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},
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"f12618": {
"value": "SECTION 1 - BASIS OF PREPARATION
Presented below are those accounting policies that relate to the \ufb01nancial statements as a whole and includes details of
new accounting standards that are or will be effective for 2022 or later years. To facilitate the understanding of each note
to the \ufb01nancial statements those accounting policies that are relevant to a particular category are presented within the
relevant notes.
Pendragon PLC is a Group domiciled in the United Kingdom. The consolidated \ufb01nancial statements of the Group for
the year ended 31 December 2022 comprise the Group and its subsidiaries and the Group\u2019s interest in jointly controlled
entities, together referred to as the \u2018Group\u2019.
The consolidated \ufb01nancial statements of the Group as at and for the year ended 31 December 2022 are prepared in
accordance with International Financial Reporting Standards as adopted in the United Kingdom (\"adopted IFRS\").
The Group has elected to prepare its parent Company \ufb01nancial statements in accordance with FRS 101. These are presented
on pages 197 to 208.
The \ufb01nancial statements are presented in millions of UK pounds, rounded to the nearest \u00a30.1m. They have been prepared
under the historical cost convention and where other bases are applied these are identi\ufb01ed in the relevant accounting
policy in the notes below.
Going concern
Notwithstanding net current liabilities of \u00a354.7m as at 31 December 2022 for the Group, the Directors are, at the time
of approving the \ufb01nancial statements, satis\ufb01ed that the Group and Company has adequate resources to continue in
operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing the \ufb01nancial statements.
The Directors have considered the potential impact of a macro-economic downturn,
a market correction in used pricing and shortfalls in both new and used car supply resulting from shortages in microchips
impacting manufacturing.
The Group meets its day-to-day working capital requirements from a revolving credit facility of \u00a375m and senior note
of \u00a397m together with cash balances and a requirement for ongoing access to rolling vehicle credit stocking facilities
amounting to \u00a3582.7m at 31 December 2022 as disclosed in note 4.2. The senior note is due for renewal in March 2027 and
the revolving credit facility is due for renewal in March 2025, with a further two, one-year options available at the election
of lenders to March 2026 and then March 2027. The senior note and revolving credit facility have quarterly leverage and
\ufb01xed charge covenants, as well as an absolute EBITDA covenant, a breach of which would result in the amounts drawn
becoming repayable on demand.
The Group remained compliant with its banking covenants throughout the year to 31
December 2022.
In the context of the above, the directors have prepared cash \ufb02ow forecasts for the period to 31 March 2024 which indicate
that, taking account of reasonably possible downsides, the Group will have suf\ufb01cient funds to meet its liabilities as they fall
due for that period. The Directors have modelled scenarios as follows:
1. A base cash \ufb02ow forecast. The 2023 \ufb01gures in this forecast are based on the Group\u2019s 2023 budget, which re\ufb02ect current
run-rates and expected strategic improvements.
The 2024 \ufb01gures in the base cash \ufb02ow forecast are based on the 2023
budget with a modest growth rate applied to gross pro\ufb01t and operating costs.
2. A severe, but plausible downside scenario. The directors have also prepared a sensitised forecast which considers the
impact of certain severe but plausible downside events, when compared to the base case. This scenario re\ufb02ects a severe
downturn to vehicle volumes and margins. This considers both a worsening in economic conditions and restricted new car
supply due to manufacturing constraints.
In this scenario, capital expenditure has been reduced to run-rate expenditure
and projects committed to and the directors have assessed that the business would operate with lower staf\ufb01ng levels
through the non-replacement of leavers.
This scenario demonstrates that the Group would remain well within its facility
limits and would retain signi\ufb01cant headroom on liquidity covenants. The scenario shows that the Group would also
remain within its minimum EBITDA covenant although this is dependant upon the mitigating actions referred to above.
Based on the above, the directors are con\ufb01dent that the Group and Company will have suf\ufb01cient funds to continue
to meet its liabilities as they fall due for at least 12 months from the date of approval of the \ufb01nancial statements, and
therefore the directors believe it remains appropriate to prepare the \ufb01nancial statements on a going concern basis.
Prior year adjustment
The Group has made adjustments to the presentation of the comparative Balance Sheet. The directors have considered
that the overdraft balances of Group entities should be separately presented gross on the Consolidated Balance Sheet,
rather than netted off against cash and cash equivalents held either by the same entity, or other Group entities, with the
same bank. As a result, the Consolidated Balance Sheet as at 31 December 2021 has been restated as follows.
2021
2021
as reported
restatement
restated
\u00a3m
\u00a3m
\u00a3m
Current Assets
Cash and cash equivalents
37.6
162.5
200.1
Current liabilities
Bank overdraft
-
(162.5)
(162.5)
37.6
-
37.6
The restatement did not result in any change to reported pro\ufb01t, earnings per share, net assets or cash \ufb02ows reported in
the 2021 \ufb01nancial year.
The impact on the opening Consolidated Balance Sheet as at 31 December 2020 is as follows:
2020
2020
as reported
restatement
restated
\u00a3m
\u00a3m
\u00a3m
Current Assets
Cash and cash equivalents
56.0
187.6
243.6
Current liabilities
Bank overdraft
-
(187.6)
(187.6)
56.0
-
56.0
The restatement did not result in any change to reported pro\ufb01t, earnings per share, net assets or cash \ufb02ows reported in
the 2020 \ufb01nancial year.
As these individual overdraft accounts are an integral part of the Group's cash management they are still classi\ufb01ed as cash
and cash equivalents (see note 4.2) in the Consolidated Cash Flow Statement and therefore this reclassi\ufb01cation has no
effect on total cash \ufb02ows in the comparative period.
Judgements
The Group applies judgement in how it applies its accounting policies, which do not involve estimation, but could materially
affect the numbers disclosed in these \ufb01nancial statements. There are no key accounting judgements, without estimation,
that have been applied in these \ufb01nancial statements.
Accounting Estimates
The preparation of \ufb01nancial statements in conformity with adopted IFRSs requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the \ufb01nancial statements and the reported amounts of
revenues and expenses during the reporting year. Although these estimates are based on management\u2019s best knowledge
of the amount, events or actions, actual results ultimately may differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the circumstances.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the revision affects both current and future periods. The
directors consider the following to be the key estimates applicable to the \ufb01nancial statements, which have a signi\ufb01cant risk
of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next \ufb01nancial year or in the
long term:
Key estimate area
Key assumption
Potential
impact within
the next
\ufb01nancial year
Potential
impact in
the longer
term
Note
reference
Inventory fair value
(UK used inventory
of \u00a3388.6m (2021:
\u00a3351.4m))
The Group assessment of fair values of used
inventory involves an element of estimation. The key
assumption is estimating the likely sale period and
the expected pro\ufb01t or loss on sale for each of our
inventory items that are held at the year end point.
We conduct this analysis by looking at stock by age
category and comparing historical trends and our
forward expectations on these assumptions.
3
3.4
Retirement bene\ufb01t
obligations
The main assumptions in determining the Group\u2019s
Retirement Bene\ufb01t Obligations are: discount rate,
mortality and rate of in\ufb02ation. Full detail is included
in the pension note, 5.1.
3
3
5.1
Basis of consolidation
The consolidated \ufb01nancial statements include the \ufb01nancial statements of Pendragon PLC, all its subsidiary undertakings
and investments. Consistent accounting policies have been applied in the preparation of all such \ufb01nancial statements.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. The \ufb01nancial statements of subsidiaries are included in the consolidated \ufb01nancial statements from the date that
control commences until the date that control ceases.
Intragroup balances and any unrealised gains or losses or income and expenses arising from intragroup transactions, are
eliminated in preparing the consolidated \ufb01nancial statements.
Foreign currencies
Transactions in foreign currencies are translated to the respective functional currency of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary
assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated
at fair value are translated to sterling at foreign exchange rates ruling at the dates the fair value was determined. Foreign
currency differences arising on retranslation are recognised in pro\ufb01t or loss.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are
translated to sterling at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign
operations are translated to sterling at rates approximating to the foreign exchange rates ruling at the dates of the
transactions.
Foreign currency differences arising on the retranslation of a \ufb01nancial liability designated as a hedge of a net investment
in a foreign operation are recognised directly in equity, in the foreign currency translation reserve, to the extent the hedge
is effective. To the extent the hedge is ineffective, such differences are recognised in pro\ufb01t or loss. When the hedged net
investment is disposed of, the cumulative amount in equity is transferred to pro\ufb01t and loss on disposal.
In respect of all foreign operations, any differences that have arisen after 1 January 2004, the date of transition to IFRS, are
presented as a separate component of equity.
Cash and cash equivalents
For the purposes of the cash \ufb02ow statement, cash and cash equivalents comprise deposits with banks and \ufb01nancial
institutions, bank and cash balances, and liquid investments, net of bank overdrafts. Bank overdrafts that are repayable
on demand and form an integral part of the Group's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash \ufb02ows. In the balance sheet, bank overdrafts are included in current
borrowings.
Government grants
Government grants are recognised when there is reasonable assurance the grants will be received and the conditions
of the grant will be complied with. There was no income from government grants during 2022 (2021: \u00a31.6m, being the
Coronavirus Job Retention Scheme, is included within payroll expenses). No business rates relief was received in 2022
(2021: \u00a38.7m was received by way of business rates relief by way of waiver of these charges)
Impairment
The carrying amounts of the Group's assets, other than inventories (see note 3.4) and deferred tax assets (see note 2.7),
are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated.
For goodwill the recoverable amount is estimated at each balance sheet date. The recoverable amount is the higher of fair
value less costs to sell and value in use. In assessing value in use, the estimated future cash \ufb02ows are discounted to their
present value using a pre-tax discount rate that re\ufb02ects current market assessments of the time value of money and the
risks speci\ufb01c to the asset for which the estimates of future cash \ufb02ows have not been adjusted.
In assessing fair value less costs to sell, the estimated future cash \ufb02ows are multiplied by an appropriate trading multiple
or by assessing the fair value of the individual assets.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash in\ufb02ows from continuing use that are largely independent of the cash in\ufb02ows from other groups of assets ('the cash
generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing is allocated to
cash generating units. Management have determined that the cash generating units of the Group are the motor franchise
groups and other business segments.
An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash generating units are allocated \ufb01rst to reduce the carrying amount of any
goodwill allocated to cash generating units and then, to reduce the carrying amount of the other assets in the unit on
a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. The impact of the current year impairment review
can be seen in note 3.1.
Adoption of new and revised standards and new standards and interpretations not yet adopted
No new or amended standards and interpretations have been adopted during the year.
IFRS 17 Insurance Contracts is effective for annual periods beginning after 1 January 2023 and is not expected to have a
signi\ufb01cant impact on the Group\u2019s consolidated \ufb01nancial statements.
Alternative performance measures
The Group uses a number of key performance measures ('KPI\u2019s') which are non-IFRS measures to monitor the performance
of its operations. The Group believes these KPIs provide useful historical \ufb01nancial information to help investors and
other stakeholders evaluate the performance of the business and are measures commonly used by certain investors for
evaluating the performance of the Group. In particular, the Group uses KPIs which re\ufb02ect the underlying performance on
the basis that this provides a more relevant focus on the core business performance of the Group. The Group has been
using the following KPIs on a consistent basis and they are de\ufb01ned and reconciled as follows:
Dividend per share
- dividend per share is de\ufb01ned as the interim dividend per share plus the proposed \ufb01nal year dividend
per share for a given period.
Gross margin %
- gross margin is de\ufb01ned as gross pro\ufb01t as a percentage of revenue.
Operating margin %
- operating margin is de\ufb01ned as operating pro\ufb01t as a percentage of revenue.
Underlying operating pro\ufb01t/pro\ufb01t before tax
- results on an underlying basis exclude items that have non-trading
attributes due to their size, nature or incidence. The detail of the non-underlying results is shown in note 2.6 and this is also
shown on the face of the consolidated income statement to reconcile from the underlying to total results.
Operating pro\ufb01t reconciliation
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Gains on the sale of businesses and property, plant and equipment (see note 2.6)
7.7
2.7
Impairment of goodwill (see note 2.6)
(3.6)
-
Impairment of property, plant and equipment (see note 2.6)
(1.0)
-
Impairment of right of use assets (see note 2.6)
(0.2)
(9.6)
Aborted transaction related expenses (see note 2.6)
(0.4)
-
Termination and severance payments (see note 2.6)
(0.2)
(1.8)
Business closure income (see note 2.6)
0.2
-
Non-underlying operating pro\ufb01t/(loss) items
2.5
(8.7)
Operating pro\ufb01t
101.0
107.6
Pro\ufb01t before tax reconciliation
2022
2021
\u00a3m
\u00a3m
Underlying pro\ufb01t before tax
57.6
83.0
Non-underlying operating pro\ufb01t/(loss) items (see reconciliation above)
2.5
(8.7)
Non-underlying net \ufb01nance costs (see note 2.6)
(2.9)
(1.0)
Non-underlying operating pro\ufb01t/(loss) and \ufb01nance costs items
(0.4)
(9.7)
Pro\ufb01t before tax
57.2
73.3
Pro\ufb01t after tax reconciliation
2022
2021
\u00a3m
\u00a3m
Underlying pro\ufb01t after tax
44.5
69.0
Non-underlying operating pro\ufb01t/(loss) and \ufb01nance costs items (see reconciliation above)
(0.4)
(9.7)
Non-underlying tax (see note 2.6)
1.4
2.2
Non-underlying operating pro\ufb01t/(loss), \ufb01nance costs and tax items
1.0
(7.5)
Pro\ufb01t after tax
45.5
61.5
Underlying basic earnings per share ('underlying earnings per share') \u2013 the Group presents underlying basic earnings per
share as the directors consider that this is a better measure of comparative performance. Underlying basic earnings per
share is calculated by dividing the underlying pro\ufb01t or loss attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period. A full reconciliation of how this is derived is found in note 2.8.
Underlying diluted earnings per share \u2013 the Group presents underlying diluted earnings per share as the directors consider
that this is a better measure of comparative performance.
Underlying diluted earnings per share is calculated by dividing
the underlying pro\ufb01t and loss attributable to ordinary shareholders by the weighted average number of ordinary shares
in issue taking account of the effects of all dilutive potential ordinary shares, which comprise of share options granted to
employees, LTIPs and share warrants. A full reconciliation of how this is derived is found in note 2.8.
Adjusted net debt
\u2013 All loans and borrowings less cash and cash equivalents less IFRS 16 lease liabilities less vehicle
stocking loans.
Leverage ratio
\u2013 the Group uses the ratio of adjusted net cash/(debt) to underlying EBITDA to assess the use of the
Group\u2019s \ufb01nancial resources. The reconciliation of this and the composition of underlying EBITDA is shown in note 4.2.
Like-for-Like reconciliations
Like for like (LFL) results only include trading businesses which have comparative trading periods in two consecutive
\ufb01nancial years. We use like-for-like results to aid in the understanding of the like-for-like movement in revenue, gross pro\ufb01t
and operating pro\ufb01t in the business. The difference to underlying results are those businesses which are not like-for-like
which have recently commenced operation and therefore do not have a full current year and prior year history plus any
retail points closed during the current or previous period. The like-for-like adjustments are split between those in relation
to businesses disposed and those other adjustments which relate to the elimination of results for a period in a year which
does not have a corresponding amount in the comparative year.
Revenues by Department - UK Motor
Other
non
Other
non
Group
Disposals
like-for-like
Like-for-like
Group
Disposals
like-for-like
Like-for-like
revenue
revenue
revenue
revenue
revenue
revenue
revenue
revenue
2022
2022
2022
2022
2021
2021
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Aftersales revenue
276.1
-
-
276.1
261.9
(5.1)
-
256.8
Used vehicle revenue
1,808.6
(0.2)
(0.7)
1,807.7
1,708.4
(10.8)
-
1,697.6
New vehicle revenue
1,451.5
-
-
1,451.5
1,362.4
(12.2)
-
1,350.2
Total Revenue
3,536.2
(0.2)
(0.7)
3,535.3
3,332.7
(28.1)
-
3,304.6
Revenues by Department - US Motor
Other non
Other non
Group
Disposals
like-for-like
Like-for-like
Group
Disposals
like-for-like
Like-for-like
revenue
revenue
revenue
revenue
revenue
revenue
revenue
revenue
2022
2022
2022
2022
2021
2021
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Aftersales revenue
-
-
-
-
2.8
(2.8)
-
-
Used vehicle revenue
-
-
-
-
3.0
(3.0)
-
-
New vehicle revenue
-
-
-
-
22.8
(22.8)
-
-
Total Revenue
-
-
-
-
28.6
(28.6)
-
-
Gross pro\ufb01t by Department - UK Motor
Group
gross pro\ufb01t
2022
\u00a3m
Disposals
gross pro\ufb01t
2022
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2022
\u00a3m
Like-for-like
gross pro\ufb01t
2022
\u00a3m
Group
gross pro\ufb01t
2021
\u00a3m
Disposals
gross pro\ufb01t
2021
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2021
\u00a3m
Like-for-like
gross pro\ufb01t
2021
\u00a3m
Aftersales gross pro\ufb01t
139.5
0.3
-
139.8
133.2
(2.4)
-
130.8
Used vehicle gross pro\ufb01t
143.6
-
-
143.6
164.2
(0.2)
-
164.0
New vehicle gross pro\ufb01t
132.6
-
-
132.6
99.9
(0.9)
-
99.0
Total Gross pro\ufb01t
415.7
0.3
-
416.0
397.3
(3.5)
-
393.8
Gross pro\ufb01t by Department - US Motor
Group
gross pro\ufb01t
2022
\u00a3m
Disposals
gross pro\ufb01t
2022
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2022
\u00a3m
Like-for-like
gross pro\ufb01t
2022
\u00a3m
Group
gross pro\ufb01t
2021
\u00a3m
Disposals
gross pro\ufb01t
2021
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2021
\u00a3m
Like-for-like
gross pro\ufb01t
2021
\u00a3m
Aftersales gross pro\ufb01t
-
-
-
-
1.6
(1.6)
-
-
Used gross pro\ufb01t
-
-
-
-
0.2
(0.2)
-
-
New vehicle gross pro\ufb01t
-
-
-
-
2.2
(2.2)
-
-
Total Gross pro\ufb01t
-
-
-
-
4.0
(4.0)
-
-
Underlying operating pro\ufb01t
Group
underlying
operating
pro\ufb01t/
(loss)
2022
\u00a3m
Disposals
underlying
operating
pro\ufb01t
2022
\u00a3m
Other non
like-for-like
underlying
operating
pro\ufb01t
2022
\u00a3m
Like-for-like
underlying
operating
pro\ufb01t
2022
\u00a3m
Group
underlying
operating
pro\ufb01t/
(loss)
2021
\u00a3m
Disposals
underlying
operating
pro\ufb01t
2021
\u00a3m
Other non
like-for-like
underlying
operating
pro\ufb01t
2021
\u00a3m
Like-for-like
underlying
operating
pro\ufb01t
2021
\u00a3m
UK Motor
69.1
1.0
0.2
70.3
87.4
1.1
-
88.5
Software
11.0
-
-
11.0
12.5
-
-
12.5
Leasing
19.9
-
-
19.9
17.5
-
-
17.5
US Motor
(1.5)
1.5
-
-
(1.1)
1.1
-
-
Total underlying
operating pro\ufb01t
98.5
2.5
0.2
101.2
116.3
2.2
-
118.5
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12619": {
"value": "SECTION 1 - BASIS OF PREPARATION
Presented below are those accounting policies that relate to the \ufb01nancial statements as a whole and includes details of
new accounting standards that are or will be effective for 2022 or later years. To facilitate the understanding of each note
to the \ufb01nancial statements those accounting policies that are relevant to a particular category are presented within the
relevant notes.
Pendragon PLC is a Group domiciled in the United Kingdom. The consolidated \ufb01nancial statements of the Group for
the year ended 31 December 2022 comprise the Group and its subsidiaries and the Group\u2019s interest in jointly controlled
entities, together referred to as the \u2018Group\u2019.
The consolidated \ufb01nancial statements of the Group as at and for the year ended 31 December 2022 are prepared in
accordance with International Financial Reporting Standards as adopted in the United Kingdom (\"adopted IFRS\").
The Group has elected to prepare its parent Company \ufb01nancial statements in accordance with FRS 101. These are presented
on pages 197 to 208.
The \ufb01nancial statements are presented in millions of UK pounds, rounded to the nearest \u00a30.1m. They have been prepared
under the historical cost convention and where other bases are applied these are identi\ufb01ed in the relevant accounting
policy in the notes below.
Going concern
Notwithstanding net current liabilities of \u00a354.7m as at 31 December 2022 for the Group, the Directors are, at the time
of approving the \ufb01nancial statements, satis\ufb01ed that the Group and Company has adequate resources to continue in
operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing the \ufb01nancial statements.
The Directors have considered the potential impact of a macro-economic downturn,
a market correction in used pricing and shortfalls in both new and used car supply resulting from shortages in microchips
impacting manufacturing.
The Group meets its day-to-day working capital requirements from a revolving credit facility of \u00a375m and senior note
of \u00a397m together with cash balances and a requirement for ongoing access to rolling vehicle credit stocking facilities
amounting to \u00a3582.7m at 31 December 2022 as disclosed in note 4.2. The senior note is due for renewal in March 2027 and
the revolving credit facility is due for renewal in March 2025, with a further two, one-year options available at the election
of lenders to March 2026 and then March 2027. The senior note and revolving credit facility have quarterly leverage and
\ufb01xed charge covenants, as well as an absolute EBITDA covenant, a breach of which would result in the amounts drawn
becoming repayable on demand.
The Group remained compliant with its banking covenants throughout the year to 31
December 2022.
In the context of the above, the directors have prepared cash \ufb02ow forecasts for the period to 31 March 2024 which indicate
that, taking account of reasonably possible downsides, the Group will have suf\ufb01cient funds to meet its liabilities as they fall
due for that period. The Directors have modelled scenarios as follows:
1. A base cash \ufb02ow forecast. The 2023 \ufb01gures in this forecast are based on the Group\u2019s 2023 budget, which re\ufb02ect current
run-rates and expected strategic improvements.
The 2024 \ufb01gures in the base cash \ufb02ow forecast are based on the 2023
budget with a modest growth rate applied to gross pro\ufb01t and operating costs.
2. A severe, but plausible downside scenario. The directors have also prepared a sensitised forecast which considers the
impact of certain severe but plausible downside events, when compared to the base case. This scenario re\ufb02ects a severe
downturn to vehicle volumes and margins. This considers both a worsening in economic conditions and restricted new car
supply due to manufacturing constraints.
In this scenario, capital expenditure has been reduced to run-rate expenditure
and projects committed to and the directors have assessed that the business would operate with lower staf\ufb01ng levels
through the non-replacement of leavers.
This scenario demonstrates that the Group would remain well within its facility
limits and would retain signi\ufb01cant headroom on liquidity covenants. The scenario shows that the Group would also
remain within its minimum EBITDA covenant although this is dependant upon the mitigating actions referred to above.
Based on the above, the directors are con\ufb01dent that the Group and Company will have suf\ufb01cient funds to continue
to meet its liabilities as they fall due for at least 12 months from the date of approval of the \ufb01nancial statements, and
therefore the directors believe it remains appropriate to prepare the \ufb01nancial statements on a going concern basis.
Prior year adjustment
The Group has made adjustments to the presentation of the comparative Balance Sheet. The directors have considered
that the overdraft balances of Group entities should be separately presented gross on the Consolidated Balance Sheet,
rather than netted off against cash and cash equivalents held either by the same entity, or other Group entities, with the
same bank. As a result, the Consolidated Balance Sheet as at 31 December 2021 has been restated as follows.
2021
2021
as reported
restatement
restated
\u00a3m
\u00a3m
\u00a3m
Current Assets
Cash and cash equivalents
37.6
162.5
200.1
Current liabilities
Bank overdraft
-
(162.5)
(162.5)
37.6
-
37.6
The restatement did not result in any change to reported pro\ufb01t, earnings per share, net assets or cash \ufb02ows reported in
the 2021 \ufb01nancial year.
The impact on the opening Consolidated Balance Sheet as at 31 December 2020 is as follows:
2020
2020
as reported
restatement
restated
\u00a3m
\u00a3m
\u00a3m
Current Assets
Cash and cash equivalents
56.0
187.6
243.6
Current liabilities
Bank overdraft
-
(187.6)
(187.6)
56.0
-
56.0
The restatement did not result in any change to reported pro\ufb01t, earnings per share, net assets or cash \ufb02ows reported in
the 2020 \ufb01nancial year.
As these individual overdraft accounts are an integral part of the Group's cash management they are still classi\ufb01ed as cash
and cash equivalents (see note 4.2) in the Consolidated Cash Flow Statement and therefore this reclassi\ufb01cation has no
effect on total cash \ufb02ows in the comparative period.
Judgements
The Group applies judgement in how it applies its accounting policies, which do not involve estimation, but could materially
affect the numbers disclosed in these \ufb01nancial statements. There are no key accounting judgements, without estimation,
that have been applied in these \ufb01nancial statements.
Accounting Estimates
The preparation of \ufb01nancial statements in conformity with adopted IFRSs requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the \ufb01nancial statements and the reported amounts of
revenues and expenses during the reporting year. Although these estimates are based on management\u2019s best knowledge
of the amount, events or actions, actual results ultimately may differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the circumstances.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the revision affects both current and future periods. The
directors consider the following to be the key estimates applicable to the \ufb01nancial statements, which have a signi\ufb01cant risk
of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next \ufb01nancial year or in the
long term:
Key estimate area
Key assumption
Potential
impact within
the next
\ufb01nancial year
Potential
impact in
the longer
term
Note
reference
Inventory fair value
(UK used inventory
of \u00a3388.6m (2021:
\u00a3351.4m))
The Group assessment of fair values of used
inventory involves an element of estimation. The key
assumption is estimating the likely sale period and
the expected pro\ufb01t or loss on sale for each of our
inventory items that are held at the year end point.
We conduct this analysis by looking at stock by age
category and comparing historical trends and our
forward expectations on these assumptions.
3
3.4
Retirement bene\ufb01t
obligations
The main assumptions in determining the Group\u2019s
Retirement Bene\ufb01t Obligations are: discount rate,
mortality and rate of in\ufb02ation. Full detail is included
in the pension note, 5.1.
3
3
5.1
Basis of consolidation
The consolidated \ufb01nancial statements include the \ufb01nancial statements of Pendragon PLC, all its subsidiary undertakings
and investments. Consistent accounting policies have been applied in the preparation of all such \ufb01nancial statements.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. The \ufb01nancial statements of subsidiaries are included in the consolidated \ufb01nancial statements from the date that
control commences until the date that control ceases.
Intragroup balances and any unrealised gains or losses or income and expenses arising from intragroup transactions, are
eliminated in preparing the consolidated \ufb01nancial statements.
Foreign currencies
Transactions in foreign currencies are translated to the respective functional currency of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary
assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated
at fair value are translated to sterling at foreign exchange rates ruling at the dates the fair value was determined. Foreign
currency differences arising on retranslation are recognised in pro\ufb01t or loss.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are
translated to sterling at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign
operations are translated to sterling at rates approximating to the foreign exchange rates ruling at the dates of the
transactions.
Foreign currency differences arising on the retranslation of a \ufb01nancial liability designated as a hedge of a net investment
in a foreign operation are recognised directly in equity, in the foreign currency translation reserve, to the extent the hedge
is effective. To the extent the hedge is ineffective, such differences are recognised in pro\ufb01t or loss. When the hedged net
investment is disposed of, the cumulative amount in equity is transferred to pro\ufb01t and loss on disposal.
In respect of all foreign operations, any differences that have arisen after 1 January 2004, the date of transition to IFRS, are
presented as a separate component of equity.
Cash and cash equivalents
For the purposes of the cash \ufb02ow statement, cash and cash equivalents comprise deposits with banks and \ufb01nancial
institutions, bank and cash balances, and liquid investments, net of bank overdrafts. Bank overdrafts that are repayable
on demand and form an integral part of the Group's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash \ufb02ows. In the balance sheet, bank overdrafts are included in current
borrowings.
Government grants
Government grants are recognised when there is reasonable assurance the grants will be received and the conditions
of the grant will be complied with. There was no income from government grants during 2022 (2021: \u00a31.6m, being the
Coronavirus Job Retention Scheme, is included within payroll expenses). No business rates relief was received in 2022
(2021: \u00a38.7m was received by way of business rates relief by way of waiver of these charges)
Impairment
The carrying amounts of the Group's assets, other than inventories (see note 3.4) and deferred tax assets (see note 2.7),
are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated.
For goodwill the recoverable amount is estimated at each balance sheet date. The recoverable amount is the higher of fair
value less costs to sell and value in use. In assessing value in use, the estimated future cash \ufb02ows are discounted to their
present value using a pre-tax discount rate that re\ufb02ects current market assessments of the time value of money and the
risks speci\ufb01c to the asset for which the estimates of future cash \ufb02ows have not been adjusted.
In assessing fair value less costs to sell, the estimated future cash \ufb02ows are multiplied by an appropriate trading multiple
or by assessing the fair value of the individual assets.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash in\ufb02ows from continuing use that are largely independent of the cash in\ufb02ows from other groups of assets ('the cash
generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing is allocated to
cash generating units. Management have determined that the cash generating units of the Group are the motor franchise
groups and other business segments.
An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash generating units are allocated \ufb01rst to reduce the carrying amount of any
goodwill allocated to cash generating units and then, to reduce the carrying amount of the other assets in the unit on
a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. The impact of the current year impairment review
can be seen in note 3.1.
Adoption of new and revised standards and new standards and interpretations not yet adopted
No new or amended standards and interpretations have been adopted during the year.
IFRS 17 Insurance Contracts is effective for annual periods beginning after 1 January 2023 and is not expected to have a
signi\ufb01cant impact on the Group\u2019s consolidated \ufb01nancial statements.
Alternative performance measures
The Group uses a number of key performance measures ('KPI\u2019s') which are non-IFRS measures to monitor the performance
of its operations. The Group believes these KPIs provide useful historical \ufb01nancial information to help investors and
other stakeholders evaluate the performance of the business and are measures commonly used by certain investors for
evaluating the performance of the Group. In particular, the Group uses KPIs which re\ufb02ect the underlying performance on
the basis that this provides a more relevant focus on the core business performance of the Group. The Group has been
using the following KPIs on a consistent basis and they are de\ufb01ned and reconciled as follows:
Dividend per share
- dividend per share is de\ufb01ned as the interim dividend per share plus the proposed \ufb01nal year dividend
per share for a given period.
Gross margin %
- gross margin is de\ufb01ned as gross pro\ufb01t as a percentage of revenue.
Operating margin %
- operating margin is de\ufb01ned as operating pro\ufb01t as a percentage of revenue.
Underlying operating pro\ufb01t/pro\ufb01t before tax
- results on an underlying basis exclude items that have non-trading
attributes due to their size, nature or incidence. The detail of the non-underlying results is shown in note 2.6 and this is also
shown on the face of the consolidated income statement to reconcile from the underlying to total results.
Operating pro\ufb01t reconciliation
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Gains on the sale of businesses and property, plant and equipment (see note 2.6)
7.7
2.7
Impairment of goodwill (see note 2.6)
(3.6)
-
Impairment of property, plant and equipment (see note 2.6)
(1.0)
-
Impairment of right of use assets (see note 2.6)
(0.2)
(9.6)
Aborted transaction related expenses (see note 2.6)
(0.4)
-
Termination and severance payments (see note 2.6)
(0.2)
(1.8)
Business closure income (see note 2.6)
0.2
-
Non-underlying operating pro\ufb01t/(loss) items
2.5
(8.7)
Operating pro\ufb01t
101.0
107.6
Pro\ufb01t before tax reconciliation
2022
2021
\u00a3m
\u00a3m
Underlying pro\ufb01t before tax
57.6
83.0
Non-underlying operating pro\ufb01t/(loss) items (see reconciliation above)
2.5
(8.7)
Non-underlying net \ufb01nance costs (see note 2.6)
(2.9)
(1.0)
Non-underlying operating pro\ufb01t/(loss) and \ufb01nance costs items
(0.4)
(9.7)
Pro\ufb01t before tax
57.2
73.3
Pro\ufb01t after tax reconciliation
2022
2021
\u00a3m
\u00a3m
Underlying pro\ufb01t after tax
44.5
69.0
Non-underlying operating pro\ufb01t/(loss) and \ufb01nance costs items (see reconciliation above)
(0.4)
(9.7)
Non-underlying tax (see note 2.6)
1.4
2.2
Non-underlying operating pro\ufb01t/(loss), \ufb01nance costs and tax items
1.0
(7.5)
Pro\ufb01t after tax
45.5
61.5
Underlying basic earnings per share ('underlying earnings per share') \u2013 the Group presents underlying basic earnings per
share as the directors consider that this is a better measure of comparative performance. Underlying basic earnings per
share is calculated by dividing the underlying pro\ufb01t or loss attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period. A full reconciliation of how this is derived is found in note 2.8.
Underlying diluted earnings per share \u2013 the Group presents underlying diluted earnings per share as the directors consider
that this is a better measure of comparative performance.
Underlying diluted earnings per share is calculated by dividing
the underlying pro\ufb01t and loss attributable to ordinary shareholders by the weighted average number of ordinary shares
in issue taking account of the effects of all dilutive potential ordinary shares, which comprise of share options granted to
employees, LTIPs and share warrants. A full reconciliation of how this is derived is found in note 2.8.
Adjusted net debt
\u2013 All loans and borrowings less cash and cash equivalents less IFRS 16 lease liabilities less vehicle
stocking loans.
Leverage ratio
\u2013 the Group uses the ratio of adjusted net cash/(debt) to underlying EBITDA to assess the use of the
Group\u2019s \ufb01nancial resources. The reconciliation of this and the composition of underlying EBITDA is shown in note 4.2.
Like-for-Like reconciliations
Like for like (LFL) results only include trading businesses which have comparative trading periods in two consecutive
\ufb01nancial years. We use like-for-like results to aid in the understanding of the like-for-like movement in revenue, gross pro\ufb01t
and operating pro\ufb01t in the business. The difference to underlying results are those businesses which are not like-for-like
which have recently commenced operation and therefore do not have a full current year and prior year history plus any
retail points closed during the current or previous period. The like-for-like adjustments are split between those in relation
to businesses disposed and those other adjustments which relate to the elimination of results for a period in a year which
does not have a corresponding amount in the comparative year.
Revenues by Department - UK Motor
Other
non
Other
non
Group
Disposals
like-for-like
Like-for-like
Group
Disposals
like-for-like
Like-for-like
revenue
revenue
revenue
revenue
revenue
revenue
revenue
revenue
2022
2022
2022
2022
2021
2021
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Aftersales revenue
276.1
-
-
276.1
261.9
(5.1)
-
256.8
Used vehicle revenue
1,808.6
(0.2)
(0.7)
1,807.7
1,708.4
(10.8)
-
1,697.6
New vehicle revenue
1,451.5
-
-
1,451.5
1,362.4
(12.2)
-
1,350.2
Total Revenue
3,536.2
(0.2)
(0.7)
3,535.3
3,332.7
(28.1)
-
3,304.6
Revenues by Department - US Motor
Other non
Other non
Group
Disposals
like-for-like
Like-for-like
Group
Disposals
like-for-like
Like-for-like
revenue
revenue
revenue
revenue
revenue
revenue
revenue
revenue
2022
2022
2022
2022
2021
2021
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Aftersales revenue
-
-
-
-
2.8
(2.8)
-
-
Used vehicle revenue
-
-
-
-
3.0
(3.0)
-
-
New vehicle revenue
-
-
-
-
22.8
(22.8)
-
-
Total Revenue
-
-
-
-
28.6
(28.6)
-
-
Gross pro\ufb01t by Department - UK Motor
Group
gross pro\ufb01t
2022
\u00a3m
Disposals
gross pro\ufb01t
2022
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2022
\u00a3m
Like-for-like
gross pro\ufb01t
2022
\u00a3m
Group
gross pro\ufb01t
2021
\u00a3m
Disposals
gross pro\ufb01t
2021
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2021
\u00a3m
Like-for-like
gross pro\ufb01t
2021
\u00a3m
Aftersales gross pro\ufb01t
139.5
0.3
-
139.8
133.2
(2.4)
-
130.8
Used vehicle gross pro\ufb01t
143.6
-
-
143.6
164.2
(0.2)
-
164.0
New vehicle gross pro\ufb01t
132.6
-
-
132.6
99.9
(0.9)
-
99.0
Total Gross pro\ufb01t
415.7
0.3
-
416.0
397.3
(3.5)
-
393.8
Gross pro\ufb01t by Department - US Motor
Group
gross pro\ufb01t
2022
\u00a3m
Disposals
gross pro\ufb01t
2022
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2022
\u00a3m
Like-for-like
gross pro\ufb01t
2022
\u00a3m
Group
gross pro\ufb01t
2021
\u00a3m
Disposals
gross pro\ufb01t
2021
\u00a3m
Other non
like-for-like
gross pro\ufb01t
2021
\u00a3m
Like-for-like
gross pro\ufb01t
2021
\u00a3m
Aftersales gross pro\ufb01t
-
-
-
-
1.6
(1.6)
-
-
Used gross pro\ufb01t
-
-
-
-
0.2
(0.2)
-
-
New vehicle gross pro\ufb01t
-
-
-
-
2.2
(2.2)
-
-
Total Gross pro\ufb01t
-
-
-
-
4.0
(4.0)
-
-
Underlying operating pro\ufb01t
Group
underlying
operating
pro\ufb01t/
(loss)
2022
\u00a3m
Disposals
underlying
operating
pro\ufb01t
2022
\u00a3m
Other non
like-for-like
underlying
operating
pro\ufb01t
2022
\u00a3m
Like-for-like
underlying
operating
pro\ufb01t
2022
\u00a3m
Group
underlying
operating
pro\ufb01t/
(loss)
2021
\u00a3m
Disposals
underlying
operating
pro\ufb01t
2021
\u00a3m
Other non
like-for-like
underlying
operating
pro\ufb01t
2021
\u00a3m
Like-for-like
underlying
operating
pro\ufb01t
2021
\u00a3m
UK Motor
69.1
1.0
0.2
70.3
87.4
1.1
-
88.5
Software
11.0
-
-
11.0
12.5
-
-
12.5
Leasing
19.9
-
-
19.9
17.5
-
-
17.5
US Motor
(1.5)
1.5
-
-
(1.1)
1.1
-
-
Total underlying
operating pro\ufb01t
98.5
2.5
0.2
101.2
116.3
2.2
-
118.5
SECTION 2 - RESULTS AND TRADING
This section contains the notes and information to support the results presented in the income statement:
2.1
Revenue
2.5
Audit fees
2.2
Net operating expenses
2.6
Non-underlying items
2.3
Operating segments
2.7
Taxation
2.4
Staff costs
2.8
Earnings per share
2.1 Revenue
Accounting policy
Revenue is measured based on the consideration speci\ufb01ed in a contract with a customer and excludes amounts collected
on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a
customer.
The following is a description of principal activities from which the Group generates its revenue categorised by the
reportable segments as detailed in note 2.3.
UK Motor segment and US Motor segment
The UK Motor and US Motor segments principally generate revenue from the sale of new and used motor vehicles, together
with the supply of motor vehicle parts, servicing and repair activities, collectively referred to as aftersales.
Products and
services may be sold separately or in bundled packages. Examples of a bundled package will include the supply of a vehicle
with an extended warranty or a servicing plan. For bundled packages, the Group accounts for individual products and
services separately as they are distinct items, as each performance obligation within that contract is separately identi\ufb01able
from other items in the bundled package. The consideration is proportionately allocated between separate products and
services in a bundle based on their stand-alone selling prices. The stand-alone selling prices are determined based on the
list prices at which the Group sells these items and are separately identi\ufb01ed on the customer's invoice.
The Group has a number of manufacturer partners who will provide goods/services to customers, for example a warranty
or free servicing when purchasing a new vehicle. Such items do not have a contractual obligation on the Group as the
obligation lies with the manufacturer and therefore no revenue is recognised in respect of these items.
Products
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
and services
New and used
The Group recognises revenue on the sale of motor vehicles and parts revenue when they have
vehicles, parts and
been supplied to the customer. The satisfaction of the performance obligation occurs on delivery
accessories
or collection of the product. Vehicles are usually paid for prior to delivery though selected
corporate operators may be granted terms of up to seven days. Parts are either paid for on
delivery or within one month, dependant upon whether or not the customer is retail or has trade
terms.
Aftersales service
The Group recognises revenue when the one time service has been completed. Revenue is
and repairs
recognised at this point provided that the revenue and costs can be measured reliably, the
recovery of the consideration is probable and there is no continuing management involvement
with the goods. Payment terms are upon completion of the service or within one month,
dependant upon whether or not the customer is retail or trade.
Commissions
The Group receives commissions when it arranges \ufb01nance and insurance packages for its
received
customers to purchase its products and services, acting as agent on behalf of various \ufb01nance and
insurance companies. Any commission earned is recognised when the customer draws down the
\ufb01nance or commences the insurance policy from the supplier which coincides with the delivery of
the product or service. Commissions receivable are paid typically in the month after the \ufb01nance is
drawn down.
Vehicle warranty
The Group offers a warranty product on vehicles supplied with a guarantee period typically
ranging from 3 months to 3 years. The Group recognises revenue on warranties on a straight-line
basis over the warranty period. The performance obligation of the Group, being the recti\ufb01cation
of mechanical faults on vehicles sold, will be the period over which the customer can exercise
their rights under the warranty and therefore revenue should be recognised over the period of
the warranty. Warranties are paid for prior to the commencement of the policy. The unrecognised
income is held within deferred income (see note 3.8). There were no such warranties offered for
sale in the US Motor segment.
Leasing
The leasing segment generates revenue from the provision of vehicle leasing services, principally to \ufb02eets run by various
commercial operators. Vehicles are supplied to customers on operating leases and may include servicing and maintenance
agreements, which are bundled into the overall contract. For bundled packages, the Group accounts for individual products
and services separately as they are distinct items, as each performance obligation within that contract is separately
identi\ufb01able from other items in the bundled package. At the end of each contract the Group will generate revenue from
the disposal of the vehicle, recovery of any recti\ufb01cation work and in some instances additional rentals beyond the original
contract term.
Products
and services
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
Leasing
Where vehicles are supplied to a leasing group for contract hire purposes and the Group
undertakes to repurchase the vehicle at a predetermined date and value the transfer of control is
deemed not to have transferred outside the Group and consequently no sale is recognised. As a
result the accounting for the arrangement re\ufb02ects the Group's retention of the asset to generate
future rentals and, in accordance with IFRS 16 Leases, the Group is considered to be an operating
lessor for all arrangements in place. The initial amounts received in consideration from the
leasing group are held as deferred income allocated between the present value of the repurchase
commitment, held within trade and other payables and a residual amount of deferred revenue held
within deferred income. A \ufb01nance charge is accrued against the present value of the repurchase
commitment and recorded as a \ufb01nance expense in the income statement. The remaining deferred
revenue, which effectively represents rentals received in advance, is taken to the income
statement on a straight line basis over the related lease term. No additional disclosures are made
under IFRS 16 as there are no future rentals receivable. These vehicles are held within 'property,
plant and equipment' at their cost to the Group and are depreciated to their residual values over
the terms of the leases. These assets are transferred into inventory at their carrying amount when
they cease to be rented and they become available for sale as part of the Group's ordinary course
of business. Rentals are billed and paid for on a monthly basis.
Maintenance
The Group offer a maintenance contract to customers to cover routine servicing and unexpected
repairs of vehicles under a leasing contract. Revenue is recognised over the period of the contract
on a straight line basis. Maintenance contracts are billed and paid for on a monthly basis.
Used Vehicles
The Group recognises revenue on the sale of ex contract hire motor vehicles when they have been
supplied to the customer. This occurs on delivery or collection of the product. Vehicles are paid for
on delivery.
Software
The Group, through its Pinewood business, supplies dealer management systems to motor vehicle dealers. These systems
include consultancy, training and installation services and the right to use the Group's software over a contractual period.
Products and services may be sold separately or in bundled packages. Examples of a bundled package will include system
consultancy, on and off site training for users together with the right for a number of users to use the software.
For
bundled packages, the Group accounts for individual products and services separately as they are distinct items, as
each performance obligation within that contract is separately identi\ufb01able from other items in the bundled package.
The consideration is allocated between separate products and services in a bundle based on their stand-alone selling
prices. The stand-alone selling prices are determined based on the list prices at which the Group sells these items and are
separately identi\ufb01ed on the customer's contract and subsequent invoice.
Products
and services
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
Software
Pinewood supply its software on a hosting basis and licence speci\ufb01c numbers of users to access
this service. As such Pinewood supply 'Software as a Service' (SaaS). The software licences
are provided only in conjunction with a hosting service, the customer cannot take control of
the licence or use the software without the hosting service and as such the customer cannot
bene\ufb01t from the licence on its own and the licence is not separable from the hosting services.
Therefore, the licence is not distinct and would be combined with the hosting service. The Group's
assessment of its performance obligation under IFRS 15 of providing SaaS is that revenue is
recognised over the period of the contract. SaaS is billed one month in advance of a quarterly
billing cycle ensuring payment is received prior to commencement of usage.
Training,
Installation and
Consultancy
The Group recognises revenue on the provision of any consultancy time, training and installation
at the point of providing and delivering the service. Consultancy hours are billed at the time of
delivery. Training courses are billed at the time of booking which may be in advance of the date
the training is scheduled for. Installation hours are billed at the time of completion of the service.
Disaggregation of revenue
In the following table, revenue is disaggregated by primary geographical market, major products/service lines and timing
of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group\u2019s four strategic
divisions, which are its reportable segments, see note 2.3
__UK Motor __
__Software__
__Leasing__
discontinued
__US Motor__
____Total____
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
Primary geographical
markets
Europe
3,536.2
3,332.7
18.1
18.8
64.7
69.1
-
-
3,619.0
3,420.6
North America
-
-
-
-
-
-
-
28.6
-
28.6
Africa
-
-
0.6
0.5
-
-
-
-
0.6
0.5
Asia
-
-
0.4
0.2
-
-
-
-
0.4
0.2
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Major products/service
lines
Aftersales revenue
276.1
261.9
-
-
-
-
-
2.8
276.1
264.7
Used vehicle revenue
1,808.6
1,708.4
-
-
-
-
-
3.0
1,808.6
1,711.4
New vehicle revenue
1,451.5
1,362.4
-
-
-
-
-
22.8
1,451.5
1,385.2
Software revenue
-
-
19.1
19.5
-
-
-
-
19.1
19.5
Leasing revenue
-
-
-
-
64.7
69.1
-
-
64.7
69.1
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Timing of revenue
recognition
At point in time
3,526.7
3,322.7
1.4
1.9
30.9
32.1
-
28.6
3,559.0
3,385.3
Over time
9.5
10.0
17.7
17.6
33.8
37.0
-
-
61.0
64.6
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Contract liabilities
The Group recognises the following contract liabilities:
2022
2021
\u00a3m
\u00a3m
Deposits received from customers
30.4
26.2
Unearned proportion of warranty policies sold
21.2
16.5
Movements in the deferred income balance in respect of the warranty policies is presented in note 3.8 which shows the
value of policies sold during the year and the income recognised during the year.
2.2 Net operating expenses
2022
2021
\u00a3m
\u00a3m
Net operating expenses:
Distribution costs
(185.2)
(171.5)
Administrative expenses
(181.3)
(166.5)
Impairment loss on trade receivables
(0.3)
(0.2)
Rents received
2.9
1.8
(363.9)
(336.4)
2.3 Operating segments
The Group has revised its reporting segments.
In January 2022 the Group re-organised its management and reporting
structure.
The signi\ufb01cant changes were that the Franchised UK Motor and Car Store operations were brought under the
management of the UK Motor operation. This revised segmental structure is re\ufb02ected in the internal reporting structure as
presented to the Chief Operating Decision Maker. In the 2022 \ufb01nancial statements therefore, the Franchised UK Motor and
Car Store segments are no longer reported separately.
The results of the Franchised UK Motor and Car Store segments for the comparative period have been aggregated into the
new UK Motor Group segment and is re-presented as follows for the period ended 31 December 2021:
UK Motor segment restatement
UK Motor
segment as
Franchised
restated
UK Motor
Car Store
31 Dec 21
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,191.2
141.5
3,332.7
Inter-segment revenue
-
-
-
Revenue from external customers
3,191.2
141.5
3,332.7
Operating pro\ufb01t before non-underlying
85.8
1.6
87.4
items
Other income and non-underlying items
(4.5)
(0.3)
(4.8)
Operating pro\ufb01t
81.3
1.3
82.6
Finance expense
-
-
-
Finance income
-
-
-
Segmental pro\ufb01t before tax
81.3
1.3
82.6
Other items included in the income statement are as follows:
Depreciation and impairment
(31.1)
(0.1)
(31.2)
Impairment of property, plant and equipment
(4.3)
(0.3)
(4.6)
Amortisation
(0.4)
-
(0.4)
Share based payments
(2.9)
-
(2.9)
Termination and severance costs
(1.8)
-
(1.8)
Business closure costs
(0.2)
-
(0.2)
Other income - pro\ufb01t on the sale of business
-
1.8
-
1.8
es and property, plant and equipment
Following the revisions to the Group\u2019s operating segments as outlined above there are now four reportable segments,
as described below, which are the Group's strategic business units. The segments offer different ranges of products and
services and are managed separately because they require their own specialism in terms of market and product. For
each of these segments, the Executive Committee which is deemed to be the Chief Operating Decision Maker (CODM),
reviews internal management reports on at least a monthly basis. The review of these management reports enables the
CODM to allocate resources to each segment and form the basis of strategic and operational decisions, such as acquisition
strategy,closure programme or working capital allocation. The following summary describes the operations in each of the
Group's reportable segments:
UK Motor
. This segment comprises the Group's motor vehicle retail, parts wholesale and \ufb02eet operations from its
franchised dealer network and the Group's used vehicle retail operation branded Car Store. These encompass the sale
of new and used motor cars, motorbikes, trucks and vans, together with associated aftersales activities of service, body
repair and parts sales.
Software
. This segment comprises the Group's activities as a dealer management systems provider.
Leasing
. This segment comprises the Group's contract hire and leasing activities.
US Motor
. This segment comprises the Group's retail operation in California in the United States encompassing the sale
of new and used motor cars, together with associated aftersales activities of service and parts sales. This segment ceased
trading in 2021 following the sale of its remaining stores.
The tables of \ufb01nancial performance presented in the Operational and Financial Review on pages 24 to 37 are based upon
these segmental reports.
Inter-segment transfers and transactions are entered into under normal commercial terms and conditions that would also
be available to unrelated third parties.
Year ended 31 December 2022
Continuing
Discontinued
Group operations operations
UK Motor
Software
Leasing
interest
Sub total
US Motor
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,536.2
25.4
83.7
-
3,645.3
-
3,645.3
Inter-segment revenue
-
(6.3)
(19.0)
-
(25.3)
-
(25.3)
Revenue from external customers
3,536.2
19.1
64.7
-
3,620.0
-
3,620.0
Operating pro\ufb01t/(loss) before non-underlying
69.1
11.0
19.9
-
100.0
(1.5)
98.5
items
Non-underlying items
2.5
-
-
-
2.5
-
2.5
Operating pro\ufb01t/(loss)
71.6
11.0
19.9
-
102.5
(1.5)
101.0
Finance expense
-
-
(2.5)
(42.3)
(44.8)
-
(44.8)
Finance income
-
-
-
1.0
1.0
-
1.0
Segmental pro\ufb01t/(loss) before tax
71.6
11.0
17.4
(41.3)
58.7
(1.5)
57.2
Other items included in the income statement are as follows:
Depreciation and impairment
(28.5)
(0.1)
(36.1)
-
(64.7)
-
(64.7)
Impairment of property, plant and equipment
1.2
-
-
-
1.2
-
1.2
Amortisation
(0.6)
(4.2)
(0.1)
-
(4.9)
-
(4.9)
Share based payments
3.3
-
-
-
3.3
-
3.3
Termination and severance costs
(0.2)
-
-
-
(0.2)
-
(0.2)
Business closure costs
0.2
-
-
-
0.2
-
0.2
Other income - pro\ufb01t on the sale of businesses
7.7
-
-
-
7.7
-
7.7
and property, plant and equipment
Year ended 31 December 2021
Continuing
Discontinued
Group operations operations
UK Motor
Software
Leasing
interest
Sub total
US Motor
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,332.7
24.4
89.9
-
3,447.0
28.6
3,475.6
Inter-segment revenue
-
(4.9)
(20.8)
-
(25.7)
-
(25.7)
Revenue from external customers
3,332.7
19.5
69.1
-
3,421.3
28.6
3,449.9
Operating pro\ufb01t before non-underlying items
87.4
12.5
17.5
-
117.4
(1.1)
116.3
Non-underlying items
(4.8)
-
-
-
(4.8)
(3.9)
(8.7)
Operating pro\ufb01t
82.6
12.5
17.5
-
112.6
(5.0)
107.6
Finance expense
-
-
(2.7)
(32.2)
(34.9)
(0.3)
(35.2)
Finance income
-
-
-
0.9
0.9
-
0.9
Segmental pro\ufb01t before tax
82.6
12.5
14.8
(31.3)
78.6
(5.3)
73.3
Other items included in the income statement are as follows:
Depreciation and impairment
(31.2)
(0.6)
(38.5)
-
(70.3)
(0.1)
(70.4)
Impairment of property, plant and equipment
(4.6)
-
-
-
(4.6)
(5.0)
(9.6)
Amortisation
(0.4)
(3.7)
(0.1)
-
(4.2)
-
(4.2)
Share based payments
(2.9)
-
-
-
(2.9)
-
(2.9)
Termination and severance costs
(1.8)
-
-
-
(1.8)
-
(1.8)
Business closure costs
(0.2)
-
-
-
(0.2)
0.2
-
Other income - pro\ufb01t on the sale of businesses
1.8
-
-
-
1.8
0.9
2.7
and property, plant and equipment
Geographical information.
All segments, with the exception of the US Motor Group in the United States originate in the United Kingdom. The US Motor
Group segment is a discontinued operation.
2.4 Staff costs
The average number of people employed by the Group in the following areas was:
2022
2021
Number
Number
Sales
1,823
1,811
Aftersales
2,487
2,470
Administration
1,216
1,208
5,526
5,489
Costs incurred in respect of these employees were:
2022
2021
\u00a3m
\u00a3m
Wages and salaries
192.1
182.9
Less -
receipts from the Government Coronavirus Job Retention Scheme
-
(1.6)
Social security costs
20.4
17.9
Contributions to de\ufb01ned contribution plans (see note 5.1)
11.7
7.2
Cost recognised for de\ufb01ned bene\ufb01t plans (see note 5.1)
0.3
1.0
Share based payments (see note 4.6)
3.3
2.9
227.8
210.3
Information relating to directors' emoluments, share options and pension entitlements is set out in the Directors'
Remuneration Report on pages 77 to 95.
During the previous year the Group appropriately used government assistance from the Coronavirus Job Retention
Scheme and has bene\ufb01tted from \u00a31.6m of furlough support during 2021, which was recognised against the wages and
salaries expense. The furlough support is included in the underlying result as the Group do not consider it to meet the
de\ufb01nition of non-underlying when taken together with the payroll costs that the amount compensates for. No Government
grants were received in 2022.
2.5 Audit fees
2022
2021
Auditor\u2019s remuneration:
\u00a3000
\u00a3000
Fees payable to the company's Auditor for the audit of the company's annual accounts
770.0
513.0
Fees payable to the company's Auditor and its associates for other services:
Audit of the company's subsidiaries pursuant to legislation
385.0
300.0
Audit-related assurance services
155.0
140.0
1,310.0
953.0
2.6 Non-underlying items
Non-underlying income and expenses are items that are not incurred in the normal course of business and are suf\ufb01ciently
signi\ufb01cant and/or irregular to impact the underlying trends in the business.
