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Registration number: 07219455

Teamsport Racing Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 30 June 2023

 

Teamsport Racing Limited

Contents

Company Information

1

Strategic Report

2 to 4

Directors' Report

5

Statement of Directors' Responsibilities

6

Independent Auditor's Report

7 to 9

Consolidated Profit and Loss Account

10

Consolidated Balance Sheet

11

Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15 to 29

 

Teamsport Racing Limited

Company Information

Directors

D Gaynor

D J Wilkinson

S A Wooldridge

Registered office

C1, Endeavour Place
Coxbridge Business Park
Alton Road
Farnham
Surrey
GU10 5EH

Solicitors

Harrison Clark Rickerbys Limited
5 Deansway
Worcester
WR1 2JG

Bankers

National Westminster Bank Plc
135 Bishopsgate
London
EC2M 3UR

Lloyds Bank Plc
18 Prince of Wales Walk
Camberley
GU15 3SJ

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Teamsport Racing 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 £57,008,912 (2022 - £60,570,096) and an operating profit of £8,736,538 (2022 – £16,330,308). At 30 June 2023 the group had total assets less current liabilities of £30,121,010 (2022 - £24,687,544). In addition, we held cash of £13,185,242 (2022 - £25,389,515).

As noted in the Chairman’s statement of Luigi Topco Limited, the ultimate parent company, this has been a phenomenal year, that has seen the business hit a series of key milestones.

Balance sheet strength

We entered the year with cash of £25,389,515. With strong trading, we finish the year with cash of £13,185,242.

Given our strong cash position our committed Revolving Facility is undrawn, giving us an additional £2.2 million of liquidity.

From 1 January 2022 the overall Group's historic covenants, that had been suspended during the Covid pandemic, again apply. Our strong cash position ensures that we have significant headroom, and despite a strong programme of growth, continue to do so throughout our three year forecast, giving security to all our stakeholders.

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.

 

Teamsport Racing Limited

Strategic Report for the Year Ended 30 June 2023

Growth strategy

Whilst international expansion remains a key strategy for the Group, 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 across the UK.

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, 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.

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.

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, and this remains a key focus.

We also recognise the strong talent in our business, and consequently we are setting ourselves ambitious targets to ensure wherever possible management positions are filled through internal promotion. Training and retention of staff is key to our continuing performance improvement.

Outlook

The strong trading that we saw throughout the last financial year has continued into the first quarter of our current financial year. We are in line with our initial expectations, despite the headwinds that are hitting both businesses and consumers alike across Europe.

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 or position of the group 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.

 

Teamsport Racing Limited

Strategic Report for the Year Ended 30 June 2023

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 and assess our pricing and offer at each site individually to ensure that we offer an almost 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.

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 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 Board on 27 October 2023 and signed on its behalf by:


D J Wilkinson
Director

 

Teamsport Racing 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:

D Gaynor

D J Wilkinson

S A Wooldridge

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, colour, 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.

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 Board on 27 October 2023 and signed on its behalf by:


D J Wilkinson
Director

 

Teamsport Racing 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 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.

 

Teamsport Racing Limited

Independent Auditor's Report to the Members of Teamsport Racing Limited

Opinion

We have audited the financial statements of Teamsport Racing 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 Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 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.

 

Teamsport Racing Limited

Independent Auditor's Report to the Members of Teamsport Racing Limited

Opinion on other matters prescribed by the Companies Act 2006

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

the information given in the 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 6, 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.

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

 

Teamsport Racing Limited

Independent Auditor's Report to the Members of Teamsport Racing Limited

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 group financial statements or that had a fundamental effect on the group'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 group 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 group'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 2022 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.

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;

challenging assumptions and judgements made by management in its significant accounting estimates; and

identifying and testing journal entries, in particular any journal entries with unusual characteristics.

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.





