Registration number:
for the
Year Ended 30 June 2023
Luigi TopCo Limited
Contents
Company Information |
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Chairman's Report |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Statement of Comprehensive Income |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Luigi TopCo Limited
Company Information
Directors |
A Troup J Lawford D Gaynor D Wilkinson K Bacon D Earlam S Wooldridge N Pryce |
Registered office |
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Solicitors |
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Bankers |
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Auditors |
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Luigi TopCo Limited
Chairman's Report for the Year Ended 30 June 2023
The Directors present their report for the year ended 30 June 2023.
Chairman's statement
Following a highly successful year in 2022, strong trading continued in 2023.
Despite the much-publicised inflationary pressure, resulting in interest rate rises, our market positioning and premium offering, has ensured that we have remained front of mind for our consumers.
A strong focus on safety continued to improve our accident rates, ensuring our adrenaline fuelled experience continues to get high customer advocacy.
During the year we made some material investments in our business:
• |
We completed a major refurbishment of our Eastleigh track. This was the oldest and most under invested site in the Group, and following signing of a new lease we were able to invest in a complete site redesign, electrifying the track and rolling out a significant ancillary offer. This has really resonated with our customers driving material growth in trading, well ahead of our expectations. |
• |
Last year I reported that a key part of our strategy is the electrification of our karts, and the development of our Net Zero glide path. In the year we electrified our tracks in Brighton, Hull, Clydebank, Newcastle, Eastleigh and Nottingham. With further investment we will be over 50% electric by December 2023, with a commitment that we will not purchase any more petrol fleets after this date. This is a significant and much welcome development as we continue to lead the sector with our focus on the environment. |
• |
We have developed Combat Karts, a fun alternative to traditional karting. We believe this gamification of karting will attract a much wider customer base, increase our dwell time and increase the level of repeat customer visits. |
In March 2022 we opened our first international site in Monchengladbach, Germany. The business is really resonating with the local market, and is delivering strong like for like growth, giving us confidence as we continue our planned roll out strategy in Europe.
In October 2022 we acquired Kart Palast in Munich, the largest track in Europe. The excellent team has significant expertise in bowling, and food and beverage, that will become a blueprint for how we operate in Europe. We were delighted to welcome the experienced management team and staff to the TeamSport Crew.
In the year we also commenced construction on our first site in the Netherlands at the The Wall retail development in Utrecht. The site opened, post year end, in July 2023 and has performed very well in its first few weeks of trading.
The business has always been passionate about promoting diversity and inclusion with both our customers, and our staff. In July 2023, post year end, in conjunction with F1 Academy and Motorsport UK we launched F1 Academy Discover Your Drive. This is an amazing initiative that sees us partner with Formula 1 to support the aim of getting the first female onto the F1 Grid. Initially the programme was piloted at six TeamSport tracks, with plans to expand to include every TeamSport track in the UK next year.
For the third year in a row, we were also delighted to have achieved Great Place to Work certification and be voted 26th overall, our best result to date. This is testament to the strong ethos of TeamSport, and the unwavering hard work and loyalty of all our teams. I would like to thank all our employees for their contribution.
Since the year end, trading has continued to be strong, remaining well ahead of pre pandemic levels. We have a significant investment plan in place to improve our offer further, whilst at the same time managing our cost base to ensure that we deliver a good return for all our stakeholders.
Glenn Earlam
Chairman
Luigi TopCo Limited
Strategic Report for the Year Ended 30 June 2023
The directors present their strategic report for the year ended 30 June 2023.
Principal activity
The principal activity of the group is managing and operating indoor go karting tracks.
The principal activity of the company is that of a holding company.
Fair review of the business
The results for the year which are set out in the profit and loss account show turnover of £62,923,468 (2022 - £60,646,437) and an operating profit of £4,634,134, (2022 – £12,067,350). At 30 June 2023 the group had total assets less current liabilities of £48,029,472 (2022 - £46,577,511). In addition, we held cash of £13,511,176 (2022 - £25,444,512).
As noted in the Chairman’s statement this has been a phenomenal year, that has seen the business hit a series of key milestones.
Balance sheet strength
Despite investing over £15 million in our business in the year, we had an average cash balance of £17,691,871, finishing the year with cash of £13,511,176.
Given our strong cash position our committed Revolving Facility remains undrawn, giving us an additional £2.2 million of liquidity. At the time of writing, we are finalising the drawdown of the £5m accordion facility with our existing lenders, ensuring we have the resources to deliver on our exceptional pipeline of opportunities.
From 1 January 2022 our historic covenants, that had been suspended during the Covid pandemic, have applied. Throughout the year, and for the year ahead, we have significant headroom.
People engagement 'Great place to work'
We have continued to focus on all areas of crew engagement throughout the last year which has helped us again to be voted one of the Best Large Companies to work for in the UK. With high levels of trading throughout the year our crew again worked tirelessly to ensure our customers have safe, unique and exciting experiences. Our focus has been maintained to ensure we find, train, retain and reward great people and during the last year we increased our rates of pay to ensure we are one of the best paying businesses within the leisure sector.
