Sinclair Motor Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04395583 (England and Wales)

Sinclair Motor Holdings Limited

Group Strategic Report, Report of the Directors and

Audited Consolidated Financial Statements for the Year Ended 31 December 2019

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

6

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

Directors:

Mr G S Sinclair

Mr A J Sinclair

Registered office:

Sinclair Group

Old Field Road

Bocam Park

Pencoed

CF35 5LJ

Registered number:

04395583 (England and Wales)

Auditors:

Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

Bankers:

Barclays Bank PLC

PO Box 10

Windsor Court

Cardiff

CF1 3WP

Solicitors:

Acuity Legal

3 Assembly Square

Britannia Quay

Cardiff Bay

Cardiff

CF10 4PL

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

Sinclair Motor Holdings Limited operates its core functions of retailing new cars, used cars, commercial vehicles,

servicing (including repairs), bodyshop repairs, parts sales and fuel sales.

Review of business

31/12/2019

31/12/2018

31/12/2017

31/12/2016

Turnover

£545,579,259

£480,332,495

£464,793,894

£438,683,424

Profit before tax

£4,531,311

£4,001,282

£3,567,332

£3,051,460

Total equity

£36,406,851

£32,971,455

£29,937,034

£24,260,107

The directors are pleased with the performance of the group during very challenging times, despite the continued

pressure on margins in the ever- competitive customer driven environment. We recognise that to be competitive in the

market today we need to differentiate ourselves from the competition. We believe that by maintaining a high level of

customer satisfaction, the focus on customer care will put the Sinclair name above its competitors and retain the local

market share.Through building on sustainable core business in used cars and aftersales, the Sinclair Group has

advanced its long term strategy of growth through re-investment.

The directors are delighted to announce the acquisition of Jaguar Land Rover business at Swansea on 12th July 2019.

The Group continues to strengthen its portfolio of premier brands.

Principal risks and uncertainties

The group benefits from the close commercial relationships with a number of key suppliers and customers. The loss of

any of these of key suppliers and customers or a significant worsening in commercial terms could have a material

impact on the results.

The group devotes significant resources to supporting these relationships to ensure that they continue to operate as

well in the future. From time to time the group undertakes surveys of customer satisfaction, which are reviewed by the

board. The directors realise the importance of excellent customer service to remain ahead of competition.

Coronavirus (Covid-19) Pandemic Risk:

It is impossible to predict either the likely duration of the current Coronavirus pandemic or to be definitive about its

financial impact on the business and the UK economy. However, with the improvements made to processes and

structures within the company, we are confident that the group is better able to withstand these pressures and to

service its existing and growing customer base. The strengthened financial position will also enable us to meet its

environmental and social commitments for the foreseeable future.

Price Risk:

The group operates in highly competitive markets. Significant product innovations, technical advances or the

intensification of price competition could adversely affect the results for the group. The group invests in significant

training of its staff to ensure that it is well placed to provide a choice for customers, to ensure that they are aware of

their options and are satisfied with the level of service we provide. The group also continually work to streamline its

cost base to ensure that it remains competitive.

Credit Risk:

The group has well established policies and procedures that require appropriate credit checks on potential customers

before sales are made. The amount of exposure to any individual customer is subject to a limit which is reassessed

annually by the company.

Liquidity Risk:

Effective management of cash and working capital is a key ongoing priority. The company has an intercompany facility

in place that is sufficient to ensure available funds for its operations.

Section 172(1) statement

Statement by the directors in performance of their statutory duties in accordance with s172(1) Companies Act 2006

The board of directors of Sinclair Motor Holdings Limited consider 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

(having regard to the stakeholders and matters set out in s172(1)(a)-(f) of the Act) in the decisions taken during the

year ended 31 December 2019.

The Sinclair group was started by Bill Sinclair in 1945 and the company continues to be controlled and run by the

Sinclair family. We're proud of the ways in which the company has provided employment, training and financial reward

for its owners and employees for over 70 years. We are the largest and most successful motor group in Wales,

representing some of the most prestigious automotive brands. In a highly competitive market, we aim to stand out

from our competitors by virtue of quality, reliability and the great customer care that our reputation is built upon.

We make strategic decisions based on long-term objectives. In particular, this has meant significant investment in

premises and people in the business. This investment is to continue in the future to provide customers with state-of-

the-art facilities and the very finest expertise. We acknowledge that, in order to progress to the next phase in the

company's future, it is likely that we will continue to expand our existing businesses and add to the prestige brand

portfolio that we have. We continue to explore possibilities along these lines. Our aim continues to be to maximise the

company's ability to grow profits to fund continued investment for the future of the business and job security for the

employees.

Our Employees

We rely on the hard work, commitment and enthusiasm of our staff which is fundamental to the delivery of our plan.

We aim to be a responsible employer in our approach to the pay and benefits our team members receive. We provide

comprehensive training and career development support. The health, safety and well-being of our employees is one of

our primary considerations in the way we do business.

