Specialist Cars Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: 06047694 (England and Wales)

Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 December 2019

for

Specialist Cars Holdings Limited

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

7

Report of the Independent Auditors

9

Consolidated Statement of Income and Retained
Earnings

11

Consolidated Statement of Financial Position

12

Company Statement of Financial Position

13

Consolidated Statement of Cash Flows

14

Notes to the Consolidated Statement of Cash Flows

15

Notes to the Consolidated Financial Statements

17

Directors:

C M Fletcher

M J Donovan

Secretary:

C M James

Registered office:

C/o Specialist Cars Ltd

Arlington Business Park

Gunnels Wood Road

Stevenage

Hertfordshire

SG1 2BE

Registered number:

06047694 (England and Wales)

Auditors:

Benjamin Taylor Diner Limited

120 New Cavendish Street,

London

W1W 6XX

The directors present their strategic report of the company and the group for the year ended 31 December 2019.

Review and analysis of business during the year

The principal activity of the group is that of the retailing of motor vehicles and motor vehicle parts and the provision of

motor engineering servicing facilities.

The directors are not aware, at the date of this report, of any major changes in the group's activities in the next year.

Principal risks and uncertainties

Competitive pressures in the UK are a continuing risk to the group. The manufacturer manages this risk by introducing

innovative products on a regular basis and the group provides a value added service to its customers.

The loss of key personnel would present significant operational difficulties for the group. However, management seek to

ensure that key personnel are appropriately remunerated to ensure that good performance is recognised.

Section 172(1) statement

The Directors of the Company, as those of all UK companies, must act in accordance with a set of general duties.

These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:

"A director of a company must act in a way they consider, in good faith, would be most likely to promote the success of

the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:

- the likely consequences of any decisions in the long-term;

- the interests of the company's employees;

- the need to foster the company's business relationships with suppliers, customers and others;

- the impact of the company's operations on the community and environment;

- the desirability of the company maintaining a reputation for high standards of business conduct, and

- the need to act fairly as between shareholders of the Company."

As part of their induction, a Director is briefed on their duties and they can access professional advice on these, either

from the Company Secretary or, if they judge it necessary, from an independent advisor. It is important to recognise that

in a large organisation such as ours, the Directors fulfil their duties partly through a governance framework that

delegates day-to-day decision making to employees of the Company.

The board of directors consider that during the year ended 31 December 2019, individually and together, that they have

acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit

of its members as a whole and in accordance with the matters set out above.

Engagement with suppliers, customers and others

The board considers fostering business relationships with stakeholders, such as customers and suppliers key to the

companys success. The board maintains visibility of these relationships so that it is able to take stakeholders

considerations into account when making decisions. In their decision making the directors have regard to the impact of

the companys activities not only on the stakeholders, but also the community and environment.

Statement of corporate governance arrangements

The board of Directors intention is to behave responsibly and ensure that management operate the business in a

responsible manner, operating within the high standards of business conduct and good governance expected for a

business such as ours.

Key performance indicators (kpi's)

The company monitors its performance by reference to the following KPI's:-

2019

2018

Units Sold

BMW

New retail volumes

1,241

1,325

New corporate volumes

901

1,105

Used volumes

1,979

1,951

MINI

New retail volumes

631

649

New corporate volumes

355

266

Used volumes

730

714

Service Department

2019

2018

Hours

Service hours sold

79,617

76,197

Bodyshop

2019

2018

£

Bodyshop hours sold

25,695

25,038

Parts Department

2019

2018

£

Parts turnover

15.65m

13.81m

A second consecutive difficult year for the motor industry was reflected in the performance of the Group. There were

many challenges throughout the year, some general economic issues such as Brexit, some motor sector specific and

some brand specific. The Directors are of the opinion that 2020 should see improved confidence returning to the market

following the General Election result and more certainty surrounding Brexit. Given these issues the New Car market was

again operating in a hyper-competitive marketplace with sustained pressure on margin retention. The Used Car market

was disproportionately distorted with a high percentage of vehicles for sale under 12 months old. The upside to many

customers delaying their purchase was that Aftersales side of the Group was able to take advantage of the additional

servicing and associated parts requirements of the older vehicle. The Group Bodyshop also continued to perform well

given the market and the facility constraints of the site in Hitchin.

BMW Sales

New Retail sales declined in line with the overall market but, despite expenses being reduced, the pressures above led

to a further reduction in retained profits despite Manufacturer support. The absolute volume of Used cars sold remained

similar to 2019 but stock was under much tighter management control with a significantly smaller percentage of

self-registrations. This together with expenses under control led to an improvement in financial performance of over

£700,000. Corporate sales were again disappointing but a change in structure and amendments to Manufacturer

targeting for 2020 will hopefully reverse the trend from the previous two years. A full year of new volume product such

as the BMW 1 and 3 series together with the launch of 7 further Plug-In Hybrid vehicles lead to the Directors looking

forward to better trading in all aspects of BMW sales.