2022
2021
\u00a3m
\u00a3m
Within operating expenses:
Impairment of goodwill
(3.6)
-
Impairment of property, plant and equipment
(1.0)
-
Impairment of right of use assets
(0.2)
(9.6)
Termination and severance costs
(0.2)
(1.8)
Aborted transaction related expenses
(0.4)
-
Business closure income
0.2
-
(5.2)
(11.4)
Within other income - gains on the sale of businesses, property, plant and equipment:
Gains on the sale of businesses
0.3
0.7
Gains on the sale of property
7.4
2.0
7.7
2.7
Within net \ufb01nance expense:
Costs incurred on re\ufb01nancing
(2.6)
-
Net interest on pension scheme obligations
(0.3)
(1.0)
(2.9)
(1.0)
Total non-underlying items before tax
(0.4)
(9.7)
Non-underlying items in tax
1.4
2.2
Total non-underlying items after tax
1.0
(7.5)
The following amounts have been presented as non-underlying items in these \ufb01nancial statements:
Goodwill has been reviewed for any possible impairment and as a result of this review there was an impairment charge of
\u00a33.6m made during the year (2021: \u00a3nil) (see note 3.1). The \u00a33.6m impairment related to the goodwill in respect of the DAF
business which was classi\ufb01ed for sale when the Group presented its interim results at 30 June 2022, prior to its eventual
sale in October 2022.
Group property, plant and equipment and assets held for sale have been reviewed for possible impairments. As a result of
this review there was no impairment charge against assets held for sale made during the year (2021: \u00a3nil) and property,
plant and equipment of \u00a31.2m (of which \u00a30.2m was in respect of right of use assets) (2021: \u00a39.6m all right of use assets).
There were no reversals of previous impairment charges in respect of assets held for sale where anticipated proceeds less
costs to sell have increased over their impaired carrying values (2021: \u00a3nil).
There were termination and severance costs of \u00a30.2m in FY22 (2021: \u00a31.8m of which \u00a31.3m related to the transfer of
Finance process from dealerships to a centralised shared service centre as part of the Finance Transformation in the UK).
This cost is driven by a combination of a small number of redundancy payments and relocation costs.
During the year approaches and subsequent bids were made by external parties to the purchase the Company. As a
consequence professional and advisory fees of \u00a30.4m were incurred in assisting with the due diligence process undertaken
by the parties.
No internal costs have been allocated against this process as non-underlying in respect of time and
resource of Group management.
Following the disposal of the US business in 2021 a release of an over accrued settlement resulted in a credit of \u00a30.2m
being recognised in the year.
Other income consists of the pro\ufb01t or loss on disposal of businesses and property, plant and equipment. This comprises a
\u00a30.3m gain (2021: \u00a30.7m gain in respect of discontinued operations ) on disposals of motor vehicle dealerships during the
year, a \u00a37.4m pro\ufb01t on sale of properties (2021: \u00a32.0m). These do not include routine transactions in relation to the disposal
of individual assets, and only relates to the disposal or closure of motor vehicle dealerships and associated properties.
During the year, upon the successful completion of the re\ufb01nancing of the Group in March 2022, a net loss of \u00a32.6m was
recorded which comprised of settlement of obligations under the previous arrangement.
The net \ufb01nancing return on pension obligations in respect of the de\ufb01ned bene\ufb01t schemes closed to future accrual is shown
as a non-underlying item due to the irregularity of this amount historically and it is not incurred in the normal course of
business. A net expense of \u00a30.3m has been recognised during the year (2021: \u00a31.0m).
2.7 Taxation
Accounting policy
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in other comprehensive income, in which case it is recognised in the statement
of comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability method, recognising temporary differences between the
carrying amounts of assets and liabilities for \ufb01nancial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not recognised: initial recognition of goodwill, the initial recognition of assets or
liabilities in a transaction that is not a business combination that affect neither accounting nor taxable pro\ufb01t. The amount
of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable pro\ufb01ts will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax bene\ufb01t will be realised.
Estimates and judgements
The actual tax on the Group's pro\ufb01ts is determined according to complex laws and regulations. Where the effect of
these laws and regulations is unclear, estimates are used in determining the liability for the tax to be paid on pro\ufb01ts
which are recognised in the \ufb01nancial statements. The Group considers the estimates, assumptions and judgements to be
reasonable but this can involve complex issues which may take a number of years to resolve. The \ufb01nal determination of tax
liabilities could be different from the estimates re\ufb02ected in the \ufb01nancial statements but the Group believes that none have
a signi\ufb01cant risk of causing a material adjustment to the carrying amount of the liability within the next \ufb01nancial year.
Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. In particular,
judgement is used when assessing the extent to which deferred tax assets should be recognised with consideration given
to the timing and level of future taxable income. The unrecognised deferred tax assets are disclosed below.
Taxation - Income statement
2022
2021
\u00a3m
\u00a3m
UK corporation tax:
Current tax on pro\ufb01t for the year
2.6
3.9
Adjustments in respect of prior periods
0.3
-
2.9
3.9
Overseas taxation:
Current tax on pro\ufb01t for the year
-
1.1
Adjustments in respect of prior periods
-
(0.9)
-
0.2
Total current tax
2.9
4.1
Deferred tax expense:
Origination and reversal of temporary differences
8.3
8.2
Adjustments in respect of prior periods
0.5
(0.5)
Total deferred tax
8.8
7.7
Total income tax expense in the income statement
11.7
11.8
Factors affecting the tax charge for the period:
The tax assessed is different from the standard rate of corporation tax in the UK of
19.00% (2021: 19.00%)
The differences are explained below:
2022
2021
\u00a3m
\u00a3m
Pro\ufb01t before taxation
57.2
73.3
Tax on pro\ufb01t at UK rate of 19.00% (2021: 19.00%)
10.9
13.9
Differences:
Tax effect of expenses that are not deductible in determining taxable pro\ufb01t
0.6
0.5
Permanent differences arising in respect of \ufb01xed assets
0.5
0.8
Unrecognised losses
0.3
0.1
Tax rate differential on overseas income
-
(0.1)
Non-underlying items (see below)
(1.4)
(0.4)
Impact of UK corporation tax rate change
-
(1.6)
Adjustments to tax charge in respect of previous periods
0.8
(1.4)
Total income tax expense in the income statement
11.7
11.8
Taxation - Other comprehensive income
2022
2021
\u00a3m
\u00a3m
Relating to de\ufb01ned bene\ufb01t plan remeasurement gains
(1.6)
(6.9)
Other short term temporary differences
(0.1)
0.3
(1.7)
(6.6)
Tax rate
The UK tax rate applying throughout 2022 was 19%, this rate is set to increase to 25% on 1 April 2023.
The rate change
to 25% was substantively enacted on 24 May 2021 and as such in the prior year the portion of the deferred tax assets and
liabilities forecast to remain at 31 March 2023 were revalued to 25% which gave a tax credit to the 2021 income statement
of \u00a31.6m.
In 2021 the US operations ceased trading following the disposal of the remaining two dealerships.
During 2022 the US
operations incurred winding-up costs on which no deferred tax asset has been recognised.
Factors affecting the tax charge
The tax charge is decreased by the release of prior year provisions relating to UK corporation tax returns.
The tax charge
is increased by the incidence of non-deductible expenses including the impairment of goodwill and non-qualifying
depreciation.
Non-underlying tax credit
The tax credit in relation to non-underlying items referred to in note 2.6 is \u00a31.4m (2021: \u00a32.2m). The tax credit is higher than
the non-underlying loss multiplied by the tax rate (19%) due to a portion of gains on disposal of property being covered by
capital losses or roll-over relief (which consitute utilisation of previously unrecognised deferred tax assets, see below).
Unrecognised deferred tax assets
There are unutilised tax losses within the Group of \u00a313.8m (2021: \u00a313.8m) relating to former overseas businesses for
which no deferred tax asset has been recognised pending the clarity of the availability of intra-EU losses. There are also
unrecognised capital losses net of rolled over gains of \u00a352.5m (2021: \u00a346.7m).
During 2021 Pinewood established an
operation in Sweden, this Swedish subsidiary has been loss making in its start-up phase and no deferred tax asset has
been recognised on the cumulative losses of \u00a30.1m.
Operations in the USA are now in a winding-down phase following
the disposal of the remaining two car dealerships in 2021. No deferred tax asset has been recognised on the US losses of
\u00a31.2m.
The unrecognised carried forward losses related to operations in Sweden and the USA carry forward inde\ufb01nitely.
The UK capital losses carry forward inde\ufb01nitely but are subject to restriction on their use when capital gains are realised.
Deferred tax assets/(liabilities)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same \ufb01scal authority. The deferred tax
assets all relate to the UK.
2022
2021
\u00a3m
\u00a3m
Deferred tax assets
11.6
22.1
The table below outlines the deferred tax assets/(liabilities) that are recognised on the balance sheet, together with their
movements in the year;
(Charged)/
(Charged)/
Credited to
Credited
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2021
statement
income
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
5.8
2.2
-
8.0
Retirement bene\ufb01t obligations
14.5
(2.5)
(6.9)
5.1
Other short term temporary differences
0.7
0.7
0.3
1.7
Losses
15.4
(8.1)
-
7.3
Tax assets
36.4
(7.7)
(6.6)
22.1
(Charged) to
(Charged)
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2022
statement
income
2022
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
8.0
(1.7)
-
6.3
Retirement bene\ufb01t obligations
5.1
(2.5)
(1.6)
1.0
Other short term temporary differences
1.7
(1.2)
(0.1)
0.4
Losses
7.3
(3.4)
-
3.9
Tax assets/(liabilities)
22.1
(8.8)
(1.7)
11.6
The Group remained pro\ufb01table in 2022 after returning to pro\ufb01t in 2021.
During 2022 \u00a33.4m of the deferred tax asset in
respect of losses was utilised. The use of losses is restricted to 50% of taxable pro\ufb01ts over \u00a35.0m resulting in a spreading
of losses across periods where brought forward losses are over \u00a35.0m.
The deferred tax asset on losses remaining at 31
December 2022 is \u00a33.9m.
This deferred tax asset on losses has been recognised as it is considered probable that the losses
will be utilised.
In order to support the recognition of the \u00a33.9m asset on losses, modelling was undertaken to review
the recovery period of the deferred tax asset.
The modelling was based on management forecasts and showed that the
deferred tax asset on losses is expected to be recovered by 2024.
A plausible downside case was also modelled which
included reduced sales volumes and margins and is the same model used for going-concern analysis; this downside case
modelling showed that the deferred tax asset on losses would also be recovered by 2024.
2.8 Earnings per share
Accounting policy
The Group presents basic and diluted earnings per share (\u2018EPS\u2019) data for its ordinary shares. Basic EPS is calculated by
dividing the pro\ufb01t or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares in issue during the period. The shares held by the EBT have been excluded from the calculation until such time
as they vest unconditionally with the employees. Diluted EPS is calculated by dividing the pro\ufb01t and loss attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue taking account of the effects of all
dilutive potential ordinary shares, which comprise of share options granted to employees and LTIPs.
Earnings per share calculation
2022
2022
2021
2021
Earnings
Earnings
Earnings
Earnings
per share
Total
per share
Total
pence
\u00a3m
pence
\u00a3m
Basic earnings per share from continuing operations
3.3
45.5
4.7
65.5
Basic earnings per share from discontinued operations
-
-
(0.3)
(4.0)
Basic earnings per share
3.3
45.5
4.4
61.5
Adjusting items:
Non-underlying items attributable to the parent from continuing operations
-
0.4
0.4
5.8
Non-underlying items attributable to the parent from discontinued operations
-
-
0.3
3.9
Non-underlying items attributable to the parent (see note 2.6)
-
0.4
0.7
9.7
Tax effect of non-underlying items from continuing operations
(0.1)
(1.4)
(0.3)
(3.1)
Tax effect of non-underlying items from discontinued operations
-
-
0.1
0.9
Tax effect of non-underlying items
(0.1)
(1.4)
(0.2)
(2.2)
Underlying earnings per share from continuing operations (Non-GAAP measure)
3.2
44.5
4.9
68.2
Underlying earnings per share from discontinued operations (Non-GAAP measure)
-
-
0.1
0.8
Underlying earnings per share (Non-GAAP measure)
3.2
44.5
5.0
69.0
Diluted earnings per share from continuing operations
3.1
45.5
4.6
65.5
Diluted earnings per share from discontinued operations
-
-
(0.3)
(4.0)
Diluted earnings per share
3.1
45.5
4.3
61.5
Diluted earnings per share - underlying from continuing operations (Non-GAAP measure)
3.1
44.5
4.8
68.2
Diluted earnings per share - underlying from discontinued operations (Non-GAAP measure)
-
-
0.1
0.8
Diluted earnings per share - underlying (Non-GAAP measure)
3.1
44.5
4.9
69.0
The calculation of basic, adjusted and diluted earnings per share is based on
the following number of shares in issue (millions):
2022
2021
Number
Number
Weighted average number of ordinary shares in issue
1,392.9
1,390.7
Weighted average number of dilutive shares under option
51.8
25.1
Weighted average number of shares in issue taking account of applicable
1,444.7
1,415.8
outstanding share options
Non-dilutive shares under option
20.7
28.7
The Directors consider that the underlying earnings per share \ufb01gure provides a better measure of comparative performance.
SECTION 3 - OPERATING ASSETS AND LIABILITIES
This section contains the notes and information to support those assets and liabilities presented in the Consolidated
Balance Sheet that relate to the Group\u2019s operating activities.
3.1
Intangible assets and goodwill
3.5
Movement in contract hire vehicle balances
3.2
Property, plant and equipment
3.6
Trade and other receivables
3.3
Assets held for sale and discontinued operations
3.7
Trade and other payables
3.4 Inventories
3.8
Deferred income
3.1 Intangible assets and goodwill
Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
Development
Other
Goodwill
costs
intangibles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
406.8
20.4
4.4
431.6
Additions
-
5.0
0.1
5.1
At 31 December 2021
406.8
25.4
4.5
436.7
At 1 January 2022
406.8
25.4
4.5
436.7
Additions
-
5.7
0.5
6.2
Disposals
(8.2)
-
(0.1)
(8.3)
At 31 December 2022
398.6
31.1
4.9
434.6
Amortisation
At 1 January 2021
256.5
11.0
3.6
271.1
Amortised during the year
-
3.7
0.5
4.2
At 31 December 2021
256.5
14.7
4.1
275.3
At 1 January 2022
256.5
14.7
4.1
275.3
Amortised during the year
-
4.2
0.7
4.9
Impairment of goodwill on sale of DAF business
3.6
-
-
3.6
Disposals
(6.1)
-
(0.1)
(6.2)
At 31 December 2022
254.0
18.9
4.7
277.6
Carrying amounts
At 1 January 2021
150.3
9.4
0.8
160.5
At 31 December 2021
150.3
10.7
0.4
161.4
At 31 December 2022
144.6
12.2
0.2
157.0
The following have been recognised in the income statement within net operating
2022
2021
expenses:
\u00a3m
\u00a3m
Amortisation of internally generated intangible assets
4.2
3.7
Amortisation of other intangible assets
0.7
0.5
Impairment of goodwill
3.6
-
Research and development costs
1.2
1.0
Goodwill is allocated across multiple cash-generating units which are UK Motor franchise groups, Pinewood and Leasing.
This is the lowest level at which cash-generating units are formed. Therefore there is a consistent approach to performing
the annual impairment test to assess the carrying value of this amount is taken. This value was determined by comparing
the carrying value of the asset with the higher of its fair value less costs to sell (where value is determined by applying
a trading multiple to the estimated future cash \ufb02ow or by assessing the depreciated replacement cost of the individual
assets) and value in use (where value is determined by discounting the future cash \ufb02ows generated from the continuing
use of the unit and was based on the following key assumptions):
Future cash \ufb02ows were projected into perpetuity with reference to the Group\u2019s forecasts for 2023. The 2023 forecast was
derived from the corporate plan, approved by the Board and compiled on a bottom up basis. New car volume growth was
based on the latest SMMT forecasts. Used car and aftersales revenue and gross pro\ufb01t growth has been based on latest run-
rates for the CGUs. The 2024 to 2027 forecast represents a projection from the 2023 bottom up forecast with new volume
growth based on the latest market projections and run-rates applied to determine used volume growth, with associated
gross pro\ufb01ts calculated from adjusted GPUs. Short term income and costs growth have been applied at 2.0% and 2.5%
respectively. These have been applied based on short term market in\ufb02ation assumptions. The directors have considered
the impact of climate change in respect of the impairment testing of goodwill. Climate change is impacting the pro\ufb01le of
vehicles the group sells, but is not fundamentally impacting the total cash \ufb02ows in each CGU and therefore no speci\ufb01c
adjustments have been made.
All goodwill CGUs carrying values have been based on their respective value in use.
It is anticipated that the units will grow revenues in the future. For the purpose of the impairment testing, a long-term
growth rate of 2.0% (2021: 2.0%) has been assumed beyond 2027. The growth rate of 2.0% that has been used in the
impairment calculations is based on long-term in\ufb02ation.
Goodwill has been reviewed for any possible impairment and as a result of this review there was an impairment charge
of \u00a33.6m made during the year (2021: \u00a3nil). The \u00a33.6m impairment related to the goodwill in respect of the DAF business
which was classi\ufb01ed for sale when the Group presented its interim results at 30 June 2022, prior to its eventual sale
in October 2022.
Goodwill by segment
2022
2021
\u00a3m
\u00a3m
UK Motor
122.3
128.0
Pinewood
0.3
0.3
Leasing
22.0
22.0
144.6
150.3
The pre-tax discount rates are estimated to re\ufb02ect current market estimates of the time value of money and is calculated
after consideration of market information and risk adjusted for individual circumstances. The pre-tax discount rates used are
speci\ufb01c to each CGU. Pinewood and Leasing pre-tax discount rates is 16.7% (2021: 15.2% and 11.3% respectively). Please see
the below table for the UK Motor Segment:
UK Motor CGUs
Goodwill
Current
Pre-tax
Value
Headroom
Discount
\u00a3m
\u00a3m
Rate
Ford
69.8
56.1
13.9%
Vauxhall
35.2
6.8
12.9%
Other UK Motor
17.3
56.1
8.2% - 12.6%
122.3
119.0
Sensitivity of assumptions
The forecasts used to determine impairment are sensitive to the key assumptions used in preparing those forecasts. Future
uncertainty with respect to the markets we operate in could have an effect on sales volumes and margins and the general
costs of doing business. The key assumptions used in our forecasts are the vehicle volumes and margins. The sensitivities
below indicate the total change in the value in use forecast, keeping other assumptions constant.
The directors and management have considered and assessed reasonably possible changes to the key assumptions. Within
a downside scenario, the reasonably possible changes to the key assumptions are a severe downturn to vehicle volumes
and margins. This considers both a worsening in economic conditions and restricted new car supply due to manufacturing
constraints. This gives sensitivity of an overall reduction in free cash\ufb02ow of 11.2%.
This downside sensitivity, there was no effect on both the Pinewood and Leasing segment goodwill values, only UK Motor,
which gives rise to an impairment charge to the Vauxhall CGU of \u00a37.5m, no other CGU impairment noted. The breakeven
point for the Vauxhall CGU would require a reduction in both new and used units of 2.8% into perpetuity or a reduction in
both new and used GPU of 1.2% into perpetuity.
3.2 Property, plant and equipment
Accounting policy
Freehold land is not depreciated. Depreciation is provided to write off the cost less the estimated residual value of other
assets by equal instalments over their estimated useful economic lives. On transition to IFRS as at 1 January 2004, all land
and buildings were restated to fair value as permitted by IFRS 1, which is then treated as the deemed cost. All other assets
are initially measured and recorded at cost.
Depreciation rates are as follows:
\u2022
Freehold buildings \u2013 2% per annum
\u2022 Right of use assets - over the period of the lease
\u2022
Leasehold property improvements \u2013 2% per annum or over the period of the lease if less than 50 years
\u2022
Fixtures, \ufb01ttings and of\ufb01ce equipment \u2013 10 \u2013 20% per annum
\u2022
Plant and machinery \u2013 10 \u2013 33% per annum
\u2022
Motor vehicles \u2013 20 \u2013 25% per annum
\u2022 Contract hire vehicles are depreciated to their residual value over the period of their lease
The residual value of all assets, depreciation methods and useful economic lives, if signi\ufb01cant, are reassessed annually.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of
such an item when that cost is incurred if it is possible that the future economic bene\ufb01ts embodied with the item will \ufb02ow
to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as
an expense as incurred.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised net within other income in the
income statement.
The depreciation charge in respect of property, plant and equipment is recognised within administrative expenses within
the income statement.
Contract
Land &
Plant &
Motor
hire
buildings
equipment
vehicles
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
689.1
85.2
25.7
230.4
1,030.4
Reclassi\ufb01cation
-
-
(22.7)
-
(22.7)
Exchange adjustments
0.1
-
-
-
0.1
Additions
17.4
4.4
0.1
42.4
64.3
Business disposals
-
(1.6)
-
-
(1.6)
Other disposals
(19.9)
(1.5)
(0.6)
-
(22.0)
Contract hire vehicles transferred to inventory
-
-
-
(48.0)
(48.0)
Classi\ufb01ed as non-current assets held for sale
(10.5)
-
-
-
(10.5)
Reinstated from non-current assets held for sale
7.1
0.1
-
-
7.2
At 31 December 2021
683.3
86.6
2.5
224.8
997.2
At 1 January 2022
683.3
86.6
2.5
224.8
997.2
Additions
47.5
10.3
0.2
46.6
104.6
Business disposals
(0.5)
(1.9)
-
-
(2.4)
Other disposals
(39.0)
(9.9)
(0.3)
-
(49.2)
Contract hire vehicles transferred to inventory
-
-
-
(51.4)
(51.4)
Classi\ufb01ed as non-current assets held for sale
(2.8)
-
-
-
(2.8)
Reinstated from non-current assets held for sale
3.8
-
-
-
3.8
At 31 December 2022
692.3
85.1
2.4
220.0
999.8
Contract
Land &
Plant &
Motor
hire
buildings
equipment
vehicles
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Depreciation
At 1 January 2021
320.7
59.0
4.9
73.0
457.6
Reclassi\ufb01cation
-
-
(3.8)
-
(3.8)
Exchange adjustments
0.1
-
-
-
0.1
Charge for the year
24.8
6.6
0.5
38.5
70.4
Impairment
9.6
-
-
-
9.6
Business disposals
-
(1.2)
-
-
(1.2)
Other disposals
(14.0)
(0.7)
(0.6)
-
(15.3)
Contract hire vehicles transferred to inventory
-
-
-
(17.9)
(17.9)
Classi\ufb01ed as non-current assets held for sale
(2.7)
-
-
-
(2.7)
Reinstated from non-current assets held for sale
0.8
0.1
-
-
0.9
At 31 December 2021
339.3
63.8
1.0
93.6
497.7
At 1 January 2022
339.3
63.8
1.0
93.6
497.7
Charge for the year
21.6
6.9
0.1
36.1
64.7
Impairment
1.0
0.2
-
-
1.2
Business disposals
(0.5)
(1.7)
-
-
(2.2)
Other disposals
(33.9)
(9.3)
(0.3)
-
(43.5)
Contract hire vehicles transferred to inventory
-
-
-
(34.6)
(34.6)
Classi\ufb01ed as non-current assets held for sale
(0.9)
-
-
-
(0.9)
Reinstated from non-current assets held for sale
1.5
-
-
-
1.5
At 31 December 2022
328.1
59.9
0.8
95.1
483.9
Carrying amounts
At 1 January 2021
368.4
26.2
20.8
157.4
572.8
At 31 December 2021
344.0
22.8
1.5
131.2
499.5
At 31 December 2022
364.2
25.2
1.6
124.9
515.9
Assets leased out under operating leases
Cost at 31 December 2022
30.2
-
-
220.0
250.2
Accumulated depreciation at 31 December 2022
(13.9)
-
-
(95.1)
(109.0)
Accumulated impairment at 31 December 2022
(4.4)
-
-
-
(4.4)
Carrying value of assets leased out under
11.9
-
-
124.9
136.8
operating leases at 31 December 2022
Property, plant and equipment includes right-of-use assets of \u00a3130.5m
(see Note 4.7).
During the year two properties were re-classi\ufb01ed as property, plant and equipment following a decision to withdraw them
from sale. The properties have been re-instated at the lower of their recoverable amount, or the carrying amount had the
assets never been moved to assets held for sale. In this instance the properties were re-instated at their recoverable values
having been previously impaired down to those values.
2022
2021
\u00a3m
\u00a3m
Building projects currently under construction for which no depreciation has
7.6
8.7
been charged during the year
Future capital expenditure which has been contracted for but not yet provided
2.8
7.1
in the \ufb01nancial statements - property development and refurbishment
Cumulative interest charges capitalised as construction costs and included in
6.0
5.2
land and buildings
The following items have been charged to the income statement as operating
expenses during the year:
Depreciation of property, plant and equipment - leased
15.2
18.5
Depreciation of contract hire vehicles - leased
36.1
38.5
Depreciation of property, plant and equipment - owned
13.4
13.4
Cash \ufb02ow statement information
2022
2021
\u00a3m
\u00a3m
Additions to property, plant, equipment and intangible assets:
Additions to land and buildings
(47.5)
(17.4)
Additions to plant and equipment
(10.3)
(4.4)
Additions to motor vehicles
(0.2)
(0.1)
Additions to intangible assets (see note 3.1)
(6.2)
(5.1)
Total additions
(64.2)
(27.0)
Less additions of property, plant and equipment acquired under leases for
which no cash \ufb02ow arises (excludes fees capitalised of \u00a32.6m (2021: \u00a30.1)) (see
19.9
8.7
note 4.7)
Cash \ufb02ows relating to additions of property, plant and equipment made by the
-
(0.3)
US disposal group disclosed within assets held for sale
Cash \ufb02ows from investing activities in respect of additions to property, plant
(44.3)
(18.6)
and equipment
Cash \ufb02ows relating to the purchase of contract hire vehicles are disclosed within Movement in contract hire vehicle balances
(see note 3.5).
3.3 Assets held for sale and discontinued operations
Accounting policy
Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are
classi\ufb01ed as held for sale. Immediately before classi\ufb01cation as held for sale, the assets are measured in accordance with
the Group's accounting policies. Thereafter the assets are measured at the lower of their carrying amount and fair value
less costs to sell. Impairment losses on remeasurement are recognised in the income statement. Gains are not recognised
in excess of any cumulative impairment loss. Non-current assets classi\ufb01ed as held for sale are available for immediate sale
and a resultant disposal is highly probable within one year.
A non-current asset that stops being classi\ufb01ed as held for sale is remeasured at the lower of its carrying amount prior
to the asset or disposal group being classi\ufb01ed as held for sale, adjusted for any depreciation or amortisation that would
have been recognised if the asset had not been classi\ufb01ed as held for sale, or, its recoverable amount at the date of the
decision not to sell.
Discontinued operations
There were no buinsesses in the Group classi\ufb01ed as a discontinued operation in 2022.
During the previous period, 2021,
the Group sold its two remaining stores in its US Business, which was shown as a discontinued operation within the
comparative information in these consolidated \ufb01nancial statements.
The results of the discontinued operation are set out on the face of the consolidated income statement. Other \ufb01nancial
information relating to the discontinued operation for the period is set out below.
Assets and liabilities of a disposal Group held for sale
From 31 December 2018 until the sale of the \ufb01nal business unit in March 2021, the US motor business was classi\ufb01ed as a
disposal group which was stated at fair value less costs to sell and comprised the following assets and liabilities.
2022
2021
\u00a3m
\u00a3m
Net cash used in operating activities
-
(5.4)
Net cash from investing activities
-
27.6
Net cash used in \ufb01nancing activities
-
(31.3)
Net cash decrease generated by discontinued operation
-
(9.1)
Included within net cash used in \ufb01nancing activities for 2021 is \u00a328.8m in respect of a dividend paid by the US company to its UK
holding company.
2022
2021
pence
pence
Basic earnings per share from discontinued operation
-
(0.3)
Underlying basic earnings per share from discontinued operation
-
(0.1)
Diluted earnings per share from discontinued operation
-
(0.3)
Balance sheet
The Group holds a number of freehold properties that are currently being marketed for sale which are expected to be
disposed of during 2023. Properties are valued using a combination of external quali\ufb01ed valuers and in-house experts. Due
to the nature of the market, especially in light of current economic conditions, a property may ultimately realise proceeds
that vary from those valuations applied.
Assets classi\ufb01ed for sale comprise:
2022
2021
\u00a3m
\u00a3m
Property, plant and equipment
6.1
10.4
Income statement
The following items have been credited/(charged)
Income statement category
2022
2021
to the income statement during the year:
\u00a3m
\u00a3m
Other income - gains on the sale of busi-
Pro\ufb01t on sale of assets classi\ufb01ed as held for sale
8.0
1.7
nesses and property, plant and equipment
If the fair value less costs to sell assigned to each property were to be reduced by 10% a further impairment loss of \u00a30.1m
would have been recognised (2021: \u00a30.4m).
3.4 Inventories
Accounting policies
Motor vehicle inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product
to its present location and condition are included and cost is based on price including delivery costs less speci\ufb01c trade
discounts. Fair value reviews of stock are conducted regularly utilising our market intelligence and analysis of the market
which we conduct by segment and by model, these fair values are updated in the light of any changing trends by model
line. The assessment of fair values involves an element of estimation: the Group takes the age pro\ufb01le of our inventories
at the year end, estimates the likely sale period and the expected pro\ufb01t or loss on sale to determine the fair value at the
balance sheet date. Whilst this data is deemed representative of current values it is possible that ultimate sales values can
vary from those applied. Parts inventories are based on an average purchase cost principle and are written down to net
realisable value by providing for obsolescence on a time in stock based formula approach.
Consignment vehicles are regarded as being effectively under the control of the Group and are included within inventories
on the balance sheet as the Group has the signi\ufb01cant risks and rewards of ownership even though legal title has not yet
passed. The corresponding liability is included in trade and other payables. Movements in consignment vehicle inventory
and its corresponding liability within trade and other payables are not included within movements of inventories and
payables as stated in the consolidated cash \ufb02ow statement as no cash \ufb02ows arise in respect of these transactions until the
vehicle is either sold or purchased at which point it is reclassi\ufb01ed within new and used vehicle inventory.
Motor vehicles are transferred from contract hire activities at the end of their lease term to inventory at their depreciated
cost. No physical cash \ufb02ow arises from these transfers.
Balance sheet
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
Vehicle parts and other inventories
25.3
24.4
620.3
512.8
2022
2021
\u00a3m
\u00a3m
Inventories recognised as an expense during the year
3,126.2
2,972.0
Carrying value of inventories subject to retention of title clauses
462.1
447.8
Write-down of inventories to net realisable value (included within cost of sales)
8.1
10.1
Included within the write-down of inventories to net realisable value is the write-down of used vehicle inventory of \u00a36.9m
(2021: \u00a38.0m). The key assumptions underpinning the write-down of net realisable value of the used vehicle inventory are
(i) the time to sell each vehicle; (ii) the expected sales price at the date of sale. Sensitivities have been performed on the
key assumptions; (i) a 30 day sensitivity has been used for the time to sell each vehicle as this is a plausible scenario and
(ii) a \u00a3500 sensitivity has been used for the expected sales price at the date of sale as in the region of \u00a3500 variations in
GPUs have been seen in previous reporting periods.
If the average time to sell a vehicle is increased by 30 days then it would increase the write-down of the used vehicle
inventory by \u00a32.5m (2021: \u00a30.2m). If the expected sales prices at the date of sale were to decrease by \u00a3500 per vehicle,
then it would increase the value of the write-down of used vehicle inventory by \u00a33.7m (2021: \u00a34.1m) at the balance sheet
date. Whereas if the average time to sell a vehicle is decreased by 30 days then it would decrease the value of the write-
down of used vehicle inventory by \u00a32.3m (2021: \u00a31.3m). Also if the expected sales prices at the date of sale were to
increase by \u00a3500 per vehicle then it would decrease the value of the write-down of used vehicle inventory by \u00a32.4m (2021:
\u00a33.1m) at the balance sheet date.
Cash \ufb02ow statement information
2022
2021
\u00a3m
\u00a3m
Movement in inventory
(107.5)
96.0
Reclassi\ufb01cation from property, plant and equipment (see note 3.2)
-
18.9
Inventory changes in business combinations and disposals
(37.2)
(0.6)
Impact of exchange differences
-
0.1
Non cash movement in consignment vehicles
8.1
(54.5)
Classi\ufb01ed as held for sale
-
17.8
Transfer value of contract hire vehicles from \ufb01xed assets to inventory
16.8
30.1
Cash \ufb02ow (decrease)/increase due to movements in inventory
(119.8)
107.8
3.5 Movement in contract hire vehicle balance
2022
2021
\u00a3m
\u00a3m
Depreciation
36.1
38.5
Changes in trade and other payables and deferred income
(7.9)
(30.2)
Purchases of contract hire vehicles
(46.6)
(42.4)
Unwinding of discounts in contract hire residual values
(2.5)
(2.7)
(20.9)
(36.8)
3.6 Trade and other receivables
Accounting policy
Trade and other receivables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any impairment losses.
Impairment losses are measured in accordance with IFRS 9, which is based on an \u2018expected credit loss\u2019 (ECL) model. The
impairment model applies to \ufb01nancial assets measured at amortised cost.
The calculation of ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and
the cash \ufb02ows that the Group expects to receive).
The Group considers a trade or other receivable to be in default when the borrower is unlikely to pay its credit obligations
to the Group in full after all reasonable actions have been taken to recover the debt.
Credit risk management
The Group is exposed to credit risk primarily in respect of its trade receivables and \ufb01nancial assets. Trade receivables are
stated net of provision for estimated impairment losses. Exposure to credit risk in respect of trade receivables is mitigated
by the Group\u2019s policy of only granting credit to certain customers after an appropriate evaluation of credit risk. Credit risk
arises in respect of amounts due from vehicle manufacturers in relation to bonuses and warranty receivables. This risk is
mitigated by the range of manufacturers dealt with, the Group\u2019s procedures in effecting timely collection of amounts due
and management\u2019s belief that it does not expect any manufacturer to fail to meet its obligations. Financial assets comprise
trade and other receivables (as above) and cash balances. The counterparties are banks and management does not expect
any counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying
amount of each \ufb01nancial asset, including derivative \ufb01nancial instruments, in the balance sheet.
Before granting any new customer credit terms the Group uses external credit scoring systems to assess the potential new
customer\u2019s credit quality and de\ufb01nes credit limits by customer. These limits and credit worthiness are regularly reviewed
and use is made of monitoring alerts provided by the providers of the credit scoring systems. The Group has no customer
that represents more than 5% of the total balance of trade receivables.
Balance sheet
2022
2021
\u00a3m
\u00a3m
Trade receivables
58.9
45.7
Allowance for doubtful debts
(0.3)
(0.3)
58.6
45.4
Manufacturer bonus receivables
23.3
17.4
Other receivables
24.3
34.7
Prepayments
9.5
3.8
115.7
101.3
All amounts are due within one year.
All trade receivables are classi\ufb01ed as loans and receivables and held at amortised cost in the current year and prior year.
Total trade receivables held by the Group at 31 December 2022 was \u00a358.6m (2021: \u00a345.4m).
The average credit period taken on sales of goods is 29 days (2021: 29 days). No interest is charged on trade receivables.
The Group makes an impairment provision based on the expected credit losses it deems likely to incur. The calculation
is based on an average of previous default experiences which is assessed against the risk of the current total in light of
current economic expectations.
An expense has been recognised in respect of impairment losses during the year of
\u00a30.3m (2021: \u00a30.1m).
The ageing of trade and other receivables at the reporting date was:
Manufacturer
Manufacturer
Trade
bonus
Other
Trade
bonus
Other
receivables
receivables
receivables
receivables
receivables
receivables
2022
2022
2022
2021
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Not past due
27.6
22.8
23.4
20.6
12.5
31.3
Past due 0-30 days
19.8
0.2
0.6
10.7
2.4
0.8
Past due 31-120 days
8.5
0.3
0.3
12.4
2.5
2.6
Past due 120+ days
3.0
-
-
2.0
-
-
58.9
23.3
24.3
45.7
17.4
34.7
Provision for impairment
(0.3)
-
-
(0.3)
-
-
58.6
23.3
24.3
45.4
17.4
34.7
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
2022
2021
\u00a3m
\u00a3m
Balance at 1 January
0.3
0.4
Utilisation
(0.3)
(0.3)
Impairment loss recognised
0.3
0.2
Balance at 31 December
0.3
0.3
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Finance lease receivables
Where the group acts as a lessor of properties of which it is a lessee and the term of the head lease and sub lease are
coterminous, rather than recognise a right of use asset the Group recognises a \ufb01nance lease receivable which is measured
at the net present value of future cash receipts discounted at the Group's incremental borrowing rate. The \ufb01nance income
element of rentals received under these leases is credited so as to give a constant rate of \ufb01nance income on the remainder
of the obligation. Finance income is credited in the income statement. The \ufb01nance lease receivable is reduced by rentals
received and increased by the interest income recognised.
2022
2021
\u00a3m
\u00a3m
Non-current
14.8
15.5
Current
2.4
2.1
17.2
17.6
Finance lease rentals are invoiced quarterly on standard rent quarter days, no credit terms are extended beyond these
dates. Expected credit losses in respect of \ufb01nance lease receivables are deemed immaterial.
3.7 Trade and other payables
Accounting policy
Trade and other payables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any write-offs.
Balance sheet
2022
2021
\u00a3m
\u00a3m
Trade payables
71.8
56.4
Vehicle stocking loans
547.4
420.6
Contract hire buyback commitments
58.2
62.0
Consignment vehicle liabilities
35.3
27.2
Payments received on account
30.4
26.2
Other taxation and social security
2.9
24.7
Accruals
101.8
117.5
847.7
734.6
Non-current
35.7
41.9
Current
812.0
692.7
847.7
734.6
Trade payables are classi\ufb01ed as other \ufb01nancial liabilities. Fair value is deemed to be the same as carrying value.
Details of the stocking loan facilities are presented in the Capital Management section of note 4.2 below.
The non-current element of trade and other payables relates to contract hire buyback commitments where the Group
has contracted to repurchase vehicles, at predetermined values and dates, that have been let under operating leases or
similar arrangements.
The Group enters into leasing arrangements whereby it agrees to repurchase vehicles from providers of lease \ufb01nance at
the end of the lease agreement, typically two to four years in the future. The repurchase price is determined at the time
the agreement is entered into based on the then estimate of a vehicle\u2019s future residual value. The actual value of the
vehicles at the end of the lease contract, and therefore the proceeds that can be realised from eventual sale, can vary from
these estimates. Annual reviews are undertaken to reappraise residual values and to recognise impairment write downs
where necessary.
3.8 Deferred income
Warranty policies sold
The income received in respect of warranty policies sold and administered by the Group is recognised over the period of
the policy on a straight line basis. The unrecognised income is held within deferred income.
Contract hire
Vehicles supplied to a leasing group for contract hire purposes where the Group undertakes to repurchase the vehicle
at a predetermined date are accounted for in accordance with IFRS 16 Leases, where the Group is considered to be an
operating lessor for all arrangements in place. The initial amounts received in consideration from the leasing group are
allocated between the present value of the repurchase commitment, held within trade and other payables and a residual
amount of deferred revenue held within deferred income. The deferred revenue, which effectively represents rentals
received in advance, is taken to the income statement on a straight line basis over the related lease term.
Warranty
Contract
policies
hire
Total
\u00a3m
\u00a3m
\u00a3m
At 1 January 2022
16.5
57.5
74.0
Created in the year
19.0
29.7
48.7
Recognised as income during the year
(9.5)
(33.8)
(43.3)
Warranty claims paid
(4.8)
-
(4.8)
At 31 December 2022
21.2
53.4
74.6
Non-current
8.7
27.7
36.4
Current
12.5
25.7
38.2
21.2
53.4
74.6
Recognition of opening balance as at 31 December 2021
Recognised during the year
9.1
28.1
37.2
Carried forward at 31 December 2022
7.4
29.4
36.8
16.5
57.5
74.0
The deferred income balance at 31 December for warranty policies and contract hire is the aggregate transaction price
allocated to performance obligations that are unsatis\ufb01ed or partly satis\ufb01ed at the reporting date. No information is provided
about remaining performance obligations at 31 December 2022 or 31 December 2021 that have an original expected
duration of one year or less as allowed by IFRS 15.
SECTION 4 - FINANCING ACTIVITIES AND CAPITAL STRUCTURE
This section contains the notes and information to support the elements of both net debt and equity \ufb01nancing as presented
in the Consolidated Balance Sheet.
4.1
Accounting policies
4.5
Dividends
4.2
Financial instruments and derivatives
4.6
Share based compensation
4.3
Net \ufb01nancing costs
4.7
Leases
4.4
Capital and reserves
4.1 Accounting policies
IFRS 9 requires an entity to recognise a \ufb01nancial asset or a \ufb01nancial liability in its statement of \ufb01nancial position when it
becomes party to the contractual provisions of the instrument. At initial recognition, an entity measures a \ufb01nancial asset or
a \ufb01nancial liability at its fair value plus or minus, in the case of a \ufb01nancial asset or a \ufb01nancial liability not at fair value through
pro\ufb01t or loss, transaction costs that are directly attributable to the acquisition or issue of the \ufb01nancial asset or the \ufb01nancial
liability. Subsequent to initial recognition \ufb01nancial assets and \ufb01nancial liabilities are classi\ufb01ed and measured as described
below.
Financial assets
IFRS 9 classi\ufb01es assets according to the business model for their realisation, as determined by the expected contractual
cash\ufb02ows. This classi\ufb01cation determines the accounting treatment, and the classi\ufb01cation under IFRS 9 is by reference to
the accounting treatment i.e. amortised cost, fair value through other comprehensive income or fair value through pro\ufb01t
and loss.
A \ufb01nancial asset is measured at amortised cost if both of the following conditions are met:
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash \ufb02ows; and
the contractual terms of the \ufb01nancial asset give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets are therefore classi\ufb01ed and measured in these \ufb01nancial statements at amortised cost.
The Group recognises loss allowances for expected credit losses (ECLs) on \ufb01nancial assets measured at amortised cost,
debt investments measured at FVOCI and contract assets (as de\ufb01ned in IFRS 15).
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the expected life of the \ufb01nancial instrument) has not increased
signi\ufb01cantly since initial recognition which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a \ufb01nancial asset has increased signi\ufb01cantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical
experience and informed credit assessment and including forward-looking information.
The Group assumes that the credit risk on a \ufb01nancial asset has increased signi\ufb01cantly if it is more than 30 days past due.
The Group considers a \ufb01nancial asset to be in default when:
\u2022
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or
\u2022
the \ufb01nancial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a \ufb01nancial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is
exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and the cash \ufb02ows
that the Group expects to receive). ECLs are discounted at the effective interest rate of the \ufb01nancial asset.
Credit-impaired \ufb01nancial assets
At each reporting date, the Group assesses whether \ufb01nancial assets carried at amortised cost and debt securities at FVOCI
are credit-impaired. A \ufb01nancial asset is \u2018credit-impaired\u2019 when one or more events that have a detrimental impact on the
estimated future cash \ufb02ows of the \ufb01nancial asset have occurred.
Write-offs
The gross carrying amount of a \ufb01nancial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery.
Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
Financial assets
IFRS 9
classi\ufb01cation
\u00a3m
Trade and other receivables
Amortised cost
106.2
Finance lease receivables
Amortised cost
17.2
Cash and cash equivalents
Amortised cost
69.4
Trade and other receivables
- see note 3.6
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits, and other short term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insigni\ufb01cant risk of changes in value.
Loans and borrowings
Interest-bearing loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective interest
basis. The effective interest basis is a method of calculating the amortised cost of a \ufb01nancial liability and of allocating
interest payments over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the \ufb01nancial liability, or where appropriate, a shorter period.
Trade and other payables
- see note 3.7
Hedging Instruments
The Group no longer holds any hedging instruments to hedge currency risks arising from its activities. There are no
material Group operations conducted in currencies other than GBP.
4.2 Financial instruments and derivatives
Adjusted net debt
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents
69.4
37.6
Current interest bearing loans and borrowings
(1.7)
-
Non-current interest bearing loans and borrowings
(91.0)
(87.3)
(23.3)
(49.7)
The Group has since adoption of IFRS 16 Leases excluded Lease liabilities from its measure of Adjusted Net Debt.
Full
details of lease liabilities are presented in note 4.7. The Group also exclude Vehicle stocking loans from its measure of
Adjusted Net Debt which are presented as current liabilities in note 3.7.
Cash and cash equivalents
Restated - see note 1
Carrying value
Carrying value
and fair value
and fair value
2022
2021
\u00a3m
\u00a3m
Bank balances and cash equivalents
69.4
37.6
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents in the Balance Sheet
171.9
200.1
Bank overdrafts repayable on demand and used for cash management in the
(102.5)
(162.5)
Balance Sheet
Cash and cash equivalents in the statement of cash \ufb02ows
69.4
37.6
Bank overdrafts re\ufb02ect the aggregated overdrawn balances of Group companies (even if those companies have other
positive cash balances).
Borrowings
In March 2022, the Group re\ufb01nanced its \u00a3175m RCF and \u00a360m Private Placement, both of which were due to mature in
March 2023. The new facilities comprise a
5 year \u00a3100m Senior Term Finance Agreement (SFA), maturing March 2027,
with the Group\u2019s existing Private Placement lender plus a new lender, and a \u00a375m 3+1+1 Revolving Credit Facility (RCF)
with four out of the \ufb01ve of the Group\u2019s existing bankers, maturing March 2025, with extensions at the option of lenders to
March 2026 and then March 2027. The SFA comprises a term loan, with principal repayments at 1% per quarter in years
1 and 2, and at 2.5% per quarter thereafter. The RCF comprises a \"bullet\" facility i.e. there are no scheduled reductions.
Both the SFA and RCF are secured over the assets of the Group (with the exception of the Pension Fund's Central Asset
Reserve assets set out at note 5.1) , and rank pari-passu with the Pension Fund. Interest in respect of the RCF is in a range
of SONIA + 5.00%-6.00%, and for the SFA at SONIA + 6.00%-7.00%, both dependent on the same leverage ratio. Financial
covenants are common to both the RCF and SFA, and comprise leverage, \ufb01xed charge cover and minimum underlying
EBITDA.
As at 31 December 2022, total facility commitments and expiry are as set out below:
Expiry Date
\u00a3m
RCF
March 2025
75.0
SFA
March 2027
97.0
172.0
At 31 December 2022 the following margins and fees were in place:
Commitment
(non-utilisation)
Current
margin
fee
RCF
5.00%
2.25%
SFA
6.00%
n/a
The leverage covenant is calculated as the ratio of net debt to underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis. This
ratio can not exceed 2.00 times. At 31 December 2022 the ratio was 0.2 times.
The \ufb01xed charge cover covenant is calculated as the ratio of underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis plus
rent paid, to \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) plus payments for
rent, scheduled amortisation under the SFA and pension contributions. This ratio must exceed 1.60 times. At 31 December
2022 the ratio was 2.7 times.
The minimum underlying EBITDA covenant is calculated as for the leverage covenant ratio i.e. underlying pro\ufb01t before tax,
depreciation, amortisation and \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3)
calculated on an IAS 17 basis. This must exceed \u00a375.0m at 31 December 2022 and was \u00a3124.9m.
Summary of borrowings
Carrying
Carrying
value
Fair value
value
Fair value
2022
2022
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Non-current:
Bank borrowings (RCF)
-
-
27.1
27.1
SFA
90.8
90.8
-
-
5.75% Senior note 2023
-
-
60.0
60.0
Other loan notes
0.2
0.2
0.2
0.2
Lease liabilities
197.9
197.9
195.4
195.4
Total non-current
288.9
288.9
282.7
282.7
SFA
1.7
1.7
-
-
Bank overdraft*
102.5
102.5
162.5
162.5
Lease liabilities
20.0
20.0
26.7
26.7
Total current
124.2
124.2
189.2
189.2
Total borrowings
413.1
413.1
471.9
471.9
* 2021 restated - see note 1
Reconciliation of movements of liabilities to cash \ufb02ows arising from \ufb01nancing activities
____Borrowings___
__________Equity_________
Long term
Finance
Share
Other
Retained
borrowings
Lease
capital
reserves
earnings
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2022
87.3
222.1
69.9
75.0
80.7
535.0
Cash \ufb02ows from \ufb01nancing activities
Payment of lease liabilities
-
(22.2)
-
-
-
(22.2)
Repayment of loans
(90.5)
-
-
-
-
(90.5)
Proceeds from issue of loans (net of directly attributable
93.8
-
-
-
93.8
transaction costs)
3.3
(22.2)
-
-
-
(18.9)
Other changes
The effect of changes in foreign exchange rates
0.1
0.1
-
-
-
0.2
New leases undertaken - non cash
-
35.3
-
-
-
35.3
Disposal of \ufb01nance leases - non cash
-
(17.6)
-
-
-
(17.6)
Liability-related : Lease expenses - non cash
-
0.2
-
-
-
0.2
Liability-related : Amortisation of fees and expenses
2.0
-
-
-
-
2.0
Equity-related : Total other changes
-
-
-
0.5
54.9
55.4
At 31 December 2022
92.7
217.9
69.9
75.5
135.6
591.6
Interest payments in respect of the above borrowings are reported in operating cash \ufb02ows in the Consolidated Cash Flow
Statement.
Fair value hierarchy
Financial instruments carried at fair value are required to be measured by reference to the following levels:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The RCF and SFA have been measured by a Level 2 valuation method.
The effective interest rates for all borrowings are all based by reference to SONIA. Leases are effectively held at \ufb01xed
rates of interest within the range set out below. Information regarding classi\ufb01cation of balances and interest, the range of
interest rates applied in the year to 31 December 2022 and repricing periods, is set out in the table below.
Carrying
value
Interest
Interest
Classi\ufb01cation
\u00a3m
Classi\ufb01cation
classi\ufb01cation
rate range
Repricing periods
Bank balances and cash equivalents
Loans and receivables
69.4
Amortised cost
Floating GBP
0.45%-4.50%
6 months or less
Borrowings
Non - current:
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating GBP
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
90.8
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Other loan notes
Other \ufb01nancial liabilities
0.2
Amortised cost
Fixed GBP
12.50%
n/a
Lease liabilities
Other \ufb01nancial liabilities
197.9
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total non-current
288.9
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating USD
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
1.7
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Bank overdraft *
Other \ufb01nancial liabilities
102.5
Amortised cost
Floating GBP
0%
6 months or less
Lease liabilities
Other \ufb01nancial liabilities
20.0
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total current
124.2
Total borrowings
413.1
* 2021 restated - see note 1
The carrying amounts of the Group\u2019s borrowings are denominated in the following currencies:
2022
2021
\u00a3m
\u00a3m
Pound sterling
413.1
463.8
US dollar
-
8.1
413.1
471.9
* 2021 restated - see note 1
Treasury policy, \ufb01nancial risk, funding and liquidity management
Financial risk management
The Group is exposed to the following risks from its use of \ufb01nancial instruments:
Funding and liquidity risk - the risk that the Group will not be able to meet its \ufb01nancial obligations as they fall due.
Credit risk - the risk of \ufb01nancial loss to the Group if a customer or counterparty to a \ufb01nancial instrument fails to meet its
contractual obligations, and arises principally from the Group\u2019s receivables from customers and investment securities.
Market risk - the risk that changes in market prices, such as interest rates and foreign exchange rates, have on the Group's
\ufb01nancial performance.
The Group's quantitative exposure to these risks is explained throughout these \ufb01nancial statements whilst the Group's
objectives and management of these risks is set out below.
Treasury policy and procedures
Group treasury matters are managed within policy guidelines set by the Board with prime areas of focus being liquidity and
interest rate exposure. Management of these areas is the responsibility of the Group\u2019s central treasury function. The Board
does not permit the speculative use of derivatives..
Funding and liquidity management
The Group is \ufb01nanced primarily by its SFA, RCF, vehicle stocking credit lines and operating cash \ufb02ow. The RCF and SFA
are committed facilities which mature within appropriate timescales and are maintained at levels in excess of planned
requirements. .
Each business within the Group is responsible for its own day-to-day cash management and the overall cash position is
monitored on a daily basis by the Group treasury department.
The maturity of non-current borrowings is as follows, excluding lease liabilities:
2022
2021
\u00a3m
\u00a3m
Between 1 and 2 years
7.3
87.1
Between 2 and 5 years
83.7
0.2
91.0
87.3
Maturities include amounts drawn under revolving credit facilities which are contractually repayable generally within a
month of the year end but which may be redrawn at the Group\u2019s option, together with contractual repayment dates for
the amortising SFA. The maturities above therefore represent the \ufb01nal repayment dates for these facilities. If the amounts
drawn at the year end were redrawn at the Group\u2019s usual practice of monthly drawings, the total cash out\ufb02ows associated
with all borrowings, assuming interest rates remain at the same rates as at the year end, are estimated on an undiscounted
basis as follows:
Carrying
Contractual
Within 6
6 - 12
over 5
amount
cash\ufb02ows
months
months
1-2 years
2-5 years
years
RCF
-
-
-
-
-
-
-
SFA
92.5
126.0
5.4
5.3
15.9
99.4
-
Loan notes
0.2
0.4
-
-
-
0.4
-
92.7
126.4
5.4
5.3
15.9
99.8
-
Bank overdraft
102.5
102.5
102.5
-
-
-
-
Leases liabilities
217.9
371.3
17.9
16.4
32.2
76.5
228.3
Trade payables
71.7
71.7
71.7
-
-
-
-
Vehicle stocking loans
582.7
598.4
336.9
261.5
-
-
-
1,067.5
1,270.3
534.4
283.2
48.1
176.3
228.3
The Group has the following undrawn borrowing facilities:
2022
2021
\u00a3m
\u00a3m
Expiring in 1-2 years
-
87.9
Expiring in 2-5 years
70.0
-
70.0
87.9
The above re\ufb02ects that \u00a35m has been drawn on the RCF by way of bank guarantees to third parties, but such amounts do
not constitute borrowings.
Interest rate risk management
The objective of the Group\u2019s interest rate policy is to minimise interest costs whilst protecting the Group from adverse
movements in interest rates. Borrowings issued at variable rates expose the Group to cash \ufb02ow interest rate risk whereas
borrowings issued at \ufb01xed rates expose the Group to fair value interest rate risk. The Group does not actively manage cash
\ufb02ow interest rate risk as the Board believes that the retail sector in which the Group operates provides a natural hedge
against interest rate movements. Consequently, it is normal Group policy to borrow on a \ufb02oating rate basis and all fair value
interest rate risk arising from \ufb01xed rate borrowings entered into by the Group are usually managed by swaps into \ufb02oating
rate. However, due to the relatively low historical rates in \ufb02oating interest rates, there was relatively low downside risk in
maintaining the Group\u2019s \u00a360.0m Senior note 2023
at \ufb01xed rate. On re\ufb01nancing in March 2022, all loans were at \ufb02oating
rate, which were maintained in line with the Group's normal policy.
Interest rate risk sensitivity analysis
As some of the Group\u2019s borrowings and vehicle stocking credit lines are \ufb02oating rate instruments they therefore have a
sensitivity to changes in market rates of interest. The table below shows the effect of a 100 basis points change in interest
rates for \ufb02oating rate instruments outstanding at the period end, showing how pro\ufb01t or loss would have varied in the period
on the assumption that the instruments at the period end were outstanding for the entire period.
Pro\ufb01t/(loss)
Pro\ufb01t/(loss)
2022
2021
\u00a3m
\u00a3m
100 basis points increase
(5.5)
(3.8)
Tax effect
1.0
0.7
Effect on net assets
(4.5)
(3.1)
100 basis points decrease
5.5
1.9
Tax effect
(1.0)
(0.4)
Effect on net assets
4.5
1.5
Foreign exchange risk management
The Group faces currency risk in respect of its net assets denominated in currencies other than sterling. On translation
into sterling, movements in currency will affect the value of these assets. The Group\u2019s policy is therefore to match, where
possible, net assets in overseas subsidiaries which are denominated in a foreign currency with borrowings in the same
currency. With very little US assets remaining at the year end following the disposal all US business interests in prior years,
no material hedging requirement remains so the Group now has no USD borrowings (2021: USD 10.0m) against its net
assets held in overseas subsidiaries.
Hedges of net investments in overseas operations
A gain or loss in respect of an effective hedge of a net investment in an overseas operation is recognised directly in
equity. Any ineffective portion of the hedge is recognised in the income statement.
