2 Moto Limited - Limited company accounts 23.2

REGISTERED NUMBER: 08231834 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

2 MOTO LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Profit and loss account

10

Consolidated Other Comprehensive Income

11

Consolidated Balance Sheet

12

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

14

Company Statement of Changes in Equity

15

Consolidated Cash Flow Statement

16

Notes to the Consolidated Cash Flow Statement

17

Notes to the Consolidated Financial Statements

18

DIRECTORS:

L J Mason

Mrs E Mason

REGISTERED OFFICE:

White Bear Yard

Park Road

Adlington

Chorley

Lancashire

PR7 4HZ

REGISTERED NUMBER:

08231834 (England and Wales)

AUDITORS:

Fairhurst

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

BANKERS:

Yorkshire Bank plc

3 Orchard Street

Preston

PR1 2EN

The directors present their strategic report of the company and the group for the year ended 31 December 2022.

REVIEW OF BUSINESS

The 2 Moto Group has recorded sales in excess of £100million and operating profits of £8.5million for the year 2022, which is pleasing.

In 2021 when the whole world had to deal with the awful impacts of Covid - 19, business wise the effects of this led to an upturn in our motorcycle sales and profits overall in a most positive way as we described in our 2021 Business Review. What helped us to maintain this during the effects of Covid-19 was the strong financial position that the Group is in, and our keen sense of discipline in the decisions we make on a day to day basis, and this continues to be the case in 2022 and going forward.

The 2 Moto Group are able to offer a range of new and used motorcycles from all the leading manufacturers and offer a wide range of services from finance, MOT and servicing, parts and accessories, along with delivery and collection options.

There has been a substantial increase in the cost of living that has affected everyone which has obviously had an impact on people's priority of spending. We hope and strive to offer our discerning customers value for money and customer satisfaction.

We continue to improve our website for a positive and informative experience for all our potential customers, offering a healthy range of motorcycles showing competitive options and rates in the marketplace.

We will always be fully committed to providing our customers with the best and ultimate motorcycling experience. We realise fully and appreciate that our customers are 'key' and their continued support directly relates to our success in business.

We also continue to have good working relationships with our suppliers, offering the customers a wide range of products and pricing and services required to back this up.

We will endeavour to continue our success going forward into 2023 using both our drive and determination to achieve this.

Key Performance Indicators

KPI's include sales, margins, wages and overheads and cash flow which are monitored by senior management by retail outlet and also at the warehouse and head office.

2022

2021

£'000

£'000

Turnover

100,075

90,352

Gross profit

19,696

18,039

Gross margin (%)

19.7%

20.0%

Operating profit

8,472

8,484

EBITDA

8,727

8,742

Net assets

35,016

28,351

Senior management also monitor performance by reference to certain non financial KPI's, including customer, supplier and employee satisfaction, supply lead times and technology advancement, both internally and externally.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal financial risks and uncertainties associated with the group and company's ability to monitor and manage:

Cashflow

The group has certain transactions in foreign currencies but is not exposed to any material risks relating to exchange fluctuations. The group has a shared bank facility with fellow subsidiary companies operating within the agreed facility. The group's exposure to interest rate movements is not considered material and hence it is not believed to be necessary to hedge against rates.

Credit Risk

The group's principal financial asset is in stock. The credit risk is limited by an exposure to a number of major customers on whom either credit reports are obtained or whose annual accounts are regularly reviewed. Supplier terms are reviewed regularly, so as to take advantage of price and exchange rates, where appropriate.

Liquidity Risk

The cash facilities available to the group and company have been compared to their likely credit requirements over the next 12 months, from the date of signing these financial statements and are deemed to be adequate.

Price Risk

The group is exposed to a price risk arising on its bike purchases; we constantly monitor the markets, both at home and abroad, to ensure our buying and selling price structures are well managed and competitive.

Other risks including supply and stock holding constraints, commercial and contractual, are managed internally by holding regular senior managers meetings and also meetings with key suppliers.

HEALTH, SAFETY AND ENVIRONMENTAL ISSUES

The group and company is committed to outstanding performance in health, safety and environmental matters through a policy of training, communication and co-operation applied consistently throughout all operations.

SECTION 172(1) STATEMENT

The directors consider that they have acted in the way they consider, in good faith, would be most likely to promote the success of the group and company for the benefit of its members as a whole (having regard to the stakeholders and the matters set out in s172(1)(a-f) of the Companies Act 2006) in the decisions taken in the year ended 31 December 2022.

Customer and supplier engagement and satisfaction is at the heart of everything we do and any decision made by the directors are made with full consideration of the impact on the group's customers and suppliers.

The group has a small number of key supplier partners with which directors and senior management maintain close relationships on an ongoing basis through regular dialogue, formal meetings and conferences.

