REGISTERED NUMBER: 09288660 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 28 February 2023 |
for |
Pentagon Sport (Cheshire) Ltd |
REGISTERED NUMBER: 09288660 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 28 February 2023 |
for |
Pentagon Sport (Cheshire) Ltd |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Contents of the Consolidated Financial Statements |
for the Year Ended 28 February 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Consolidated Profit and Loss Account | 9 |
Consolidated Other Comprehensive Income | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 17 |
Pentagon Sport (Cheshire) Ltd |
Company Information |
for the Year Ended 28 February 2023 |
DIRECTORS: |
SECRETARIES: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
and Statutory Auditors |
Ebenezer House |
Ryecroft |
Newcastle under Lyme |
Staffordshire |
ST5 2BE |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Group Strategic Report |
for the Year Ended 28 February 2023 |
The directors present their strategic report of the company and the group for the year ended 28 February 2023. |
REVIEW OF BUSINESS |
Pentagon Sport (Cheshire) Limited have been committed to improving the structure and integrity of the business to create a stable foundation for us to grow. We have been concentrating on our people and investing into; new talent, training and management. We have created opportunities for senior managers to undertake both in house and external training courses to improve their key skills and drive the business forward. |
This investment has been rewarded with a strong financial performance this year. Our business has grown from £10,825,619 turnover with a gross profit of 36.78% and a net profit of 10.02% to a turnover of £14,955,712 with a gross profit of 43.33% and a net profit of 14.82%. |
We have also heavily invested in our manufacturing department to promote innovation and development of our in house product production. We have made capital purchases on several new machines, redesigned the layout and invested in lean six sigma manufacturing training for many of the strategic managers. This has allowed us to our increase our turnover in the manufacturing centre and use the additional capacity to take on the manufacturing for third party companies. |
The board is very happy with the performance of the business and have set us targets for FY2024 to continue to grow the business in our core markets, move into new markets which align to our key skill set and to drive down cost through efficiencies and partnerships with our supply chain. |
We are looking to improve our FY24 performance to 45% GP and 16% NP and are track to do so to date. |
Our future investments will see us invest more into our manufacturing department, continue investing into our people and manage our pipeline and forecasting more effectively to react better to growth. |
It is a fundamental objective to maintain a sustainable growth plan, and the group has taken the time during the year to focus on a wider spread of market sectors. |
KEY PERFORMANCE INDICATORS |
The key performance indicator detailed above is recognised as an integral part of monitoring the business, along with gross margin and net margin. |
2023 2022 |
Turnover growth 38.15% 49.87% |
Gross profit 43.33% 36.78% |
Net profit 14.82% 10.02% |
It is the responsibility of the commercial team to regularly monitor and review these figures and report the results and any corrective actions to the board. |
The company continue to invest in research and development expenditure to develop the internal systems of the business. |
The directors are happy with the company's performance against those indicators, especially during the challenges presented during recent times. |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Group Strategic Report |
for the Year Ended 28 February 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
There are certain risks, which could materially and adversely impact the company's results compared to expectation. A summary of the key risks is set out below. This is not an exhaustive list of the factors that could adversely impact company profitability. |
FINANCIAL INSTRUMENTS |
The group uses various financial instruments; these include cash and various items, such as trade debtors and trade creditors, that arise directly from its operations. |
