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Registered number: 04149504









CYCLESPORT NORTH LTD









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 5 NOVEMBER 2023

 
CYCLESPORT NORTH LTD
 
 
COMPANY INFORMATION


Directors
M J Lawson 
A Smallwood 
D A Stacey 




Registered number
04149504



Registered office
363 Leach Place
Walton Summit Centre

Bamber Bridge

Preston

Lancs

PR5 8AS




Independent auditors
Donald Reid Limited
Chartered Accountants & Statutory Auditors

Prince Albert House

20 King Street

Maidenhead

Berkshire

SL6 1DT





 
CYCLESPORT NORTH LTD
 

CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditors' report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 31


 
CYCLESPORT NORTH LTD
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 5 NOVEMBER 2023

Introduction
 
The directors present their strategic report for the year ended 5th November 2023.

Principal Activities
 
The Company’s principal business activity is as a designer, manufacturer and retailer of bicycles with the sale of bicycle parts and accessories an ancillary element of the business’s activity. The Company serves customers worldwide from its operating facilities in the United Kingdom and through its dedicated web domains in the United Kingdom and Germany.

Business review
 
FY23 saw the challenges the business faced post the disruption caused by the COVID years start to ease, with much stronger supply chain performance and, as a consequence better delivery dates for customers and more certainty giving them confidence to buy.
Turnover grew by £2.4m (9.2%) in FY23 to £28.5m as a result of this improved customer confidence and gross profit increased by £1.2m (16.7%) to £8.6m as a consequence of the annualisation of the operational efficiency savings made over the past 18 months. 
The business has gone through a period of restructure to right-size and operate at an efficient and economic manufacturing level and thereby reverse the losses seen in FY22 and get back to profit for the future.  Overall, the company halved its operating loss to £2.3m which is a very positive step on the journey returning the business to profit.
During FY23 there was a restructuring of the company's funding from its shareholders with an injection of additional loan finance together with a conversion of loan debt into equity. This has considerably strengthened the balance sheet, and at 5th November 2023 the Company has positive net assets of £2.8m.

Page 1

 
CYCLESPORT NORTH LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 5 NOVEMBER 2023

Future Developments
 
The hard work in FY23 to significantly improve the performance of the business will continue into FY24 and with the full year impact of savings delivered in FY23, together with further efficiency savings the new ERP system will deliver, the Company is well on course to achieve the strategic plan of profit at EBITDA level for this financial year.  Supply chain predictability and availability continues to improve, and with further production efficiency gains the business is now in a position to offer robust delivery dates for customers within a target 2-3 week window.  
Macro-economic challenges for the consumer together with over-stocking being experienced in the marketplace generally continues to put pressure on retail pricing, but with continued brand investment underpinning the product the business continues to benchmark itself at the premium end of the marketplace and with a strong trading message it is encouraging to see strong Q1 unit sales performance. 
The business has effectively managed the post Covid overstock position through FY23 and is going into FY24 in a significantly better position.  Supply chain will continue to be a primary focus of the Company to underpin reliability and quality for the customer and thereby support the drive for sales growth, and the business will continue to ensure it is taking all steps to mitigate against future supply chain disruption and over-stocking risk. 
 
Investment in the digital e-commerce platform is also an important focus for the business to ensure we continue to develop the customer journey and user experience, and ultimately support the brand proposition and sales conversion.
Product innovation and technical development remain a key focus for the business, and the new product development pipeline remains on-track to deliver a range of new launches over coming years, further establishing the brand at the top end of the market, with a world-class, differentiated product range.

Principal risks and uncertainties
 
After due consideration the directors believe that the exposure of the Company to credit risk is minimal. The main risks to which the Company is exposed to are: economic risk, currency risk, liquidity and stock risk.
Economic risk: As an on-line retailer the Company is exposed to economic risk in respect of its retail operations as a result of the ability of consumers to spend money.  The Company seeks to minimise this exposure through competitive pricing, a highly credible, market leading and quality product range and a wide geographical spread of provision across International markets.
Currency risk:  The Company is exposed to Foreign currency risk through its stock purchasing in USD and Euro currencies. The Company is also exposed to further currency risk through its international trade. The Company seeks to minimise this exposure through constant review of trading exchange rates and is actively hedging where appropriate.
Liquidity risk: If required the company has access to a mixture of shareholder loans and short-term bank facilities to ensure sufficient funds are available for ongoing operations and future developments.
Stock risk: The company has forecast its core third-party component stock requirements out to FY24 in line with budgeted growth. The company retains further risk mitigation through bike specification flexibility due to being in control of its own brand bike specification, assembly process and retail channels. The company is also holding higher levels of stock than it would usually to further mitigate against disruption.