Included within bank borrowings are balances denominated in US dollars which are designated as a hedge of the net
investment in the Group\u2019s US subsidiaries. Foreign exchange differences on translation of the borrowings to sterling at
the balance sheet date are recognised within the translation differences reserve in equity, net of exchange differences in
respect of the net investments being hedged.
2022
2021
$m
$m
Aggregate fair value of borrowings designated as hedge of net investment
-
10.0
in the Group's US subsidiaries
\u00a3m
\u00a3m
Foreign
exchange gains/(losses) on translation of borrowings to sterling at
-
0.5
balance sheet date
Foreign exchange (losses)/gains on translation of net investments to ster-
0.5
(0.5)
ling at balance sheet date
Net
exchange
gain/(loss) recognised within translation reserve in equity
0.5
-
Capital management
The Group views its \ufb01nancial capital resources as primarily comprising share capital, loans (RCF and SFA), vehicle stocking
credit lines and operating cash\ufb02ow.
Core debt is essentially funded by the Group\u2019s SFA. The Group requires its revolving credit facility to fund its day-to-day
working capital requirements. A fundamental element of the Group\u2019s \ufb01nancial resources is the provision of vehicle stocking
credit lines, provided by the vehicle manufacturers\u2019 funding arms and other third party providers. The Group\u2019s funding of
its vehicle inventories is set out below:
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
595.0
488.4
2022
2021
\u00a3m
\u00a3m
Manufacturer \ufb01nance arm
286.0
224.7
Third
party stock \ufb01nance
296.7
262.5
Total inventories
582.7
487.2
Inventories are stated net of any Value Added Tax (VAT) whilst the related creditor is a gross amount. The creditor may
also be higher than the inventory value due to timing of the vehicle sale and payment of the related liability.
When considering vehicle stocks from a funding risk view point we split the funding into that which is funded by the vehicle
manufacturers through their related \ufb01nance arms and that funded through third party stock \ufb01nance facilities and bank
borrowings. Financing for stock other than through bank borrowings is shown in trade creditors in the balance sheet. The
maturity analysis on page 167 includes stock \ufb01nance facilities.
The third party stock facilities have prescribed limits and can be used to fund virtually any vehicle. Any undrawn amount
is therefore directly relatable to the ability of the Group to increase inventory and fund it accordingly. Undrawn third party
stock \ufb01nance facilities at 31 December 2022 amounted to \u00a365.9m (2021: \u00a373.1m). In contrast, manufacturer limits vary with
the manufacturer\u2019s requirements (depending on the amount of stocks each manufacturer wishes to put into the network,
which varies depending on the time of year and level of production) and are therefore not directly related to the Group\u2019s
liquidity: it is therefore not appropriate to quote an undrawn facility.
The key contractual terms of the facilities (both manufacturer and third party) are:
\u2022 The facilities are usually structured as an agency to purchase vehicles on behalf of the funder .
\u2022 Those vehicles are immediately sold back to Pendragon on deferred payment terms.
\u2022
Legal title to the vehicles thus remains with the funder as the funder has purchased the vehicles (via the dealer as agent)
and has an unpaid invoice (either in part or in full) outstanding from Pendragon.
\u2022
The unpaid invoice is therefore trade credit and is accounted for as a trade payable in the \ufb01nancial statements.
\u2022
The payment terms for the invoice vary with the type of vehicle:
\u2022
A new vehicle invoice typically requires no upfront deposit payment (a new i.e. unregistered vehicle, does not
depreciate) and remains outstanding for varying periods up to 360 days.
\u2022 A used vehicle invoice typically requires an immediate payment of c.10% i.e. so that the effective \u201cloan to value\u201d given
for the vehicle is c.90%. As a used vehicle depreciates with age and mileage, periodic instalment payments might
also be required, for example 2% per month or 10% at day 90.
\u2022
Interest is payable in respect of the unpaid invoice. Most new vehicle invoices from manufacturers have an interest free
period followed by commercial rates of interest. Interest rates from third party stock funders are at a commercial rate
from the start.
Payment of any outstanding amounts is due on the earlier of the sale of the vehicle by Pendragon to a customer, or upon
the expiry of a pre-determined maturity period. The maturity period varies by funder and by type of vehicle but is up to
360 days in respect of new vehicles and 330 days in respect of used vehicles.
Manufacturer facility agreements are tied to the franchise agreement i.e. for as long as the franchise agreement is
operational the manufacturer will provide funding facilities to enable the franchisee to sell the product. Other than that,
the normal provisions regarding immediate termination due to an insolvency event or change of control would apply.
Third party facility agreements are uncommitted and can be terminated immediately upon default or upon written notice
by either party; those notice periods vary by agreement but can be from 30-120 days. In practice, if notice is given, no
new contracts for funding individual vehicles would be entered into by the funding partner and the facility in respect of
each individual vehicle would be paid down over time as normal i.e. on the earlier of the normal maturity of the facility for
a particular vehicle or upon sale of the vehicle to a customer. Despite the uncommitted nature of the agreements, most
relationships with funders are of a long standing nature.
The Group is also responsible for funding the pension de\ufb01cit. The total \ufb01nancial resources required by the Group to fund
itself at 31 December 2022 comprises:
2022
2021
\u00a3m
\u00a3m
Net debt
23.3
49.7
Finance lease liabilities
217.9
222.1
Stock \ufb01nance
582.7
447.8
Pension de\ufb01cit
2.6
23.6
826.5
743.2
The Board\u2019s policy is to maintain a strong capital base to maintain market con\ufb01dence and to sustain the development of
the business, whilst maximising the return on capital to the Group\u2019s shareholders. The Group\u2019s strategy will be to maintain
facilities appropriate to the working requirements of the Group and to service its debt requirements through generating
cash \ufb02ow. At 31 December 2022 the adjusted net debt : underlying EBITDA ratio achieved was 0.1 : 1, calculated as follows:
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Depreciation
64.7
70.4
Amortisation
4.9
4.2
Underlying EBITDA
168.1
190.9
Adjusted net debt (being net debt as set out in the alternative performance measures
23.3
49.7
in note 1)
Adjusted net debt : underlying EBITDA ratio
0.1
0.3
The key measures which management uses to evaluate the Group's use of its \ufb01nancial resources, and performance achieved
against these in 2022 and 2021 are set out below:
2022
2021
Underlying pro\ufb01t before tax (\u00a3m)
57.6
83.0
Underlying earnings per share (p)
3.2
5.0
Net debt : underlying EBITDA
0.1
0.3
The Group\u2019s capital structure and capital allocation priorities were reassessed during 2020 as part of the determination
of the Group's strategy for the next \ufb01ve years. That strategy shall require investment to grow the used car non-franchise
business, to develop Pinewood's offering and to maintain and improve the UK Motor franchise business.
The Group has previously engaged in share buyback programmes though none are currently operating. The Group may
also issue shares or purchase them in the market to satisfy share incentives issued to employees of the Group. The Group
encourages employees to be shareholders of the Group, providing selective share option and LTIP schemes from time to
time.
Certain of the Group\u2019s subsidiaries are required to maintain issued share capital at levels to support capital adequacy under
Financial Conduct Authority (FCA) requirements. The Group ensures these requirements are met by injections of equity to
the subsidiaries in question, when required.
Other than speci\ufb01cally set out above, there were no changes to capital management in the year.
4.3 Net \ufb01nancing costs
Accounting policy
Finance income comprises interest income on funds invested, return on net pension scheme assets and gains on hedging
instruments that are recognised in pro\ufb01t and loss. Interest income is recognised as it accrues in pro\ufb01t and loss, using the
effective rate method.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
Gross \ufb01nance costs directly attributable to the construction of property, plant and equipment are capitalised as part of the
cost of those assets until such a time as the assets are substantially ready for their intended use or sale.
Finance expense
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest payable on bank borrowings, SFA, Senior note and loan notes
10.8
9.4
Vehicle stocking plan interest
14.7
9.8
Interest payable on leases
14.7
12.6
Costs incurred on re\ufb01nancing (non-underlying - see note 2.6)
2.6
-
Net interest on pension scheme obligations (non-underlying - see note 2.6)
0.3
1.0
Less: interest capitalised
(0.8)
(0.3)
Total interest expense being interest expense in respect of \ufb01nancial liabili
-
42.3
32.5
ties held at amortised cost
Unwinding of discounts in contract hire residual values
2.5
2.7
Total \ufb01nance expense
44.8
35.2
Interest of \u00a30.8m has been capitalised during the year on assets under construction at an average rate of 7.47% (2021:
\u00a30.3m).
Finance income
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest
receivable on \ufb01nance leases
1.0
0.9
Total \ufb01nance income
1.0
0.9
4.4 Capital and reserves
Ordinary share capital
Ordinary shares are classi\ufb01ed as equity.
Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
Number
\u00a3m
Allotted, called up and fully paid shares of 5p each at 31 December 2021 and
1,396,944,405
69.9
31 December 2022
There were no issues of ordinary shares during the year.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Group. All shares rank equally with regard to the Group\u2019s residual assets.
Capital redemption reserve
The capital redemption reserve has arisen following the purchase by the Group of its own shares and comprises the
amount by which distributable pro\ufb01ts were reduced on these transactions in accordance with s733 of the Companies Act
2006. There were no transfers into the capital redemption reserve during the year in respect of shares purchased by the
Group and subsequently cancelled (2021: \u00a3nil).
Other reserves
Other reserves comprise the amount of demerger reserve arising on the demerger of the Group from Williams Holdings
PLC in 1989.
Own shares held by Employee Bene\ufb01t Trust (EBT)
Transactions of the Group-sponsored EBT are included in the Group \ufb01nancial statements. In particular, the trust\u2019s
purchases of shares in the Group, which are classi\ufb01ed as own shares, are debited directly to equity through retained
earnings. When own shares are sold or reissued the resulting surplus or de\ufb01cit on the transaction is also recognised within
retained earnings.
The market value of the investment in the Group's own shares at 31 December 2022 was \u00a30.3m (2021: \u00a31.3m), being
1.5m (2021: 5.8m) shares with a nominal value of 5p each, acquired at an average cost of \u00a30.24 each (2021: \u00a30.33). The
trustee of the EBT is Salamanca Group Trust (Jersey) Limited. The shares in trust may subsequently be awarded to
Executive Directors and employees under the Pendragon 1999 Approved Executive Share Option Scheme, Pendragon
1999 Unapproved Executive Share Option Scheme and to satisfy amounts under LTIPs. Details of the plans are given in the
Directors' Remuneration Report on pages 77 to 95..
Dividends on the shares owned by the trust, the purchase of which were funded by interest free loans to the trust from
Pendragon PLC, are waived. All expenses incurred by the trust are settled directly by Pendragon PLC and charged in the
accounts as incurred.
The trust is regarded as a quasi subsidiary and its assets and results are consolidated into the \ufb01nancial statements of the
Group.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the net investment
in foreign operations as well as from the translation of liabilities held to hedge the respective net investment in foreign
operations.
4.5 Dividends
The Board is not recommending the payment of a \ufb01nal dividend for 2022 (2021: nil).
4.6 Share based compensation
Accounting policy
The Group operates a number of employee share option schemes and an executive share ownership plan 'exsop' awarded
in 2010. The fair value at the date at which the share options are granted is recognised in the income statement on a
straight line basis over the vesting period, taking into account the number of options that are expected to vest. The fair
value of the options granted is measured using an option pricing model, taking into account the terms and conditions
upon which the options were granted. The number of options that are expected to become exercisable is reviewed at each
balance sheet date and if necessary estimates are revised.
Executive share options
The number and weighted average exercise prices of share options is as follows:
Weighted
Number
Weighted
Number
average
of
average
of
exercise
options
exercise
options
price
millions
price
millions
2022
2022
2021
2021
Outstanding at beginning of period
24.0p
3.8
24.0p
4.6
Exercised during the period
13.5p
(0.5)
8.8p
(0.6)
Lapsed during the period
13.5p
(0.5)
8.8p
(0.2)
Outstanding at the end of the period
31.8p
2.8
24.0p
3.8
Exercisable at the end of the period
31.8p
2.8
27.0p
3.8
The options outstanding at 31 December 2022 have an exercise price of 31.82p and a weighted contractual life of 1.7 years.
All share options are settled in equity.
Movements in the number of options to acquire ordinary shares under the Group's various share option schemes, together
with exercise prices and the outstanding position at 31 December 2022 were as follows:
At 31
At 31
Exercise
December
December
price per
2021
Exercised
Lapsed
2022
Exercise period
Date of grant
share
Number
Number
Number
Number
31 March 2015 to 30 March 2022
30 March 2012
13.50p
1,000,000
(500,000)
(500,000)
-
19 September 2017 to 19 September 2024
18 September 2014
31.82p
2,829,500
-
-
2,829,500
3,829,500
(500,000)
(500,000)
2,829,500
All grants of share options were issued pursuant to the 2009 Executive Share Option Scheme, which prescribed an earnings
per share performance criterion. It is a precondition to the exercise of grants made under the 2009 Scheme that the growth
in the Group's earnings per share over the prescribed three year period must exceed by at least 3 percent per annum
compound the annual rate of in\ufb02ation as shown by the RPI Index.
The weighted average share price at the date of exercise for share options exercised in the year was 27.50p (2021:
17.68p).
All options are settled by physical delivery of shares.
The fair value of the services received in return for share options is measured by reference to the fair value of the options
granted. The estimate of the fair value of the services received in respect of share option schemes is measured using the
Black-Scholes option pricing model. The weighted average fair value of the options at the date of grant for those that are
outstanding at 31 December 2022 is 7.7p (2021: 6.4p).
Executive Long Term Incentive Plan (\u201cLTIPs\u201d)
The number and weighted average exercise prices of executive LTIPs is as follows:
Weighted
Number
Weighted
Number
average
of
average
of
exercise
options
exercise
options
price
millions
price
millions
2022
2022
2021
2021
Outstanding at the start of the period
0.00p
44.1
0.00p
27.6
Granted during the period
0.00p
12.3
0.00p
16.5
Outstanding at the end of the period
0.00p
56.4
0.00p
44.1
Movements in the number of options to acquire ordinary shares under the Group's LTIP, together with the outstanding
position at 31 December 2022 were as follows:
At 31
At 31
December
December
2021
Granted
2022
Exercise period
Date of grant
Number
Number
Number
27 October 2023
28 October 2020
27,648,123
-
27,648,123
12 July 2024
13 July 2021
16,506,004
-
16,506,004
13 August 2025
14 August 2022
-
19,562,808
19,562,808
44,154,127
19,562,808
63,716,935
All grants of LTIPs were issued pursuant to the Long Term Incentive Plan. Vesting of the 2020 and 2021 Awards under the
LTIP is subject to the satisfaction of certain performance conditions, 50% of which is based on achieving a de\ufb01ned earnings
per share target over a de\ufb01ned performance period, commencing on the grant date and measured at the respective year
end, with the remaining 50% based on the achievement of certain qualitative strategic performance metrics aligned to
the Company\u2019s strategic milestones as set out in the Company\u2019s Group Strategy Investor Presentation (available at www.
pendragonplc.com). For both the 2020 and 2021 LTIP, the Remuneration Committee concluded that the performance
conditions had been satis\ufb01ed in full in terms of the EPS metric, and the Company had delivered signi\ufb01cantly on stretching
strategic targets for 2021, such that both plans would vest at 91.6% in October 2023 and July 2024 respectively.
For awards made in August 2022, the performance metrics applicable were (i) achieving a de\ufb01ned earnings per share
target over a three year performance period, commencing on 01 January 2022 and measured at year end 2024, namely
achieving a target EPS derived from a mix of the most recently available analyst/broker consensus published at or around
the time of making the award and our business plan of 4.0p at target by year end 2024 (70% weighting); (ii) achieving an
overall reduction in carbon emissions of 5% at target by 2024 (5% weighting); (iii) deliver a year end 2024 gross pro\ufb01t of
\u00a3180m in used cars at target (15% weighting) and (iv) deliver revenue of \u00a330m by year end 2024 in Pinewood at target
(10% weighting).
If the performance conditions are not satis\ufb01ed, none of the LTIP award shares will vest.
Executive bonuses relating to performance in 2020 were granted in the form of deferred share awards that have vested
one year after grant date. They automatically convert into one ordinary share each on vesting at an exercise price of nil.
The executives do not receive any dividends and are not entitled to vote in relation to the deferred shares during the
vesting period.
The fair value at the date at which the share options are granted is recognised in the income statement on a straight line
basis over the vesting period, taking into account the number of options that are expected to vest. The number of options
that are expected to become exercisable is reviewed at each balance sheet date and if necessary estimates are revised. The
fair value of the services received in return for the LTIPs is measured by reference to the fair value of the LTIPs granted.
The estimate of the fair value of the services received in respect of the LTIPs is measured using the Black-Scholes option
pricing model.
The weighted average fair value of the options at the date of grant for those that are outstanding at 31
December 2022 is 14.08p (2021: 14.08p).
Executive LTIP Scheme
2022
2021
Number of share options granted in year
19,562,808
16,506,004
Weighted average share price (pence)
0.00
0.00
Weighted average exercise price (pence)
0.00
0.00
Weighted average fair value (pence)
23.72
19.09
Expected volatility (%)
50.6%
48.9%
Expected life (years)
3.0
3.0
Risk free rate (%)
358.3%
69.3%
Expected dividend yield (%)
0.0%
0.0%
Expected volatility was determined by calculating the historical volatility of the Group's share price over the corresponding
historical period.
The expected life used in the model has been adjusted, based on management's best estimate, for the
effects of exercise restrictions and associate turnover.
Income statement
The Group recognised a total net expense of \u00a33.3m (2021: \u00a32.9m) as an employee bene\ufb01t cost in respect of all equity-
settled share based payment transactions included within administration costs.
4.7 Leases
Accounting policies
Leases as a Lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identi\ufb01ed asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identi\ufb01ed asset, the Group uses the de\ufb01nition of a
lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019.
The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is
initially measured at cost, and subsequently at cost less accumulated depreciation and impairment losses, and adjusted for
certain remeasurements of the lease liability. Cost comprises the initial amount of the lease liability adjusted for any initial
direct costs incurred less any lease incentives received. Depreciation is recognised on a straight line basis over the period
of the lease the right of use asset is expected to be utilised.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date, discounted by the interest rate implicit in the lease or when this is not readily attainable, the Group\u2019s incremental
borrowing rate. Lease payments include \ufb01xed rental payments and amounts expected to be payable under a residual
value guarantee. Generally the Group uses its incremental borrowing rate as the discount rate. The Group determines
its incremental borrowing rate by obtaining interest rates from various external \ufb01nancing sources and makes certain
adjustments to re\ufb02ect the terms of the lease and type of the asset leased.
The lease liability is subsequently increased by the interest cost on the lease liability and reduced by payments made. It is
remeasured when there is a change in future lease payments arising from a change of index or rate, a variation in amounts
payable following contractual rent reviews and changes in the assessment of whether an extension/termination option is
reasonably certain to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made
to the carrying amount of the right-of-use asset, or is recorded in pro\ufb01t or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Sale and leaseback transactions. When a transfer of an asset is made and it is deemed a sale in accordance with IFRS 15,
the resulting right-of-use asset arising from the leaseback is measured at the proportion of the previous carrying amount
of the asset that relates to the right of use retained by the seller/lessee. Gain or loss is recognised only at the amount that
relates to the rights transferred to the buyer/lessor.
The Group presents right-of-use assets that do not meet the de\ufb01nition of investment property in \u2018property, plant and
equipment\u2019 and lease liabilities in \u2018loans and borrowings\u2019 in the Balance Sheet.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
Balance Sheet
The Group leases a large number of properties for use as motor vehicle dealerships, parts distribution warehouses, storage
compounds and of\ufb01ces. Lease terms vary and at 31 December 2022 property leases had an average of around 12.4 years
to expiry.
These leases comprise those with provision for periodic rent reviews, \ufb01xed scheduled increases and those
with periodic increases based on the RPI. The Group does not have any property leases that contain extension clauses. A
number of property leases have break clauses allowing the Group to terminate the agreement earlier than the lease expiry
date. The Group has applied judgement in that unless it is reasonably certain that such a break option will be exercised, the
calculation of the lease liability and right of use asset is made up to the expiry date of the lease. Had the Group recognised a
shorter lease term then right of use assets and lease liabilities would both be lower than currently reported and the interest
expense for the current year on lease liabilities would be reduced with the possibility depreciation charges could increase.
In addition to property leases the Group have leases for various items of plant and equipment and motor vehicles.
Right of use assets are presented as part of property, plant and equipment as presented in note 3.2.
Land &
Motor
Right of Use Assets
buildings
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
Balance at 1 January 2021
145.6
0.4
146.0
Additions to right of use assets
8.7
0.1
8.8
Reinstated from assets held for sale as part of a disposal group
5.0
-
5.0
Depreciation charge
(18.1)
(0.4)
(18.5)
Impairment
(9.6)
-
(9.6)
Disposals of right of use assets
(5.2)
-
(5.2)
Balance at 31 December 2021
126.4
0.1
126.5
Balance at 1 January 2022
126.4
0.1
126.5
Additions to right of use assets
22.5
-
22.5
Depreciation charge
(15.1)
(0.1)
(15.2)
Impairment
(0.2)
-
(0.2)
Disposals of right of use assets
(3.1)
-
(3.1)
Balance at 31 December 2022
130.5
-
130.5
Disposals of right of use assets have occurred on assignment of leases, derecognition on entering into sub leases and early
terminations.
Lease liabilities
Included within
liabilities
associated with
Land &
Motor
the assets held
buildings
vehicles
Total
for sale
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Balance at 1 January 2021
(242.7)
(0.5)
(243.2)
(30.6)
Additions to right of use assets
(8.7)
(0.1)
(8.8)
-
Additions to lease receivables
(0.4)
-
(0.4)
-
Interest expense related to lease liabilities
(12.5)
-
(12.5)
(0.1)
Disposals of lease liabilities on sale of business
-
-
-
27.8
Other disposals of lease liabilities
5.8
-
5.8
-
Reinstated from liabilities held for sale as part of a disposal group
(2.5)
-
(2.5)
2.5
Repayment of lease liabilities (including interest element)
38.9
0.5
39.4
0.4
Exchange adjustments
0.2
-
0.2
-
Other movements
(0.1)
-
(0.1)
-
Balance at 31 December 2021
(222.0)
(0.1)
(222.1)
-
Non-current
(195.4)
-
(195.4)
Current
(26.6)
(0.1)
(26.7)
Balance at 31 December 2021
(222.0)
(0.1)
(222.1)
Balance at 1 January 2022
(222.0)
(0.1)
(222.1)
Additions to right of use assets
(34.9)
-
(34.9)
Additions to lease receivables
(0.4)
-
(0.4)
Interest expense related to lease liabilities
(14.7)
-
(14.7)
Disposals of lease liabilities
17.6
-
17.6
Repayment of lease liabilities (including interest element)
36.8
0.1
36.9
Exchange adjustments
(0.1)
-
(0.1)
Other movements
(0.2)
-
(0.2)
Balance at 31 December 2022
(217.9)
-
(217.9)
Non-current
(197.9)
-
(197.9)
Current
(20.0)
-
(20.0)
Balance at 31 December 2022
(217.9)
-
(217.9)
During the year a lease regear was undertaken with our largest property partner in which 30 prime leaseholds were extended
until 2042 with the Group bene\ufb01tting from reductions in rent payable from the agreement to hand-back 12 vacant properties
to the landlord in exchange for the lease extensions. The extensions were deemed lease modi\ufb01cations in light of the increased
duration with all other terms of the leases remaining unchanged. An updated discount rate appropriate to these modi\ufb01ed
leases was applied in determining the increased liability and right of use asset. The 12 leases terminated had a lease liability
of \u00a316.8m in respect of right of use assets of \u00a30.7m and \ufb01nance lease receivables of \u00a31.1m, giving an overall net liability at
the time of the transaction of \u00a315.0m, which, because the extensions were considered to subsidise the terminations, has
been recognised as a lease incentive and as such a reduction in the value of the 30 extended right of use assets. In respect
of the tables above this transaction resulted in additions to right of use assets of \u00a316.5m (after deduction of the \u00a315.0m
lease incentive and including \u00a32.6m of additional costs incurred), disposals of right of use assets of \u00a30.7m, disposals of
\ufb01nance lease receivables of \u00a31.1m, disposals of lease liabilities of \u00a316.8m and an addition of a lease liability of \u00a328.9m.
The calculation of the lease liability and the right of use asset relies upon the estimation of a suitable interest rate.
The
Group has applied rates to represent the different types of leases it has by applying its incremental borrowing rate for
shorter term leases and a higher rates based upon market rates for borrowing against equivalent assets with similar risk
pro\ufb01les in speci\ufb01c markets for medium to longer term leases.
Future increases in rentals linked to an index or rate are not included in the lease liability until the change in cash \ufb02ows
takes effect. Approximately 69.0% (2021: 69.5%) of the Group\u2019s lease liabilities are subject to in\ufb02ation linked rentals. Rental
changes linked to in\ufb02ation or rent reviews typically occur on an annual basis and are subject to caps. Remeasurement
adjustments in respect of these increases are included in additions to right of use assets and lease liabilities in the tables
above.
Other future possible cash out\ufb02ows not included in the lease liability include the payment of dilapidations in respect of
properties where the lease contains speci\ufb01c condition of return clauses. Whilst the Group endeavours to maintain its
properties to a high standard it is likely that such payments will be made in the future when lease contracts end.
Amounts recognised in pro\ufb01t or loss
2022
2021
\u00a3m
\u00a3m
Depreciation of right of use assets
15.2
18.5
Impairment of right of use assets (non-underlying)
0.2
9.6
Gains on the dispoal, termination and assignment of leases
(non-underlying) (included
0.6
1.5
in Other income - gains on the sale of businesses and property, plant and equipment)
Interest on lease liabilities
14.7
12.6
Expense relating to variable lease payments not included in lease liabilities
0.1
0.1
Expenses relating to low value leases
0.7
0.1
Expenses relating to short term leases
6.5
1.1
Expenses relating to variable lease payments not included in lease liabilities relate to the payment of dilapidation claims
made on properties.
The Group as lessor
Leases as a Lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a \ufb01nance lease or an operating
lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks
and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a \ufb01nance lease; if not, then
it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for
the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It
assesses the lease classi\ufb01cation of a sub-lease with reference to the right-of-use asset arising from the head lease, not with
reference to the underlying asset.
Where the Group acts as a Lessor of an operating lease, receipts of lease payments are recognised in the income statement
on a straight line basis over the period of the lease. Where the Group acts as a Lessor of a \ufb01nance lease the Group will,
rather than recognise a right of use asset, recognise a \ufb01nance lease receivable, this being the present value of future lease
receipts discounted at the interest rate implicit in the lease or if this is not speci\ufb01ed the Group's incremental borrowing
rate. The \ufb01nance lease receivable will be increased by the interest received and reduced by payments made by the lessee.
Balance Sheet
Lease receivables
2022
2021
Land and buildings
\u00a3m
\u00a3m
Balance at 1 January
17.6
18.6
Additions to lease receivables
2.6
2.7
Interest income related to lease receivables
1.0
0.9
Disposals of lease liabilities
(1.0)
(1.5)
Payment of lease receivables (including interest element)
(3.0)
(3.1)
Balance at 31 December
17.2
17.6
Non-current
14.8
15.5
Current
2.4
2.1
17.2
17.6
The following table sets out a maturity analysis of lease payments receivable, showing the undiscounted lease payments
to be received after the reporting date:
2022
2021
\u00a3m
\u00a3m
Less than one year
3.3
3.0
Between one and two years
3.1
3.0
Between two and three years
2.5
2.9
Between three and four years
2.3
2.2
Between four and \ufb01ve years
2.3
2.0
More than \ufb01ve years
8.0
9.5
Total undiscounted lease receivable
21.5
22.6
Unearned \ufb01nance income
(4.3)
(5.0)
17.2
17.6
At the 31 December 2022 balance sheet date, the Group had contracted with tenants for the following future minimum
lease payments on leases classi\ufb01ed as operating leases.
2022
2021
Property
Property
\u00a3m
\u00a3m
Less than one year
2.4
2.2
Between one and two years
2.3
1.9
Between two and three years
2.2
1.9
Between three and four years
1.8
1.8
Between four and \ufb01ve years
1.1
1.8
More than \ufb01ve years
2.8
4.5
12.6
14.1
The Group has no properties that are treated as investment properties.
Amounts recognised in pro\ufb01t or loss
2022
2021
\u00a3m
\u00a3m
Operating lease rentals received
2.9
1.8
Interest received on \ufb01nance lease receivables
1.0
0.9
3.9
2.7
SECTION 5 - PENSION SCHEMES
This section explains the pension scheme obligations of the Group.
5.1 Pension obligations
Accounting policy
The Group operated a number of de\ufb01ned bene\ufb01t and de\ufb01ned contribution plans during the year. The assets of the de\ufb01ned
bene\ufb01t plan and one de\ufb01ned contribution plan are held in independent trustee administered funds. The Group also operates
a Group Personal Pension Plan which is a de\ufb01ned contribution plan where the assets are held by the insurance Group under
a contract with each individual.
De\ufb01ned contribution plans - A de\ufb01ned contribution plan is one under which the Group pays \ufb01xed contributions and has
no legal or constructive obligation to pay further amounts. Therefore, no assets or liabilities of these plans are recorded
in these \ufb01nancial statements. Obligations for contributions to de\ufb01ned contribution pension plans are recognised as an
employee bene\ufb01t expense in the income statement when they are due.
De\ufb01ned bene\ufb01t plans - Pension accounting costs for de\ufb01ned bene\ufb01t plans are assessed by determining the pension
obligation using the projected unit credit method after including a net return on the plan assets. Under this method, in
accordance with the advice of quali\ufb01ed actuaries, the amounts charged in respect of employee bene\ufb01ts re\ufb02ect the cost of
bene\ufb01ts accruing in the year and the cost of \ufb01nancing historical accrued bene\ufb01ts. The Group recognises all actuarial gains
and losses arising from de\ufb01ned bene\ufb01t plans in the statement of other comprehensive income immediately.
The present value of pension obligations is measured by reference to market yields on high quality corporate bonds
which have terms to maturity approximating to the terms of the related pension liability. Plan assets are measured at fair
value. When the calculation results in a bene\ufb01t to the Group, the recognised asset is limited to the total of the present
value of economic bene\ufb01ts available in the form of any future refunds from the plan or reductions in future contributions
to the plan. An economic bene\ufb01t is available to the Group if it is realisable during the life of the plan, or on settlement of
the plan liabilities.
Under IAS 19 Employee Bene\ufb01ts, the Group recognises an interest expense or income which is calculated on the net
de\ufb01ned bene\ufb01t liability or asset respectively by applying the discount rate to the net de\ufb01ned bene\ufb01t liability or asset.
Remeasurements arising from de\ufb01ned bene\ufb01t plans comprise actuarial gains and losses and the return on plan assets
(excluding interest) are immediately recognised directly in the statement of other comprehensive income. Actuarial
gains and losses are the differences between actual and interest income during the year, experience losses on scheme
liabilities and the impact of any changes in assumptions. Details of the last independent statutory actuarial valuation and
assumptions are set out below.
Pension arrangements
The Group operated six de\ufb01ned bene\ufb01t pension schemes (one of which had a de\ufb01ned contribution section) which closed
to new members and accrual of future bene\ufb01ts on 30 September 2006 and a de\ufb01ned contribution scheme which was
closed to new contributions from April 2006. All affected employees were offered membership of a de\ufb01ned contribution
pension arrangement with Friends Provident. A Group Personal Pension arrangement with Legal & General replaced the
Friends Provident arrangement from 1 January 2010. Total contributions paid by the Group in 2021 to the Legal & General
arrangement were \u00a34.7m (2021: \u00a33.0m). To comply with the Government\u2019s automatic enrolment legislation, the Group
chose to participate in the People\u2019s Pension Scheme in April 2013. This is a de\ufb01ned contribution occupational pension
scheme provided by B&CE. Total contributions paid by the Group to the People\u2019s Pension in 2022 were \u00a36.0m (2021:
\u00a34.2m). The combined contributions to the Group's Personal Pension arrangement and the Peoples Pension scheme
therefore totalled \u00a310.7m in the period (2021: \u00a37.2m).
During 2012 the Trustees merged the six de\ufb01ned bene\ufb01t schemes into one new de\ufb01ned bene\ufb01t scheme, \u2018the Pendragon
Group Pension Scheme\u2019, which remains closed to new members and accrual of future bene\ufb01ts. The assets of the six
schemes have all been transferred into the new scheme and the bene\ufb01ts previously accrued in the six schemes were
transferred without amendment of the bene\ufb01t entitlement of members to the new scheme.
The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December
2005. This, together with documents issued by the Pensions Regulator, and Guidance Notes adopted by the Financial
Reporting Council, set out the framework for funding de\ufb01ned bene\ufb01t occupational pension schemes in the UK.
The Board of the Trustees of the pension scheme is currently composed of two member nominated trustees (i.e. members
of the pension scheme nominated by other members to be trustees), two employer representatives and a professional
independent trustee, who became chair during 2018. The Trustee of the scheme is required to act in the best interest of the
scheme\u2019s bene\ufb01ciaries. The appointment of the Trustee is determined by the scheme\u2019s trust documentation.
Under IAS 24, the pension schemes are related parties of the Group. At 31 December 2022 there was an outstanding
balance of \u00a30.9m (2021: \u00a30.9m)
Funding
The Pendragon Group Pension Scheme is fully funded by the Group\u2019s subsidiaries. The funding requirements are based on
the Scheme\u2019s actuarial measurement framework set out in the funding policies of the Scheme. Employees are not required
to contribute to the plans.
Explanation of the Pension De\ufb01cit
The liability to pay future pensions is a liability to settle a stream of future cash\ufb02ows. These future cash\ufb02ows have the
following pro\ufb01le:
30
25
Annual Payment \u00a3m
20
15
10
5
0
2030
2040
2050
2060
2070
2080
2090
2100
2110
2120
Deferreds
Pensioners
Expenses
'Deferred' are those pension scheme members not yet drawing a pension as at 31 December 2022; 'Pensioners' are those
in receipt of pension at 31 December 2022.
The actual total cash liabilities shown above are estimated at \u00a3766m. The value of these liabilities discounted to present
value at 31 December 2022 are \u00a3368.9m.
In order to meet those future cash\ufb02ows, the Pension Scheme has to grow its assets suf\ufb01cient to settle those liabilities. The
risk of the future value of those assets is dependent on the \ufb01nancial return; the liabilities will change dependent on the
rate of in\ufb02ation (as most pensions are in\ufb02ation adjusted) and longevity (how long the pensioner lives for and therefore
in receipt of pension). The pension de\ufb01cit is the gap between those assets and liabilities and can be calculated in one of
two ways, both of which are arithmetically identical: either forecast future assets at the asset growth rate to offset against
actual liabilities or discount future liabilities by the asset growth rate and compare with the present value of the assets. The
latter method is the one commonly adopted and accounting standards require that the asset growth rate (the discount
rate) should be estimated on a similar basis for every Group, to enhance comparability and to assume a relatively low level
of risk. The more realistic picture is provided by the actuarial valuation which considers what the prudent estimate of the
asset growth rate should be and hence what the gap is that the Group will be required to fund through cash contributions.
These actuarial valuations are conducted every three years (the triennial valuation). The last triennial valuation was
conducted as at 31 December 2021 giving the following comparison:
As at 31 December 2021
IAS 19
Actuarial
(Accounts)
valuation
\u00a3m
\u00a3m
Assets
545.6
545.6
Liabilities
(569.2)
(578.7)
Pension
de\ufb01cit
(23.6)
(33.1)
At each term p.a.
Nominal Gilt
Discount rate used
1.80%
Yield + 0.75%
Gilt in\ufb02ation
RPI in\ufb02ation
3.50%
curve
Gilt in\ufb02ation
curve less
CPI in\ufb02ation
3.00%
0.70% to 2020,
no adjustment
thereafter
The triennial valuation of the pension scheme re\ufb02ecting the position as at 31 December 2021 was agreed by the Trustees
on 2 November 2022. The Group has agreed with the trustees that it will aim to eliminate the de\ufb01cit over a period of
2 years from December 2021 until December 2023 by the payment of de\ufb01cit recovery contributions of \u00a313.06m each
year, increasing at 2.25% p.a. These contributions include the expected quarterly distributions from the Central Asset
Reserve (CAR) over the recovery period. Recognising that both the Trustee and the Group aim to achieve full funding
on a long term funding target, contributions will continue beyond 31 December 2023, but only in respect of the quarterly
distributions from the CAR. On this basis, contributions will reduce to \u00a33.45m p.a. from 1 January 2024, increasing at a rate
of 2.25% p.a, and will be paid until 31 December 2026.
The next triennial valuation of the pension scheme will re\ufb02ect the
position as at 31 December 2024.
Central Asset Reserve
Pendragon PLC is a general partner and the Pendragon Group Pension Scheme is a limited partner of the Pendragon
Scottish Limited Partnership (the Partnership). The Partnership holds properties with a book value of \u00a345.1m (with a most
recent market valuation of \u00a347.1m), which have been leased back to the Group at market rates. The Group retains control
over these properties, including the \ufb02exibility to substitute alternative properties. As such, the Partnership is consolidated
into the results of the Group. During the year the Group has paid \u00a33.2m to the Pendragon Group Pension Scheme through
the Partnership (2021: \u00a33.1m) and this will increase by 2.25% on 1 August each year until the leases expire on 31 July 2031.
These payments could cease in advance of that date if the Pension Scheme\u2019s actuarial valuation reaches a point where
there is a surplus of 5% over the liability value (on the actuarial triennial valuation basis). The Pension Scheme therefore
has a right to receive a future stream of rental receipts. No asset is recognised in these \ufb01nancial statements as the Group
has to consent to any proposed disposal of this asset by the Pension Scheme. However, if the Group became insolvent the
properties themselves would be retained by the Pension Scheme.
IAS 19 assumptions
The assumptions used by the actuary in performing the triennial valuation at 31 December 2021 include an element of
caution and are chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not
necessarily be borne out in practice. The IAS assumptions have been updated at 31 December 2022 and differ from those
used for the earlier independent statutory actuarial valuations explained above.
The principal assumptions used by the independent quali\ufb01ed actuaries for the purposes of IAS 19 for all schemes were:
2022
2021
In\ufb02ation - RPI
3.25%
3.50%
In\ufb02ation - CPI
2.85%
3.00%
Discount rate
5.00%
1.80%
111% of the standard tables S3PMA/
VitaCurves CMI 2020 M/F
Mortality table assumption *
S3PFA_M, Year of birth, no age rat
-
(1.25%)
ing projected using CMI_2021 (1.25%)
*The mortality table assumption implies the following expected future lifetime from age 65:
2022
2021
Years
Years
Males aged 45
22.7
22.6
Females aged 45
24.7
24.8
Males aged 65
21.4
21.3
Females aged 65
23.2
23.2
No adjustments have been made to mortality assumptions at the year end to re\ufb02ect the potential effects of Covid-19 as the
actual plan experience is not yet available and it is to soon to make a judgement on the impact of the pandemic on future
mortality improvements.
During 2010 the Government announced a change to the index to be used for pension increases from RPI to CPI. The
change applied to certain elements of pension increases depending on the nature of the pension entitlement, the period in
which it was earned and the rules of each scheme. The application of either RPI or CPI to calculate the pension liability has
been assessed for each scheme and the relevant elements of pension increases within each scheme.
The outcome of the formal consultation on the proposed changes to RPI was announced on 25 November 2020 and
con\ufb01rmed that RPI will match CPI including Housing (CPIH) from 2030.
On balance, it is reasonable to assume that RPI
reform is priced into the market implied RPI curve and therefore, as last year, the assumption makes no change to the base
derivation of the break-even RPI assumption, other than a general allowance for the in\ufb02ation risk premium of 0.2% within
the in\ufb02ation curve.
At present there is no reliable indicator for market expectations of CPI in\ufb02ation.
Therefore typical market practice is to
make an adjustment to the RPI assumption which takes into account the expected difference between the two in\ufb02ation
measures.
The RPI/CPI gap of 0.40% p.a. (2021: 0.50% p.a.) broadly re\ufb02ects an average of a long term assumed gap of
1.0% p.a. before 2030 and 0% thereafter, suitably weighted to re\ufb02ect the scheme\u2019s exposure to CPI liabilities.
The sensitivities regarding the principal assumptions used to measure scheme liabilities are set out below. The Group
regards these sensitivities as reasonably likely to occur.
Assumption
Change in assumption
Impact on scheme liabilities
Discount rate
Increase/decrease by 1.00%
Decrease of 10.9%/increase of 13.2%
Rate of in\ufb02ation
Increase/decrease by 0.25%
Increase of 1.2%/decrease of 1.5%
Mortality
Increase in life expectancy of 1 year
Increase by 2.9%
The sensitivities shown above are approximate.
The discount rate sensititity has been set at 1.00% for 2022 to re\ufb02ect
current market uncertainty.. Each sensitivity considers one change in isolation. The in\ufb02ation sensitivity includes the impact
of changes to the assumptions for revaluation and pension increases. The average duration of the de\ufb01ned bene\ufb01t obligation
at the period ending 31 December 2022 is 14 years (2021: 16 years).
The scheme typically exposes the Group to actuarial risks such as investment risk in assets (the return and gain or loss
on assets invested in), in\ufb02ation risk (as pensions typically rise in line with in\ufb02ation) and mortality risk (the length of time a
pensioner lives for) in respect of liabilities. As the accounting de\ufb01cit is calculated by reference to a discount rate linked to
corporate bonds then the Group is also exposed to interest rate risk i.e. the discounted value of liabilities will rise or fall in
line with changes in the interest rate used to calculate (discount) the future pension liabilities to present value. A decrease
in corporate bond yields, a rise in in\ufb02ation or an increase in life expectancy would result in an increase to scheme liabilities.
This would detrimentally impact the balance sheet position and may give rise to increased charges in future income
statements. This effect could be partially offset by an increase in the value of the scheme\u2019s assets. In order to further
mitigate risk, the scheme\u2019s investment strategy operates within a framework known as Liability Driven Investments (\u2018LDI\u2019)
i.e. the scheme invests in a mix of assets that are broadly expected to match the expected movement in the net present
value of liabilities. This is achieved by investing in assets that are broadly expected to hedge the underlying in\ufb02ation and
interest rate risks of 100% of the liabilities. The nature of the products available for liability driven investing mean that a
greater proportion of the scheme\u2019s assets can be used to invest in assets that are expected to have a higher growth rate
than low risk assets. The scheme's assets can therefore be broadly subdivided into two categories: return -seeking assets
which aim to achieve a level of growth to reduce the de\ufb01cit and \"protection seeking\" assets, which comprise the LDI
assets held to mitigate the changes in liabilities. There is further diversi\ufb01cation within these individual categories, as further
described below, and a strategy to \"de-risk\" assets when certain pre-de\ufb01ned benchmarks are met: in this way the Scheme
disinvests from assets with more risk into assets with lower risk.
The fair value of the scheme\u2019s assets which are not intended to be realised in the short term and may be subject to
signi\ufb01cant change before they are realised, and the value of the schemes liabilities, which is derived from cash \ufb02ow
projections over long periods and thus inherently uncertain, are:
Scheme assets and liabilities
2022
2021
\u00a3m
\u00a3m
Global equities
31.0
81.0
Credit funds
134.9
182.8
Private markets
69.0
92.8
Liability driven investments
86.3
106.7
Diversi\ufb01ed growth fund
20.7
52.0
Cash
24.4
30.3
Fair value of scheme assets
366.3
545.6
Present value of funded de\ufb01ned bene\ufb01t obligations
(368.9)
(569.2)
Net liability on the balance sheet
(2.6)
(23.6)
In addition to the assets and liabilities set out above there are a small number of insurance policies (with a value of \u00a34.4m at
the last triennial valuation date of 31 December 2021) purchased to pay annuities to 70 pensioners. These policies represent
both an asset and liability of the scheme and therefore have no impact on the net de\ufb01cit position.
None of the fair values of the assets shown above include any of the Group\u2019s own \ufb01nancial instruments or any property
occupied by, or other assets used by, the Group.
All of the assets are held within pooled investment vehicles (where cash is invested in a quoted fund designed by the fund
manager).
Investment
risk
The pension scheme has exposure to a number of risks:
Credit risk: this is the risk that one party to a \ufb01nancial instrument will cause a \ufb01nancial loss for the other party by failing to
discharge an obligation.
Currency risk: this is the risk that the fair value or future cash \ufb02ows of a \ufb01nancial asset will \ufb02uctuate because of changes in
foreign exchange rates.
Interest rate risk: this is the risk that the fair value or future cash \ufb02ows of a \ufb01nancial asset will \ufb02uctuate because of changes
in market interest rates.
Other price risk: this is the risk that the fair value of future cash \ufb02ows of a \ufb01nancial asset will \ufb02uctuate because of changes
in market prices (other than those arising from interest rate risk or currency risk).
Credit risk
The Scheme is subject to credit risk as it has credit fund exposure and has cash balances. The Scheme invests in pooled
investment vehicles and is therefore directly exposed to credit risk in relation to the holdings in the pooled investment
vehicles, and is indirectly exposed to credit risks arising on the \ufb01nancial instruments that make up the pooled investment
vehicles.
Direct credit risk arising from pooled investment vehicles is mitigated by the underlying assets of the pooled arrangements
being ring-fenced from the pooled manager, the regulatory environments in which the pooled managers operate and
diversi\ufb01cation of investments amongst a number of pooled arrangements.
Currency risk
The Scheme\u2019s liabilities are denominated in sterling. The Scheme is exposed to currency risk because some of its investments
are held in overseas markets. For example, the Scheme invests in pooled funds that hold overseas equities, global credit
and also funds where the manager has discretion to hold overseas assets. The respective fund managers hedge all, or a
proportion of,
these risks back to sterling.
Interest rate risk and other price risk
The Scheme is subject to interest rate risk on the investments comprising of bonds and cash held through pooled vehicles
and other price risk arises principally in relation to the Scheme\u2019s return-seeking portfolio which includes equities held in
pooled investment vehicles. The Scheme manages this exposure to other price risk by constructing a diverse portfolio of
investments across various markets.
Fair value determination
The fair value of \ufb01nancial instruments has been determined using the following fair value hierarchy:
Level 1: The unadjusted quoted price in an active market for identical assets or liabilities which the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 which are observable (i.e. developed using market data)
for the asset or liability, either directly or indirectly
Level 3: Inputs which are unobservable (i.e. for which market data is unavailable) for the asset or liability
A summary of the risks and the fair value determination is set out in the table below
Interest
Other
rate risk
price risk
Other
Level 1
Level 2
Level 3
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
LDI and cash
110.7
-
-
24.4
86.3
-
Credit funds
134.9
-
-
-
134.9
-
Equity
31.0
-
-
31.0
-
Private markets
-
69.0
-
45.6
23.4
DGF
-
20.7
-
20.7
-
245.6
31.0
89.7
24.4
318.5
23.4
Being:
Indirect - Bonds
221.2
-
-
-
221.2
-
Indirect - Cash
24.4
-
-
24.4
-
-
Indirect - equities
-
31.0
-
-
31.0
-
Indirect - multi-asset
-
-
89.7
-
66.3
23.4
245.6
31.0
89.7
24.4
318.5
23.4
No speci\ufb01c risk is assigned to investment held in multi asset pooled investment vehicles, as they are multi asset by
de\ufb01nition, and therefore the asset allocations within these funds, and the associated risk theron, change frequently.
The Private markets investments have a level 3 valuation as they comprise investments in one fund invested in property.
It is the policy of the Trustee and the Group to review the investment strategy at the time of each funding valuation and
keep this under review. The Trustee investment objectives and the processes undertaken to measure and manage the risks
inherent in the scheme investment strategy are documented in the scheme\u2019s Statement of Investment Principles.
The Group has reviewed implications of the guidance provided by IFRIC 14 and have concluded that it is not necessary
to make any adjustments to the IAS 19 \ufb01gures in respect of an asset ceiling or Minimum Funding Requirement as at 31
December 2022 and at 31 December 2021.
The Trust Deed provides Pendragon with an unconditional right to a refund of surplus assets assuming the full settlement
of plan liabilities in the event of a plan wind-up. Based on this right, any net surplus in the UK scheme is recognised in
full.
Movements in the net liability for de\ufb01ned bene\ufb01t obligations recognised in the balance sheet
2022
2021
\u00a3m
\u00a3m
Net liability for de\ufb01ned bene\ufb01t obligations at 1 January
(23.6)
(75.5)
Contributions received
13.1
12.8
Expense recognised in the income statement
(0.3)
(1.0)
Actuarial gains and losses recognised in the statement of other comprehensive income
8.2
40.1
Net liability for de\ufb01ned bene\ufb01t obligations at 31 December
(2.6)
(23.6)
The de\ufb01ned bene\ufb01t obligation can be allocated to the plan\u2019s participants as follows:
2022
2021
%
%
Deferred plan participants
51
58
Retirees
49
42
2022
2021
\u00a3m
\u00a3m
Actual return on assets
28.3
28.3
Expected contributions in following year
13.1
13.1
Total in the income statement
2022
2021
\u00a3m
\u00a3m
Net interest on obligation
0.3
1.0
The expense is recognised in the following line items in the income statement:
2022
2021
\u00a3m
\u00a3m
Finance costs
0.3
1.0
The expected discount rate as at 31 December 2022 was 5.00%. This compares to the discount rate of 1.80% used in the
calculation of the interest income for the period ending 31 December 2021.
Based on the reported de\ufb01cit of \u00a32.6m at 31 December 2022 and the discount rate assumption of 5.00% the charge in 2023
is expected to be \u00a30.1m.
Past service costs
The High Court ruling in the Lloyds Banking Group Pension Trustees Limited v Lloyds Bank plc and others published in
October 2018 held that UK pension schemes with Guaranteed Minimum Pensions (GMPs) accrued from 17 May 1990 must
equalise for the different effects of these GMPs between men and women. Allowance was made in the bene\ufb01t obligations
at 31 December 2018 for the estimated impact, with a cost recorded as a bene\ufb01t change in the Income Statement. The
Trustees and Company have yet to implement GMP equalisation and there is no new evidence. Therefore, the previous
GMP equalisation allowance has been retained but adjusted for the passage of time and to re\ufb02ect the estimated impact of
changes in market conditions.
A further High Court ruling on 20 November 2020 in the Lloyds Bank Trustees' case extends the scope of the GMP
equalisation to include previous transfer values paid from the scheme since 1990. An allowance for the estimated impact
of this was included in the bene\ufb01t obligations at 31 December 2020 of \u00a33.3m and similarly recorded as a past service cost
in the Income Statement in 2020. This approximate allowance for GMP equalisation in historic transfers out of the Plan has
been retained but adjusted for the passage of time and to re\ufb02ect the estimated impact of changes in market conditions.
Actuarial gains and losses recognised directly in the statement of other comprehensive income
2022
2021
\u00a3m
\u00a3m
Cumulative amount at 1 January
(37.4)
(77.5)
Recognised during the period
8.2
40.1
Cumulative amount at 31 December
(29.2)
(37.4)
De\ufb01ned bene\ufb01t income recognised in statement of other comprehensive income
2022
2021
\u00a3m
\u00a3m
Return on plan assets, excluding interest income
(184.1)
21.0
Experience gain on scheme liabilities
(25.6)
8.7
Changes in assumptions underlying the present value of scheme obligations
217.9
10.4
8.2
40.1
Changes in the present value of the de\ufb01ned bene\ufb01t obligation
2022
2021
\u00a3m
\u00a3m
Opening present value of de\ufb01ned bene\ufb01t obligation
569.2
599.1
Interest cost
10.1
8.3
Remeasurements:
Experience adjustments
25.6
(8.7)
Actuarial gains due to changes in demographic assumptions
(1.3)
4.2
Actuarial (gains) due to changes in \ufb01nancial assumptions
(216.6)
(14.6)
Bene\ufb01ts paid
(18.1)
(19.1)
Closing present value of de\ufb01ned bene\ufb01t obligation
368.9
569.2
Movement in fair value of scheme assets during the period
2022
2021
\u00a3m
\u00a3m
Opening fair value of assets
545.6
523.6
Interest income
9.8
7.3
Return on plan assets, excluding interest income
(184.1)
21.0
Contributions by employer
13.1
12.8
Bene\ufb01ts paid
(18.1)
(19.1)
End of period
366.3
545.6
History of experience adjustments
2022
2021
2020
2019
2018
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Present value of de\ufb01ned bene\ufb01t obligation
368.9
569.2
599.1
531.2
486.3
Fair value of scheme assets
366.3
545.6
523.6
472.2
418.0
De\ufb01cit in schemes
2.6
23.6
75.5
59.0
68.3
Experience adjustments on scheme liabilities:
Amount
(192.3)
(19.1)
74.6
55.6
(37.9)
Percentage of scheme liabilities (%)
(52.1%)
(3.4%)
12.5%
10.5%
(7.8%)
Experience adjustments on scheme assets:
Amount
(184.1)
21.0
50.0
54.3
(38.8)
Percentage of scheme assets (%)
(50.3%)
3.8%
9.5%
11.5%
(9.3%)
SECTION 6 - OTHER NOTES
This section contains the notes and information relating to acquisitions and disposals and related party transactions:
6.1
Business disposals
6.2
Related party transactions
6.1 Business disposals
Accounting policy
The results of businesses disposed of during the year are included up to the effective date of disposal using the acquisition
method of accounting.
Activity
During the year the Group disposed of its remaining motor cycle and trucks businesses for net proceeds of \u00a33.2m which
resulted in a pro\ufb01t on disposal of \u00a30.3m.
Net assets at the date of disposal:
Total net
book value
\u00a3m
Assets held for sale
-
Goodwill
2.1
Property, plant and equipment
0.2
Inventories
37.2
Trade and other receivables
0.1
Trade and other payables
(36.7)
2.9
Pro\ufb01t on sale of businesses
0.3
Total proceeds
3.2
Proceeds on sale comprise
Proceeds on sale satis\ufb01ed by cash and cash equivalents
3.2
Deferred consideration
0.7
3.9
No cash was disposed as part of any business disposal during the year.
Goodwill in respect of the DAF business was impaired by \u00a33.6m when it was classi\ufb01ed for sale.
Deferred consideration received during the year relates to the sale of the US businesses where a retention was held
pending the successful completion of a store development in progress at the time of the sale.
During the previous year the Group disposed of two US and three UK dealerships for proceeds of \u00a327.6m and realising a
pro\ufb01t of \u00a30.7m on disposal.
6.2 Related party transactions
Subsidiaries
The Group's ultimate parent company is Pendragon PLC. A listing of subsidiaries is shown within the \ufb01nancial statements
of the Group on page 205.
Transactions with key management personnel
The key management personnel of the Group comprise the executive and non-executive directors. The details of the
remuneration, long term incentive plans, shareholdings, share option and pension entitlements of individual directors are
included in the Directors' Remuneration Report on pages 77 to 95.
Directors of the Group and their immediate relatives control 1.000% of the ordinary shares of the Group.
During the year key management personnel compensation was as follows:
2022
2021
\u00a3m
\u00a3m
Short term employee bene\ufb01ts
3.0
3.2
Post-employment bene\ufb01ts
0.1
0.1
Share based payments
1.9
2.0
5.0
5.3
6.3 Contingent liabilities
One of the Group\u2019s subsidiary companies, Pinewood Technologies PLC (\u201cPinewood\u201d), is currently in dispute with one of its
former software resellers, Pinewood Technologies Asia Paci\ufb01c Limited (\u201cPAP\u201d).
PAP historically contributed c.\u00a30.2m of pro\ufb01t p.a. to the overall Pinewood performance. PAP owes Pinewood approximately
\u00a30.5m (including daily interest and other charges), which relates to unpaid invoices arising from the reseller agreements.
Subsequent to the non-payment of this debt, PAP has claimed that Pinewood is in breach of the reseller agreements and
has made a claim against Pinewood. It is not practicable to estimate any potential \ufb01nancial effect of this claim because it
is at a level that Pinewood considers to be entirely disproportionate to the scale of the business. This claim includes a claim
for \u2018loss of pro\ufb01ts\u2019 which is speci\ufb01cally excluded from the reseller agreement.
