Registration number:
for the Year Ended
Registration number:
for the Year Ended
Birchwood Motor Group Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Statement of Comprehensive Income |
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Balance Sheet |
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Statement of Cash Flows |
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Notes to the Financial Statements |
Birchwood Motor Group Limited
Company Information
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Directors |
Mr CJ Hunt Mr I Sexton Mr J S Newton |
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Company secretary |
Mr SD Rebbetts |
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Registered office |
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Auditors |
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Birchwood Motor Group Limited
Strategic Report for the Year Ended 31 December 2024
The directors present their strategic report for the year ended 31 December 2024.
Principal activity
The principal activity of the company is retail and servicing of motor vehicles under franchise.
Fair review of the business
The company made an operating profit for the year of £242k (2023: £680k) and a loss for the year of £327k (2023: profit of £31k).
The UK national motor retail industry
In 2024, new car registrations in the UK reached approximately 1.8 million, reflecting a continued recovery and growth from the previous year. Following the normalisation of supply post-COVID, the automotive market experienced a boost in sales, driven by enhanced OEM targets and the expansion of channels such as Motability, national fleet services, and daily rentals. Increased competition among manufacturers contributed to higher volumes, although this also resulted in reduced profit margins compared to the previous three years.
The electric vehicle (EV) sector continued to play a significant role in sales growth, claiming approximately 25% of the total market, up from 20% in 2023. This surge was fuelled by the increasing availability of EV models and the ongoing shift towards electrification, with several manufacturers announcing the discontinuation of mainstream internal combustion engine (ICE) models, further emphasising their commitment to electric mobility. Brands from China increased their market presence, offering a broader range of vehicles, including EVs, hybrids, and ICE models.
Light commercial vehicles (LCV)
The LCV market in 2024 saw registrations rise to around 400,000 units, an increase of approximately 20,000 units compared to 2023. This growth was primarily driven by the ongoing expansion of e-commerce and last-mile delivery services, necessitating efficient transportation solutions for tradespeople and businesses. The demand for LCVs has remained robust, reflecting the changing needs of both business and recreational users, as they seek vehicles that meet utility requirements while adapting to the evolving market landscape.
Overall, the UK motor retail industry in 2024 demonstrated resilience and adaptability amidst shifting consumer preferences and market dynamics, with a clear trajectory toward electrification and increased operational efficiency in the commercial sector.
New and used vehicle sales
Whilst the UK new car market increased marginally year on year, it was good to see BMG grow their New car volume by 417 units or 27.4%. The Used car volume increased by 198 units, or 8.9%. This strong performance was even more appreciable given that the Kia brand went from strength to strength increasing its national market share up to 5.7%/112,252 units and became the 6th biggest car company in the UK. Unfortunately, Ford's Fiesta model ran out of its final supply. A pleasing and significant outcome of 2024 sales was that of margin. In contrast to most of the OEM composite data for the year, the average BMG margin saw a tiny increase in new margin of £23ppu and a fractional decrease on used margin of £15ppu. The pedigree of the sales business at BMG further improved in the challenging year of 2024 with an overall New & Used increase in GP of £222,820 or 2.7%. The industry experienced a significant downturn in the retail car market in the second half of 2024. Without this, and combined with the run-out of Fiesta, the year would have been even stronger.
Birchwood Motor Group Limited
Strategic Report for the Year Ended 31 December 2024
The company continued to drive sales of its F+I (incremental upsell products such as GAP insurance, paint/fabric enhancements and service plans) to top quartile composite performance levels across the UK. The Used vehicle supply continuum is a major key to the strong performance; BMG’s ongoing focus on PCP renewals, combined with a Used vehicle specialist and the use of technology-based pricing tools drove its high performance. Resultantly, an average group stock turn of 10.1% was achieved which is good for the industry.
NB:The Hastings site suffered as a major road network development started in the Spring which severely affected all volumes at the site.