Our focus on having a diverse and inclusive culture has also led to us being voted one of the Best Companies to Work For Women, published in Elle Magazine, post year end, in August 2023. We were also voted as one of the Best Companies for Wellbeing in the UK, thanks to our focus on looking after our Crew, giving them access to wellbeing support and education.
Luigi TopCo Limited
Strategic Report for the Year Ended 30 June 2023
Growth strategy
Our principal strategy remains our international expansion. In March 2022, we opened our first track in Germany, in Monchengladbach. This was followed by the acquisition of Kart Palast in Munich in October 2022. This was our primary target when assessing European opportunities, and we were delighted to successfully integrate the business into TeamSport. The strong alignment of culture, and the same relentless focus on the customer, has ensured that the business has made a seamless transition as we embark on a programme of re-investment.
In the year we also signed a lease for a new site in Stuttgart, and shortly after the year end we agreed terms for a new site in Dusseldorf. With a strong pipeline we expect significant growth in Germany in the next 12-18 months.
We also opened our first site in the Netherlands in July 2023, and completed the acquisition of Kart en Bowlingcentrum Groningen B.V. in September 2023. This cements our position in Europe, where we have already built a strong in territory management team to grow the business.
Whilst international expansion is our number one strategy, we believe the UK still has significant potential for white space. In the year we identified and negotiated leases in several city centre, retail locations, enabling us to further develop our offer. We expect to announce a number of exciting new openings in 2024.
In addition, we are investing in the continued refurbishment of our existing estate. In October we reopened our oldest track in Eastleigh, after a £1.9 million refurbishment. We have similar plans for our sites in Liverpool and Warrington, as well as other significant investment programmes to electrify and rebrand sites in Reading, Crawley and Mitcham.
As reported previously, in August 2021 we experienced a fire at our track in Preston. Thankfully there was no injury to customers or staff. We were fully insured, and with the support of the whole team were finally able to reopen the track in May 2023. The new site showcases the very latest evolution of TeamSport, and we are delighted to see such a strong trading performance.
ESG
This remains a key pillar of our strategy, as it has for many years. By the end of 2023 we expect over half our sites to be fully electric, compared to just five tracks pre-pandemic. We continue to focus on reducing our energy consumption, and our impact on the environment. For the last two years we have been carbon neutral, but we recognise more needs to be done. In the next few months we will issue our first Net Zero glidepath, with a challenging plan to achieve Net Zero by 2030.
As part of our approach to ESG, diversity and inclusion has always been a priority. Our Gender Pay Gap has always been a key area of focus, to ensure that we treat our staff fairly, and ensure that we have the right balance across our business. One area identified as an opportunity was representation at Board level, and we are delighted to appoint Nicky Pryce to our Board.
Outlook
The strong trading we have seen post-Covid has continued into the first quarter of our new financial year. We are performing in line with our expectations, despite the headwinds that have hit both businesses and consumers alike across Europe.
Future developments
We expect to deliver robust performance over the next 12 months. Our focus on financial performance is critical to our management of the business, and our marketing resource is deployed to ensure we react to any softening in consumer spending.
Despite rising interest rates, our re-positioning of the business and even greater focus on premiumisation has resulted in continued strong trading performance. In addition, the development of our food and beverage offering, and installation of multiple ancillary leisure activities at TeamSport tracks, ensures that we continue to see improving spend per head.
Luigi TopCo Limited
Strategic Report for the Year Ended 30 June 2023
Key performance indicators
The group uses several indicators to monitor and improve development, performance, and the position of the business. Indicators are reviewed and altered to meet changes both in the internal and external environments. The Directors do not consider the inclusion of an analysis using performance indicators to be necessary to assist users of the financial statements in their understanding of the financial performance, as the key indicator is earnings before interest, tax, amortisation, and depreciation, which is shown in the financial statements. In addition, we constantly focus on short and medium term cash.
We monitor web traffic, a key source of customer bookings, as well as conversion rates etc daily. We also monitor our reputation scores on a track-by-track basis. This measures how our customers are rating their experience with us. This is the key to our success.
We also monitor our employee satisfaction, striving for year-on-year improvement. We are a customer facing business, and the engagement of our Crew is key to this.
Principal risks and uncertainties
The management of the group and the execution of the group's strategy are subject to several risks. The group uses several indicators to monitor and improve the development, performance, and position of the business. Indicators are viewed and altered to meet changes in the internal and external environments.
Falling consumer confidence and rising interest rates present a volatile environment, however, we continually assess our pricing and product offer at each site, to ensure that we offer an unrivalled value for money experience in all our locations.
Financial instruments
The group uses financial instruments as part of its financial risk management. Although not considered a major risk, the nature of its financial instruments means that they are subject to normal trading risk and liquidity risks from the covenants in operation over the outstanding debt.
In the year we took out a fixed cap interest rate hedge, ensuring we are protected from any further escalation in interest rates.
Going concern
In accordance with the Financial Reporting Council's Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009' the Directors of all companies are now required to provide disclosures regarding the going concern basis of accounting.