James Morter (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

27 October 2023

 

Teamsport Racing Limited

Consolidated Profit and Loss Account for the Year Ended 30 June 2023

Notes

2023
 £

2022
 £

Turnover

3

57,008,912

60,570,096

Cost of sales

 

(21,077,686)

(18,864,221)

Other operating income

4

163,175

240,474

Gross profit

 

36,094,401

41,946,349

Administrative expenses

 

(23,588,501)

(20,158,904)

Operating profit before amortisation, depreciation and exceptional items

 

12,505,900

21,787,445

Amortisation expense

 

(417,014)

(408,276)

Depreciation expense

 

(4,655,191)

(5,030,764)

Administrative expenses - exceptional

6

(45,457)

(106,670)

Other operating income - exceptional

6

1,348,300

88,573

Operating profit

5

8,736,538

16,330,308

Other interest receivable and similar income

-

43,647

Interest payable and similar charges

7

(820,908)

(1,150,060)

Profit before tax

 

7,915,630

15,223,895

Taxation

11

(968,716)

(1,281,055)

Profit for the financial year

 

6,946,914

13,942,840

The above results were derived from continuing operations.

The group has no other comprehensive income for the year.

 

Teamsport Racing Limited

(Registration number: 07219455)
Consolidated Balance Sheet as at 30 June 2023

Notes

2023
 £

2022
 £

Fixed assets

 

Intangible assets

12

1,667,407

1,888,945

Tangible assets

13

21,672,612

16,991,732

 

23,340,019

18,880,677

Current assets

 

Stocks

15

1,261,410

663,145

Debtors

16

17,916,047

6,677,705

Cash at bank and in hand

 

13,185,242

25,389,515

 

32,362,699

32,730,365

Creditors: Amounts falling due within one year

17

(25,581,708)

(26,923,498)

Net current assets

 

6,780,991

5,806,867

Total assets less current liabilities

 

30,121,010

24,687,544

Creditors: Amounts falling due after more than one year

17

5,312,278

8,269,135

Provisions for liabilities

11

1,706,851

767,064

   

7,019,129

9,036,199

Capital and reserves

 

Called up share capital

18

2,671

2,671

Share premium reserve

19

28,731

28,731

Capital contribution reserve

19

503,622

799,308

Profit and loss account

19

22,566,857

14,820,635

Total equity

 

23,101,881

15,651,345

Total capital, reserves and long term liabilities

 

30,121,010

24,687,544

Approved and authorised by the Board on 27 October 2023 and signed on its behalf by:
 

D J Wilkinson
Director

 

Teamsport Racing Limited

(Registration number: 07219455)
Balance Sheet as at 30 June 2023

Notes

2023
 £

2022
 £

Fixed assets

 

Investments

14

2,301

2,301

Current assets

 

Debtors

16

4,557,159

4,557,159

Net assets

 

4,559,460

4,559,460

Capital and reserves

 

Called up share capital

18

2,671

2,671

Share premium reserve

19

28,731

28,731

Profit and loss account

19

4,528,058

4,528,058

Total equity

 

4,559,460

4,559,460

The company made a loss after tax for the financial year of £Nil (2022 - loss of £Nil).

Approved and authorised by the Board on 27 October 2023 and signed on its behalf by:
 

D J Wilkinson
Director

 

Teamsport Racing Limited

Consolidated Statement of Changes in Equity for the Year Ended 30 June 2023
Equity attributable to the parent company

Share capital
£

Share premium
£

Capital contribution reserve
£

Profit and loss account
£

Total
£

At 1 July 2021

2,671

28,731

1,147,897

(270,102)

909,197

Profit for the year

-

-

-

13,942,840

13,942,840

Capital contribution from parent undertaking

-

-

799,308

-

799,308

Transfers

-

-

(1,147,897)

1,147,897

-

At 30 June 2022

2,671

28,731

799,308

14,820,635

15,651,345

Share capital
£

Share premium
£

Capital contribution reserve
£

Profit and loss account
£

Total
£

At 1 July 2022

2,671

28,731

799,308

14,820,635

15,651,345

Profit for the year

-

-

-

6,946,914

6,946,914

Capital contribution from parent undertaking

-

-

503,622

-

503,622

Transfers

-

-

(799,308)

