06 Ormskirk Limited - Limited company accounts 18.2

REGISTERED NUMBER: 05540164 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2018

for

06 Ormskirk Limited

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

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTORS:

P Byron

J Dickson

REGISTERED OFFICE:

152 County Road

Ormskirk

Lancashire

L39 1NW

REGISTERED NUMBER:

05540164 (England and Wales)

AUDITORS:

Myersons

Statutory Auditors

Chartered Accountants

32 Derby Street

Ormskirk

Lancashire

L39 2BY

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

REVIEW OF BUSINESS

Turnover for the year ended 31 December 2018 was £16,723,567 (2017: £15,948,087).

Profit before tax was £424,516 (2017: £345,228).

After what proved to be a tough year for the industry due to both economic and competitive headwinds, the directors are

satisfied with the trading performance and believe that the company is well placed for 2019 to deliver the company's

business priorities.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the nature of the company's strategy are subject to a number of risks. The directors

have set out below the principal risks facing the business.

a) Manufacturers supply of new and improved products

The company is reliant on new vehicle products from Vauxhall. This exposes the company to risks in a number of areas

as the company is dependent on its manufacturer/supplier in respect of:

- availability of new vehicle products

- quality of new vehicle products

- pricing of new vehicle products

The directors are confident that future new products from its manufacturer/supplier will continue to be competitively

priced and high quality and therefore consider that this "manufacturer risk" is minimal. The directors believe that the

transfer of Vauxhall to the PSA Group has had a positive impact on the future direction of the franchise, strengthening

the car lines and the introduction of electric and hybrid vehicles in early 2020. Strong core business areas of the

company, including used vehicle sales, parts sales and service work has performed well over the financial year.

b) Economic downturn

The success of the business is reliant on consumer spending. An economic downturn, resulting in a reduction of

consumer spending power, will have a direct impact on the income achieved by the company.

In response to this risk, senior management aim to keep abreast of economic conditions. In cases of severe economic

downturn, marketing and pricing strategies are modified to reflect the new market conditions. Concern is however felt

over the continuing Brexit debate but the directors feel that the strong business processes and planning have well

equipped the business for all eventualities.

c) Development and performance

The strategy remains as previous years to build on the market position established by the company, together with a

strong manufacturer brand nationally. This strategy is based largely on well-established models (including Corsa, Astra

and Mokka) and the development of new models including Grandland and Crossland as well as the electrification of the

fleet. In addition to this, the board are delighted to announce the change from Vauxhall to Mitsubishi franchise at the

Skelmersdale branch with the added benefit of remaining as an official Vauxhall Service Centre.

FINANCIAL KEY PERFORMANCE INDICATORS

The directors have monitored the progress of the overall company strategy and the individual strategic elements by

reference to gross margin and operating profit.

OTHER KEY PERFORMANCE INDICATORS

A key non-financial key performance indicator is new and used vehicle units, and retail service hours sold which were:

New retail units

263 (2017: 350)

-24.8%

Used units

917 (2017: 882)

+4.0%

Retail service hours

12,026 (2017: 12,582)

-4.4%

Warranty service hours

1,661 (2017: 1,674)

-0.8%

Despite the overall reduction in vehicles sold in a highly competitive market, the profitability achieved per unit within

vehicles sales department was broadly similar compared to the prior year as the company focused on margin retention.

ON BEHALF OF THE BOARD:

J Dickson - Director

30 May 2019

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

PRINCIPAL ACTIVITIES

The principal activities of the company in the year under review were those of the sale of new and used vehicles, parts

and vehicle servicing and repair. The company operates from two sites representing the Vauxhall franchise at Ormskirk

and Skelmersdale.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2018 will be £ 154,440 .

DIRECTORS

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

report.

P Byron

J Dickson

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The company uses various financial instruments which include bank, financial institution and stocking loans, cash and

various items, such as consignment stock, trade debtors and trade creditors that arise directly from operations. The main

purpose of these financial instruments is to raise finance for the company's operations. Their existence exposes the

company to a number of financial risks.

The main risks arising from the company's financial instruments are interest rate risk, liquidity risk and credit risk. The

directors review and agree policies for managing each of these risks which are summarised below. These policies have

remained unchanged from previous years.