We produce detailed short term cash flows to monitor our cash spend, ensuring that we maintain appropriate levels of cash. We also monitor our performance daily, ensuring that on a monthly basis we consider the validity of current forecasts. Where necessary we will redeploy capital to ensure the security of our business.
The Directors believe that the Group has sufficient financial resources available to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.
Approved by the
Director
Luigi TopCo Limited
Directors' Report for the Year Ended 30 June 2023
The directors present their report and the for the year ended 30 June 2023.
Directors of the company
The directors who held office during the year were as follows:
The following director was appointed after the year end:
Employment of disabled persons
The groups' policy is to consider the recruitment of disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, where possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.
The group's selection, training, development and promotion policies ensure equal opportunities for all colleagues regardless of factors such as gender, marital status, race, age, sexual preference and orientation, color, creed, ethnic origin, religion or belief, disability or trade union affiliation. All of our decisions are based on merit.
S172 statement
The Directors believe that they have effectively implemented their duties under section 172 of the Companies Act 2006. The Group has considered the long-term strategy of the business in the strategic report and consider that this strategy will continue to deliver long term success to the business and it’s stakeholders.
The Group is committed to maintaining an excellent reputation and strives to achieve high standards. We are highly selective about which suppliers are used to deliver best value while maintaining an awareness of the environmental impact of the work that they do and strive to reduce their carbon footprint.
The Directors recognise the importance of wider stakeholders in delivering their strategy and achieving sustainability within the business. The main stakeholders in the company are considered to be the employees, suppliers and customers.
In ensuring that all our stakeholders are considered as part of every decision process we believe we act fairly between all members of the Group.
Streamlined energy and carbon reporting summary
Approach
The UK Government’s environmental reporting guidance on how to measure and report greenhouse gas emissions has been used, along with the provided greenhouse gas reporting figures for the relevant year. The financial control approach has been used to define the scope boundary.
Base year and changes in emissions
A base year of 1 July 2021 - 30 June 2022 has been used, as this is the earliest year for which reliable data was recorded and measured. The base year is used as the benchmark for emission data and consumption changes, and the changes between this reporting period and the base year have been recorded and detailed. The recalculation policy is to recalculate the base year emissions only for relevant significant changes which meet the threshold of affecting 5% of base year emissions.
Luigi TopCo Limited
Directors' Report for the Year Ended 30 June 2023
Operational scopes
Scope 1, scope 2 and 3 emissions have been included within this report. The Group operated from 35 buildings during this period in the UK, where electricity and gas are the primary and only utilities used. The Group owned company vehicles, vans, and karts and had staff mileage claims. All activities are based within the UK.
• |
Scope 1 emissions consists of natural gas usage within the building and fuel for company-owned/ leased vehicles and karts. |
• |
Scope 2 emissions consists of electricity usage within the building and company-owned/ leased electric vehicles and karts. |
• |
Scope 3 emissions have been included. |
Table 1 shows the breakdown of carbon emissions, in tonnes of carbon dioxide equivalent (tCO2e), by scope and specific area, with comparison to the base year.
Table 1 - Breakdown of consumption and carbon emissions by scope, with comparison to the base year, for the current reporting period 1st July 2022 - 30th June 2023.
Base Year (FY2022) |
FY2023 |
tCO2e Change |
||||||||
tCO2e |
% of Total |
TCO2e |
% of Total |
|||||||
Scope 1 |
2,381 |
62% |
1,867 |
58% |
(514) |
|||||
Natural gas |
19 |
0% |
15 |
0% |
(4) |
|||||
Karts - Petrol w/out catalytic converters Karts - Petrol w/out catalytic converters |
817 |
22% |
627 |
20 |
(190) |
|||||
Karts - Petrol with catalytic converters |
1,428 |
39% |
1,124 |
37% |
(304) |
|||||
Company Cars - Diesel (miles) |
41 |
1% |
21 |
1% |
(20) |
|||||
Company Cars - Petrol (miles) |
5 |
0% |
3 |
0% |
(2) |
|||||
Company Cars - Hybrid (miles) |
9 |
0% |
18 |
1% |
9 |
|||||
Company Vans - Diesel (miles) |
62 |
2% |
59 |
2% |
3 |
|||||
Scope 2 |
1,378 |
36% |
1,265 |
40% |
113 |
|||||
Electricity |
1,374 |
36% |
1,261 |
34% |
113 |
|||||
Company Cars - Battery Electric (miles) |
4 |
0% |
4 |
0% |
- |
|||||
Scope 3 |
65 |
2% |
61 |
2% |
(4) |
|||||
Grey Fleet Mileage – Diesel (miles) |
22 |
1% |
18 |
1% |
(4) |
|||||
Grey Fleet Mileage – Petrol (miles) |
43 |
1% |
43 |
1% |
- |
|||||
Total gross emissions |
3,825 |
100% |
3,193 |
100% |
(632) |
|||||
Less Renewable Electricity |
(1,348) |
(35%) |
(1,235) |
(37%) |
(113) |
|||||
Gross Emissions (Market Based) |
2,477 |
65% |
1,958 |
63% |
(519) |
|||||
Less Offsets |
(2,400) |
(64%) |
(2,000) |
(64%) |
(400) |
|||||
Total net emissions |
77 |
1% |
(42) |
(1%) |
(119) |
|||||
Luigi TopCo Limited
Directors' Report for the Year Ended 30 June 2023
Carbon offsets and electricity
Electricity purchased for own use or consumption: 6,110,113 kWh.
