F & G Commercials (Huddersfield) Ltd - Limited company accounts 18.2

REGISTERED NUMBER: 02960340 (England and Wales)

F & G Commercials (Huddersfield) Ltd

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2018

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

Mr F Woodhead

Mr G A Stevenson

REGISTERED OFFICE:

Bradley Junction Industrial Estate

Leeds Road

Huddersfield

West Yorkshire

HD2 1UR

REGISTERED NUMBER:

02960340 (England and Wales)

AUDITORS:

Jolliffe Cork LLP

Chartered Accountants & Statutory Auditor

33 George Street

Wakefield

West Yorkshire

WF1 1LX

The directors present their strategic report for the year ended 31 December 2018.

DEVELOPMENT AND PERFORMANCE OF THE COMPANY’S BUSINESS DURING THE YEAR.

The company has enjoyed a solid year in 2018 with revenues and gross profits increasing when compared to the previous year.

The new vehicle sales area of the business has seen activity levels increase over those reached in 2017. Retail unit sales have

increased by 14% and fleet sales by 43% while used vehicle activity increased by 5%. Percentage gross margins have remained in

line to generate an increase in gross profits.

The aftersales areas of the business have also seen increases in revenue for 2018 when compared to 2017. Percentage margins in

both parts and maintenance have been reduced, reflecting efforts to attract new business as well as retaining existing customers in an

ever more competitive marketplace. Despite the reduction in percentage margins, the aftersales areas of the business showed an

increase in gross profits compared to 2017.

Costs across the business continue to be controlled in all areas subject to maintaining standards expected by our customers,

employees and suppliers. Remuneration and training costs have increased as the business strives to attract and retain high quality

employees who are suitably trained to provide the level of service expected by our customers.

KEY PERFORMANCE INDICATORS

The Company's key performance indicators during the year were as follows:

2018

2017

Change

Turnover

£32.6m

£26.0m

£6.6m

Gross profit

£2.7m

£2.7m

£0.0m

Gross profit margin

8.3%

10.4%

(2.1%

)

Stock turnover

4.59

4.71

(0.12

)

Trade debtor days

42.24

41.83

0.41

POSITION OF THE COMPANY AT THE BALANCE SHEET DATE

The company has shown a reduction in its net current assets during the year predominantly reflecting the short-term repayments of

borrowings for investment in capital assets. There is a continued focus on working capital control of stock and debtors whilst paying

trade creditors as they fall due. The company's borrowings continue to be repaid in line with agreed terms.

Non term bank borrowings as a proportion of stock holding of 50% (2017 20%) were also within permissible limits 50%. The

increase was due to borrowings on behalf of the parent company.

The company enters 2019 with a solid bank of vehicle orders so this area of the business should present another solid performance.

The after sales market remains competitive but performance is expected to be maintained through a combination of competitive

pricing and a high quality of service.

PRINCIPAL RISKS AND UNCERTAINTIES

Any business associated with the transport industry is vulnerable to external factors, both economic and political. Fuel costs, interest

rates, finance availability and general economic concerns affect consumers which has a knock on effect throughout our industry.

The direction of the UK economy during and after Brexit adds a further degree of uncertainty which may have an impact on future

activity levels as operators adjust their fleets to meet changing demands. The company has increased its stock holding of parts to try

to minimise the impact of any potential supply disruptions.

Our new vehicle sales performance has some reliance on the represented manufacturer continuing to supply competitively priced

vehicles in a timely manner. Adverse movements in pricing or lead times against other manufacturers could have an adverse effect

on activity and profitability. The used sales performance remains reliant on the availability of suitable products in the marketplace

to meet the needs of customers.

The general improvement in vehicle durability and reliability inevitably leads to some reduction in repairs which is an on-going

feature of the market. Providing a high quality service to customers at a competitive price is a challenge faced by all companies in

the sector and will continue to be so. The company continues to invest in the development of its employees and premises in order to

continue to provide its strongest possible offering in the marketplace.