Notwithstanding the size of the claim, Pinewood considers PAP's claim to be entirely misconceived and lacking merit such
that no provision needs to be made for it on that basis. Pinewood has also applied for summary judgment to dismiss PAP's
claim and on Pinewood's claim for payment of the outstanding debt.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12628": {
"value": "Pendragon PLC",
"dimensions": {
"concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12629": {
"value": "PLC",
"dimensions": {
"concept": "ifrs-full:LegalFormOfEntity",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12630": {
"value": "United Kingdom",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12631": {
"value": "United Kingdom",
"dimensions": {
"concept": "ifrs-full:CountryOfIncorporation",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12632": {
"value": "United Kingdom",
"dimensions": {
"concept": "ifrs-full:DomicileOfEntity",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12634": {
"value": "2022-12-31",
"dimensions": {
"concept": "ifrs-full:DateOfEndOfReportingPeriod2013",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12636": {
"value": "The consolidated \ufb01nancial statements of the Group as at and for the year ended 31 December 2022 are prepared in
accordance with International Financial Reporting Standards as adopted in the United Kingdom (\"adopted IFRS\").
",
"dimensions": {
"concept": "ifrs-full:StatementOfIFRSCompliance",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12645": {
"value": "Going concern
Notwithstanding net current liabilities of \u00a354.7m as at 31 December 2022 for the Group, the Directors are, at the time
of approving the \ufb01nancial statements, satis\ufb01ed that the Group and Company has adequate resources to continue in
operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis of accounting in
preparing the \ufb01nancial statements.
The Directors have considered the potential impact of a macro-economic downturn,
a market correction in used pricing and shortfalls in both new and used car supply resulting from shortages in microchips
impacting manufacturing.
The Group meets its day-to-day working capital requirements from a revolving credit facility of \u00a375m and senior note
of \u00a397m together with cash balances and a requirement for ongoing access to rolling vehicle credit stocking facilities
amounting to \u00a3582.7m at 31 December 2022 as disclosed in note 4.2. The senior note is due for renewal in March 2027 and
the revolving credit facility is due for renewal in March 2025, with a further two, one-year options available at the election
of lenders to March 2026 and then March 2027. The senior note and revolving credit facility have quarterly leverage and
\ufb01xed charge covenants, as well as an absolute EBITDA covenant, a breach of which would result in the amounts drawn
becoming repayable on demand.
The Group remained compliant with its banking covenants throughout the year to 31
December 2022.
In the context of the above, the directors have prepared cash \ufb02ow forecasts for the period to 31 March 2024 which indicate
that, taking account of reasonably possible downsides, the Group will have suf\ufb01cient funds to meet its liabilities as they fall
due for that period. The Directors have modelled scenarios as follows:
1. A base cash \ufb02ow forecast. The 2023 \ufb01gures in this forecast are based on the Group\u2019s 2023 budget, which re\ufb02ect current
run-rates and expected strategic improvements.
The 2024 \ufb01gures in the base cash \ufb02ow forecast are based on the 2023
budget with a modest growth rate applied to gross pro\ufb01t and operating costs.
2. A severe, but plausible downside scenario. The directors have also prepared a sensitised forecast which considers the
impact of certain severe but plausible downside events, when compared to the base case. This scenario re\ufb02ects a severe
downturn to vehicle volumes and margins. This considers both a worsening in economic conditions and restricted new car
supply due to manufacturing constraints.
In this scenario, capital expenditure has been reduced to run-rate expenditure
and projects committed to and the directors have assessed that the business would operate with lower staf\ufb01ng levels
through the non-replacement of leavers.
This scenario demonstrates that the Group would remain well within its facility
limits and would retain signi\ufb01cant headroom on liquidity covenants. The scenario shows that the Group would also
remain within its minimum EBITDA covenant although this is dependant upon the mitigating actions referred to above.
Based on the above, the directors are con\ufb01dent that the Group and Company will have suf\ufb01cient funds to continue
to meet its liabilities as they fall due for at least 12 months from the date of approval of the \ufb01nancial statements, and
therefore the directors believe it remains appropriate to prepare the \ufb01nancial statements on a going concern basis.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoingConcernExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12778": {
"value": "Judgements
The Group applies judgement in how it applies its accounting policies, which do not involve estimation, but could materially
affect the numbers disclosed in these \ufb01nancial statements. There are no key accounting judgements, without estimation,
that have been applied in these \ufb01nancial statements.
Accounting Estimates
The preparation of \ufb01nancial statements in conformity with adopted IFRSs requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the \ufb01nancial statements and the reported amounts of
revenues and expenses during the reporting year. Although these estimates are based on management\u2019s best knowledge
of the amount, events or actions, actual results ultimately may differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the circumstances.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the revision affects both current and future periods. The
directors consider the following to be the key estimates applicable to the \ufb01nancial statements, which have a signi\ufb01cant risk
of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next \ufb01nancial year or in the
long term:
Key estimate area
Key assumption
Potential
impact within
the next
\ufb01nancial year
Potential
impact in
the longer
term
Note
reference
Inventory fair value
(UK used inventory
of \u00a3388.6m (2021:
\u00a3351.4m))
The Group assessment of fair values of used
inventory involves an element of estimation. The key
assumption is estimating the likely sale period and
the expected pro\ufb01t or loss on sale for each of our
inventory items that are held at the year end point.
We conduct this analysis by looking at stock by age
category and comparing historical trends and our
forward expectations on these assumptions.
3
3.4
Retirement bene\ufb01t
obligations
The main assumptions in determining the Group\u2019s
Retirement Bene\ufb01t Obligations are: discount rate,
mortality and rate of in\ufb02ation. Full detail is included
in the pension note, 5.1.
3
3
5.1
Estimates and judgements
The actual tax on the Group's pro\ufb01ts is determined according to complex laws and regulations. Where the effect of
these laws and regulations is unclear, estimates are used in determining the liability for the tax to be paid on pro\ufb01ts
which are recognised in the \ufb01nancial statements. The Group considers the estimates, assumptions and judgements to be
reasonable but this can involve complex issues which may take a number of years to resolve. The \ufb01nal determination of tax
liabilities could be different from the estimates re\ufb02ected in the \ufb01nancial statements but the Group believes that none have
a signi\ufb01cant risk of causing a material adjustment to the carrying amount of the liability within the next \ufb01nancial year.
Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. In particular,
judgement is used when assessing the extent to which deferred tax assets should be recognised with consideration given
to the timing and level of future taxable income. The unrecognised deferred tax assets are disclosed below.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12847": {
"value": "Basis of consolidation
The consolidated \ufb01nancial statements include the \ufb01nancial statements of Pendragon PLC, all its subsidiary undertakings
and investments. Consistent accounting policies have been applied in the preparation of all such \ufb01nancial statements.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. The \ufb01nancial statements of subsidiaries are included in the consolidated \ufb01nancial statements from the date that
control commences until the date that control ceases.
Intragroup balances and any unrealised gains or losses or income and expenses arising from intragroup transactions, are
eliminated in preparing the consolidated \ufb01nancial statements.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12859": {
"value": "Foreign currencies
Transactions in foreign currencies are translated to the respective functional currency of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary
assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated
at fair value are translated to sterling at foreign exchange rates ruling at the dates the fair value was determined. Foreign
currency differences arising on retranslation are recognised in pro\ufb01t or loss.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are
translated to sterling at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign
operations are translated to sterling at rates approximating to the foreign exchange rates ruling at the dates of the
transactions.
Foreign currency differences arising on the retranslation of a \ufb01nancial liability designated as a hedge of a net investment
in a foreign operation are recognised directly in equity, in the foreign currency translation reserve, to the extent the hedge
is effective. To the extent the hedge is ineffective, such differences are recognised in pro\ufb01t or loss. When the hedged net
investment is disposed of, the cumulative amount in equity is transferred to pro\ufb01t and loss on disposal.
In respect of all foreign operations, any differences that have arisen after 1 January 2004, the date of transition to IFRS, are
presented as a separate component of equity.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12862": {
"value": "Transactions in foreign currencies are translated to the respective functional currency of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary
assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated
at fair value are translated to sterling at foreign exchange rates ruling at the dates the fair value was determined. Foreign
currency differences arising on retranslation are recognised in pro\ufb01t or loss.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12883": {
"value": "Cash and cash equivalents
For the purposes of the cash \ufb02ow statement, cash and cash equivalents comprise deposits with banks and \ufb01nancial
institutions, bank and cash balances, and liquid investments, net of bank overdrafts. Bank overdrafts that are repayable
on demand and form an integral part of the Group's cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash \ufb02ows. In the balance sheet, bank overdrafts are included in current
borrowings.
Cash and cash equivalents
Restated - see note 1
Carrying value
Carrying value
and fair value
and fair value
2022
2021
\u00a3m
\u00a3m
Bank balances and cash equivalents
69.4
37.6
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents in the Balance Sheet
171.9
200.1
Bank overdrafts repayable on demand and used for cash management in the
(102.5)
(162.5)
Balance Sheet
Cash and cash equivalents in the statement of cash \ufb02ows
69.4
37.6
Bank overdrafts re\ufb02ect the aggregated overdrawn balances of Group companies (even if those companies have other
positive cash balances).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12890": {
"value": "Government grants
Government grants are recognised when there is reasonable assurance the grants will be received and the conditions
of the grant will be complied with. There was no income from government grants during 2022 (2021: \u00a31.6m, being the
Coronavirus Job Retention Scheme, is included within payroll expenses). No business rates relief was received in 2022
(2021: \u00a38.7m was received by way of business rates relief by way of waiver of these charges)
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12916": {
"value": "Impairment
The carrying amounts of the Group's assets, other than inventories (see note 3.4) and deferred tax assets (see note 2.7),
are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated.
For goodwill the recoverable amount is estimated at each balance sheet date. The recoverable amount is the higher of fair
value less costs to sell and value in use. In assessing value in use, the estimated future cash \ufb02ows are discounted to their
present value using a pre-tax discount rate that re\ufb02ects current market assessments of the time value of money and the
risks speci\ufb01c to the asset for which the estimates of future cash \ufb02ows have not been adjusted.
In assessing fair value less costs to sell, the estimated future cash \ufb02ows are multiplied by an appropriate trading multiple
or by assessing the fair value of the individual assets.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates
cash in\ufb02ows from continuing use that are largely independent of the cash in\ufb02ows from other groups of assets ('the cash
generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing is allocated to
cash generating units. Management have determined that the cash generating units of the Group are the motor franchise
groups and other business segments.
An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash generating units are allocated \ufb01rst to reduce the carrying amount of any
goodwill allocated to cash generating units and then, to reduce the carrying amount of the other assets in the unit on
a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised. The impact of the current year impairment review
can be seen in note 3.1.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f12944": {
"value": "Adoption of new and revised standards and new standards and interpretations not yet adopted
No new or amended standards and interpretations have been adopted during the year.
IFRS 17 Insurance Contracts is effective for annual periods beginning after 1 January 2023 and is not expected to have a
signi\ufb01cant impact on the Group\u2019s consolidated \ufb01nancial statements.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13534": {
"value": "SECTION 2 - RESULTS AND TRADING
This section contains the notes and information to support the results presented in the income statement:
2.1
Revenue
2.5
Audit fees
2.2
Net operating expenses
2.6
Non-underlying items
2.3
Operating segments
2.7
Taxation
2.4
Staff costs
2.8
Earnings per share
2.1 Revenue
Accounting policy
Revenue is measured based on the consideration speci\ufb01ed in a contract with a customer and excludes amounts collected
on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a
customer.
The following is a description of principal activities from which the Group generates its revenue categorised by the
reportable segments as detailed in note 2.3.
UK Motor segment and US Motor segment
The UK Motor and US Motor segments principally generate revenue from the sale of new and used motor vehicles, together
with the supply of motor vehicle parts, servicing and repair activities, collectively referred to as aftersales.
Products and
services may be sold separately or in bundled packages. Examples of a bundled package will include the supply of a vehicle
with an extended warranty or a servicing plan. For bundled packages, the Group accounts for individual products and
services separately as they are distinct items, as each performance obligation within that contract is separately identi\ufb01able
from other items in the bundled package. The consideration is proportionately allocated between separate products and
services in a bundle based on their stand-alone selling prices. The stand-alone selling prices are determined based on the
list prices at which the Group sells these items and are separately identi\ufb01ed on the customer's invoice.
The Group has a number of manufacturer partners who will provide goods/services to customers, for example a warranty
or free servicing when purchasing a new vehicle. Such items do not have a contractual obligation on the Group as the
obligation lies with the manufacturer and therefore no revenue is recognised in respect of these items.
Products
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
and services
New and used
The Group recognises revenue on the sale of motor vehicles and parts revenue when they have
vehicles, parts and
been supplied to the customer. The satisfaction of the performance obligation occurs on delivery
accessories
or collection of the product. Vehicles are usually paid for prior to delivery though selected
corporate operators may be granted terms of up to seven days. Parts are either paid for on
delivery or within one month, dependant upon whether or not the customer is retail or has trade
terms.
Aftersales service
The Group recognises revenue when the one time service has been completed. Revenue is
and repairs
recognised at this point provided that the revenue and costs can be measured reliably, the
recovery of the consideration is probable and there is no continuing management involvement
with the goods. Payment terms are upon completion of the service or within one month,
dependant upon whether or not the customer is retail or trade.
Commissions
The Group receives commissions when it arranges \ufb01nance and insurance packages for its
received
customers to purchase its products and services, acting as agent on behalf of various \ufb01nance and
insurance companies. Any commission earned is recognised when the customer draws down the
\ufb01nance or commences the insurance policy from the supplier which coincides with the delivery of
the product or service. Commissions receivable are paid typically in the month after the \ufb01nance is
drawn down.
Vehicle warranty
The Group offers a warranty product on vehicles supplied with a guarantee period typically
ranging from 3 months to 3 years. The Group recognises revenue on warranties on a straight-line
basis over the warranty period. The performance obligation of the Group, being the recti\ufb01cation
of mechanical faults on vehicles sold, will be the period over which the customer can exercise
their rights under the warranty and therefore revenue should be recognised over the period of
the warranty. Warranties are paid for prior to the commencement of the policy. The unrecognised
income is held within deferred income (see note 3.8). There were no such warranties offered for
sale in the US Motor segment.
Leasing
The leasing segment generates revenue from the provision of vehicle leasing services, principally to \ufb02eets run by various
commercial operators. Vehicles are supplied to customers on operating leases and may include servicing and maintenance
agreements, which are bundled into the overall contract. For bundled packages, the Group accounts for individual products
and services separately as they are distinct items, as each performance obligation within that contract is separately
identi\ufb01able from other items in the bundled package. At the end of each contract the Group will generate revenue from
the disposal of the vehicle, recovery of any recti\ufb01cation work and in some instances additional rentals beyond the original
contract term.
Products
and services
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
Leasing
Where vehicles are supplied to a leasing group for contract hire purposes and the Group
undertakes to repurchase the vehicle at a predetermined date and value the transfer of control is
deemed not to have transferred outside the Group and consequently no sale is recognised. As a
result the accounting for the arrangement re\ufb02ects the Group's retention of the asset to generate
future rentals and, in accordance with IFRS 16 Leases, the Group is considered to be an operating
lessor for all arrangements in place. The initial amounts received in consideration from the
leasing group are held as deferred income allocated between the present value of the repurchase
commitment, held within trade and other payables and a residual amount of deferred revenue held
within deferred income. A \ufb01nance charge is accrued against the present value of the repurchase
commitment and recorded as a \ufb01nance expense in the income statement. The remaining deferred
revenue, which effectively represents rentals received in advance, is taken to the income
statement on a straight line basis over the related lease term. No additional disclosures are made
under IFRS 16 as there are no future rentals receivable. These vehicles are held within 'property,
plant and equipment' at their cost to the Group and are depreciated to their residual values over
the terms of the leases. These assets are transferred into inventory at their carrying amount when
they cease to be rented and they become available for sale as part of the Group's ordinary course
of business. Rentals are billed and paid for on a monthly basis.
Maintenance
The Group offer a maintenance contract to customers to cover routine servicing and unexpected
repairs of vehicles under a leasing contract. Revenue is recognised over the period of the contract
on a straight line basis. Maintenance contracts are billed and paid for on a monthly basis.
Used Vehicles
The Group recognises revenue on the sale of ex contract hire motor vehicles when they have been
supplied to the customer. This occurs on delivery or collection of the product. Vehicles are paid for
on delivery.
Software
The Group, through its Pinewood business, supplies dealer management systems to motor vehicle dealers. These systems
include consultancy, training and installation services and the right to use the Group's software over a contractual period.
Products and services may be sold separately or in bundled packages. Examples of a bundled package will include system
consultancy, on and off site training for users together with the right for a number of users to use the software.
For
bundled packages, the Group accounts for individual products and services separately as they are distinct items, as
each performance obligation within that contract is separately identi\ufb01able from other items in the bundled package.
The consideration is allocated between separate products and services in a bundle based on their stand-alone selling
prices. The stand-alone selling prices are determined based on the list prices at which the Group sells these items and are
separately identi\ufb01ed on the customer's contract and subsequent invoice.
Products
and services
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
Software
Pinewood supply its software on a hosting basis and licence speci\ufb01c numbers of users to access
this service. As such Pinewood supply 'Software as a Service' (SaaS). The software licences
are provided only in conjunction with a hosting service, the customer cannot take control of
the licence or use the software without the hosting service and as such the customer cannot
bene\ufb01t from the licence on its own and the licence is not separable from the hosting services.
Therefore, the licence is not distinct and would be combined with the hosting service. The Group's
assessment of its performance obligation under IFRS 15 of providing SaaS is that revenue is
recognised over the period of the contract. SaaS is billed one month in advance of a quarterly
billing cycle ensuring payment is received prior to commencement of usage.
Training,
Installation and
Consultancy
The Group recognises revenue on the provision of any consultancy time, training and installation
at the point of providing and delivering the service. Consultancy hours are billed at the time of
delivery. Training courses are billed at the time of booking which may be in advance of the date
the training is scheduled for. Installation hours are billed at the time of completion of the service.
Disaggregation of revenue
In the following table, revenue is disaggregated by primary geographical market, major products/service lines and timing
of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group\u2019s four strategic
divisions, which are its reportable segments, see note 2.3
__UK Motor __
__Software__
__Leasing__
discontinued
__US Motor__
____Total____
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
Primary geographical
markets
Europe
3,536.2
3,332.7
18.1
18.8
64.7
69.1
-
-
3,619.0
3,420.6
North America
-
-
-
-
-
-
-
28.6
-
28.6
Africa
-
-
0.6
0.5
-
-
-
-
0.6
0.5
Asia
-
-
0.4
0.2
-
-
-
-
0.4
0.2
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Major products/service
lines
Aftersales revenue
276.1
261.9
-
-
-
-
-
2.8
276.1
264.7
Used vehicle revenue
1,808.6
1,708.4
-
-
-
-
-
3.0
1,808.6
1,711.4
New vehicle revenue
1,451.5
1,362.4
-
-
-
-
-
22.8
1,451.5
1,385.2
Software revenue
-
-
19.1
19.5
-
-
-
-
19.1
19.5
Leasing revenue
-
-
-
-
64.7
69.1
-
-
64.7
69.1
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Timing of revenue
recognition
At point in time
3,526.7
3,322.7
1.4
1.9
30.9
32.1
-
28.6
3,559.0
3,385.3
Over time
9.5
10.0
17.7
17.6
33.8
37.0
-
-
61.0
64.6
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Contract liabilities
The Group recognises the following contract liabilities:
2022
2021
\u00a3m
\u00a3m
Deposits received from customers
30.4
26.2
Unearned proportion of warranty policies sold
21.2
16.5
Movements in the deferred income balance in respect of the warranty policies is presented in note 3.8 which shows the
value of policies sold during the year and the income recognised during the year.
2.2 Net operating expenses
2022
2021
\u00a3m
\u00a3m
Net operating expenses:
Distribution costs
(185.2)
(171.5)
Administrative expenses
(181.3)
(166.5)
Impairment loss on trade receivables
(0.3)
(0.2)
Rents received
2.9
1.8
(363.9)
(336.4)
2.3 Operating segments
The Group has revised its reporting segments.
In January 2022 the Group re-organised its management and reporting
structure.
The signi\ufb01cant changes were that the Franchised UK Motor and Car Store operations were brought under the
management of the UK Motor operation. This revised segmental structure is re\ufb02ected in the internal reporting structure as
presented to the Chief Operating Decision Maker. In the 2022 \ufb01nancial statements therefore, the Franchised UK Motor and
Car Store segments are no longer reported separately.
The results of the Franchised UK Motor and Car Store segments for the comparative period have been aggregated into the
new UK Motor Group segment and is re-presented as follows for the period ended 31 December 2021:
UK Motor segment restatement
UK Motor
segment as
Franchised
restated
UK Motor
Car Store
31 Dec 21
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,191.2
141.5
3,332.7
Inter-segment revenue
-
-
-
Revenue from external customers
3,191.2
141.5
3,332.7
Operating pro\ufb01t before non-underlying
85.8
1.6
87.4
items
Other income and non-underlying items
(4.5)
(0.3)
(4.8)
Operating pro\ufb01t
81.3
1.3
82.6
Finance expense
-
-
-
Finance income
-
-
-
Segmental pro\ufb01t before tax
81.3
1.3
82.6
Other items included in the income statement are as follows:
Depreciation and impairment
(31.1)
(0.1)
(31.2)
Impairment of property, plant and equipment
(4.3)
(0.3)
(4.6)
Amortisation
(0.4)
-
(0.4)
Share based payments
(2.9)
-
(2.9)
Termination and severance costs
(1.8)
-
(1.8)
Business closure costs
(0.2)
-
(0.2)
Other income - pro\ufb01t on the sale of business
-
1.8
-
1.8
es and property, plant and equipment
Following the revisions to the Group\u2019s operating segments as outlined above there are now four reportable segments,
as described below, which are the Group's strategic business units. The segments offer different ranges of products and
services and are managed separately because they require their own specialism in terms of market and product. For
each of these segments, the Executive Committee which is deemed to be the Chief Operating Decision Maker (CODM),
reviews internal management reports on at least a monthly basis. The review of these management reports enables the
CODM to allocate resources to each segment and form the basis of strategic and operational decisions, such as acquisition
strategy,closure programme or working capital allocation. The following summary describes the operations in each of the
Group's reportable segments:
UK Motor
. This segment comprises the Group's motor vehicle retail, parts wholesale and \ufb02eet operations from its
franchised dealer network and the Group's used vehicle retail operation branded Car Store. These encompass the sale
of new and used motor cars, motorbikes, trucks and vans, together with associated aftersales activities of service, body
repair and parts sales.
Software
. This segment comprises the Group's activities as a dealer management systems provider.
Leasing
. This segment comprises the Group's contract hire and leasing activities.
US Motor
. This segment comprises the Group's retail operation in California in the United States encompassing the sale
of new and used motor cars, together with associated aftersales activities of service and parts sales. This segment ceased
trading in 2021 following the sale of its remaining stores.
The tables of \ufb01nancial performance presented in the Operational and Financial Review on pages 24 to 37 are based upon
these segmental reports.
Inter-segment transfers and transactions are entered into under normal commercial terms and conditions that would also
be available to unrelated third parties.
Year ended 31 December 2022
Continuing
Discontinued
Group operations operations
UK Motor
Software
Leasing
interest
Sub total
US Motor
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,536.2
25.4
83.7
-
3,645.3
-
3,645.3
Inter-segment revenue
-
(6.3)
(19.0)
-
(25.3)
-
(25.3)
Revenue from external customers
3,536.2
19.1
64.7
-
3,620.0
-
3,620.0
Operating pro\ufb01t/(loss) before non-underlying
69.1
11.0
19.9
-
100.0
(1.5)
98.5
items
Non-underlying items
2.5
-
-
-
2.5
-
2.5
Operating pro\ufb01t/(loss)
71.6
11.0
19.9
-
102.5
(1.5)
101.0
Finance expense
-
-
(2.5)
(42.3)
(44.8)
-
(44.8)
Finance income
-
-
-
1.0
1.0
-
1.0
Segmental pro\ufb01t/(loss) before tax
71.6
11.0
17.4
(41.3)
58.7
(1.5)
57.2
Other items included in the income statement are as follows:
Depreciation and impairment
(28.5)
(0.1)
(36.1)
-
(64.7)
-
(64.7)
Impairment of property, plant and equipment
1.2
-
-
-
1.2
-
1.2
Amortisation
(0.6)
(4.2)
(0.1)
-
(4.9)
-
(4.9)
Share based payments
3.3
-
-
-
3.3
-
3.3
Termination and severance costs
(0.2)
-
-
-
(0.2)
-
(0.2)
Business closure costs
0.2
-
-
-
0.2
-
0.2
Other income - pro\ufb01t on the sale of businesses
7.7
-
-
-
7.7
-
7.7
and property, plant and equipment
Year ended 31 December 2021
Continuing
Discontinued
Group operations operations
UK Motor
Software
Leasing
interest
Sub total
US Motor
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,332.7
24.4
89.9
-
3,447.0
28.6
3,475.6
Inter-segment revenue
-
(4.9)
(20.8)
-
(25.7)
-
(25.7)
Revenue from external customers
3,332.7
19.5
69.1
-
3,421.3
28.6
3,449.9
Operating pro\ufb01t before non-underlying items
87.4
12.5
17.5
-
117.4
(1.1)
116.3
Non-underlying items
(4.8)
-
-
-
(4.8)
(3.9)
(8.7)
Operating pro\ufb01t
82.6
12.5
17.5
-
112.6
(5.0)
107.6
Finance expense
-
-
(2.7)
(32.2)
(34.9)
(0.3)
(35.2)
Finance income
-
-
-
0.9
0.9
-
0.9
Segmental pro\ufb01t before tax
82.6
12.5
14.8
(31.3)
78.6
(5.3)
73.3
Other items included in the income statement are as follows:
Depreciation and impairment
(31.2)
(0.6)
(38.5)
-
(70.3)
(0.1)
(70.4)
Impairment of property, plant and equipment
(4.6)
-
-
-
(4.6)
(5.0)
(9.6)
Amortisation
(0.4)
(3.7)
(0.1)
-
(4.2)
-
(4.2)
Share based payments
(2.9)
-
-
-
(2.9)
-
(2.9)
Termination and severance costs
(1.8)
-
-
-
(1.8)
-
(1.8)
Business closure costs
(0.2)
-
-
-
(0.2)
0.2
-
Other income - pro\ufb01t on the sale of businesses
1.8
-
-
-
1.8
0.9
2.7
and property, plant and equipment
Geographical information.
All segments, with the exception of the US Motor Group in the United States originate in the United Kingdom. The US Motor
Group segment is a discontinued operation.
2.4 Staff costs
The average number of people employed by the Group in the following areas was:
2022
2021
Number
Number
Sales
1,823
1,811
Aftersales
2,487
2,470
Administration
1,216
1,208
5,526
5,489
Costs incurred in respect of these employees were:
2022
2021
\u00a3m
\u00a3m
Wages and salaries
192.1
182.9
Less -
receipts from the Government Coronavirus Job Retention Scheme
-
(1.6)
Social security costs
20.4
17.9
Contributions to de\ufb01ned contribution plans (see note 5.1)
11.7
7.2
Cost recognised for de\ufb01ned bene\ufb01t plans (see note 5.1)
0.3
1.0
Share based payments (see note 4.6)
3.3
2.9
227.8
210.3
Information relating to directors' emoluments, share options and pension entitlements is set out in the Directors'
Remuneration Report on pages 77 to 95.
During the previous year the Group appropriately used government assistance from the Coronavirus Job Retention
Scheme and has bene\ufb01tted from \u00a31.6m of furlough support during 2021, which was recognised against the wages and
salaries expense. The furlough support is included in the underlying result as the Group do not consider it to meet the
de\ufb01nition of non-underlying when taken together with the payroll costs that the amount compensates for. No Government
grants were received in 2022.
2.5 Audit fees
2022
2021
Auditor\u2019s remuneration:
\u00a3000
\u00a3000
Fees payable to the company's Auditor for the audit of the company's annual accounts
770.0
513.0
Fees payable to the company's Auditor and its associates for other services:
Audit of the company's subsidiaries pursuant to legislation
385.0
300.0
Audit-related assurance services
155.0
140.0
1,310.0
953.0
2.6 Non-underlying items
Non-underlying income and expenses are items that are not incurred in the normal course of business and are suf\ufb01ciently
signi\ufb01cant and/or irregular to impact the underlying trends in the business.
2022
2021
\u00a3m
\u00a3m
Within operating expenses:
Impairment of goodwill
(3.6)
-
Impairment of property, plant and equipment
(1.0)
-
Impairment of right of use assets
(0.2)
(9.6)
Termination and severance costs
(0.2)
(1.8)
Aborted transaction related expenses
(0.4)
-
Business closure income
0.2
-
(5.2)
(11.4)
Within other income - gains on the sale of businesses, property, plant and equipment:
Gains on the sale of businesses
0.3
0.7
Gains on the sale of property
7.4
2.0
7.7
2.7
Within net \ufb01nance expense:
Costs incurred on re\ufb01nancing
(2.6)
-
Net interest on pension scheme obligations
(0.3)
(1.0)
(2.9)
(1.0)
Total non-underlying items before tax
(0.4)
(9.7)
Non-underlying items in tax
1.4
2.2
Total non-underlying items after tax
1.0
(7.5)
The following amounts have been presented as non-underlying items in these \ufb01nancial statements:
Goodwill has been reviewed for any possible impairment and as a result of this review there was an impairment charge of
\u00a33.6m made during the year (2021: \u00a3nil) (see note 3.1). The \u00a33.6m impairment related to the goodwill in respect of the DAF
business which was classi\ufb01ed for sale when the Group presented its interim results at 30 June 2022, prior to its eventual
sale in October 2022.
Group property, plant and equipment and assets held for sale have been reviewed for possible impairments. As a result of
this review there was no impairment charge against assets held for sale made during the year (2021: \u00a3nil) and property,
plant and equipment of \u00a31.2m (of which \u00a30.2m was in respect of right of use assets) (2021: \u00a39.6m all right of use assets).
There were no reversals of previous impairment charges in respect of assets held for sale where anticipated proceeds less
costs to sell have increased over their impaired carrying values (2021: \u00a3nil).
There were termination and severance costs of \u00a30.2m in FY22 (2021: \u00a31.8m of which \u00a31.3m related to the transfer of
Finance process from dealerships to a centralised shared service centre as part of the Finance Transformation in the UK).
This cost is driven by a combination of a small number of redundancy payments and relocation costs.
During the year approaches and subsequent bids were made by external parties to the purchase the Company. As a
consequence professional and advisory fees of \u00a30.4m were incurred in assisting with the due diligence process undertaken
by the parties.
No internal costs have been allocated against this process as non-underlying in respect of time and
resource of Group management.
Following the disposal of the US business in 2021 a release of an over accrued settlement resulted in a credit of \u00a30.2m
being recognised in the year.
Other income consists of the pro\ufb01t or loss on disposal of businesses and property, plant and equipment. This comprises a
\u00a30.3m gain (2021: \u00a30.7m gain in respect of discontinued operations ) on disposals of motor vehicle dealerships during the
year, a \u00a37.4m pro\ufb01t on sale of properties (2021: \u00a32.0m). These do not include routine transactions in relation to the disposal
of individual assets, and only relates to the disposal or closure of motor vehicle dealerships and associated properties.
During the year, upon the successful completion of the re\ufb01nancing of the Group in March 2022, a net loss of \u00a32.6m was
recorded which comprised of settlement of obligations under the previous arrangement.
The net \ufb01nancing return on pension obligations in respect of the de\ufb01ned bene\ufb01t schemes closed to future accrual is shown
as a non-underlying item due to the irregularity of this amount historically and it is not incurred in the normal course of
business. A net expense of \u00a30.3m has been recognised during the year (2021: \u00a31.0m).
2.7 Taxation
Accounting policy
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in other comprehensive income, in which case it is recognised in the statement
of comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability method, recognising temporary differences between the
carrying amounts of assets and liabilities for \ufb01nancial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not recognised: initial recognition of goodwill, the initial recognition of assets or
liabilities in a transaction that is not a business combination that affect neither accounting nor taxable pro\ufb01t. The amount
of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable pro\ufb01ts will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax bene\ufb01t will be realised.
Estimates and judgements
The actual tax on the Group's pro\ufb01ts is determined according to complex laws and regulations. Where the effect of
these laws and regulations is unclear, estimates are used in determining the liability for the tax to be paid on pro\ufb01ts
which are recognised in the \ufb01nancial statements. The Group considers the estimates, assumptions and judgements to be
reasonable but this can involve complex issues which may take a number of years to resolve. The \ufb01nal determination of tax
liabilities could be different from the estimates re\ufb02ected in the \ufb01nancial statements but the Group believes that none have
a signi\ufb01cant risk of causing a material adjustment to the carrying amount of the liability within the next \ufb01nancial year.
Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. In particular,
judgement is used when assessing the extent to which deferred tax assets should be recognised with consideration given
to the timing and level of future taxable income. The unrecognised deferred tax assets are disclosed below.
Taxation - Income statement
2022
2021
\u00a3m
\u00a3m
UK corporation tax:
Current tax on pro\ufb01t for the year
2.6
3.9
Adjustments in respect of prior periods
0.3
-
2.9
3.9
Overseas taxation:
Current tax on pro\ufb01t for the year
-
1.1
Adjustments in respect of prior periods
-
(0.9)
-
0.2
Total current tax
2.9
4.1
Deferred tax expense:
Origination and reversal of temporary differences
8.3
8.2
Adjustments in respect of prior periods
0.5
(0.5)
Total deferred tax
8.8
7.7
Total income tax expense in the income statement
11.7
11.8
Factors affecting the tax charge for the period:
The tax assessed is different from the standard rate of corporation tax in the UK of
19.00% (2021: 19.00%)
The differences are explained below:
2022
2021
\u00a3m
\u00a3m
Pro\ufb01t before taxation
57.2
73.3
Tax on pro\ufb01t at UK rate of 19.00% (2021: 19.00%)
10.9
13.9
Differences:
Tax effect of expenses that are not deductible in determining taxable pro\ufb01t
0.6
0.5
Permanent differences arising in respect of \ufb01xed assets
0.5
0.8
Unrecognised losses
0.3
0.1
Tax rate differential on overseas income
-
(0.1)
Non-underlying items (see below)
(1.4)
(0.4)
Impact of UK corporation tax rate change
-
(1.6)
Adjustments to tax charge in respect of previous periods
0.8
(1.4)
Total income tax expense in the income statement
11.7
11.8
Taxation - Other comprehensive income
2022
2021
\u00a3m
\u00a3m
Relating to de\ufb01ned bene\ufb01t plan remeasurement gains
(1.6)
(6.9)
Other short term temporary differences
(0.1)
0.3
(1.7)
(6.6)
Tax rate
The UK tax rate applying throughout 2022 was 19%, this rate is set to increase to 25% on 1 April 2023.
The rate change
to 25% was substantively enacted on 24 May 2021 and as such in the prior year the portion of the deferred tax assets and
liabilities forecast to remain at 31 March 2023 were revalued to 25% which gave a tax credit to the 2021 income statement
of \u00a31.6m.
In 2021 the US operations ceased trading following the disposal of the remaining two dealerships.
During 2022 the US
operations incurred winding-up costs on which no deferred tax asset has been recognised.
Factors affecting the tax charge
The tax charge is decreased by the release of prior year provisions relating to UK corporation tax returns.
The tax charge
is increased by the incidence of non-deductible expenses including the impairment of goodwill and non-qualifying
depreciation.
Non-underlying tax credit
The tax credit in relation to non-underlying items referred to in note 2.6 is \u00a31.4m (2021: \u00a32.2m). The tax credit is higher than
the non-underlying loss multiplied by the tax rate (19%) due to a portion of gains on disposal of property being covered by
capital losses or roll-over relief (which consitute utilisation of previously unrecognised deferred tax assets, see below).
Unrecognised deferred tax assets
There are unutilised tax losses within the Group of \u00a313.8m (2021: \u00a313.8m) relating to former overseas businesses for
which no deferred tax asset has been recognised pending the clarity of the availability of intra-EU losses. There are also
unrecognised capital losses net of rolled over gains of \u00a352.5m (2021: \u00a346.7m).
During 2021 Pinewood established an
operation in Sweden, this Swedish subsidiary has been loss making in its start-up phase and no deferred tax asset has
been recognised on the cumulative losses of \u00a30.1m.
Operations in the USA are now in a winding-down phase following
the disposal of the remaining two car dealerships in 2021. No deferred tax asset has been recognised on the US losses of
\u00a31.2m.
The unrecognised carried forward losses related to operations in Sweden and the USA carry forward inde\ufb01nitely.
The UK capital losses carry forward inde\ufb01nitely but are subject to restriction on their use when capital gains are realised.
Deferred tax assets/(liabilities)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same \ufb01scal authority. The deferred tax
assets all relate to the UK.
2022
2021
\u00a3m
\u00a3m
Deferred tax assets
11.6
22.1
The table below outlines the deferred tax assets/(liabilities) that are recognised on the balance sheet, together with their
movements in the year;
(Charged)/
(Charged)/
Credited to
Credited
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2021
statement
income
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
5.8
2.2
-
8.0
Retirement bene\ufb01t obligations
14.5
(2.5)
(6.9)
5.1
Other short term temporary differences
0.7
0.7
0.3
1.7
Losses
15.4
(8.1)
-
7.3
Tax assets
36.4
(7.7)
(6.6)
22.1
(Charged) to
(Charged)
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2022
statement
income
2022
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
8.0
(1.7)
-
6.3
Retirement bene\ufb01t obligations
5.1
(2.5)
(1.6)
1.0
Other short term temporary differences
1.7
(1.2)
(0.1)
0.4
Losses
7.3
(3.4)
-
3.9
Tax assets/(liabilities)
22.1
(8.8)
(1.7)
11.6
The Group remained pro\ufb01table in 2022 after returning to pro\ufb01t in 2021.
During 2022 \u00a33.4m of the deferred tax asset in
respect of losses was utilised. The use of losses is restricted to 50% of taxable pro\ufb01ts over \u00a35.0m resulting in a spreading
of losses across periods where brought forward losses are over \u00a35.0m.
The deferred tax asset on losses remaining at 31
December 2022 is \u00a33.9m.
This deferred tax asset on losses has been recognised as it is considered probable that the losses
will be utilised.
In order to support the recognition of the \u00a33.9m asset on losses, modelling was undertaken to review
the recovery period of the deferred tax asset.
The modelling was based on management forecasts and showed that the
deferred tax asset on losses is expected to be recovered by 2024.
A plausible downside case was also modelled which
included reduced sales volumes and margins and is the same model used for going-concern analysis; this downside case
modelling showed that the deferred tax asset on losses would also be recovered by 2024.
2.8 Earnings per share
Accounting policy
The Group presents basic and diluted earnings per share (\u2018EPS\u2019) data for its ordinary shares. Basic EPS is calculated by
dividing the pro\ufb01t or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares in issue during the period. The shares held by the EBT have been excluded from the calculation until such time
as they vest unconditionally with the employees. Diluted EPS is calculated by dividing the pro\ufb01t and loss attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue taking account of the effects of all
dilutive potential ordinary shares, which comprise of share options granted to employees and LTIPs.
Earnings per share calculation
2022
2022
2021
2021
Earnings
Earnings
Earnings
Earnings
per share
Total
per share
Total
pence
\u00a3m
pence
\u00a3m
Basic earnings per share from continuing operations
3.3
45.5
4.7
65.5
Basic earnings per share from discontinued operations
-
-
(0.3)
(4.0)
Basic earnings per share
3.3
45.5
4.4
61.5
Adjusting items:
Non-underlying items attributable to the parent from continuing operations
-
0.4
0.4
5.8
Non-underlying items attributable to the parent from discontinued operations
-
-
0.3
3.9
Non-underlying items attributable to the parent (see note 2.6)
-
0.4
0.7
9.7
Tax effect of non-underlying items from continuing operations
(0.1)
(1.4)
(0.3)
(3.1)
Tax effect of non-underlying items from discontinued operations
-
-
0.1
0.9
Tax effect of non-underlying items
(0.1)
(1.4)
(0.2)
(2.2)
Underlying earnings per share from continuing operations (Non-GAAP measure)
3.2
44.5
4.9
68.2
Underlying earnings per share from discontinued operations (Non-GAAP measure)
-
-
0.1
0.8
Underlying earnings per share (Non-GAAP measure)
3.2
44.5
5.0
69.0
Diluted earnings per share from continuing operations
3.1
45.5
4.6
65.5
Diluted earnings per share from discontinued operations
-
-
(0.3)
(4.0)
Diluted earnings per share
3.1
45.5
4.3
61.5
Diluted earnings per share - underlying from continuing operations (Non-GAAP measure)
3.1
44.5
4.8
68.2
Diluted earnings per share - underlying from discontinued operations (Non-GAAP measure)
-
-
0.1
0.8
Diluted earnings per share - underlying (Non-GAAP measure)
3.1
44.5
4.9
69.0
The calculation of basic, adjusted and diluted earnings per share is based on
the following number of shares in issue (millions):
2022
2021
Number
Number
Weighted average number of ordinary shares in issue
1,392.9
1,390.7
Weighted average number of dilutive shares under option
51.8
25.1
Weighted average number of shares in issue taking account of applicable
1,444.7
1,415.8
outstanding share options
Non-dilutive shares under option
20.7
28.7
The Directors consider that the underlying earnings per share \ufb01gure provides a better measure of comparative performance.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradingIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13554": {
"value": "2.1 Revenue
Accounting policy
Revenue is measured based on the consideration speci\ufb01ed in a contract with a customer and excludes amounts collected
on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a
customer.
The following is a description of principal activities from which the Group generates its revenue categorised by the
reportable segments as detailed in note 2.3.
UK Motor segment and US Motor segment
The UK Motor and US Motor segments principally generate revenue from the sale of new and used motor vehicles, together
with the supply of motor vehicle parts, servicing and repair activities, collectively referred to as aftersales.
Products and
services may be sold separately or in bundled packages. Examples of a bundled package will include the supply of a vehicle
with an extended warranty or a servicing plan. For bundled packages, the Group accounts for individual products and
services separately as they are distinct items, as each performance obligation within that contract is separately identi\ufb01able
from other items in the bundled package. The consideration is proportionately allocated between separate products and
services in a bundle based on their stand-alone selling prices. The stand-alone selling prices are determined based on the
list prices at which the Group sells these items and are separately identi\ufb01ed on the customer's invoice.
The Group has a number of manufacturer partners who will provide goods/services to customers, for example a warranty
or free servicing when purchasing a new vehicle. Such items do not have a contractual obligation on the Group as the
obligation lies with the manufacturer and therefore no revenue is recognised in respect of these items.
Products
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
and services
New and used
The Group recognises revenue on the sale of motor vehicles and parts revenue when they have
vehicles, parts and
been supplied to the customer. The satisfaction of the performance obligation occurs on delivery
accessories
or collection of the product. Vehicles are usually paid for prior to delivery though selected
corporate operators may be granted terms of up to seven days. Parts are either paid for on
delivery or within one month, dependant upon whether or not the customer is retail or has trade
terms.
Aftersales service
The Group recognises revenue when the one time service has been completed. Revenue is
and repairs
recognised at this point provided that the revenue and costs can be measured reliably, the
recovery of the consideration is probable and there is no continuing management involvement
with the goods. Payment terms are upon completion of the service or within one month,
dependant upon whether or not the customer is retail or trade.
Commissions
The Group receives commissions when it arranges \ufb01nance and insurance packages for its
received
customers to purchase its products and services, acting as agent on behalf of various \ufb01nance and
insurance companies. Any commission earned is recognised when the customer draws down the
\ufb01nance or commences the insurance policy from the supplier which coincides with the delivery of
the product or service. Commissions receivable are paid typically in the month after the \ufb01nance is
drawn down.
Vehicle warranty
The Group offers a warranty product on vehicles supplied with a guarantee period typically
ranging from 3 months to 3 years. The Group recognises revenue on warranties on a straight-line
basis over the warranty period. The performance obligation of the Group, being the recti\ufb01cation
of mechanical faults on vehicles sold, will be the period over which the customer can exercise
their rights under the warranty and therefore revenue should be recognised over the period of
the warranty. Warranties are paid for prior to the commencement of the policy. The unrecognised
income is held within deferred income (see note 3.8). There were no such warranties offered for
sale in the US Motor segment.
Leasing
The leasing segment generates revenue from the provision of vehicle leasing services, principally to \ufb02eets run by various
commercial operators. Vehicles are supplied to customers on operating leases and may include servicing and maintenance
agreements, which are bundled into the overall contract. For bundled packages, the Group accounts for individual products
and services separately as they are distinct items, as each performance obligation within that contract is separately
identi\ufb01able from other items in the bundled package. At the end of each contract the Group will generate revenue from
the disposal of the vehicle, recovery of any recti\ufb01cation work and in some instances additional rentals beyond the original
contract term.
Products
and services
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
Leasing
Where vehicles are supplied to a leasing group for contract hire purposes and the Group
undertakes to repurchase the vehicle at a predetermined date and value the transfer of control is
deemed not to have transferred outside the Group and consequently no sale is recognised. As a
result the accounting for the arrangement re\ufb02ects the Group's retention of the asset to generate
future rentals and, in accordance with IFRS 16 Leases, the Group is considered to be an operating
lessor for all arrangements in place. The initial amounts received in consideration from the
leasing group are held as deferred income allocated between the present value of the repurchase
commitment, held within trade and other payables and a residual amount of deferred revenue held
within deferred income. A \ufb01nance charge is accrued against the present value of the repurchase
commitment and recorded as a \ufb01nance expense in the income statement. The remaining deferred
revenue, which effectively represents rentals received in advance, is taken to the income
statement on a straight line basis over the related lease term. No additional disclosures are made
under IFRS 16 as there are no future rentals receivable. These vehicles are held within 'property,
plant and equipment' at their cost to the Group and are depreciated to their residual values over
the terms of the leases. These assets are transferred into inventory at their carrying amount when
they cease to be rented and they become available for sale as part of the Group's ordinary course
of business. Rentals are billed and paid for on a monthly basis.
Maintenance
The Group offer a maintenance contract to customers to cover routine servicing and unexpected
repairs of vehicles under a leasing contract. Revenue is recognised over the period of the contract
on a straight line basis. Maintenance contracts are billed and paid for on a monthly basis.
Used Vehicles
The Group recognises revenue on the sale of ex contract hire motor vehicles when they have been
supplied to the customer. This occurs on delivery or collection of the product. Vehicles are paid for
on delivery.
Software
The Group, through its Pinewood business, supplies dealer management systems to motor vehicle dealers. These systems
include consultancy, training and installation services and the right to use the Group's software over a contractual period.
Products and services may be sold separately or in bundled packages. Examples of a bundled package will include system
consultancy, on and off site training for users together with the right for a number of users to use the software.
For
bundled packages, the Group accounts for individual products and services separately as they are distinct items, as
each performance obligation within that contract is separately identi\ufb01able from other items in the bundled package.
The consideration is allocated between separate products and services in a bundle based on their stand-alone selling
prices. The stand-alone selling prices are determined based on the list prices at which the Group sells these items and are
separately identi\ufb01ed on the customer's contract and subsequent invoice.
Products
and services
Nature, timing of satisfaction of performance obligations and signi\ufb01cant payment terms
Software
Pinewood supply its software on a hosting basis and licence speci\ufb01c numbers of users to access
this service. As such Pinewood supply 'Software as a Service' (SaaS). The software licences
are provided only in conjunction with a hosting service, the customer cannot take control of
the licence or use the software without the hosting service and as such the customer cannot
bene\ufb01t from the licence on its own and the licence is not separable from the hosting services.
Therefore, the licence is not distinct and would be combined with the hosting service. The Group's
assessment of its performance obligation under IFRS 15 of providing SaaS is that revenue is
recognised over the period of the contract. SaaS is billed one month in advance of a quarterly
billing cycle ensuring payment is received prior to commencement of usage.
Training,
Installation and
Consultancy
The Group recognises revenue on the provision of any consultancy time, training and installation
at the point of providing and delivering the service. Consultancy hours are billed at the time of
delivery. Training courses are billed at the time of booking which may be in advance of the date
the training is scheduled for. Installation hours are billed at the time of completion of the service.
Disaggregation of revenue
In the following table, revenue is disaggregated by primary geographical market, major products/service lines and timing
of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the Group\u2019s four strategic
divisions, which are its reportable segments, see note 2.3
__UK Motor __
__Software__
__Leasing__
discontinued
__US Motor__
____Total____
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
2022
\u00a3m
2021
\u00a3m
Primary geographical
markets
Europe
3,536.2
3,332.7
18.1
18.8
64.7
69.1
-
-
3,619.0
3,420.6
North America
-
-
-
-
-
-
-
28.6
-
28.6
Africa
-
-
0.6
0.5
-
-
-
-
0.6
0.5
Asia
-
-
0.4
0.2
-
-
-
-
0.4
0.2
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Major products/service
lines
Aftersales revenue
276.1
261.9
-
-
-
-
-
2.8
276.1
264.7
Used vehicle revenue
1,808.6
1,708.4
-
-
-
-
-
3.0
1,808.6
1,711.4
New vehicle revenue
1,451.5
1,362.4
-
-
-
-
-
22.8
1,451.5
1,385.2
Software revenue
-
-
19.1
19.5
-
-
-
-
19.1
19.5
Leasing revenue
-
-
-
-
64.7
69.1
-
-
64.7
69.1
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Timing of revenue
recognition
At point in time
3,526.7
3,322.7
1.4
1.9
30.9
32.1
-
28.6
3,559.0
3,385.3
Over time
9.5
10.0
17.7
17.6
33.8
37.0
-
-
61.0
64.6
Revenue from external
customers
3,536.2
3,332.7
19.1
19.5
64.7
69.1
-
28.6
3,620.0
3,449.9
Contract liabilities
The Group recognises the following contract liabilities:
2022
2021
\u00a3m
\u00a3m
Deposits received from customers
30.4
26.2
Unearned proportion of warranty policies sold
21.2
16.5
Movements in the deferred income balance in respect of the warranty policies is presented in note 3.8 which shows the
value of policies sold during the year and the income recognised during the year.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRevenueExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13557": {
"value": "Accounting policy
Revenue is measured based on the consideration speci\ufb01ed in a contract with a customer and excludes amounts collected
on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a
customer.
The following is a description of principal activities from which the Group generates its revenue categorised by the
reportable segments as detailed in note 2.3.
Accounting policy
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in other comprehensive income, in which case it is recognised in the statement
of comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability method, recognising temporary differences between the
carrying amounts of assets and liabilities for \ufb01nancial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not recognised: initial recognition of goodwill, the initial recognition of assets or
liabilities in a transaction that is not a business combination that affect neither accounting nor taxable pro\ufb01t. The amount
of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable pro\ufb01ts will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax bene\ufb01t will be realised.
Accounting policy
The Group presents basic and diluted earnings per share (\u2018EPS\u2019) data for its ordinary shares. Basic EPS is calculated by
dividing the pro\ufb01t or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares in issue during the period. The shares held by the EBT have been excluded from the calculation until such time
as they vest unconditionally with the employees. Diluted EPS is calculated by dividing the pro\ufb01t and loss attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue taking account of the effects of all
dilutive potential ordinary shares, which comprise of share options granted to employees and LTIPs.
Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
Accounting policy
Freehold land is not depreciated. Depreciation is provided to write off the cost less the estimated residual value of other
assets by equal instalments over their estimated useful economic lives. On transition to IFRS as at 1 January 2004, all land
and buildings were restated to fair value as permitted by IFRS 1, which is then treated as the deemed cost. All other assets
are initially measured and recorded at cost.
Depreciation rates are as follows:
\u2022
Freehold buildings \u2013 2% per annum
\u2022 Right of use assets - over the period of the lease
\u2022
Leasehold property improvements \u2013 2% per annum or over the period of the lease if less than 50 years
\u2022
Fixtures, \ufb01ttings and of\ufb01ce equipment \u2013 10 \u2013 20% per annum
\u2022
Plant and machinery \u2013 10 \u2013 33% per annum
\u2022
Motor vehicles \u2013 20 \u2013 25% per annum
\u2022 Contract hire vehicles are depreciated to their residual value over the period of their lease
The residual value of all assets, depreciation methods and useful economic lives, if signi\ufb01cant, are reassessed annually.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of
such an item when that cost is incurred if it is possible that the future economic bene\ufb01ts embodied with the item will \ufb02ow
to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as
an expense as incurred.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised net within other income in the
income statement.
The depreciation charge in respect of property, plant and equipment is recognised within administrative expenses within
the income statement.
Accounting policy
Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are
classi\ufb01ed as held for sale. Immediately before classi\ufb01cation as held for sale, the assets are measured in accordance with
the Group's accounting policies. Thereafter the assets are measured at the lower of their carrying amount and fair value
less costs to sell. Impairment losses on remeasurement are recognised in the income statement. Gains are not recognised
in excess of any cumulative impairment loss. Non-current assets classi\ufb01ed as held for sale are available for immediate sale
and a resultant disposal is highly probable within one year.
A non-current asset that stops being classi\ufb01ed as held for sale is remeasured at the lower of its carrying amount prior
to the asset or disposal group being classi\ufb01ed as held for sale, adjusted for any depreciation or amortisation that would
have been recognised if the asset had not been classi\ufb01ed as held for sale, or, its recoverable amount at the date of the
decision not to sell.
Accounting policies
Motor vehicle inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product
to its present location and condition are included and cost is based on price including delivery costs less speci\ufb01c trade
discounts. Fair value reviews of stock are conducted regularly utilising our market intelligence and analysis of the market
which we conduct by segment and by model, these fair values are updated in the light of any changing trends by model
line. The assessment of fair values involves an element of estimation: the Group takes the age pro\ufb01le of our inventories
at the year end, estimates the likely sale period and the expected pro\ufb01t or loss on sale to determine the fair value at the
balance sheet date. Whilst this data is deemed representative of current values it is possible that ultimate sales values can
vary from those applied. Parts inventories are based on an average purchase cost principle and are written down to net
realisable value by providing for obsolescence on a time in stock based formula approach.
Consignment vehicles are regarded as being effectively under the control of the Group and are included within inventories
on the balance sheet as the Group has the signi\ufb01cant risks and rewards of ownership even though legal title has not yet
passed. The corresponding liability is included in trade and other payables. Movements in consignment vehicle inventory
and its corresponding liability within trade and other payables are not included within movements of inventories and
payables as stated in the consolidated cash \ufb02ow statement as no cash \ufb02ows arise in respect of these transactions until the
vehicle is either sold or purchased at which point it is reclassi\ufb01ed within new and used vehicle inventory.
Motor vehicles are transferred from contract hire activities at the end of their lease term to inventory at their depreciated
cost. No physical cash \ufb02ow arises from these transfers.
Accounting policy
Trade and other receivables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any impairment losses.
Impairment losses are measured in accordance with IFRS 9, which is based on an \u2018expected credit loss\u2019 (ECL) model. The
impairment model applies to \ufb01nancial assets measured at amortised cost.
The calculation of ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and
the cash \ufb02ows that the Group expects to receive).
The Group considers a trade or other receivable to be in default when the borrower is unlikely to pay its credit obligations
to the Group in full after all reasonable actions have been taken to recover the debt.
Accounting policy
Trade and other payables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any write-offs.
4.1 Accounting policies
IFRS 9 requires an entity to recognise a \ufb01nancial asset or a \ufb01nancial liability in its statement of \ufb01nancial position when it
becomes party to the contractual provisions of the instrument. At initial recognition, an entity measures a \ufb01nancial asset or
a \ufb01nancial liability at its fair value plus or minus, in the case of a \ufb01nancial asset or a \ufb01nancial liability not at fair value through
pro\ufb01t or loss, transaction costs that are directly attributable to the acquisition or issue of the \ufb01nancial asset or the \ufb01nancial
liability. Subsequent to initial recognition \ufb01nancial assets and \ufb01nancial liabilities are classi\ufb01ed and measured as described
below.
Financial assets
IFRS 9 classi\ufb01es assets according to the business model for their realisation, as determined by the expected contractual
cash\ufb02ows. This classi\ufb01cation determines the accounting treatment, and the classi\ufb01cation under IFRS 9 is by reference to
the accounting treatment i.e. amortised cost, fair value through other comprehensive income or fair value through pro\ufb01t
and loss.