MINI Sales

As with BMW, MINI new and used sales volumes remained virtually static but with margins under continued pressure

the financial result was again disappointing. A restructure at Luton led to additional used car losses in 2019 that could

not be made up for in the other two Centres but that operation has now been stabilised and looks forward to 2020 with

confidence. The Manufacturer has acknowledged some of the difficulties in the market by maintaining 2019 targets into

2020 and everyone is looking forward to the launch of the MINI SE electric car together with the MINI GP both of which

have a strong order bank despite not being available until March.

Aftersales

With change cycles continuing to be extended and a major Manufacturer recall in the first half of 2019 our Aftersales

businesses took advantage of the opportunity offered. Overall Group labour turnover increased by 7%, parts sales by

13% but direct profit by only 5% as competitive pressures together with increased overhead costs took their toll.

Recruitment and retention of the right calibre of Technician and Service Advisor has played a part in the increased costs

as did the need for additional vehicle storage at all three Centres as a result of the recall. However for the start of 2020

staffing levels are at the correct levels in Stevenage, Luton and Tring and the Directors are looking forward to continued

improvement in both the financial results but perhaps more importantly Customer Satisfaction as these Aftersales

customers will hopefully become next years Sales customers.

Development and financial performance during the year

The group reports a profit after tax for the year amounting to £1,084,486 compared with a loss after tax for 2018 of .

£1,501,813.

The subsidiary company Specialist Cars Limited, reported a profit after tax amounting to £534,951 compared with a

profit after tax for 2018 of £536,326.

The subsidiary company Specialist Cars Tring Limited, reported a profit after tax amounting to £56,907 compared with a

loss after tax for 2018 of £344,616.

The subsidiary company Ivor Holmes Limited, reported a loss after tax amounting to £831,708 compared with a profit

after tax for 2018 of £2,051,861 (after the provision for loans to be capitalised amounting to £3,000,000).

The subsidiary company Specialist Cars Property (Stevenage) Limited, reported a profit after tax amounting to

£1,373,642 compared with a loss after tax for 2018 of £694,077.

Financial position at the reporting date

The directors consider the state of affairs at the balance sheet date to be in line with expectations for the year.

The balance sheet on page 12 shows the company's capital and reserves decreased by £915,514 to £17,231,403

during the year. This was after a payment of a dividend amounting to £2,000,000

Going Concern

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to

continue in operational existence for the foreseeable future. The company therefore continues to adopt the going

concern basis in preparing its financial statements.

Covid-19

During the course of this audit, the Group, and the Country, has entered into unprecedented territory with the worldwide

Pandemic "Coronavirus". On 23rd March the Government legislated to close Car Dealership showrooms, and the Group

have adhered to this whilst operating a minimal team to administer and look after online New and Used Car Sales

enquiries. The Service teams are operating with skeleton staffing levels to carry out emergency and essential repairs/

servicing handling breakdowns. The vast majority of the staff were "furloughed" from 1st April under the Coronavirus

Job Retention Scheme and very little business has been transacted since then. This has already impacted the very

important registration month of March and will clearly continue to affect the profitability of the Group for the remainder of

2020. There is currently a disrupted supply of new vehicles from the factories and it remains very uncertain as to what

demand there will be from both Retail and Corporate customers once the lockdown is released. It is however hoped that

there will be some degree of return to the positive start the Company enjoyed in January and February following the

Election certainty and Brexit resolution

Financial risk management objectives and policies

The group's principal financial instruments comprise bank balances, bank overdrafts, trade creditors, loans to the group

and finance lease agreements. The main purpose of these instruments is to raise funds for the group's operations and

to finance the group's operations.

Due to the nature of the financial instruments used by the group there is no exposure to price risk. The group's

approach to managing other risks applicable to the financial instruments concerned is shown below.

In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and

flexibility through the use of overdrafts at floating rates of interest.

In respect of loans these comprise loans from the directors and loans from financial institutions. The interest rate on the

loans from financial institutions is variable but the monthly repayments are fixed. The group manages the liquidity risk by

ensuring there are sufficient funds to meet the payments. The loans from the directors are interest free and payable on

demand. The directors are aware of the company's required finance and have determined that these will only be repaid,

in whole or in part, when finance is available.