Renewable electricity generated from owned or controlled sources: 5,965,224 kWh.
The Group recognises that it’s primary responsibility is to reduce emissions as far as possible. However, as the Group works towards responsible consumption practices, to mitigate any impact, a green tariff for 100% renewable electricity has been purchased from Shell Energy and Ecotricity. Every unit of renewable energy purchased with Shell Energy and Ecotricity comes with its own Renewable Energy Guarantee of Origin (REGO) certificate. This means there are no associated carbon emissions from electricity, reducing the carbon footprint by 1,235.24 tCO2e, however location-based grid average emissions have been used to report the emissions figure.
Intensity ratios and target
An overall intensity ratio of gross Scope 1, 2 and 3 emissions per £M Turnover has been calculated. This will allow comparison and benchmarking with similar sites and organisations and still drives energy reduction goals. Although building electricity is sourced through renewable energy contracts the location-based grid average emissions have been used to calculate intensity ratios.
The previous reduction target was to reduce gross Scope 1, 2 and 3 emissions by 5% from FY2022 to FY2023. The chosen emissions reduction target for this financial year is to reduce the overall business intensity ratio by 5% from FY2023 to FY2024. The target is based upon the intensity ratio to improve performance, rather than allow for spurious improvements due to changes in operations. If the turnover theoretically remains the same across the current and upcoming reporting periods, predicted gross emissions are 1,859.92 tCO2e. Table 2 shows the intensity ratio of £56.8M and target for the business, with comparison to the base year.
Table 2 - Overall intensity ratio, target, and predicted tCO2e, with comparison to the base year. Intensity ratios are presented as Gross and Net Scope 1, 2and 3 tCO2e/£M Turnover.
Base year (year ended 30 June 2022) |
Year ending 30 June 2023 |
Predicted year ending 30 June 2024 |
||||||
tCO2e |
Intensity ratio |
tCO2e |
Intensity ratio |
Predicted tCO2e |
Intensity target |
|||
Gross Emissions (Location based) |
3,825 |
71.82 |
3,193 |
56.22 |
3,033 |
53.41 |
||
Gross emissions (Market based) |
2,476 |
47 |
1,958 |
34 |
1,860 |
33 |
||
Net Emissions |
76.92 |
1.44 |
(42) |
-0.74 |
(40) |
-0.71 |
||
Carbon reduction initiatives
Team Sport completed an Energy Savings Opportunity Scheme (ESOS) assessment in November 2019 to identify opportunities for energy savings. Team Sport are using this information to invest in reducing carbon footprint.
The following actions have been taken to reduce environmental impact:
• |
Significant company investment continues in converting sites that run petrol engine karts, to operating electrified karts, reducing the need for ventilation as well as petrol consumption. |
• |
All direct energy supplies are now sourced through renewable energy contracts, meaning any electricity consumed at standalone sites produces no carbon emissions. |
• |
A roll out plan to replace LED lighting has begun across all sites. |
Luigi TopCo Limited
Directors' Report for the Year Ended 30 June 2023
Disclosure of information to the auditor
Each director has taken the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Reappointment of auditors
Hazlewoods LLP have expressed their willingness to continue in office.
Approved by the
Director
Luigi TopCo Limited
Statement of Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and of the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• | select suitable accounting policies and apply them consistently; |
• | make judgements and accounting estimates that are reasonable and prudent; |
• | state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Luigi TopCo Limited
Independent Auditor's Report to the Members of Luigi TopCo Limited
Opinion
We have audited the financial statements of Luigi TopCo Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 30 June 2023 and of the group's loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Luigi TopCo Limited
Independent Auditor's Report to the Members of Luigi TopCo Limited
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 10, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Luigi TopCo Limited
Independent Auditor's Report to the Members of Luigi TopCo Limited
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the
financial statements may not be detected, even though the audit is properly planned and performed in
accordance with the ISA's (UK).
