordance with the relevant contract conditions. Where there are disputes or variations to the goods and/or services provided it is the group’s policy to notify the supplier as soon as is practical.
The directors are aware of the importance of fostering long term business relationships with suppliers and customers as a key strategic element to trade profitably for the future. The creditor payment period of the group for the year was 30 days (2023:40 days).
During the year, the policy of providing employees with information about the group has been continued through internal media methods in which employees have also been encouraged to present their suggestions and views on the group's performance. Employees are incentivised where their suggestions lead to cost savings or revenue improvements via payment of bonuses so that they share financially from the savings made. Regular meetings are held between local management and employees to allow a free flow of information and ideas and an annual survey has been initiated to allow employees further opportunity to feedback to management.
Individual departments are regularly involved in discussions about the financial performance of their operation as well as the business as a whole and the competitive environment in which the business operates. The directors continue to follow prudent strategic decisions safeguarding the performance of the business to the benefit of all employees and their interests. Gender pay gap In accordance with the Equality Act 2010 the group intends to publish on its own and also the government website the relevant information relating to the Act, in particular the average hourly rates of pay for full time male and female employees as well as bonuses and the proportion between both groups The group will always provide training and career development as well as professional development for employees with disabilities and vulnerabilities wherever appropriate.
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LONDON HIRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
The calculations use the GHG Protocol Methodology.
The energy consumption data was collected as follows: • Total electricity consumption was that invoiced by EDF Energy. • Total mileage was identified by reviewing mileage expense claims. Average car conversion rates were used to convert mileage into kilowatt hours. The emissions were calculated using conversion factors from the government's GHG reporting publications (see below for references). The emissions factor for Grid Electricity scope 2 emissions produced from ‘electricity generated’ was used to calculate emissions associated with electricity consumption. The emissions factor for an average UK diesel passenger vehicle was used to calculate emissions associated with transport fuel. References: • https://www.gov.uk/government /publications /greenhouse-gas-reporting -conversion -factors-2020
The group continues to monitor its carbon usage and has made improvements in logistics and staff working
practices to reduce the intensity ratio in the future.
After careful consideration, London Hire Limited has decided that the Intensity Ratio used for SECR reporting will be tonnes of CO2e per turnover in the period.
The intensity ratio is therefore 11.5 tCO2e per £1m of turnover (2023: 13.5 tCO2e per £1m of turnover).
The company has chosen in accordance with s.414C(11) Companies Act 2006, to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial risk management and exposure and engagement with customers and suppliers.
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LONDON HIRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
There have been no significant events affecting the group since the year end.
After the year end Barnes Roffe LLP resigned as auditors due to the transfer of its audit business and its
successor Barnes Roffe Audit Limited was appointed by the directors under s485 Companies Act 2006.
This report was approved by the board on
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LONDON HIRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LONDON HIRE LIMITED
We have audited the financial statements of London Hire Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 or the 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.
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LONDON HIRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LONDON HIRE LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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LONDON HIRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LONDON HIRE LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with law and regulations, was as follows:
• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; • We identified the laws and regulations applicable to the company through discussion with directors and other management, and from our commercial knowledge and experience of the relevant sector; • The specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, are as follows; o Companies Act 2006 o FRS102 o Health and Safety legislation o Employment legislation o GDPR o Tax legislation o Vehicle operators regulations • We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing board minutes and inspecting legal correspondence; • Laws and regulations were communicated within the audit team at the planning meeting, and during the audit as any further laws and regulation were identified. The audit team remained alert to instances of non-compliance throughout the audit; and
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LONDON HIRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LONDON HIRE LIMITED (CONTINUED)
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:
• Making enquires of management as to where they consider there was susceptibility to fraud and their knowledge of actual suspected and alleged fraud; • Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; • Reviewing the financial statements and testing the disclosures against supporting documentation; • Performing analytical procedures to identify any unusual or unexpected trends or anomalies; • Inspecting and testing journal entries to identify unusual or unexpected transactions; • Assessing whether judgement and assumptions made in determining significant accounting estimates, were indicative of management bias; and • Investigating the rationale behind significant transactions, or transactions that are unusual or outside the company’s usual course of business. The areas that we identified as being susceptible to misstatement through fraud were: • Management bias in the estimates and judgements made; • Management override of controls; and • Posting of unusual journals or transactions. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Charles Lake House
Claire Causeway
Crossways Business Park
Kent
DA2 6QA
Date:
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LONDON HIRE LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
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LONDON HIRE LIMITED
REGISTERED NUMBER: 01773149
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2024
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LONDON HIRE LIMITED
REGISTERED NUMBER: 01773149
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 23 to 43 form part of these financial statements.