Aftersales performance
In 2024, Birchwood Motor Group experienced significant growth in aftersales revenues, with Eastbourne Kia achieving record service volumes and Washington Kia maintaining its historically high output. Eastbourne Ford also delivered impressive throughput, benefiting from a strategic staff rotation model of four days on and four days off, which optimised asset utilisation and enhanced profitability. Despite Hastings facing challenges due to customer cancellations linked to ongoing roadworks, it sustained a commendable level of productivity.
Cost base management
The organisation faced escalating pressures on direct costs, including wage increases, interest charges, and general inflation, alongside rising indirect costs such as utilities and rent. In response, Birchwood conducted a thorough analysis of its cost structure, identifying numerous savings opportunities. The ongoing streamlining initiatives, encompassing representation footprint adjustments and enhancements in technology and processes, remain a priority. Additionally, BMG implemented tactical cost savings at the senior management level to support a new growth-oriented structure.
Strategy for growth
The company has evolved its Six Pillar strategy into the ‘Compass’ game plan, encapsulated by the motto “Embracing change to grow.” This strategy emphasizes a VMOST (Vision, Mission, Objectives, Strategy, Tactics) framework, ensuring alignment from top leadership to tactical execution.
Culture and people development
Recognising the shifting attitudes and expectations of the workforce post-pandemic, the company is committed to becoming the employer of choice. The appointment of a Director of People and Culture (DoPaC) in 2024 signifies this commitment, focusing on loyalty, productivity, and improved employee attraction to enhance overall workforce satisfaction and reduce costs.
Next generation marketing
The introduction of a Director of Digital Transition (DoDT) is aimed at establishing BMG as a leader in marketing across all channels-from tactical initiatives to social influence and events. The company is prioritizing a sharper retail focus, with an omnichannel approach ensuring customer engagement at every touchpoint, be it physical or digital.
Adapting to change
The company acknowledges that change is essential for success and is prepared to proactively adapt. The DoPaC will facilitate this transition, addressing new processes, technologies, and evolving consumer expectations. A structured change program is underway to support employees through this transformative period.
Transformational technology
An audit of existing technologies has prompted a strategic shift towards modernising systems, particularly the DMS. Under the direction of the new DoDT, the company is implementing changes that are expected to enhance customer experiences, improve sales, and drive process efficiencies, with positive financial results anticipated by the end of 2024.
Birchwood Motor Group Limited
Strategic Report for the Year Ended 31 December 2024
Structured for success
To optimize performance, the company will operate with three heads of franchise overseeing Ford, Kia, and Motorcycles. This structure is designed to maximize profitability and key performance indicators (KPIs) while embracing all strategic pillars.
Efficient growth
2024 was a further transformative year for Birchwood Motor Group amid unprecedented industry changes. The Compass strategy has garnered positive feedback from OEMs and stakeholders alike. As consumer expectations shift and competitive pressures rise, the company is poised for an exciting future in 2025 and beyond, dedicated to embracing change and driving sustainable growth.
Summary
The industry is going through unprecedented change and 2023 was a pivotal year for BMG in its choices and strategic decisions. Its Compass activity will embrace change to grow and has had significant plaudits from OEM’s and other stakeholders. The consumers expectations are changing dramatically as social outlook and technology evolves. OEM competition is high with a raft of EV complications as we embrace a fossil fuel free future. Employees are also changing, and our cost base is under pressure. At every level Birchwood strategized in 2023 and is very excited about what 2024 and beyond has to offer.
Principal risks and uncertainties
The group's strategy and the general nature of the business are subject to a number of risks. The directors have set out below the principal risks facing the business.
The directors consider that through robust risk management procedures, involving the formal review of the risks identified below, systems are in place to monitor and mitigate such risks.
The market in which the group operates is highly competitive. Specific territories are allocated by manufacturers which mitigates direct competition in respect of new vehicles, used vehicle and servicing competition to a point. In addition, similar class vehicles are available from other manufacturers and as a result the group has a diverse portfolio of marques within the 'volume' vehicle market. The company has a relentless determination to understand the implications of the digital market and has resultantly created strategies to gain competitive advantage.