A \ufb01nancial asset is measured at amortised cost if both of the following conditions are met:
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash \ufb02ows; and
the contractual terms of the \ufb01nancial asset give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets are therefore classi\ufb01ed and measured in these \ufb01nancial statements at amortised cost.
The Group recognises loss allowances for expected credit losses (ECLs) on \ufb01nancial assets measured at amortised cost,
debt investments measured at FVOCI and contract assets (as de\ufb01ned in IFRS 15).
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the expected life of the \ufb01nancial instrument) has not increased
signi\ufb01cantly since initial recognition which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a \ufb01nancial asset has increased signi\ufb01cantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical
experience and informed credit assessment and including forward-looking information.
The Group assumes that the credit risk on a \ufb01nancial asset has increased signi\ufb01cantly if it is more than 30 days past due.
The Group considers a \ufb01nancial asset to be in default when:
\u2022
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or
\u2022
the \ufb01nancial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a \ufb01nancial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is
exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and the cash \ufb02ows
that the Group expects to receive). ECLs are discounted at the effective interest rate of the \ufb01nancial asset.
Credit-impaired \ufb01nancial assets
At each reporting date, the Group assesses whether \ufb01nancial assets carried at amortised cost and debt securities at FVOCI
are credit-impaired. A \ufb01nancial asset is \u2018credit-impaired\u2019 when one or more events that have a detrimental impact on the
estimated future cash \ufb02ows of the \ufb01nancial asset have occurred.
Write-offs
The gross carrying amount of a \ufb01nancial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery.
Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
Financial assets
IFRS 9
classi\ufb01cation
\u00a3m
Trade and other receivables
Amortised cost
106.2
Finance lease receivables
Amortised cost
17.2
Cash and cash equivalents
Amortised cost
69.4
Trade and other receivables
- see note 3.6
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits, and other short term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insigni\ufb01cant risk of changes in value.
Loans and borrowings
Interest-bearing loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective interest
basis. The effective interest basis is a method of calculating the amortised cost of a \ufb01nancial liability and of allocating
interest payments over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the \ufb01nancial liability, or where appropriate, a shorter period.
Accounting policy
Finance income comprises interest income on funds invested, return on net pension scheme assets and gains on hedging
instruments that are recognised in pro\ufb01t and loss. Interest income is recognised as it accrues in pro\ufb01t and loss, using the
effective rate method.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
Gross \ufb01nance costs directly attributable to the construction of property, plant and equipment are capitalised as part of the
cost of those assets until such a time as the assets are substantially ready for their intended use or sale.
Accounting policy
The Group operates a number of employee share option schemes and an executive share ownership plan 'exsop' awarded
in 2010. The fair value at the date at which the share options are granted is recognised in the income statement on a
straight line basis over the vesting period, taking into account the number of options that are expected to vest. The fair
value of the options granted is measured using an option pricing model, taking into account the terms and conditions
upon which the options were granted. The number of options that are expected to become exercisable is reviewed at each
balance sheet date and if necessary estimates are revised.
Accounting policies
Leases as a Lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identi\ufb01ed asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identi\ufb01ed asset, the Group uses the de\ufb01nition of a
lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019.
The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is
initially measured at cost, and subsequently at cost less accumulated depreciation and impairment losses, and adjusted for
certain remeasurements of the lease liability. Cost comprises the initial amount of the lease liability adjusted for any initial
direct costs incurred less any lease incentives received. Depreciation is recognised on a straight line basis over the period
of the lease the right of use asset is expected to be utilised.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date, discounted by the interest rate implicit in the lease or when this is not readily attainable, the Group\u2019s incremental
borrowing rate. Lease payments include \ufb01xed rental payments and amounts expected to be payable under a residual
value guarantee. Generally the Group uses its incremental borrowing rate as the discount rate. The Group determines
its incremental borrowing rate by obtaining interest rates from various external \ufb01nancing sources and makes certain
adjustments to re\ufb02ect the terms of the lease and type of the asset leased.
The lease liability is subsequently increased by the interest cost on the lease liability and reduced by payments made. It is
remeasured when there is a change in future lease payments arising from a change of index or rate, a variation in amounts
payable following contractual rent reviews and changes in the assessment of whether an extension/termination option is
reasonably certain to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made
to the carrying amount of the right-of-use asset, or is recorded in pro\ufb01t or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Sale and leaseback transactions. When a transfer of an asset is made and it is deemed a sale in accordance with IFRS 15,
the resulting right-of-use asset arising from the leaseback is measured at the proportion of the previous carrying amount
of the asset that relates to the right of use retained by the seller/lessee. Gain or loss is recognised only at the amount that
relates to the rights transferred to the buyer/lessor.
The Group presents right-of-use assets that do not meet the de\ufb01nition of investment property in \u2018property, plant and
equipment\u2019 and lease liabilities in \u2018loans and borrowings\u2019 in the Balance Sheet.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
Accounting policy
The Group operated a number of de\ufb01ned bene\ufb01t and de\ufb01ned contribution plans during the year. The assets of the de\ufb01ned
bene\ufb01t plan and one de\ufb01ned contribution plan are held in independent trustee administered funds. The Group also operates
a Group Personal Pension Plan which is a de\ufb01ned contribution plan where the assets are held by the insurance Group under
a contract with each individual.
De\ufb01ned contribution plans - A de\ufb01ned contribution plan is one under which the Group pays \ufb01xed contributions and has
no legal or constructive obligation to pay further amounts. Therefore, no assets or liabilities of these plans are recorded
in these \ufb01nancial statements. Obligations for contributions to de\ufb01ned contribution pension plans are recognised as an
employee bene\ufb01t expense in the income statement when they are due.
De\ufb01ned bene\ufb01t plans - Pension accounting costs for de\ufb01ned bene\ufb01t plans are assessed by determining the pension
obligation using the projected unit credit method after including a net return on the plan assets. Under this method, in
accordance with the advice of quali\ufb01ed actuaries, the amounts charged in respect of employee bene\ufb01ts re\ufb02ect the cost of
bene\ufb01ts accruing in the year and the cost of \ufb01nancing historical accrued bene\ufb01ts. The Group recognises all actuarial gains
and losses arising from de\ufb01ned bene\ufb01t plans in the statement of other comprehensive income immediately.
The present value of pension obligations is measured by reference to market yields on high quality corporate bonds
which have terms to maturity approximating to the terms of the related pension liability. Plan assets are measured at fair
value. When the calculation results in a bene\ufb01t to the Group, the recognised asset is limited to the total of the present
value of economic bene\ufb01ts available in the form of any future refunds from the plan or reductions in future contributions
to the plan. An economic bene\ufb01t is available to the Group if it is realisable during the life of the plan, or on settlement of
the plan liabilities.
Under IAS 19 Employee Bene\ufb01ts, the Group recognises an interest expense or income which is calculated on the net
de\ufb01ned bene\ufb01t liability or asset respectively by applying the discount rate to the net de\ufb01ned bene\ufb01t liability or asset.
Remeasurements arising from de\ufb01ned bene\ufb01t plans comprise actuarial gains and losses and the return on plan assets
(excluding interest) are immediately recognised directly in the statement of other comprehensive income. Actuarial
gains and losses are the differences between actual and interest income during the year, experience losses on scheme
liabilities and the impact of any changes in assumptions. Details of the last independent statutory actuarial valuation and
assumptions are set out below.
Accounting policy
The results of businesses disposed of during the year are included up to the effective date of disposal using the acquisition
method of accounting.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13558": {
"value": "Accounting policy
Revenue is measured based on the consideration speci\ufb01ed in a contract with a customer and excludes amounts collected
on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a
customer.
The following is a description of principal activities from which the Group generates its revenue categorised by the
reportable segments as detailed in note 2.3.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f13577": {
"value": "The Group has a number of manufacturer partners who will provide goods/services to customers, for example a warranty or free servicing when purchasing a new vehicle.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14014": {
"value": "2.2 Net operating expenses
2022
2021
\u00a3m
\u00a3m
Net operating expenses:
Distribution costs
(185.2)
(171.5)
Administrative expenses
(181.3)
(166.5)
Impairment loss on trade receivables
(0.3)
(0.2)
Rents received
2.9
1.8
(363.9)
(336.4)
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14054": {
"value": "2.3 Operating segments
The Group has revised its reporting segments.
In January 2022 the Group re-organised its management and reporting
structure.
The signi\ufb01cant changes were that the Franchised UK Motor and Car Store operations were brought under the
management of the UK Motor operation. This revised segmental structure is re\ufb02ected in the internal reporting structure as
presented to the Chief Operating Decision Maker. In the 2022 \ufb01nancial statements therefore, the Franchised UK Motor and
Car Store segments are no longer reported separately.
The results of the Franchised UK Motor and Car Store segments for the comparative period have been aggregated into the
new UK Motor Group segment and is re-presented as follows for the period ended 31 December 2021:
UK Motor segment restatement
UK Motor
segment as
Franchised
restated
UK Motor
Car Store
31 Dec 21
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,191.2
141.5
3,332.7
Inter-segment revenue
-
-
-
Revenue from external customers
3,191.2
141.5
3,332.7
Operating pro\ufb01t before non-underlying
85.8
1.6
87.4
items
Other income and non-underlying items
(4.5)
(0.3)
(4.8)
Operating pro\ufb01t
81.3
1.3
82.6
Finance expense
-
-
-
Finance income
-
-
-
Segmental pro\ufb01t before tax
81.3
1.3
82.6
Other items included in the income statement are as follows:
Depreciation and impairment
(31.1)
(0.1)
(31.2)
Impairment of property, plant and equipment
(4.3)
(0.3)
(4.6)
Amortisation
(0.4)
-
(0.4)
Share based payments
(2.9)
-
(2.9)
Termination and severance costs
(1.8)
-
(1.8)
Business closure costs
(0.2)
-
(0.2)
Other income - pro\ufb01t on the sale of business
-
1.8
-
1.8
es and property, plant and equipment
Following the revisions to the Group\u2019s operating segments as outlined above there are now four reportable segments,
as described below, which are the Group's strategic business units. The segments offer different ranges of products and
services and are managed separately because they require their own specialism in terms of market and product. For
each of these segments, the Executive Committee which is deemed to be the Chief Operating Decision Maker (CODM),
reviews internal management reports on at least a monthly basis. The review of these management reports enables the
CODM to allocate resources to each segment and form the basis of strategic and operational decisions, such as acquisition
strategy,closure programme or working capital allocation. The following summary describes the operations in each of the
Group's reportable segments:
UK Motor
. This segment comprises the Group's motor vehicle retail, parts wholesale and \ufb02eet operations from its
franchised dealer network and the Group's used vehicle retail operation branded Car Store. These encompass the sale
of new and used motor cars, motorbikes, trucks and vans, together with associated aftersales activities of service, body
repair and parts sales.
Software
. This segment comprises the Group's activities as a dealer management systems provider.
Leasing
. This segment comprises the Group's contract hire and leasing activities.
US Motor
. This segment comprises the Group's retail operation in California in the United States encompassing the sale
of new and used motor cars, together with associated aftersales activities of service and parts sales. This segment ceased
trading in 2021 following the sale of its remaining stores.
The tables of \ufb01nancial performance presented in the Operational and Financial Review on pages 24 to 37 are based upon
these segmental reports.
Inter-segment transfers and transactions are entered into under normal commercial terms and conditions that would also
be available to unrelated third parties.
Year ended 31 December 2022
Continuing
Discontinued
Group operations operations
UK Motor
Software
Leasing
interest
Sub total
US Motor
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,536.2
25.4
83.7
-
3,645.3
-
3,645.3
Inter-segment revenue
-
(6.3)
(19.0)
-
(25.3)
-
(25.3)
Revenue from external customers
3,536.2
19.1
64.7
-
3,620.0
-
3,620.0
Operating pro\ufb01t/(loss) before non-underlying
69.1
11.0
19.9
-
100.0
(1.5)
98.5
items
Non-underlying items
2.5
-
-
-
2.5
-
2.5
Operating pro\ufb01t/(loss)
71.6
11.0
19.9
-
102.5
(1.5)
101.0
Finance expense
-
-
(2.5)
(42.3)
(44.8)
-
(44.8)
Finance income
-
-
-
1.0
1.0
-
1.0
Segmental pro\ufb01t/(loss) before tax
71.6
11.0
17.4
(41.3)
58.7
(1.5)
57.2
Other items included in the income statement are as follows:
Depreciation and impairment
(28.5)
(0.1)
(36.1)
-
(64.7)
-
(64.7)
Impairment of property, plant and equipment
1.2
-
-
-
1.2
-
1.2
Amortisation
(0.6)
(4.2)
(0.1)
-
(4.9)
-
(4.9)
Share based payments
3.3
-
-
-
3.3
-
3.3
Termination and severance costs
(0.2)
-
-
-
(0.2)
-
(0.2)
Business closure costs
0.2
-
-
-
0.2
-
0.2
Other income - pro\ufb01t on the sale of businesses
7.7
-
-
-
7.7
-
7.7
and property, plant and equipment
Year ended 31 December 2021
Continuing
Discontinued
Group operations operations
UK Motor
Software
Leasing
interest
Sub total
US Motor
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Total gross segment revenue
3,332.7
24.4
89.9
-
3,447.0
28.6
3,475.6
Inter-segment revenue
-
(4.9)
(20.8)
-
(25.7)
-
(25.7)
Revenue from external customers
3,332.7
19.5
69.1
-
3,421.3
28.6
3,449.9
Operating pro\ufb01t before non-underlying items
87.4
12.5
17.5
-
117.4
(1.1)
116.3
Non-underlying items
(4.8)
-
-
-
(4.8)
(3.9)
(8.7)
Operating pro\ufb01t
82.6
12.5
17.5
-
112.6
(5.0)
107.6
Finance expense
-
-
(2.7)
(32.2)
(34.9)
(0.3)
(35.2)
Finance income
-
-
-
0.9
0.9
-
0.9
Segmental pro\ufb01t before tax
82.6
12.5
14.8
(31.3)
78.6
(5.3)
73.3
Other items included in the income statement are as follows:
Depreciation and impairment
(31.2)
(0.6)
(38.5)
-
(70.3)
(0.1)
(70.4)
Impairment of property, plant and equipment
(4.6)
-
-
-
(4.6)
(5.0)
(9.6)
Amortisation
(0.4)
(3.7)
(0.1)
-
(4.2)
-
(4.2)
Share based payments
(2.9)
-
-
-
(2.9)
-
(2.9)
Termination and severance costs
(1.8)
-
-
-
(1.8)
-
(1.8)
Business closure costs
(0.2)
-
-
-
(0.2)
0.2
-
Other income - pro\ufb01t on the sale of businesses
1.8
-
-
-
1.8
0.9
2.7
and property, plant and equipment
Geographical information.
All segments, with the exception of the US Motor Group in the United States originate in the United Kingdom. The US Motor
Group segment is a discontinued operation.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14537": {
"value": "2.4 Staff costs
The average number of people employed by the Group in the following areas was:
2022
2021
Number
Number
Sales
1,823
1,811
Aftersales
2,487
2,470
Administration
1,216
1,208
5,526
5,489
Costs incurred in respect of these employees were:
2022
2021
\u00a3m
\u00a3m
Wages and salaries
192.1
182.9
Less -
receipts from the Government Coronavirus Job Retention Scheme
-
(1.6)
Social security costs
20.4
17.9
Contributions to de\ufb01ned contribution plans (see note 5.1)
11.7
7.2
Cost recognised for de\ufb01ned bene\ufb01t plans (see note 5.1)
0.3
1.0
Share based payments (see note 4.6)
3.3
2.9
227.8
210.3
Information relating to directors' emoluments, share options and pension entitlements is set out in the Directors'
Remuneration Report on pages 77 to 95.
During the previous year the Group appropriately used government assistance from the Coronavirus Job Retention
Scheme and has bene\ufb01tted from \u00a31.6m of furlough support during 2021, which was recognised against the wages and
salaries expense. The furlough support is included in the underlying result as the Group do not consider it to meet the
de\ufb01nition of non-underlying when taken together with the payroll costs that the amount compensates for. No Government
grants were received in 2022.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14590": {
"value": "2.5 Audit fees
2022
2021
Auditor\u2019s remuneration:
\u00a3000
\u00a3000
Fees payable to the company's Auditor for the audit of the company's annual accounts
770.0
513.0
Fees payable to the company's Auditor and its associates for other services:
Audit of the company's subsidiaries pursuant to legislation
385.0
300.0
Audit-related assurance services
155.0
140.0
1,310.0
953.0
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14752": {
"value": "2.7 Taxation
Accounting policy
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in other comprehensive income, in which case it is recognised in the statement
of comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability method, recognising temporary differences between the
carrying amounts of assets and liabilities for \ufb01nancial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not recognised: initial recognition of goodwill, the initial recognition of assets or
liabilities in a transaction that is not a business combination that affect neither accounting nor taxable pro\ufb01t. The amount
of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable pro\ufb01ts will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax bene\ufb01t will be realised.
Estimates and judgements
The actual tax on the Group's pro\ufb01ts is determined according to complex laws and regulations. Where the effect of
these laws and regulations is unclear, estimates are used in determining the liability for the tax to be paid on pro\ufb01ts
which are recognised in the \ufb01nancial statements. The Group considers the estimates, assumptions and judgements to be
reasonable but this can involve complex issues which may take a number of years to resolve. The \ufb01nal determination of tax
liabilities could be different from the estimates re\ufb02ected in the \ufb01nancial statements but the Group believes that none have
a signi\ufb01cant risk of causing a material adjustment to the carrying amount of the liability within the next \ufb01nancial year.
Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised. In particular,
judgement is used when assessing the extent to which deferred tax assets should be recognised with consideration given
to the timing and level of future taxable income. The unrecognised deferred tax assets are disclosed below.
Taxation - Income statement
2022
2021
\u00a3m
\u00a3m
UK corporation tax:
Current tax on pro\ufb01t for the year
2.6
3.9
Adjustments in respect of prior periods
0.3
-
2.9
3.9
Overseas taxation:
Current tax on pro\ufb01t for the year
-
1.1
Adjustments in respect of prior periods
-
(0.9)
-
0.2
Total current tax
2.9
4.1
Deferred tax expense:
Origination and reversal of temporary differences
8.3
8.2
Adjustments in respect of prior periods
0.5
(0.5)
Total deferred tax
8.8
7.7
Total income tax expense in the income statement
11.7
11.8
Factors affecting the tax charge for the period:
The tax assessed is different from the standard rate of corporation tax in the UK of
19.00% (2021: 19.00%)
The differences are explained below:
2022
2021
\u00a3m
\u00a3m
Pro\ufb01t before taxation
57.2
73.3
Tax on pro\ufb01t at UK rate of 19.00% (2021: 19.00%)
10.9
13.9
Differences:
Tax effect of expenses that are not deductible in determining taxable pro\ufb01t
0.6
0.5
Permanent differences arising in respect of \ufb01xed assets
0.5
0.8
Unrecognised losses
0.3
0.1
Tax rate differential on overseas income
-
(0.1)
Non-underlying items (see below)
(1.4)
(0.4)
Impact of UK corporation tax rate change
-
(1.6)
Adjustments to tax charge in respect of previous periods
0.8
(1.4)
Total income tax expense in the income statement
11.7
11.8
Taxation - Other comprehensive income
2022
2021
\u00a3m
\u00a3m
Relating to de\ufb01ned bene\ufb01t plan remeasurement gains
(1.6)
(6.9)
Other short term temporary differences
(0.1)
0.3
(1.7)
(6.6)
Tax rate
The UK tax rate applying throughout 2022 was 19%, this rate is set to increase to 25% on 1 April 2023.
The rate change
to 25% was substantively enacted on 24 May 2021 and as such in the prior year the portion of the deferred tax assets and
liabilities forecast to remain at 31 March 2023 were revalued to 25% which gave a tax credit to the 2021 income statement
of \u00a31.6m.
In 2021 the US operations ceased trading following the disposal of the remaining two dealerships.
During 2022 the US
operations incurred winding-up costs on which no deferred tax asset has been recognised.
Factors affecting the tax charge
The tax charge is decreased by the release of prior year provisions relating to UK corporation tax returns.
The tax charge
is increased by the incidence of non-deductible expenses including the impairment of goodwill and non-qualifying
depreciation.
Non-underlying tax credit
The tax credit in relation to non-underlying items referred to in note 2.6 is \u00a31.4m (2021: \u00a32.2m). The tax credit is higher than
the non-underlying loss multiplied by the tax rate (19%) due to a portion of gains on disposal of property being covered by
capital losses or roll-over relief (which consitute utilisation of previously unrecognised deferred tax assets, see below).
Unrecognised deferred tax assets
There are unutilised tax losses within the Group of \u00a313.8m (2021: \u00a313.8m) relating to former overseas businesses for
which no deferred tax asset has been recognised pending the clarity of the availability of intra-EU losses. There are also
unrecognised capital losses net of rolled over gains of \u00a352.5m (2021: \u00a346.7m).
During 2021 Pinewood established an
operation in Sweden, this Swedish subsidiary has been loss making in its start-up phase and no deferred tax asset has
been recognised on the cumulative losses of \u00a30.1m.
Operations in the USA are now in a winding-down phase following
the disposal of the remaining two car dealerships in 2021. No deferred tax asset has been recognised on the US losses of
\u00a31.2m.
The unrecognised carried forward losses related to operations in Sweden and the USA carry forward inde\ufb01nitely.
The UK capital losses carry forward inde\ufb01nitely but are subject to restriction on their use when capital gains are realised.
Deferred tax assets/(liabilities)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same \ufb01scal authority. The deferred tax
assets all relate to the UK.
2022
2021
\u00a3m
\u00a3m
Deferred tax assets
11.6
22.1
The table below outlines the deferred tax assets/(liabilities) that are recognised on the balance sheet, together with their
movements in the year;
(Charged)/
(Charged)/
Credited to
Credited
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2021
statement
income
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
5.8
2.2
-
8.0
Retirement bene\ufb01t obligations
14.5
(2.5)
(6.9)
5.1
Other short term temporary differences
0.7
0.7
0.3
1.7
Losses
15.4
(8.1)
-
7.3
Tax assets
36.4
(7.7)
(6.6)
22.1
(Charged) to
(Charged)
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2022
statement
income
2022
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
8.0
(1.7)
-
6.3
Retirement bene\ufb01t obligations
5.1
(2.5)
(1.6)
1.0
Other short term temporary differences
1.7
(1.2)
(0.1)
0.4
Losses
7.3
(3.4)
-
3.9
Tax assets/(liabilities)
22.1
(8.8)
(1.7)
11.6
The Group remained pro\ufb01table in 2022 after returning to pro\ufb01t in 2021.
During 2022 \u00a33.4m of the deferred tax asset in
respect of losses was utilised. The use of losses is restricted to 50% of taxable pro\ufb01ts over \u00a35.0m resulting in a spreading
of losses across periods where brought forward losses are over \u00a35.0m.
The deferred tax asset on losses remaining at 31
December 2022 is \u00a33.9m.
This deferred tax asset on losses has been recognised as it is considered probable that the losses
will be utilised.
In order to support the recognition of the \u00a33.9m asset on losses, modelling was undertaken to review
the recovery period of the deferred tax asset.
The modelling was based on management forecasts and showed that the
deferred tax asset on losses is expected to be recovered by 2024.
A plausible downside case was also modelled which
included reduced sales volumes and margins and is the same model used for going-concern analysis; this downside case
modelling showed that the deferred tax asset on losses would also be recovered by 2024.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14756": {
"value": "Accounting policy
Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent
that it relates to items recognised directly in other comprehensive income, in which case it is recognised in the statement
of comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet liability method, recognising temporary differences between the
carrying amounts of assets and liabilities for \ufb01nancial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not recognised: initial recognition of goodwill, the initial recognition of assets or
liabilities in a transaction that is not a business combination that affect neither accounting nor taxable pro\ufb01t. The amount
of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable pro\ufb01ts will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax bene\ufb01t will be realised.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14764": {
"value": "Deferred tax is recognised using the balance sheet liability method, recognising temporary differences between the
carrying amounts of assets and liabilities for \ufb01nancial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not recognised: initial recognition of goodwill, the initial recognition of assets or
liabilities in a transaction that is not a business combination that affect neither accounting nor taxable pro\ufb01t. The amount
of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable pro\ufb01ts will be available against
which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related
tax bene\ufb01t will be realised.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f14957": {
"value": "Deferred tax assets/(liabilities)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes relate to the same \ufb01scal authority. The deferred tax
assets all relate to the UK.
2022
2021
\u00a3m
\u00a3m
Deferred tax assets
11.6
22.1
The table below outlines the deferred tax assets/(liabilities) that are recognised on the balance sheet, together with their
movements in the year;
(Charged)/
(Charged)/
Credited to
Credited
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2021
statement
income
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
5.8
2.2
-
8.0
Retirement bene\ufb01t obligations
14.5
(2.5)
(6.9)
5.1
Other short term temporary differences
0.7
0.7
0.3
1.7
Losses
15.4
(8.1)
-
7.3
Tax assets
36.4
(7.7)
(6.6)
22.1
(Charged) to
(Charged)
At 1
consolidated
to other
At 31
January
income
comprehensive
December
2022
statement
income
2022
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Property, plant and equipment
8.0
(1.7)
-
6.3
Retirement bene\ufb01t obligations
5.1
(2.5)
(1.6)
1.0
Other short term temporary differences
1.7
(1.2)
(0.1)
0.4
Losses
7.3
(3.4)
-
3.9
Tax assets/(liabilities)
22.1
(8.8)
(1.7)
11.6
The Group remained pro\ufb01table in 2022 after returning to pro\ufb01t in 2021.
During 2022 \u00a33.4m of the deferred tax asset in
respect of losses was utilised. The use of losses is restricted to 50% of taxable pro\ufb01ts over \u00a35.0m resulting in a spreading
of losses across periods where brought forward losses are over \u00a35.0m.
The deferred tax asset on losses remaining at 31
December 2022 is \u00a33.9m.
This deferred tax asset on losses has been recognised as it is considered probable that the losses
will be utilised.
In order to support the recognition of the \u00a33.9m asset on losses, modelling was undertaken to review
the recovery period of the deferred tax asset.
The modelling was based on management forecasts and showed that the
deferred tax asset on losses is expected to be recovered by 2024.
A plausible downside case was also modelled which
included reduced sales volumes and margins and is the same model used for going-concern analysis; this downside case
modelling showed that the deferred tax asset on losses would also be recovered by 2024.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15121": {
"value": "2.8 Earnings per share
Accounting policy
The Group presents basic and diluted earnings per share (\u2018EPS\u2019) data for its ordinary shares. Basic EPS is calculated by
dividing the pro\ufb01t or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares in issue during the period. The shares held by the EBT have been excluded from the calculation until such time
as they vest unconditionally with the employees. Diluted EPS is calculated by dividing the pro\ufb01t and loss attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue taking account of the effects of all
dilutive potential ordinary shares, which comprise of share options granted to employees and LTIPs.
Earnings per share calculation
2022
2022
2021
2021
Earnings
Earnings
Earnings
Earnings
per share
Total
per share
Total
pence
\u00a3m
pence
\u00a3m
Basic earnings per share from continuing operations
3.3
45.5
4.7
65.5
Basic earnings per share from discontinued operations
-
-
(0.3)
(4.0)
Basic earnings per share
3.3
45.5
4.4
61.5
Adjusting items:
Non-underlying items attributable to the parent from continuing operations
-
0.4
0.4
5.8
Non-underlying items attributable to the parent from discontinued operations
-
-
0.3
3.9
Non-underlying items attributable to the parent (see note 2.6)
-
0.4
0.7
9.7
Tax effect of non-underlying items from continuing operations
(0.1)
(1.4)
(0.3)
(3.1)
Tax effect of non-underlying items from discontinued operations
-
-
0.1
0.9
Tax effect of non-underlying items
(0.1)
(1.4)
(0.2)
(2.2)
Underlying earnings per share from continuing operations (Non-GAAP measure)
3.2
44.5
4.9
68.2
Underlying earnings per share from discontinued operations (Non-GAAP measure)
-
-
0.1
0.8
Underlying earnings per share (Non-GAAP measure)
3.2
44.5
5.0
69.0
Diluted earnings per share from continuing operations
3.1
45.5
4.6
65.5
Diluted earnings per share from discontinued operations
-
-
(0.3)
(4.0)
Diluted earnings per share
3.1
45.5
4.3
61.5
Diluted earnings per share - underlying from continuing operations (Non-GAAP measure)
3.1
44.5
4.8
68.2
Diluted earnings per share - underlying from discontinued operations (Non-GAAP measure)
-
-
0.1
0.8
Diluted earnings per share - underlying (Non-GAAP measure)
3.1
44.5
4.9
69.0
The calculation of basic, adjusted and diluted earnings per share is based on
the following number of shares in issue (millions):
2022
2021
Number
Number
Weighted average number of ordinary shares in issue
1,392.9
1,390.7
Weighted average number of dilutive shares under option
51.8
25.1
Weighted average number of shares in issue taking account of applicable
1,444.7
1,415.8
outstanding share options
Non-dilutive shares under option
20.7
28.7
The Directors consider that the underlying earnings per share \ufb01gure provides a better measure of comparative performance.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15125": {
"value": "Accounting policy
The Group presents basic and diluted earnings per share (\u2018EPS\u2019) data for its ordinary shares. Basic EPS is calculated by
dividing the pro\ufb01t or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares in issue during the period. The shares held by the EBT have been excluded from the calculation until such time
as they vest unconditionally with the employees. Diluted EPS is calculated by dividing the pro\ufb01t and loss attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue taking account of the effects of all
dilutive potential ordinary shares, which comprise of share options granted to employees and LTIPs.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15297": {
"value": "3.1 Intangible assets and goodwill
Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
Development
Other
Goodwill
costs
intangibles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
406.8
20.4
4.4
431.6
Additions
-
5.0
0.1
5.1
At 31 December 2021
406.8
25.4
4.5
436.7
At 1 January 2022
406.8
25.4
4.5
436.7
Additions
-
5.7
0.5
6.2
Disposals
(8.2)
-
(0.1)
(8.3)
At 31 December 2022
398.6
31.1
4.9
434.6
Amortisation
At 1 January 2021
256.5
11.0
3.6
271.1
Amortised during the year
-
3.7
0.5
4.2
At 31 December 2021
256.5
14.7
4.1
275.3
At 1 January 2022
256.5
14.7
4.1
275.3
Amortised during the year
-
4.2
0.7
4.9
Impairment of goodwill on sale of DAF business
3.6
-
-
3.6
Disposals
(6.1)
-
(0.1)
(6.2)
At 31 December 2022
254.0
18.9
4.7
277.6
Carrying amounts
At 1 January 2021
150.3
9.4
0.8
160.5
At 31 December 2021
150.3
10.7
0.4
161.4
At 31 December 2022
144.6
12.2
0.2
157.0
The following have been recognised in the income statement within net operating
2022
2021
expenses:
\u00a3m
\u00a3m
Amortisation of internally generated intangible assets
4.2
3.7
Amortisation of other intangible assets
0.7
0.5
Impairment of goodwill
3.6
-
Research and development costs
1.2
1.0
Goodwill is allocated across multiple cash-generating units which are UK Motor franchise groups, Pinewood and Leasing.
This is the lowest level at which cash-generating units are formed. Therefore there is a consistent approach to performing
the annual impairment test to assess the carrying value of this amount is taken. This value was determined by comparing
the carrying value of the asset with the higher of its fair value less costs to sell (where value is determined by applying
a trading multiple to the estimated future cash \ufb02ow or by assessing the depreciated replacement cost of the individual
assets) and value in use (where value is determined by discounting the future cash \ufb02ows generated from the continuing
use of the unit and was based on the following key assumptions):
Future cash \ufb02ows were projected into perpetuity with reference to the Group\u2019s forecasts for 2023. The 2023 forecast was
derived from the corporate plan, approved by the Board and compiled on a bottom up basis. New car volume growth was
based on the latest SMMT forecasts. Used car and aftersales revenue and gross pro\ufb01t growth has been based on latest run-
rates for the CGUs. The 2024 to 2027 forecast represents a projection from the 2023 bottom up forecast with new volume
growth based on the latest market projections and run-rates applied to determine used volume growth, with associated
gross pro\ufb01ts calculated from adjusted GPUs. Short term income and costs growth have been applied at 2.0% and 2.5%
respectively. These have been applied based on short term market in\ufb02ation assumptions. The directors have considered
the impact of climate change in respect of the impairment testing of goodwill. Climate change is impacting the pro\ufb01le of
vehicles the group sells, but is not fundamentally impacting the total cash \ufb02ows in each CGU and therefore no speci\ufb01c
adjustments have been made.
All goodwill CGUs carrying values have been based on their respective value in use.
It is anticipated that the units will grow revenues in the future. For the purpose of the impairment testing, a long-term
growth rate of 2.0% (2021: 2.0%) has been assumed beyond 2027. The growth rate of 2.0% that has been used in the
impairment calculations is based on long-term in\ufb02ation.
Goodwill has been reviewed for any possible impairment and as a result of this review there was an impairment charge
of \u00a33.6m made during the year (2021: \u00a3nil). The \u00a33.6m impairment related to the goodwill in respect of the DAF business
which was classi\ufb01ed for sale when the Group presented its interim results at 30 June 2022, prior to its eventual sale
in October 2022.
Goodwill by segment
2022
2021
\u00a3m
\u00a3m
UK Motor
122.3
128.0
Pinewood
0.3
0.3
Leasing
22.0
22.0
144.6
150.3
The pre-tax discount rates are estimated to re\ufb02ect current market estimates of the time value of money and is calculated
after consideration of market information and risk adjusted for individual circumstances. The pre-tax discount rates used are
speci\ufb01c to each CGU. Pinewood and Leasing pre-tax discount rates is 16.7% (2021: 15.2% and 11.3% respectively). Please see
the below table for the UK Motor Segment:
UK Motor CGUs
Goodwill
Current
Pre-tax
Value
Headroom
Discount
\u00a3m
\u00a3m
Rate
Ford
69.8
56.1
13.9%
Vauxhall
35.2
6.8
12.9%
Other UK Motor
17.3
56.1
8.2% - 12.6%
122.3
119.0
Sensitivity of assumptions
The forecasts used to determine impairment are sensitive to the key assumptions used in preparing those forecasts. Future
uncertainty with respect to the markets we operate in could have an effect on sales volumes and margins and the general
costs of doing business. The key assumptions used in our forecasts are the vehicle volumes and margins. The sensitivities
below indicate the total change in the value in use forecast, keeping other assumptions constant.
The directors and management have considered and assessed reasonably possible changes to the key assumptions. Within
a downside scenario, the reasonably possible changes to the key assumptions are a severe downturn to vehicle volumes
and margins. This considers both a worsening in economic conditions and restricted new car supply due to manufacturing
constraints. This gives sensitivity of an overall reduction in free cash\ufb02ow of 11.2%.
This downside sensitivity, there was no effect on both the Pinewood and Leasing segment goodwill values, only UK Motor,
which gives rise to an impairment charge to the Vauxhall CGU of \u00a37.5m, no other CGU impairment noted. The breakeven
point for the Vauxhall CGU would require a reduction in both new and used units of 2.8% into perpetuity or a reduction in
both new and used GPU of 1.2% into perpetuity.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15298": {
"value": "3.1 Intangible assets and goodwill
Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
Development
Other
Goodwill
costs
intangibles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
406.8
20.4
4.4
431.6
Additions
-
5.0
0.1
5.1
At 31 December 2021
406.8
25.4
4.5
436.7
At 1 January 2022
406.8
25.4
4.5
436.7
Additions
-
5.7
0.5
6.2
Disposals
(8.2)
-
(0.1)
(8.3)
At 31 December 2022
398.6
31.1
4.9
434.6
Amortisation
At 1 January 2021
256.5
11.0
3.6
271.1
Amortised during the year
-
3.7
0.5
4.2
At 31 December 2021
256.5
14.7
4.1
275.3
At 1 January 2022
256.5
14.7
4.1
275.3
Amortised during the year
-
4.2
0.7
4.9
Impairment of goodwill on sale of DAF business
3.6
-
-
3.6
Disposals
(6.1)
-
(0.1)
(6.2)
At 31 December 2022
254.0
18.9
4.7
277.6
Carrying amounts
At 1 January 2021
150.3
9.4
0.8
160.5
At 31 December 2021
150.3
10.7
0.4
161.4
At 31 December 2022
144.6
12.2
0.2
157.0
The following have been recognised in the income statement within net operating
2022
2021
expenses:
\u00a3m
\u00a3m
Amortisation of internally generated intangible assets
4.2
3.7
Amortisation of other intangible assets
0.7
0.5
Impairment of goodwill
3.6
-
Research and development costs
1.2
1.0
Goodwill is allocated across multiple cash-generating units which are UK Motor franchise groups, Pinewood and Leasing.
This is the lowest level at which cash-generating units are formed. Therefore there is a consistent approach to performing
the annual impairment test to assess the carrying value of this amount is taken. This value was determined by comparing
the carrying value of the asset with the higher of its fair value less costs to sell (where value is determined by applying
a trading multiple to the estimated future cash \ufb02ow or by assessing the depreciated replacement cost of the individual
assets) and value in use (where value is determined by discounting the future cash \ufb02ows generated from the continuing
use of the unit and was based on the following key assumptions):
Future cash \ufb02ows were projected into perpetuity with reference to the Group\u2019s forecasts for 2023. The 2023 forecast was
derived from the corporate plan, approved by the Board and compiled on a bottom up basis. New car volume growth was
based on the latest SMMT forecasts. Used car and aftersales revenue and gross pro\ufb01t growth has been based on latest run-
rates for the CGUs. The 2024 to 2027 forecast represents a projection from the 2023 bottom up forecast with new volume
growth based on the latest market projections and run-rates applied to determine used volume growth, with associated
gross pro\ufb01ts calculated from adjusted GPUs. Short term income and costs growth have been applied at 2.0% and 2.5%
respectively. These have been applied based on short term market in\ufb02ation assumptions. The directors have considered
the impact of climate change in respect of the impairment testing of goodwill. Climate change is impacting the pro\ufb01le of
vehicles the group sells, but is not fundamentally impacting the total cash \ufb02ows in each CGU and therefore no speci\ufb01c
adjustments have been made.
All goodwill CGUs carrying values have been based on their respective value in use.
It is anticipated that the units will grow revenues in the future. For the purpose of the impairment testing, a long-term
growth rate of 2.0% (2021: 2.0%) has been assumed beyond 2027. The growth rate of 2.0% that has been used in the
impairment calculations is based on long-term in\ufb02ation.
Goodwill has been reviewed for any possible impairment and as a result of this review there was an impairment charge
of \u00a33.6m made during the year (2021: \u00a3nil). The \u00a33.6m impairment related to the goodwill in respect of the DAF business
which was classi\ufb01ed for sale when the Group presented its interim results at 30 June 2022, prior to its eventual sale
in October 2022.
Goodwill by segment
2022
2021
\u00a3m
\u00a3m
UK Motor
122.3
128.0
Pinewood
0.3
0.3
Leasing
22.0
22.0
144.6
150.3
The pre-tax discount rates are estimated to re\ufb02ect current market estimates of the time value of money and is calculated
after consideration of market information and risk adjusted for individual circumstances. The pre-tax discount rates used are
speci\ufb01c to each CGU. Pinewood and Leasing pre-tax discount rates is 16.7% (2021: 15.2% and 11.3% respectively). Please see
the below table for the UK Motor Segment:
UK Motor CGUs
Goodwill
Current
Pre-tax
Value
Headroom
Discount
\u00a3m
\u00a3m
Rate
Ford
69.8
56.1
13.9%
Vauxhall
35.2
6.8
12.9%
Other UK Motor
17.3
56.1
8.2% - 12.6%
122.3
119.0
Sensitivity of assumptions
The forecasts used to determine impairment are sensitive to the key assumptions used in preparing those forecasts. Future
uncertainty with respect to the markets we operate in could have an effect on sales volumes and margins and the general
costs of doing business. The key assumptions used in our forecasts are the vehicle volumes and margins. The sensitivities
below indicate the total change in the value in use forecast, keeping other assumptions constant.
The directors and management have considered and assessed reasonably possible changes to the key assumptions. Within
a downside scenario, the reasonably possible changes to the key assumptions are a severe downturn to vehicle volumes
and margins. This considers both a worsening in economic conditions and restricted new car supply due to manufacturing
constraints. This gives sensitivity of an overall reduction in free cash\ufb02ow of 11.2%.
This downside sensitivity, there was no effect on both the Pinewood and Leasing segment goodwill values, only UK Motor,
which gives rise to an impairment charge to the Vauxhall CGU of \u00a37.5m, no other CGU impairment noted. The breakeven
point for the Vauxhall CGU would require a reduction in both new and used units of 2.8% into perpetuity or a reduction in
both new and used GPU of 1.2% into perpetuity.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15299": {
"value": "3.1 Intangible assets and goodwill
Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
Development
Other
Goodwill
costs
intangibles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
406.8
20.4
4.4
431.6
Additions
-
5.0
0.1
5.1
At 31 December 2021
406.8
25.4
4.5
436.7
At 1 January 2022
406.8
25.4
4.5
436.7
Additions
-
5.7
0.5
6.2
Disposals
(8.2)
-
(0.1)
(8.3)
At 31 December 2022
398.6
31.1
4.9
434.6
Amortisation
At 1 January 2021
256.5
11.0
3.6
271.1
Amortised during the year
-
3.7
0.5
4.2
At 31 December 2021
256.5
14.7
4.1
275.3
At 1 January 2022
256.5
14.7
4.1
275.3
Amortised during the year
-
4.2
0.7
4.9
Impairment of goodwill on sale of DAF business
3.6
-
-
3.6
Disposals
(6.1)
-
(0.1)
(6.2)
At 31 December 2022
254.0
18.9
4.7
277.6
Carrying amounts
At 1 January 2021
150.3
9.4
0.8
160.5
At 31 December 2021
150.3
10.7
0.4
161.4
At 31 December 2022
144.6
12.2
0.2
157.0
The following have been recognised in the income statement within net operating
2022
2021
expenses:
\u00a3m
\u00a3m
Amortisation of internally generated intangible assets
4.2
3.7
Amortisation of other intangible assets
0.7
0.5
Impairment of goodwill
3.6
-
Research and development costs
1.2
1.0
Goodwill is allocated across multiple cash-generating units which are UK Motor franchise groups, Pinewood and Leasing.
This is the lowest level at which cash-generating units are formed. Therefore there is a consistent approach to performing
the annual impairment test to assess the carrying value of this amount is taken. This value was determined by comparing
the carrying value of the asset with the higher of its fair value less costs to sell (where value is determined by applying
a trading multiple to the estimated future cash \ufb02ow or by assessing the depreciated replacement cost of the individual
assets) and value in use (where value is determined by discounting the future cash \ufb02ows generated from the continuing
use of the unit and was based on the following key assumptions):
Future cash \ufb02ows were projected into perpetuity with reference to the Group\u2019s forecasts for 2023. The 2023 forecast was
derived from the corporate plan, approved by the Board and compiled on a bottom up basis. New car volume growth was
based on the latest SMMT forecasts. Used car and aftersales revenue and gross pro\ufb01t growth has been based on latest run-
rates for the CGUs. The 2024 to 2027 forecast represents a projection from the 2023 bottom up forecast with new volume
growth based on the latest market projections and run-rates applied to determine used volume growth, with associated
gross pro\ufb01ts calculated from adjusted GPUs. Short term income and costs growth have been applied at 2.0% and 2.5%
respectively. These have been applied based on short term market in\ufb02ation assumptions. The directors have considered
the impact of climate change in respect of the impairment testing of goodwill. Climate change is impacting the pro\ufb01le of
vehicles the group sells, but is not fundamentally impacting the total cash \ufb02ows in each CGU and therefore no speci\ufb01c
adjustments have been made.
All goodwill CGUs carrying values have been based on their respective value in use.
It is anticipated that the units will grow revenues in the future. For the purpose of the impairment testing, a long-term
growth rate of 2.0% (2021: 2.0%) has been assumed beyond 2027. The growth rate of 2.0% that has been used in the
impairment calculations is based on long-term in\ufb02ation.
Goodwill has been reviewed for any possible impairment and as a result of this review there was an impairment charge
of \u00a33.6m made during the year (2021: \u00a3nil). The \u00a33.6m impairment related to the goodwill in respect of the DAF business
which was classi\ufb01ed for sale when the Group presented its interim results at 30 June 2022, prior to its eventual sale
in October 2022.
Goodwill by segment
2022
2021
\u00a3m
\u00a3m
UK Motor
122.3
128.0
Pinewood
0.3
0.3
Leasing
22.0
22.0
144.6
150.3
The pre-tax discount rates are estimated to re\ufb02ect current market estimates of the time value of money and is calculated
after consideration of market information and risk adjusted for individual circumstances. The pre-tax discount rates used are
speci\ufb01c to each CGU. Pinewood and Leasing pre-tax discount rates is 16.7% (2021: 15.2% and 11.3% respectively). Please see
the below table for the UK Motor Segment:
UK Motor CGUs
Goodwill
Current
Pre-tax
Value
Headroom
Discount
\u00a3m
\u00a3m
Rate
Ford
69.8
56.1
13.9%
Vauxhall
35.2
6.8
12.9%
Other UK Motor
17.3
56.1
8.2% - 12.6%
122.3
119.0
Sensitivity of assumptions
The forecasts used to determine impairment are sensitive to the key assumptions used in preparing those forecasts. Future
uncertainty with respect to the markets we operate in could have an effect on sales volumes and margins and the general
costs of doing business. The key assumptions used in our forecasts are the vehicle volumes and margins. The sensitivities
below indicate the total change in the value in use forecast, keeping other assumptions constant.
The directors and management have considered and assessed reasonably possible changes to the key assumptions. Within
a downside scenario, the reasonably possible changes to the key assumptions are a severe downturn to vehicle volumes
and margins. This considers both a worsening in economic conditions and restricted new car supply due to manufacturing
constraints. This gives sensitivity of an overall reduction in free cash\ufb02ow of 11.2%.
This downside sensitivity, there was no effect on both the Pinewood and Leasing segment goodwill values, only UK Motor,
which gives rise to an impairment charge to the Vauxhall CGU of \u00a37.5m, no other CGU impairment noted. The breakeven
point for the Vauxhall CGU would require a reduction in both new and used units of 2.8% into perpetuity or a reduction in
both new and used GPU of 1.2% into perpetuity.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15304": {
"value": "Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15305": {
"value": "Accounting policies
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic bene\ufb01ts
embodied in the speci\ufb01c asset to which it relates. All other expenditure is expensed as incurred.
Intangible assets arising on an acquisition are recognised separately from goodwill if the fair value of the asset can be
identi\ufb01ed separately and measured reliably. Amortisation is calculated on a straight line basis over the estimated useful life
of the intangible asset. Amortisation methods and useful lives are reviewed annually and adjusted if appropriate.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15311": {
"value": "All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the cost
of acquisition over the net fair value of the identi\ufb01able assets, liabilities and contingent liabilities of the acquired subsidiary
undertakings at the effective date of acquisition and is included in the balance sheet under the heading of intangible
assets. The goodwill is allocated to cash generating units (CGUs), which are franchise groups and other business units.
An impairment test is performed annually as detailed below. Goodwill is then held in the balance sheet at cost less any
accumulated impairment losses.
Adjustments are applied to bring the accounting policies of the acquired businesses into alignment with those of the
Group. The costs associated with reorganising or restructuring are charged to the post acquisition income statement. For
those acquisitions made prior to 1 January 2004, goodwill is recorded on the basis of its deemed cost which represented
its carrying value as at 1 January 2004 under UK GAAP. Fair value adjustments are made in respect of acquisitions. If
at the balance sheet date the fair value of the acquiree\u2019s identi\ufb01able assets, liabilities and contingent liabilities can only
be established provisionally then these values are used. Any adjustments to these values made within 12 months of the
acquisition date are taken as adjustments to goodwill.
Accounting policy
The results of businesses disposed of during the year are included up to the effective date of disposal using the acquisition
method of accounting.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15325": {
"value": "Internally generated intangible assets relate to activities that involve the development of dealer management systems
by the Group\u2019s Pinewood division. Development expenditure is capitalised only if development costs can be measured
reliably, the product is technically and commercially feasible, future economic bene\ufb01ts are probable and the Group intends
to and has suf\ufb01cient resources to complete development and to use or sell the asset. The expenditure capitalised includes
the costs of labour and overhead costs that are directly attributable to preparing the asset for its intended use. If the
development expenditure does not meet the above criteria it is expensed to the income statement.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses and is amortised over a period of \ufb01ve years.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15336": {
"value": "Intangible assets other than goodwill are stated at cost less accumulated amortisation and any impairment losses. This
category of asset includes purchased computer software and internally generated intangible assets which are amortised
by equal instalments over four years and the fair value of the bene\ufb01t of forward sales orders assumed on acquisition, which
is amortised by reference to when those orders are delivered.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15375": {
"value": "Development
Other
Goodwill
costs
intangibles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
406.8
20.4
4.4
431.6
Additions
-
5.0
0.1
5.1
At 31 December 2021
406.8
25.4
4.5
436.7
At 1 January 2022
406.8
25.4
4.5
436.7
Additions
-
5.7
0.5
6.2
Disposals
(8.2)
-
(0.1)
(8.3)
At 31 December 2022
398.6
31.1
4.9
434.6
Amortisation
At 1 January 2021
256.5
11.0
3.6
271.1
Amortised during the year
-
3.7
0.5
4.2
At 31 December 2021
256.5
14.7
4.1
275.3
At 1 January 2022
256.5
14.7
4.1
275.3
Amortised during the year
-
4.2
0.7
4.9
Impairment of goodwill on sale of DAF business
3.6
-
-
3.6
Disposals
(6.1)
-
(0.1)
(6.2)
At 31 December 2022
254.0
18.9
4.7
277.6
Carrying amounts
At 1 January 2021
150.3
9.4
0.8
160.5
At 31 December 2021
150.3
10.7
0.4
161.4
At 31 December 2022
144.6
12.2
0.2
157.0
Contract
Land &
Plant &
Motor
hire
buildings
equipment
vehicles
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Depreciation
At 1 January 2021
320.7
59.0
4.9
73.0
457.6
Reclassi\ufb01cation
-
-
(3.8)
-
(3.8)
Exchange adjustments
0.1
-
-
-
0.1
Charge for the year
24.8
6.6
0.5
38.5
70.4
Impairment
9.6
-
-
-
9.6
Business disposals
-
(1.2)
-
-
(1.2)
Other disposals
(14.0)
(0.7)
(0.6)
-
(15.3)
Contract hire vehicles transferred to inventory
-
-
-
(17.9)
(17.9)
Classi\ufb01ed as non-current assets held for sale
(2.7)
-
-
-
(2.7)
Reinstated from non-current assets held for sale
0.8
0.1
-
-
0.9
At 31 December 2021
339.3
63.8
1.0
93.6
497.7
At 1 January 2022
339.3
63.8
1.0
93.6
497.7
Charge for the year
21.6
6.9
0.1
36.1
64.7
Impairment
1.0
0.2
-
-
1.2
Business disposals
(0.5)
(1.7)
-
-
(2.2)
Other disposals
(33.9)
(9.3)
(0.3)
-
(43.5)
Contract hire vehicles transferred to inventory
-
-
-
(34.6)
(34.6)
Classi\ufb01ed as non-current assets held for sale
(0.9)
-
-
-
(0.9)
Reinstated from non-current assets held for sale
1.5
-
-
-
1.5
At 31 December 2022
328.1
59.9
0.8
95.1
483.9
Carrying amounts
At 1 January 2021
368.4
26.2
20.8
157.4
572.8
At 31 December 2021
344.0
22.8
1.5
131.2
499.5
At 31 December 2022
364.2
25.2
1.6
124.9
515.9
Assets leased out under operating leases
Cost at 31 December 2022
30.2
-
-
220.0
250.2
Accumulated depreciation at 31 December 2022
(13.9)
-
-
(95.1)
(109.0)
Accumulated impairment at 31 December 2022
(4.4)
-
-
-
(4.4)
Carrying value of assets leased out under
11.9
-
-
124.9
136.8
operating leases at 31 December 2022
2022
2021
\u00a3m
\u00a3m
Building projects currently under construction for which no depreciation has
7.6
8.7
been charged during the year
Future capital expenditure which has been contracted for but not yet provided
2.8
7.1
in the \ufb01nancial statements - property development and refurbishment
Cumulative interest charges capitalised as construction costs and included in
6.0
5.2
land and buildings
The following items have been charged to the income statement as operating
expenses during the year:
Depreciation of property, plant and equipment - leased
15.2
18.5
Depreciation of contract hire vehicles - leased
36.1
38.5
Depreciation of property, plant and equipment - owned
13.4
13.4
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15635": {
"value": "3.2 Property, plant and equipment
Accounting policy
Freehold land is not depreciated. Depreciation is provided to write off the cost less the estimated residual value of other
assets by equal instalments over their estimated useful economic lives. On transition to IFRS as at 1 January 2004, all land
and buildings were restated to fair value as permitted by IFRS 1, which is then treated as the deemed cost. All other assets
are initially measured and recorded at cost.
Depreciation rates are as follows:
\u2022
Freehold buildings \u2013 2% per annum
\u2022 Right of use assets - over the period of the lease
\u2022
Leasehold property improvements \u2013 2% per annum or over the period of the lease if less than 50 years
\u2022
Fixtures, \ufb01ttings and of\ufb01ce equipment \u2013 10 \u2013 20% per annum
\u2022
Plant and machinery \u2013 10 \u2013 33% per annum
\u2022
Motor vehicles \u2013 20 \u2013 25% per annum
\u2022 Contract hire vehicles are depreciated to their residual value over the period of their lease
The residual value of all assets, depreciation methods and useful economic lives, if signi\ufb01cant, are reassessed annually.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of
such an item when that cost is incurred if it is possible that the future economic bene\ufb01ts embodied with the item will \ufb02ow
to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as
an expense as incurred.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised net within other income in the
income statement.
The depreciation charge in respect of property, plant and equipment is recognised within administrative expenses within
the income statement.
Contract
Land &
Plant &
Motor
hire
buildings
equipment
vehicles
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Cost
At 1 January 2021
689.1
85.2
25.7
230.4
1,030.4
Reclassi\ufb01cation
-
-
(22.7)
-
(22.7)
Exchange adjustments
0.1
-
-
-
0.1
Additions
17.4
4.4
0.1
42.4
64.3
Business disposals
-
(1.6)
-
-
(1.6)
Other disposals
(19.9)
(1.5)
(0.6)
-
(22.0)
Contract hire vehicles transferred to inventory
-
-
-
(48.0)
(48.0)
Classi\ufb01ed as non-current assets held for sale
(10.5)
-
-
-
(10.5)
Reinstated from non-current assets held for sale
7.1
0.1
-
-
7.2
At 31 December 2021
683.3
86.6
2.5
224.8
997.2
At 1 January 2022
683.3
86.6
2.5
224.8
997.2
Additions
47.5
10.3
0.2
46.6
104.6
Business disposals
(0.5)
(1.9)
-
-
(2.4)
Other disposals
(39.0)
(9.9)
(0.3)
-
(49.2)
Contract hire vehicles transferred to inventory
-
-
-
(51.4)
(51.4)
Classi\ufb01ed as non-current assets held for sale
(2.8)
-
-
-
(2.8)
Reinstated from non-current assets held for sale
3.8
-
-
-
3.8
At 31 December 2022
692.3
85.1
2.4
220.0
999.8
Contract
Land &
Plant &
Motor
hire
buildings
equipment
vehicles
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Depreciation
At 1 January 2021
320.7
59.0
4.9
73.0
457.6
Reclassi\ufb01cation
-
-
(3.8)
-
(3.8)
Exchange adjustments
0.1
-
-
-
0.1
Charge for the year
24.8
6.6
0.5
38.5
70.4
Impairment
9.6
-
-
-
9.6
Business disposals
-
(1.2)
-
-
(1.2)
Other disposals
(14.0)
(0.7)
(0.6)
-
(15.3)
Contract hire vehicles transferred to inventory
-
-
-
(17.9)
(17.9)
Classi\ufb01ed as non-current assets held for sale
(2.7)
-
-
-
(2.7)
Reinstated from non-current assets held for sale
0.8
0.1
-
-
0.9
At 31 December 2021
339.3
63.8
1.0
93.6
497.7
At 1 January 2022
339.3
63.8
1.0
93.6
497.7
Charge for the year
21.6
6.9
0.1
36.1
64.7
Impairment
1.0
0.2
-
-
1.2
Business disposals
(0.5)
(1.7)
-
-
(2.2)
Other disposals
(33.9)
(9.3)
(0.3)
-
(43.5)
Contract hire vehicles transferred to inventory
-
-
-
(34.6)
(34.6)
Classi\ufb01ed as non-current assets held for sale
(0.9)
-
-
-
(0.9)
Reinstated from non-current assets held for sale
1.5
-
-
-
1.5
At 31 December 2022
328.1
59.9
0.8
95.1
483.9
Carrying amounts
At 1 January 2021
368.4
26.2
20.8
157.4
572.8
At 31 December 2021
344.0
22.8
1.5
131.2
499.5
At 31 December 2022
364.2
25.2
1.6
124.9
515.9
Assets leased out under operating leases
Cost at 31 December 2022
30.2
-
-
220.0
250.2
Accumulated depreciation at 31 December 2022
(13.9)
-
-
(95.1)
(109.0)
Accumulated impairment at 31 December 2022
(4.4)
-
-
-
(4.4)
Carrying value of assets leased out under
11.9
-
-
124.9
136.8
operating leases at 31 December 2022
Property, plant and equipment includes right-of-use assets of \u00a3130.5m
(see Note 4.7).