799,308

-

At 30 June 2023

2,671

28,731

503,622

22,566,857

23,101,881

 

Teamsport Racing Limited

Statement of Changes in Equity for the Year Ended 30 June 2023

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 July 2022 and at 30 June 2023

2,671

28,731

4,528,058

4,559,460

Share capital
£

Share premium
£

Profit and loss account
£

Total
£

At 1 July 2021 and at 30 June 2022

2,671

28,731

4,528,058

4,559,460

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
C1, Endeavour Place
Coxbridge Business Park
Alton Road
Farnham
Surrey
GU10 5EH

 

2

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 UK and Republic of Ireland'.

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 Pound 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.

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.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

2

Accounting policies (continued)

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.

Summary of disclosure exemptions

As a qualifying entity, the Company has taken advantage of the following disclosure exemptions from FRS 102:
- the requirements to prepare a cash flow statement; and
- the requirements in relation to financial instruments of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26 (in relation to those cross-referenced paragraphs from which a disclosure exemption is available), 12.27, 12.29(a), 12.29(b), and 12.29A, where equivalent disclosure is given in consolidated financial statements.

Name of parent company

These financial statements are consolidated in the financial statements of Luigi Topco Limited.

The financial statements of Luigi Topco Limited may be obtained from Companies House

Going concern

As noted in the Strategic Report, after reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company 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 company’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


Fair value on financing loan from other group undertakings
The group has the benefit of an unsecured interest free financing loan from its parent company. The fair value of this loan has been calculated using a 10% discount rate which is derived from the interest rate on other unsecured debt within the group.

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 company. 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.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

2

Accounting policies (continued)

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

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

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.

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 3 to 6 years

Motor vehicles

Over 2 to 3 years

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.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

2

Accounting policies (continued)

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

Straight line over 5 years

Software development

Straight line 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.

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 debtors are repayable within one year and are hence included at the undiscounted amount of the 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 receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out method.

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.

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.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

2

Accounting policies (continued)

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

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 company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.


 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

Non-financial assets:
An 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.

Financial assets:
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.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

3

Revenue

The analysis of the group's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Rendering of services

53,759,898

58,690,453

Other revenue

2,885,909

1,756,578

Management charges

363,105

123,065

57,008,912

60,570,096

The group's revenue from the rendering of goods and services is derived entirely from sales in the United Kingdom.

Other revenue is derived from expired liabilities, insurance receipts and other sales.

Management charges is derived from charges to a fellow subsidiary in the wider group headed by Luigi Topco Limited based in Europe in relation to their portion of head office related costs.

 

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2023
£

2022
£

Other operating income (direct)

163,175

240,474

The other operating income in the current year relates to Fast Forward grant funding while in the prior year it relates to primarily Kickstart and Fast Forward grant funding.

 

5

Operating profit/(loss)

Arrived at after charging/(crediting)

2023
 £

2022
 £

Depreciation expense

4,655,191

5,030,764

Amortisation expense

417,014

408,276

Foreign exchange gains

(117,911)

-

Operating lease expense - property

6,563,705

6,615,128

Operating lease expense - other

100,013

-

Profit on disposal of property, plant and equipment

(1,348,300)

-

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

6

Exceptional items

2023
 £

2022
 £

Exceptional expenses

45,457

106,670

Other exceptional income

(1,348,300)

(88,573)

 

(1,302,843)

18,097

Exceptional administrative expenses in the current year relate to 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 historic 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 Company'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.

 

7

Interest payable and similar expenses

2023
£

2022
£

Interest expense on other finance liabilities

820,908

1,150,060

Interest expense on other liabilities relates to the notional interest calculated on the unwinding of the discount applied to the long term loan due from group undertakings as described in note 17. This has no cash impact to the Group.

 

8

Staff costs

Group
The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

17,553,214

16,248,838

Social security costs

1,268,880

1,201,463

Pension costs, defined contribution scheme

230,890

215,317

19,052,984

17,665,618

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Operations

975

907

Administration and support

119

105

1,094

1,012

Company
The company incurred no staff costs and had no employees other than the directors.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

790,288

715,133

Contributions paid to money purchase schemes

14,690

13,157

804,978

728,290

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
No.