The group is a lessee in respect of finance leased assets. The liquidity risk in respect of these leased assets is

managed in the same way as the loans referred to above.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers

and the regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

On behalf of the board:

C M James - Secretary

24 June 2020

The directors present their report with the financial statements of the company and the group for the year ended

31 December 2019.

Dividends

During the year the Group paid the following dividends:

2019

2018

£

Ordinary "A" shares of £1 each

900,000

-

Ordinary "B" shares of £1 each

899,980

-

Ordinary "C" shares of £1 each

20

-

Ordinary "D" shares of £1 each

200,000

-

2,000,000

-

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Directors

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this

report.

C M Fletcher

M J Donovan

Employment of disabled persons

The group gives full consideration to application for employment from the disabled persons where the requirements of

the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it

is the group's policy wherever practicable to provide continuing employment under normal terms and conditions and to

provide training and career development and promotion to disabled employees wherever appropriate.

Employee involvement

During the year, the policy of providing employees with information about the group has been continued through internal

media methods in which employees have also been encouraged to present their suggestions and views on the group's

performance. Regular meetings are held between management and employees to allow a free flow of information and

ideas.

Statement of directors' responsibilities

The directors are responsible for preparing the Group 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 the group 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 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 company will continue in business.

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

company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group 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 the group 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 group'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 group's

auditors are aware of that information.

On behalf of the board:

C M James - Secretary

24 June 2020

Opinion

We have audited the financial statements of Specialist Cars Holdings Limited (the 'parent company') and its subsidiaries

(the 'group') for the year ended 31 December 2019 which comprise the Consolidated Statement of Income and

Retained Earnings, Consolidated Statement of Financial Position, Company Statement of Financial Position,

Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 group's and of the parent company affairs as at 31 December 2019 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 Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the group 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 group'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 Group

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.

Opinions 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 Group 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 Group 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 group and the parent company and its environment obtained in

the course of the audit, we have not identified material misstatements in the Group 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 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page eight, 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 group's and 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 group or the parent 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.

Jeffrey Diner FCA (Senior Statutory Auditor)

for and on behalf of Benjamin Taylor Diner Limited

120 New Cavendish Street,

London

W1W 6XX

24 June 2020

Specialist Cars Holdings Limited (Registered number: 06047694)

Consolidated Statement of Income and Retained Earnings

for the Year Ended 31 December 2019

31.12.19

31.12.18

Notes

£

Turnover

5

171,485,395

175,403,705

Cost of sales

158,553,470

162,780,533

Gross profit

12,931,925

12,623,172

Distribution costs

7,673,553

8,232,704

Administrative expenses

5,051,549

4,812,794

12,725,102

13,045,498

Operating profit/(loss)

7

206,823

(422,326

)

Income from fixed asset investments

1,423,753

(603,422

)

Interest receivable and similar income

243

431

1,423,996

(602,991

)

1,630,819

(1,025,317

)

Interest payable and similar expenses

9

695,120

527,766

Profit/(loss) before taxation

935,699

(1,553,083

)

Tax on profit/(loss)

10

(148,787

)

(51,270

)

Profit/(loss) for the financial year

1,084,486

(1,501,813

)

Retained earnings at beginning of year

13,397,663

14,296,054

Dividends

12

(2,000,000

)

-

Retained earnings for the group at end of
year

12,482,149

12,794,241

Profit/(loss) attributable to:

Owners of the parent

1,084,486

(1,501,813

)

Specialist Cars Holdings Limited (Registered number: 06047694)

Consolidated Statement of Financial Position

31 December 2019

31.12.19

31.12.18

Notes

£

Fixed assets

Intangible assets

13

44,783

89,558

Tangible assets

14

3,574,363

3,880,523

Investments

15

-

Investment property

16

12,465,000

11,390,000

16,084,146

15,360,081

Current assets

Stocks

17

29,485,375

31,252,262

Debtors

18

8,846,155

8,032,024

Cash at bank and in hand

4,134,277

3,421,305

42,465,807

42,705,591

Creditors

Amounts falling due within one year

19

36,332,743

34,384,165

Net current assets

6,133,064

8,321,426

Total assets less current liabilities

22,217,210

23,681,507

Creditors

Amounts falling due after more than one
year

20

(4,966,617

)

(5,366,613

)

Provisions for liabilities

24

(19,190

)

(167,977

)

Net assets

17,231,403

18,146,917

Capital and reserves

Called up share capital

25

100,000

Non-distributable reserve

26

6,073,007

4,649,254

Retained earnings

26

11,058,396

13,397,663

Shareholders' funds

17,231,403

18,146,917

The financial statements were approved by the Board of Directors and authorised for issue on 24 June 2020 and were

signed on its behalf by:

C M Fletcher - Director

M J Donovan - Director

Specialist Cars Holdings Limited (Registered number: 06047694)

Company Statement of Financial Position

31 December 2019

31.12.19

31.12.18

Notes

£

Fixed assets

Intangible assets

13

-

Tangible assets

14

-

Investments

15

4,206,637

1,302,637

Investment property

16

-

4,206,637

1,302,637

Current assets

Debtors

18

3,847,685

5,805,497

Cash at bank

54,404

58,436

3,902,089

5,863,933

Creditors

Amounts falling due within one year

19

7,677,024

4,634,337

Net current (liabilities)/assets

(3,774,935

)

1,229,596

Total assets less current liabilities

431,702

2,532,233

Capital and reserves

Called up share capital

25

100,000

Retained earnings

26

331,702

2,432,233

Shareholders' funds

431,702

2,532,233

Company's (loss)/profit for the financial year

(100,531

)

286,958

The financial statements were approved by the Board of Directors and authorised for issue on 24 June 2020 and were
signed on its behalf by:

M J Donovan - Director

C M Fletcher - Director

Cash flows from operating activities

Cash generated from operations

1

3,353,496

(193,028

)

Interest paid

(209,149

)

(181,001

)

Finance costs paid

(485,971

)

(346,765

)

Tax paid

(242

)

(147,450

)

Net cash from operating activities

2,658,134

(868,244

)

Cash flows from investing activities

Purchase of tangible fixed assets

(199,239

)

(328,187

)

Freehold property additions

(10,747

)

(528,422

)

Sale of tangible fixed assets

10,295

-

Interest received

243

431

Net cash from investing activities

(199,448

)

(856,178

)

Cash flows from financing activities

New loans in year

-

6,000,000

Loan repayments in year

(399,997

)

(2,049,705

)

Amount introduced by directors

1,061,237

99,053

Amount withdrawn by directors

723,690

(990,896

)

Equity dividends paid

(2,000,000

)

-

Net cash from financing activities

(615,070

)

3,058,452

Increase in cash and cash equivalents

1,843,616

1,334,030

Cash and cash equivalents at beginning
of year

2

788,428

(545,602

)

Cash and cash equivalents at end of year

2

2,632,044

788,428

1.	Reconciliation of profit/(loss) before taxation to cash generated from operations

31.12.19

31.12.18

£

Profit/(loss) before taxation

935,699

(1,553,083

)

Depreciation charges

904,742

941,953

Profit on disposal of fixed assets

(5,362

)

-

Finance costs

695,120

527,766

Finance income

(1,423,996

)

602,991

1,106,203

519,627

Decrease in stocks

1,766,887

11,617

(Increase)/decrease in trade and other debtors

(1,741,278

)

1,317,262

Increase/(decrease) in trade and other creditors

2,221,684

(2,041,534

)

Cash generated from operations

3,353,496

(193,028

)

2.	Cash and cash equivalents

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

of these Statement of Financial Position amounts:

Year ended 31 December 2019

31.12.19

1.1.19

£

Cash and cash equivalents

4,134,277

3,421,305

Bank overdrafts

(1,502,233

)

(2,632,877

)

2,632,044

788,428

Year ended 31 December 2018

31.12.18

1.1.18

£

Cash and cash equivalents

3,421,305

810,710

Bank overdrafts

(2,632,877

)

(1,356,312

)

788,428

(545,602

)

3.	Analysis of changes in net debt

At 1.1.19

Cash flow

At 31.12.19

£

Net cash

Cash at bank and in hand

3,421,305

712,972

4,134,277

Bank overdrafts

(2,632,877

)

1,130,644

(1,502,233

)

788,428

1,843,616

2,632,044

Debt

Debts falling due within 1 year

(399,996

)

-

(399,996

)

Debts falling due after 1 year

(5,366,613

)

399,996

(4,966,617

)

(5,766,609

)

399,996

(5,366,613

)

Total

(4,978,181

)

2,243,612

(2,734,569

)

1.	Group principal activity

The group's principal business activity is that of the retailing of motor vehicles and motor vehicle parts and the

provision of motor engineering servicing facilities.

2.	Statutory information

The Company is a private company limited by shares, incorporated in England and Wales. Its registered office is

Arlington Business Park, Gunnels Wood Road, Stevenage, Hertfordshire, SG1 2BE.

The company's principal activity is that of a holding company.

3.	Statement of compliance

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.

4.	Accounting policies

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the revaluation

of certain assets.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the entities accounting policies, the directors are required to make judgements, estimates

and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other

sources. The financial statements do not included any significant judgements or estimates.

Revenue recognition

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

value added tax and other sales taxes.

