Company registration number: 06574030
COMPANY INFORMATION
CONTENTS
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The directors present the strategic report for the year ended 31 March 2025.
Autoguard Warranties Ltd derives its income from the provision of non-regulated service and maintenance plans and regulated motor vehicle warranties to the automobile industry across the UK and Internationally, as well as directly to Individuals in the UK. The service and maintenance plans, and warranties are designed to cover repair costs in the event that the vehicle suffers a breakdown during the period of cover, to ensure our customers remain mobile.
The sales are made either directly to customers via our online platform or by a dedicated sales team via a network of motor dealers.
The principal activity of Autoguard Warranties Ltd is the provision of administration services, repair request and claims handling, and the management of all products, ensuring all services and support are to the high standard expected by our customers. Our in-house administration and claims teams ensure services are provided to a clear and auditable standard.
The sales are made either directly to customers via our online platform or by a dedicated sales team via a network of motor dealers.
The principal activity of Autoguard Warranties Ltd is the provision of administration services, repair request and claims handling, and the management of all products, ensuring all services and support are to the high standard expected by our customers. Our in-house administration and claims teams ensure services are provided to a clear and auditable standard.
The Group has separated out the international business from Autoguard Warranties Ltd into a specific wholly owned Group branch named Autoguard Group Ltd Branch. The International branch results now are included in Group.
Autoguard Warranties Ltd itself has once again experienced an excellent year of business performance across all areas of its UK operations. Turnover has increased by 22% (almost £3m) with Gross Profit Margin held at 36%.
While this performance reflects strong underlying growth, it should be noted that changes to the revenue recognition policy have resulted in the financial year 2023/24 results being restated upwards. Profit before tax for 2024/25 has decreased by £996k. Adjusting for this, the underlying performance remains positive and in line with expectations.
Growth in turnover has also seen an increase in the cost base as we continue to invest in people, processes and IT. We have continued to increase the size of our direct sales workforce to provide more coverage and service more customers. We have seen both our B2C team, and our Administration & Claims teams increase to support our growth. These teams are now at a size where they can support growth throughout the financial year 2025/26 and beyond.
Despite the used car market in the UK continuing to be challenging, specifically effected by external factors, our online B2C business through our Best4 brand, grew significantly again. We feel this growth reflects our view that consumers are keeping their cars for longer and that points to an increasing demand for warranties and service and maintenance plans.
In line with our growth, our employee numbers increased from 56 to 63 during the year enforcing our commitment to grow our workforce to ensure continued success for the future. We continue to invest in the wellbeing and training of all our employees.
Autoguard Warranties Ltd itself has once again experienced an excellent year of business performance across all areas of its UK operations. Turnover has increased by 22% (almost £3m) with Gross Profit Margin held at 36%.
While this performance reflects strong underlying growth, it should be noted that changes to the revenue recognition policy have resulted in the financial year 2023/24 results being restated upwards. Profit before tax for 2024/25 has decreased by £996k. Adjusting for this, the underlying performance remains positive and in line with expectations.
Growth in turnover has also seen an increase in the cost base as we continue to invest in people, processes and IT. We have continued to increase the size of our direct sales workforce to provide more coverage and service more customers. We have seen both our B2C team, and our Administration & Claims teams increase to support our growth. These teams are now at a size where they can support growth throughout the financial year 2025/26 and beyond.
Despite the used car market in the UK continuing to be challenging, specifically effected by external factors, our online B2C business through our Best4 brand, grew significantly again. We feel this growth reflects our view that consumers are keeping their cars for longer and that points to an increasing demand for warranties and service and maintenance plans.
In line with our growth, our employee numbers increased from 56 to 63 during the year enforcing our commitment to grow our workforce to ensure continued success for the future. We continue to invest in the wellbeing and training of all our employees.
Financial Position
We ended the financial year with a net profit before tax of £0.8m a decrease of £1.0m on last year and a net cash balance of £2.3m an increase on last year’s results of £0.7m.
Future Developments
For the coming 12 months and beyond, we are expecting to see continued organic growth in all business areas. As the international business is reported via Group this has allowed us to embark upon a full process review across the entire business. We are looking at utilising technology to improve service levels and response times across the business while keeping the overheads under control.
