Company registration number: 13746196
COMPANY INFORMATION
CONTENTS
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The directors present the strategic report for the year ended 31 March 2025.
Autoguard Group 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 and OEM’s.
The principal activity of Autoguard Group 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, both in the UK and Internationally.
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 and OEM’s.
The principal activity of Autoguard Group 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, both in the UK and Internationally.
Our in-house administration and claims teams ensure services are provided to a clear and auditable standard.
The international business has been moved out of Autoguard Warranties Ltd and is now operated through a branch of the Group in the UAE — Autoguard Group Ltd - UAE Branch. While this branch is fully controlled and managed by the Group, it is not a separate legal entity, but rather an extension of Autoguard Group Ltd operating overseas.
Autoguard Group Ltd has experienced an excellent year of business performance across all areas of its operations. Turnover has increased by 33% (almost £5m). Gross Profit Margin has decreased by 2% (to 36%) reflecting change in product mix.
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 2023/24 has increased by £363k.
Adjusting for this, the underlying performance remains positive and in line with expectations.
Growth in turnover has seen an increase in cost base as it has been another year of investment for Autoguard Group Ltd. We have increased the size of our direct sales workforce, both in the UK and internationally, 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.
We continued investing heavily in our international business, expanding our relationships overseas, which will contribute significant growth next year. There have been significant wins with major OEM brands and large independent Automotive companies. We have expanded the branch office in the UAE increasing the staff to include claims & administration personnel to support the local markets.
Our relationship with our business partners and insurers continues to be strong in all markets.
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 across the Group, our employee numbers increased from 66 to 78 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 Group Ltd has experienced an excellent year of business performance across all areas of its operations. Turnover has increased by 33% (almost £5m). Gross Profit Margin has decreased by 2% (to 36%) reflecting change in product mix.
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 2023/24 has increased by £363k.
Adjusting for this, the underlying performance remains positive and in line with expectations.
Growth in turnover has seen an increase in cost base as it has been another year of investment for Autoguard Group Ltd. We have increased the size of our direct sales workforce, both in the UK and internationally, 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.
We continued investing heavily in our international business, expanding our relationships overseas, which will contribute significant growth next year. There have been significant wins with major OEM brands and large independent Automotive companies. We have expanded the branch office in the UAE increasing the staff to include claims & administration personnel to support the local markets.
Our relationship with our business partners and insurers continues to be strong in all markets.
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 across the Group, our employee numbers increased from 66 to 78 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.
Page 1
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Although the Group continues to perform strongly from a trading perspective, it is important to note that Autoguard Group Ltd remains in a net liability position as at the reporting date. The directors are aware of this and have taken steps to ensure adequate financial resources and support are in place. The Group’s cash flow is regularly monitored, and the directors are confident that the business is a going concern and well-positioned for future profitability and balance sheet recovery.
The Group’s net cash balance of £3.4m is £1m higher than last year’s position.
The Group’s net cash balance of £3.4m is £1m higher than last year’s position.
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 Group’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 Group 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
Page 2
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Methods used to manage those risks
The Group 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 Group 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 £19,798,050 £14,883,685
Profit before tax £1,105,135 £1,681,490
The above are deemed the most relevant KPI's by the Directors. These are discussed throughout this report.
There was a change in accounting policy in the year, which has resulted in a prior year adjustment. This is detailed in note 26 of these financial statements.
Turnover £19,798,050 £14,883,685
Profit before tax £1,105,135 £1,681,490
The above are deemed the most relevant KPI's by the Directors. These are discussed throughout this report.
There was a change in accounting policy in the year, which has resulted in a prior year adjustment. This is detailed in note 26 of these financial statements.
This report was approved by the board and signed on its behalf.
Page 3
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 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 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 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 £549,846 (2024 -£1,063,482).
Ordinary dividends were paid amounting to £Nil (2024 - £899,770). 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.
Page 4
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.
Page 5
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD GROUP LIMITED
We have audited the financial statements of Autoguard Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2025, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, 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 Auditor's 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.
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.
Page 6
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD GROUP LIMITED (CONTINUED)
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.
Page 7
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD GROUP 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 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:
∙The Group 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 Group 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 Group engagement partner assessed whether the Group 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 Group 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 Group's financial position;
−Posting of unusual journals and complex transactions;
−The use of management override of controls to manipulate results, or to cause the Group to enter into transactions not in its best interests; and
−The misrepresentation of revenue to enable staff and consultants to receive commission payments that are not warranted by actual sales.