The existence of these financial instruments exposes the company to several financial risks which are described in more detail below. |
The main risks arising from the group's financial instruments are categorised as market risk, credit risk and liquidity risk. The directors review and agree policies for managing these risks and they are summarised below. |
MARKET RISK |
The directors are constantly monitoring both the quality and price of the products it acquires and the range of goods it supplies to minimise the market risk. |
CREDIT RISK |
To counteract the risk of bad debts the business has increased the use of credit checking and monitoring facilities to assess the risk to the group. If a significant risk is identified then a further review is made and where appropriate protective actions are undertaken. |
LIQUIDITY RISK |
The business has a very strong relationship with its bank. The group has the facilities available to meet its needs on an ongoing basis. These facilities are reviewed on a regular basis, by both the bank and the management, and are in accordance with the needs of the group. |
FUTURE DEVELOPMENTS |
The directors are keen to expand the core business, through organic sustainable growth, supply chain partnerships, and through strategic acquisition opportunities. |
The business has a continued re-investment programme replacing equipment with newer technology to enable the group to compete in increasingly competitive markets, which is constantly reviewed in line with business opportunities. |
ON BEHALF OF THE BOARD: |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Report of the Directors |
for the Year Ended 28 February 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 28 February 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of providing playground equipment and installation. |
DIVIDENDS |
The total distribution of dividends for the year ended 28 February 2023 will be £ 1,134,603 . |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 March 2022 to the date of this report. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 company and the group 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 then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Thompson Wright Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Pentagon Sport (Cheshire) Ltd |
Qualified opinion |
We have audited the financial statements of Pentagon Sport (Cheshire) Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2023 which comprise the Consolidated Profit and Loss Account, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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). |
We express a qualified opinion on the accompanying financial statements of the Company. Because of the significance of the matters described in the Basis for qualified opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an unqualified audit opinion on these financial statements. |
Basis for qualified opinion |
We were not appointed as auditors of Pentagon Sport Ltd until after 28 February 2022 and thus did not observe the counting of physical stock at the beginning of the year. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 28 February 2022 which are stated in the balance sheet at £934,672. We were also unable to audit the opening balances for year due to the reasons given above. |
As a result of this matter, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded stock, and the elements making up the profit and loss account and statement of changes in equity. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent 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. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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. |
Opinions 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 Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
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. |
Report of the Independent Auditors to the Members of |
Pentagon Sport (Cheshire) Ltd |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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. |
Report of the Independent Auditors to the Members of |
Pentagon Sport (Cheshire) Ltd |