2022
No.

Accruing benefits under money purchase pension scheme

3

3

In respect of the highest paid director:

2023
£

2022
£

Remuneration

318,397

339,657

Company contributions to money purchase pension schemes

10,000

10,000

 

10

Auditors' remuneration

2023
£

2022
£

Audit of these financial statements

40,900

30,000

Other fees to auditors

All other non-audit services

23,550

16,000

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

11

Taxation

Tax charged/(credited) in the consolidated profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

-

513,991

UK corporation tax adjustment to prior periods

28,929

-

28,929

513,991

Deferred taxation

Arising from origination and reversal of timing differences

873,362

1,965,941

Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods

66,425

(1,198,877)

Total deferred taxation

939,787

767,064

Tax expense in the income statement

968,716

1,281,055

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 20.5% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

7,915,630

15,223,895

Corporation tax at standard rate

1,622,704

2,892,540

Effect of revenues exempt from taxation

(206,715)

-

Effect of expense not deductible in determining taxable profit (tax loss)

42,792

281,204

Deferred tax expense relating to changes in tax rates or laws

157,205

-

Decrease from effect of tax incentives

(127,665)

-

Deferred tax expense/(credit) from unrecognised temporary difference from a prior period

66,425

(1,171,521)

Increase in UK and foreign current tax from adjustment for prior periods

28,929

-

Tax increase from effect of capital allowances and depreciation

315,911

244,378

Tax decrease arising from group relief

(888,734)

(1,430,349)

Other tax effects for reconciliation between accounting profit and tax expense (income)

(42,136)

464,803

Total tax charge

968,716

1,281,055

A UK corporation rate of 25% became effective from 1 April 2023. This will increase the company's future current tax charge accordingly.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

11

Taxation (continued)

Deferred tax

Group

Deferred tax assets and liabilities

2023

Liability
£

Differences between accumulated depreciation and capital allowances

831,711

Losses and other deductions

27,355

Other short term timing differences

(92,002)

767,064

2022

Liability
£

Differences between accumulated depreciation and capital allowances

831,711

Losses and other deductions

27,355

Other short term timing differences

(92,002)

767,064

 

12

Intangible assets

Group

Goodwill
 £

Software development costs
 £

Total
£

Cost

At 1 July 2022

4,756,346

389,383

5,145,729

Development cost additions at cost

-

195,476

195,476

At 30 June 2023

4,756,346

584,859

5,341,205

Amortisation

At 1 July 2022

3,023,566

233,218

3,256,784

Amortisation charge

275,099

141,915

417,014

At 30 June 2023

3,298,665

375,133

3,673,798

Carrying amount

At 30 June 2023

1,457,681

209,726

1,667,407

At 30 June 2022

1,732,780

156,165

1,888,945

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

13

Tangible assets

Group

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost

At 1 July 2022

26,461,137

11,510,297

148,774

38,120,208

Additions

4,136,844

5,651,759

-

9,788,603

Disposals

-

(1,139,428)

-

(1,139,428)

At 30 June 2023

30,597,981

16,022,628

148,774

46,769,383

Depreciation

At 1 July 2022

12,601,680

8,451,593

75,200

21,128,473

Charge for the year

2,754,637

1,869,247

31,307

4,655,191

Eliminated on disposal

-

(686,893)

-

(686,893)

At 30 June 2023

15,356,317

9,633,947

106,507

25,096,771

Carrying amount

At 30 June 2023

15,241,664

6,388,681

42,267

21,672,612

At 30 June 2022

13,859,455

3,058,702

73,575

16,991,732

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

14

Investments

Company

2023
£

2022
£

Investments in subsidiaries

2,301

2,301

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

Go Karting For Fun Limited

United Kingdom

Ordinary

100%

100%

Go Karting For Fun (Crawley) Limited

United Kingdom

Ordinary

100%

100%

Linfix Limited

United Kingdom

Ordinary

100%

100%

Teamsport Indoor Karting (London) Limited

United Kingdom

Ordinary

100%

100%

Teamsport Indoor Karting (Brighton) Limited

United Kingdom

Ordinary

100%

100%

Principal activity

Go Karting For Fun Limited and Teamsport Indoor Karting (Brighton) Limited's principal activity s the operation of indoor go karting tracks. Go karting for Fun (Crawley) Limited, Teamsport Indoor Karting (London) and Linfix Limited are all dormant.