The group maintains exemplary dealer standards and prides itself on meeting and exceeding customer expectations. Policies of constant price monitoring and on-going market research are in place to mitigate competition risks.
Approved and authorised by the
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Birchwood Motor Group Limited
Directors' Report for the Year Ended 31 December 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Directors of the company
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
The group uses financial instruments other than derivatives comprising borrowings, cash and other liquid resources and various other items such as trade debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group's operations. The main risks arising from the group's financial instruments are interest rate risk and liquidity risk The directors review and agree policies for managing each of these risks and they are summarised below.
Price risk, credit risk, liquidity risk and cash flow risk
Interest rate risk:
The group finances its operations through a mixture of reserves, related party loans, bank finance and trade borrowings from manufacturers, predominantly Ford. The group's exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities.
The increase in the Bank of England base rate during and since the year has meant that the overall cost of borrowing has increased significantly. The directors keep borrowing levels under regular review.
Liquidity risk:
The group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable requirements. The group policy throughout the year has been to ensure continuity of funding from manufacturers and from the group's bankers.
Short term flexibility is achieved by an overdraft facility, which stood at £348,603 at the balance sheet date (2023: £244,396).
Other debt is structured so that repayments can be made out of cash generated through operations.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Approved and authorised by the
Birchwood Motor Group Limited
Directors' Report for the Year Ended 31 December 2024
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Birchwood Motor Group Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have 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 directors must not approve the financial statements unless they are 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 directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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 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.
Birchwood Motor Group Limited
Independent Auditor's Report to the Members of Birchwood Motor Group Limited
Opinion
We have audited the financial statements of Birchwood Motor Group Limited (the 'company') for the year ended 31 December 2024, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Cash Flows, and Notes to the Financial Statements, 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).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 December 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 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 original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
Birchwood Motor Group Limited
Independent Auditor's Report to the Members of Birchwood Motor Group Limited
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where 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 directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 7], the directors are 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 directors determine 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor Responsibilities for the audit of the financial statements
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.
Birchwood Motor Group Limited
Independent Auditor's Report to the Members of Birchwood Motor Group Limited
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations. The laws and regulations applicable to the company were identified through discussions with directors and other management and from our commercial knowledge and experience of the motor dealership industry. Of these laws and regulations, we focused on those that we considered may have a direct material impact on the financial statements or the operations of the company.
Our assessment of the laws and regulations that may materially affect the financial statements or operations of the company included the Companies Act 2006, taxation legislation, employment law, health and safety regulations and environmental regulations. We also considered GDPR, anti-money laundering, FCA rules and the Consumer Credit Act throughout the audit. The extent of the company's compliance with these laws and regulations identified above was assessed through making enquiries of management and inspecting correspondence and other documentation. The identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the duration of the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:
• Making enquiries of management and directors as to where they have considered there is a susceptibility to fraud, and their knowledge of actual, suspected or alleged fraud;
• Considering the internal controls in place to mitigate the risk of fraud and non-compliance with laws and regulations.
To address the risk of fraud arising through management bias and override of controls we have:
• Performed analytical procedures to identify any unusual or unexpected relationships or balances;
• Tested journal entries to identify unusual transactions;
• Assessed whether judgements and assumptions made in determining the accounting estimates of the company were indicative of potential bias; and
• Investigated the rationale behind any significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
• Agreeing disclosures in these financial statements to underlying supporting documentation;
• Enquiring of management as to actual and potential litigation and claims; and
• Reviewing correspondence with HMRC, the company’s franchisors and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The further removed that laws and regulations are from the financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identified non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence where present. Material misstatements that arise due to fraud can be more difficult to detect than those arising from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Birchwood Motor Group Limited
Independent Auditor's Report to the Members of Birchwood Motor Group Limited
Use of our 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.