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 a Report of the Auditors 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: |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of playground equipment and installation. |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment and health and safety legislation and FSC and PEFC compliance; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- reading the minutes of meetings of those charged with governance; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company's legal advisors. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Pentagon Sport (Cheshire) Ltd |
Other matters which we are required to address |
In the previous period the directors of the company took advantage of audit exemption under s477 of the Companies Act. Therefore the prior period financial statements were not subject to audit. |
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 a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants |
and Statutory Auditors |
Ebenezer House |
Ryecroft |
Newcastle under Lyme |
Staffordshire |
ST5 2BE |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Consolidated Profit and Loss Account |
for the Year Ended 28 February 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 3 | 14,955,712 | 10,825,619 |
Cost of sales | 8,475,328 | 6,843,556 |
GROSS PROFIT | 6,480,384 | 3,982,063 |
Administrative expenses | 5,377,583 | 3,757,650 |
1,102,801 | 224,413 |
Other operating income | 1,120,990 | 866,445 |
OPERATING PROFIT | 5 | 2,223,791 | 1,090,858 |
Interest receivable and similar income | 3,040 | 746 |
2,226,831 | 1,091,604 |
Interest payable and similar expenses | 6 | 10,768 | 6,755 |
PROFIT BEFORE TAXATION | 2,216,063 | 1,084,849 |
Tax on profit | 7 | 337,696 | 81,618 |
PROFIT FOR THE FINANCIAL YEAR |
Profit attributable to: |
Owners of the parent | 1,878,367 | 1,003,231 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Consolidated Other Comprehensive Income |
for the Year Ended 28 February 2023 |
2023 | 2022 |
Notes | £ | £ |
PROFIT FOR THE YEAR | 1,878,367 | 1,003,231 |
OTHER COMPREHENSIVE INCOME |
Purchase of own shares | (76,588 | ) | - |
Income tax relating to other comprehensive income |
- |
- |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
(76,588 |
) |
- |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 1,801,779 | 1,003,231 |
Total comprehensive income attributable to: |
Owners of the parent | 1,801,779 | 1,003,231 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Consolidated Balance Sheet |
28 February 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 | 281,614 | 428,922 |
Tangible assets | 11 | 983,704 | 962,725 |
Investments | 12 | - | - |
1,265,318 | 1,391,647 |
CURRENT ASSETS |
Stocks | 13 | 668,424 | 934,672 |
Debtors | 14 | 4,257,118 | 4,063,923 |
Cash at bank | 2,879,971 | 2,168,860 |
7,805,513 | 7,167,455 |
CREDITORS |
Amounts falling due within one year | 15 | 2,845,933 | 3,013,755 |
NET CURRENT ASSETS | 4,959,580 | 4,153,700 |
TOTAL ASSETS LESS CURRENT LIABILITIES | 6,224,898 | 5,545,347 |
CREDITORS |
Amounts falling due after more than one year | 16 | (280,400 | ) | (320,541 | ) |
PROVISIONS FOR LIABILITIES | 20 | (229,444 | ) | (176,928 | ) |
NET ASSETS | 5,715,054 | 5,047,878 |
CAPITAL AND RESERVES |
Called up share capital | 21 | 200 | 206 |
Share premium | 22 | 1,091,902 | 1,091,902 |
Capital redemption reserve | 22 | 6 | - |
Other reserves | 22 | 34,032 | 34,032 |
Retained earnings | 22 | 4,588,914 | 3,921,738 |
SHAREHOLDERS' FUNDS | 5,715,054 | 5,047,878 |
The financial statements were approved by the Board of Directors and authorised for issue on 30 November 2023 and were signed on its behalf by: |
M R Bischof - Director |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Company Balance Sheet |
28 February 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Debtors | 14 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 20 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Share premium |
Capital redemption reserve |
Other reserves |
Retained earnings |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 778,921 | 937,466 |
The financial statements were approved by the Board of Directors and authorised for issue on |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Consolidated Statement of Changes in Equity |