During the year two properties were re-classi\ufb01ed as property, plant and equipment following a decision to withdraw them
from sale. The properties have been re-instated at the lower of their recoverable amount, or the carrying amount had the
assets never been moved to assets held for sale. In this instance the properties were re-instated at their recoverable values
having been previously impaired down to those values.
2022
2021
\u00a3m
\u00a3m
Building projects currently under construction for which no depreciation has
7.6
8.7
been charged during the year
Future capital expenditure which has been contracted for but not yet provided
2.8
7.1
in the \ufb01nancial statements - property development and refurbishment
Cumulative interest charges capitalised as construction costs and included in
6.0
5.2
land and buildings
The following items have been charged to the income statement as operating
expenses during the year:
Depreciation of property, plant and equipment - leased
15.2
18.5
Depreciation of contract hire vehicles - leased
36.1
38.5
Depreciation of property, plant and equipment - owned
13.4
13.4
Cash \ufb02ow statement information
2022
2021
\u00a3m
\u00a3m
Additions to property, plant, equipment and intangible assets:
Additions to land and buildings
(47.5)
(17.4)
Additions to plant and equipment
(10.3)
(4.4)
Additions to motor vehicles
(0.2)
(0.1)
Additions to intangible assets (see note 3.1)
(6.2)
(5.1)
Total additions
(64.2)
(27.0)
Less additions of property, plant and equipment acquired under leases for
which no cash \ufb02ow arises (excludes fees capitalised of \u00a32.6m (2021: \u00a30.1)) (see
19.9
8.7
note 4.7)
Cash \ufb02ows relating to additions of property, plant and equipment made by the
-
(0.3)
US disposal group disclosed within assets held for sale
Cash \ufb02ows from investing activities in respect of additions to property, plant
(44.3)
(18.6)
and equipment
Cash \ufb02ows relating to the purchase of contract hire vehicles are disclosed within Movement in contract hire vehicle balances
(see note 3.5).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15638": {
"value": "Accounting policy
Freehold land is not depreciated. Depreciation is provided to write off the cost less the estimated residual value of other
assets by equal instalments over their estimated useful economic lives. On transition to IFRS as at 1 January 2004, all land
and buildings were restated to fair value as permitted by IFRS 1, which is then treated as the deemed cost. All other assets
are initially measured and recorded at cost.
Depreciation rates are as follows:
\u2022
Freehold buildings \u2013 2% per annum
\u2022 Right of use assets - over the period of the lease
\u2022
Leasehold property improvements \u2013 2% per annum or over the period of the lease if less than 50 years
\u2022
Fixtures, \ufb01ttings and of\ufb01ce equipment \u2013 10 \u2013 20% per annum
\u2022
Plant and machinery \u2013 10 \u2013 33% per annum
\u2022
Motor vehicles \u2013 20 \u2013 25% per annum
\u2022 Contract hire vehicles are depreciated to their residual value over the period of their lease
The residual value of all assets, depreciation methods and useful economic lives, if signi\ufb01cant, are reassessed annually.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of
such an item when that cost is incurred if it is possible that the future economic bene\ufb01ts embodied with the item will \ufb02ow
to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as
an expense as incurred.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised net within other income in the
income statement.
The depreciation charge in respect of property, plant and equipment is recognised within administrative expenses within
the income statement.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f15642": {
"value": "Freehold land is not depreciated. Depreciation is provided to write off the cost less the estimated residual value of other
assets by equal instalments over their estimated useful economic lives. On transition to IFRS as at 1 January 2004, all land
and buildings were restated to fair value as permitted by IFRS 1, which is then treated as the deemed cost. All other assets
are initially measured and recorded at cost.
Depreciation rates are as follows:
\u2022
Freehold buildings \u2013 2% per annum
\u2022 Right of use assets - over the period of the lease
\u2022
Leasehold property improvements \u2013 2% per annum or over the period of the lease if less than 50 years
\u2022
Fixtures, \ufb01ttings and of\ufb01ce equipment \u2013 10 \u2013 20% per annum
\u2022
Plant and machinery \u2013 10 \u2013 33% per annum
\u2022
Motor vehicles \u2013 20 \u2013 25% per annum
\u2022 Contract hire vehicles are depreciated to their residual value over the period of their lease
The residual value of all assets, depreciation methods and useful economic lives, if signi\ufb01cant, are reassessed annually.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16089": {
"value": "Cash \ufb02ow statement information
2022
2021
\u00a3m
\u00a3m
Additions to property, plant, equipment and intangible assets:
Additions to land and buildings
(47.5)
(17.4)
Additions to plant and equipment
(10.3)
(4.4)
Additions to motor vehicles
(0.2)
(0.1)
Additions to intangible assets (see note 3.1)
(6.2)
(5.1)
Total additions
(64.2)
(27.0)
Less additions of property, plant and equipment acquired under leases for
which no cash \ufb02ow arises (excludes fees capitalised of \u00a32.6m (2021: \u00a30.1)) (see
19.9
8.7
note 4.7)
Cash \ufb02ows relating to additions of property, plant and equipment made by the
-
(0.3)
US disposal group disclosed within assets held for sale
Cash \ufb02ows from investing activities in respect of additions to property, plant
(44.3)
(18.6)
and equipment
Cash \ufb02ows relating to the purchase of contract hire vehicles are disclosed within Movement in contract hire vehicle balances
(see note 3.5).
Cash \ufb02ow statement information
2022
2021
\u00a3m
\u00a3m
Movement in inventory
(107.5)
96.0
Reclassi\ufb01cation from property, plant and equipment (see note 3.2)
-
18.9
Inventory changes in business combinations and disposals
(37.2)
(0.6)
Impact of exchange differences
-
0.1
Non cash movement in consignment vehicles
8.1
(54.5)
Classi\ufb01ed as held for sale
-
17.8
Transfer value of contract hire vehicles from \ufb01xed assets to inventory
16.8
30.1
Cash \ufb02ow (decrease)/increase due to movements in inventory
(119.8)
107.8
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16144": {
"value": "3.3 Assets held for sale and discontinued operations
Accounting policy
Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are
classi\ufb01ed as held for sale. Immediately before classi\ufb01cation as held for sale, the assets are measured in accordance with
the Group's accounting policies. Thereafter the assets are measured at the lower of their carrying amount and fair value
less costs to sell. Impairment losses on remeasurement are recognised in the income statement. Gains are not recognised
in excess of any cumulative impairment loss. Non-current assets classi\ufb01ed as held for sale are available for immediate sale
and a resultant disposal is highly probable within one year.
A non-current asset that stops being classi\ufb01ed as held for sale is remeasured at the lower of its carrying amount prior
to the asset or disposal group being classi\ufb01ed as held for sale, adjusted for any depreciation or amortisation that would
have been recognised if the asset had not been classi\ufb01ed as held for sale, or, its recoverable amount at the date of the
decision not to sell.
Discontinued operations
There were no buinsesses in the Group classi\ufb01ed as a discontinued operation in 2022.
During the previous period, 2021,
the Group sold its two remaining stores in its US Business, which was shown as a discontinued operation within the
comparative information in these consolidated \ufb01nancial statements.
The results of the discontinued operation are set out on the face of the consolidated income statement. Other \ufb01nancial
information relating to the discontinued operation for the period is set out below.
Assets and liabilities of a disposal Group held for sale
From 31 December 2018 until the sale of the \ufb01nal business unit in March 2021, the US motor business was classi\ufb01ed as a
disposal group which was stated at fair value less costs to sell and comprised the following assets and liabilities.
2022
2021
\u00a3m
\u00a3m
Net cash used in operating activities
-
(5.4)
Net cash from investing activities
-
27.6
Net cash used in \ufb01nancing activities
-
(31.3)
Net cash decrease generated by discontinued operation
-
(9.1)
Included within net cash used in \ufb01nancing activities for 2021 is \u00a328.8m in respect of a dividend paid by the US company to its UK
holding company.
2022
2021
pence
pence
Basic earnings per share from discontinued operation
-
(0.3)
Underlying basic earnings per share from discontinued operation
-
(0.1)
Diluted earnings per share from discontinued operation
-
(0.3)
Balance sheet
The Group holds a number of freehold properties that are currently being marketed for sale which are expected to be
disposed of during 2023. Properties are valued using a combination of external quali\ufb01ed valuers and in-house experts. Due
to the nature of the market, especially in light of current economic conditions, a property may ultimately realise proceeds
that vary from those valuations applied.
Assets classi\ufb01ed for sale comprise:
2022
2021
\u00a3m
\u00a3m
Property, plant and equipment
6.1
10.4
Income statement
The following items have been credited/(charged)
Income statement category
2022
2021
to the income statement during the year:
\u00a3m
\u00a3m
Other income - gains on the sale of busi-
Pro\ufb01t on sale of assets classi\ufb01ed as held for sale
8.0
1.7
nesses and property, plant and equipment
If the fair value less costs to sell assigned to each property were to be reduced by 10% a further impairment loss of \u00a30.1m
would have been recognised (2021: \u00a30.4m).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16147": {
"value": "Accounting policy
Non-current assets that are expected to be recovered primarily through sale rather than through continuing use are
classi\ufb01ed as held for sale. Immediately before classi\ufb01cation as held for sale, the assets are measured in accordance with
the Group's accounting policies. Thereafter the assets are measured at the lower of their carrying amount and fair value
less costs to sell. Impairment losses on remeasurement are recognised in the income statement. Gains are not recognised
in excess of any cumulative impairment loss. Non-current assets classi\ufb01ed as held for sale are available for immediate sale
and a resultant disposal is highly probable within one year.
A non-current asset that stops being classi\ufb01ed as held for sale is remeasured at the lower of its carrying amount prior
to the asset or disposal group being classi\ufb01ed as held for sale, adjusted for any depreciation or amortisation that would
have been recognised if the asset had not been classi\ufb01ed as held for sale, or, its recoverable amount at the date of the
decision not to sell.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16163": {
"value": "Discontinued operations
There were no buinsesses in the Group classi\ufb01ed as a discontinued operation in 2022.
During the previous period, 2021,
the Group sold its two remaining stores in its US Business, which was shown as a discontinued operation within the
comparative information in these consolidated \ufb01nancial statements.
The results of the discontinued operation are set out on the face of the consolidated income statement. Other \ufb01nancial
information relating to the discontinued operation for the period is set out below.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16173": {
"value": "Assets and liabilities of a disposal Group held for sale
From 31 December 2018 until the sale of the \ufb01nal business unit in March 2021, the US motor business was classi\ufb01ed as a
disposal group which was stated at fair value less costs to sell and comprised the following assets and liabilities.
2022
2021
\u00a3m
\u00a3m
Net cash used in operating activities
-
(5.4)
Net cash from investing activities
-
27.6
Net cash used in \ufb01nancing activities
-
(31.3)
Net cash decrease generated by discontinued operation
-
(9.1)
Included within net cash used in \ufb01nancing activities for 2021 is \u00a328.8m in respect of a dividend paid by the US company to its UK
holding company.
2022
2021
pence
pence
Basic earnings per share from discontinued operation
-
(0.3)
Underlying basic earnings per share from discontinued operation
-
(0.1)
Diluted earnings per share from discontinued operation
-
(0.3)
Balance sheet
The Group holds a number of freehold properties that are currently being marketed for sale which are expected to be
disposed of during 2023. Properties are valued using a combination of external quali\ufb01ed valuers and in-house experts. Due
to the nature of the market, especially in light of current economic conditions, a property may ultimately realise proceeds
that vary from those valuations applied.
Assets classi\ufb01ed for sale comprise:
2022
2021
\u00a3m
\u00a3m
Property, plant and equipment
6.1
10.4
Income statement
The following items have been credited/(charged)
Income statement category
2022
2021
to the income statement during the year:
\u00a3m
\u00a3m
Other income - gains on the sale of busi-
Pro\ufb01t on sale of assets classi\ufb01ed as held for sale
8.0
1.7
nesses and property, plant and equipment
If the fair value less costs to sell assigned to each property were to be reduced by 10% a further impairment loss of \u00a30.1m
would have been recognised (2021: \u00a30.4m).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16265": {
"value": "3.4 Inventories
Accounting policies
Motor vehicle inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product
to its present location and condition are included and cost is based on price including delivery costs less speci\ufb01c trade
discounts. Fair value reviews of stock are conducted regularly utilising our market intelligence and analysis of the market
which we conduct by segment and by model, these fair values are updated in the light of any changing trends by model
line. The assessment of fair values involves an element of estimation: the Group takes the age pro\ufb01le of our inventories
at the year end, estimates the likely sale period and the expected pro\ufb01t or loss on sale to determine the fair value at the
balance sheet date. Whilst this data is deemed representative of current values it is possible that ultimate sales values can
vary from those applied. Parts inventories are based on an average purchase cost principle and are written down to net
realisable value by providing for obsolescence on a time in stock based formula approach.
Consignment vehicles are regarded as being effectively under the control of the Group and are included within inventories
on the balance sheet as the Group has the signi\ufb01cant risks and rewards of ownership even though legal title has not yet
passed. The corresponding liability is included in trade and other payables. Movements in consignment vehicle inventory
and its corresponding liability within trade and other payables are not included within movements of inventories and
payables as stated in the consolidated cash \ufb02ow statement as no cash \ufb02ows arise in respect of these transactions until the
vehicle is either sold or purchased at which point it is reclassi\ufb01ed within new and used vehicle inventory.
Motor vehicles are transferred from contract hire activities at the end of their lease term to inventory at their depreciated
cost. No physical cash \ufb02ow arises from these transfers.
Balance sheet
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
Vehicle parts and other inventories
25.3
24.4
620.3
512.8
2022
2021
\u00a3m
\u00a3m
Inventories recognised as an expense during the year
3,126.2
2,972.0
Carrying value of inventories subject to retention of title clauses
462.1
447.8
Write-down of inventories to net realisable value (included within cost of sales)
8.1
10.1
Included within the write-down of inventories to net realisable value is the write-down of used vehicle inventory of \u00a36.9m
(2021: \u00a38.0m). The key assumptions underpinning the write-down of net realisable value of the used vehicle inventory are
(i) the time to sell each vehicle; (ii) the expected sales price at the date of sale. Sensitivities have been performed on the
key assumptions; (i) a 30 day sensitivity has been used for the time to sell each vehicle as this is a plausible scenario and
(ii) a \u00a3500 sensitivity has been used for the expected sales price at the date of sale as in the region of \u00a3500 variations in
GPUs have been seen in previous reporting periods.
If the average time to sell a vehicle is increased by 30 days then it would increase the write-down of the used vehicle
inventory by \u00a32.5m (2021: \u00a30.2m). If the expected sales prices at the date of sale were to decrease by \u00a3500 per vehicle,
then it would increase the value of the write-down of used vehicle inventory by \u00a33.7m (2021: \u00a34.1m) at the balance sheet
date. Whereas if the average time to sell a vehicle is decreased by 30 days then it would decrease the value of the write-
down of used vehicle inventory by \u00a32.3m (2021: \u00a31.3m). Also if the expected sales prices at the date of sale were to
increase by \u00a3500 per vehicle then it would decrease the value of the write-down of used vehicle inventory by \u00a32.4m (2021:
\u00a33.1m) at the balance sheet date.
Cash \ufb02ow statement information
2022
2021
\u00a3m
\u00a3m
Movement in inventory
(107.5)
96.0
Reclassi\ufb01cation from property, plant and equipment (see note 3.2)
-
18.9
Inventory changes in business combinations and disposals
(37.2)
(0.6)
Impact of exchange differences
-
0.1
Non cash movement in consignment vehicles
8.1
(54.5)
Classi\ufb01ed as held for sale
-
17.8
Transfer value of contract hire vehicles from \ufb01xed assets to inventory
16.8
30.1
Cash \ufb02ow (decrease)/increase due to movements in inventory
(119.8)
107.8
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInventoriesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16268": {
"value": "Accounting policies
Motor vehicle inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product
to its present location and condition are included and cost is based on price including delivery costs less speci\ufb01c trade
discounts. Fair value reviews of stock are conducted regularly utilising our market intelligence and analysis of the market
which we conduct by segment and by model, these fair values are updated in the light of any changing trends by model
line. The assessment of fair values involves an element of estimation: the Group takes the age pro\ufb01le of our inventories
at the year end, estimates the likely sale period and the expected pro\ufb01t or loss on sale to determine the fair value at the
balance sheet date. Whilst this data is deemed representative of current values it is possible that ultimate sales values can
vary from those applied. Parts inventories are based on an average purchase cost principle and are written down to net
realisable value by providing for obsolescence on a time in stock based formula approach.
Consignment vehicles are regarded as being effectively under the control of the Group and are included within inventories
on the balance sheet as the Group has the signi\ufb01cant risks and rewards of ownership even though legal title has not yet
passed. The corresponding liability is included in trade and other payables. Movements in consignment vehicle inventory
and its corresponding liability within trade and other payables are not included within movements of inventories and
payables as stated in the consolidated cash \ufb02ow statement as no cash \ufb02ows arise in respect of these transactions until the
vehicle is either sold or purchased at which point it is reclassi\ufb01ed within new and used vehicle inventory.
Motor vehicles are transferred from contract hire activities at the end of their lease term to inventory at their depreciated
cost. No physical cash \ufb02ow arises from these transfers.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16424": {
"value": "3.6 Trade and other receivables
Accounting policy
Trade and other receivables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any impairment losses.
Impairment losses are measured in accordance with IFRS 9, which is based on an \u2018expected credit loss\u2019 (ECL) model. The
impairment model applies to \ufb01nancial assets measured at amortised cost.
The calculation of ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and
the cash \ufb02ows that the Group expects to receive).
The Group considers a trade or other receivable to be in default when the borrower is unlikely to pay its credit obligations
to the Group in full after all reasonable actions have been taken to recover the debt.
Credit risk management
The Group is exposed to credit risk primarily in respect of its trade receivables and \ufb01nancial assets. Trade receivables are
stated net of provision for estimated impairment losses. Exposure to credit risk in respect of trade receivables is mitigated
by the Group\u2019s policy of only granting credit to certain customers after an appropriate evaluation of credit risk. Credit risk
arises in respect of amounts due from vehicle manufacturers in relation to bonuses and warranty receivables. This risk is
mitigated by the range of manufacturers dealt with, the Group\u2019s procedures in effecting timely collection of amounts due
and management\u2019s belief that it does not expect any manufacturer to fail to meet its obligations. Financial assets comprise
trade and other receivables (as above) and cash balances. The counterparties are banks and management does not expect
any counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying
amount of each \ufb01nancial asset, including derivative \ufb01nancial instruments, in the balance sheet.
Before granting any new customer credit terms the Group uses external credit scoring systems to assess the potential new
customer\u2019s credit quality and de\ufb01nes credit limits by customer. These limits and credit worthiness are regularly reviewed
and use is made of monitoring alerts provided by the providers of the credit scoring systems. The Group has no customer
that represents more than 5% of the total balance of trade receivables.
Balance sheet
2022
2021
\u00a3m
\u00a3m
Trade receivables
58.9
45.7
Allowance for doubtful debts
(0.3)
(0.3)
58.6
45.4
Manufacturer bonus receivables
23.3
17.4
Other receivables
24.3
34.7
Prepayments
9.5
3.8
115.7
101.3
All amounts are due within one year.
All trade receivables are classi\ufb01ed as loans and receivables and held at amortised cost in the current year and prior year.
Total trade receivables held by the Group at 31 December 2022 was \u00a358.6m (2021: \u00a345.4m).
The average credit period taken on sales of goods is 29 days (2021: 29 days). No interest is charged on trade receivables.
The Group makes an impairment provision based on the expected credit losses it deems likely to incur. The calculation
is based on an average of previous default experiences which is assessed against the risk of the current total in light of
current economic expectations.
An expense has been recognised in respect of impairment losses during the year of
\u00a30.3m (2021: \u00a30.1m).
The ageing of trade and other receivables at the reporting date was:
Manufacturer
Manufacturer
Trade
bonus
Other
Trade
bonus
Other
receivables
receivables
receivables
receivables
receivables
receivables
2022
2022
2022
2021
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Not past due
27.6
22.8
23.4
20.6
12.5
31.3
Past due 0-30 days
19.8
0.2
0.6
10.7
2.4
0.8
Past due 31-120 days
8.5
0.3
0.3
12.4
2.5
2.6
Past due 120+ days
3.0
-
-
2.0
-
-
58.9
23.3
24.3
45.7
17.4
34.7
Provision for impairment
(0.3)
-
-
(0.3)
-
-
58.6
23.3
24.3
45.4
17.4
34.7
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
2022
2021
\u00a3m
\u00a3m
Balance at 1 January
0.3
0.4
Utilisation
(0.3)
(0.3)
Impairment loss recognised
0.3
0.2
Balance at 31 December
0.3
0.3
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Finance lease receivables
Where the group acts as a lessor of properties of which it is a lessee and the term of the head lease and sub lease are
coterminous, rather than recognise a right of use asset the Group recognises a \ufb01nance lease receivable which is measured
at the net present value of future cash receipts discounted at the Group's incremental borrowing rate. The \ufb01nance income
element of rentals received under these leases is credited so as to give a constant rate of \ufb01nance income on the remainder
of the obligation. Finance income is credited in the income statement. The \ufb01nance lease receivable is reduced by rentals
received and increased by the interest income recognised.
2022
2021
\u00a3m
\u00a3m
Non-current
14.8
15.5
Current
2.4
2.1
17.2
17.6
Finance lease rentals are invoiced quarterly on standard rent quarter days, no credit terms are extended beyond these
dates. Expected credit losses in respect of \ufb01nance lease receivables are deemed immaterial.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16427": {
"value": "Accounting policy
Trade and other receivables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any impairment losses.
Impairment losses are measured in accordance with IFRS 9, which is based on an \u2018expected credit loss\u2019 (ECL) model. The
impairment model applies to \ufb01nancial assets measured at amortised cost.
The calculation of ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and
the cash \ufb02ows that the Group expects to receive).
The Group considers a trade or other receivable to be in default when the borrower is unlikely to pay its credit obligations
to the Group in full after all reasonable actions have been taken to recover the debt.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16442": {
"value": "Credit risk management
The Group is exposed to credit risk primarily in respect of its trade receivables and \ufb01nancial assets. Trade receivables are
stated net of provision for estimated impairment losses. Exposure to credit risk in respect of trade receivables is mitigated
by the Group\u2019s policy of only granting credit to certain customers after an appropriate evaluation of credit risk. Credit risk
arises in respect of amounts due from vehicle manufacturers in relation to bonuses and warranty receivables. This risk is
mitigated by the range of manufacturers dealt with, the Group\u2019s procedures in effecting timely collection of amounts due
and management\u2019s belief that it does not expect any manufacturer to fail to meet its obligations. Financial assets comprise
trade and other receivables (as above) and cash balances. The counterparties are banks and management does not expect
any counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying
amount of each \ufb01nancial asset, including derivative \ufb01nancial instruments, in the balance sheet.
Before granting any new customer credit terms the Group uses external credit scoring systems to assess the potential new
customer\u2019s credit quality and de\ufb01nes credit limits by customer. These limits and credit worthiness are regularly reviewed
and use is made of monitoring alerts provided by the providers of the credit scoring systems. The Group has no customer
that represents more than 5% of the total balance of trade receivables.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfCreditRiskExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16669": {
"value": "3.7 Trade and other payables
Accounting policy
Trade and other payables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any write-offs.
Balance sheet
2022
2021
\u00a3m
\u00a3m
Trade payables
71.8
56.4
Vehicle stocking loans
547.4
420.6
Contract hire buyback commitments
58.2
62.0
Consignment vehicle liabilities
35.3
27.2
Payments received on account
30.4
26.2
Other taxation and social security
2.9
24.7
Accruals
101.8
117.5
847.7
734.6
Non-current
35.7
41.9
Current
812.0
692.7
847.7
734.6
Trade payables are classi\ufb01ed as other \ufb01nancial liabilities. Fair value is deemed to be the same as carrying value.
Details of the stocking loan facilities are presented in the Capital Management section of note 4.2 below.
The non-current element of trade and other payables relates to contract hire buyback commitments where the Group
has contracted to repurchase vehicles, at predetermined values and dates, that have been let under operating leases or
similar arrangements.
The Group enters into leasing arrangements whereby it agrees to repurchase vehicles from providers of lease \ufb01nance at
the end of the lease agreement, typically two to four years in the future. The repurchase price is determined at the time
the agreement is entered into based on the then estimate of a vehicle\u2019s future residual value. The actual value of the
vehicles at the end of the lease contract, and therefore the proceeds that can be realised from eventual sale, can vary from
these estimates. Annual reviews are undertaken to reappraise residual values and to recognise impairment write downs
where necessary.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16672": {
"value": "Accounting policy
Trade and other payables are recognised initially at fair value and are subsequently stated at amortised cost using the
effective interest method, less any write-offs.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16744": {
"value": "3.8 Deferred income
Warranty policies sold
The income received in respect of warranty policies sold and administered by the Group is recognised over the period of
the policy on a straight line basis. The unrecognised income is held within deferred income.
Contract hire
Vehicles supplied to a leasing group for contract hire purposes where the Group undertakes to repurchase the vehicle
at a predetermined date are accounted for in accordance with IFRS 16 Leases, where the Group is considered to be an
operating lessor for all arrangements in place. The initial amounts received in consideration from the leasing group are
allocated between the present value of the repurchase commitment, held within trade and other payables and a residual
amount of deferred revenue held within deferred income. The deferred revenue, which effectively represents rentals
received in advance, is taken to the income statement on a straight line basis over the related lease term.
Warranty
Contract
policies
hire
Total
\u00a3m
\u00a3m
\u00a3m
At 1 January 2022
16.5
57.5
74.0
Created in the year
19.0
29.7
48.7
Recognised as income during the year
(9.5)
(33.8)
(43.3)
Warranty claims paid
(4.8)
-
(4.8)
At 31 December 2022
21.2
53.4
74.6
Non-current
8.7
27.7
36.4
Current
12.5
25.7
38.2
21.2
53.4
74.6
Recognition of opening balance as at 31 December 2021
Recognised during the year
9.1
28.1
37.2
Carried forward at 31 December 2022
7.4
29.4
36.8
16.5
57.5
74.0
The deferred income balance at 31 December for warranty policies and contract hire is the aggregate transaction price
allocated to performance obligations that are unsatis\ufb01ed or partly satis\ufb01ed at the reporting date. No information is provided
about remaining performance obligations at 31 December 2022 or 31 December 2021 that have an original expected
duration of one year or less as allowed by IFRS 15.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16747": {
"value": "Warranty policies sold
The income received in respect of warranty policies sold and administered by the Group is recognised over the period of
the policy on a straight line basis. The unrecognised income is held within deferred income.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForWarrantsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16847": {
"value": "4.1 Accounting policies
IFRS 9 requires an entity to recognise a \ufb01nancial asset or a \ufb01nancial liability in its statement of \ufb01nancial position when it
becomes party to the contractual provisions of the instrument. At initial recognition, an entity measures a \ufb01nancial asset or
a \ufb01nancial liability at its fair value plus or minus, in the case of a \ufb01nancial asset or a \ufb01nancial liability not at fair value through
pro\ufb01t or loss, transaction costs that are directly attributable to the acquisition or issue of the \ufb01nancial asset or the \ufb01nancial
liability. Subsequent to initial recognition \ufb01nancial assets and \ufb01nancial liabilities are classi\ufb01ed and measured as described
below.
Financial assets
IFRS 9 classi\ufb01es assets according to the business model for their realisation, as determined by the expected contractual
cash\ufb02ows. This classi\ufb01cation determines the accounting treatment, and the classi\ufb01cation under IFRS 9 is by reference to
the accounting treatment i.e. amortised cost, fair value through other comprehensive income or fair value through pro\ufb01t
and loss.
A \ufb01nancial asset is measured at amortised cost if both of the following conditions are met:
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash \ufb02ows; and
the contractual terms of the \ufb01nancial asset give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets are therefore classi\ufb01ed and measured in these \ufb01nancial statements at amortised cost.
The Group recognises loss allowances for expected credit losses (ECLs) on \ufb01nancial assets measured at amortised cost,
debt investments measured at FVOCI and contract assets (as de\ufb01ned in IFRS 15).
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the expected life of the \ufb01nancial instrument) has not increased
signi\ufb01cantly since initial recognition which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a \ufb01nancial asset has increased signi\ufb01cantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical
experience and informed credit assessment and including forward-looking information.
The Group assumes that the credit risk on a \ufb01nancial asset has increased signi\ufb01cantly if it is more than 30 days past due.
The Group considers a \ufb01nancial asset to be in default when:
\u2022
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or
\u2022
the \ufb01nancial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a \ufb01nancial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is
exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and the cash \ufb02ows
that the Group expects to receive). ECLs are discounted at the effective interest rate of the \ufb01nancial asset.
Credit-impaired \ufb01nancial assets
At each reporting date, the Group assesses whether \ufb01nancial assets carried at amortised cost and debt securities at FVOCI
are credit-impaired. A \ufb01nancial asset is \u2018credit-impaired\u2019 when one or more events that have a detrimental impact on the
estimated future cash \ufb02ows of the \ufb01nancial asset have occurred.
Write-offs
The gross carrying amount of a \ufb01nancial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery.
Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
Financial assets
IFRS 9
classi\ufb01cation
\u00a3m
Trade and other receivables
Amortised cost
106.2
Finance lease receivables
Amortised cost
17.2
Cash and cash equivalents
Amortised cost
69.4
Trade and other receivables
- see note 3.6
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits, and other short term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insigni\ufb01cant risk of changes in value.
Loans and borrowings
Interest-bearing loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective interest
basis. The effective interest basis is a method of calculating the amortised cost of a \ufb01nancial liability and of allocating
interest payments over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the \ufb01nancial liability, or where appropriate, a shorter period.
Trade and other payables
- see note 3.7
Hedging Instruments
The Group no longer holds any hedging instruments to hedge currency risks arising from its activities. There are no
material Group operations conducted in currencies other than GBP.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16858": {
"value": "Financial assets
IFRS 9 classi\ufb01es assets according to the business model for their realisation, as determined by the expected contractual
cash\ufb02ows. This classi\ufb01cation determines the accounting treatment, and the classi\ufb01cation under IFRS 9 is by reference to
the accounting treatment i.e. amortised cost, fair value through other comprehensive income or fair value through pro\ufb01t
and loss.
A \ufb01nancial asset is measured at amortised cost if both of the following conditions are met:
the asset is held within a business model whose objective is to hold assets in order to collect contractual cash \ufb02ows; and
the contractual terms of the \ufb01nancial asset give rise on speci\ufb01ed dates to cash \ufb02ows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets are therefore classi\ufb01ed and measured in these \ufb01nancial statements at amortised cost.
The Group recognises loss allowances for expected credit losses (ECLs) on \ufb01nancial assets measured at amortised cost,
debt investments measured at FVOCI and contract assets (as de\ufb01ned in IFRS 15).
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the expected life of the \ufb01nancial instrument) has not increased
signi\ufb01cantly since initial recognition which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a \ufb01nancial asset has increased signi\ufb01cantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical
experience and informed credit assessment and including forward-looking information.
The Group assumes that the credit risk on a \ufb01nancial asset has increased signi\ufb01cantly if it is more than 30 days past due.
The Group considers a \ufb01nancial asset to be in default when:
\u2022
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or
\u2022
the \ufb01nancial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a \ufb01nancial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is
exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and the cash \ufb02ows
that the Group expects to receive). ECLs are discounted at the effective interest rate of the \ufb01nancial asset.
Credit-impaired \ufb01nancial assets
At each reporting date, the Group assesses whether \ufb01nancial assets carried at amortised cost and debt securities at FVOCI
are credit-impaired. A \ufb01nancial asset is \u2018credit-impaired\u2019 when one or more events that have a detrimental impact on the
estimated future cash \ufb02ows of the \ufb01nancial asset have occurred.
Write-offs
The gross carrying amount of a \ufb01nancial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery.
Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
Financial assets
IFRS 9
classi\ufb01cation
\u00a3m
Trade and other receivables
Amortised cost
106.2
Finance lease receivables
Amortised cost
17.2
Cash and cash equivalents
Amortised cost
69.4
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16870": {
"value": "The Group recognises loss allowances for expected credit losses (ECLs) on \ufb01nancial assets measured at amortised cost,
debt investments measured at FVOCI and contract assets (as de\ufb01ned in IFRS 15).
The Group measures loss allowances at an amount equal to lifetime ECL, except for other debt securities and bank balances
for which credit risk (i.e. the risk of default occurring over the expected life of the \ufb01nancial instrument) has not increased
signi\ufb01cantly since initial recognition which are measured as 12-month ECL.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.
When determining whether the credit risk of a \ufb01nancial asset has increased signi\ufb01cantly since initial recognition and when
estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group\u2019s historical
experience and informed credit assessment and including forward-looking information.
The Group assumes that the credit risk on a \ufb01nancial asset has increased signi\ufb01cantly if it is more than 30 days past due.
The Group considers a \ufb01nancial asset to be in default when:
\u2022
the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such
as realising security (if any is held); or
\u2022
the \ufb01nancial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a \ufb01nancial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the
reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is
exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash \ufb02ows due to the entity in accordance with the contract and the cash \ufb02ows
that the Group expects to receive). ECLs are discounted at the effective interest rate of the \ufb01nancial asset.
Credit-impaired \ufb01nancial assets
At each reporting date, the Group assesses whether \ufb01nancial assets carried at amortised cost and debt securities at FVOCI
are credit-impaired. A \ufb01nancial asset is \u2018credit-impaired\u2019 when one or more events that have a detrimental impact on the
estimated future cash \ufb02ows of the \ufb01nancial asset have occurred.
Write-offs
The gross carrying amount of a \ufb01nancial asset is written off (either partially or in full) to the extent that there is no realistic
prospect of recovery.
Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16935": {
"value": "Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16936": {
"value": "Impairment of \ufb01nancial assets
IFRS 9 adopts an expected credit loss approach (ECL).
The IFRS 9 approach does not require a credit event (an actual
loss or a debt past a number of days due)
to occur but is based on changes in expectations of credit losses.
IFRS 9 also
requires that impairment of \ufb01nancial assets be shown as a separate line item in either the statement of comprehensive
income or the income statement.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16966": {
"value": "Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits, and other short term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insigni\ufb01cant risk of changes in value.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f16997": {
"value": "Loans and borrowings
Interest-bearing loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of the borrowings on an effective interest
basis. The effective interest basis is a method of calculating the amortised cost of a \ufb01nancial liability and of allocating
interest payments over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the \ufb01nancial liability, or where appropriate, a shorter period.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17011": {
"value": "Hedging Instruments
The Group no longer holds any hedging instruments to hedge currency risks arising from its activities. There are no
material Group operations conducted in currencies other than GBP.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17018": {
"value": "4.2 Financial instruments and derivatives
Adjusted net debt
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents
69.4
37.6
Current interest bearing loans and borrowings
(1.7)
-
Non-current interest bearing loans and borrowings
(91.0)
(87.3)
(23.3)
(49.7)
The Group has since adoption of IFRS 16 Leases excluded Lease liabilities from its measure of Adjusted Net Debt.
Full
details of lease liabilities are presented in note 4.7. The Group also exclude Vehicle stocking loans from its measure of
Adjusted Net Debt which are presented as current liabilities in note 3.7.
Cash and cash equivalents
Restated - see note 1
Carrying value
Carrying value
and fair value
and fair value
2022
2021
\u00a3m
\u00a3m
Bank balances and cash equivalents
69.4
37.6
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents in the Balance Sheet
171.9
200.1
Bank overdrafts repayable on demand and used for cash management in the
(102.5)
(162.5)
Balance Sheet
Cash and cash equivalents in the statement of cash \ufb02ows
69.4
37.6
Bank overdrafts re\ufb02ect the aggregated overdrawn balances of Group companies (even if those companies have other
positive cash balances).
Borrowings
In March 2022, the Group re\ufb01nanced its \u00a3175m RCF and \u00a360m Private Placement, both of which were due to mature in
March 2023. The new facilities comprise a
5 year \u00a3100m Senior Term Finance Agreement (SFA), maturing March 2027,
with the Group\u2019s existing Private Placement lender plus a new lender, and a \u00a375m 3+1+1 Revolving Credit Facility (RCF)
with four out of the \ufb01ve of the Group\u2019s existing bankers, maturing March 2025, with extensions at the option of lenders to
March 2026 and then March 2027. The SFA comprises a term loan, with principal repayments at 1% per quarter in years
1 and 2, and at 2.5% per quarter thereafter. The RCF comprises a \"bullet\" facility i.e. there are no scheduled reductions.
Both the SFA and RCF are secured over the assets of the Group (with the exception of the Pension Fund's Central Asset
Reserve assets set out at note 5.1) , and rank pari-passu with the Pension Fund. Interest in respect of the RCF is in a range
of SONIA + 5.00%-6.00%, and for the SFA at SONIA + 6.00%-7.00%, both dependent on the same leverage ratio. Financial
covenants are common to both the RCF and SFA, and comprise leverage, \ufb01xed charge cover and minimum underlying
EBITDA.
As at 31 December 2022, total facility commitments and expiry are as set out below:
Expiry Date
\u00a3m
RCF
March 2025
75.0
SFA
March 2027
97.0
172.0
At 31 December 2022 the following margins and fees were in place:
Commitment
(non-utilisation)
Current
margin
fee
RCF
5.00%
2.25%
SFA
6.00%
n/a
The leverage covenant is calculated as the ratio of net debt to underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis. This
ratio can not exceed 2.00 times. At 31 December 2022 the ratio was 0.2 times.
The \ufb01xed charge cover covenant is calculated as the ratio of underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis plus
rent paid, to \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) plus payments for
rent, scheduled amortisation under the SFA and pension contributions. This ratio must exceed 1.60 times. At 31 December
2022 the ratio was 2.7 times.
The minimum underlying EBITDA covenant is calculated as for the leverage covenant ratio i.e. underlying pro\ufb01t before tax,
depreciation, amortisation and \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3)
calculated on an IAS 17 basis. This must exceed \u00a375.0m at 31 December 2022 and was \u00a3124.9m.
Summary of borrowings
Carrying
Carrying
value
Fair value
value
Fair value
2022
2022
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Non-current:
Bank borrowings (RCF)
-
-
27.1
27.1
SFA
90.8
90.8
-
-
5.75% Senior note 2023
-
-
60.0
60.0
Other loan notes
0.2
0.2
0.2
0.2
Lease liabilities
197.9
197.9
195.4
195.4
Total non-current
288.9
288.9
282.7
282.7
SFA
1.7
1.7
-
-
Bank overdraft*
102.5
102.5
162.5
162.5
Lease liabilities
20.0
20.0
26.7
26.7
Total current
124.2
124.2
189.2
189.2
Total borrowings
413.1
413.1
471.9
471.9
* 2021 restated - see note 1
Reconciliation of movements of liabilities to cash \ufb02ows arising from \ufb01nancing activities
____Borrowings___
__________Equity_________
Long term
Finance
Share
Other
Retained
borrowings
Lease
capital
reserves
earnings
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2022
87.3
222.1
69.9
75.0
80.7
535.0
Cash \ufb02ows from \ufb01nancing activities
Payment of lease liabilities
-
(22.2)
-
-
-
(22.2)
Repayment of loans
(90.5)
-
-
-
-
(90.5)
Proceeds from issue of loans (net of directly attributable
93.8
-
-
-
93.8
transaction costs)
3.3
(22.2)
-
-
-
(18.9)
Other changes
The effect of changes in foreign exchange rates
0.1
0.1
-
-
-
0.2
New leases undertaken - non cash
-
35.3
-
-
-
35.3
Disposal of \ufb01nance leases - non cash
-
(17.6)
-
-
-
(17.6)
Liability-related : Lease expenses - non cash
-
0.2
-
-
-
0.2
Liability-related : Amortisation of fees and expenses
2.0
-
-
-
-
2.0
Equity-related : Total other changes
-
-
-
0.5
54.9
55.4
At 31 December 2022
92.7
217.9
69.9
75.5
135.6
591.6
Interest payments in respect of the above borrowings are reported in operating cash \ufb02ows in the Consolidated Cash Flow
Statement.
Fair value hierarchy
Financial instruments carried at fair value are required to be measured by reference to the following levels:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The RCF and SFA have been measured by a Level 2 valuation method.
The effective interest rates for all borrowings are all based by reference to SONIA. Leases are effectively held at \ufb01xed
rates of interest within the range set out below. Information regarding classi\ufb01cation of balances and interest, the range of
interest rates applied in the year to 31 December 2022 and repricing periods, is set out in the table below.
Carrying
value
Interest
Interest
Classi\ufb01cation
\u00a3m
Classi\ufb01cation
classi\ufb01cation
rate range
Repricing periods
Bank balances and cash equivalents
Loans and receivables
69.4
Amortised cost
Floating GBP
0.45%-4.50%
6 months or less
Borrowings
Non - current:
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating GBP
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
90.8
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Other loan notes
Other \ufb01nancial liabilities
0.2
Amortised cost
Fixed GBP
12.50%
n/a
Lease liabilities
Other \ufb01nancial liabilities
197.9
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total non-current
288.9
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating USD
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
1.7
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Bank overdraft *
Other \ufb01nancial liabilities
102.5
Amortised cost
Floating GBP
0%
6 months or less
Lease liabilities
Other \ufb01nancial liabilities
20.0
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total current
124.2
Total borrowings
413.1
* 2021 restated - see note 1
The carrying amounts of the Group\u2019s borrowings are denominated in the following currencies:
2022
2021
\u00a3m
\u00a3m
Pound sterling
413.1
463.8
US dollar
-
8.1
413.1
471.9
* 2021 restated - see note 1
Treasury policy, \ufb01nancial risk, funding and liquidity management
Financial risk management
The Group is exposed to the following risks from its use of \ufb01nancial instruments:
Funding and liquidity risk - the risk that the Group will not be able to meet its \ufb01nancial obligations as they fall due.
Credit risk - the risk of \ufb01nancial loss to the Group if a customer or counterparty to a \ufb01nancial instrument fails to meet its
contractual obligations, and arises principally from the Group\u2019s receivables from customers and investment securities.
Market risk - the risk that changes in market prices, such as interest rates and foreign exchange rates, have on the Group's
\ufb01nancial performance.
The Group's quantitative exposure to these risks is explained throughout these \ufb01nancial statements whilst the Group's
objectives and management of these risks is set out below.
Treasury policy and procedures
Group treasury matters are managed within policy guidelines set by the Board with prime areas of focus being liquidity and
interest rate exposure. Management of these areas is the responsibility of the Group\u2019s central treasury function. The Board
does not permit the speculative use of derivatives..
Funding and liquidity management
The Group is \ufb01nanced primarily by its SFA, RCF, vehicle stocking credit lines and operating cash \ufb02ow. The RCF and SFA
are committed facilities which mature within appropriate timescales and are maintained at levels in excess of planned
requirements. .
Each business within the Group is responsible for its own day-to-day cash management and the overall cash position is
monitored on a daily basis by the Group treasury department.
The maturity of non-current borrowings is as follows, excluding lease liabilities:
2022
2021
\u00a3m
\u00a3m
Between 1 and 2 years
7.3
87.1
Between 2 and 5 years
83.7
0.2
91.0
87.3
Maturities include amounts drawn under revolving credit facilities which are contractually repayable generally within a
month of the year end but which may be redrawn at the Group\u2019s option, together with contractual repayment dates for
the amortising SFA. The maturities above therefore represent the \ufb01nal repayment dates for these facilities. If the amounts
drawn at the year end were redrawn at the Group\u2019s usual practice of monthly drawings, the total cash out\ufb02ows associated
with all borrowings, assuming interest rates remain at the same rates as at the year end, are estimated on an undiscounted
basis as follows:
Carrying
Contractual
Within 6
6 - 12
over 5
amount
cash\ufb02ows
months
months
1-2 years
2-5 years
years
RCF
-
-
-
-
-
-
-
SFA
92.5
126.0
5.4
5.3
15.9
99.4
-
Loan notes
0.2
0.4
-
-
-
0.4
-
92.7
126.4
5.4
5.3
15.9
99.8
-
Bank overdraft
102.5
102.5
102.5
-
-
-
-
Leases liabilities
217.9
371.3
17.9
16.4
32.2
76.5
228.3
Trade payables
71.7
71.7
71.7
-
-
-
-
Vehicle stocking loans
582.7
598.4
336.9
261.5
-
-
-
1,067.5
1,270.3
534.4
283.2
48.1
176.3
228.3
The Group has the following undrawn borrowing facilities:
2022
2021
\u00a3m
\u00a3m
Expiring in 1-2 years
-
87.9
Expiring in 2-5 years
70.0
-
70.0
87.9
The above re\ufb02ects that \u00a35m has been drawn on the RCF by way of bank guarantees to third parties, but such amounts do
not constitute borrowings.
Interest rate risk management
The objective of the Group\u2019s interest rate policy is to minimise interest costs whilst protecting the Group from adverse
movements in interest rates. Borrowings issued at variable rates expose the Group to cash \ufb02ow interest rate risk whereas
borrowings issued at \ufb01xed rates expose the Group to fair value interest rate risk. The Group does not actively manage cash
\ufb02ow interest rate risk as the Board believes that the retail sector in which the Group operates provides a natural hedge
against interest rate movements. Consequently, it is normal Group policy to borrow on a \ufb02oating rate basis and all fair value
interest rate risk arising from \ufb01xed rate borrowings entered into by the Group are usually managed by swaps into \ufb02oating
rate. However, due to the relatively low historical rates in \ufb02oating interest rates, there was relatively low downside risk in
maintaining the Group\u2019s \u00a360.0m Senior note 2023
at \ufb01xed rate. On re\ufb01nancing in March 2022, all loans were at \ufb02oating
rate, which were maintained in line with the Group's normal policy.
Interest rate risk sensitivity analysis
As some of the Group\u2019s borrowings and vehicle stocking credit lines are \ufb02oating rate instruments they therefore have a
sensitivity to changes in market rates of interest. The table below shows the effect of a 100 basis points change in interest
rates for \ufb02oating rate instruments outstanding at the period end, showing how pro\ufb01t or loss would have varied in the period
on the assumption that the instruments at the period end were outstanding for the entire period.
Pro\ufb01t/(loss)
Pro\ufb01t/(loss)
2022
2021
\u00a3m
\u00a3m
100 basis points increase
(5.5)
(3.8)
Tax effect
1.0
0.7
Effect on net assets
(4.5)
(3.1)
100 basis points decrease
5.5
1.9
Tax effect
(1.0)
(0.4)
Effect on net assets
4.5
1.5
Foreign exchange risk management
The Group faces currency risk in respect of its net assets denominated in currencies other than sterling. On translation
into sterling, movements in currency will affect the value of these assets. The Group\u2019s policy is therefore to match, where
possible, net assets in overseas subsidiaries which are denominated in a foreign currency with borrowings in the same
currency. With very little US assets remaining at the year end following the disposal all US business interests in prior years,
no material hedging requirement remains so the Group now has no USD borrowings (2021: USD 10.0m) against its net
assets held in overseas subsidiaries.
Hedges of net investments in overseas operations
A gain or loss in respect of an effective hedge of a net investment in an overseas operation is recognised directly in
equity. Any ineffective portion of the hedge is recognised in the income statement.
Included within bank borrowings are balances denominated in US dollars which are designated as a hedge of the net
investment in the Group\u2019s US subsidiaries. Foreign exchange differences on translation of the borrowings to sterling at
the balance sheet date are recognised within the translation differences reserve in equity, net of exchange differences in
respect of the net investments being hedged.
2022
2021
$m
$m
Aggregate fair value of borrowings designated as hedge of net investment
-
10.0
in the Group's US subsidiaries
\u00a3m
\u00a3m
Foreign
exchange gains/(losses) on translation of borrowings to sterling at
-
0.5
balance sheet date
Foreign exchange (losses)/gains on translation of net investments to ster-
0.5
(0.5)
ling at balance sheet date
Net
exchange
gain/(loss) recognised within translation reserve in equity
0.5
-
Capital management
The Group views its \ufb01nancial capital resources as primarily comprising share capital, loans (RCF and SFA), vehicle stocking
credit lines and operating cash\ufb02ow.
Core debt is essentially funded by the Group\u2019s SFA. The Group requires its revolving credit facility to fund its day-to-day
working capital requirements. A fundamental element of the Group\u2019s \ufb01nancial resources is the provision of vehicle stocking
credit lines, provided by the vehicle manufacturers\u2019 funding arms and other third party providers. The Group\u2019s funding of
its vehicle inventories is set out below:
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
595.0
488.4
2022
2021
\u00a3m
\u00a3m
Manufacturer \ufb01nance arm
286.0
224.7
Third
party stock \ufb01nance
296.7
262.5
Total inventories
582.7
487.2
Inventories are stated net of any Value Added Tax (VAT) whilst the related creditor is a gross amount. The creditor may
also be higher than the inventory value due to timing of the vehicle sale and payment of the related liability.
When considering vehicle stocks from a funding risk view point we split the funding into that which is funded by the vehicle
manufacturers through their related \ufb01nance arms and that funded through third party stock \ufb01nance facilities and bank
borrowings. Financing for stock other than through bank borrowings is shown in trade creditors in the balance sheet. The
maturity analysis on page 167 includes stock \ufb01nance facilities.
The third party stock facilities have prescribed limits and can be used to fund virtually any vehicle. Any undrawn amount
is therefore directly relatable to the ability of the Group to increase inventory and fund it accordingly. Undrawn third party
stock \ufb01nance facilities at 31 December 2022 amounted to \u00a365.9m (2021: \u00a373.1m). In contrast, manufacturer limits vary with
the manufacturer\u2019s requirements (depending on the amount of stocks each manufacturer wishes to put into the network,
which varies depending on the time of year and level of production) and are therefore not directly related to the Group\u2019s
liquidity: it is therefore not appropriate to quote an undrawn facility.
The key contractual terms of the facilities (both manufacturer and third party) are:
\u2022 The facilities are usually structured as an agency to purchase vehicles on behalf of the funder .
\u2022 Those vehicles are immediately sold back to Pendragon on deferred payment terms.
\u2022
Legal title to the vehicles thus remains with the funder as the funder has purchased the vehicles (via the dealer as agent)
and has an unpaid invoice (either in part or in full) outstanding from Pendragon.
\u2022
The unpaid invoice is therefore trade credit and is accounted for as a trade payable in the \ufb01nancial statements.
\u2022
The payment terms for the invoice vary with the type of vehicle:
\u2022
A new vehicle invoice typically requires no upfront deposit payment (a new i.e. unregistered vehicle, does not
depreciate) and remains outstanding for varying periods up to 360 days.
\u2022 A used vehicle invoice typically requires an immediate payment of c.10% i.e. so that the effective \u201cloan to value\u201d given
for the vehicle is c.90%. As a used vehicle depreciates with age and mileage, periodic instalment payments might
also be required, for example 2% per month or 10% at day 90.
\u2022
Interest is payable in respect of the unpaid invoice. Most new vehicle invoices from manufacturers have an interest free
period followed by commercial rates of interest. Interest rates from third party stock funders are at a commercial rate
from the start.
Payment of any outstanding amounts is due on the earlier of the sale of the vehicle by Pendragon to a customer, or upon
the expiry of a pre-determined maturity period. The maturity period varies by funder and by type of vehicle but is up to
360 days in respect of new vehicles and 330 days in respect of used vehicles.
Manufacturer facility agreements are tied to the franchise agreement i.e. for as long as the franchise agreement is
operational the manufacturer will provide funding facilities to enable the franchisee to sell the product. Other than that,
the normal provisions regarding immediate termination due to an insolvency event or change of control would apply.
Third party facility agreements are uncommitted and can be terminated immediately upon default or upon written notice
by either party; those notice periods vary by agreement but can be from 30-120 days. In practice, if notice is given, no
new contracts for funding individual vehicles would be entered into by the funding partner and the facility in respect of
each individual vehicle would be paid down over time as normal i.e. on the earlier of the normal maturity of the facility for
a particular vehicle or upon sale of the vehicle to a customer. Despite the uncommitted nature of the agreements, most
relationships with funders are of a long standing nature.
The Group is also responsible for funding the pension de\ufb01cit. The total \ufb01nancial resources required by the Group to fund
itself at 31 December 2022 comprises:
2022
2021
\u00a3m
\u00a3m
Net debt
23.3
49.7
Finance lease liabilities
217.9
222.1
Stock \ufb01nance
582.7
447.8
Pension de\ufb01cit
2.6
23.6
826.5
743.2
The Board\u2019s policy is to maintain a strong capital base to maintain market con\ufb01dence and to sustain the development of
the business, whilst maximising the return on capital to the Group\u2019s shareholders. The Group\u2019s strategy will be to maintain
facilities appropriate to the working requirements of the Group and to service its debt requirements through generating
cash \ufb02ow. At 31 December 2022 the adjusted net debt : underlying EBITDA ratio achieved was 0.1 : 1, calculated as follows:
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Depreciation
64.7
70.4
Amortisation
4.9
4.2
Underlying EBITDA
168.1
190.9
Adjusted net debt (being net debt as set out in the alternative performance measures
23.3
49.7
in note 1)
Adjusted net debt : underlying EBITDA ratio
0.1
0.3
The key measures which management uses to evaluate the Group's use of its \ufb01nancial resources, and performance achieved
against these in 2022 and 2021 are set out below:
2022
2021
Underlying pro\ufb01t before tax (\u00a3m)
57.6
83.0
Underlying earnings per share (p)
3.2
5.0
Net debt : underlying EBITDA
0.1
0.3
The Group\u2019s capital structure and capital allocation priorities were reassessed during 2020 as part of the determination
of the Group's strategy for the next \ufb01ve years. That strategy shall require investment to grow the used car non-franchise
business, to develop Pinewood's offering and to maintain and improve the UK Motor franchise business.
The Group has previously engaged in share buyback programmes though none are currently operating. The Group may
also issue shares or purchase them in the market to satisfy share incentives issued to employees of the Group. The Group
encourages employees to be shareholders of the Group, providing selective share option and LTIP schemes from time to
time.
Certain of the Group\u2019s subsidiaries are required to maintain issued share capital at levels to support capital adequacy under
Financial Conduct Authority (FCA) requirements. The Group ensures these requirements are met by injections of equity to
the subsidiaries in question, when required.
Other than speci\ufb01cally set out above, there were no changes to capital management in the year.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17019": {
"value": "4.2 Financial instruments and derivatives
Adjusted net debt
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents
69.4
37.6
Current interest bearing loans and borrowings
(1.7)
-
Non-current interest bearing loans and borrowings
(91.0)
(87.3)
(23.3)
(49.7)
The Group has since adoption of IFRS 16 Leases excluded Lease liabilities from its measure of Adjusted Net Debt.
Full
details of lease liabilities are presented in note 4.7. The Group also exclude Vehicle stocking loans from its measure of
Adjusted Net Debt which are presented as current liabilities in note 3.7.