Turnover from the sale of goods is recognised in the profit and loss account, net of discounts, when the

significant risks and rewards of ownership have been transferred to the buyer. In general this occurs when

vehicles or parts have been supplied or when service has been completed. Turnover from services rendered is

recognised in the profit and loss account in proportion to the stage of completion of the transaction at the

reporting date. The stage of completion is assessed by surveys of work performed or by reference to time

expended on services that are charged on labour rate basis.

Incentives received from manufacturers in respect of target achievements are accounted for as a deduction from

the cost of the vehicles or parts to which they relate.

Goodwill

Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the

company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired

business.

Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is

amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or

intangible assets cannot be made, the life is presumed not to exceed ten years.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the

useful life of that asset as follows:

Goodwill - over 20 years

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value

of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being

estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is

impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an

individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset

belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and

generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful

life.

Leasehold improvements

-

Straight line over 16 years and Over 20 years

Plant and machinery

-

10% - 33% on cost and 6.25% - 33% on cost

Fixtures and fittings

-

10% - 25% on cost and 6.25% - 33% on cost

Motor vehicles

-

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

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation

and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the

date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment

losses.

An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other

comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the

same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of

revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation

increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated

revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Investments

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated

impairment losses.

Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.

Stocks

Stocks are stated at the lower of cost and net realisable value. Cost is computed on a first in first out basis.

Net realisable value is based on estimated selling price less the estimated cost of disposal.

New consignment vehicles in respect of which finance charges are levied are regarded as being effectively

under the control of the Company and are included within stocks on the balance sheet even though legal title

has not yet passed to the Company. The corresponding liability is included in creditors.

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial

assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third

parties, loans to related parties and investments in non-puttable ordinary shares.

Debt instruments like loans and other accounts receivable and payable are initially measured at present value of

the future payments and subsequently at amortised cost using the effective interest method; Debt instruments

that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and

subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.

However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a

trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in

the case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and

subsequently, at the present value of the future payments discounted at a market rate of interest for a similar

debt instrument.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period

for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is

recognised in profit and loss.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an

asset's carrying amount and the present value of estimated cash flows discounted at the asset's original

effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any

impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference

between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the

company would received for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when

there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis

or to realise the asset and settle the liability simultaneously.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated 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 statement of financial position date.

Deferred tax

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

statement of financial position 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.

Operating leases

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Defined contribution plans

The pension costs charged against profits represents the amount of the contributions payable to personal

pension schemes during the accounting period.

Cash and cash equivalent

Cash includes cash in hand, deposits held with banks and bank overdrafts. Bank overdrafts, when applicable,

are shown within borrowings in current liabilities. Cash equivalents are highly liquid investments that are readily

convertible to known amounts of cash with insignificant risk of change in value.

Going concern

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to

continue in operational existence for the foreseeable future. The group therefore continues to adopt the going

concern basis in preparing its financial statements.

Disclosure exemptions

The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage

has been taken of the following reduced disclosures available under FRS 102:

(a) Disclosures in respect of each class of share capital have not been presented.

(b) No cash flow statement has been presented for the company.

(c) Disclosures in respect of financial instruments have not been presented.

(d) No disclosure has been given for the aggregate remuneration of key management personnel.

Consolidation

The financial statements consolidate the financial statements of Specialist Cars Holdings Limited and all of its

subsidiary undertakings.

The results of subsidiaries acquired or disposed of during the year are included from or to the date that control

passes.

The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has

not presented its individual profit and loss account.

5.

Turnover

Turnover arises from:

2019

2018

£

Sale of motor vehicles, motor vehicle parts and motor engineering services

171,485,395

175,403,705

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United

Kingdom.

6.	Employees and directors

31.12.19

31.12.18

£

Wages and salaries

10,799,375

10,567,297

Social security costs

1,125,630

1,167,387

Other pension costs

288,622

176,102

12,213,627

11,910,786

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

31.12.19

31.12.18

Production staff

145

141

Distribution staff

108

110

Administration staff

73

Management staff

7

8

333

332

31.12.19

31.12.18

£

Directors' remuneration

491,388

482,008

Information regarding the highest paid director is as follows:

31.12.19

31.12.18

£

Emoluments etc

138,020

125,687

7.	Operating profit/(loss)

The operating profit (2018 - operating loss) is stated after charging/(crediting):

31.12.19

31.12.18

£

Hire of plant and machinery

7,050

7,795

Rent

822,654

812,873

Depreciation - owned assets

859,966

897,179

Profit on disposal of fixed assets

(5,362

)

-

Goodwill amortisation

44,775

Auditors' remuneration

44,000

Taxation compliance services

7,950

17,000

8.	Fair value movement on investment property

31.12.19

31.12.18

£

Fair value movement on freehold property

1,423,753

(603,422

)

9.