Financial key performance indicators
 
The Directors monitor sales demand, operational output, stock holding, cash flow and profitability as key indicators.

Page 2

 
CYCLESPORT NORTH LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 5 NOVEMBER 2023


This report was approved by the board on 5 March 2024 and signed on its behalf.



A Smallwood
Director

Page 3

 
CYCLESPORT NORTH LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 5 NOVEMBER 2023

The directors present their report and the financial statements for the year ended 5 November 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £2,658,587 (2022 - loss £4,970,133).

No interim dividend has been paid. The directors do not propose the payment of a final dividend.

Directors

The directors who served during the year were:

M J Lawson 
A Smallwood 
D A Stacey 

Future developments

Please see future developments section in Strategic Report.

Page 4

 
CYCLESPORT NORTH LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 5 NOVEMBER 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There were no post balance sheet events. 

Auditors

The auditorsDonald Reid Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 5 March 2024 and signed on its behalf.
 





A Smallwood
Director

Page 5

 
CYCLESPORT NORTH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD
 

Opinion


We have audited the financial statements of Cyclesport North Ltd (the 'Company') for the year ended 5 November 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 Company's affairs as at 5 November 2023 and of its 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Page 6

 
CYCLESPORT NORTH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


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 the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the 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 the 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 or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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 Directors' responsibilities statement set out on page 4, 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 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 Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
CYCLESPORT NORTH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• obtaining an understanding of the entity’s risk assessment process, including the risk of fraud;
• testing significant transactions, in particular the evaluation of the business rationale for any which appear unusual or outside the company’s normal course of business
• evaluating the assumptions and judgements used by management within significant accounting estimates andnassessing if these indicate evidence of management bias
• evaluating the consistency of selected amounts or other items presented in the other information with the financial statements
• requesting a reconciliation of amounts within the other information and the financial statements from management; comparing items in the reconciliation to the financial statements and the other information; and checking the mathematically accuracy of the reconciliation
• communicating relevant matters to all members of the audit team to ensure they understood the risks specific to Cyclesport North Limited and the audit procedures planned to mitigate these.
• challenging assumptions and judgements made by management in their significant accounting estimates


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 2006Our 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 Auditors' 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.


Page 8

 
CYCLESPORT NORTH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD (CONTINUED)





Daniel Reid FCA (Senior statutory auditor)
  
for and on behalf of
Donald Reid Limited
 
Chartered Accountants
Statutory Auditors
  
Prince Albert House
20 King Street
Maidenhead
Berkshire
SL6 1DT

6 March 2024
Page 9

 
CYCLESPORT NORTH LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 5 NOVEMBER 2023

Year ended 5 November 2023
Year ended 6 November 2022
Note
£
£

  

Turnover
 5 
28,458,571
26,043,049

Cost of sales
  
(19,795,855)
(18,621,110)

Gross profit
  
8,662,716
7,421,939

Distribution costs
  
(4,705,993)
(4,421,879)

Administrative expenses
  
(6,289,186)
(7,950,435)

Operating loss
 6 
(2,332,463)
(4,950,375)

Interest receivable and similar income
 10 
3,645
406

Interest payable and similar expenses
 11 
(301,461)
(20,164)

Loss before tax
  
(2,630,279)
(4,970,133)

Tax on loss
 12 
(28,308)
-

Loss for the financial year
  
(2,658,587)
(4,970,133)

Other comprehensive income for the year
  

Total comprehensive income for the year
  
(2,658,587)
(4,970,133)

The notes on pages 13 to 31 form part of these financial statements.

Page 10

 
CYCLESPORT NORTH LTD
REGISTERED NUMBER: 04149504

BALANCE SHEET
AS AT 5 NOVEMBER 2023

5 November 2023
6 November 2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
575,907
484,348

Tangible assets
 14 
2,026,978
2,150,047

  
2,602,885
2,634,395

Current assets
  

Stocks
 15 
8,314,433
13,544,996

Debtors: amounts falling due within one year
 16 
1,529,923
1,917,573

Cash at bank and in hand
 17 
518,249
968,792

  
10,362,605
16,431,361

Creditors: amounts falling due within one year
 18 
(5,367,370)
(13,561,028)

Net current assets
  
 
 
4,995,235
 
 
2,870,333

Total assets less current liabilities
  
7,598,120
5,504,728

Creditors: amounts falling due after more than one year
 19 
(4,751,979)
(9,784,123)

  

Net assets/(liabilities)
  
2,846,141
(4,279,395)


Capital and reserves
  

Called up share capital 
 21 
9,784,223
100

Profit and loss account
 22 
(6,938,082)
(4,279,495)

  
2,846,141
(4,279,395)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 March 2024.