Our suppliers and customers

We meet with our manufacturing partners regularly throughout the year and take the appropriate action to prevent

involvement in modern slavery, corruption, bribery and breaches of competition law. Our business model prioritises

quality and customer satisfaction. We have built and will maintain a reputation for transparency and fair dealing with

customers and suppliers

Our Community and the Environment

We are a family-run company with roots in South Wales and have invested in our community through our charity

donation scheme. From sponsoring sports kit of local childrens' clubs, to having employees play and arrange

charitable football matches. Our plan takes into account the impact of the Group's operations on the community and

environment and our wider social responsibilities, and in particular how we comply with environmental legislation and

pursue waste-saving opportunities and react promptly to local community concerns.

Business conduct and Corporate Governance

As the Board of Directors, our intention is to behave responsibly and ensure that the 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 and in doing so, will contribute to the delivery of our plan. The intention is to

nurture our reputation, through both the construction and delivery of our plan, that reflects our responsible behaviour.

As the Board of Directors, our intention is to behave responsibly towards our shareholders and treat them fairly and

equally, so they too may benefit from the successful delivery of our plan.

Employment of disabled persons

It is the policy that disabled persons shall be considered for employment, career development and promotion on the

basis of their aptitude and abilities in common with all employees.

Employee involvement

The Directors recognise the importance of good communications and relations with employees and management is

encouraged to adopt employee consultations.

On behalf of the board:

Mr A J Sinclair - Director

22 September 2020

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

31 December 2019.

Principal activity

The principal activity of the group in the year under review was that of retailing of motor vehicles and related activities

in the motor trade.

The group is to continue investing in training all staff for the purpose of meeting its long term goal of growth through

the provision of excellent customer service.

Dividends

No dividends will be distributed for the year ended 31 December 2019.

Directors

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

report.

Mr G S Sinclair

Mr A J Sinclair

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:

Mr A J Sinclair - Director

22 September 2020

Opinion

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

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

Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of

Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the

Consolidated 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 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.

The impact of uncertainties on our audit owing to COVID -19

The Directors' view on the impact of COVID-19 is disclosed on accounting policies note 2.

Uncertainties related to the effects of COVID-19 are relevant to understanding our audit of the financial statements. All

audits assess and challenge the reasonableness of estimates made by the directors, such as recoverability

andvaluation of assets, appropriateness of the going concern basis of preparation of the financial statements and

associated disclosures. All of these depend on assessments of the future economic environment and the company's

future prospects and performance.

The COVID-19 viral pandemic is one of the most significant economic events for the UK, and at the date of this report,

its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects

unknown. We have applied a standardised approach in response to that uncertainty when assessing the company's

future prospects and performance. However, no audit should be expected to predict the unknowable factors or all

possible future implications for a company and this is particularly the case in relation to the COVID-19 pandemic.

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 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 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.

Clive Edwards (Senior Statutory Auditor)

for and on behalf of Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

22 September 2020

Turnover

3

545,579,259

480,332,495

Cost of sales

(504,979,265

)

(444,422,425

)

Gross profit

40,599,994

35,910,070

Administrative expenses

(34,308,788

)

(30,997,731

)

6,291,206

4,912,339

Other operating income

12,120

549,282

Operating profit

5

6,303,326

5,461,621

Interest receivable and similar income

4,436

-

6,307,762

5,461,621

Interest payable and similar expenses

6

(1,776,451

)

(1,460,339

)

Profit before taxation

4,531,311

4,001,282

Tax on profit

7

(1,035,915

)

(906,861

)

Profit for the financial year

3,495,396

3,094,421

Profit attributable to:

Owners of the parent

3,426,432

3,045,266

Non-controlling interests

68,964

49,155

3,495,396

3,094,421

Profit for the year

3,495,396

3,094,421

Other comprehensive income

-

-

Total comprehensive income for the year

3,495,396

3,094,421

Total comprehensive income attributable to:

Owners of the parent

3,426,432

3,045,266

Non-controlling interests

68,964

49,155

3,495,396

3,094,421

Fixed assets

Intangible assets

9

1,716,814

1,629,793

Tangible assets

10

38,509,263

35,760,184

Investments

11

20,000

-

40,246,077

37,389,977

Current assets

Stocks

12

98,787,091

82,570,338

Debtors

13

22,076,976

18,445,912

Cash at bank and in hand

1,121,486

7,995,745

121,985,553

109,011,995

Creditors

Amounts falling due within one year

14

(115,583,017

)

(104,217,567

)

Net current assets

6,402,536

4,794,428

Total assets less current liabilities

46,648,613

42,184,405

Creditors

Amounts falling due after more than one year

15

(10,029,216

)

(9,068,617

)

Provisions for liabilities

19

(212,546

)

(144,333

)

