The directors present the strategic report for the year ended 28 February 2025.

The group's main activities continue to be the provision of new and used vehicles, parts and servicing. Turnover from continuing activities for the year ended 28 February 2025 was £35,105,347 (2024 - £39,713,481). Profit before tax was £455,525 (2024 - £1,095,388). The key financial highlights are shown as follows:

                    2025        2024        2023        

                    £'000        £'000        £'000        

Vehicle sales                29,856        35,380        32,278        

After sales and other income         5,249         4,333         4,016        

Total sales                35,105        39,713        36,294        

Gross profit                 2,745         2,809         2,955        

Net profit before tax             455         1,095         956        

                     %         %         %

Turnover growth                 (11.60)         9.42          4.62

Gross profit margin             7.82         7.07         8.14        

Net profit margin                 1.30          2.76         2.63        

The year presented significant challenges for both new and used car sales, largely due to a reduced product range from Ford, limited availability of used vehicles following a contraction in the new car market in prior years and a continued decline in used vehicle values. Despite these conditions, the company remained resilient and delivered a profit. Strong performance from the aftersales departments played a key role in mitigating the impact of weaker vehicle sales.

The group continues to maintain high levels of customer satisfaction, achieving positive results in ‘Mystery Shop’ assessments and securing several Ford incentive program awards. Management remains committed to ongoing investment in staff training, health, and wellbeing to ensure the business continues to meet and exceed customer expectations.

Amidst persistently high inflation and rising costs, management have remained focused on cost control and closely monitors key performance indicators and financial ratios. This proactive approach enables the business to adapt effectively and manage working capital efficiently, helping to navigate both industry-specific and broader economic challenges.

Given the market conditions, the Board are pleased with the group’s performance and remains optimistic for the year ahead as the market shows signs of recovery.

The board closely monitors and identifies mitigating actions to limit the exposure of material risks and uncertainties that are fundamental to the operation of the company. Principal risks have been identified as follows:

Economic risk

The board continually monitors economic risk whereby negative economic conditions may affect the group's operations. This risk is carefully considered when factoring in the current economy with high inflation and a rise in costs generally.

The group also operates a defined benefit pension scheme. Assumptions adopted in its valuation, including RPI/CPI inflation and discount rates, are largely impacted by current economic conditions.

The impact of changing economic conditions is carefully managed through close engagement with Ford and the Trustees of the defined benefit pension scheme, along with strong working capital management.

Operational risk

The board recognise the continued importance of a strong relationship and the supply of new vehicles from our franchisor. We further recognise the motor retail market in which the group operates is highly competitive.

The group is committed to providing the highest levels of customer service and provide regular staff training in order to continually meet these standards. Our dedication to this has resulted in a number of awards in recent years, including the Ford Chairman's award for excellent customer service.

We further mitigate operations risk through focusing on our other core business areas including used vehicle sales, parts and service sales.

Financial risk

The group's operations expose it to a variety of financial risks that include the effects of credit risk and interest rate fluctuations on company debt.

Credit risk is limited to after sales invoices raised to trade customers whereby bad debts will detrimentally affect the cash flow and ultimate profitability of the company. Credit risk is mitigated through determining the credit worthiness of each customer and setting appropriate credit limits.

Fluctuating interest rates can potentially give the group uncertainty over the amount of debt servicing cash payments. Vehicle stocking loans are funded through a Ford credit facility. Exposure to the rise in short-term interest rates is reduced through prompt repayment of credit provided, with bank borrowing at a fixed rate of interest.

On behalf of the board

The directors present their annual report and financial statements for the year ended 28 February 2025.

The principal activity of the group was that of the sale of new and used motor vehicles, together with provision of after-sales services, including servicing, repairs, and parts supply.

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

Ordinary dividends were paid amounting to £100,000. The directors do not recommend payment of a further dividend.

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

The group will be surrendering the new car sales element of its Ford franchise from January 2026 but will retain full Ford Authorised Repairer status. This will enable the business to continue providing Ford-approved servicing, repairs, warranty work, and parts supply. All aftersales staff will maintain Ford-accredited training standards, and the site will continue to comply with Ford facility requirements, retaining its full Ford identity.

The directors do not believe this change will have a material impact on profitability.

Despite the uncertain economic outlook over the foreseeable future, the board are confident that the group's policies and strategies in place will ensure that it can positively adapt and embrace the forthcoming challenges and changes in the industry.

The auditors, Schofields, will be proposed for re-appointment at the forthcoming Annual General Meeting.

The directors are responsible 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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 auditor of the company 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 auditor of the company is aware of that information.

We have audited the financial statements of Birchclaim Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and the parent company's affairs as at 28 February 2025 and of the group's profit 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 group and parent 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

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 directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company 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.

As explained more fully in the directors' responsibilities statement, 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 parent 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 parent company or to cease operations, or have 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We considered the potential for non-compliance with laws and regulations, including fraud, that could have a material effect on the financial statements. Our audit procedures were designed to respond to the risk of material misstatement in the financial statements, whether due to fraud or error. However, the primary responsibility for the prevention and detection of fraud rests with those charged with governance.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the nature of the company, the sector in which it operates, its control environment, and the company’s policies and procedures regarding compliance with laws and regulations. We also made enquiries of management and those charged with governance concerning any actual or suspected non-compliance and considered whether there was any evidence of such through our audit procedures.