In identifying and assessing risks of material mis-statement in respect of fraud, including irregularities and
non-compliance with laws and regulations, our procedures included the following:
• |
We obtained an understanding of the legal and regulatory frameworks applicable to the company financial statements or that had a fundamental effect on the company's operations. We determined that the most significant laws and regulations included UK GAAP, UK Companies Act 2006 and taxation laws. |
• |
We understood how the company is complying with those legal and regulatory frameworks by making inquiries of management, those responsible for legal and compliance procedures. |
• |
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. |
Audit procedures performed by the engagement team included: |
|
• |
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; |
• |
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process. Detailed analysis of journals posted through the accounting system during the year to 30 June 2023 has been undertaken; |
• |
Understanding the controls in place to prevent and detect fraud. Reliance was not placed on controls for the entirety of the audit, instead taking a substantive testing approach, however controls were in place to prevent fraud, and they appeared to be working effectively; |
• |
Challenging assumptions and judgements made by management in its significant accounting estimates. |
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
For and on behalf of
Windsor House
Bayshill Road
GL50 3AT
Luigi TopCo Limited
Consolidated Profit and Loss Account for the Year Ended 30 June 2023
Notes |
2023 |
2022 |
|
Turnover |
|
|
|
Cost of sales |
(24,045,759) |
(19,203,010) |
|
Other operating income |
163,175 |
240,474 |
|
Gross profit |
|
|
|
Administrative expenses |
(26,746,822) |
(20,775,929) |
|
Operating profit before amortisation, depreciation and exceptional items |
12,294,062 |
20,907,972 |
|
Amortisation expense |
(3,826,009) |
(3,547,645) |
|
Depreciation expense |
(4,995,760) |
(5,122,189) |
|
Administrative expenses - exceptional |
(186,459) |
(259,361) |
|
Other operating income - exceptional |
1,348,300 |
88,573 |
|
Operating profit |
|
|
|
Interest payable and similar charges |
( |
( |
|
(Loss)/profit before tax |
( |
|
|
Taxation |
( |
( |
|
(Loss)/profit for the financial year |
( |
|
The above results were derived from continuing operations.
Luigi TopCo Limited
Consolidated Statement of Comprehensive Income for the Year Ended 30 June 2023
2023 |
2022 |
|
(Loss)/profit for the year |
( |
|
Foreign currency translation (loss)/gain |
( |
|
Total comprehensive income for the year |
( |
|
Luigi TopCo Limited
(Registration number: 11010959)
Consolidated Balance Sheet as at 30 June 2023
Notes |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
13,511,176 |
25,444,512 |
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
|
|
|
Provisions for liabilities |
|
- |
|
89,072,434 |
82,255,911 |
||
Capital and reserves |
|||
Called up share capital |
|
|
|
Share premium reserve |
|
|
|
Profit and loss account |
( |
( |
|
Total equity |
( |
( |
|
Total capital, reserves and long term liabilities |
48,029,472 |
46,577,511 |
Approved and authorised by the
Director
Luigi TopCo Limited
(Registration number: 11010959)
Balance Sheet as at 30 June 2023
Notes |
2023 |
2022 |
|
Fixed assets |
|||
Investments |
|
|
|
Current assets |
|||
Debtors |
|
|
|
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Share premium reserve |
|
|
|
Total equity |
|
|
The company made a loss after tax for the financial year of £Nil (2022 - loss of £Nil).
Approved and authorised by the
Director
Luigi TopCo Limited
Consolidated Statement of Changes in Equity for the Year Ended 30 June 2023
Equity attributable to the parent company
Share capital |
Share premium |
Treasury share capital |
Profit and loss account |
Total |
|
At 1 July 2021 |
|
|
( |
( |
( |
Profit for the year |
- |
- |
- |
|
|
Other comprehensive income |
- |
- |
- |
|
|
Total comprehensive income |
- |
- |
- |
|
|
New share capital subscribed |
|
|
- |
- |
|
Purchase of own share capital |
- |
- |
(650) |
- |
(650) |
Transfers |
- |
- |
13,768 |
(13,768) |
- |
Other capital redemption reserve movements |
- |
- |
3,182 |
- |
3,182 |
At 30 June 2022 |
|
|
- |
( |
( |
Share capital |
Share premium |
Profit and loss account |
Total |
|
At 1 July 2022 |
|
|
( |
( |
Loss for the year |
- |
- |
( |
( |
Other comprehensive income |
- |
- |
( |
( |
Total comprehensive income |
- |
- |
( |
( |
At 30 June 2023 |
|
|
( |
( |
Luigi TopCo Limited
Statement of Changes in Equity for the Year Ended 30 June 2023
Share capital |
Share premium |
Total |
|
At 1 July 2021 |
|
|
|
New share capital subscribed |
|
|
|
At 30 June 2022 |
|
|
|
Share capital |
Share premium |
Total |
|
At 1 July 2022 |
|
|
|
At 30 June 2023 |
|
|
|
Luigi TopCo Limited
Consolidated Statement of Cash Flows for the Year Ended 30 June 2023
Note |
2023 |
2022 |
|
Cash flows from operating activities |
|||
(Loss)/profit for the year |
( |
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Financial instrument net gains/(losses) through profit and loss |
- |
|
|
Profit on disposal of tangible assets |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
|
|
|
Foreign exchange (gains)/losses |
(108,403) |
8,356 |
|
|
|
||
Working capital adjustments |
|||
(Increase)/decrease in stocks |
( |
|
|
Increase in trade debtors |
( |
( |
|
(Decrease)/increase in trade creditors |
( |
|
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
- |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
|
|
|
Acquisition of intangible assets |
( |
( |
|
Acquisition of subsidiaries (net of cash acquired) |
( |
- |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Proceeds from issue of ordinary shares, net of issue costs |
- |
|
|
Payments for purchase of own shares |
- |
( |
|
Proceeds from bank borrowing draw downs |
- |
|
|
Proceeds from the issue of treasury shares |
- |
|
|
Repayment of bank borrowing |
- |
( |
|
Net cash flows from financing activities |
( |
( |
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
Cash and cash equivalents at 1 July |
|
|
|
Effect of exchange rate fluctuations on cash held |
( |
- |
|
Cash and cash equivalents at 30 June |
13,511,176 |
25,444,512 |
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 June 2023.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Going concern
As noted in the Strategic Report, after reviewing the group's forecasts and projections, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its financial statements.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. 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 estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year relate to amortisation and depreciation of intangible and tangible fixed assets and are addressed below.