Net assets

36,406,851

32,971,455

Capital and reserves

Called up share capital

20

30,030

30,030

Capital redemption reserve

21

23,000

23,000

Retained earnings

21

35,210,327

31,783,895

Shareholders' funds

35,263,357

31,836,925

Non-controlling interests

22

1,143,494

1,134,530

Total equity

36,406,851

32,971,455

The financial statements were approved by the Board of Directors and authorised for issue on 22 September 2020 and

were signed on its behalf by:

Mr A J Sinclair - Director

Fixed assets

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

7,795,875

7,795,875

7,795,875

7,795,875

Current assets

Debtors

13

2,474,146

2,474,146

Cash at bank

2,697

2,697

2,476,843

2,476,843

Creditors

Amounts falling due within one year

14

(8,908,424

)

(8,908,424

)

Net current liabilities

(6,431,581

)

(6,431,581

)

Total assets less current liabilities

1,364,294

1,364,294

Capital and reserves

Called up share capital

20

30,030

30,030

Retained earnings

1,334,264

1,334,264

Shareholders' funds

1,364,294

1,364,294

Company's profit for the financial year

-

-

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 22 September 2020 and were signed on its behalf by:

Mr A J Sinclair - Director

Called up

Capital

share

Retained

redemption

capital

earnings

reserve

£

£

£

Balance at 1 January 2018

30,030

28,738,629

23,000

Changes in equity

Total comprehensive income

-

3,045,266

-

Balance at 31 December 2018

30,030

31,783,895

23,000

Changes in equity

Total comprehensive income

-

3,426,432

-

Balance at 31 December 2019

30,030

35,210,327

23,000

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 January 2018

28,791,659

1,145,375

29,937,034

Changes in equity

Dividends

-

(60,000

)

(60,000

)

Total comprehensive income

3,045,266

49,155

3,094,421

Balance at 31 December 2018

31,836,925

1,134,530

32,971,455

Changes in equity

Dividends

-

(60,000

)

(60,000

)

Total comprehensive income

3,426,432

68,964

3,495,396

Balance at 31 December 2019

35,263,357

1,143,494

36,406,851

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

30,030

1,334,264

1,364,294

Changes in equity

Balance at 31 December 2018

30,030

1,334,264

1,364,294

Changes in equity

Balance at 31 December 2019

30,030

1,334,264

1,364,294

Cash flows from operating activities

Cash generated from operations

1

4,030,042

10,107,630

Interest paid

(1,776,451

)

(1,460,339

)

Tax paid

(756,770

)

(870,465

)

Net cash from operating activities

1,496,821

7,776,826

Cash flows from investing activities

Purchase intangible fixed assets

(250,000

)

(1,629,793

)

Purchase tangible fixed assets

(4,280,039

)

(1,709,763

)

Purchase fixed asset investments

(20,000

)

-

Purchase tangible assets on acquisition

-

(3,456,560

)

Interest received

4,436

-

Net cash from investing activities

(4,545,603

)

(6,796,116

)

Cash flows from financing activities

Loan movements

214,800

3,505,221

Capital repayments in year

-

(800

)

Amount introduced by directors

(231,669

)

248,031

Amount withdrawn by directors

-

(54,894

)

Share issue

-

(1

)

HP repayments

(3,587

)

-

Dividends paid to minority interests

60,000

-

Net cash from financing activities

39,544

3,697,557

(Decrease)/increase in cash and cash equivalents

(3,009,238

)

4,678,267

Cash and cash equivalents at beginning of year

2

3,542,420

(1,135,847

)

Cash and cash equivalents at end of year

2

533,182

3,542,420

1.	Reconciliation of profit before taxation to cash generated from operations

2019

2018

£

£

Profit before taxation

4,531,311

4,001,282

Depreciation charges

1,729,768

1,351,524

Loss on disposal of fixed assets

28,150

76,404

NCI Profit

68,964

-

Dividends Paid

60,000

-

Finance costs

1,776,451

1,460,339

Finance income

(4,436

)

-

8,190,208

6,889,549

Increase in stocks

(16,216,753

)

(7,252,371

)

Increase in trade and other debtors

(3,631,063

)

(214,090

)

Increase in trade and other creditors

15,687,650

10,684,542

Cash generated from operations

4,030,042

10,107,630

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 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

1,121,486

7,995,745

Bank overdrafts

(588,304

)

(4,453,325

)

533,182

3,542,420

Year ended 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

7,995,745

3,207,747

Bank overdrafts

(4,453,325

)

(4,343,594

)

3,542,420

(1,135,847

)

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

7,995,745

(6,874,259

)

1,121,486

Bank overdrafts

(4,453,325

)

3,865,021

(588,304

)

3,542,420

(3,009,238

)

533,182

Debt

Finance leases

-

(12,843

)

(12,843

)

Debts falling due within 1 year

(1,530,237

)

737,586

(792,651

)

Debts falling due after 1 year

(9,068,617

)

(952,386

)

(10,021,003

)

(10,598,854

)

(227,643

)

(10,826,497

)

Total

(7,056,434

)

(3,236,881

)

(10,293,315

)