Registered number:
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
COMPANY INFORMATION
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CYCLESPORT NORTH LTD
CONTENTS
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CYCLESPORT NORTH LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 5 NOVEMBER 2023
The directors present their strategic report for the year ended 5th November 2023.
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.
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.
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CYCLESPORT NORTH LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 5 NOVEMBER 2023
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.
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.
The Directors monitor sales demand, operational output, stock holding, cash flow and profitability as key indicators.
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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.
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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.
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 2006. They 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.
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.
The directors who served during the year were:
Please see future developments section in Strategic Report.
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CYCLESPORT NORTH LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 5 NOVEMBER 2023
There were no post balance sheet events.
The auditors, Donald Reid Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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CYCLESPORT NORTH LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD
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 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 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.
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.
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CYCLESPORT NORTH LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD (CONTINUED)
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 Report. 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. 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.
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.
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.
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CYCLESPORT NORTH LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD (CONTINUED)
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.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an 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.
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CYCLESPORT NORTH LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CYCLESPORT NORTH LTD (CONTINUED)
for and on behalf of
Chartered Accountants
Statutory Auditors
Prince Albert House
20 King Street
Berkshire
SL6 1DT
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CYCLESPORT NORTH LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
REGISTERED NUMBER: 04149504
BALANCE SHEET
AS AT 5 NOVEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 13 to 31 form part of these financial statements.
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CYCLESPORT NORTH LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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
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:
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.
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.
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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.
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
2.Accounting policies (continued)
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
2.Accounting policies (continued)
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
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.
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:
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.
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
2.Accounting policies (continued)
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
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
2.Accounting policies (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
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
2.Accounting policies (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.
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).
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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.
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:
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
12.Taxation (continued)
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.
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
14.Tangible fixed assets (continued)
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
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.
Profit and loss account
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.
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CYCLESPORT NORTH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 5 NOVEMBER 2023
The parent undertaking of the largest and smallest group is
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