We have also invested heavily in marketing partnerships to support initiatives such as a new Leisure care division, in which we have partnered with one of the UK’s leading caravan and motorhome event organisers. This has already delivered a return on investment, and we expect this area to continue to grow over the next 12 months.
We have also invested heavily in marketing partnerships to support initiatives such as a new Leisure care division, in which we have partnered with one of the UK’s leading caravan and motorhome event organisers. This has already delivered a return on investment, and we expect this area to continue to grow over the next 12 months.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
The directors consider the principal risks and uncertainties facing the business to be:
Credit
Credit risk is the risk that a customer or provider fails to perform its financial obligations.
The company's principal financial assets are bank balances, trade and other debtors. The company's exposure to credit risk is mitigated by the large numbers of individual motor dealers in their network. In addition, the financial position of the company is continually reviewed to limit any risk. Our credit control in the UK is excellent and we have very little overdue debt.
Liquidity
Liquidity risk is the risk that the company is unable to meets its financial obligations as they fall due.
The company's exposure to liquidity risk is mitigated by the regular review of cash forecasts, actual cash flows and ensuring adequate cash reserves. There is also regular analysis of loss ratios to ensure adequate funds remain in place for future repair request and claims.
Compliance
Regulatory changes are always a challenge in this industry, and the company ensures that preparations are made in the background to ensure business continuity should any regulatory changes be imposed. Autoguard Warranties Ltd has been subject to an HMRC VAT review for the years 21/22. This is still ongoing and may result in an assessment in due course.
Commercial
Commercial risks include economic conditions and competition factors that may impact the company's financial performance.
The company regularly reviews and, where appropriate, updates its warranty and service and maintenance plan terms to ensure they meet changing requirements of customers and their vehicles. This includes competitive pricing and reviews of products. The company is fully aware of economic conditions and regularly reviews key financial performance indicators to identify any emerging trends.
Objectives, policies and processes for managing risks arising from non-regulated contracts
The Company’s objective in managing risks from non-regulated contracts is to ensure the continued fulfilment of obligations under non-regulated administration services and service & maintenance plans, while maintaining financial stability. The Company implements robust pricing, operational, and reserving policies to address its risk exposure for these contracts.
Key policies include:
•Maintaining the positive customer outcomes are at the centre of decision making
•Reviewing and adjusting non-regulated contract pricing based on historical repair/service request data
•Maintaining adequate reserves to meet expected future obligations for non-regulated contracts
•Monitoring live contract performance across non-regulated products and regions
•Conducting due diligence on dealer partners to reduce fraudulent repair/service request exposure
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Methods used to manage those risks
The Company mitigates its exposure through a combination of internal controls and operational processes:
•Experienced in-house handlers validate and authorise repair/service requests against strict criteria for non-regulated products
•Proactive fraud detection and case monitoring for non-regulated business
•Regular performance reviews of non-regulated products and customer experience metrics
•Segregation of dealer funds and customer contract provisions for non-regulated risk management and solvency
Risk management procedures are reviewed by senior management and adjusted as needed in response to evolving market or operational factors.
Exposure to risk on non-regulated contracts
The primary risk is that the cost or frequency of repair/service requests exceeds expectations. This is managed through detailed modelling, contract structuring, and conservative provisioning based on historic performance.
Concentrations of non-regulated risk
Risk is well diversified across a wide portfolio of vehicle types, customers and geographic markets. No individual dealer or customer represents a significant concentration of exposure.
Actual claims compared with previous estimates
Activity during the year was in line with management’s estimates, reflecting growth in volumes and observed inflation in average cost per repair/service request. The provision model is reviewed regularly to ensure appropriate matching of income and liabilities.
Market risk
The Company is exposed to changes in the cost of repairs, parts, and labour which may affect profitability of non-regulated products. This is managed through frequent reviews of average costs and by adjusting contract pricing where appropriate. Currency exposure is limited due to the majority of transactions being denominated in GBP.
2025 2024
Turnover £16,683,688 £13,710,572
Profit before tax £832,173 £1,828,009
The above are deemed the most relevant KPI's by the Directors. These are discussed throughout this report.
Turnover £16,683,688 £13,710,572
Profit before tax £832,173 £1,828,009
The above are deemed the most relevant KPI's by the Directors. These are discussed throughout this report.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The directors present their report and the financial statements for the year ended 31 March 2025.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the 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 Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £439,481 (2024 - £1,221,150).