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For and on behalf of
2/4 Ash Lane
Rustington
West Sussex
BN16 3BZ
Birchwood Motor Group Limited
Profit and Loss Account for the Year Ended 31 December 2024
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Note |
2024 |
2023 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Other operating income |
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Operating profit |
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Other gains/losses |
- |
(122) |
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Interest payable and similar charges |
( |
( |
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(Loss)/profit before tax |
( |
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Taxation |
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( |
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(Loss)/profit for the financial year |
( |
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The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
Birchwood Motor Group Limited
Statement of Comprehensive Income for the Year Ended 31 December 2024
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Note |
2024 |
2023 |
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(Loss)/profit for the year |
( |
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Total comprehensive income for the year |
( |
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Birchwood Motor Group Limited
(Registration number: 6512050)
Balance Sheet as at 31 December 2024
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Note |
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Fixed assets |
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Tangible assets |
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Other financial assets |
10 |
10 |
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Current assets |
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Stocks |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Provisions for liabilities |
( |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Retained earnings |
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Shareholders' funds |
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Approved and authorised by the
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Birchwood Motor Group Limited
Statement of Cash Flows for the Year Ended 31 December 2024
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Note |
2024 |
2023 |
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Cash flows from operating activities |
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(Loss)/profit for the year |
( |
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Adjustments to cash flows from non-cash items |
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Depreciation and amortisation |
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Loss on disposal of tangible assets |
- |
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Finance costs |
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Income tax expense |
( |
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Working capital adjustments |
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Increase in stocks |
( |
( |
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Increase in trade debtors |
( |
( |
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Increase in trade creditors |
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Increase in deferred income, including government grants |
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Cash generated from operations |
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Income taxes received/(paid) |
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( |
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Net cash flow from operating activities |
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Cash flows from investing activities |
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Acquisitions of tangible assets |
( |
( |
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Cash flows from financing activities |
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Interest paid |
( |
( |
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Proceeds from other borrowing draw downs |
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- |
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Repayment of other borrowing |
( |
- |
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Net cash flows from financing activities |
( |
( |
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Net (decrease)/increase in cash and cash equivalents |
( |
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Cash and cash equivalents at 1 January |
( |
( |
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Cash and cash equivalents at 31 December |
(312) |
(209) |
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Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
These financial statements are presented in Sterling, which is also the company's functional currency. The financial statements are rounded to the nearest £1,000.
Judgements
Consignment inventories have been included within the statement of financial position on the grounds that the company considerably bears the risks and rewards of ownership attached to these vehicles. As such, the consignment inventories are considered to be under the control of the company. |
At each reporting date, property, plant and equipment is assessed for any indication of impairment. If such indication exists, the recoverable amount of each asset is determined based on value in use calculations which require estimates to be made of future cash flows. An impairment loss is recognised where the carrying amount exceeds the recoverable amount. |
The company receives income in the form of various incentives which are determined by the company's brand partners. The amount receivable is generally based on achieving specific objectives such as specified sales volumes, as well as other objectives including maintaining brand partner standards which may include, but are not limited to, retail centre image and design requirements, customer satisfaction survey results and training standards. Objectives are generally set and measured on either a quarterly or annual basis. |
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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Accounting policies (continued) |
Key sources of estimation uncertainty
Potential provisions for the impairment of used vehicle values requires an assessment of the realisable value of such stocks. Realisable value is obtained using market reseach data based upon recent industry activity. Whilst this data is deemed to be representative of current values, it is possible that the ultimate sales values will differ from the realisable value applied. The carrying amount is £Nil (2023 -£Nil).
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, exclusive of trade discounts, value added tax and other sales related taxes.
Sales of motor vehicles, parts and accessories are recognised when the significant risks and rewards of ownership have been transferred to the buyer. In general this occurs when vehicles or parts are delivered to the customer and title has passed.
Income arising from servicing and bodyshop sales are recognised on completion of the agreed work.
Sales of peripheral goods and services such as road fund licences and insurance policies are recognised as miscellaneous sales when the company defrays its responsibilities under the contract.