for the Year Ended 28 February 2023 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£ | £ | £ |
Balance at 1 March 2021 | 206 | 3,397,907 | 1,091,902 |
Changes in equity |
Dividends | - | (479,400 | ) | - |
Total comprehensive income | - | 1,003,231 | - |
Balance at 28 February 2022 | 206 | 3,921,738 | 1,091,902 |
Changes in equity |
Reduction in share capital | (6 | ) | - | - |
Dividends | - | (1,134,603 | ) | - |
Total comprehensive income | - | 1,801,779 | - |
Balance at 28 February 2023 | 200 | 4,588,914 | 1,091,902 |
Capital |
redemption | Other | Total |
reserve | reserves | equity |
£ | £ | £ |
Balance at 1 March 2021 | - | 34,032 | 4,524,047 |
Changes in equity |
Dividends | - | - | (479,400 | ) |
Total comprehensive income | - | - | 1,003,231 |
Balance at 28 February 2022 | - | 34,032 | 5,047,878 |
Changes in equity |
Reduction in share capital | 6 | - | - |
Dividends | - | - | (1,134,603 | ) |
Total comprehensive income | - | - | 1,801,779 |
Balance at 28 February 2023 | 6 | 34,032 | 5,715,054 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Company Statement of Changes in Equity |
for the Year Ended 28 February 2023 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£ | £ | £ |
Balance at 1 March 2021 |
Changes in equity |
Dividends | - | ( |
) | - |
Total comprehensive income | - | - |
Balance at 28 February 2022 |
Changes in equity |
Reduction in share capital | (6 | ) | - | - |
Dividends | - | ( |
) | - |
Total comprehensive income | - | - |
Balance at 28 February 2023 |
Capital |
redemption | Other | Total |
reserve | reserves | equity |
£ | £ | £ |
Balance at 1 March 2021 |
Changes in equity |
Dividends | - | - | ( |
) |
Total comprehensive income |
Balance at 28 February 2022 |
Changes in equity |
Reduction in share capital | 6 | - | - |
Dividends | - | - | ( |
) |
Total comprehensive income |
Balance at 28 February 2023 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Consolidated Cash Flow Statement |
for the Year Ended 28 February 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 2,258,142 | 1,669,199 |
Interest paid | (7,808 | ) | (5,850 | ) |
Interest element of hire purchase payments paid | (2,960 | ) | (905 | ) |
Government grants | 3,000 | 17,625 |
Tax paid | (43,771 | ) | (204,104 | ) |
Net cash from operating activities | 2,206,603 | 1,475,965 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (289,057 | ) | (525,609 | ) |
Sale of tangible fixed assets | 16,707 | 1,000 |
Interest received | 3,040 | 746 |
Net cash from investing activities | (269,310 | ) | (523,863 | ) |
Cash flows from financing activities |
Loan repayments in year | (50,000 | ) | - |
Purchase of own shares | (76,588 | ) | - |
Capital repayments in year | 27,234 | 155,628 |
Amount introduced by directors | 7,775 | - |
Equity dividends paid | (1,134,603 | ) | (479,400 | ) |
Net cash from financing activities | (1,226,182 | ) | (323,772 | ) |
Increase in cash and cash equivalents | 711,111 | 628,330 |
Cash and cash equivalents at beginning of year | 2 | 2,168,860 | 1,540,530 |
Cash and cash equivalents at end of year | 2 | 2,879,971 | 2,168,860 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 28 February 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation | 2,216,063 | 1,084,849 |
Depreciation charges | 388,941 | 317,405 |
Loss/(profit) on disposal of fixed assets | 9,738 | (240 | ) |
Government grants | (3,000 | ) | (17,625 | ) |
Finance costs | 10,768 | 6,755 |
Finance income | (3,040 | ) | (746 | ) |
2,619,470 | 1,390,398 |
Decrease/(increase) in stocks | 266,248 | (518,455 | ) |
Increase in trade and other debtors | (112,570 | ) | (950,545 | ) |
(Decrease)/increase in trade and other creditors | (515,006 | ) | 1,747,801 |
Cash generated from operations | 2,258,142 | 1,669,199 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 28 February 2023 |
28.2.23 | 1.3.22 |
£ | £ |
Cash and cash equivalents | 2,879,971 | 2,168,860 |
Year ended 28 February 2022 |
28.2.22 | 1.3.21 |
£ | £ |
Cash and cash equivalents | 2,168,860 | 1,540,530 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
Other |
non-cash |
At 1.3.22 | Cash flow | changes | At 28.2.23 |
£ | £ | £ | £ |
Net cash |
Cash at bank | 2,168,860 | 711,111 | 2,879,971 |
2,168,860 | 711,111 | 2,879,971 |
Debt |