By spreading our activities across both vehicle sales and after sales we aim to reduce the risk associated with each aspect of the

business.

Costs increases are minimised where ever possible though external factors such as energy price rises mean some cost increase is

unavoidable.

ON BEHALF OF THE BOARD:

Mr F Woodhead - Director

3 May 2019

The directors present their report with the financial statements of the company for the year ended 31 December 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a commercial vehicle dealership.

DIVIDENDS

An interim dividend of 88.09p per share was paid on 31 December 2018. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2018 will be £321,800.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2018 to the date of this report.

Mr F Woodhead

Mr G A Stevenson

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting

Standard applicable in the UK and Republic of Ireland'. 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:

-	select suitable accounting policies and then apply them consistently;

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

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's

transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of

which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order

to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

Mr F Woodhead - Director

3 May 2019

Opinion

We have audited the financial statements of F & G Commercials (Huddersfield) Ltd (the 'company') for the year ended

31 December 2018 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in

Equity 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 2018 and of its 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 Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and

the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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.

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 matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not

identified material misstatements in the Strategic Report or the Report of the Directors.

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 four, 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 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.

Auditors' 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's

website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Claire Lawton FCA DChA (Senior Statutory Auditor)

for and on behalf of Jolliffe Cork LLP

Chartered Accountants & Statutory Auditor

33 George Street

Wakefield

West Yorkshire

WF1 1LX

3 May 2019

TURNOVER

3

32,612,306

25,982,605

Cost of sales

29,920,911

23,326,917

GROSS PROFIT

2,691,395

2,655,688

Administrative expenses

2,231,523

2,174,203

459,872

481,485

Other operating income

17,775

(1,247

)

OPERATING PROFIT

5

477,647

480,238

Interest payable and similar expenses

6

61,162

29,997

PROFIT BEFORE TAXATION

416,485

450,241

Tax on profit

7

89,029

98,656

PROFIT FOR THE FINANCIAL YEAR

327,456

351,585

PROFIT FOR THE YEAR

327,456

351,585

OTHER COMPREHENSIVE INCOME

Revaluation of long leasehold property

(64,000

)

789,500

Income tax relating to other comprehensive income

25,017

(109,241

)

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

(38,983

)

680,259

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

288,473

1,031,844

FIXED ASSETS

Tangible assets

9

3,936,280

2,469,358

CURRENT ASSETS

Stocks

10

8,406,510

9,403,553

Debtors

11

5,087,413

4,746,227

Cash in hand

921

1,198

13,494,844

14,150,978

CREDITORS

Amounts falling due within one year

12

11,920,557

12,303,511

NET CURRENT ASSETS

1,574,287

1,847,467

TOTAL ASSETS LESS CURRENT LIABILITIES

5,510,567

4,316,825

CREDITORS

Amounts falling due after more than one year

13

(1,922,943

)

(713,684

)

PROVISIONS FOR LIABILITIES

17

(170,575

)

(152,765

)

NET ASSETS

3,417,049

3,450,376

CAPITAL AND RESERVES

Called up share capital

18

365,290

365,290

Revaluation reserve

19

1,169,142

1,208,125

Retained earnings

19

1,882,617

1,876,961

SHAREHOLDERS' FUNDS

3,417,049

3,450,376

The financial statements were approved by the Board of Directors on 3 May 2019 and were signed on its behalf by:

Mr F Woodhead - Director

Mr G A Stevenson - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2017

365,290

1,755,457

535,285

2,656,032

Changes in equity

Dividends

-

(237,500

)

-

(237,500

)

Total comprehensive income

-

359,004

672,840

1,031,844

Balance at 31 December 2017

365,290

1,876,961

1,208,125

3,450,376

Changes in equity

Dividends

-

(321,800

)

-

(321,800

)

Total comprehensive income

-

327,456

(38,983

)

288,473

Balance at 31 December 2018

365,290

1,882,617

1,169,142

3,417,049

1.	STATUTORY INFORMATION

F & G Commercials (Huddersfield) Ltd is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