All entities are directly held by, and have the same registered address as TeamSport Racing Limited.

 

15

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Stocks

1,261,410

663,145

-

-

 

16

Debtors

 

Group

Company

2023
 £

2022
 £

2023
 £

2022
 £

Trade debtors

145,287

144,147

-

-

Amounts due from group undertakings

10,904,904

3,209,061

4,557,159

4,557,159

Other debtors

3,127,951

187,409

-

-

Prepayments

3,737,905

3,137,088

-

-

17,916,047

6,677,705

4,557,159

4,557,159

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

17

Creditors

 

Group

Company

2023
 £

2022
 £

2023
 £

2022
 £

Due within one year

Trade creditors

5,770,216

4,591,141

-

-

Amounts due to group undertakings

6,442,995

6,634,774

-

-

Social security and other taxes

1,099,559

2,143,365

-

-

Outstanding defined contribution pension costs

59,349

56,235

-

-

Other creditors

3,571,197

3,310,547

-

-

Accrued expenses

8,618,486

9,673,445

-

-

Corporation tax liability

19,906

513,991

-

-

25,581,708

26,923,498

-

-

Due after one year

Amounts due to group undertakings

5,036,224

7,993,081

-

-

Other creditors

276,054

276,054

-

-

5,312,278

8,269,135

-

-

The amounts due to group undertakings which are due after one year and have a net present value of £5,036,224 (2022 - £7,993,081 ) have been discounted at 10% which is based on the cost of capital of the wider group. The balance requires 12 months notice before settlement and has no other fixed repayment terms.

Other creditors due after more than one year relates to the straight-lining of leases with stepped lease costs over the term of the respective lease periods.

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

18

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary A shares of £0.25 each

10,016

2,504

10,016

2,504

Ordinary B shares of £0.25 each

668

167

668

167

 

10,684

2,671

10,684

2,671

Rights, preferences and restrictions

Each class of share rank pari passu except as detailed in the Company's Articles of Association.

 

19

Reserves

Group

Share premium

The share premium reserve is the amount received for the issue of shares in excess of their par value.

Capital redemption reserve

The capital contribution reserve is a non-distributable reserve created as a result of fair valueing of non-current inter-group loans with entities in the wider Luigi Topco Limited group where the terms of these loans are not at a fair market value. The resulting adjustment creates a deemed capital contribution which is realised to the profit and loss upon interest being charged at a fair market value or upon settlement of the loan.

Profit and loss account

The profit and loss account is an accumulation of all profits and losses from the later of incorporation or the date at which the group obtained control.

 

20

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 £230,890 (2022 - £215,317).

Contributions totalling £59,349 (2022 - £56,235) were payable to the scheme at the end of the year and are included in creditors.

 

21

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

5,392,988

5,948,868

Later than one year and not later than five years

16,011,599

18,222,837

Later than five years

5,479,146

6,095,385

26,883,733

30,267,090

The amount of non-cancellable operating lease payments recognised as an expense during the year was £6,663,718 (2022 - £6,615,128).

 

Teamsport Racing Limited

Notes to the Financial Statements for the Year Ended 30 June 2023

 

22

Contingent liabilities

Company

The company is party to a cross guarantee arranged with its group companies totalling £88,974,492 (2022 - £82,596,301).

 

23

Parent and ultimate parent undertaking

The company's immediate parent is Teamsport Investments Limited, incorporated in England and Wales.

 The ultimate parent is Luigi Topco Limited, incorporated in England and Wales.