Interest payable and similar expenses

31.12.19

31.12.18

£

Bank interest

1,264

8,145

Interest paid to HMRC

-

107

Loan interest payable

207,885

172,749

Dealer stocking charges

485,971

346,765

695,120

527,766

10.

Taxation

Analysis of the tax credit

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

31.12.19

31.12.18

£

Current tax:

UK corporation tax

-

(1,368

)

Deferred tax

(148,787

)

(49,902

)

Tax on profit/(loss)

(148,787

)

(51,270

)

Reconciliation of total tax credit included in profit and loss

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

explained below:

31.12.19

31.12.18

£

Profit/(loss) before tax

935,699

(1,553,083

)

Profit/(loss) multiplied by the standard rate of corporation tax in the UK of
19 % (2018 - 19 %)

177,783

(295,086

)

Effects of:

Expenses not deductible for tax purposes

(94,699

)

298,834

Capital allowances

(81,650

)

(106,184

)

Effect of different UK tax rates

-

(18

)

year

Deferred tax on accelerated capital allowaces

(148,787

)

(49,902

)

Unused tax losses

(1,434

)

101,086

Total tax credit

(148,787

)

(51,270

)

11.	Individual income statement

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not

presented as part of these financial statements.

12.

Dividends

2019

2018

£

Ordinary "A" shares of £1 each

900,000

-

Ordinary "B" shares of £1 each

899,980

-

Ordinary "C" shares of £1 each

20

-

Ordinary "D" shares of £1 each

200,000

-

2,000,000

-

13.	Intangible fixed assets

Group

Goodwill

£

Cost

At 1 January 2019

and 31 December 2019

895,509

Amortisation

At 1 January 2019

805,951

Amortisation for year

44,775

At 31 December 2019

850,726

Net book value

At 31 December 2019

44,783

At 31 December 2018

89,558

Goodwill amounting to £895,509 arose on consolidation and is being amortised over 20 years.

14.	Tangible fixed assets

Group

Fixtures

Leasehold

Plant and

and

Motor

improvements

machinery

fittings

vehicles

Totals

£

Cost

At 1 January 2019

1,590,094

2,877,157

2,884,463

292,370

7,644,084

Additions

-

103,803

66,836

28,600

199,239

Disposals

-

(28,482

)

(28,482

)

At 31 December 2019

1,590,094

2,980,960

2,951,299

292,488

7,814,841

Depreciation

At 1 January 2019

303,318

1,631,967

1,611,031

217,245

3,763,561

Charge for year

97,625

141,968

215,663

45,210

500,466

Eliminated on disposal

-

(23,549

)

(23,549

)

At 31 December 2019

400,943

1,773,935

1,826,694

238,906

4,240,478

Net book value

At 31 December 2019

1,189,151

1,207,025

1,124,605

53,582

3,574,363

At 31 December 2018

1,286,776

1,245,190

1,273,432

75,125

3,880,523

15.	Fixed asset investments

Company

Shares in

group

undertakings

£

Cost

At 1 January 2019

1,302,637

Additions

2,904,000

At 31 December 2019

4,206,637

Net book value

At 31 December 2019

4,206,637

At 31 December 2018

1,302,637

The group or the company's investments at the Statement of Financial Position date in the share capital of

companies include the following:

Subsidiaries

Specialist Cars Limited

Registered office: England

Nature of business: Motor Dealer

%

Class of shares:

holding

Ordinary shares

100.00

31.12.19

31.12.18

£

Aggregate capital and reserves

13,133,205

12,598,254

Profit for the year

534,951

536,326

Ivor Holmes Limited

Registered office: England

Nature of business: Motor dealer

%

Class of shares:

holding

Ordinary shares

100.00

31.12.19

31.12.18

£

Aggregate capital and reserves

926,664

1,758,372

(Loss)/profit for the year

(831,708

)

2,051,861

Specialist Cars Tring Limited

Registered office: England

Nature of business: Motor dealer

%

Class of shares:

holding

Ordinary shares

100.00

31.12.19

31.12.18

£

Aggregate capital and reserves

732,630

675,723

Profit/(loss) for the year

56,907

(344,616

)

Specialist Cars Property (Stevenage) Limited

Registered office: England

Nature of business: Property company

%

Class of shares:

holding

Ordinary shares

100.00

31.12.19

31.12.18

£

Aggregate capital and reserves

6,169,057

4,795,415

Profit/(loss) for the year

1,373,642

(694,077

)