The directors seek to promote a culture of environmental sustainability within the business which primarily focuses on an energy efficient approach to the design and management of our retail outlets and head office/warehouse. This includes fitting out our retail outlets and head office/warehouse with mechanical and electrical systems that comply with government energy saving schemes, water-saving bathroom facilities, installing LED energy saving lighting and using energy-efficient equipment.

ON BEHALF OF THE BOARD:

L J Mason - Director

28 September 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of wholesale and retail distribution of motorcycles and accessories. The principal activity of the company in the period under review was that of a holding company.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2022 will be £ 4,000 .

DIRECTORS

The directors who have held office during the period from 1 January 2022 to the date of this report are as follows:

L J Mason - appointed 4 November 2022

Mrs E Mason was appointed as a director after 31 December 2022 but prior to the date of this report.

K J Mason ceased to be a director after 31 December 2022 but prior to the date of this report.

BUSINESS RELATIONSHIPS

Business relationships are discussed within the Strategic Report on page 3, in accordance with the provisions of s172(1)(c) of the Companies Act 2006.

STREAMLINED ENERGY AND CARBON REPORTING

As a large company and group, under the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, we are required to prepare a Streamlined Energy Carbon Reporting Report. This report contains details of the Group's annual energy usage (in kWh) and the relevant greenhouse gas emissions (in tonnes of carbon dioxide equivalent (CO2e)).

2022 Energy Usage in kWh

2022Greenhouse Gas Emissions in CO2e

2021 Energy Usage in kWh

2021Greenhouse Gas Emissions in CO2e

Gas

1,016,713

215,879

1,088,841

231,194

Electricity

881,715

187,215

664,246

141,039

Transport

2,106,114

533,625

1,842,391

466,825

Total

4,004,542

936,718

3,595,478

839,058

The conversion factors used in the above table are taken from the UK Government GHG Conversion Factors for Company Reporting. In the year the group used 4,004,542 kWh of energy for its warehouse, retail outlets and transport. This equates to 936,718 kg of CO2e emissions across the following subsidiaries: Moto GB Limited, Chorley Yamaha Centre Limited, Motorcycle Centre Orrell Limited and KJM Superbikes Limited.

The total turnover for the group for the year is £100,074,912 (2021: £90,323,521), which when compared to the CO2e emissions of the year, gives us an intensity ratio of 9.36 Kg (2021: 9.29 Kg) of CO2e emissions per £1,000 of turnover.

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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:

L J Mason - Director

28 September 2023

Opinion

We have audited the financial statements of 2 Moto Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Profit and loss account, 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 2022 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

- we identified the laws and regulations applicable to the company and group through discussions with directors and other management, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on it's operations. Key laws and regulations that we identified included the UK Companies Act, tax legislation, employment legislation and Health and Safety regulations.

- we enquired of the directors and reviewed correspondence with HMRC for evidence of non-compliance with laws and regulations. We also reviewed controls the directors have in place to ensure compliance.

We assessed the susceptibility of the company's and group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.

- we reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above;

- we enquired of the directors about actual and potential litigation and claims.

Due to inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

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.

John B S Fairhurst BA(Hons) FCA (Senior Statutory Auditor)

for and on behalf of Fairhurst

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

28 September 2023

TURNOVER

100,074,912

90,352,234

Cost of sales

80,378,794

72,312,838

GROSS PROFIT

19,696,118

18,039,396

Administrative expenses

11,252,876

9,922,311

8,443,242

8,117,085

Other operating income

28,922

366,739

OPERATING PROFIT

8,472,164

8,483,824

Interest payable and similar expenses

4

215,667

11,008

PROFIT BEFORE TAXATION

5

8,256,497

8,472,816

Tax on profit

6

1,587,574

1,653,644

PROFIT FOR THE FINANCIAL YEAR

6,668,923

6,819,172

Profit attributable to:

Owners of the parent

6,668,923

6,819,172

PROFIT FOR THE YEAR

6,668,923

6,819,172

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

6,668,923

6,819,172

Total comprehensive income attributable to:

Owners of the parent

6,668,923

6,819,172

FIXED ASSETS

Intangible assets

9

484,017

645,356

Tangible assets

10

1,301,689

1,280,446

Investments

11

-

-

Investment property

12

400,000

400,000

2,185,706

2,325,802

CURRENT ASSETS

Stocks

13

35,955,976

23,117,467

Debtors

14

16,394,341

15,190,909

Cash at bank and in hand

22,798

656,619

52,373,115

38,964,995

CREDITORS

Amounts falling due within one year

15

19,500,335

12,850,333

NET CURRENT ASSETS

32,872,780

26,114,662

TOTAL ASSETS LESS CURRENT LIABILITIES

35,058,486

28,440,464

PROVISIONS FOR LIABILITIES

18

42,511

89,412

NET ASSETS

35,015,975

28,351,052

CAPITAL AND RESERVES

Called up share capital

19

1,000

1,000

Share premium

20

2,359,002

2,359,002

Non distributable reserves

20

309,266

309,266

Retained earnings

20

32,346,707

25,681,784

SHAREHOLDERS' FUNDS

35,015,975

28,351,052

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2023 and were signed on its behalf by:

L J Mason - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

5,360,000

5,360,000

Investment property

12

-

-

5,360,000

5,360,000

CURRENT ASSETS

Debtors

14

559,608

559,609

Cash in hand

2

2

559,610

559,611

CREDITORS

Amounts falling due within one year

15

2,559,608

3,559,609

NET CURRENT LIABILITIES

(1,999,998

)

(2,999,998

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,360,002

2,360,002

CAPITAL AND RESERVES

Called up share capital

19

1,000

1,000

Share premium

20

2,359,002

2,359,002

Retained earnings

20

1,000,000

-

SHAREHOLDERS' FUNDS

3,360,002

2,360,002

Company's profit for the financial year

1,004,000

4,000

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2023 and were signed on its behalf by:

L J Mason - Director

Called up

Non

share

Retained

Share

distributable

Total

capital

earnings

premium

reserves

equity

£

£

£

£

£

Balance at 1 January 2021

1,000

18,866,612

2,359,002

309,266

21,535,880

Changes in equity

Dividends

-

(4,000

)

-

-

(4,000

)

Total comprehensive income

-

6,819,172

-

-

6,819,172

Balance at 31 December 2021

1,000

25,681,784

2,359,002

309,266

28,351,052

Changes in equity

Dividends

-

(4,000

)

-

-

(4,000

)

Total comprehensive income

-

6,668,923

-

-

6,668,923

Balance at 31 December 2022

1,000

32,346,707

2,359,002

309,266

35,015,975

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2021

1,000

-

2,359,002

2,360,002

Changes in equity

Dividends

-

(4,000

)

-

(4,000

)

Total comprehensive income

-

4,000

-

4,000

Balance at 31 December 2021

1,000

-

2,359,002

2,360,002

Changes in equity

Dividends

-

(4,000

)

-

(4,000

)

Total comprehensive income

-

1,004,000

-

1,004,000

Balance at 31 December 2022

1,000

1,000,000

2,359,002

3,360,002

Cash flows from operating activities

Cash generated from operations

1

(6,274,067

)

2,767,668

Interest paid

(215,667

)

(11,008

)

Tax paid

(552,439

)

(1,420,525

)

Net cash from operating activities

(7,042,173

)

1,336,135

Cash flows from investing activities

Purchase of tangible fixed assets

(114,640

)

(167,658

)

Sale of tangible fixed assets

-

15,282

Net cash from investing activities

(114,640

)

(152,376

)

Cash flows from financing activities

Loan repayments in year

(159,372

)

(416,641

)

Amount introduced by directors

376,873

417,500

Amount withdrawn by directors

(523,604

)

(212,474

)

Movement in related party loans

957,555

(3,539,663

)

Equity dividends paid

(4,000

)

(4,000

)

Net cash from financing activities

647,452

(3,755,278

)

Decrease in cash and cash equivalents

(6,509,361

)

(2,571,519

)

Cash and cash equivalents at beginning of year

2

(392,308

)

2,179,211

Cash and cash equivalents at end of year

2

(6,901,669

)

(392,308

)

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

2022

2021

£

£

Profit before taxation

8,256,497

8,472,816

Depreciation charges

254,736

254,369

Loss on disposal of fixed assets

-

3,530

Finance costs

215,667

11,008

8,726,900

8,741,723

Increase in stocks

(12,838,509

)

(2,909,883

)

Increase in trade and other debtors

(2,160,987

)

(6,162,704

)

(Decrease)/increase in trade and other creditors

(1,471

)

3,098,532

Cash generated from operations

(6,274,067

)

2,767,668

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 2022

31/12/22

1/1/22

£

£

Cash and cash equivalents

22,798

656,619

Bank overdrafts

(6,924,467

)

(1,048,927

)

(6,901,669

)

(392,308

)

Year ended 31 December 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

656,619

2,179,211

Bank overdrafts

(1,048,927

)

-

(392,308

)

2,179,211

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/1/22

Cash flow

At 31/12/22

£

£

£

Net cash

Cash at bank and in hand

656,619

(633,821

)

22,798

Bank overdrafts

(1,048,927

)

(5,875,540

)

(6,924,467

)

(392,308

)

(6,509,361

)

(6,901,669

)

Debt

Debts falling due within 1 year

(159,372

)

159,372

-

(159,372

)

159,372

-

Total

(551,680

)

(6,349,989

)

(6,901,669

)