Commissions and incentive payments from franchisors and finance providers are recognised as earned. Where such income relates to specific vehicles, this is recognised in line with the recognition of the relevant vehicle.
Government grants
Government grants relating to coronavirus support are recognised at the point that the company becomes eligible for the grant.
Other grants
Other grants are credited to the profit and loss account as the related expenditure is incurred.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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Accounting policies (continued) |
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Short leasehold property |
Over the period of the lease |
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Plant and machinery |
10 years straight line |
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Fixtures and fittings |
7 years straight line |
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Office equipment |
3 years straight line |
Intangible assets
Intangible assets are stated in the statement of financial position at cost, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
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Asset class |
Amortisation method and rate |
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Goodwill |
15 years straight line |
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Computer software and website development |
3 years straight line |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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Accounting policies (continued) |
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method. Cost includes the purchase price, including taxes and duties, and transport and handling directly attributable to bringing the stock to its present location and condition.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Throughout each reporting period, stocks are periodically assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
Stocks include consignment stocks where the risks and rewards of ownership have been passed to the company. Where consignment stocks are recognised, the associated liabilitty is included within creditors.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
2 |
Accounting policies (continued) |
Leases
At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the agreement.
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.
The company acts as a lessor by sub letting certain operating leases. Rentals receivable under these sub leases are credited to the profit and loss account on a straight line basis over the period of the lease, even if payments are not received on such a basis.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
2 |
Accounting policies (continued) |
Financial instruments
Classification
Recognition and measurement
Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short term instrument constitute a financing transaction, such as the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case off an outright short term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow, discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Impairment
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying value and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is an 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.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Revenue |
The analysis of the company's revenue for the year from continuing operations is as follows:
|
2024 |
2023 |
|
|
Sale of goods |
|
|
|
Rendering of services |
|
|
|
Commissions received |
|
|
|
Other revenue |
|
|
|
|
|
The analysis of the company's turnover for the year by class of business is as follows:
|
2024 |
2023 |
|
|
Sale of new vehicles |
|
|
|
Sale of used vehicles |
|
|
|
Servicing and parts income |
|
|
|
Other turnover |
3,866 |
4,269 |
|
|
|
The analysis of the company's turnover for the year by market is as follows:
|
2024 |
2023 |
|
|
UK |
|
|
|
|
|
|
Other operating income |
The analysis of the company's other operating income for the year is as follows:
|
2024 |
2023 |
|
|
Miscellaneous other operating income |
|
|
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Other gains and losses |
The analysis of the company's other gains and losses for the year is as follows:
|
2024 |
2023 |
|
|
Gain/loss on disposal of property, plant and equipment |
- |
( |
|
- |
(122) |
|
Operating profit |
Arrived at after charging/(crediting)
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Write-down of stocks to net realisable value |
|
|
|
Operating lease expense - other |
18 |
2 |
|
Loss on disposal of property, plant and equipment |
- |
|
|
Interest payable and similar expenses |
|
2024 |
2023 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Interest expense on other finance liabilities |
|
|
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Other short-term employee benefits |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
Other employee expense |
|
|
|
|
|
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
8 |
Staff costs (continued) |
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