Page 8
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AUTOGUARD GROUP LIMITED (CONTINUED)
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 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
Page 9
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2025
Page 10
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2025
Page 11
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
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 19 to 38 form part of these financial statements.
Page 12
COMPANY 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 19 to 38 form part of these financial statements.
Page 13
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
Page 14
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2025
Page 15
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2025
Page 16
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2025
Page 17
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2025
Page 18
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Autoguard Group Limited ("the Company") 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.
The Group consists of Autoguard Group Limited and all of its subsidiaries.
The Group consists of Autoguard Group Limited and all of its subsidiaries.
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 judgement 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 Statement of Financial Position, 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 consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, 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 profit before tax of £1,105,135 (2024 - £1,681,490) and has net liabilities of £175,064 (2024 - net liabilities of £784,335). At the year end the Group has net current assets of £2,459,225 (2024 - £567,710).
The application of the going concern basis in preparing the financial statements has been critically analysed and reviewed to determine its viability.
At the time of approving the financial statements the directors have taken into consideration the below matters, to form a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future:
The application of the going concern basis in preparing the financial statements has been critically analysed and reviewed to determine its viability.
At the time of approving the financial statements the directors have taken into consideration the below matters, to form a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future:
−Review of the Group's budget for the next 12 months; and
−Stress testing the budget.
On the basis of this review, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore the directors have used the going concern basis in preparing the financial statements.
Page 19
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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.
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.
Page 20
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Regulated policies
The Group acts as agent to all insured transactions. The Group 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 Group'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.
Admin Services
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 Group'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 Group’s obligations.
Page 21
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
2.Accounting policies (continued)
Page 22
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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.
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.
Goodwill is deemed to have a maximum useful life of ten years due to the assessed useful life of the investment being at least equal to the maximum permitted 10 years.
Goodwill is deemed to have a maximum useful life of ten years due to the assessed useful life of the investment being at least equal to the maximum permitted 10 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 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.
Page 23
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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.
The Group 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 23.
The Group 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.
Page 24
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
3.Judgements in applying accounting policies (continued)
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 and Goodwill impairment
The investment in subsidiary companies and the goodwill arising on consolidation are 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 future forecast cash flows of the relevant cash generating units.
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.
Warranty Provision
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.
Page 25
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Analysis of turnover by country of destination:
Page 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Page 29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
||||
|
|
Page 30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
Page 31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
Page 32
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 £544,918 (2024: £192,054). This is in relation to non-regulated income.
Page 33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
Page 34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
22.Deferred taxation (continued)
|
|
||
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
Page 35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
Share premium account
Capital redemption reserve
Profit and loss account
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, in one of the subisidiaries, 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 retained earnings as at 1 April 2024 have increased by a total of £277,215.
In addition to the above adjustments to a subsidiary, a prior year consolidation adjustment has been made to correct an eliminating journal in connection with deferred income which was not released as at 31 March 2024 in error, resulting in an increase in consolidated revenue and a corresponding decrease in deferred income of £193,039.
Therefore the total effect of the above adjustments to the Group retained earnings is an increase in closing reserves as at 31 March 2024 of £470,254.
As a result, in one of the subisidiaries, 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 retained earnings as at 1 April 2024 have increased by a total of £277,215.
In addition to the above adjustments to a subsidiary, a prior year consolidation adjustment has been made to correct an eliminating journal in connection with deferred income which was not released as at 31 March 2024 in error, resulting in an increase in consolidated revenue and a corresponding decrease in deferred income of £193,039.
Therefore the total effect of the above adjustments to the Group retained earnings is an increase in closing reserves as at 31 March 2024 of £470,254.
Page 36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
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 Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund.
Contributions totalling £18,907 (2024 - £1,745) were payable to the fund at the reporting date and are included in creditors.
Contributions totalling £18,907 (2024 - £1,745) were payable to the fund at the reporting date and are included in creditors.
During the year the group provided services to Warranty Administration Services Limited, a UK registered company in which the group owns 80% of the issued share capital, totalling £30,000 (2024: £60,000). There was no interest charged on these balances and no amounts were owed at the end of the accounting periods.
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.
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.
Page 37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2025
The ultimate controlling party is R J Dockerill.
Page 38