Based on our understanding of the group and its environment, we assessed the areas of the financial statements most susceptible to material misstatement due to fraud to be:

• Revenue recognition, particularly the completeness and timing of vehicle sales, aftersales servicing and parts income, including the treatment of manufacturer incentives and bonuses;

• Management override of controls, through the posting of manual journals and adjustments;

• Inventory valuation, with a focus on the accuracy of new and used vehicle stock, demonstration vehicles, and parts, ensuring these are recorded at the lower of cost and net realisable value; and

• Use of estimates and judgements, particularly in relation to warranty and stock provisions, and year-end accruals

These areas were considered susceptible either due to the level of management judgement involved or the opportunity for intentional misstatement. Our audit procedures were designed accordingly to respond to these risks.

As part of this process, we considered both those laws and regulations that have a direct impact on the preparation of the financial statements (such as the Companies Act 2006 and UK tax legislation) and those with an indirect effect that are fundamental to the entity’s operations. These included regulations relevant to the motor vehicle sales and service industry, such as health and safety legislation, employment law, and regulations relating to vehicle sales and servicing. We also considered other relevant laws, including data protection legislation and consumer protection laws, to the extent that non-compliance might reasonably be expected to impact the financial statements.

Our audit procedures included:

• Revenue recognition: Test a sample of vehicle sales, after-sales servicing, and parts income, performing cut-off and analytical procedures to ensure revenue is complete, accurate, and recorded in the correct period.

• Management override of controls: Review and test manual journals and other adjustments for unusual, unsupported, or irregular entries.

• Valuation of inventory: We attended the year-end stock count and tested a sample of new and used vehicles and parts. We also performed follow-up procedures, including verification of ownership documentation and review of valuation, to ensure stock is recorded at the lower of cost and net realisable value.

• Use of estimates and judgements: Assess the reasonableness and supporting evidence for key estimates, including warranty and stock provisions and year-end accruals.

• Compliance with laws and regulations: Review adherence to relevant legislation to ensure non-compliance does not materially impact the financial statements.

Because of the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though our audit was properly planned and performed in accordance with auditing standards. This is particularly the case in relation to irregularities involving collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

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 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.

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

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £297,529 (2024 - £731,750 profit).

Birchclaim Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

The group consists of Birchclaim Limited and all of its subsidiaries.

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, modified to include the revaluation of investment properties at fair value. The principal accounting policies adopted are set out below.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Birchclaim Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 28 February 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on delivery to the customer), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Revenue from the sale of property is recognised on completion.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and has been fully amortised on a systematic basis over its expected life.

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

Depreciation is recognised so as to write off the cost or valuation 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 recognised in the profit and loss account.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

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.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Consignment stock is recognised in the balance sheet when the company bears the risk and responsibilities of ownership following shipment from the manufacturer holding centre.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and 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 group 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 group 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.

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the group 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 group.

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 group’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.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

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.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss 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 leased asset are consumed.

In the application of the group’s accounting policies, the directors are 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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The group operates a defined benefit pension scheme in the UK. This is a separate trustee administered fund holding the pension scheme assets to meet the long term pension liabilities, which requires estimates of the present value of projected future payments to all participants. The assumptions adopted for disclosure are appropriate to meet the requirements of Section 28 of FRS102. The assumptions have been set consistently with previous years, using the same market indices and adjustments unless there is a major plan event change. The assumptions include mortality projections, retirement rates, RPI and CPI inflation, discount rates and expected contributions which are all disclosed in the financial statements

In determining the net realisable value of stocks, management take into account the most reliable evidence available at the dates estimates are made. Future realisation of the carrying amounts of stocks is affected by price changes in different market segments. The directors have used guidance from valuation tools and their knowledge of the industry when assessing the level of provisions required.

All turnover arose within the United Kingdom.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 3 (2024 - 3).

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

The fair value of the investment properties has primarily been determined using a market approach, which has provided an indication of value by comparing the subject asset with similar assets for which price information is available. Other factors were also considered when deriving fair value, these include, but are not limited to, rental yields and lease terms.

Details of the company's subsidiaries at 28 February 2025 are as follows:

The investment carrying value represents the cost of shares in the wholly owned subsidiary company.

The group's bank borrowings are secured by way of a debenture and a fixed and floating charge over the group's assets.

Vehicle stocking loans amounting to £1,734,312 (2024 - £1,875,037) relate to new vehicles that the group bears the risks and rewards of ownership. The vehicle stocking loans hold security over all new and used vehicle stock.

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

No material reversal of deferred tax liabilities is expected to occur in the year beginning after the reporting period.

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 5 April 2022 with an update carried out at 28 February 2025 for FRS 102 reporting purposes by a qualified actuary. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.

Assumed life expectations on retirement at age 65:

The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:

The actual return on plan assets was £142,000 (2024 - £137,000).

The share premium reserve records the amount above the nominal value received for shares sold, less transaction costs.

The capital redemption reserve records the nominal value of shares repurchased by the company.

The non-distributable profits reserve represents unrealised gains arising from the revaluation of investment properties. In accordance with company law, this reserve is not distributable as a dividend.

Retained earnings represents cumulative profits and losses net of dividends and other adjustments.

The parent company has provided a cross guarantee with Barclays Bank in respect of the overdraft facility held by the subsidiary undertaking.

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

No guarantees have been given or received.