Judgements
No significant judgements have been made by management in preparing these financial statements. |
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group.
The group recognises revenue when:
• The amount of revenue can be reliably measured;
• it is probable that future economic benefits will flow to the entity;
• and specific criteria have been met for each of the group's activities.
Government grants
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets over their estimated useful lives as follows:
Asset class |
Depreciation method and rate |
Leasehold property |
over the life of the lease or 10 years |
Plant and machinery |
over three or six years |
Motor vehicles |
over two to three years |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Goodwill
Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intangible assets
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.
Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.
Development costs are initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Goodwill |
over 10 years |
Software development |
over 3 years |
Investments
Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Dividends on equity securities are recognised in income when receivable.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtors.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Financial instruments
Classification
Recognition and measurement
Financial assets and liabilities are only offset in the balance sheet when, and only when, there exists a legally enforceable right to set off the recognised amounts and the group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Impairment
A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.
Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Revenue |
The analysis of the group's revenue for the year from continuing operations is as follows:
2023 |
2022 |
|
Rendering of goods and services |
|
|
Other revenue |
|
|
|
|
Other revenue is derived from expired liabilities, business interruption insurance receipts and other sales.
The analysis of the group's turnover for the year by market is as follows:
2023 |
2022 |
|
UK |
|
|
Europe |
|
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2023 |
2022 |
|
Other operating income (direct) |
|
|
The other operating income in the current year relates to Fast Forward grant funding while in the prior year relates it relates to primarily Kickstart and Fast Forward grant funding.
Operating profit |
Arrived at after charging/(crediting)
2023 |
2022 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange (gains)/losses |
( |
|
Operating lease expense - property |
|
|
Operating lease expense - plant and machinery |
|
- |
Operating lease expense - other |
100,013 |
- |
Exceptional gain on replacement of tangible fixed assets |
(1,348,300) |
- |
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Exceptional items |
2023 |
2022 |
|
Exceptional expenses |
186,459 |
259,361 |
Exceptional income |
(1,348,300) |
(88,573) |
(1,161,841) |
170,788 |
Exceptional administrative expenses in the current year relate predominantly to recruitment costs and small non-recurring costs while the prior year costs relate predominantly to preliminary costs incurred in relation to new sites that were subsequently aborted as well as costs related to legal claims and historical business rates costs.
Exceptional income in the current year relates to the exceptional gain arising directly as a result of the replacement of tangible fixed assets damaged or destroyed by the fire which broke out at the Group's Preston track on 15 August 2021. The prior year exceptional income relates to rental receipts relating to a previous year which the directors considered exceptional as the revenue did not relate to the prior year but rather to a preceding financial period.
Interest payable and similar expenses |
2023 |
2022 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest expense on other finance liabilities |
|
|
Other finance costs |
|
|
|
|
Staff costs |
Group
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Operations |
|
|
Administration and support |
|
|
|
|
Company
The company incurred no staff costs and had no employees other than the directors.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Directors' remuneration |
The directors' remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
897,978 |
945,455 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
2023 |
2022 |
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
2023 |
2022 |
|
Remuneration |
|
|
Company contributions to money purchase pension schemes |
|
|
Auditors' remuneration |
2023 |
2022 |
|
Audit of these financial statements |
40,900 |
30,000 |
Other fees to auditors |
||
All other non-audit services |
|
|
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
2023 |
2022 |
|
Current taxation |
||
UK corporation tax |
- |
|
UK corporation tax adjustment to prior periods |
|
- |
28,929 |
513,991 |
|
Foreign tax |
|
- |
Total current income tax |
134,110 |
513,991 |
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
|
Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods |
(379,350) |
(1,198,877) |
Total deferred taxation |
|
( |
Tax expense in the income statement |
|
|
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
11 |
Taxation (continued) |
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2023 |
2022 |
|
(Loss)/profit before tax |
( |
|
Corporation tax at standard rate |
( |
|
Effect of revenues exempt from taxation |
( |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Deferred tax expense relating to changes in tax rates or laws |
|
- |
Increase from tax losses for which no deferred tax asset was recognised |
- |
|
Decrease from effect of tax incentives |
( |
- |
Deferred tax credit from unrecognised temporary difference from a prior period |
( |
( |
Increase in UK and foreign current tax from adjustment for prior periods |
|
- |
Tax increase from effect of capital allowances and depreciation |
|
|
Tax increase arising from overseas tax suffered/expensed |
|
- |
Tax increase from effect of unrelieved loss on foreign subsidiaries |
- |
|
Other tax effects for reconciliation between accounting profit and tax expense (income) |
|
|
Total tax charge |
|
|
A UK corporation tax rate of 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. This will increase the company's future current tax charge accordingly and as such deferred tax in both the current and prior year has been charged at 25%.