16.	Investment property

Group

Total

£

Fair value

At 1 January 2019

11,390,000

Additions

10,747

Revaluations

1,064,253

At 31 December 2019

12,465,000

Depreciation

Charge for year

359,500

Revaluation adjustments

(359,500

)

At 31 December 2019

-

Net book value

At 31 December 2019

12,465,000

At 31 December 2018

11,390,000

Fair value at 31 December 2019 is represented by:

£

Valuation in 2007

1,506,166

Valuation in 2010

(2,275,000

)

Valuation in 2015

2,475,000

Valuation in 2017

188,698

Valuation in 2018

(1,008,422

)

Valuation in 2019

1,064,253

Cost

10,514,305

12,465,000

Freehold land and buildings were valued at £12,465,000 on the 31st December 2019, on a fair value basis by

Tom Poynton MRICS and Adam Chapman MRICS.

Included in freehold property is land valued at £5,200,000 which is not depreciated.

The historical cost of the property is £10,514,305.

17.

Stocks

Group

31.12.19

31.12.18

£

Stocks

24,494,995

27,405,638

Consignment stock

4,990,380

3,846,624

29,485,375

31,252,262

Included in stock are demonstrator vehicles amounting to £4,485,247 (2018: £5,328,738), which are subject to

finance leases. The respective liability has been included in dealer stocking loans in creditors.

Vehicles on consignment from the manufacturer, amounting to £4,990,380 (2018: £3,846,623) have been

included in stock. The corresponding liability has been included as a consignment stocking loan in creditors. This

is due to the fact that whilst the manufacturer retains legal title to the stock, the group bears the risks and

rewards of ownership of the stock. Individual vehicles held on consignment may be returned to or swapped with

the manufacturer. This however is on an individual vehicle basis and group could not return the entire

consignment stock to the manufa cturer.

18.

Debtors: amounts falling due within one year

Group

Company

31.12.19

31.12.18

31.12.19

31.12.18

£

Trade debtors

7,963,744

5,942,625

-

Amounts owed by group undertakings

-

3,847,177

5,804,989

Other debtors

81,817

32,654

-

Directors' current accounts

133,848

1,061,237

-

Corporation tax

75,306

75,064

-

VAT

-

20,678

508

Prepayments and accrued income

591,440

899,766

-

8,846,155

8,032,024

3,847,685

5,805,497

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

19.

Creditors: amounts falling due within one year

Group

Company

31.12.19

31.12.18

31.12.19

31.12.18

£

Bank loans and overdrafts (see note 21)

1,502,233

2,632,877

-

Other loans (see note 21)

399,996

-

Trade creditors

31,070,838

29,808,317

-

Amounts owed to group undertakings

-

7,672,994

4,630,807

Social security and other taxes

431,574

453,267

-

VAT

1,033,327

-

Other creditors

604,871

580,876

-

Directors' current accounts

941,606

84,068

-

Accruals and deferred income

348,298

424,764

4,030

3,530

36,332,743

34,384,165

7,677,024

4,634,337

Amounts owed to group undertakings are unsecured, repayable on demand and interest free.

Included in trade creditors are the following:-

2019

2018

£

Consignment stocking loans

4,990,380

3,846,623

Demonstrator stocking loans

4,485,247

5,328,738

Other vehicle stocking loans

19,095,603

15,889,635

28,571,230

25,064,996

The bank overdraft is secured by a debenture over the assets of the company.

20.

Creditors: amounts falling due after more than one year

Group

31.12.19

31.12.18

£

Other loans (see note 21)

4,966,617

5,366,613

The amount due as other loans is a loan from BMW Financial Services (GB) Limited which is secured by a legal

charge over the company's freehold property situated at Gunnels Wood Road, Stevenage.

21.

Loans

An analysis of the maturity of loans is given below:

Group

31.12.19

31.12.18

£

Amounts falling due within one year or on

demand:

Bank overdrafts

1,502,233

2,632,877

Other loans

399,996

1,902,229

3,032,873

Amounts falling due between one and two

years:

Other loans - 1-2 years

399,996

Amounts falling due between two and five

years:

Other loans - 2-5 years

1,199,988

Amounts falling due in more than five years:

Repayable by instalments

Other loans more 5yrs instal

3,366,633

3,766,629

During the year ended 31st December 2018 the company refinanced its operations with a new £6m loan from

BMW Financial Services (GB) Limited, and in the process settled its previous long term loan.

The new loan from BMW Financial Services (GB) Limited is repayable by instalments over a term of 15 years.

Interest is charged on the loan at a rate of 2% per annum above the highest of:

a) three month Sterling BBA LIBOR; or

b) 1.75% per annum.

