The director presents the strategic report for the year ended 30 September 2024.

The principal activities of the company continued to be the sale and repair of commercial vehicles and the hire of commercial vehicles.

The company’s key financial indicators were as follows:

The gross profit margin for 2024 reflected difficult trading conditions in the used light commercial vehicle market, driven by an increased supply of new light commercial vehicles, which resulted in decreases in the value of the company's stock of used vehicles and elements of the company's rental vehicle fleet which were sold during the year.

The parts and servicing department traded at steady levels year-on-year in terms of turnover and gross profit. Skilled labour shortages continued to be a constraining factor for this department and the overheads associated with the premises and staff requirements were considered to be onerous.

The company’s fleet of rental vehicles increased by £741k to £3.5m, funded through increased hire purchase borrowings. The company’s stock of used vehicles held for resale decreased by £598k to £962k. This demonstrates the director’s strategy to modernise the company’s motor vehicle fleet, and to capitalise on the increased supply of new light commercial vehicles.

The trading loss for the year and the declaration of a dividend of £625k resulted in the reduction in the company's net assets to £487k. Of the dividends declared, £550k was retained within the group by the 100% parent company, providing it with funds to acquire land and buildings from this company in March 2025.

Future developments

Trading conditions have been challenging in the period since the year end and the director commenced a process of simplifying the business. A key step in that process was the sale of the company's parts and servicing business in September 2025, which realised a profit of approximately £500k based on consideration receivable compared to the book value of the assets concerned. The business was sold as a going concern and employees transferred to the new owner.

The new owner took occupation of the premises in Yeovil and the vehicle sales and rental business were relocated to new premises in Ottery St Mary, which are owned by the company's 100% parent company.

The book value of the rental vehicle fleet and stock of vehicles has reduced since the year end through vehicle sales, and associated borrowings have also been reduced.

Having reduced the company's cost base and the level of debt in the business, the director is projecting profitable future trading.

General economic factors, including UK interest rates can impact on customer demand for vehicles.

Management of cash flow is of key importance, ensuring that the company meets debt servicing obligations as they fall due and has access to new sources of borrowing where required to support asset additions. The timing of cash inflows is not always easy to predict in the vehicles sales department, particularly when customers use their old vehicles as part exchange.

Financial risk management

The company’s operations expose it to a variety of financial risks that include credit risk, liquidity risk and interest risk.

Credit risk

The company has implemented policies that require appropriate credit checks on potential customers before sales are made. However, the potential for bad debts remains when customers face challenges in their own businesses.

Liquidity risk

The company actively maintains debt finance that is designed to ensure the company has sufficient available funds for operations and asset additions. Stock finance and bank loan facilities support the holding of vehicle stock for resale. Hire purchase agreements and other short term loans finance the fleet of rental vehicles, enabling the cash flow cost to be spread over a period of years.

Interest risk

Hire purchase agreements bear interest at rates fixed at the inception of the agreements. The company’s stocking and other loan facilities bear interest at variable rates. So, the company is exposed to changes in the Bank of England base rate.

On behalf of the board

The principal activity of the company has been the sale and repair of commercial vehicles and the hire of commercial vehicles.

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £625,000. The director does not recommend payment of a final dividend.

The director who held office during the year and up to the date of signature of the financial statements was as follows:

The auditor, Simpkins Edwards Audit LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the director is required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 enable them to ensure that the financial statements comply with the Companies Act 2006. He is 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.

We have audited the financial statements of SMV Commercials Limited (the 'company') for the year ended 30 September 2024 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 30 September 2024 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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 UK, including the FRC’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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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.

The above statements notwithstanding, we draw attention to note 1.3 in the financial statements which explains circumstances relevant to going concern. Our opinion is not modified in respect of this matter.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's 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 director's report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of director's remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

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. In so doing, we considered the following:-

• The nature of the company, its control environment and performance indicators;

• Results of our enquiries of management and directors regarding their own identification and assessment of the risks of irregularities; and

• the matters discussed among the audit engagement team regarding how and where irregularities might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud and identified the greatest potential for fraud in relation to the recognition of revenue and valuation of stock. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context relate to the UK Companies Act.