Ordinary dividends were paid amounting to £Nil (2024 - £889,770). The directors do not recommend payment of a further dividend.
The directors who served during the year were:
The Company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the Company's strategic report information required by the schedule 7 of the Large and Medium-sized companies and Groups (Accounts and Reports) Regulation 2008 it must be stated in the Director's Report that it has done so. This includes information that would have been included in the business review, the principal risks and uncertainties and future developments.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD WARRANTIES LIMITED
We have audited the financial statements of Autoguard Warranties Ltd (the 'Company') for the year ended 31 March 2025, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 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.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's 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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD WARRANTIES LIMITED (CONTINUED)
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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD WARRANTIES 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 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.
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:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including;
−The Companies Act 2006;
−Financial Reporting Standard 102;
−UK employment legislation;
−UK tax legislation;
−The Financial Conduct Authority regulations;
−UK health and safety legislation; and
−General Data Protection Regulations.
∙We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
∙We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of relevant documentation.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included;
−Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
−Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
−Challenging assumptions and judgements made by management in its significant accounting estimates; and
−Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
−The application of inappropriate judgements or estimation to manipulate the Company's financial position;
−Posting of unusual journals and complex transactions;
−The use of management override of controls to manipulate results, or to cause the Company to enter into transactions not in its best interests;
−The misrepresentation of revenue to enable staff and consultants to receive commission payments that are not warranted by actual sales.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD WARRANTIES LIMITED (CONTINUED)
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 Auditor's 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.
for and on behalf of
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Surrey
KT22 8DY
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
Page 10
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 31 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Autoguard Warranties Ltd is a private company limited by shares incorporated in England and Wales. Details of the Company's registered office, which is also its principal place of business, can be found on the company information page.
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 management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Autoguard Group Limited as at 31 March 2025 and these financial statements may be obtained from its registered office, Building 5 Archipelago Office Park, Lyon Way, Surrey, GU16 7ER.
The company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the companies Act 2006.
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
The Directors reviewed the revenue recognition policy and determined that a change was required in order to more accurately match revenue arising on unregulated warranty contracts against the costs incurred in delivering the relevant services. Previously, the percentage of income recognised up front at the inception of a contract was calculated based on the expected direct costs incurred in relation to warranty claims paid out, plus directly attributable costs of selling the policy. A review of claim curve data and customer service activities identified that, in addition to these up front costs, a significant proportion of the overall cost to the company of administrating each warranty policy is incurred within the first 90 days of the policy. Accordingly, the proportion of income recognised on inception of each contract has been increased and the proportion deferred over the remaining duration of the policy has been reduced.
During the year the Directors have identified new information regarding the average gross profit margin achieved on sales based on historic data and analysis. The company has therefore adjusted the accounting estimate in relation to the proportion of deferred income to release in the year, to accurately reflect the average margin achievable on warranty contracts based on data available over the duration of contracts within Autoguard's portfolio. The effect of this change in estimate in the current year is an increase in revenue and decrease in deferred income of £196,020 to bring the gross profit margin in line with the achievable average margin based on underlying contract data.
Regulated policies
Autoguard Warranties Limited acts as agent to all insured transactions. The Company recognises the revenue in line with the cost to the business on inception, the remaining commission is deferred over the term of the policy to reflect the Company's obligation to fulfil claims handling.
Non-regulated service contracts
Revenue from non regulated service contracts is recognised in line with the cost to the business on inception, the remaining revenue is deferred to reflect the Company's obligation to fulfil claims handling. Additionally, income is released to align the reported margin with the latest achievable margin data across Autoguard's portfolio of comparable contracts. The deferred income is released over the term of the agreement.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Revenue from non-regulated admin services is recognised as each performance obligation is discharged, apportioned according to the apportionment of costs incurred. Certain performance obligations are discharged immediately on inception of the contract. The remaining turnover is deferred and released over the term of the contract. Revenue is deferred to reflect the Company's obligation to fulfil administration services for our dealer partners.
Recovery and breakdown
Revenue from recovery and breakdown services is recognised as each performance obligation is discharged, apportioned according to the apportionment of costs incurred. Certain performance obligations are discharged immediately on inception of the contract. The remaining revenue is deferred over the length of the contract in order to meet the Company’s obligations.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
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.