The loan is secured by a legal charge over the freehold property situated at Gunnels Wood Road, Stevenage.

22.	Leasing agreements

Minimum lease payments fall due as follows:

Group

Non-cancellable

operating leases

31.12.19

31.12.18

£

Within one year

645,277

636,908

Between one and five years

2,581,110

2,547,634

In more than five years

5,186,942

5,765,268

8,413,329

8,949,810

23.	Financial instruments

The company's principal financial instruments include bank overdrafts, loans and other borrowings, the main

purpose of which is to raise finance for the group's operations. In addition, the group has various other financial

assets and liabilities such as trade debtors and trade creditors arising directly from the company's operations.

The group has the following financial instruments:

2019

2018

£

Financial assets

Financial assets that are debt instruments at amortised cost

12,231,869

10,425,167

Financial liabilities

Financial liabilities that are measure at amortised cost

38,881,290

38,291,871

24.	Provisions for liabilities

Group

31.12.19

31.12.18

£

Deferred tax

Accelerated capital allowances

19,190

167,977

Group

Deferred

tax

£

Balance at 1 January 2019

167,977

Provided during year

(148,787

)

Balance at 31 December 2019

19,190

25.	Called up share capital

2018

2017

No.

£

No.

£

Ordinary "A" shares of £1 each

45,000

Ordinary "B" shares of £1 each

44,999

Ordinary "C" shares of £1 each

1

Ordinary "D" shares of £1 each

10,000

100,000

All shares rank pari passu except:

As regards voting, the "A" Ordinary shares and "B" Ordinary shares shall entitle the holders thereof to receive

notice of or to attend and vote at any General Meeting of the Company only on matters pertaining to the Trading

Companies. The "C" Ordinary shares shall not entitle the holders thereof to receive notice of or to attend and

vote (either in person or by proxy) at any General Meeting of the Company. The "D" Ordinary shares shall entitle

the holders thereof to receive notice of or to attend and vote at any General Meeting of the Company only on

matters pertaining to Property Companies.

As regards to income, the holders of the "A" Ordinary shares, "B" Ordinary shares, "C" Ordinary Shares, and

"D" Ordinary Shares all rank pari passu with regards to entitlement to dividends. The directors shall at any time

resolve to declare dividend payments on "A" Ordinary Shares, "B" Ordinary Shares and "C" Ordinary Shares only

out of profits related to underlying assets in the Trading Companies, and "D" Ordinary Shares only out of profits

related to underlying assets in the Property Companies.

26.

Reserves

Group

Retained

Non-distributable

earnings

reserve

Totals

£

At 1 January 2019

13,397,663

4,649,254

18,046,917

Profit for the year

1,084,486

Dividends

(2,000,000

)

(2,000,000

)

Transfer to Non-distributable
reserve

(1,423,753

)

1,423,753

-

At 31 December 2019

11,058,396

6,073,007

17,131,403

Company

Retained

earnings

£

At 1 January 2019

2,432,233

Deficit for the year

(100,531

)

Dividends

(2,000,000

)

At 31 December 2019

331,702

27.	Directors' advances, credits and guarantees

The company owed the directors the following amounts at the balance sheet date:

2019

2018

£

C. Fletcher

874,388

84,068

M. Donovan

67,219

-

The company was owed the following amount by the directors at the balance sheet date:

2019

2018

£

J. Bourne

73,747

45,861

C. James

60,100

46,854

M. Donovan

-

889,684

The directors loans are interest free, unsecured and repayable on demand.

28.	Post balance sheet events - covid-19

During the course of this audit, the Group, and the Country, has entered into unprecedented territory with the

worldwide Pandemic "Coronavirus". On 23rd March the Government legislated to close Car Dealership

showrooms, and the Group have adhered to this whilst operating a minimal team to administer and look after

online New and Used Car Sales enquiries. The Service teams are operating with skeleton staffing levels to carry

out emergency and essential repairs/ servicing handling breakdowns. The vast majority of the staff were

"furloughed" from 1st April under the Coronavirus Job Retention Scheme and very little business has been

transacted since then. This has already impacted the very important registration month of March and will clearly

continue to affect the profitability of the Group for the remainder of 2020. There is currently a disrupted supply of

new vehicles from the factories and it remains very uncertain as to what demand there will be from both Retail

and Corporate customers once the lockdown is released. It is however hoped that there will be some degree of

return to the positive start the Company enjoyed in January and February following the Election certainty and

Brexit resolution

29.	Ultimate controlling party

The group was controlled throughout the current and previous year by C. Fletcher and M. Donovan (together

with their close family) by virtue of their 100% ownership of the issued share capital in Specialist Cars Holdings

Limited.