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LONDON HIRE LIMITED
REGISTERED NUMBER: 01773149
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2024
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LONDON HIRE LIMITED
REGISTERED NUMBER: 01773149
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 23 to 43 form part of these financial statements.
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LONDON HIRE LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
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LONDON HIRE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
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LONDON HIRE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
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LONDON HIRE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
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LONDON HIRE LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 AUGUST 2024
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
London Hire Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office is 185 Manor Road, Erith, Kent, DA8 2AD. The principal activity of the company is that of motor vehicle hire and the provision of specialised passenger transport.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires group management to exercise judgment in applying the group's accounting policies (see note 3).
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The group made a pre-tax profit of £2,172,033, in the year to 31 August 2024 and had net assets of £9,657,737 at the year end. Subsequent to the year end, the group has continued to trade profitably.
The group has an ongoing overdraft facility of £600,000 and an invoice discounting facility of £1,500,000. The group finances its activities primarily through hire purchase and finance lease finance for the purchase of new vehicles. The directors have no reason to believe that financing will not be continued. The group provides essential transport services with a high proportion of its services provided to local authorities. With the resources that the group has, together with the current actions being taken,the group is better positioned than most to continue operations. After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual reports and accounts.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Page 24
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Page 25
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following bases:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
2.Accounting policies (continued)
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, with 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
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Financial liabilities
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 the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Useful economic lives of tangible assets Tangible fixed assets are depreciated to their estimated residual values over their estimated useful lives. The group exercises judgement to determine these useful lives and residual values as described in note 2.13. In the current year, the directors undertook a review of fixed assets and their usage. This review identified that a change in depreciation rates was considered appropriate to more accurately reflect the useful economic life of these assets. Deferred tax Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised and the applicable rate of tax to utilise in the calculations. Tax rates are based on tax legislation that has been approved and for the purpose of these accounts has been calculated at 25%. This is based on the directors' best assessment of the applicable tax rates to apply when timing differences reverse. When assessing the extent to which deferred tax assets should be recognised consideration is given to the timing, nature, and level of future taxable income. The recognition of deferred tax assets relating to tax losses carried forward relies on profit projections and taxable profit forecasts prepared by management, where a number of assumptions are required based on the levels of growth in profits and the reversal of deferred tax balances.
The turnover is attributable to services provided of £34,698,216 (2023: £28,559,342), goods sold of £56,500 (2023: £139,933) and rental income of £86,937 (2023: £160,600)
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 30
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 31
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
10.Taxation (continued)
The company has losses of £2,880,520 (2023: £1,945,755) to carry forward as at 31 August 2024, and subsidiary undertakings have losses of £51,301 (2023: £340,862) to carry forward for offset against future taxable profits.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The profit after tax of the parent company for the year was £
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
14.Intangible assets (continued)
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 35
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
15.Tangible fixed assets (continued)
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 37
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 38
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 39
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Bank loans are secured by debenture over the group's total assets, and a guarantee and charge over a residential property owned by certain directors of the company.
Hire purchase liabilities are secured over the assets to which they relate.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 41
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £235,389 (2023 - £220,309). Contributions totalling £27,432 (2023 - £8,684) were payable to the fund at the balance sheet date and are included in creditors.
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LONDON HIRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
Page 43
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