Finance leases | (155,628 | ) | 51,611 | (78,845 | ) | (182,862 | ) |
Debts falling due |
within 1 year | (50,000 | ) | - | - | (50,000 | ) |
Debts falling due |
after 1 year | (200,000 | ) | 50,000 | - | (150,000 | ) |
(405,628 | ) | 101,611 | (78,845 | ) | (382,862 | ) |
Total | 1,763,232 | 812,722 | (78,845 | ) | 2,497,109 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements |
for the Year Ended 28 February 2023 |
1. | STATUTORY INFORMATION |
Pentagon Sport (Cheshire) Ltd is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements have been prepared on a going concern basis which assumes the Group will have sufficient funds to continue to pay its debts as and when they fall due and thus continue to trade. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future based on its forecasts and projections. In making their assessment, the directors have considered a period of at least 12 months from the date of signing these financial statements. |
Basis of consolidation |
The group accounts consolidate the accounts of the group and its subsidiary at 28 February. All companies have coterminous year ends. All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. |
Related party exemption |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
Significant judgements and estimates |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believe to be reasonable under the circumstances. |
Critical accounting estimates and assumptions |
The company makes estimates and assumptions concerning the future. The resulting account estimates will, by definition, seldom equal the related actual results. 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 are addressed below. |
Useful economic life of tangible assets |
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The usual economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover represents net invoiced sales of goods and services, excluding value added tax. |
Revenue is recognised as the company becomes entitled to consideration for the goods and services supplied. |
Turnover is attributable to the principle activity of the company which is carried out entirely within the United Kingdom. |
All turnover is derived from UK customers. |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
2. | ACCOUNTING POLICIES - continued |
Goodwill |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Improvements to property | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
Stocks |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Profit and Loss Account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
Licensing fees | 789,087 | 627,620 |
Supply & Installation | 12,815,865 | 9,771,266 |
Materials | 125,772 | 123,231 |
Repairs | 85,034 | 49,810 |
Web shop orders | 1,013,693 | 71,224 |
Other | 126,261 | 182,468 |
14,955,712 | 10,825,619 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries | 3,839,114 | 2,200,292 |
Social security costs | 378,735 | 215,926 |
Other pension costs | 205,142 | 135,153 |
4,422,991 | 2,551,371 |
The average number of employees during the year was as follows: |
2023 | 2022 |
Office staff | 63 | 47 |
Warehouse staff | 14 | 9 |
Installation staff | 39 | 19 |
The average number of employees by undertakings that were proportionately consolidated during the year was 116 (2022 - 75 ) . |
2023 | 2022 |
£ | £ |
Directors' remuneration | 196,308 | 119,444 |
Directors' pension contributions to money purchase schemes | 3,678 | 24,093 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery | 220,302 | 334,867 |
Other operating leases | 317,484 | 223,545 |
Depreciation - owned assets | 197,113 | 156,802 |
Depreciation - assets on hire purchase contracts | 44,520 | 13,295 |
Loss/(profit) on disposal of fixed assets | 9,738 | (240 | ) |
Goodwill amortisation | 147,308 | 147,308 |
Foreign exchange differences | 3,627 | (257 | ) |
Auditors remuneration | 21,000 | - |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest | 7,808 | 5,850 |
Hire purchase | 2,960 | 905 |
10,768 | 6,755 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | 284,215 | 43,770 |
Prior year tax adjustment | 965 | (46,682 | ) |
Total current tax | 285,180 | (2,912 | ) |
Deferred tax | 52,516 | 84,530 |
Tax on profit | 337,696 | 81,618 |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax | 2,216,063 | 1,084,849 |
