Motorway reveals £1.27m accounting error

Motorway reveals £1.27m accounting error

Oct 6, 2023

Online used car marketplace Motorway has reported a £1.27m accounting error related to the reporting of share options over a three-year period

The company has restated its accounts for year end 2021 following errors in the reporting of share based payment expenses on the share options granted between 2018 and 2021.

The adjustment followed the appointment of the company’s first auditor in 2022, when PwC took over the annual audit.  For the financial year ending 31 December 2021, the company was exempted from audit under section 477 of the Companies Act.

The restatement has resulted in an increase of £1,271,000 in administrative expenses in the comparative year, reported in the annual accounts for year end 2022.

This has led to an opening balance adjustment of £749,000 to the other reserves balance, which related to the share based payment equity reserve and a corresponding increase of £749,000 in the profit and loss accounts as at 1 January 2021.

In the latest results, Motorway reported pre-tax losses of £43.4m, with sales of £41.2m, which the company said was the result of staff recruitment costs and advertising spend.

PwC earned £155,000 in audit fees  and £15,000 for non-audit fees for year end FY22.

In November 2021, Motorway secured additional Series C funding of £156m in 2021, co-led by Index Ventures and ICONIQ Growth, supported by existing investors Latitude, Unbound and BMW i Ventures.