|
2024 |
2023 |
|
|
Vehicle sales |
|
|
|
Servicing and parts |
|
|
|
Administration and support |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Sums paid to third parties for directors' services |
|
|
|
462 |
459 |
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of the financial statements |
|
|
|
Other fees to auditors |
||
|
Taxation compliance services |
|
|
|
All other assurance services |
|
|
|
|
|
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Taxation |
Tax charged/(credited) in the income statement
|
2024 |
2023 |
|
|
Current taxation |
||
|
UK corporation tax |
( |
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
|
|
|
Tax (receipt)/expense in the income statement |
( |
|
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2023 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024 |
2023 |
|
|
(Loss)/profit before tax |
( |
|
|
Corporation tax at standard rate |
( |
|
|
UK deferred tax expense relating to changes in tax rates or laws |
|
|
|
Tax (decrease)/increase from effect of capital allowances and depreciation |
( |
|
|
Other tax effects for reconciliation between accounting profit and tax expense (income) |
- |
( |
|
Total tax (credit)/charge |
( |
|
Deferred tax
Deferred tax assets and liabilities
|
2024 |
|
|
||
|
Accelerated capital allowances |
- |
|
||
|
Unpaid pension contributions |
- |
( |
||
|
- |
|
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
11 |
Taxation (continued) |
|
2023 |
|
|
||
|
Accelerated capital allowances |
- |
|
||
|
Unpaid pension contributions |
- |
( |
||
|
- |
|
|
Intangible assets |
|
Other intangible assets |
Total |
|
|
Cost or valuation |
||
|
At 1 January 2024 |
|
|
|
At 31 December 2024 |
|
|
|
Amortisation |
||
|
At 1 January 2024 |
|
|
|
At 31 December 2024 |
|
|
|
Carrying amount |
||
|
At 31 December 2024 |
- |
- |
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Tangible assets |
|
Short leasehold land and buildings |
Fixtures and fittings |
Office equipment |
Other tangible assets |
Total |
|
|
Cost or valuation |
|||||
|
At 1 January 2024 |
|
|
|
|
|
|
Additions |
|
|
|
|
|
|
At 31 December 2024 |
|
|
|
|
|
|
Depreciation |
|||||
|
At 1 January 2024 |
|
|
|
|
|
|
Charge for the year |
|
|
|
|
|
|
At 31 December 2024 |
|
|
|
|
|
|
Carrying amount |
|||||
|
At 31 December 2024 |
|
|
|
|
|
|
At 31 December 2023 |
|
|
|
|
|
Included within the net book value of land and buildings above is £795,380 (2023 - £686,268) in respect of short leasehold land and buildings.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Other financial assets (current and non-current) |
|
Financial assets at cost less impairment |
Total |
|
|
Non-current financial assets |
||
|
Cost or valuation |
||
|
At 1 January 2024 |
10 |
10 |
|
At 31 December 2024 |
10 |
10 |
|
Impairment |
||
|
Carrying amount |
||
|
At 31 December 2024 |
|
10 |
|
Stocks |
|
2024 |
2023 |
|
|
New vehicles |
|
|
|
Used vehicles |
|
|
|
Parts |
|
|
|
|
|
Impairment of stocks
The amount of impairment loss included in profit or loss is £577,330 (2023 - £544,522). The impairment loss is included in cost of sales.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Debtors |
|
Current |
Note |
2024 |
2023 |
|
Trade debtors |
|
|
|
|
Amounts owed by related parties |
|
|
|
|
Other debtors |
|
|
|
|
Prepayments |
|
|
|
|
Income tax asset |
|
- |
|
|
|
|
|
Cash and cash equivalents |
|
2024 |
2023 |
|
|
Cash on hand |
|
|
|
Cash at bank |
|
|
|
Short-term deposits |
- |
|
|
|
|
|
|
Bank overdrafts |
( |
( |
|
Cash and cash equivalents in statement of cash flows |
(312) |
(209) |
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Creditors |
|
Note |
2024 |
2023 |
|
|
Due within one year |
|||
|
Loans and borrowings |
|
|
|
|
Trade creditors |
|
|
|
|
Amounts due to related parties |
|
|
|
|
Social security and other taxes |
|
|
|
|
Outstanding defined contribution pension costs |
|
|
|
|
Accrued expenses |
|
|
|
|
Income tax liability |
- |
43 |
|
|
Deferred income |
|
|
|
|
Customer deposits held |
|
|
|
|
|
|
||
|
Due after one year |
|||
|
Loans and borrowings |
|
|
|
|
2,360 |
2,300 |
|
Provisions for liabilities |
|
Deferred tax |
Total |
|
|
At 1 January 2024 |
|
|
|
Increase (decrease) in existing provisions |
|
|
|
At 31 December 2024 |
|
|
|
|
||
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £87,377 (2023 - £
Contributions totalling £
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. 000 |
£ 000 |
No. 000 |
£ 000 |
|
|
|
|
1 |
|
1 |
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Loans and borrowings |
|
2024 |
2023 |
|
|
Non-current loans and borrowings |
||
|
Other borrowings |
|
|
|
|
|
|
|
2024 |
2023 |
|
|
Current loans and borrowings |
||
|
Bank overdrafts |
|
|
|
Other borrowings |
|
- |
|
|
|
|
Bank borrowings
|
Bank overdrafts are part of a group overdraft facility which is secured by cross guarantees between the companies concerned, and fixed and floating charges over the assets of the companies concerned. |
Other borrowings
Autozones loan with a carrying amount of £2,300,000 (2023 - £2,300,000) is denominated in Sterling with a nominal interest rate of 2% above base rate.