Our procedures in response to the risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation;

• understanding and evaluating the design and implementation of management controls;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• challenging assumptions and judgements made by management in their significant accounting estimates, in particular, in relation to income recognition, stock valuation and cut off; and

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

SMV Commercials Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Summit, Woodwater Park, Pynes Hill, Exeter, United Kingdom, EX2 5WS.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Commercial Vehicles (Yeovil) Limited. These consolidated financial statements are available from its registered office, The Summit, Woodwater Park, Pynes Hill, Exeter, EX2 5WS.

During the year the company changed its estimate of the useful life of its motor vehicle fleet. The depreciation rate applied to the motor vehicle fleet has decreased from 7% straight-line per annum to 5% straight-line per annum. This has resulted in a decreased depreciation charge of £78,963 for the year. The reduction in rate reflects the larger number of newer vehicles in the fleet for which supplier discounts are available at the point of original purchase. A review of profits and losses on the disposal of ex-rental vehicles supported the change of estimate.

The company's results for the year and in the period since year end reflect adverse trading conditions in the company's industry, including increased costs of borrowing, reduced second hand values in the light commercial vehicle market and cost and wages inflation. The company's cost base was considered to be high relative to the gross profit achievable and, as a result, the director has commenced simplifying the business as described in the strategic report.

The sale of the parts and servicing business and relocation to freehold premises (owned by the 100% parent company) has reduced the company's cost base and facilitated a reduction in company borrowings.

The director has prepared projections of future profitability and cash flow for the restructured business and continues to monitor cash flow carefully. However, the timing of cash inflows is not always easy to predict in the vehicles sales department. Part exchanges and repayments of stocking loan facilities can also impact on the level of cash achieved from vehicle sales. Nevertheless, the director considers that there is sufficient equity within the company's asset base to provide a buffer in the event of an unforeseen cash flow shortage.

On the basis of projections of future performance and the continuing availability of appropriate finance facilities, the director considers that the company has adequate resources to continue in operational existence for the foreseeable future. These financial statements are therefore prepared on a going concern basis.

Turnover represents amounts receivable for the sale, repair and hire of commercial vehicles net of VAT and trade discounts.

Income from the sale of commercial vehicles is recognised when the sales contract is completed.

Income from the hire of commercial vehicles is recognised in the associated rental period.

Vehicle repair sales are recognised at the point of completion of the relevant work.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 4 years.

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The key areas of judgement in relation to these financial statements are:-

• The determination of the useful economic life of tangible fixed assets and the depreciation policy to be applied. The policies used are as detailed above.

• The determination of the net realisable value of used vehicle stock, which is assessed at frequent intervals by the company director by reference to current industry pricing guides.

Turnover is derived entirely from the company's principal activity which is undertaken wholly in the UK.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Net obligations under finance leases and hire purchase agreements are secured on the assets to which they relate.

Included within other borrowings is a stocking loan totalling £820,123 (2023: £814,533) which is secured on the stock of vehicles. In the previous year included within other creditors was a loan of £86,890 which was secured by way of a floating charge over certain of the company's tangible fixed assets.

Bank overdrafts are secured by fixed and floating charges over the company's assets.

Bank loans are repayable by monthly instalments over the next 3 to 5 years and are secured by Government guarantees under the Coronavirus Business Interruption Loan Scheme.

Other loans include stocking loans which are secured on specific vehicles within stock.

Finance lease payments represent rentals payable by the company for certain motor vehicles and plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Net obligations under finance lease and hire purchase contracts are secured by fixed charges on the assets concerned.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Operating lease payments represent rentals payable by the company for it's trading premises.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

During the year the company entered into the following transactions with related parties:

Companies under common control

The total year end balance owed by three companies under common control was £102,985 (2023: £98,148).

Balances with these connected companies are interest free, with no set repayment terms.

Sales to one company under common control for the year were £262,288 (2023: £9,617). Purchases from one company under common control were £155,145 (2023: £4,500).

Advances or credits have been granted by the company to its directors as follows:

The company is a wholly owned subsidiary of Commercial Vehicles (Yeovil) Limited, whose registered office is The Summit, Woodwater Park, Pynes Hill, Exeter, EX2 5WS.

In March 2025, the company transferred its freehold land and buildings to its parent company, Commercial Vehicles (Yeovil) Limited, at book value.

In September 2025, the company sold its parts and servicing business and associated assets to an unconnected party, realising a profit of approximately £500,000 based on the consideration receivable compared to book value.