Profit multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
421,052 |
206,121 |
Effects of: |
Expenses not deductible for tax purposes | 32,080 | 30,520 |
Depreciation in excess of capital allowances | 41,991 | 3,801 |
Adjustments to tax charge in respect of previous periods | 965 | (49,335 | ) |
R&D deduction | (158,392 | ) | (109,489 | ) |
Total tax charge | 337,696 | 81,618 |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Purchase of own shares | (76,588 | ) | - | (76,588 | ) |
8. | INDIVIDUAL PROFIT AND LOSS ACCOUNT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
9. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Ordinary A shares of 1p each |
Interim | 213,329 | 149,400 |
Ordinary B shares of 1p each |
Interim | 213,328 | 330,000 |
Ordinary C shares of 1p each |
Interim | 314,162 | - |
Ordinary D shares of 1p each |
Interim | 314,162 | - |
Ordinary E shares of 1p each |
Interim | 8,880 | - |
Ordinary F shares of 1p each |
Interim | 8,880 | - |
Ordinary G shares of 1p each |
Interim | 10,579 | - |
Ordinary H shares of 1p each |
Interim | 10,579 | - |
Ordinary I shares of 1p each |
Interim | 40,704 | - |
1,134,603 | 479,400 |
10. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£ |
COST |
At 1 March 2022 |
and 28 February 2023 | 1,473,075 |
AMORTISATION |
At 1 March 2022 | 1,044,153 |
Amortisation for year | 147,308 |
At 28 February 2023 | 1,191,461 |
NET BOOK VALUE |
At 28 February 2023 | 281,614 |
At 28 February 2022 | 428,922 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
11. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | Plant and | and |
property | machinery | fittings |
£ | £ | £ |
COST |
At 1 March 2022 | 281,343 | 618,138 | 312,464 |
Additions | - | 31,673 | 74,751 |
Disposals | - | - | - |
At 28 February 2023 | 281,343 | 649,811 | 387,215 |
DEPRECIATION |
At 1 March 2022 | 49,267 | 172,252 | 219,147 |
Charge for year | 28,135 | 122,964 | 40,657 |
Eliminated on disposal | - | - | - |
At 28 February 2023 | 77,402 | 295,216 | 259,804 |
NET BOOK VALUE |
At 28 February 2023 | 203,941 | 354,595 | 127,411 |
At 28 February 2022 | 232,076 | 445,886 | 93,317 |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
COST |
At 1 March 2022 | 177,496 | 30,768 | 1,420,209 |
Additions | 173,895 | 8,738 | 289,057 |
Disposals | (27,500 | ) | (583 | ) | (28,083 | ) |
At 28 February 2023 | 323,891 | 38,923 | 1,681,183 |
DEPRECIATION |
At 1 March 2022 | 7,726 | 9,092 | 457,484 |
Charge for year | 44,820 | 5,057 | 241,633 |
Eliminated on disposal | (1,375 | ) | (263 | ) | (1,638 | ) |
At 28 February 2023 | 51,171 | 13,886 | 697,479 |
NET BOOK VALUE |
At 28 February 2023 | 272,720 | 25,037 | 983,704 |
At 28 February 2022 | 169,770 | 21,676 | 962,725 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
11. | TANGIBLE FIXED ASSETS - continued |
Group |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and | Motor |
machinery | vehicles | Totals |
£ | £ | £ |
COST |
At 1 March 2022 | 46,200 | 173,930 | 220,130 |
Additions | - | 78,845 | 78,845 |
Disposals | - | (27,500 | ) | (27,500 | ) |
At 28 February 2023 | 46,200 | 225,275 | 271,475 |
DEPRECIATION |
At 1 March 2022 | 7,700 | 5,595 | 13,295 |
Charge for year | 9,240 | 35,280 | 44,520 |
Eliminated on disposal | - | (1,375 | ) | (1,375 | ) |
At 28 February 2023 | 16,940 | 39,500 | 56,440 |
NET BOOK VALUE |
At 28 February 2023 | 29,260 | 185,775 | 215,035 |
At 28 February 2022 | 38,500 | 168,335 | 206,835 |
Company |
Computer |
equipment |
£ |
COST |
At 1 March 2022 |
Additions |
Disposals | ( |
) |
At 28 February 2023 |
DEPRECIATION |
At 1 March 2022 |
Charge for year |
Eliminated on disposal | ( |
) |
At 28 February 2023 |
NET BOOK VALUE |
At 28 February 2023 |
At 28 February 2022 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
12. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 March 2022 |
and 28 February 2023 |
NET BOOK VALUE |
At 28 February 2023 |
At 28 February 2022 |
13. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Stocks | 630,122 | 558,133 |
Work-in-progress | 38,302 | 376,539 |
668,424 | 934,672 |
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 1,807,322 | 1,846,087 |
Amounts owed by group undertakings | - | - |
Other debtors | 150,456 | 497 |
Tax recoverable - S455 | 513,596 | 425,196 | 513,596 | 425,196 |