INTEREST RATE RISK

The company finances its operations through a mixture of bank and other external borrowings. The company's exposure

to interest rate fluctuations on its borrowings is managed by the use of fixed and floating facilities. The balance sheet

includes trade debtors and creditors which do not attract interest and are therefore subject to fair value interest rate risk.

The company policy throughout the year has been to achieve its objective of managing interest rate risk through day to

day involvement of management in business decisions rather than through setting maximum or minimum levels for the

level of fixed interest rate borrowings.

LIQUIDITY RISK

The company seeks to manage risk by ensuring sufficient liquidity is available to meet foreseeable needs to invest cash

assets safely and profitably.

The company's policy throughout the year has been to achieve this objective through the day to day involvement of

management in business decisions rather than through setting maximum or minimum liquidity ratios.

CREDIT RISK

The company's principal financial assets are cash and trade debtors. The credit risk associated with the cash is limited as

the counterparts have high credit ratings assigned by international credit-rating agencies. The principle credit risk

therefore arises from its trade debtors.

In order to manage credit risk, the directors set credit limits for customers based on a combination of payment history

and third party credit references. Credit limits are reviewed by the directors on a regular basis in conjunction

with debt ageing and collection history.

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). 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.

ON BEHALF OF THE BOARD:

J Dickson - Director

30 May 2019

Opinion

We have audited the financial statements of 06 Ormskirk Limited (the 'company') for the year ended 31 December 2018

which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity,

Cash Flow Statement and Notes to the Cash Flow Statement, 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 five, 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.

Paul Rothwell FCCA ATII (Senior Statutory Auditor)

for and on behalf of Myersons

Statutory Auditors

Chartered Accountants

32 Derby Street

Ormskirk

Lancashire

L39 2BY

31 May 2019

TURNOVER

3

16,723,567

15,948,087

Cost of sales

14,652,838

13,836,894

GROSS PROFIT

2,070,729

2,111,193

Administrative expenses

1,582,631

1,689,528

OPERATING PROFIT

5

488,098

421,665

Interest receivable and similar income

133

17

488,231

421,682

Interest payable and similar expenses

6

63,715

76,454

PROFIT BEFORE TAXATION

424,516

345,228

Tax on profit

7

82,457

69,139

PROFIT FOR THE FINANCIAL YEAR

342,059

276,089

PROFIT FOR THE YEAR

342,059

276,089

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

342,059

276,089

FIXED ASSETS

Tangible assets

9

1,906,026

1,943,272

CURRENT ASSETS

Stocks

10

1,779,916

1,912,872

Debtors

11

207,938

276,626

Cash at bank and in hand

154,760

122,543

2,142,614

2,312,041

CREDITORS

Amounts falling due within one year

12

2,613,316

2,914,749

NET CURRENT LIABILITIES

(470,702

)

(602,708

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,435,324

1,340,564

CREDITORS

Amounts falling due after more than one year

13

123,809

216,668

NET ASSETS

1,311,515

1,123,896

CAPITAL AND RESERVES

Called up share capital

18

202,020

202,020

Capital redemption reserve

19

597,980

597,980

Retained earnings

19

511,515

323,896

SHAREHOLDERS' FUNDS

1,311,515

1,123,896

The financial statements were approved by the Board of Directors on 30 May 2019 and were signed on its behalf by:

J Dickson - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2017

202,020

203,807

597,980

1,003,807

Changes in equity

Dividends

-

(156,000

)

-

(156,000

)

Total comprehensive income

-

276,089

-

276,089

Balance at 31 December 2017

202,020

323,896

597,980

1,123,896

Changes in equity

Dividends

-

(154,440

)

-

(154,440

)

Total comprehensive income

-

342,059

-

342,059

Balance at 31 December 2018

202,020

511,515

597,980

1,311,515

Cash flows from operating activities

Cash generated from operations

1

344,202

506,450

Interest paid

(20,082

)

(19,079

)

Interest element of finance lease payments paid

(510

)

(1,183

)

Finance costs paid

(43,123

)

(56,192

)

Tax paid

(70,178

)

(40,810

)

Net cash from operating activities

210,309

389,186

Cash flows from investing activities

Purchase of tangible fixed assets

(1,978

)

(3,547

)

Sale of tangible fixed assets

124

-

Interest received

133

17

Net cash from investing activities

(1,721

)

(3,530

)

Cash flows from financing activities

Loan repayments in year

(100,596

)

(92,856

)

Capital repayments in year

(7,135

)