The estimated useful lives range as follows:
The IT development is deemed to have a maximum useful life of seven years due to the rapidly changing environment in which technology develops.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
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 basis:
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.
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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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
The Company is party to service contracts and dealer admin warranty programs which, whilst they do not meet the legal definition of insurance contracts, are subject to an element of insurance risk as defined in FRS 103. Income and expenditure, assets and liabilities and cash flows arising from these contracts are accounted for in accordance with the provisions of FRS 103, which are not substantially different to the revenue recognition principles applied to income arising from service contracts in accordance with FRS 102. Disclosures in relation to accounting estimates and assumptions arising from such contracts can be found in notes 2.5, 2.6 and 3. Details of the risks arising in connection with these contracts and management of these risks can be found in the Strategic Report. A reconciliation of liabilities arising in connection with such contracts can be found in note 25.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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.
Investment impairment
The investment in subsidiary companies is reviewed on an annual basis by the directors for impairment, and an adjustment made in the financial statements accordingly if required. The impairment is based on the cost generating unit of the future cashflows.
Deferred Income
The directors understand that they need to recognise turnover over the period of the contract, taking into account contract start dates and length of contract. The initial non regulated revenue from a service contract is recognised as the initial performance obligations are discharged, apportioned according to the apportionment of costs incurred. The remaining revenue is deferred and released over the term of the contract. The estimated costs are calculated based on an average cost of a non regulated service contract, any variance is released on an annual basis to the profit and loss. The commission received from our regulated activity is recognised over the term of the contract. Income is deferred into the correct accounting year which enables the Company to fulfil its obligations, primarily claims handling, to its dealer partners for the life of the contract.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
3.Judgements in applying accounting policies (continued)
The Warranty Provision requires the Directors to make a judgement on the extent to which a provision for future service contract claims is required. The provision is derived from a percentage of fund set aside per contract sold and is calculated and monitored using historical data and knowledge from the Directors to enable the company to have sufficient funds to pay all future claims that arise. This provision fund is closely monitored and adjustments to what goes into it can be made according to how a dealer’s fund is performing. The estimates and assumptions are reviewed by the Directors on an ongoing basis to ensure that obligations can be met.
Margin on contracts
Based on up to date data and analysis, the average gross profit margin achievable across Autoguard's portfolio of contracts is assessed and revenue is adjusted each year to bring the gross profit margin in line with current data. Management review the resulting revenue adjustment in the context of their own knowledge and wider industry trends to ensure that the margin recorded is a fair reflection of the expected future performance of the underlying contract portfolio at each year end.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
8.Employees (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
13.Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Page 25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Page 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Included in the cash at bank figure at the year end is monies held on behalf of clients totalling £408,437 (2024: £192,054). This is in relation to non-regulated income.
The company has facilities in place with Barclays that includes a fixed change and floating charge over the company, and contains a negative pledge over the credit balance dated 5 April 2024.
The company has facilities in place with Barclays that includes a fixed change and floating charge over the company, and contains a negative pledge over the credit balance dated 5 April 2024.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Page 28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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Share premium account
Capital redemption reserve
Profit and loss account
Page 29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
During the process of preparing the financial statements for the year ended 31 March 2025, the Directors reviewed the revenue recognition policy and determined that a change was required in order to more accurately match revenue arising on unregulated warranty contracts against the costs incurred in delivering the relevant services. Previously, the percentage of income recognised up front at the inception of a contract was calculated based on the expected direct costs incurred in relation to warranty claims paid out, plus directly attributable costs of selling the policy. A review of claim curve data and customer service activities identified that, in addition to these up front costs, a significant proportion of the overall cost to the company of administrating each warranty policy is incurred within the first 90 days of the policy. Accordingly, the proportion of income recognised on inception of each contract has been increased and the proportion deferred over the remaining duration of the policy has been reduced.
As a result, a prior year restatement was made to increase revenue by £169,501 in the year ended 31 March 2024 and by £456,378 for the year ended 31 March 2023. Deferred income due within one year and deferred income due after more than one year were also reduced by £496,423 and £129,456. The corresponding tax effect of this adjustment was an increase in the corporation tax charge of £42,375 for the year ended 31 March 2024 and an increase of £114,095 for the year ended 31 March 2023.