A Smallwood
Director

The notes on pages 13 to 31 form part of these financial statements.

Page 11

 
CYCLESPORT NORTH LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 5 NOVEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 November 2021
100
690,638
690,738


Comprehensive income for the period

Loss for the period

-
(4,970,133)
(4,970,133)
Total comprehensive income for the period
-
(4,970,133)
(4,970,133)


Total transactions with owners
-
-
-



At 6 November 2022
100
(4,279,495)
(4,279,395)


Comprehensive income for the year

Loss for the year

-
(2,658,587)
(2,658,587)
Total comprehensive income for the year
-
(2,658,587)
(2,658,587)


Contributions by and distributions to owners

Shares issued during the year
9,784,123
-
9,784,123


Total transactions with owners
9,784,123
-
9,784,123


At 5 November 2023
9,784,223
(6,938,082)
2,846,141


The notes on pages 13 to 31 form part of these financial statements.

Page 12

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

1.


General information

Cyclesport North Limited is a private company limited by shares and incorporated in the United Kingdom, registered in England and Wales. Its registered office is 363 Leach Place, Walton Summit Centre, Bamber Bridge, Preston, Lancs, PR5 8AS.
The principal activity of Cyclesport North Limited is the design, manufacture and online retail of bicycles and bicycle parts and accessories.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 4).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Bradley Ultra Topco Limited as at 5 November 2023 and these financial statements may be obtained from 363 Leach Place, Walton Summit Centre, Bamber Bridge, Preston, Lancashire, England, PR5 8AS.

 
2.3

Going concern

These financial statements are prepared on a going concern basis. The results of the Company in the period reflect the Company’s principal business activity, being a manufacturer and retailer of complete bicycles. In considering the Company’s going concern the directors have obtained assurances from True Capital III LP that, if required, funds will be available to meet liabilities as they fall due.

Page 13

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 5 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Page 14

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

2.Accounting policies (continued)

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.11

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 15

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of comprehensive income over its useful economic life of 20 years.
Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using a combination of the straight-line and reducing balance methods..

Depreciation is provided on the following basis:

Freehold property
-
2%
per annum on cost
Property alterations
-
20%
per annum on cost
Plant and machinery
-
20%
per annum on cost
Motor vehicles
-
25%
per annum on reducing balance
Fixtures and fittings
-
20%
per annum on reducing balance
Assets under construction
-
depreciation will commence when assets are available for use
Computer equipment
-
33%
per annum on cost
Domains
-
10%
per annum on cost

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 16

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

2.Accounting policies (continued)

 
2.14

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. 

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.18

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash
Page 17

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

2.Accounting policies (continued)


2.18
Financial instruments (continued)

equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the
Page 18

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

2.Accounting policies (continued)


2.18
Financial instruments (continued)

derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Accounting reference date

The company's accounting reference date is 31 October. As permitted by section 390 of the Companies Act 2006, the company has prepared the financial statements to 5 November 2023 (2022: 6 November 2022).

Page 19

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

4.


Judgments in applying accounting policies and key sources of estimation uncertainty

Useful economic lives of intangible and tangible assets
Judgments:
Depreciation cost and amortisation cost are areas which require judgement. The applicable accounting policies detailing this area are shown in the notes above.
The directors consider the condition of the property to be maintained at such a level that its residual value would not be materially below its cost, as a result they consider that no depreciation charge should be made on the freehold property as this better enables the accounts to show a true and fair view.
Inventory provisioning:
The company designs, manufactures and sells bicycles parts and accessories and is subject to changing consumer demands and trends. As a result, it is necessary to consider the recoverability of the cost of inventory.
Judgments:
When calculating the inventory provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. See note 15 for the net carrying amount of inventory.
Estimates:
If an indication of impairment exists, an estimate is made of the amount recoverable and any impairment loss is recognised immediately in profit or loss.
 


5.


Turnover

The whole of the turnover is attributable to to the sale of bicycles, bicycle components and delivery charges.

Analysis of turnover by country of destination:

Year ended 5 November 2023
Year ended 6 November 2022
£
£

Europe
26,977,563
24,206,138

The Americas
1,338,140
1,618,577

Australasia
142,868
218,334

28,458,571
26,043,049


Page 20

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

6.