The functional and presentation currency for the company is the pound sterling (£). All financial information presented has

been rounded to the nearest (£), unless otherwise stated.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Going concern

The directors are of the opinion that the company continues to be a going concern and have therefore adopted that basis in

the preparation of the financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as

permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. Estimates and

Judgements are continually evaluated and are based on historical experience and other factors, including expectations of

future events that are believed to be reasonable under the circumstances. The items in the financial statements where these

judgements and estimates have been made include:

(i) Useful economic lives of tangible assets

The annual amortisation and depreciation charges for intangible and tangible fixed assets is sensitive to changes in the

estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed

annually. They are amended when necessary to reflect current estimates, based on technological advancement, future

investments, economic utilisation and the physical condition of the assets.

(ii) Stock provisions

When calculating the stock provisions, management considers the nature and condition of the stock, as well as applying

assumptions around anticipated saleability.

(iii) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade

and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of

debtors and historical experience.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added

tax and other sales taxes.

Parts are invoiced and recognised as a sale when the goods are delivered to or collected by the customer. Maintenance work

is invoiced and recognised as a sale when all works are completed and third party costs received. Vehicle sales are invoiced

and recognised as a sale when two of the following criteria are met; the vehicle is either taxed, delivered to the customer or

paid for in full by the customer.

Revenue from long term maintenance contracts is recognised in the profit and loss account over the life of the contract in

line with the costs incurred in the performance of the contract with any residual balances being recognised at the conclusion

of the contract.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Long leasehold

-

2% on cost

Plant and machinery

-

15% on cost

Motor vehicles

-

25% on cost

Computer equipment

-

25% on cost

All fixed assets are initially recorded at cost.

Long leasehold property is recorded at fair value, as determined by the directors having taken the appropriate professional

advice and based on similar properties in the local area.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving

items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent

that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively

enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in

which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted

or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be

recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire

purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over

their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the

future payments is treated as a liability.

Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are

charged against profits on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are

charged to profit or loss in the period to which they relate.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2018

2017

£

£

United Kingdom

32,612,306

25,982,605

32,612,306

25,982,605

4.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

1,778,962

1,565,807

Social security costs

188,634

177,224

Other pension costs

101,402

96,989

2,068,998

1,840,020

The average number of employees during the year was as follows:

2018

2017

Sales

6

6

Technicians

21

21

Parts

14

14

Administration

11

12

52

53

2018

2017

£

£

Directors' remuneration

-

-

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2018

2017

£

£

Depreciation - owned assets

136,251

155,968

Depreciation - assets on hire purchase contracts

337,451

221,792

Profit on disposal of fixed assets

(102,576

)

(34,428

)

Auditors' remuneration

8,000

7,500

Operating leases - others

4,340

6,533

In addition to remuneration for the audit, the auditors have also levied the following fees:

2018

2017

£

£

Tax advisory services

1,150

1,150

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2018

2017

£

£

Bank interest

33,247

10,741

Bank loan interest

10,335

9,869

Hire purchase

17,580

9,387

61,162

29,997

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2018

2017

£

£

Current tax:

UK corporation tax

46,202

117,813

Deferred tax

42,827

(19,157

)

Tax on profit

89,029

98,656

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained

below:

2018

2017

£

£

Profit before tax

416,485

450,241

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19%)

79,132

85,546

Effects of:

Expenses not deductible for tax purposes

5,288

9,193

Depreciation in excess of capital allowances

6,807

4,515

Other timing differences

(2,198

)

1,077

Rate change on corporation tax

-

1,509

Rate change on deferred tax

-

(3,184

)

Total tax charge

89,029

98,656

Tax effects relating to effects of other comprehensive income

2018

Gross

Tax

Net

£

£

£

Revaluation of long leasehold property

(64,000

)

25,017

(38,983

)

2017

Gross

Tax

Net

£

£

£

Revaluation of long leasehold property

789,500

(109,241

)

680,259

8.

DIVIDENDS

2018

2017

£

£

Interim

321,800

237,500