A prior year restatement was made to reduce corporation tax recoverable by £71,208 to reflect the amount that was recovered in the year and increase the deferred tax liability by £120,987 for the year ended 31 March 2024. As a result of this, the overall tax charge was also increased by £192,194, reducing opening reserves by this amount.
Retained earnings as at 1 April 2023 have increased by £342,283, and opening reserves as at 1 April 2024 have increased by a total of £277,215.
As a result, a prior year restatement was made to increase revenue by £169,501 in the year ended 31 March 2024 and by £456,378 for the year ended 31 March 2023. Deferred income due within one year and deferred income due after more than one year were also reduced by £496,423 and £129,456. The corresponding tax effect of this adjustment was an increase in the corporation tax charge of £42,375 for the year ended 31 March 2024 and an increase of £114,095 for the year ended 31 March 2023.
A prior year restatement was made to reduce corporation tax recoverable by £71,208 to reflect the amount that was recovered in the year and increase the deferred tax liability by £120,987 for the year ended 31 March 2024. As a result of this, the overall tax charge was also increased by £192,194, reducing opening reserves by this amount.
Retained earnings as at 1 April 2023 have increased by £342,283, and opening reserves as at 1 April 2024 have increased by a total of £277,215.
An investigation is currently ongoing with HMRC in relation to outstanding balances that may be due to the company or due to HMRC.
HMRC have issued an assessment for the periods from June 2021 to December 2022. This will be appealed and therefore the outcome is awaited and currently unknown. Therefore it cannot be estimated reliably and provided for in these financial statements as this would be prejudicial to the appeal.
No assessment has been made for Insurance Premium Tax, and therefore this also cannot be estimated reliably, and provided for in these financial statements.
At the date of signing this report the investigation remains ongoing. No provision has been made in these financial statements for the continued review, as the conclusions relate to industry wide regulation, for which the outcome is awaited from the FCA. The possible financial impact to the company cannot be reliably measured at this time.
HMRC have issued an assessment for the periods from June 2021 to December 2022. This will be appealed and therefore the outcome is awaited and currently unknown. Therefore it cannot be estimated reliably and provided for in these financial statements as this would be prejudicial to the appeal.
No assessment has been made for Insurance Premium Tax, and therefore this also cannot be estimated reliably, and provided for in these financial statements.
At the date of signing this report the investigation remains ongoing. No provision has been made in these financial statements for the continued review, as the conclusions relate to industry wide regulation, for which the outcome is awaited from the FCA. The possible financial impact to the company cannot be reliably measured at this time.
The Company operates a defined contribution plan for its employees. The assets of the plan are held separately from the Company in independently administered funds.
At the year end, the amount included in creditors in respect of unpaid pension contributions was £14,337 (2024 - £Nil).
At the year end, the amount included in creditors in respect of unpaid pension contributions was £14,337 (2024 - £Nil).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
The Company has taken advantage of the exemption available within FRS 102 Section 33.1A, from disclosing transactions entered into with entities which are a wholly owned part of the group.
An amount of £128,500 (2024: £Nil) due from key management personnel is included within other debtors.
During the year, the company received £30,000 (2024 - £60,000) of group management charge income from a group company that is 80% owned. At 31 March 2025, the balance due to the company amounted to £Nil (2024 - £Nil). The balance is unsecured, interest free and repayable on demand.
An amount of £128,500 (2024: £Nil) due from key management personnel is included within other debtors.
During the year, the company received £30,000 (2024 - £60,000) of group management charge income from a group company that is 80% owned. At 31 March 2025, the balance due to the company amounted to £Nil (2024 - £Nil). The balance is unsecured, interest free and repayable on demand.
The Immediate and ultimate parent company is Autoguard Group Limited, a company incorporated in England and Wales. Autoguard Group Limited is the smallest and largest group for which consolidated accounts are prepared.
Copies of the group accounts for Autoguard Group Limited may be obtained from Building 5 Archipelago Office Park, Lyon Way, Surrey, GU16 7ER.
The ultimate controlling party is R J Dockerill.
Copies of the group accounts for Autoguard Group Limited may be obtained from Building 5 Archipelago Office Park, Lyon Way, Surrey, GU16 7ER.
The ultimate controlling party is R J Dockerill.
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