Cash and cash equivalents
Restated - see note 1
Carrying value
Carrying value
and fair value
and fair value
2022
2021
\u00a3m
\u00a3m
Bank balances and cash equivalents
69.4
37.6
2022
2021
\u00a3m
\u00a3m
Cash and cash equivalents in the Balance Sheet
171.9
200.1
Bank overdrafts repayable on demand and used for cash management in the
(102.5)
(162.5)
Balance Sheet
Cash and cash equivalents in the statement of cash \ufb02ows
69.4
37.6
Bank overdrafts re\ufb02ect the aggregated overdrawn balances of Group companies (even if those companies have other
positive cash balances).
Borrowings
In March 2022, the Group re\ufb01nanced its \u00a3175m RCF and \u00a360m Private Placement, both of which were due to mature in
March 2023. The new facilities comprise a
5 year \u00a3100m Senior Term Finance Agreement (SFA), maturing March 2027,
with the Group\u2019s existing Private Placement lender plus a new lender, and a \u00a375m 3+1+1 Revolving Credit Facility (RCF)
with four out of the \ufb01ve of the Group\u2019s existing bankers, maturing March 2025, with extensions at the option of lenders to
March 2026 and then March 2027. The SFA comprises a term loan, with principal repayments at 1% per quarter in years
1 and 2, and at 2.5% per quarter thereafter. The RCF comprises a \"bullet\" facility i.e. there are no scheduled reductions.
Both the SFA and RCF are secured over the assets of the Group (with the exception of the Pension Fund's Central Asset
Reserve assets set out at note 5.1) , and rank pari-passu with the Pension Fund. Interest in respect of the RCF is in a range
of SONIA + 5.00%-6.00%, and for the SFA at SONIA + 6.00%-7.00%, both dependent on the same leverage ratio. Financial
covenants are common to both the RCF and SFA, and comprise leverage, \ufb01xed charge cover and minimum underlying
EBITDA.
As at 31 December 2022, total facility commitments and expiry are as set out below:
Expiry Date
\u00a3m
RCF
March 2025
75.0
SFA
March 2027
97.0
172.0
At 31 December 2022 the following margins and fees were in place:
Commitment
(non-utilisation)
Current
margin
fee
RCF
5.00%
2.25%
SFA
6.00%
n/a
The leverage covenant is calculated as the ratio of net debt to underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis. This
ratio can not exceed 2.00 times. At 31 December 2022 the ratio was 0.2 times.
The \ufb01xed charge cover covenant is calculated as the ratio of underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis plus
rent paid, to \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) plus payments for
rent, scheduled amortisation under the SFA and pension contributions. This ratio must exceed 1.60 times. At 31 December
2022 the ratio was 2.7 times.
The minimum underlying EBITDA covenant is calculated as for the leverage covenant ratio i.e. underlying pro\ufb01t before tax,
depreciation, amortisation and \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3)
calculated on an IAS 17 basis. This must exceed \u00a375.0m at 31 December 2022 and was \u00a3124.9m.
Summary of borrowings
Carrying
Carrying
value
Fair value
value
Fair value
2022
2022
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Non-current:
Bank borrowings (RCF)
-
-
27.1
27.1
SFA
90.8
90.8
-
-
5.75% Senior note 2023
-
-
60.0
60.0
Other loan notes
0.2
0.2
0.2
0.2
Lease liabilities
197.9
197.9
195.4
195.4
Total non-current
288.9
288.9
282.7
282.7
SFA
1.7
1.7
-
-
Bank overdraft*
102.5
102.5
162.5
162.5
Lease liabilities
20.0
20.0
26.7
26.7
Total current
124.2
124.2
189.2
189.2
Total borrowings
413.1
413.1
471.9
471.9
* 2021 restated - see note 1
Reconciliation of movements of liabilities to cash \ufb02ows arising from \ufb01nancing activities
____Borrowings___
__________Equity_________
Long term
Finance
Share
Other
Retained
borrowings
Lease
capital
reserves
earnings
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
At 1 January 2022
87.3
222.1
69.9
75.0
80.7
535.0
Cash \ufb02ows from \ufb01nancing activities
Payment of lease liabilities
-
(22.2)
-
-
-
(22.2)
Repayment of loans
(90.5)
-
-
-
-
(90.5)
Proceeds from issue of loans (net of directly attributable
93.8
-
-
-
93.8
transaction costs)
3.3
(22.2)
-
-
-
(18.9)
Other changes
The effect of changes in foreign exchange rates
0.1
0.1
-
-
-
0.2
New leases undertaken - non cash
-
35.3
-
-
-
35.3
Disposal of \ufb01nance leases - non cash
-
(17.6)
-
-
-
(17.6)
Liability-related : Lease expenses - non cash
-
0.2
-
-
-
0.2
Liability-related : Amortisation of fees and expenses
2.0
-
-
-
-
2.0
Equity-related : Total other changes
-
-
-
0.5
54.9
55.4
At 31 December 2022
92.7
217.9
69.9
75.5
135.6
591.6
Interest payments in respect of the above borrowings are reported in operating cash \ufb02ows in the Consolidated Cash Flow
Statement.
Fair value hierarchy
Financial instruments carried at fair value are required to be measured by reference to the following levels:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The RCF and SFA have been measured by a Level 2 valuation method.
The effective interest rates for all borrowings are all based by reference to SONIA. Leases are effectively held at \ufb01xed
rates of interest within the range set out below. Information regarding classi\ufb01cation of balances and interest, the range of
interest rates applied in the year to 31 December 2022 and repricing periods, is set out in the table below.
Carrying
value
Interest
Interest
Classi\ufb01cation
\u00a3m
Classi\ufb01cation
classi\ufb01cation
rate range
Repricing periods
Bank balances and cash equivalents
Loans and receivables
69.4
Amortised cost
Floating GBP
0.45%-4.50%
6 months or less
Borrowings
Non - current:
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating GBP
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
90.8
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Other loan notes
Other \ufb01nancial liabilities
0.2
Amortised cost
Fixed GBP
12.50%
n/a
Lease liabilities
Other \ufb01nancial liabilities
197.9
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total non-current
288.9
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating USD
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
1.7
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Bank overdraft *
Other \ufb01nancial liabilities
102.5
Amortised cost
Floating GBP
0%
6 months or less
Lease liabilities
Other \ufb01nancial liabilities
20.0
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total current
124.2
Total borrowings
413.1
* 2021 restated - see note 1
The carrying amounts of the Group\u2019s borrowings are denominated in the following currencies:
2022
2021
\u00a3m
\u00a3m
Pound sterling
413.1
463.8
US dollar
-
8.1
413.1
471.9
* 2021 restated - see note 1
Treasury policy, \ufb01nancial risk, funding and liquidity management
Financial risk management
The Group is exposed to the following risks from its use of \ufb01nancial instruments:
Funding and liquidity risk - the risk that the Group will not be able to meet its \ufb01nancial obligations as they fall due.
Credit risk - the risk of \ufb01nancial loss to the Group if a customer or counterparty to a \ufb01nancial instrument fails to meet its
contractual obligations, and arises principally from the Group\u2019s receivables from customers and investment securities.
Market risk - the risk that changes in market prices, such as interest rates and foreign exchange rates, have on the Group's
\ufb01nancial performance.
The Group's quantitative exposure to these risks is explained throughout these \ufb01nancial statements whilst the Group's
objectives and management of these risks is set out below.
Treasury policy and procedures
Group treasury matters are managed within policy guidelines set by the Board with prime areas of focus being liquidity and
interest rate exposure. Management of these areas is the responsibility of the Group\u2019s central treasury function. The Board
does not permit the speculative use of derivatives..
Funding and liquidity management
The Group is \ufb01nanced primarily by its SFA, RCF, vehicle stocking credit lines and operating cash \ufb02ow. The RCF and SFA
are committed facilities which mature within appropriate timescales and are maintained at levels in excess of planned
requirements. .
Each business within the Group is responsible for its own day-to-day cash management and the overall cash position is
monitored on a daily basis by the Group treasury department.
The maturity of non-current borrowings is as follows, excluding lease liabilities:
2022
2021
\u00a3m
\u00a3m
Between 1 and 2 years
7.3
87.1
Between 2 and 5 years
83.7
0.2
91.0
87.3
Maturities include amounts drawn under revolving credit facilities which are contractually repayable generally within a
month of the year end but which may be redrawn at the Group\u2019s option, together with contractual repayment dates for
the amortising SFA. The maturities above therefore represent the \ufb01nal repayment dates for these facilities. If the amounts
drawn at the year end were redrawn at the Group\u2019s usual practice of monthly drawings, the total cash out\ufb02ows associated
with all borrowings, assuming interest rates remain at the same rates as at the year end, are estimated on an undiscounted
basis as follows:
Carrying
Contractual
Within 6
6 - 12
over 5
amount
cash\ufb02ows
months
months
1-2 years
2-5 years
years
RCF
-
-
-
-
-
-
-
SFA
92.5
126.0
5.4
5.3
15.9
99.4
-
Loan notes
0.2
0.4
-
-
-
0.4
-
92.7
126.4
5.4
5.3
15.9
99.8
-
Bank overdraft
102.5
102.5
102.5
-
-
-
-
Leases liabilities
217.9
371.3
17.9
16.4
32.2
76.5
228.3
Trade payables
71.7
71.7
71.7
-
-
-
-
Vehicle stocking loans
582.7
598.4
336.9
261.5
-
-
-
1,067.5
1,270.3
534.4
283.2
48.1
176.3
228.3
The Group has the following undrawn borrowing facilities:
2022
2021
\u00a3m
\u00a3m
Expiring in 1-2 years
-
87.9
Expiring in 2-5 years
70.0
-
70.0
87.9
The above re\ufb02ects that \u00a35m has been drawn on the RCF by way of bank guarantees to third parties, but such amounts do
not constitute borrowings.
Interest rate risk management
The objective of the Group\u2019s interest rate policy is to minimise interest costs whilst protecting the Group from adverse
movements in interest rates. Borrowings issued at variable rates expose the Group to cash \ufb02ow interest rate risk whereas
borrowings issued at \ufb01xed rates expose the Group to fair value interest rate risk. The Group does not actively manage cash
\ufb02ow interest rate risk as the Board believes that the retail sector in which the Group operates provides a natural hedge
against interest rate movements. Consequently, it is normal Group policy to borrow on a \ufb02oating rate basis and all fair value
interest rate risk arising from \ufb01xed rate borrowings entered into by the Group are usually managed by swaps into \ufb02oating
rate. However, due to the relatively low historical rates in \ufb02oating interest rates, there was relatively low downside risk in
maintaining the Group\u2019s \u00a360.0m Senior note 2023
at \ufb01xed rate. On re\ufb01nancing in March 2022, all loans were at \ufb02oating
rate, which were maintained in line with the Group's normal policy.
Interest rate risk sensitivity analysis
As some of the Group\u2019s borrowings and vehicle stocking credit lines are \ufb02oating rate instruments they therefore have a
sensitivity to changes in market rates of interest. The table below shows the effect of a 100 basis points change in interest
rates for \ufb02oating rate instruments outstanding at the period end, showing how pro\ufb01t or loss would have varied in the period
on the assumption that the instruments at the period end were outstanding for the entire period.
Pro\ufb01t/(loss)
Pro\ufb01t/(loss)
2022
2021
\u00a3m
\u00a3m
100 basis points increase
(5.5)
(3.8)
Tax effect
1.0
0.7
Effect on net assets
(4.5)
(3.1)
100 basis points decrease
5.5
1.9
Tax effect
(1.0)
(0.4)
Effect on net assets
4.5
1.5
Foreign exchange risk management
The Group faces currency risk in respect of its net assets denominated in currencies other than sterling. On translation
into sterling, movements in currency will affect the value of these assets. The Group\u2019s policy is therefore to match, where
possible, net assets in overseas subsidiaries which are denominated in a foreign currency with borrowings in the same
currency. With very little US assets remaining at the year end following the disposal all US business interests in prior years,
no material hedging requirement remains so the Group now has no USD borrowings (2021: USD 10.0m) against its net
assets held in overseas subsidiaries.
Hedges of net investments in overseas operations
A gain or loss in respect of an effective hedge of a net investment in an overseas operation is recognised directly in
equity. Any ineffective portion of the hedge is recognised in the income statement.
Included within bank borrowings are balances denominated in US dollars which are designated as a hedge of the net
investment in the Group\u2019s US subsidiaries. Foreign exchange differences on translation of the borrowings to sterling at
the balance sheet date are recognised within the translation differences reserve in equity, net of exchange differences in
respect of the net investments being hedged.
2022
2021
$m
$m
Aggregate fair value of borrowings designated as hedge of net investment
-
10.0
in the Group's US subsidiaries
\u00a3m
\u00a3m
Foreign
exchange gains/(losses) on translation of borrowings to sterling at
-
0.5
balance sheet date
Foreign exchange (losses)/gains on translation of net investments to ster-
0.5
(0.5)
ling at balance sheet date
Net
exchange
gain/(loss) recognised within translation reserve in equity
0.5
-
Capital management
The Group views its \ufb01nancial capital resources as primarily comprising share capital, loans (RCF and SFA), vehicle stocking
credit lines and operating cash\ufb02ow.
Core debt is essentially funded by the Group\u2019s SFA. The Group requires its revolving credit facility to fund its day-to-day
working capital requirements. A fundamental element of the Group\u2019s \ufb01nancial resources is the provision of vehicle stocking
credit lines, provided by the vehicle manufacturers\u2019 funding arms and other third party providers. The Group\u2019s funding of
its vehicle inventories is set out below:
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
595.0
488.4
2022
2021
\u00a3m
\u00a3m
Manufacturer \ufb01nance arm
286.0
224.7
Third
party stock \ufb01nance
296.7
262.5
Total inventories
582.7
487.2
Inventories are stated net of any Value Added Tax (VAT) whilst the related creditor is a gross amount. The creditor may
also be higher than the inventory value due to timing of the vehicle sale and payment of the related liability.
When considering vehicle stocks from a funding risk view point we split the funding into that which is funded by the vehicle
manufacturers through their related \ufb01nance arms and that funded through third party stock \ufb01nance facilities and bank
borrowings. Financing for stock other than through bank borrowings is shown in trade creditors in the balance sheet. The
maturity analysis on page 167 includes stock \ufb01nance facilities.
The third party stock facilities have prescribed limits and can be used to fund virtually any vehicle. Any undrawn amount
is therefore directly relatable to the ability of the Group to increase inventory and fund it accordingly. Undrawn third party
stock \ufb01nance facilities at 31 December 2022 amounted to \u00a365.9m (2021: \u00a373.1m). In contrast, manufacturer limits vary with
the manufacturer\u2019s requirements (depending on the amount of stocks each manufacturer wishes to put into the network,
which varies depending on the time of year and level of production) and are therefore not directly related to the Group\u2019s
liquidity: it is therefore not appropriate to quote an undrawn facility.
The key contractual terms of the facilities (both manufacturer and third party) are:
\u2022 The facilities are usually structured as an agency to purchase vehicles on behalf of the funder .
\u2022 Those vehicles are immediately sold back to Pendragon on deferred payment terms.
\u2022
Legal title to the vehicles thus remains with the funder as the funder has purchased the vehicles (via the dealer as agent)
and has an unpaid invoice (either in part or in full) outstanding from Pendragon.
\u2022
The unpaid invoice is therefore trade credit and is accounted for as a trade payable in the \ufb01nancial statements.
\u2022
The payment terms for the invoice vary with the type of vehicle:
\u2022
A new vehicle invoice typically requires no upfront deposit payment (a new i.e. unregistered vehicle, does not
depreciate) and remains outstanding for varying periods up to 360 days.
\u2022 A used vehicle invoice typically requires an immediate payment of c.10% i.e. so that the effective \u201cloan to value\u201d given
for the vehicle is c.90%. As a used vehicle depreciates with age and mileage, periodic instalment payments might
also be required, for example 2% per month or 10% at day 90.
\u2022
Interest is payable in respect of the unpaid invoice. Most new vehicle invoices from manufacturers have an interest free
period followed by commercial rates of interest. Interest rates from third party stock funders are at a commercial rate
from the start.
Payment of any outstanding amounts is due on the earlier of the sale of the vehicle by Pendragon to a customer, or upon
the expiry of a pre-determined maturity period. The maturity period varies by funder and by type of vehicle but is up to
360 days in respect of new vehicles and 330 days in respect of used vehicles.
Manufacturer facility agreements are tied to the franchise agreement i.e. for as long as the franchise agreement is
operational the manufacturer will provide funding facilities to enable the franchisee to sell the product. Other than that,
the normal provisions regarding immediate termination due to an insolvency event or change of control would apply.
Third party facility agreements are uncommitted and can be terminated immediately upon default or upon written notice
by either party; those notice periods vary by agreement but can be from 30-120 days. In practice, if notice is given, no
new contracts for funding individual vehicles would be entered into by the funding partner and the facility in respect of
each individual vehicle would be paid down over time as normal i.e. on the earlier of the normal maturity of the facility for
a particular vehicle or upon sale of the vehicle to a customer. Despite the uncommitted nature of the agreements, most
relationships with funders are of a long standing nature.
The Group is also responsible for funding the pension de\ufb01cit. The total \ufb01nancial resources required by the Group to fund
itself at 31 December 2022 comprises:
2022
2021
\u00a3m
\u00a3m
Net debt
23.3
49.7
Finance lease liabilities
217.9
222.1
Stock \ufb01nance
582.7
447.8
Pension de\ufb01cit
2.6
23.6
826.5
743.2
The Board\u2019s policy is to maintain a strong capital base to maintain market con\ufb01dence and to sustain the development of
the business, whilst maximising the return on capital to the Group\u2019s shareholders. The Group\u2019s strategy will be to maintain
facilities appropriate to the working requirements of the Group and to service its debt requirements through generating
cash \ufb02ow. At 31 December 2022 the adjusted net debt : underlying EBITDA ratio achieved was 0.1 : 1, calculated as follows:
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Depreciation
64.7
70.4
Amortisation
4.9
4.2
Underlying EBITDA
168.1
190.9
Adjusted net debt (being net debt as set out in the alternative performance measures
23.3
49.7
in note 1)
Adjusted net debt : underlying EBITDA ratio
0.1
0.3
The key measures which management uses to evaluate the Group's use of its \ufb01nancial resources, and performance achieved
against these in 2022 and 2021 are set out below:
2022
2021
Underlying pro\ufb01t before tax (\u00a3m)
57.6
83.0
Underlying earnings per share (p)
3.2
5.0
Net debt : underlying EBITDA
0.1
0.3
The Group\u2019s capital structure and capital allocation priorities were reassessed during 2020 as part of the determination
of the Group's strategy for the next \ufb01ve years. That strategy shall require investment to grow the used car non-franchise
business, to develop Pinewood's offering and to maintain and improve the UK Motor franchise business.
The Group has previously engaged in share buyback programmes though none are currently operating. The Group may
also issue shares or purchase them in the market to satisfy share incentives issued to employees of the Group. The Group
encourages employees to be shareholders of the Group, providing selective share option and LTIP schemes from time to
time.
Certain of the Group\u2019s subsidiaries are required to maintain issued share capital at levels to support capital adequacy under
Financial Conduct Authority (FCA) requirements. The Group ensures these requirements are met by injections of equity to
the subsidiaries in question, when required.
Other than speci\ufb01cally set out above, there were no changes to capital management in the year.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17097": {
"value": "Borrowings
In March 2022, the Group re\ufb01nanced its \u00a3175m RCF and \u00a360m Private Placement, both of which were due to mature in
March 2023. The new facilities comprise a
5 year \u00a3100m Senior Term Finance Agreement (SFA), maturing March 2027,
with the Group\u2019s existing Private Placement lender plus a new lender, and a \u00a375m 3+1+1 Revolving Credit Facility (RCF)
with four out of the \ufb01ve of the Group\u2019s existing bankers, maturing March 2025, with extensions at the option of lenders to
March 2026 and then March 2027. The SFA comprises a term loan, with principal repayments at 1% per quarter in years
1 and 2, and at 2.5% per quarter thereafter. The RCF comprises a \"bullet\" facility i.e. there are no scheduled reductions.
Both the SFA and RCF are secured over the assets of the Group (with the exception of the Pension Fund's Central Asset
Reserve assets set out at note 5.1) , and rank pari-passu with the Pension Fund. Interest in respect of the RCF is in a range
of SONIA + 5.00%-6.00%, and for the SFA at SONIA + 6.00%-7.00%, both dependent on the same leverage ratio. Financial
covenants are common to both the RCF and SFA, and comprise leverage, \ufb01xed charge cover and minimum underlying
EBITDA.
As at 31 December 2022, total facility commitments and expiry are as set out below:
Expiry Date
\u00a3m
RCF
March 2025
75.0
SFA
March 2027
97.0
172.0
At 31 December 2022 the following margins and fees were in place:
Commitment
(non-utilisation)
Current
margin
fee
RCF
5.00%
2.25%
SFA
6.00%
n/a
The leverage covenant is calculated as the ratio of net debt to underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis. This
ratio can not exceed 2.00 times. At 31 December 2022 the ratio was 0.2 times.
The \ufb01xed charge cover covenant is calculated as the ratio of underlying pro\ufb01t before tax, depreciation, amortisation and
\ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) calculated on an IAS 17 basis plus
rent paid, to \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3) plus payments for
rent, scheduled amortisation under the SFA and pension contributions. This ratio must exceed 1.60 times. At 31 December
2022 the ratio was 2.7 times.
The minimum underlying EBITDA covenant is calculated as for the leverage covenant ratio i.e. underlying pro\ufb01t before tax,
depreciation, amortisation and \ufb01nance charges (excluding vehicle stocking plan interest charges disclosed in note 4.3)
calculated on an IAS 17 basis. This must exceed \u00a375.0m at 31 December 2022 and was \u00a3124.9m.
Summary of borrowings
Carrying
Carrying
value
Fair value
value
Fair value
2022
2022
2021
2021
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Non-current:
Bank borrowings (RCF)
-
-
27.1
27.1
SFA
90.8
90.8
-
-
5.75% Senior note 2023
-
-
60.0
60.0
Other loan notes
0.2
0.2
0.2
0.2
Lease liabilities
197.9
197.9
195.4
195.4
Total non-current
288.9
288.9
282.7
282.7
SFA
1.7
1.7
-
-
Bank overdraft*
102.5
102.5
162.5
162.5
Lease liabilities
20.0
20.0
26.7
26.7
Total current
124.2
124.2
189.2
189.2
Total borrowings
413.1
413.1
471.9
471.9
* 2021 restated - see note 1
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBorrowingsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17375": {
"value": "Fair value hierarchy
Financial instruments carried at fair value are required to be measured by reference to the following levels:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The RCF and SFA have been measured by a Level 2 valuation method.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17378": {
"value": "Financial instruments carried at fair value are required to be measured by reference to the following levels:
Level 1: quoted prices in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The RCF and SFA have been measured by a Level 2 valuation method.
The effective interest rates for all borrowings are all based by reference to SONIA. Leases are effectively held at \ufb01xed
rates of interest within the range set out below. Information regarding classi\ufb01cation of balances and interest, the range of
interest rates applied in the year to 31 December 2022 and repricing periods, is set out in the table below.
Carrying
value
Interest
Interest
Classi\ufb01cation
\u00a3m
Classi\ufb01cation
classi\ufb01cation
rate range
Repricing periods
Bank balances and cash equivalents
Loans and receivables
69.4
Amortised cost
Floating GBP
0.45%-4.50%
6 months or less
Borrowings
Non - current:
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating GBP
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
90.8
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Other loan notes
Other \ufb01nancial liabilities
0.2
Amortised cost
Fixed GBP
12.50%
n/a
Lease liabilities
Other \ufb01nancial liabilities
197.9
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total non-current
288.9
RCF
Other \ufb01nancial liabilities
-
Amortised cost
Floating USD
N/A - not drawn
6 months or less
SFA
Other \ufb01nancial liabilities
1.7
Amortised cost
Floating USD
6.75% - 8.94%
6 months or less
Bank overdraft *
Other \ufb01nancial liabilities
102.5
Amortised cost
Floating GBP
0%
6 months or less
Lease liabilities
Other \ufb01nancial liabilities
20.0
Amortised cost
Fixed GBP
1.91% - 8.00%
n/a
Total current
124.2
Total borrowings
413.1
* 2021 restated - see note 1
The carrying amounts of the Group\u2019s borrowings are denominated in the following currencies:
2022
2021
\u00a3m
\u00a3m
Pound sterling
413.1
463.8
US dollar
-
8.1
413.1
471.9
* 2021 restated - see note 1
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17539": {
"value": "Financial risk management
The Group is exposed to the following risks from its use of \ufb01nancial instruments:
Funding and liquidity risk - the risk that the Group will not be able to meet its \ufb01nancial obligations as they fall due.
Credit risk - the risk of \ufb01nancial loss to the Group if a customer or counterparty to a \ufb01nancial instrument fails to meet its
contractual obligations, and arises principally from the Group\u2019s receivables from customers and investment securities.
Market risk - the risk that changes in market prices, such as interest rates and foreign exchange rates, have on the Group's
\ufb01nancial performance.
The Group's quantitative exposure to these risks is explained throughout these \ufb01nancial statements whilst the Group's
objectives and management of these risks is set out below.
Treasury policy and procedures
Group treasury matters are managed within policy guidelines set by the Board with prime areas of focus being liquidity and
interest rate exposure. Management of these areas is the responsibility of the Group\u2019s central treasury function. The Board
does not permit the speculative use of derivatives..
Funding and liquidity management
The Group is \ufb01nanced primarily by its SFA, RCF, vehicle stocking credit lines and operating cash \ufb02ow. The RCF and SFA
are committed facilities which mature within appropriate timescales and are maintained at levels in excess of planned
requirements. .
Each business within the Group is responsible for its own day-to-day cash management and the overall cash position is
monitored on a daily basis by the Group treasury department.
The maturity of non-current borrowings is as follows, excluding lease liabilities:
2022
2021
\u00a3m
\u00a3m
Between 1 and 2 years
7.3
87.1
Between 2 and 5 years
83.7
0.2
91.0
87.3
Maturities include amounts drawn under revolving credit facilities which are contractually repayable generally within a
month of the year end but which may be redrawn at the Group\u2019s option, together with contractual repayment dates for
the amortising SFA. The maturities above therefore represent the \ufb01nal repayment dates for these facilities. If the amounts
drawn at the year end were redrawn at the Group\u2019s usual practice of monthly drawings, the total cash out\ufb02ows associated
with all borrowings, assuming interest rates remain at the same rates as at the year end, are estimated on an undiscounted
basis as follows:
Carrying
Contractual
Within 6
6 - 12
over 5
amount
cash\ufb02ows
months
months
1-2 years
2-5 years
years
RCF
-
-
-
-
-
-
-
SFA
92.5
126.0
5.4
5.3
15.9
99.4
-
Loan notes
0.2
0.4
-
-
-
0.4
-
92.7
126.4
5.4
5.3
15.9
99.8
-
Bank overdraft
102.5
102.5
102.5
-
-
-
-
Leases liabilities
217.9
371.3
17.9
16.4
32.2
76.5
228.3
Trade payables
71.7
71.7
71.7
-
-
-
-
Vehicle stocking loans
582.7
598.4
336.9
261.5
-
-
-
1,067.5
1,270.3
534.4
283.2
48.1
176.3
228.3
The Group has the following undrawn borrowing facilities:
2022
2021
\u00a3m
\u00a3m
Expiring in 1-2 years
-
87.9
Expiring in 2-5 years
70.0
-
70.0
87.9
The above re\ufb02ects that \u00a35m has been drawn on the RCF by way of bank guarantees to third parties, but such amounts do
not constitute borrowings.
Interest rate risk management
The objective of the Group\u2019s interest rate policy is to minimise interest costs whilst protecting the Group from adverse
movements in interest rates. Borrowings issued at variable rates expose the Group to cash \ufb02ow interest rate risk whereas
borrowings issued at \ufb01xed rates expose the Group to fair value interest rate risk. The Group does not actively manage cash
\ufb02ow interest rate risk as the Board believes that the retail sector in which the Group operates provides a natural hedge
against interest rate movements. Consequently, it is normal Group policy to borrow on a \ufb02oating rate basis and all fair value
interest rate risk arising from \ufb01xed rate borrowings entered into by the Group are usually managed by swaps into \ufb02oating
rate. However, due to the relatively low historical rates in \ufb02oating interest rates, there was relatively low downside risk in
maintaining the Group\u2019s \u00a360.0m Senior note 2023
at \ufb01xed rate. On re\ufb01nancing in March 2022, all loans were at \ufb02oating
rate, which were maintained in line with the Group's normal policy.
Interest rate risk sensitivity analysis
As some of the Group\u2019s borrowings and vehicle stocking credit lines are \ufb02oating rate instruments they therefore have a
sensitivity to changes in market rates of interest. The table below shows the effect of a 100 basis points change in interest
rates for \ufb02oating rate instruments outstanding at the period end, showing how pro\ufb01t or loss would have varied in the period
on the assumption that the instruments at the period end were outstanding for the entire period.
Pro\ufb01t/(loss)
Pro\ufb01t/(loss)
2022
2021
\u00a3m
\u00a3m
100 basis points increase
(5.5)
(3.8)
Tax effect
1.0
0.7
Effect on net assets
(4.5)
(3.1)
100 basis points decrease
5.5
1.9
Tax effect
(1.0)
(0.4)
Effect on net assets
4.5
1.5
Foreign exchange risk management
The Group faces currency risk in respect of its net assets denominated in currencies other than sterling. On translation
into sterling, movements in currency will affect the value of these assets. The Group\u2019s policy is therefore to match, where
possible, net assets in overseas subsidiaries which are denominated in a foreign currency with borrowings in the same
currency. With very little US assets remaining at the year end following the disposal all US business interests in prior years,
no material hedging requirement remains so the Group now has no USD borrowings (2021: USD 10.0m) against its net
assets held in overseas subsidiaries.
Hedges of net investments in overseas operations
A gain or loss in respect of an effective hedge of a net investment in an overseas operation is recognised directly in
equity. Any ineffective portion of the hedge is recognised in the income statement.
Included within bank borrowings are balances denominated in US dollars which are designated as a hedge of the net
investment in the Group\u2019s US subsidiaries. Foreign exchange differences on translation of the borrowings to sterling at
the balance sheet date are recognised within the translation differences reserve in equity, net of exchange differences in
respect of the net investments being hedged.
2022
2021
$m
$m
Aggregate fair value of borrowings designated as hedge of net investment
-
10.0
in the Group's US subsidiaries
\u00a3m
\u00a3m
Foreign
exchange gains/(losses) on translation of borrowings to sterling at
-
0.5
balance sheet date
Foreign exchange (losses)/gains on translation of net investments to ster-
0.5
(0.5)
ling at balance sheet date
Net
exchange
gain/(loss) recognised within translation reserve in equity
0.5
-
Capital management
The Group views its \ufb01nancial capital resources as primarily comprising share capital, loans (RCF and SFA), vehicle stocking
credit lines and operating cash\ufb02ow.
Core debt is essentially funded by the Group\u2019s SFA. The Group requires its revolving credit facility to fund its day-to-day
working capital requirements. A fundamental element of the Group\u2019s \ufb01nancial resources is the provision of vehicle stocking
credit lines, provided by the vehicle manufacturers\u2019 funding arms and other third party providers. The Group\u2019s funding of
its vehicle inventories is set out below:
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
595.0
488.4
2022
2021
\u00a3m
\u00a3m
Manufacturer \ufb01nance arm
286.0
224.7
Third
party stock \ufb01nance
296.7
262.5
Total inventories
582.7
487.2
Inventories are stated net of any Value Added Tax (VAT) whilst the related creditor is a gross amount. The creditor may
also be higher than the inventory value due to timing of the vehicle sale and payment of the related liability.
When considering vehicle stocks from a funding risk view point we split the funding into that which is funded by the vehicle
manufacturers through their related \ufb01nance arms and that funded through third party stock \ufb01nance facilities and bank
borrowings. Financing for stock other than through bank borrowings is shown in trade creditors in the balance sheet. The
maturity analysis on page 167 includes stock \ufb01nance facilities.
The third party stock facilities have prescribed limits and can be used to fund virtually any vehicle. Any undrawn amount
is therefore directly relatable to the ability of the Group to increase inventory and fund it accordingly. Undrawn third party
stock \ufb01nance facilities at 31 December 2022 amounted to \u00a365.9m (2021: \u00a373.1m). In contrast, manufacturer limits vary with
the manufacturer\u2019s requirements (depending on the amount of stocks each manufacturer wishes to put into the network,
which varies depending on the time of year and level of production) and are therefore not directly related to the Group\u2019s
liquidity: it is therefore not appropriate to quote an undrawn facility.
The key contractual terms of the facilities (both manufacturer and third party) are:
\u2022 The facilities are usually structured as an agency to purchase vehicles on behalf of the funder .
\u2022 Those vehicles are immediately sold back to Pendragon on deferred payment terms.
\u2022
Legal title to the vehicles thus remains with the funder as the funder has purchased the vehicles (via the dealer as agent)
and has an unpaid invoice (either in part or in full) outstanding from Pendragon.
\u2022
The unpaid invoice is therefore trade credit and is accounted for as a trade payable in the \ufb01nancial statements.
\u2022
The payment terms for the invoice vary with the type of vehicle:
\u2022
A new vehicle invoice typically requires no upfront deposit payment (a new i.e. unregistered vehicle, does not
depreciate) and remains outstanding for varying periods up to 360 days.
\u2022 A used vehicle invoice typically requires an immediate payment of c.10% i.e. so that the effective \u201cloan to value\u201d given
for the vehicle is c.90%. As a used vehicle depreciates with age and mileage, periodic instalment payments might
also be required, for example 2% per month or 10% at day 90.
\u2022
Interest is payable in respect of the unpaid invoice. Most new vehicle invoices from manufacturers have an interest free
period followed by commercial rates of interest. Interest rates from third party stock funders are at a commercial rate
from the start.
Payment of any outstanding amounts is due on the earlier of the sale of the vehicle by Pendragon to a customer, or upon
the expiry of a pre-determined maturity period. The maturity period varies by funder and by type of vehicle but is up to
360 days in respect of new vehicles and 330 days in respect of used vehicles.
Manufacturer facility agreements are tied to the franchise agreement i.e. for as long as the franchise agreement is
operational the manufacturer will provide funding facilities to enable the franchisee to sell the product. Other than that,
the normal provisions regarding immediate termination due to an insolvency event or change of control would apply.
Third party facility agreements are uncommitted and can be terminated immediately upon default or upon written notice
by either party; those notice periods vary by agreement but can be from 30-120 days. In practice, if notice is given, no
new contracts for funding individual vehicles would be entered into by the funding partner and the facility in respect of
each individual vehicle would be paid down over time as normal i.e. on the earlier of the normal maturity of the facility for
a particular vehicle or upon sale of the vehicle to a customer. Despite the uncommitted nature of the agreements, most
relationships with funders are of a long standing nature.
The Group is also responsible for funding the pension de\ufb01cit. The total \ufb01nancial resources required by the Group to fund
itself at 31 December 2022 comprises:
2022
2021
\u00a3m
\u00a3m
Net debt
23.3
49.7
Finance lease liabilities
217.9
222.1
Stock \ufb01nance
582.7
447.8
Pension de\ufb01cit
2.6
23.6
826.5
743.2
The Board\u2019s policy is to maintain a strong capital base to maintain market con\ufb01dence and to sustain the development of
the business, whilst maximising the return on capital to the Group\u2019s shareholders. The Group\u2019s strategy will be to maintain
facilities appropriate to the working requirements of the Group and to service its debt requirements through generating
cash \ufb02ow. At 31 December 2022 the adjusted net debt : underlying EBITDA ratio achieved was 0.1 : 1, calculated as follows:
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Depreciation
64.7
70.4
Amortisation
4.9
4.2
Underlying EBITDA
168.1
190.9
Adjusted net debt (being net debt as set out in the alternative performance measures
23.3
49.7
in note 1)
Adjusted net debt : underlying EBITDA ratio
0.1
0.3
The key measures which management uses to evaluate the Group's use of its \ufb01nancial resources, and performance achieved
against these in 2022 and 2021 are set out below:
2022
2021
Underlying pro\ufb01t before tax (\u00a3m)
57.6
83.0
Underlying earnings per share (p)
3.2
5.0
Net debt : underlying EBITDA
0.1
0.3
The Group\u2019s capital structure and capital allocation priorities were reassessed during 2020 as part of the determination
of the Group's strategy for the next \ufb01ve years. That strategy shall require investment to grow the used car non-franchise
business, to develop Pinewood's offering and to maintain and improve the UK Motor franchise business.
The Group has previously engaged in share buyback programmes though none are currently operating. The Group may
also issue shares or purchase them in the market to satisfy share incentives issued to employees of the Group. The Group
encourages employees to be shareholders of the Group, providing selective share option and LTIP schemes from time to
time.
Certain of the Group\u2019s subsidiaries are required to maintain issued share capital at levels to support capital adequacy under
Financial Conduct Authority (FCA) requirements. The Group ensures these requirements are met by injections of equity to
the subsidiaries in question, when required.
Other than speci\ufb01cally set out above, there were no changes to capital management in the year.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17550": {
"value": "Treasury policy and procedures
Group treasury matters are managed within policy guidelines set by the Board with prime areas of focus being liquidity and
interest rate exposure. Management of these areas is the responsibility of the Group\u2019s central treasury function. The Board
does not permit the speculative use of derivatives..
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17557": {
"value": "Funding and liquidity management
The Group is \ufb01nanced primarily by its SFA, RCF, vehicle stocking credit lines and operating cash \ufb02ow. The RCF and SFA
are committed facilities which mature within appropriate timescales and are maintained at levels in excess of planned
requirements. .
Each business within the Group is responsible for its own day-to-day cash management and the overall cash position is
monitored on a daily basis by the Group treasury department.
The maturity of non-current borrowings is as follows, excluding lease liabilities:
2022
2021
\u00a3m
\u00a3m
Between 1 and 2 years
7.3
87.1
Between 2 and 5 years
83.7
0.2
91.0
87.3
Maturities include amounts drawn under revolving credit facilities which are contractually repayable generally within a
month of the year end but which may be redrawn at the Group\u2019s option, together with contractual repayment dates for
the amortising SFA. The maturities above therefore represent the \ufb01nal repayment dates for these facilities. If the amounts
drawn at the year end were redrawn at the Group\u2019s usual practice of monthly drawings, the total cash out\ufb02ows associated
with all borrowings, assuming interest rates remain at the same rates as at the year end, are estimated on an undiscounted
basis as follows:
Carrying
Contractual
Within 6
6 - 12
over 5
amount
cash\ufb02ows
months
months
1-2 years
2-5 years
years
RCF
-
-
-
-
-
-
-
SFA
92.5
126.0
5.4
5.3
15.9
99.4
-
Loan notes
0.2
0.4
-
-
-
0.4
-
92.7
126.4
5.4
5.3
15.9
99.8
-
Bank overdraft
102.5
102.5
102.5
-
-
-
-
Leases liabilities
217.9
371.3
17.9
16.4
32.2
76.5
228.3
Trade payables
71.7
71.7
71.7
-
-
-
-
Vehicle stocking loans
582.7
598.4
336.9
261.5
-
-
-
1,067.5
1,270.3
534.4
283.2
48.1
176.3
228.3
The Group has the following undrawn borrowing facilities:
2022
2021
\u00a3m
\u00a3m
Expiring in 1-2 years
-
87.9
Expiring in 2-5 years
70.0
-
70.0
87.9
The above re\ufb02ects that \u00a35m has been drawn on the RCF by way of bank guarantees to third parties, but such amounts do
not constitute borrowings.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17734": {
"value": "Interest rate risk management
The objective of the Group\u2019s interest rate policy is to minimise interest costs whilst protecting the Group from adverse
movements in interest rates. Borrowings issued at variable rates expose the Group to cash \ufb02ow interest rate risk whereas
borrowings issued at \ufb01xed rates expose the Group to fair value interest rate risk. The Group does not actively manage cash
\ufb02ow interest rate risk as the Board believes that the retail sector in which the Group operates provides a natural hedge
against interest rate movements. Consequently, it is normal Group policy to borrow on a \ufb02oating rate basis and all fair value
interest rate risk arising from \ufb01xed rate borrowings entered into by the Group are usually managed by swaps into \ufb02oating
rate. However, due to the relatively low historical rates in \ufb02oating interest rates, there was relatively low downside risk in
maintaining the Group\u2019s \u00a360.0m Senior note 2023
at \ufb01xed rate. On re\ufb01nancing in March 2022, all loans were at \ufb02oating
rate, which were maintained in line with the Group's normal policy.
Interest rate risk sensitivity analysis
As some of the Group\u2019s borrowings and vehicle stocking credit lines are \ufb02oating rate instruments they therefore have a
sensitivity to changes in market rates of interest. The table below shows the effect of a 100 basis points change in interest
rates for \ufb02oating rate instruments outstanding at the period end, showing how pro\ufb01t or loss would have varied in the period
on the assumption that the instruments at the period end were outstanding for the entire period.
Pro\ufb01t/(loss)
Pro\ufb01t/(loss)
2022
2021
\u00a3m
\u00a3m
100 basis points increase
(5.5)
(3.8)
Tax effect
1.0
0.7
Effect on net assets
(4.5)
(3.1)
100 basis points decrease
5.5
1.9
Tax effect
(1.0)
(0.4)
Effect on net assets
4.5
1.5
Foreign exchange risk management
The Group faces currency risk in respect of its net assets denominated in currencies other than sterling. On translation
into sterling, movements in currency will affect the value of these assets. The Group\u2019s policy is therefore to match, where
possible, net assets in overseas subsidiaries which are denominated in a foreign currency with borrowings in the same
currency. With very little US assets remaining at the year end following the disposal all US business interests in prior years,
no material hedging requirement remains so the Group now has no USD borrowings (2021: USD 10.0m) against its net
assets held in overseas subsidiaries.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfMarketRiskExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17776": {
"value": "Foreign exchange risk management
The Group faces currency risk in respect of its net assets denominated in currencies other than sterling. On translation
into sterling, movements in currency will affect the value of these assets. The Group\u2019s policy is therefore to match, where
possible, net assets in overseas subsidiaries which are denominated in a foreign currency with borrowings in the same
currency. With very little US assets remaining at the year end following the disposal all US business interests in prior years,
no material hedging requirement remains so the Group now has no USD borrowings (2021: USD 10.0m) against its net
assets held in overseas subsidiaries.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f17843": {
"value": "Capital management
The Group views its \ufb01nancial capital resources as primarily comprising share capital, loans (RCF and SFA), vehicle stocking
credit lines and operating cash\ufb02ow.
Core debt is essentially funded by the Group\u2019s SFA. The Group requires its revolving credit facility to fund its day-to-day
working capital requirements. A fundamental element of the Group\u2019s \ufb01nancial resources is the provision of vehicle stocking
credit lines, provided by the vehicle manufacturers\u2019 funding arms and other third party providers. The Group\u2019s funding of
its vehicle inventories is set out below:
2022
2021
\u00a3m
\u00a3m
New and used vehicles
559.7
461.2
Consignment vehicles
35.3
27.2
595.0
488.4
2022
2021
\u00a3m
\u00a3m
Manufacturer \ufb01nance arm
286.0
224.7
Third
party stock \ufb01nance
296.7
262.5
Total inventories
582.7
487.2
Inventories are stated net of any Value Added Tax (VAT) whilst the related creditor is a gross amount. The creditor may
also be higher than the inventory value due to timing of the vehicle sale and payment of the related liability.
When considering vehicle stocks from a funding risk view point we split the funding into that which is funded by the vehicle
manufacturers through their related \ufb01nance arms and that funded through third party stock \ufb01nance facilities and bank
borrowings. Financing for stock other than through bank borrowings is shown in trade creditors in the balance sheet. The
maturity analysis on page 167 includes stock \ufb01nance facilities.
The third party stock facilities have prescribed limits and can be used to fund virtually any vehicle. Any undrawn amount
is therefore directly relatable to the ability of the Group to increase inventory and fund it accordingly. Undrawn third party
stock \ufb01nance facilities at 31 December 2022 amounted to \u00a365.9m (2021: \u00a373.1m). In contrast, manufacturer limits vary with
the manufacturer\u2019s requirements (depending on the amount of stocks each manufacturer wishes to put into the network,
which varies depending on the time of year and level of production) and are therefore not directly related to the Group\u2019s
liquidity: it is therefore not appropriate to quote an undrawn facility.
The key contractual terms of the facilities (both manufacturer and third party) are:
\u2022 The facilities are usually structured as an agency to purchase vehicles on behalf of the funder .
\u2022 Those vehicles are immediately sold back to Pendragon on deferred payment terms.
\u2022
Legal title to the vehicles thus remains with the funder as the funder has purchased the vehicles (via the dealer as agent)
and has an unpaid invoice (either in part or in full) outstanding from Pendragon.
\u2022
The unpaid invoice is therefore trade credit and is accounted for as a trade payable in the \ufb01nancial statements.
\u2022
The payment terms for the invoice vary with the type of vehicle:
\u2022
A new vehicle invoice typically requires no upfront deposit payment (a new i.e. unregistered vehicle, does not
depreciate) and remains outstanding for varying periods up to 360 days.
\u2022 A used vehicle invoice typically requires an immediate payment of c.10% i.e. so that the effective \u201cloan to value\u201d given
for the vehicle is c.90%. As a used vehicle depreciates with age and mileage, periodic instalment payments might
also be required, for example 2% per month or 10% at day 90.
\u2022
Interest is payable in respect of the unpaid invoice. Most new vehicle invoices from manufacturers have an interest free
period followed by commercial rates of interest. Interest rates from third party stock funders are at a commercial rate
from the start.
Payment of any outstanding amounts is due on the earlier of the sale of the vehicle by Pendragon to a customer, or upon
the expiry of a pre-determined maturity period. The maturity period varies by funder and by type of vehicle but is up to
360 days in respect of new vehicles and 330 days in respect of used vehicles.
Manufacturer facility agreements are tied to the franchise agreement i.e. for as long as the franchise agreement is
operational the manufacturer will provide funding facilities to enable the franchisee to sell the product. Other than that,
the normal provisions regarding immediate termination due to an insolvency event or change of control would apply.
Third party facility agreements are uncommitted and can be terminated immediately upon default or upon written notice
by either party; those notice periods vary by agreement but can be from 30-120 days. In practice, if notice is given, no
new contracts for funding individual vehicles would be entered into by the funding partner and the facility in respect of
each individual vehicle would be paid down over time as normal i.e. on the earlier of the normal maturity of the facility for
a particular vehicle or upon sale of the vehicle to a customer. Despite the uncommitted nature of the agreements, most
relationships with funders are of a long standing nature.
The Group is also responsible for funding the pension de\ufb01cit. The total \ufb01nancial resources required by the Group to fund
itself at 31 December 2022 comprises:
2022
2021
\u00a3m
\u00a3m
Net debt
23.3
49.7
Finance lease liabilities
217.9
222.1
Stock \ufb01nance
582.7
447.8
Pension de\ufb01cit
2.6
23.6
826.5
743.2
The Board\u2019s policy is to maintain a strong capital base to maintain market con\ufb01dence and to sustain the development of
the business, whilst maximising the return on capital to the Group\u2019s shareholders. The Group\u2019s strategy will be to maintain
facilities appropriate to the working requirements of the Group and to service its debt requirements through generating
cash \ufb02ow. At 31 December 2022 the adjusted net debt : underlying EBITDA ratio achieved was 0.1 : 1, calculated as follows:
2022
2021
\u00a3m
\u00a3m
Underlying operating pro\ufb01t
98.5
116.3
Depreciation
64.7
70.4
Amortisation
4.9
4.2
Underlying EBITDA
168.1
190.9
Adjusted net debt (being net debt as set out in the alternative performance measures
23.3
49.7
in note 1)
Adjusted net debt : underlying EBITDA ratio
0.1
0.3
The key measures which management uses to evaluate the Group's use of its \ufb01nancial resources, and performance achieved
against these in 2022 and 2021 are set out below:
2022
2021
Underlying pro\ufb01t before tax (\u00a3m)
57.6
83.0
Underlying earnings per share (p)
3.2
5.0
Net debt : underlying EBITDA
0.1
0.3
The Group\u2019s capital structure and capital allocation priorities were reassessed during 2020 as part of the determination
of the Group's strategy for the next \ufb01ve years. That strategy shall require investment to grow the used car non-franchise
business, to develop Pinewood's offering and to maintain and improve the UK Motor franchise business.
The Group has previously engaged in share buyback programmes though none are currently operating. The Group may
also issue shares or purchase them in the market to satisfy share incentives issued to employees of the Group. The Group
encourages employees to be shareholders of the Group, providing selective share option and LTIP schemes from time to
time.
Certain of the Group\u2019s subsidiaries are required to maintain issued share capital at levels to support capital adequacy under
Financial Conduct Authority (FCA) requirements. The Group ensures these requirements are met by injections of equity to
the subsidiaries in question, when required.
Other than speci\ufb01cally set out above, there were no changes to capital management in the year.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18095": {
"value": "4.3 Net \ufb01nancing costs
Accounting policy
Finance income comprises interest income on funds invested, return on net pension scheme assets and gains on hedging
instruments that are recognised in pro\ufb01t and loss. Interest income is recognised as it accrues in pro\ufb01t and loss, using the
effective rate method.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
Gross \ufb01nance costs directly attributable to the construction of property, plant and equipment are capitalised as part of the
cost of those assets until such a time as the assets are substantially ready for their intended use or sale.
Finance expense
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest payable on bank borrowings, SFA, Senior note and loan notes
10.8
9.4
Vehicle stocking plan interest
14.7
9.8
Interest payable on leases
14.7
12.6
Costs incurred on re\ufb01nancing (non-underlying - see note 2.6)
2.6
-
Net interest on pension scheme obligations (non-underlying - see note 2.6)
0.3
1.0
Less: interest capitalised
(0.8)
(0.3)
Total interest expense being interest expense in respect of \ufb01nancial liabili
-
42.3
32.5
ties held at amortised cost
Unwinding of discounts in contract hire residual values
2.5
2.7
Total \ufb01nance expense
44.8
35.2
Interest of \u00a30.8m has been capitalised during the year on assets under construction at an average rate of 7.47% (2021:
\u00a30.3m).
Finance income
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest
receivable on \ufb01nance leases
1.0
0.9
Total \ufb01nance income
1.0
0.9
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18096": {
"value": "4.3 Net \ufb01nancing costs
Accounting policy
Finance income comprises interest income on funds invested, return on net pension scheme assets and gains on hedging
instruments that are recognised in pro\ufb01t and loss. Interest income is recognised as it accrues in pro\ufb01t and loss, using the
effective rate method.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
Gross \ufb01nance costs directly attributable to the construction of property, plant and equipment are capitalised as part of the
cost of those assets until such a time as the assets are substantially ready for their intended use or sale.
Finance expense
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest payable on bank borrowings, SFA, Senior note and loan notes
10.8
9.4
Vehicle stocking plan interest
14.7
9.8
Interest payable on leases
14.7
12.6
Costs incurred on re\ufb01nancing (non-underlying - see note 2.6)
2.6
-
Net interest on pension scheme obligations (non-underlying - see note 2.6)
0.3
1.0
Less: interest capitalised
(0.8)
(0.3)
Total interest expense being interest expense in respect of \ufb01nancial liabili
-
42.3
32.5
ties held at amortised cost
Unwinding of discounts in contract hire residual values
2.5
2.7
Total \ufb01nance expense
44.8
35.2
Interest of \u00a30.8m has been capitalised during the year on assets under construction at an average rate of 7.47% (2021:
\u00a30.3m).
Finance income
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest
receivable on \ufb01nance leases
1.0
0.9
Total \ufb01nance income
1.0
0.9
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18100": {
"value": "Accounting policy
Finance income comprises interest income on funds invested, return on net pension scheme assets and gains on hedging
instruments that are recognised in pro\ufb01t and loss. Interest income is recognised as it accrues in pro\ufb01t and loss, using the
effective rate method.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
Gross \ufb01nance costs directly attributable to the construction of property, plant and equipment are capitalised as part of the
cost of those assets until such a time as the assets are substantially ready for their intended use or sale.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18104": {
"value": "Finance income comprises interest income on funds invested, return on net pension scheme assets and gains on hedging
instruments that are recognised in pro\ufb01t and loss. Interest income is recognised as it accrues in pro\ufb01t and loss, using the
effective rate method.
Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18112": {
"value": "Finance expense comprises interest expense on borrowings, unwinding of the discount on provisions, interest on net
pension scheme obligations and losses on hedging instruments recognised in pro\ufb01t and loss. All borrowing costs are
recognised in pro\ufb01t and loss using the effective interest method.
Gross \ufb01nance costs directly attributable to the construction of property, plant and equipment are capitalised as part of the
cost of those assets until such a time as the assets are substantially ready for their intended use or sale.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18123": {
"value": "Finance expense
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest payable on bank borrowings, SFA, Senior note and loan notes
10.8
9.4
Vehicle stocking plan interest
14.7
9.8
Interest payable on leases
14.7
12.6
Costs incurred on re\ufb01nancing (non-underlying - see note 2.6)
2.6
-
Net interest on pension scheme obligations (non-underlying - see note 2.6)
0.3
1.0
Less: interest capitalised
(0.8)
(0.3)
Total interest expense being interest expense in respect of \ufb01nancial liabili
-
42.3
32.5
ties held at amortised cost
Unwinding of discounts in contract hire residual values
2.5
2.7
Total \ufb01nance expense
44.8
35.2
Interest of \u00a30.8m has been capitalised during the year on assets under construction at an average rate of 7.47% (2021:
\u00a30.3m).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceCostExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18126": {
"value": "Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest payable on bank borrowings, SFA, Senior note and loan notes
10.8
9.4
Vehicle stocking plan interest
14.7
9.8
Interest payable on leases
14.7
12.6
Costs incurred on re\ufb01nancing (non-underlying - see note 2.6)
2.6
-
Net interest on pension scheme obligations (non-underlying - see note 2.6)
0.3
1.0
Less: interest capitalised
(0.8)
(0.3)
Total interest expense being interest expense in respect of \ufb01nancial liabili
-
42.3
32.5
ties held at amortised cost
Unwinding of discounts in contract hire residual values
2.5
2.7
Total \ufb01nance expense
44.8
35.2
Interest of \u00a30.8m has been capitalised during the year on assets under construction at an average rate of 7.47% (2021:
\u00a30.3m).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18166": {
"value": "Finance income
Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest
receivable on \ufb01nance leases
1.0
0.9
Total \ufb01nance income
1.0
0.9
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18169": {
"value": "Recognised in pro\ufb01t and loss
2022
2021
\u00a3m
\u00a3m
Interest
receivable on \ufb01nance leases
1.0
0.9
Total \ufb01nance income
1.0
0.9
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18203": {
"value": "4.4 Capital and reserves
Ordinary share capital
Ordinary shares are classi\ufb01ed as equity.
Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
Number
\u00a3m
Allotted, called up and fully paid shares of 5p each at 31 December 2021 and
1,396,944,405
69.9
31 December 2022
There were no issues of ordinary shares during the year.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Group. All shares rank equally with regard to the Group\u2019s residual assets.
Capital redemption reserve
The capital redemption reserve has arisen following the purchase by the Group of its own shares and comprises the
amount by which distributable pro\ufb01ts were reduced on these transactions in accordance with s733 of the Companies Act
2006. There were no transfers into the capital redemption reserve during the year in respect of shares purchased by the
Group and subsequently cancelled (2021: \u00a3nil).
Other reserves
Other reserves comprise the amount of demerger reserve arising on the demerger of the Group from Williams Holdings
PLC in 1989.
Own shares held by Employee Bene\ufb01t Trust (EBT)
Transactions of the Group-sponsored EBT are included in the Group \ufb01nancial statements. In particular, the trust\u2019s
purchases of shares in the Group, which are classi\ufb01ed as own shares, are debited directly to equity through retained
earnings. When own shares are sold or reissued the resulting surplus or de\ufb01cit on the transaction is also recognised within
retained earnings.