Operating loss

The operating loss is stated after charging:

Year ended 5 November 2023 
Year ended 6 November 2022
£
£

Depreciation and amortisation
687,076
656,869

Exchange differences
25,976
345,551

Staff costs
5,194,980
5,735,083

Auditors' remuneration
24,000
23,500


7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


Year ended 5 November 2023 
Year ended 6 November 2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
24,000
23,500

Page 21

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

8.


Employees

Staff costs, including directors' remuneration, were as follows:


Year ended 5 November 2023
Year ended 6 November 2022
£
£

Wages and salaries
5,031,559
5,320,647

Social security costs
393,908
434,827

Other pension costs
96,153
97,309

5,521,620
5,852,783


The average monthly number of employees, including the directors, during the year was as follows:


Year ended 5 November 2023
Year ended 6 November 2022
            No.
            No.







Management Staff
24
24



Administration and distribution staff
170
210

194
234


9.


Directors' remuneration

Year ended 5 November 2023
Year ended 6 November 2022
£
£

Directors' emoluments
62,125
80,000

Company contributions to defined contribution pension schemes
3,541
9,881

65,666
89,881


During the year retirement benefits were accruing to 1 director (2022 - 1) in respect of defined contribution pension schemes.

Certain directors are remunerated via other group companies and their emoluments are disclosed in the financial statements of those companies. Remuneration disclosed above relates to 1 director (2022 - 1).

Page 22

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

10.


Interest receivable

Year ended 5 November 2023
Year ended 6 November 2022
£
£


Bank and other interest
3,645
406

3,645
406


11.


Interest payable and similar expenses

Year ended 5 November 2023
Year ended 6 November 2022
£
£


Bank interest payable
19,477
13,124

Loans from group undertakings
251,979
7,040

Other interest payable
30,005
-

301,461
20,164




12.


Taxation


Year ended 6 November 2022
Year ended 31 October 2021
£
£

Corporation tax


Adjustments in respect of previous periods
28,308
-


28,308
-


Total current tax
28,308
-

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
28,308
-
Page 23

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year/period

The tax assessed for the year/period is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 21.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss before tax
(2,630,279)
(4,970,133)


Loss multiplied by standard rate of corporation tax in the UK of 21.5% (2022 - 19%)
(565,510)
(944,325)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
35,583
5,056

Capital allowances for year/period in excess of depreciation
-
(33,580)

Deferred tax not provided
558,235
972,849

Total tax charge for the year/period
28,308
-


Factors that may affect future tax charges

At 5 November 2023 the company had unutilised trading losses of approximately £13,420,000. The deferred tax asset has not been recongised on the basis that there is insufficient certainty of future profits in the subsequent financial year to warrant recognition at this stage. 

Page 24

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

13.


Intangible assets




Development expenditure
Assets under construction
Goodwill
Total

£
£
£
£



Cost


At 6 November 2022
2,395,562
-
350,000
2,745,562


Additions
57,763
245,856
-
303,619


Disposals
(901,654)
-
-
(901,654)



At 5 November 2023

1,551,671
245,856
350,000
2,147,527



Amortisation


At 6 November 2022
1,911,214
-
350,000
2,261,214


Charge for the year on owned assets
212,060
-
-
212,060


On disposals
(901,654)
-
-
(901,654)



At 5 November 2023

1,221,620
-
350,000
1,571,620



Net book value



At 5 November 2023
330,051
245,856
-
575,907



At 5 November 2022
484,348
-
-
484,348



Page 25

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

14.


Tangible fixed assets





Freehold property
Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings

£
£
£
£
£



Cost or valuation


At 6 November 2022
1,239,076
344,352
198,997
26,000
1,139,999


Additions
-
70,589
110,763
-
3,802


Disposals
-
-
(79,640)
-
(330,769)



At 5 November 2023

1,239,076
414,941
230,120
26,000
813,032



Depreciation


At 6 November 2022
160,448
214,826
175,008
18,237
376,822


Charge for the year on owned assets
-
47,469
(10,520)
1,805
356,277


Disposals
-
-
(79,640)
-
(330,769)


On revalued assets
(160,448)
-
-
-
-



At 5 November 2023

-
262,295
84,848
20,042
402,330



Net book value



At 5 November 2023
1,239,076
152,646
145,272
5,958
410,702



At 5 November 2022
1,078,628
129,526
23,989
7,763
763,177
Page 26

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

           14.Tangible fixed assets (continued)


Computer equipment
Other fixed assets
Total

£
£
£



Cost or valuation


At 6 November 2022
367,180
35,851
3,351,455


Additions
6,345
-
191,499


Disposals
(80,438)
-
(490,847)



At 5 November 2023

293,087
35,851
3,052,107



Depreciation


At 6 November 2022
235,303
20,764
1,201,408


Charge for the year on owned assets
76,400
3,585
475,016


Disposals
(80,438)
-
(490,847)


On revalued assets
-
-
(160,448)



At 5 November 2023

231,265
24,349
1,025,129



Net book value



At 5 November 2023
61,822
11,502
2,026,978



At 5 November 2022
131,877
15,087
2,150,047

Included within freehold property is land of £413,025 (2022: £413,025).
 