Deferred tax
Group
Deferred tax assets and liabilities
2023 |
Liability |
Differences between accumulated depreciation and capital allowances |
|
Losses and other deductions |
( |
Short-term timing differences |
( |
|
2022 |
Asset |
Differences between accumulated depreciation and capital allowances |
( |
Losses and other deductions |
|
|
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Intangible assets |
Group
Goodwill |
Software development costs |
Total |
|
Cost |
|||
At 1 July 2022 |
|
|
|
Additions |
|
|
|
Foreign exchange movements |
( |
- |
( |
At 30 June 2023 |
|
|
|
Amortisation |
|||
At 1 July 2022 |
|
|
|
Amortisation charge |
|
|
|
Foreign exchange movements |
( |
- |
( |
At 30 June 2023 |
|
|
|
Carrying amount |
|||
At 30 June 2023 |
|
|
|
At 30 June 2022 |
|
|
|
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Business combinations |
On
Kart-Palast Betriebsgesellschaft mbH contributed £
The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:
Book value and Fair value |
|
Assets and liabilities acquired |
|
Financial assets |
|
Stocks |
|
Tangible assets |
|
Financial liabilities |
( |
Total identifiable assets |
|
Goodwill |
|
Total consideration |
4,103,699 |
Satisfied by: |
|
Cash |
|
Cash flow analysis: |
|
Cash consideration |
|
Less: cash and cash equivalent balances acquired |
( |
Net cash outflow arising on acquisition |
|
|
The useful life of goodwill is
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Tangible assets |
Group
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Total |
|
Cost |
||||
At 1 July 2022 |
|
|
|
|
Additions |
|
|
- |
|
Disposals |
- |
( |
- |
( |
At 30 June 2023 |
|
|
|
|
Depreciation |
||||
At 1 July 2022 |
|
|
|
|
Charge for the year |
|
|
|
|
Eliminated on disposal |
- |
( |
- |
( |
Foreign exchange movements |
- |
( |
- |
( |
At 30 June 2023 |
|
|
|
|
Carrying amount |
||||
At 30 June 2023 |
|
|
|
|
At 30 June 2022 |
|
|
|
|
Investments |
Company
2023 |
2022 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost |
|
At 1 July 2022 |
|
Provision |
|
Carrying amount |
|
At 30 June 2023 |
|
At 30 June 2022 |
|
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
15 |
Investments (continued) |
Details of undertakings
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2023 |
2022 |
Subsidiary undertakings |
||||
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
Germany |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
United Kingdom |
Ordinary |
|
|
|
Germany |
Ordinary |
|
|
|
Netherlands |
Ordinary |
|
|
Luigi Midco Limited is held directly by the company, all other subsidiaries are indirect holdings.
Principal activity
The following companies' principal activity is that of an intermediate parent company; Luigi Midco Limited, Luigi Debtco Limited, Luigi Bidco Limited, Teamsport Holdings Limited, Teamsport Investments Limited and Teamsport Racing Limited.
With the exception of Go Karting For Fun (Crawley) Limited, Luigi EBT Limited, Teamsport Indoor Karting (London) Limited and Linfix Limited, which are all dormant companies, the remaining subsidiaries’ principal activity is the operation of indoor go karting tracks.
Stocks |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Stocks |
|
|
- |
- |
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Debtors |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Trade debtors |
|
|
- |
- |
Amounts owed by group undertakings |
- |
- |
|
|
Other debtors |
|
|
- |
- |
Prepayments |
|
|
|
|
Deferred tax assets |
- |
|
- |
- |
|
|
|
|
Creditors |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Due within one year |
||||
Trade creditors |
|
|
- |
- |
Amounts due to group undertakings |
- |
- |
|
|
Social security and other taxes |
|
|
- |
- |
Outstanding defined contribution pension costs |
|
|
- |
- |
Other creditors |
|
|
- |
- |
Accrued expenses |
|
|
- |
- |
Corporation tax liability |
49,974 |
513,991 |
- |
- |
|
|
|
|
|
Due after one year |
||||
Loans and borrowings |
|
|
- |
- |
Other non-current financial liabilities |
|
|
- |
- |
88,997,663 |
82,255,911 |
- |
- |
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Loans and borrowings |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Non-current loans and borrowings |
||||
Bank borrowings |
|
|
- |
- |
Other borrowings |
|
|
- |
- |
|
|
- |
- |
Group
Bank borrowings
Accrued interest of £968,471 (2022 - £780,845) is included in the liability above, while the liability above is shown net of associated debt costs of £62,129 (2022 - £248,521) that are being released over the term of the loan against the liability. |
In addition to the above borrowing facilities, the company has access to a revolving credit facility of £2.2 million and a standby
letter of credit £1.3 million with NatWest Bank. Both facilities are denominated in GB£
and attract interest at variable rates between 2.5% and 3.25% plus SONIA. The revolving credit agreement
matures on 14 November 2025 while the letter of credit expires on 27 November 2025.
|
Other borrowings
Shareholder "Series A1" loan notes are denominated in GB£ with a nominal interest rate of 10%, and the final instalment is due on 18 October 2027. The carrying amount at year end is £17,664,289 (2022 - £15,967,089).