(9,304

)

Amount introduced by directors

83,655

154,440

Amount withdrawn by directors

(109,256

)

(240,046

)

Equity dividends paid

(154,440

)

(156,000

)

Net cash from financing activities

(287,772

)

(343,766

)

(Decrease)/increase in cash and cash equivalents

(79,184

)

41,890

Cash and cash equivalents at beginning of year

2

(352,402

)

(394,292

)

Cash and cash equivalents at end of year

2

(431,586

)

(352,402

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.12.18

31.12.17

£

£

Profit before taxation

424,516

345,228

Depreciation charges

39,100

53,926

Finance costs

63,715

76,454

Finance income

(133

)

(17

)

527,198

475,591

Decrease in stocks

132,956

233,890

Decrease in trade and other debtors

73,619

115,683

Decrease in trade and other creditors

(389,571

)

(318,714

)

Cash generated from operations

344,202

506,450

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

154,760

122,543

Bank overdrafts

(586,346

)

(474,945

)

(431,586

)

(352,402

)

Year ended 31 December 2017

31.12.17

1.1.17

£

£

Cash and cash equivalents

122,543

80,032

Bank overdrafts

(474,945

)

(474,324

)

(352,402

)

(394,292

)

1.	STATUTORY INFORMATION

06 Ormskirk Limited 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.

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.

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for sale of goods and services

to external customers in the ordinary nature of the business. The fair value of consideration takes into account

trade discounts, settlement discounts and volume rebates. Turnover is shown net of Value Added Tax. Revenue

is recognised when the significant risks and rewards of ownership of goods have passed to the buyer, the amount

of revenue can be measured reliably and receipt of payment is probable.

Revenue from commissions receivable is recognised when the amount can be reliably measured and it is

probable that the company will receive the consideration.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Freehold property

-

2% on cost

Plant and machinery

-

33% on cost, 25% on cost, 20% on cost and 10% on cost

Fixtures and fittings

-

33% on cost, 25% on cost, 20% on cost and 10% on cost

Computer equipment

-

33% on cost, 25% on cost, 20% on cost and 10% on cost

Freehold land is not depreciated.

Stocks and consignment stock

Stocks are valued on a first in, first out basis at the lower of cost and estimated selling price less costs to

complete and sell.

At each reporting date, the company assesses whether stocks are impaired or if an impairment loss recognised in

prior periods has reversed. Any excess of the carrying amount of stock 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.

Under supply agreements with General Motors, the company has access to 'consignment stock' during a

consignment period. Where the nature of these supply agreements transfers risks and rewards to the company,

which in substance give the company control over the stock during the consignment period and liabilities in

respect of holding costs, the company recognises these stocks in the balance sheet together with the equivalent

liability.

Where supply agreements do not provide risks and rewards to the company until such time as legal title actually

passes at the end of the consignment period, these stocks are not included in the balance sheet.

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

Rentals paid under operating leases are charged to profit or loss 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 principal activities of the company.

An analysis of turnover by class of business is given below:

31.12.18

31.12.17

£

£

Sale of goods

14,111,518

13,394,478

Rendering of services

2,468,517

2,434,991

Commissions receivable

143,532

118,618

16,723,567

15,948,087

4.	EMPLOYEES AND DIRECTORS

31.12.18

31.12.17

£

£

Wages and salaries

1,348,545

1,349,715

Social security costs

101,765

115,718

Other pension costs

14,628

8,684

1,464,938

1,474,117

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

31.12.18

31.12.17

Management and administration

25

28

Production

36

35

61

63

31.12.18

31.12.17

£

£

Directors' remuneration

33,644

35,442

5.	OPERATING PROFIT

The operating profit is stated after charging:

31.12.18

31.12.17

£

£

Hire of plant and machinery

1,727

1,499

Depreciation - owned assets

39,100

53,926

Auditors' remuneration

10,510

12,480

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.18

31.12.17

£

£

Bank interest

20,082

19,079

Finance leases and hire purchase contracts

510

1,183

Vehicle funding charges

43,123

56,192

63,715

76,454

7.

TAXATION

Analysis of the tax charge

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

31.12.18

31.12.17

£

£

Current tax:

UK corporation tax

83,475

70,256

Prior period adjustments

(78

)

-

Total current tax

83,397

70,256

Deferred tax

(940

)

(1,117

)

Tax on profit

82,457

69,139