Page 27

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

15.


Stocks

5 November 2023
6 November 2022
£
£

Finished goods and goods for resale
8,314,433
13,544,996

8,314,433
13,544,996


As at 5 November 2023, provision for impairment of stocks was £845,141 (2022: £719,340).
There is no significant difference between the replacement cost of finished goods and goods for resale and their carrying amounts.


16.


Debtors

5 November 2023
6 November 2022
£
£


Trade debtors
390,345
719,005

Amounts owed by group undertakings
281,951
281,883

Other debtors
396,321
459,863

Prepayments and accrued income
461,306
456,822

1,529,923
1,917,573



17.


Cash and cash equivalents

5 November 2023
5 November 2022
£
£

Cash at bank and in hand
518,249
968,792

Less: bank overdrafts
-
(302)

518,249
968,490


Page 28

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

18.


Creditors: Amounts falling due within one year

5 November 2023
6 November 2022
£
£

Bank overdrafts
-
302

Bank loans
-
750,000

Trade creditors
2,200,966
5,483,065

Amounts owed to group undertakings
619,143
317,834

Other taxation and social security
748,816
2,026,917

Other creditors
123,442
201,802

Accruals and deferred income
1,675,003
4,781,108

5,367,370
13,561,028


£619,143 (2022: £317,834) of the amounts owed to group undertakings is unsecured, interest-free and is repayable on demand.


19.


Creditors: Amounts falling due after more than one year

5 November 2023
6 November 2022
£
£

Amounts owed to group undertakings
4,751,979
9,784,123

4,751,979
9,784,123


£4,751,979 (2022: £7,620,078) of the amounts owed to group undertakings is unsecured, accrued interest at 8% per annum and is repayable on an agreed date. 
£Nil 
(2022: £2,163,145) of the amounts owed to group undertakings is unsecured, accrued interest at 7% per annum and is repayable on an agreed date.

Page 29

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

20.


Financial instruments

5 November 2023
6 November 2022
£
£

Financial assets


Financial assets that are debt instruments measured at amortised cost
1,096,925
1,460,751


Financial liabilities


Financial liabilities measured at amortised cost
7,712,639
16,666,006


Financial assets that are debt instruments measured at amortised cost comprise trade debtors of £390,345 (2022: £719,005), intercompany loans of £281,951 (2022: £281,883) and other debtors of £424,629 (2022; £459,863)


Financial liabilities measured at amortised cost comprise intercompany loans of £5,371,122 (2022: £10,101,957), trade creditors of £2,200,966 (2022: £5,483,065), accruals of £140,249 (2022: £330,682) and loans of £302 (2022: £750,302).


21.


Share capital

5 November 2023
6 November 2022
£
£
Allotted, called up and fully paid



9,784,223 (2022 - 100) Ordinary shares of £1.00 each
9,784,223
100


During the year, the company issued 9,784,123 Ordinary shares with a nominal value of £1.00 each for an aggregate consideration of £9,784,123.


22.


Reserves

Profit and loss account

Includes all current and prior year retained earnings.


23.


Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £96,152 (2022: £97,309). separately totalling £19,619 (2022: £29,179) were payable to the fund at the balance sheet date and are included in creditors.

Page 30

 
CYCLESPORT NORTH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023

24.


Commitments under operating leases

At 5 November 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

5 November 2023 
6 November 2022
£
£


Not later than 1 year
25,000
35,896

Later than 1 year and not later than 5 years
35,417
60,417

60,417
96,313


25.


Related party transactions

As a subsidiary of Bradley Ultra Topco Limited, the company has taken advantage of the exemption allowed by FRS 102 not to disclose transactions with other wholly owned members of the group.


26.


Controlling party

True Capital III LP is the company's ultimate parent and controlling party. 
The parent undertaking of the largest and smallest group is Bradley Ultra Topco Limited. Consolidated financial statements can be obtained from 363 Leach Place, Walton Summit Centre, Bamber Bridge, Preston, Lancashire, England, PR5 8AS.  

 
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