Directors' current accounts | 1,589,165 | 1,596,940 | 1,589,165 | 1,596,940 |
Prepayments | 196,579 | 195,203 |
4,257,118 | 4,063,923 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 17) | 50,000 | 50,000 |
Hire purchase contracts (see note 18) | 52,462 | 35,087 |
Trade creditors | 829,050 | 1,093,391 |
Tax | 372,615 | 42,806 |
Social security and other taxes | 131,855 | 97,248 |
VAT | 456,571 | 222,703 | 95,990 | 78,083 |
Other creditors | 236,691 | 1,088,512 |
Accruals and deferred income | 716,689 | 384,008 |
2,845,933 | 3,013,755 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
2023 | 2022 |
£ | £ |
Bank loans (see note 17) | 150,000 | 200,000 |
Hire purchase contracts (see note 18) | 130,400 | 120,541 |
280,400 | 320,541 |
17. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 50,000 | 50,000 |
Amounts falling due between one and two years: |
Bank loans - 1-2 years | 50,000 | 50,000 |
Amounts falling due between two and five years: |
Bank loans - 2-5 years | 100,000 | 150,000 |
18. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year | 52,462 | 35,087 |
Between one and five years | 130,400 | 120,541 |
182,862 | 155,628 |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year | 328,298 | 242,905 |
Between one and five years | 379,168 | 456,945 |
707,466 | 699,850 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
18. | LEASING AGREEMENTS - continued |
Company |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
19. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
£ | £ |
Hire purchase contracts | 182,862 | 155,628 |
Hire purchase creditors are secured on the related fixed assets. |
20. | PROVISIONS FOR LIABILITIES |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Deferred tax |
Accelerated capital allowances | 229,444 | 176,928 |
Group |
Deferred |
tax |
£ |
Balance at 1 March 2022 | 176,928 |
Provided during year | 52,516 |
Balance at 28 February 2023 | 229,444 |
Company |
Deferred |
tax |
£ |
Balance at 1 March 2022 |
Provided during year |
Balance at 28 February 2023 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary A | 1p | 22 | 100 |
Ordinary B | 1p | 22 | 6 |
Ordinary C | 1p | 22 | - |
2,182 | Ordinary D | 1p | 22 | - |
319 | Ordinary G | 1p | 3 | - |
319 | Ordinary H | 1p | 3 | - |
638 | Ordinary I | 1p | 6 | - |
100 | 106 |
22. | RESERVES |
Group |
Capital |
Retained | Share | redemption | Other |
earnings | premium | reserve | reserves | Totals |
£ | £ | £ | £ | £ |
At 1 March 2022 | 3,921,738 | 1,091,902 | - | 34,032 | 5,047,672 |
Profit for the year | 1,878,367 | 1,878,367 |
Dividends | (1,134,603 | ) | (1,134,603 | ) |
Purchase of own shares | (76,588 | ) | - | - | - | (76,588 | ) |
Reduction of share capital | - | - | 6 | - | 6 |
At 28 February 2023 | 4,588,914 | 1,091,902 | 6 | 34,032 | 5,714,854 |
On the 1st December 2022, the company purchased 107 Ordinary E shares from Mr U Hamid and 107 F Shares from Mrs K Hamid. On the 2nd December 2022, the company purchased a further 424 Ordinary E shares from Mr U Hamid. |
23. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to directors subsisted during the years ended 28 February 2023 and 28 February 2022: |
2023 | 2022 |
£ | £ |
A Snell |
Balance outstanding at start of year | 833,919 | 833,919 |
Amounts repaid | - | - |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 833,919 | 833,919 |
M R Bischof |
Balance outstanding at start of year | 746,375 | 746,375 |
Amounts repaid | - | - |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 746,375 | 746,375 |
Pentagon Sport (Cheshire) Ltd (Registered number: 09288660) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 28 February 2023 |
24. | RELATED PARTY DISCLOSURES |
Pentagon Sport (South) Limited |
The company is related due to both shareholders Andrew Snell & Michael Bischof also being shareholders in Pentagon Sport (South) Limited. |
During the year, the company received management charges from Pentagon Sport (South) Ltd of £1,376,812 (2022: £1,006,954). At the year end, £273,472 (2022: £202,424) was due from the related party. |
25. | PRIOR YEAR UNAUDITED |
In the previous accounting period, the directors of the company took advantage of audit exemption under s477 of the Companies Act. Therefore the prior period financial statements were not subject to audit. |