Accrued interest of £2,444,061 (2022 - £770,598) is included in the liability above. The liability above is shown net of associated debt costs of £129,179 (2022 - £152,917) that are being released over the term of the loan against the liability.
Shareholder "Series B" loan notes are denominated in GB£ with a nominal interest rate of 10%, and the final instalment is due on 18 October 2027. The carrying amount at year end is £7,926,259 (2022 - £7,337,784).
Accrued interest of £1,993,953 (2022 - £1,202,672) is included in the liability above. The liability above is shown net of associated debt costs of £173,281 (2022 - £215,007) that are being released over the term of the loan against the liability.
Shareholder "Series A2" loan notes are denominated in GB£ with a nominal interest rate of 10%, and the final instalment is due on 18 October 2027. The carrying amount at year end is £20,028,043 (2022 - £18,144,420).
Accrued interest included this loan at year end is £2,750,996 (2022 - £867,373).
Management incentive plan "Series A2" loan notes are denominated in GB£ with a nominal interest rate of 10%, and the final instalment is due on 18 October 2027. The carrying amount at year end is £3,599,089 (2022 - £3,260,597).
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
19 |
Loans and borrowings (continued) |
Accrued interest in this loan at year end is £494,361 (2022 - £155,869).
In addition to the above "Series A" loans, prior to the Series A restructure, interest had accrued on the original "Series A" loans. The portion of this interest which was not restructured into either the "Series A1", "Series A2" or "Series A2M" loan notes have continued to accrue interest under the same terms. At year end, £15,535,265 (2022 - £13,854,411) had accrued to date.
The above loans are secured by way of a group guarantee and debenture. In addition, the shares of Luigi Debtco Limited, held by Luigi Midco Limited, are held as security over these loans.
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
7,044 |
|
7,044 |
|
|
90 |
|
90 |
|
|
436 |
|
436 |
|
|
120 |
|
120 |
|
|
5 |
|
5 |
|
- |
- |
- |
- |
|
|
15,000 |
|
15,000 |
|
|
15,000 |
|
15,000 |
|
|
165,000 |
|
165,000 |
|
|
35 |
|
35 |
|
|
|
|
Rights, preferences and restrictions
Each class of share ranks pari passu except as detailed in the company's Articles of Association. |
Reserves |
Group
Share premium
The share premium reserve represents the value at which shares have been issued in excess of their par value.
Profit and loss account
The profit and loss account represents accumulated profits and losses along with unrealised gains since the later of either incorporation or the date at which the group obtained control.
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
2023 |
2022 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
Later than five years |
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Commitments |
Group
Capital commitments
The total amount contracted for but not provided in the financial statements was £
Related party transactions |
Group and company
The company has taken the exemption of not disclosing transactions with wholly owned subsidiaries. While the group only owns 75% of Kart-Palast Betriebsgesellscheft mbH, the remaining 25% of the shares have been retained by the company for resale in the future and as such, the company has been treated as wholly owned as there are no other shareholders other than the Luigi Topco Limited Group.
Transactions with related parties include transactions with members of key management, which are considered to consist of the directors only. Disclosure of remuneration of directors can be found in note 9.
Transactions with shareholders include the interest charged on shareholder loan notes which has been described further in note 19. None of this interest was paid in the year. In addition, during the year, the shareholder charged monitoring fees of £225,000 (2022 - £225,000) in respect of board monitoring across the TeamSport Group.
Luigi TopCo Limited
Notes to the Financial Statements for the Year Ended 30 June 2023
Analysis of changes in net debt |
Group
At 1 July 2022 |
Cash flows |
Interest and debt costs paid |
Interest charge and accrued debt costs |
New financial instruments |
Foreign exchange movements |
Non-cash changes |
At 30 June 2023 |
|
Cash and cash equivalents |
||||||||
Cash |
25,444,512 |
(11,924,049) |
- |
- |
- |
(9,287) |
- |
13,511,176 |
Borrowings |
||||||||
Bank borrowings |
(23,415,555) |
- |
2,311,847 |
(2,776,051) |
- |
- |
- |
(23,879,759) |
Other borrowings |
(58,564,302) |
- |
- |
(6,188,643) |
- |
- |
- |
(64,752,945) |
Lease liabilities |
(276,054) |
- |
- |
- |
- |
- |
(111,707) |
(387,761) |
Interest rate cap hedge instrument |
- |
- |
- |
- |
249,385 |
- |
- |
249,385 |
(82,255,911) |
- |
2,311,847 |
(8,964,694) |
249,385 |
- |
(111,707) |
(88,771,080) |
|
|
||||||||
Net debt |
( |
( |
|
( |
|
( |
( |
( |
Non adjusting events after the financial period |
|
Parent and ultimate parent undertaking |