The market value of the investment in the Group's own shares at 31 December 2022 was \u00a30.3m (2021: \u00a31.3m), being
1.5m (2021: 5.8m) shares with a nominal value of 5p each, acquired at an average cost of \u00a30.24 each (2021: \u00a30.33). The
trustee of the EBT is Salamanca Group Trust (Jersey) Limited. The shares in trust may subsequently be awarded to
Executive Directors and employees under the Pendragon 1999 Approved Executive Share Option Scheme, Pendragon
1999 Unapproved Executive Share Option Scheme and to satisfy amounts under LTIPs. Details of the plans are given in the
Directors' Remuneration Report on pages 77 to 95..
Dividends on the shares owned by the trust, the purchase of which were funded by interest free loans to the trust from
Pendragon PLC, are waived. All expenses incurred by the trust are settled directly by Pendragon PLC and charged in the
accounts as incurred.
The trust is regarded as a quasi subsidiary and its assets and results are consolidated into the \ufb01nancial statements of the
Group.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the net investment
in foreign operations as well as from the translation of liabilities held to hedge the respective net investment in foreign
operations.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18206": {
"value": "Ordinary share capital
Ordinary shares are classi\ufb01ed as equity.
Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
Number
\u00a3m
Allotted, called up and fully paid shares of 5p each at 31 December 2021 and
1,396,944,405
69.9
31 December 2022
There were no issues of ordinary shares during the year.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Group. All shares rank equally with regard to the Group\u2019s residual assets.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18222": {
"value": "Capital redemption reserve
The capital redemption reserve has arisen following the purchase by the Group of its own shares and comprises the
amount by which distributable pro\ufb01ts were reduced on these transactions in accordance with s733 of the Companies Act
2006. There were no transfers into the capital redemption reserve during the year in respect of shares purchased by the
Group and subsequently cancelled (2021: \u00a3nil).
Other reserves
Other reserves comprise the amount of demerger reserve arising on the demerger of the Group from Williams Holdings
PLC in 1989.
Own shares held by Employee Bene\ufb01t Trust (EBT)
Transactions of the Group-sponsored EBT are included in the Group \ufb01nancial statements. In particular, the trust\u2019s
purchases of shares in the Group, which are classi\ufb01ed as own shares, are debited directly to equity through retained
earnings. When own shares are sold or reissued the resulting surplus or de\ufb01cit on the transaction is also recognised within
retained earnings.
The market value of the investment in the Group's own shares at 31 December 2022 was \u00a30.3m (2021: \u00a31.3m), being
1.5m (2021: 5.8m) shares with a nominal value of 5p each, acquired at an average cost of \u00a30.24 each (2021: \u00a30.33). The
trustee of the EBT is Salamanca Group Trust (Jersey) Limited. The shares in trust may subsequently be awarded to
Executive Directors and employees under the Pendragon 1999 Approved Executive Share Option Scheme, Pendragon
1999 Unapproved Executive Share Option Scheme and to satisfy amounts under LTIPs. Details of the plans are given in the
Directors' Remuneration Report on pages 77 to 95..
Dividends on the shares owned by the trust, the purchase of which were funded by interest free loans to the trust from
Pendragon PLC, are waived. All expenses incurred by the trust are settled directly by Pendragon PLC and charged in the
accounts as incurred.
The trust is regarded as a quasi subsidiary and its assets and results are consolidated into the \ufb01nancial statements of the
Group.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the net investment
in foreign operations as well as from the translation of liabilities held to hedge the respective net investment in foreign
operations.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18280": {
"value": "4.5 Dividends
The Board is not recommending the payment of a \ufb01nal dividend for 2022 (2021: nil).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18300": {
"value": "4.6 Share based compensation
Accounting policy
The Group operates a number of employee share option schemes and an executive share ownership plan 'exsop' awarded
in 2010. The fair value at the date at which the share options are granted is recognised in the income statement on a
straight line basis over the vesting period, taking into account the number of options that are expected to vest. The fair
value of the options granted is measured using an option pricing model, taking into account the terms and conditions
upon which the options were granted. The number of options that are expected to become exercisable is reviewed at each
balance sheet date and if necessary estimates are revised.
Executive share options
The number and weighted average exercise prices of share options is as follows:
Weighted
Number
Weighted
Number
average
of
average
of
exercise
options
exercise
options
price
millions
price
millions
2022
2022
2021
2021
Outstanding at beginning of period
24.0p
3.8
24.0p
4.6
Exercised during the period
13.5p
(0.5)
8.8p
(0.6)
Lapsed during the period
13.5p
(0.5)
8.8p
(0.2)
Outstanding at the end of the period
31.8p
2.8
24.0p
3.8
Exercisable at the end of the period
31.8p
2.8
27.0p
3.8
The options outstanding at 31 December 2022 have an exercise price of 31.82p and a weighted contractual life of 1.7 years.
All share options are settled in equity.
Movements in the number of options to acquire ordinary shares under the Group's various share option schemes, together
with exercise prices and the outstanding position at 31 December 2022 were as follows:
At 31
At 31
Exercise
December
December
price per
2021
Exercised
Lapsed
2022
Exercise period
Date of grant
share
Number
Number
Number
Number
31 March 2015 to 30 March 2022
30 March 2012
13.50p
1,000,000
(500,000)
(500,000)
-
19 September 2017 to 19 September 2024
18 September 2014
31.82p
2,829,500
-
-
2,829,500
3,829,500
(500,000)
(500,000)
2,829,500
All grants of share options were issued pursuant to the 2009 Executive Share Option Scheme, which prescribed an earnings
per share performance criterion. It is a precondition to the exercise of grants made under the 2009 Scheme that the growth
in the Group's earnings per share over the prescribed three year period must exceed by at least 3 percent per annum
compound the annual rate of in\ufb02ation as shown by the RPI Index.
The weighted average share price at the date of exercise for share options exercised in the year was 27.50p (2021:
17.68p).
All options are settled by physical delivery of shares.
The fair value of the services received in return for share options is measured by reference to the fair value of the options
granted. The estimate of the fair value of the services received in respect of share option schemes is measured using the
Black-Scholes option pricing model. The weighted average fair value of the options at the date of grant for those that are
outstanding at 31 December 2022 is 7.7p (2021: 6.4p).
Executive Long Term Incentive Plan (\u201cLTIPs\u201d)
The number and weighted average exercise prices of executive LTIPs is as follows:
Weighted
Number
Weighted
Number
average
of
average
of
exercise
options
exercise
options
price
millions
price
millions
2022
2022
2021
2021
Outstanding at the start of the period
0.00p
44.1
0.00p
27.6
Granted during the period
0.00p
12.3
0.00p
16.5
Outstanding at the end of the period
0.00p
56.4
0.00p
44.1
Movements in the number of options to acquire ordinary shares under the Group's LTIP, together with the outstanding
position at 31 December 2022 were as follows:
At 31
At 31
December
December
2021
Granted
2022
Exercise period
Date of grant
Number
Number
Number
27 October 2023
28 October 2020
27,648,123
-
27,648,123
12 July 2024
13 July 2021
16,506,004
-
16,506,004
13 August 2025
14 August 2022
-
19,562,808
19,562,808
44,154,127
19,562,808
63,716,935
All grants of LTIPs were issued pursuant to the Long Term Incentive Plan. Vesting of the 2020 and 2021 Awards under the
LTIP is subject to the satisfaction of certain performance conditions, 50% of which is based on achieving a de\ufb01ned earnings
per share target over a de\ufb01ned performance period, commencing on the grant date and measured at the respective year
end, with the remaining 50% based on the achievement of certain qualitative strategic performance metrics aligned to
the Company\u2019s strategic milestones as set out in the Company\u2019s Group Strategy Investor Presentation (available at www.
pendragonplc.com). For both the 2020 and 2021 LTIP, the Remuneration Committee concluded that the performance
conditions had been satis\ufb01ed in full in terms of the EPS metric, and the Company had delivered signi\ufb01cantly on stretching
strategic targets for 2021, such that both plans would vest at 91.6% in October 2023 and July 2024 respectively.
For awards made in August 2022, the performance metrics applicable were (i) achieving a de\ufb01ned earnings per share
target over a three year performance period, commencing on 01 January 2022 and measured at year end 2024, namely
achieving a target EPS derived from a mix of the most recently available analyst/broker consensus published at or around
the time of making the award and our business plan of 4.0p at target by year end 2024 (70% weighting); (ii) achieving an
overall reduction in carbon emissions of 5% at target by 2024 (5% weighting); (iii) deliver a year end 2024 gross pro\ufb01t of
\u00a3180m in used cars at target (15% weighting) and (iv) deliver revenue of \u00a330m by year end 2024 in Pinewood at target
(10% weighting).
If the performance conditions are not satis\ufb01ed, none of the LTIP award shares will vest.
Executive bonuses relating to performance in 2020 were granted in the form of deferred share awards that have vested
one year after grant date. They automatically convert into one ordinary share each on vesting at an exercise price of nil.
The executives do not receive any dividends and are not entitled to vote in relation to the deferred shares during the
vesting period.
The fair value at the date at which the share options are granted is recognised in the income statement on a straight line
basis over the vesting period, taking into account the number of options that are expected to vest. The number of options
that are expected to become exercisable is reviewed at each balance sheet date and if necessary estimates are revised. The
fair value of the services received in return for the LTIPs is measured by reference to the fair value of the LTIPs granted.
The estimate of the fair value of the services received in respect of the LTIPs is measured using the Black-Scholes option
pricing model.
The weighted average fair value of the options at the date of grant for those that are outstanding at 31
December 2022 is 14.08p (2021: 14.08p).
Executive LTIP Scheme
2022
2021
Number of share options granted in year
19,562,808
16,506,004
Weighted average share price (pence)
0.00
0.00
Weighted average exercise price (pence)
0.00
0.00
Weighted average fair value (pence)
23.72
19.09
Expected volatility (%)
50.6%
48.9%
Expected life (years)
3.0
3.0
Risk free rate (%)
358.3%
69.3%
Expected dividend yield (%)
0.0%
0.0%
Expected volatility was determined by calculating the historical volatility of the Group's share price over the corresponding
historical period.
The expected life used in the model has been adjusted, based on management's best estimate, for the
effects of exercise restrictions and associate turnover.
Income statement
The Group recognised a total net expense of \u00a33.3m (2021: \u00a32.9m) as an employee bene\ufb01t cost in respect of all equity-
settled share based payment transactions included within administration costs.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18303": {
"value": "Accounting policy
The Group operates a number of employee share option schemes and an executive share ownership plan 'exsop' awarded
in 2010. The fair value at the date at which the share options are granted is recognised in the income statement on a
straight line basis over the vesting period, taking into account the number of options that are expected to vest. The fair
value of the options granted is measured using an option pricing model, taking into account the terms and conditions
upon which the options were granted. The number of options that are expected to become exercisable is reviewed at each
balance sheet date and if necessary estimates are revised.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18604": {
"value": "4.7 Leases
Accounting policies
Leases as a Lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identi\ufb01ed asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identi\ufb01ed asset, the Group uses the de\ufb01nition of a
lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019.
The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is
initially measured at cost, and subsequently at cost less accumulated depreciation and impairment losses, and adjusted for
certain remeasurements of the lease liability. Cost comprises the initial amount of the lease liability adjusted for any initial
direct costs incurred less any lease incentives received. Depreciation is recognised on a straight line basis over the period
of the lease the right of use asset is expected to be utilised.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date, discounted by the interest rate implicit in the lease or when this is not readily attainable, the Group\u2019s incremental
borrowing rate. Lease payments include \ufb01xed rental payments and amounts expected to be payable under a residual
value guarantee. Generally the Group uses its incremental borrowing rate as the discount rate. The Group determines
its incremental borrowing rate by obtaining interest rates from various external \ufb01nancing sources and makes certain
adjustments to re\ufb02ect the terms of the lease and type of the asset leased.
The lease liability is subsequently increased by the interest cost on the lease liability and reduced by payments made. It is
remeasured when there is a change in future lease payments arising from a change of index or rate, a variation in amounts
payable following contractual rent reviews and changes in the assessment of whether an extension/termination option is
reasonably certain to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made
to the carrying amount of the right-of-use asset, or is recorded in pro\ufb01t or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Sale and leaseback transactions. When a transfer of an asset is made and it is deemed a sale in accordance with IFRS 15,
the resulting right-of-use asset arising from the leaseback is measured at the proportion of the previous carrying amount
of the asset that relates to the right of use retained by the seller/lessee. Gain or loss is recognised only at the amount that
relates to the rights transferred to the buyer/lessor.
The Group presents right-of-use assets that do not meet the de\ufb01nition of investment property in \u2018property, plant and
equipment\u2019 and lease liabilities in \u2018loans and borrowings\u2019 in the Balance Sheet.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
Balance Sheet
The Group leases a large number of properties for use as motor vehicle dealerships, parts distribution warehouses, storage
compounds and of\ufb01ces. Lease terms vary and at 31 December 2022 property leases had an average of around 12.4 years
to expiry.
These leases comprise those with provision for periodic rent reviews, \ufb01xed scheduled increases and those
with periodic increases based on the RPI. The Group does not have any property leases that contain extension clauses. A
number of property leases have break clauses allowing the Group to terminate the agreement earlier than the lease expiry
date. The Group has applied judgement in that unless it is reasonably certain that such a break option will be exercised, the
calculation of the lease liability and right of use asset is made up to the expiry date of the lease. Had the Group recognised a
shorter lease term then right of use assets and lease liabilities would both be lower than currently reported and the interest
expense for the current year on lease liabilities would be reduced with the possibility depreciation charges could increase.
In addition to property leases the Group have leases for various items of plant and equipment and motor vehicles.
Right of use assets are presented as part of property, plant and equipment as presented in note 3.2.
Land &
Motor
Right of Use Assets
buildings
vehicles
Total
\u00a3m
\u00a3m
\u00a3m
Balance at 1 January 2021
145.6
0.4
146.0
Additions to right of use assets
8.7
0.1
8.8
Reinstated from assets held for sale as part of a disposal group
5.0
-
5.0
Depreciation charge
(18.1)
(0.4)
(18.5)
Impairment
(9.6)
-
(9.6)
Disposals of right of use assets
(5.2)
-
(5.2)
Balance at 31 December 2021
126.4
0.1
126.5
Balance at 1 January 2022
126.4
0.1
126.5
Additions to right of use assets
22.5
-
22.5
Depreciation charge
(15.1)
(0.1)
(15.2)
Impairment
(0.2)
-
(0.2)
Disposals of right of use assets
(3.1)
-
(3.1)
Balance at 31 December 2022
130.5
-
130.5
Disposals of right of use assets have occurred on assignment of leases, derecognition on entering into sub leases and early
terminations.
Lease liabilities
Included within
liabilities
associated with
Land &
Motor
the assets held
buildings
vehicles
Total
for sale
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Balance at 1 January 2021
(242.7)
(0.5)
(243.2)
(30.6)
Additions to right of use assets
(8.7)
(0.1)
(8.8)
-
Additions to lease receivables
(0.4)
-
(0.4)
-
Interest expense related to lease liabilities
(12.5)
-
(12.5)
(0.1)
Disposals of lease liabilities on sale of business
-
-
-
27.8
Other disposals of lease liabilities
5.8
-
5.8
-
Reinstated from liabilities held for sale as part of a disposal group
(2.5)
-
(2.5)
2.5
Repayment of lease liabilities (including interest element)
38.9
0.5
39.4
0.4
Exchange adjustments
0.2
-
0.2
-
Other movements
(0.1)
-
(0.1)
-
Balance at 31 December 2021
(222.0)
(0.1)
(222.1)
-
Non-current
(195.4)
-
(195.4)
Current
(26.6)
(0.1)
(26.7)
Balance at 31 December 2021
(222.0)
(0.1)
(222.1)
Balance at 1 January 2022
(222.0)
(0.1)
(222.1)
Additions to right of use assets
(34.9)
-
(34.9)
Additions to lease receivables
(0.4)
-
(0.4)
Interest expense related to lease liabilities
(14.7)
-
(14.7)
Disposals of lease liabilities
17.6
-
17.6
Repayment of lease liabilities (including interest element)
36.8
0.1
36.9
Exchange adjustments
(0.1)
-
(0.1)
Other movements
(0.2)
-
(0.2)
Balance at 31 December 2022
(217.9)
-
(217.9)
Non-current
(197.9)
-
(197.9)
Current
(20.0)
-
(20.0)
Balance at 31 December 2022
(217.9)
-
(217.9)
During the year a lease regear was undertaken with our largest property partner in which 30 prime leaseholds were extended
until 2042 with the Group bene\ufb01tting from reductions in rent payable from the agreement to hand-back 12 vacant properties
to the landlord in exchange for the lease extensions. The extensions were deemed lease modi\ufb01cations in light of the increased
duration with all other terms of the leases remaining unchanged. An updated discount rate appropriate to these modi\ufb01ed
leases was applied in determining the increased liability and right of use asset. The 12 leases terminated had a lease liability
of \u00a316.8m in respect of right of use assets of \u00a30.7m and \ufb01nance lease receivables of \u00a31.1m, giving an overall net liability at
the time of the transaction of \u00a315.0m, which, because the extensions were considered to subsidise the terminations, has
been recognised as a lease incentive and as such a reduction in the value of the 30 extended right of use assets. In respect
of the tables above this transaction resulted in additions to right of use assets of \u00a316.5m (after deduction of the \u00a315.0m
lease incentive and including \u00a32.6m of additional costs incurred), disposals of right of use assets of \u00a30.7m, disposals of
\ufb01nance lease receivables of \u00a31.1m, disposals of lease liabilities of \u00a316.8m and an addition of a lease liability of \u00a328.9m.
The calculation of the lease liability and the right of use asset relies upon the estimation of a suitable interest rate.
The
Group has applied rates to represent the different types of leases it has by applying its incremental borrowing rate for
shorter term leases and a higher rates based upon market rates for borrowing against equivalent assets with similar risk
pro\ufb01les in speci\ufb01c markets for medium to longer term leases.
Future increases in rentals linked to an index or rate are not included in the lease liability until the change in cash \ufb02ows
takes effect. Approximately 69.0% (2021: 69.5%) of the Group\u2019s lease liabilities are subject to in\ufb02ation linked rentals. Rental
changes linked to in\ufb02ation or rent reviews typically occur on an annual basis and are subject to caps. Remeasurement
adjustments in respect of these increases are included in additions to right of use assets and lease liabilities in the tables
above.
Other future possible cash out\ufb02ows not included in the lease liability include the payment of dilapidations in respect of
properties where the lease contains speci\ufb01c condition of return clauses. Whilst the Group endeavours to maintain its
properties to a high standard it is likely that such payments will be made in the future when lease contracts end.
Amounts recognised in pro\ufb01t or loss
2022
2021
\u00a3m
\u00a3m
Depreciation of right of use assets
15.2
18.5
Impairment of right of use assets (non-underlying)
0.2
9.6
Gains on the dispoal, termination and assignment of leases
(non-underlying) (included
0.6
1.5
in Other income - gains on the sale of businesses and property, plant and equipment)
Interest on lease liabilities
14.7
12.6
Expense relating to variable lease payments not included in lease liabilities
0.1
0.1
Expenses relating to low value leases
0.7
0.1
Expenses relating to short term leases
6.5
1.1
Expenses relating to variable lease payments not included in lease liabilities relate to the payment of dilapidation claims
made on properties.
The Group as lessor
Leases as a Lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a \ufb01nance lease or an operating
lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks
and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a \ufb01nance lease; if not, then
it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for
the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It
assesses the lease classi\ufb01cation of a sub-lease with reference to the right-of-use asset arising from the head lease, not with
reference to the underlying asset.
Where the Group acts as a Lessor of an operating lease, receipts of lease payments are recognised in the income statement
on a straight line basis over the period of the lease. Where the Group acts as a Lessor of a \ufb01nance lease the Group will,
rather than recognise a right of use asset, recognise a \ufb01nance lease receivable, this being the present value of future lease
receipts discounted at the interest rate implicit in the lease or if this is not speci\ufb01ed the Group's incremental borrowing
rate. The \ufb01nance lease receivable will be increased by the interest received and reduced by payments made by the lessee.
Balance Sheet
Lease receivables
2022
2021
Land and buildings
\u00a3m
\u00a3m
Balance at 1 January
17.6
18.6
Additions to lease receivables
2.6
2.7
Interest income related to lease receivables
1.0
0.9
Disposals of lease liabilities
(1.0)
(1.5)
Payment of lease receivables (including interest element)
(3.0)
(3.1)
Balance at 31 December
17.2
17.6
Non-current
14.8
15.5
Current
2.4
2.1
17.2
17.6
The following table sets out a maturity analysis of lease payments receivable, showing the undiscounted lease payments
to be received after the reporting date:
2022
2021
\u00a3m
\u00a3m
Less than one year
3.3
3.0
Between one and two years
3.1
3.0
Between two and three years
2.5
2.9
Between three and four years
2.3
2.2
Between four and \ufb01ve years
2.3
2.0
More than \ufb01ve years
8.0
9.5
Total undiscounted lease receivable
21.5
22.6
Unearned \ufb01nance income
(4.3)
(5.0)
17.2
17.6
At the 31 December 2022 balance sheet date, the Group had contracted with tenants for the following future minimum
lease payments on leases classi\ufb01ed as operating leases.
2022
2021
Property
Property
\u00a3m
\u00a3m
Less than one year
2.4
2.2
Between one and two years
2.3
1.9
Between two and three years
2.2
1.9
Between three and four years
1.8
1.8
Between four and \ufb01ve years
1.1
1.8
More than \ufb01ve years
2.8
4.5
12.6
14.1
The Group has no properties that are treated as investment properties.
Amounts recognised in pro\ufb01t or loss
2022
2021
\u00a3m
\u00a3m
Operating lease rentals received
2.9
1.8
Interest received on \ufb01nance lease receivables
1.0
0.9
3.9
2.7
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfLeasesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f18607": {
"value": "Accounting policies
Leases as a Lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identi\ufb01ed asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identi\ufb01ed asset, the Group uses the de\ufb01nition of a
lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019.
The Group recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is
initially measured at cost, and subsequently at cost less accumulated depreciation and impairment losses, and adjusted for
certain remeasurements of the lease liability. Cost comprises the initial amount of the lease liability adjusted for any initial
direct costs incurred less any lease incentives received. Depreciation is recognised on a straight line basis over the period
of the lease the right of use asset is expected to be utilised.
The lease liability is initially measured at the present value of lease payments that are not paid at the commencement
date, discounted by the interest rate implicit in the lease or when this is not readily attainable, the Group\u2019s incremental
borrowing rate. Lease payments include \ufb01xed rental payments and amounts expected to be payable under a residual
value guarantee. Generally the Group uses its incremental borrowing rate as the discount rate. The Group determines
its incremental borrowing rate by obtaining interest rates from various external \ufb01nancing sources and makes certain
adjustments to re\ufb02ect the terms of the lease and type of the asset leased.
The lease liability is subsequently increased by the interest cost on the lease liability and reduced by payments made. It is
remeasured when there is a change in future lease payments arising from a change of index or rate, a variation in amounts
payable following contractual rent reviews and changes in the assessment of whether an extension/termination option is
reasonably certain to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made
to the carrying amount of the right-of-use asset, or is recorded in pro\ufb01t or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Sale and leaseback transactions. When a transfer of an asset is made and it is deemed a sale in accordance with IFRS 15,
the resulting right-of-use asset arising from the leaseback is measured at the proportion of the previous carrying amount
of the asset that relates to the right of use retained by the seller/lessee. Gain or loss is recognised only at the amount that
relates to the rights transferred to the buyer/lessor.
The Group presents right-of-use assets that do not meet the de\ufb01nition of investment property in \u2018property, plant and
equipment\u2019 and lease liabilities in \u2018loans and borrowings\u2019 in the Balance Sheet.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-
term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f19160": {
"value": "5.1 Pension obligations
Accounting policy
The Group operated a number of de\ufb01ned bene\ufb01t and de\ufb01ned contribution plans during the year. The assets of the de\ufb01ned
bene\ufb01t plan and one de\ufb01ned contribution plan are held in independent trustee administered funds. The Group also operates
a Group Personal Pension Plan which is a de\ufb01ned contribution plan where the assets are held by the insurance Group under
a contract with each individual.
De\ufb01ned contribution plans - A de\ufb01ned contribution plan is one under which the Group pays \ufb01xed contributions and has
no legal or constructive obligation to pay further amounts. Therefore, no assets or liabilities of these plans are recorded
in these \ufb01nancial statements. Obligations for contributions to de\ufb01ned contribution pension plans are recognised as an
employee bene\ufb01t expense in the income statement when they are due.
De\ufb01ned bene\ufb01t plans - Pension accounting costs for de\ufb01ned bene\ufb01t plans are assessed by determining the pension
obligation using the projected unit credit method after including a net return on the plan assets. Under this method, in
accordance with the advice of quali\ufb01ed actuaries, the amounts charged in respect of employee bene\ufb01ts re\ufb02ect the cost of
bene\ufb01ts accruing in the year and the cost of \ufb01nancing historical accrued bene\ufb01ts. The Group recognises all actuarial gains
and losses arising from de\ufb01ned bene\ufb01t plans in the statement of other comprehensive income immediately.
The present value of pension obligations is measured by reference to market yields on high quality corporate bonds
which have terms to maturity approximating to the terms of the related pension liability. Plan assets are measured at fair
value. When the calculation results in a bene\ufb01t to the Group, the recognised asset is limited to the total of the present
value of economic bene\ufb01ts available in the form of any future refunds from the plan or reductions in future contributions
to the plan. An economic bene\ufb01t is available to the Group if it is realisable during the life of the plan, or on settlement of
the plan liabilities.
Under IAS 19 Employee Bene\ufb01ts, the Group recognises an interest expense or income which is calculated on the net
de\ufb01ned bene\ufb01t liability or asset respectively by applying the discount rate to the net de\ufb01ned bene\ufb01t liability or asset.
Remeasurements arising from de\ufb01ned bene\ufb01t plans comprise actuarial gains and losses and the return on plan assets
(excluding interest) are immediately recognised directly in the statement of other comprehensive income. Actuarial
gains and losses are the differences between actual and interest income during the year, experience losses on scheme
liabilities and the impact of any changes in assumptions. Details of the last independent statutory actuarial valuation and
assumptions are set out below.
Pension arrangements
The Group operated six de\ufb01ned bene\ufb01t pension schemes (one of which had a de\ufb01ned contribution section) which closed
to new members and accrual of future bene\ufb01ts on 30 September 2006 and a de\ufb01ned contribution scheme which was
closed to new contributions from April 2006. All affected employees were offered membership of a de\ufb01ned contribution
pension arrangement with Friends Provident. A Group Personal Pension arrangement with Legal & General replaced the
Friends Provident arrangement from 1 January 2010. Total contributions paid by the Group in 2021 to the Legal & General
arrangement were \u00a34.7m (2021: \u00a33.0m). To comply with the Government\u2019s automatic enrolment legislation, the Group
chose to participate in the People\u2019s Pension Scheme in April 2013. This is a de\ufb01ned contribution occupational pension
scheme provided by B&CE. Total contributions paid by the Group to the People\u2019s Pension in 2022 were \u00a36.0m (2021:
\u00a34.2m). The combined contributions to the Group's Personal Pension arrangement and the Peoples Pension scheme
therefore totalled \u00a310.7m in the period (2021: \u00a37.2m).
During 2012 the Trustees merged the six de\ufb01ned bene\ufb01t schemes into one new de\ufb01ned bene\ufb01t scheme, \u2018the Pendragon
Group Pension Scheme\u2019, which remains closed to new members and accrual of future bene\ufb01ts. The assets of the six
schemes have all been transferred into the new scheme and the bene\ufb01ts previously accrued in the six schemes were
transferred without amendment of the bene\ufb01t entitlement of members to the new scheme.
The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December
2005. This, together with documents issued by the Pensions Regulator, and Guidance Notes adopted by the Financial
Reporting Council, set out the framework for funding de\ufb01ned bene\ufb01t occupational pension schemes in the UK.
The Board of the Trustees of the pension scheme is currently composed of two member nominated trustees (i.e. members
of the pension scheme nominated by other members to be trustees), two employer representatives and a professional
independent trustee, who became chair during 2018. The Trustee of the scheme is required to act in the best interest of the
scheme\u2019s bene\ufb01ciaries. The appointment of the Trustee is determined by the scheme\u2019s trust documentation.
Under IAS 24, the pension schemes are related parties of the Group. At 31 December 2022 there was an outstanding
balance of \u00a30.9m (2021: \u00a30.9m)
Funding
The Pendragon Group Pension Scheme is fully funded by the Group\u2019s subsidiaries. The funding requirements are based on
the Scheme\u2019s actuarial measurement framework set out in the funding policies of the Scheme. Employees are not required
to contribute to the plans.
Explanation of the Pension De\ufb01cit
The liability to pay future pensions is a liability to settle a stream of future cash\ufb02ows. These future cash\ufb02ows have the
following pro\ufb01le:
30
25
Annual Payment \u00a3m
20
15
10
5
0
2030
2040
2050
2060
2070
2080
2090
2100
2110
2120
Deferreds
Pensioners
Expenses
'Deferred' are those pension scheme members not yet drawing a pension as at 31 December 2022; 'Pensioners' are those
in receipt of pension at 31 December 2022.
The actual total cash liabilities shown above are estimated at \u00a3766m. The value of these liabilities discounted to present
value at 31 December 2022 are \u00a3368.9m.
In order to meet those future cash\ufb02ows, the Pension Scheme has to grow its assets suf\ufb01cient to settle those liabilities. The
risk of the future value of those assets is dependent on the \ufb01nancial return; the liabilities will change dependent on the
rate of in\ufb02ation (as most pensions are in\ufb02ation adjusted) and longevity (how long the pensioner lives for and therefore
in receipt of pension). The pension de\ufb01cit is the gap between those assets and liabilities and can be calculated in one of
two ways, both of which are arithmetically identical: either forecast future assets at the asset growth rate to offset against
actual liabilities or discount future liabilities by the asset growth rate and compare with the present value of the assets. The
latter method is the one commonly adopted and accounting standards require that the asset growth rate (the discount
rate) should be estimated on a similar basis for every Group, to enhance comparability and to assume a relatively low level
of risk. The more realistic picture is provided by the actuarial valuation which considers what the prudent estimate of the
asset growth rate should be and hence what the gap is that the Group will be required to fund through cash contributions.
These actuarial valuations are conducted every three years (the triennial valuation). The last triennial valuation was
conducted as at 31 December 2021 giving the following comparison:
As at 31 December 2021
IAS 19
Actuarial
(Accounts)
valuation
\u00a3m
\u00a3m
Assets
545.6
545.6
Liabilities
(569.2)
(578.7)
Pension
de\ufb01cit
(23.6)
(33.1)
At each term p.a.
Nominal Gilt
Discount rate used
1.80%
Yield + 0.75%
Gilt in\ufb02ation
RPI in\ufb02ation
3.50%
curve
Gilt in\ufb02ation
curve less
CPI in\ufb02ation
3.00%
0.70% to 2020,
no adjustment
thereafter
The triennial valuation of the pension scheme re\ufb02ecting the position as at 31 December 2021 was agreed by the Trustees
on 2 November 2022. The Group has agreed with the trustees that it will aim to eliminate the de\ufb01cit over a period of
2 years from December 2021 until December 2023 by the payment of de\ufb01cit recovery contributions of \u00a313.06m each
year, increasing at 2.25% p.a. These contributions include the expected quarterly distributions from the Central Asset
Reserve (CAR) over the recovery period. Recognising that both the Trustee and the Group aim to achieve full funding
on a long term funding target, contributions will continue beyond 31 December 2023, but only in respect of the quarterly
distributions from the CAR. On this basis, contributions will reduce to \u00a33.45m p.a. from 1 January 2024, increasing at a rate
of 2.25% p.a, and will be paid until 31 December 2026.
The next triennial valuation of the pension scheme will re\ufb02ect the
position as at 31 December 2024.
Central Asset Reserve
Pendragon PLC is a general partner and the Pendragon Group Pension Scheme is a limited partner of the Pendragon
Scottish Limited Partnership (the Partnership). The Partnership holds properties with a book value of \u00a345.1m (with a most
recent market valuation of \u00a347.1m), which have been leased back to the Group at market rates. The Group retains control
over these properties, including the \ufb02exibility to substitute alternative properties. As such, the Partnership is consolidated
into the results of the Group. During the year the Group has paid \u00a33.2m to the Pendragon Group Pension Scheme through
the Partnership (2021: \u00a33.1m) and this will increase by 2.25% on 1 August each year until the leases expire on 31 July 2031.
These payments could cease in advance of that date if the Pension Scheme\u2019s actuarial valuation reaches a point where
there is a surplus of 5% over the liability value (on the actuarial triennial valuation basis). The Pension Scheme therefore
has a right to receive a future stream of rental receipts. No asset is recognised in these \ufb01nancial statements as the Group
has to consent to any proposed disposal of this asset by the Pension Scheme. However, if the Group became insolvent the
properties themselves would be retained by the Pension Scheme.
IAS 19 assumptions
The assumptions used by the actuary in performing the triennial valuation at 31 December 2021 include an element of
caution and are chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not
necessarily be borne out in practice. The IAS assumptions have been updated at 31 December 2022 and differ from those
used for the earlier independent statutory actuarial valuations explained above.
The principal assumptions used by the independent quali\ufb01ed actuaries for the purposes of IAS 19 for all schemes were:
2022
2021
In\ufb02ation - RPI
3.25%
3.50%
In\ufb02ation - CPI
2.85%
3.00%
Discount rate
5.00%
1.80%
111% of the standard tables S3PMA/
VitaCurves CMI 2020 M/F
Mortality table assumption *
S3PFA_M, Year of birth, no age rat
-
(1.25%)
ing projected using CMI_2021 (1.25%)
*The mortality table assumption implies the following expected future lifetime from age 65:
2022
2021
Years
Years
Males aged 45
22.7
22.6
Females aged 45
24.7
24.8
Males aged 65
21.4
21.3
Females aged 65
23.2
23.2
No adjustments have been made to mortality assumptions at the year end to re\ufb02ect the potential effects of Covid-19 as the
actual plan experience is not yet available and it is to soon to make a judgement on the impact of the pandemic on future
mortality improvements.
During 2010 the Government announced a change to the index to be used for pension increases from RPI to CPI. The
change applied to certain elements of pension increases depending on the nature of the pension entitlement, the period in
which it was earned and the rules of each scheme. The application of either RPI or CPI to calculate the pension liability has
been assessed for each scheme and the relevant elements of pension increases within each scheme.
The outcome of the formal consultation on the proposed changes to RPI was announced on 25 November 2020 and
con\ufb01rmed that RPI will match CPI including Housing (CPIH) from 2030.
On balance, it is reasonable to assume that RPI
reform is priced into the market implied RPI curve and therefore, as last year, the assumption makes no change to the base
derivation of the break-even RPI assumption, other than a general allowance for the in\ufb02ation risk premium of 0.2% within
the in\ufb02ation curve.
At present there is no reliable indicator for market expectations of CPI in\ufb02ation.
Therefore typical market practice is to
make an adjustment to the RPI assumption which takes into account the expected difference between the two in\ufb02ation
measures.
The RPI/CPI gap of 0.40% p.a. (2021: 0.50% p.a.) broadly re\ufb02ects an average of a long term assumed gap of
1.0% p.a. before 2030 and 0% thereafter, suitably weighted to re\ufb02ect the scheme\u2019s exposure to CPI liabilities.
The sensitivities regarding the principal assumptions used to measure scheme liabilities are set out below. The Group
regards these sensitivities as reasonably likely to occur.
Assumption
Change in assumption
Impact on scheme liabilities
Discount rate
Increase/decrease by 1.00%
Decrease of 10.9%/increase of 13.2%
Rate of in\ufb02ation
Increase/decrease by 0.25%
Increase of 1.2%/decrease of 1.5%
Mortality
Increase in life expectancy of 1 year
Increase by 2.9%
The sensitivities shown above are approximate.
The discount rate sensititity has been set at 1.00% for 2022 to re\ufb02ect
current market uncertainty.. Each sensitivity considers one change in isolation. The in\ufb02ation sensitivity includes the impact
of changes to the assumptions for revaluation and pension increases. The average duration of the de\ufb01ned bene\ufb01t obligation
at the period ending 31 December 2022 is 14 years (2021: 16 years).
The scheme typically exposes the Group to actuarial risks such as investment risk in assets (the return and gain or loss
on assets invested in), in\ufb02ation risk (as pensions typically rise in line with in\ufb02ation) and mortality risk (the length of time a
pensioner lives for) in respect of liabilities. As the accounting de\ufb01cit is calculated by reference to a discount rate linked to
corporate bonds then the Group is also exposed to interest rate risk i.e. the discounted value of liabilities will rise or fall in
line with changes in the interest rate used to calculate (discount) the future pension liabilities to present value. A decrease
in corporate bond yields, a rise in in\ufb02ation or an increase in life expectancy would result in an increase to scheme liabilities.
This would detrimentally impact the balance sheet position and may give rise to increased charges in future income
statements. This effect could be partially offset by an increase in the value of the scheme\u2019s assets. In order to further
mitigate risk, the scheme\u2019s investment strategy operates within a framework known as Liability Driven Investments (\u2018LDI\u2019)
i.e. the scheme invests in a mix of assets that are broadly expected to match the expected movement in the net present
value of liabilities. This is achieved by investing in assets that are broadly expected to hedge the underlying in\ufb02ation and
interest rate risks of 100% of the liabilities. The nature of the products available for liability driven investing mean that a
greater proportion of the scheme\u2019s assets can be used to invest in assets that are expected to have a higher growth rate
than low risk assets. The scheme's assets can therefore be broadly subdivided into two categories: return -seeking assets
which aim to achieve a level of growth to reduce the de\ufb01cit and \"protection seeking\" assets, which comprise the LDI
assets held to mitigate the changes in liabilities. There is further diversi\ufb01cation within these individual categories, as further
described below, and a strategy to \"de-risk\" assets when certain pre-de\ufb01ned benchmarks are met: in this way the Scheme
disinvests from assets with more risk into assets with lower risk.
The fair value of the scheme\u2019s assets which are not intended to be realised in the short term and may be subject to
signi\ufb01cant change before they are realised, and the value of the schemes liabilities, which is derived from cash \ufb02ow
projections over long periods and thus inherently uncertain, are:
Scheme assets and liabilities
2022
2021
\u00a3m
\u00a3m
Global equities
31.0
81.0
Credit funds
134.9
182.8
Private markets
69.0
92.8
Liability driven investments
86.3
106.7
Diversi\ufb01ed growth fund
20.7
52.0
Cash
24.4
30.3
Fair value of scheme assets
366.3
545.6
Present value of funded de\ufb01ned bene\ufb01t obligations
(368.9)
(569.2)
Net liability on the balance sheet
(2.6)
(23.6)
In addition to the assets and liabilities set out above there are a small number of insurance policies (with a value of \u00a34.4m at
the last triennial valuation date of 31 December 2021) purchased to pay annuities to 70 pensioners. These policies represent
both an asset and liability of the scheme and therefore have no impact on the net de\ufb01cit position.
None of the fair values of the assets shown above include any of the Group\u2019s own \ufb01nancial instruments or any property
occupied by, or other assets used by, the Group.
All of the assets are held within pooled investment vehicles (where cash is invested in a quoted fund designed by the fund
manager).
Investment
risk
The pension scheme has exposure to a number of risks:
Credit risk: this is the risk that one party to a \ufb01nancial instrument will cause a \ufb01nancial loss for the other party by failing to
discharge an obligation.
Currency risk: this is the risk that the fair value or future cash \ufb02ows of a \ufb01nancial asset will \ufb02uctuate because of changes in
foreign exchange rates.
Interest rate risk: this is the risk that the fair value or future cash \ufb02ows of a \ufb01nancial asset will \ufb02uctuate because of changes
in market interest rates.
Other price risk: this is the risk that the fair value of future cash \ufb02ows of a \ufb01nancial asset will \ufb02uctuate because of changes
in market prices (other than those arising from interest rate risk or currency risk).
Credit risk
The Scheme is subject to credit risk as it has credit fund exposure and has cash balances. The Scheme invests in pooled
investment vehicles and is therefore directly exposed to credit risk in relation to the holdings in the pooled investment
vehicles, and is indirectly exposed to credit risks arising on the \ufb01nancial instruments that make up the pooled investment
vehicles.
Direct credit risk arising from pooled investment vehicles is mitigated by the underlying assets of the pooled arrangements
being ring-fenced from the pooled manager, the regulatory environments in which the pooled managers operate and
diversi\ufb01cation of investments amongst a number of pooled arrangements.
Currency risk
The Scheme\u2019s liabilities are denominated in sterling. The Scheme is exposed to currency risk because some of its investments
are held in overseas markets. For example, the Scheme invests in pooled funds that hold overseas equities, global credit
and also funds where the manager has discretion to hold overseas assets. The respective fund managers hedge all, or a
proportion of,
these risks back to sterling.
Interest rate risk and other price risk
The Scheme is subject to interest rate risk on the investments comprising of bonds and cash held through pooled vehicles
and other price risk arises principally in relation to the Scheme\u2019s return-seeking portfolio which includes equities held in
pooled investment vehicles. The Scheme manages this exposure to other price risk by constructing a diverse portfolio of
investments across various markets.
Fair value determination
The fair value of \ufb01nancial instruments has been determined using the following fair value hierarchy:
Level 1: The unadjusted quoted price in an active market for identical assets or liabilities which the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 which are observable (i.e. developed using market data)
for the asset or liability, either directly or indirectly
Level 3: Inputs which are unobservable (i.e. for which market data is unavailable) for the asset or liability
A summary of the risks and the fair value determination is set out in the table below
Interest
Other
rate risk
price risk
Other
Level 1
Level 2
Level 3
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
LDI and cash
110.7
-
-
24.4
86.3
-
Credit funds
134.9
-
-
-
134.9
-
Equity
31.0
-
-
31.0
-
Private markets
-
69.0
-
45.6
23.4
DGF
-
20.7
-
20.7
-
245.6
31.0
89.7
24.4
318.5
23.4
Being:
Indirect - Bonds
221.2
-
-
-
221.2
-
Indirect - Cash
24.4
-
-
24.4
-
-
Indirect - equities
-
31.0
-
-
31.0
-
Indirect - multi-asset
-
-
89.7
-
66.3
23.4
245.6
31.0
89.7
24.4
318.5
23.4
No speci\ufb01c risk is assigned to investment held in multi asset pooled investment vehicles, as they are multi asset by
de\ufb01nition, and therefore the asset allocations within these funds, and the associated risk theron, change frequently.
The Private markets investments have a level 3 valuation as they comprise investments in one fund invested in property.
It is the policy of the Trustee and the Group to review the investment strategy at the time of each funding valuation and
keep this under review. The Trustee investment objectives and the processes undertaken to measure and manage the risks
inherent in the scheme investment strategy are documented in the scheme\u2019s Statement of Investment Principles.
The Group has reviewed implications of the guidance provided by IFRIC 14 and have concluded that it is not necessary
to make any adjustments to the IAS 19 \ufb01gures in respect of an asset ceiling or Minimum Funding Requirement as at 31
December 2022 and at 31 December 2021.
The Trust Deed provides Pendragon with an unconditional right to a refund of surplus assets assuming the full settlement
of plan liabilities in the event of a plan wind-up. Based on this right, any net surplus in the UK scheme is recognised in
full.
Movements in the net liability for de\ufb01ned bene\ufb01t obligations recognised in the balance sheet
2022
2021
\u00a3m
\u00a3m
Net liability for de\ufb01ned bene\ufb01t obligations at 1 January
(23.6)
(75.5)
Contributions received
13.1
12.8
Expense recognised in the income statement
(0.3)
(1.0)
Actuarial gains and losses recognised in the statement of other comprehensive income
8.2
40.1
Net liability for de\ufb01ned bene\ufb01t obligations at 31 December
(2.6)
(23.6)
The de\ufb01ned bene\ufb01t obligation can be allocated to the plan\u2019s participants as follows:
2022
2021
%
%
Deferred plan participants
51
58
Retirees
49
42
2022
2021
\u00a3m
\u00a3m
Actual return on assets
28.3
28.3
Expected contributions in following year
13.1
13.1
Total in the income statement
2022
2021
\u00a3m
\u00a3m
Net interest on obligation
0.3
1.0
The expense is recognised in the following line items in the income statement:
2022
2021
\u00a3m
\u00a3m
Finance costs
0.3
1.0
The expected discount rate as at 31 December 2022 was 5.00%. This compares to the discount rate of 1.80% used in the
calculation of the interest income for the period ending 31 December 2021.
Based on the reported de\ufb01cit of \u00a32.6m at 31 December 2022 and the discount rate assumption of 5.00% the charge in 2023
is expected to be \u00a30.1m.
Past service costs
The High Court ruling in the Lloyds Banking Group Pension Trustees Limited v Lloyds Bank plc and others published in
October 2018 held that UK pension schemes with Guaranteed Minimum Pensions (GMPs) accrued from 17 May 1990 must
equalise for the different effects of these GMPs between men and women. Allowance was made in the bene\ufb01t obligations
at 31 December 2018 for the estimated impact, with a cost recorded as a bene\ufb01t change in the Income Statement. The
Trustees and Company have yet to implement GMP equalisation and there is no new evidence. Therefore, the previous
GMP equalisation allowance has been retained but adjusted for the passage of time and to re\ufb02ect the estimated impact of
changes in market conditions.
A further High Court ruling on 20 November 2020 in the Lloyds Bank Trustees' case extends the scope of the GMP
equalisation to include previous transfer values paid from the scheme since 1990. An allowance for the estimated impact
of this was included in the bene\ufb01t obligations at 31 December 2020 of \u00a33.3m and similarly recorded as a past service cost
in the Income Statement in 2020. This approximate allowance for GMP equalisation in historic transfers out of the Plan has
been retained but adjusted for the passage of time and to re\ufb02ect the estimated impact of changes in market conditions.
Actuarial gains and losses recognised directly in the statement of other comprehensive income
2022
2021
\u00a3m
\u00a3m
Cumulative amount at 1 January
(37.4)
(77.5)
Recognised during the period
8.2
40.1
Cumulative amount at 31 December
(29.2)
(37.4)
De\ufb01ned bene\ufb01t income recognised in statement of other comprehensive income
2022
2021
\u00a3m
\u00a3m
Return on plan assets, excluding interest income
(184.1)
21.0
Experience gain on scheme liabilities
(25.6)
8.7
Changes in assumptions underlying the present value of scheme obligations
217.9
10.4
8.2
40.1
Changes in the present value of the de\ufb01ned bene\ufb01t obligation
2022
2021
\u00a3m
\u00a3m
Opening present value of de\ufb01ned bene\ufb01t obligation
569.2
599.1
Interest cost
10.1
8.3
Remeasurements:
Experience adjustments
25.6
(8.7)
Actuarial gains due to changes in demographic assumptions
(1.3)
4.2
Actuarial (gains) due to changes in \ufb01nancial assumptions
(216.6)
(14.6)
Bene\ufb01ts paid
(18.1)
(19.1)
Closing present value of de\ufb01ned bene\ufb01t obligation
368.9
569.2
Movement in fair value of scheme assets during the period
2022
2021
\u00a3m
\u00a3m
Opening fair value of assets
545.6
523.6
Interest income
9.8
7.3
Return on plan assets, excluding interest income
(184.1)
21.0
Contributions by employer
13.1
12.8
Bene\ufb01ts paid
(18.1)
(19.1)
End of period
366.3
545.6
History of experience adjustments
2022
2021
2020
2019
2018
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Present value of de\ufb01ned bene\ufb01t obligation
368.9
569.2
599.1
531.2
486.3
Fair value of scheme assets
366.3
545.6
523.6
472.2
418.0
De\ufb01cit in schemes
2.6
23.6
75.5
59.0
68.3
Experience adjustments on scheme liabilities:
Amount
(192.3)
(19.1)
74.6
55.6
(37.9)
Percentage of scheme liabilities (%)
(52.1%)
(3.4%)
12.5%
10.5%
(7.8%)
Experience adjustments on scheme assets:
Amount
(184.1)
21.0
50.0
54.3
(38.8)
Percentage of scheme assets (%)
(50.3%)
3.8%
9.5%
11.5%
(9.3%)
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20028": {
"value": "6.1 Business disposals
Accounting policy
The results of businesses disposed of during the year are included up to the effective date of disposal using the acquisition
method of accounting.
Activity
During the year the Group disposed of its remaining motor cycle and trucks businesses for net proceeds of \u00a33.2m which
resulted in a pro\ufb01t on disposal of \u00a30.3m.
Net assets at the date of disposal:
Total net
book value
\u00a3m
Assets held for sale
-
Goodwill
2.1
Property, plant and equipment
0.2
Inventories
37.2
Trade and other receivables
0.1
Trade and other payables
(36.7)
2.9
Pro\ufb01t on sale of businesses
0.3
Total proceeds
3.2
Proceeds on sale comprise
Proceeds on sale satis\ufb01ed by cash and cash equivalents
3.2
Deferred consideration
0.7
3.9
No cash was disposed as part of any business disposal during the year.
Goodwill in respect of the DAF business was impaired by \u00a33.6m when it was classi\ufb01ed for sale.
Deferred consideration received during the year relates to the sale of the US businesses where a retention was held
pending the successful completion of a store development in progress at the time of the sale.
During the previous year the Group disposed of two US and three UK dealerships for proceeds of \u00a327.6m and realising a
pro\ufb01t of \u00a30.7m on disposal.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20031": {
"value": "Accounting policy
The results of businesses disposed of during the year are included up to the effective date of disposal using the acquisition
method of accounting.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20098": {
"value": "6.2 Related party transactions
Subsidiaries
The Group's ultimate parent company is Pendragon PLC. A listing of subsidiaries is shown within the \ufb01nancial statements
of the Group on page 205.
Transactions with key management personnel
The key management personnel of the Group comprise the executive and non-executive directors. The details of the
remuneration, long term incentive plans, shareholdings, share option and pension entitlements of individual directors are
included in the Directors' Remuneration Report on pages 77 to 95.
Directors of the Group and their immediate relatives control 1.000% of the ordinary shares of the Group.
During the year key management personnel compensation was as follows:
2022
2021
\u00a3m
\u00a3m
Short term employee bene\ufb01ts
3.0
3.2
Post-employment bene\ufb01ts
0.1
0.1
Share based payments
1.9
2.0
5.0
5.3
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20101": {
"value": "Subsidiaries
The Group's ultimate parent company is Pendragon PLC. A listing of subsidiaries is shown within the \ufb01nancial statements
of the Group on page 205.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20105": {
"value": "Pendragon PLC",
"dimensions": {
"concept": "ifrs-full:NameOfUltimateParentOfGroup",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20108": {
"value": "Transactions with key management personnel
The key management personnel of the Group comprise the executive and non-executive directors. The details of the
remuneration, long term incentive plans, shareholdings, share option and pension entitlements of individual directors are
included in the Directors' Remuneration Report on pages 77 to 95.
Directors of the Group and their immediate relatives control 1.000% of the ordinary shares of the Group.
During the year key management personnel compensation was as follows:
2022
2021
\u00a3m
\u00a3m
Short term employee bene\ufb01ts
3.0
3.2
Post-employment bene\ufb01ts
0.1
0.1
Share based payments
1.9
2.0
5.0
5.3
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20133": {
"value": "6.3 Contingent liabilities
One of the Group\u2019s subsidiary companies, Pinewood Technologies PLC (\u201cPinewood\u201d), is currently in dispute with one of its
former software resellers, Pinewood Technologies Asia Paci\ufb01c Limited (\u201cPAP\u201d).
PAP historically contributed c.\u00a30.2m of pro\ufb01t p.a. to the overall Pinewood performance. PAP owes Pinewood approximately
\u00a30.5m (including daily interest and other charges), which relates to unpaid invoices arising from the reseller agreements.
Subsequent to the non-payment of this debt, PAP has claimed that Pinewood is in breach of the reseller agreements and
has made a claim against Pinewood. It is not practicable to estimate any potential \ufb01nancial effect of this claim because it
is at a level that Pinewood considers to be entirely disproportionate to the scale of the business. This claim includes a claim
for \u2018loss of pro\ufb01ts\u2019 which is speci\ufb01cally excluded from the reseller agreement.
Notwithstanding the size of the claim, Pinewood considers PAP's claim to be entirely misconceived and lacking merit such
that no provision needs to be made for it on that basis. Pinewood has also applied for summary judgment to dismiss PAP's
claim and on Pinewood's claim for payment of the outstanding debt.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f20158": {
"value": "COMPANY BALANCE SHEET
At 31 December 2022
2022
2021
Notes
\u00a3m
\u00a3m
Fixed assets
Investments
5
981.2
981.2
Loans to subsidiary undertakings
90.0
90.0
1,071.2
1,071.2
Current assets
Debtors (amounts due after more than one year : \u00a323.0m)
6
24.7
30.6
Cash at bank and in hand
0.5
0.3
25.2
30.9
Creditors: amounts falling due within one year
7
(491.4)
(475.7)
Net current liabilities
(466.2)
(444.8)
Total assets less current liabilities
605.0
626.4
Creditors:
amounts falling due after more than one year
8
(90.8)
(87.1)
Retirement bene\ufb01t obligations
(2.6)
(23.6)
Net assets
511.6
515.7
Capital and reserves
Called up share capital
11
69.9
69.9
Share premium account
56.8
56.8
Capital redemption reserve
11
5.6
5.6
Other reserves
11
13.9
13.9
Pro\ufb01t and loss account
365.4
369.5
Equity shareholders' funds
511.6
515.7
Approved by the Board of Directors on 22 March 2023 and signed on its behalf by:
W Berman
M S Willis
Chief Executive
Chief Finance Of\ufb01cer
Registered Company Number: 2304195
The notes on pages 200 to 208 form part of these \ufb01nancial statements.
COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME
Year ended 31 December 2022
2022
2021
\u00a3m
\u00a3m
(Loss)/pro\ufb01t for the year
(15.0)
167.0
Other comprehensive income
Items that will never be reclassi\ufb01ed to pro\ufb01t and loss:
De\ufb01ned bene\ufb01t plan remeasurement gains and (losses)
9.7
41.6
Income tax relating to de\ufb01ned bene\ufb01t plan remeasurement gains and (losses)
(1.6)
(6.9)
Other comprehensive income for the year, net of tax
8.1
34.7
Total comprehensive (expense)/income for the year
(6.9)
201.7
The notes on pages 200 to 208 form part of these \ufb01nancial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2022
Share
Capital
Share
premium
redemption
Other
Retained
capital
account
reserve
reserves
earnings
Total
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
\u00a3m
Balance at 1 January 2022
69.9
56.8
5.6
13.9
369.5
515.7
Total comprehensive income for 2022
Loss for the year
-
-
-
-
(15.0)
(15.0)
Other comprehensive income for the year, net of tax
-
-
-
-
8.1
8.1
Total comprehensive expense for the year
-
-
-
-
(6.9)
(6.9)
Transactions with owners, recorded directly in equity
Share based payments
-
-
-
-
3.3
3.3
Income tax relating to share based payments
-
-
-
-
(0.1)
(0.1)
Own shares issued by EBT
-
-
-
-
0.1
0.1
Own shares purchased by EBT
-
-
-
-
(0.5)
(0.5)
Total contributions by and distributions to owners
-
-
-
-
2.8
2.8
Balance at 31 December 2022
69.9
56.8
5.6
13.9
365.4
511.6
Balance at 1 January 2021
69.9
56.8
5.6
13.9
164.7
310.9
Total comprehensive income for 2021
Pro\ufb01t for the year
-
-
-
-
167.0
167.0
Other comprehensive income for the year, net of tax
-
-
-
-
34.7
34.7
Total comprehensive income for the year
-
-
-
-
201.7
201.7
Transactions with owners, recorded directly in equity
Share based payments
-
-
-
-
2.9
2.9
Income tax relating to share based payments
-
-
-
-
0.2
0.2
Total contributions by and distributions to owners
-
-
-
-
3.1
3.1
Balance at 31 December 2021
69.9
56.8
5.6
13.9
369.5
515.7
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfConsolidatedAndSeparateFinancialStatementsExplanatory",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f21310": {
"value": "Loxley House, 2 Oakwood Court, Little Oak Drive, Annesley, Nottingham NG15 0DR ",
"dimensions": {
"concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity",
"language": "en",
"entity": "scheme:213800VRSPZFOGMMIS18",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
}
}
}