The loan is secured by fixed and floating charge over the vehicle stocks of the company. The loan is repayable on demand, however the directors have obtained confirmation from Autozones 2000 Limited that repayment will not be required within twelve months of the date of approval of these financial statements.
Other loan with a carrying amount of £111,945 (2023 - £Nil) is denominated in GBP with a nominal interest rate of 3.4% above base rate.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Related party transactions |
Key management personnel
Key management compensation
|
2024 |
2023 |
|
|
Salaries and other short term employee benefits |
|
|
|
|
|
Summary of transactions with parent
Summary of transactions with entities with joint control or significant interest
Outstanding balances with related parties are unsecured, interest free and cash settlement is expected within 30 days of invoice.
Summary of transactions with other related parties
Outstanding balances with related parties are unsecured, interest free and cash settlement is expected within 30 days of invoice.
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
23 |
Related party transactions (continued) |
Income and receivables from related parties
|
2024 |
Entities with joint control or significant influence |
Other related parties |
|
Sale of goods |
|
|
|
Receipt of services |
- |
|
|
|
|
|
|
Amounts receivable from related party |
- |
|
|
|
||
|
2023 |
Entities with joint control or significant influence |
Other related parties |
|
Sale of goods |
|
|
|
Receipt of services |
- |
|
|
|
|
|
|
Amounts receivable from related party |
- |
|
|
|
||
Expenditure with and payables to related parties
|
2024 |
Parent |
Entities with joint control or significant influence |
Key management |
Other related parties |
|
Purchase of goods |
- |
- |
- |
|
|
Rendering of services |
|
- |
- |
|
|
Leases |
- |
|
|
- |
|
|
|
|
|
|
|
Amounts payable to related party |
- |
|
- |
|
|
|
||||
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
23 |
Related party transactions (continued) |
|
2023 |
Parent |
Entities with joint control or significant influence |
Key management |
Other related parties |
|
Purchase of goods |
- |
- |
- |
|
|
Rendering of services |
|
- |
- |
|
|
Leases |
- |
|
|
- |
|
|
|
|
|
|
|
Amounts payable to related party |
|
|
- |
- |
|
|
||||
Loans to related parties
|
2024 |
Parent |
Other related parties |
|
At start of period |
- |
|
|
Advanced |
|
|
|
At end of period |
|
|
|
|
||
|
2023 |
Other related parties |
|
Advanced |
|
|
|
|
Terms of loans to related parties
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
23 |
Related party transactions (continued) |
Loans from related parties
|
2024 |
Entities with joint control or significant influence |
Other related parties |
|
At start of period |
|
|
|
Advanced |
|
- |
|
Repaid |
( |
( |
|
At end of period |
|
|
|
|
||
|
2023 |
Entities with joint control or significant influence |
Other related parties |
|
At start of period |
|
|
|
Advanced |
|
|
|
Repaid |
( |
( |
|
At end of period |
|
|
|
|
||
Terms of loans from related parties
|
Financial instruments |
Items of income, expense, gains or losses
The total interest expense for financial liabilities not measured at fair value through profit or loss is £688,247 (2023 - £471,058).
Birchwood Motor Group Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is
The ultimate controlling party is