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REGISTERED NUMBER: 03282374 (England and Wales)












STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2023

FOR

FRANKLIN COVEY EUROPE LIMITED

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)






CONTENTS OF THE FINANCIAL STATEMENTS
for the year ended 31 August 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 6

Income Statement 9

Other Comprehensive Income 10

Balance Sheet 11

Statement of Changes in Equity 12

Cash Flow Statement 13

Notes to the Cash Flow Statement 14

Notes to the Financial Statements 15


FRANKLIN COVEY EUROPE LIMITED

COMPANY INFORMATION
for the year ended 31 August 2023







DIRECTORS: S C Asker
S W Sumsion
S D Young


REGISTERED OFFICE: Ground Floor
Blenheim Court
19 George Street
Banbury
Oxfordshire
OX16 5BH


REGISTERED NUMBER: 03282374 (England and Wales)


SENIOR STATUTORY AUDITOR: Mark Ashfield BA FCA


AUDITORS: Harrison Beale & Owen Limited
Chartered Accountants and Statutory Auditor
Highdown House
11 Highdown Road
Leamington Spa
Warwickshire
CV31 1XT


BANKERS: Barclays Bank PLC
32 Bridge Street
Banbury
Oxfordshire
OX16 5PN

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

STRATEGIC REPORT
for the year ended 31 August 2023

The directors present their strategic report for the year ended 31 August 2023.

REVIEW OF BUSINESS
The company forms part of the global organisation FranklinCovey Co, a NYSE listed company headquartered in Utah, USA. It is the sole licensed distributor for the UK and Ireland markets for its training and consultancy business whereby it specialises in the performance improvement helping organisations achieve results that require a change in human behaviour.

The business conducted is principally the running of training programmes within organisations and public sector bodies utilising its own team of consultants or by the selling of its intellectual property within training materials and licensing.

The company also supports some functions on behalf of its parent FranklinCovey Co, to which it recharges these services back including an additional management fee.

PRINCIPAL RISKS AND UNCERTAINTIES
The company being part of a global organisation owned by FranklinCovey Co, shares several risks and uncertainties that its parent experiences.

The company operates in a competitive industry and our competitors may develop courses that adversely affect our ability to sell our offerings.

Economic and political conditions and the effects of these conditions could adversely affect our clients' businesses and their levels of activity with the company.

The results of operations may be negatively affected if we cannot continue to expand or develop our services and solutions in response to client demands.

The ability for the company to continue with its growth projections could be impacted if we were unable to attract, retain, and motivate high quality employees including training consultants and experienced sales personnel with the skills required to compete effectively.

Our business could be adversely affected if our clients are not satisfied with the quality and provision of our services.

RESULTS AND PERFORMANCE
The results of the company as set out in these accounts shows a small increase in revenue of around 7% to £9.3 million (2022: £8.7 million) with a pre-tax reported profit of £559K (2022: £488K profit).

Within its core training business (excluding support services to its parent or to its subsidiary companies) revenue experienced an overall increase of around 2.5%, with pre-tax profit of £495K from a prior year profit of around £390K.

We are extremely pleased by our revenue and Adjusted EBITDA growth and the business's momentum. These results reflect the tremendous power of our continued focus on the business priorities that have continued to drive our efforts and results over the years.

We anticipate our subscription business to continue to achieve significant top and bottom-line growth in fiscal 2024 and well into the future, as substantially all our business becomes subscription and subscription services over the next few years. As this occurs, we expect to: (a) achieve accelerated growth in revenue, Adjusted EBITDA, and cash flow; (b) substantially increase our number of clients - clients who go on to become ''clients for life;'' and (c) ensure that FranklinCovey makes accelerated progress toward its goal of being ''the workplace of choice for achievers with heart.''


FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

STRATEGIC REPORT
for the year ended 31 August 2023

BUSINESS ENVIRONMENT
Although the country continues to experience relatively flat economic growth, the market conditions for the company's training services continue to improve, helped by the company continuing to focus on client organisational outcomes rather than the selling of training programmes. Organisations within both public and private sectors seem to be more open to invest within their employee base particularly in improving their skills and expertise. This has been not only in traditional vocational training but also in the softer behaviour skills that the company's services provide.

STRATEGY
The main strategy of the company is to market its services and offerings to the business community in which to secure new clients, whilst also retaining and building upon existing relationships. Its main go-to market strategy is the holding of public, free events showcasing a specific curriculum and presenting the business case for clients. These events allow potential clients to evaluate both the investment level and the respective success to their organisation.

With the support of its parent, FranklinCovey Co., the company also continues to build upon its current portfolio of services and training solutions available to its client base within the UK and Ireland. In the forthcoming year the company intends on continuing to invest significantly within its subscription service channel where we enable organisations to economically and flexibly access numerous training solutions enabling individuals and organisations to achieve results that require lasting changes in human behaviour.

KEY PERFORMANCE INDICATORS
We have continued to make progress throughout the year in relation to the key elements of our strategy. The following are key indicators which the company monitors in which to measure progress:

Pipeline Addition - to increase the value of additional opportunities to the sales pipeline across the whole business each week.

Face-To-Face CP Hours - to increase the quantity of face-to-face hours the client partners (sales team) spend with clients each week.

New Subscription Logos - to acquire new clients with a subscription model contract.

Subscriptions Passholders - to increase the level of active subscription users able to access the company's training content.

Subscription Revenue Renewal - to maintain the level of subscription client revenue being renewed.

Delivery Quality Results - to improve the net promoter score (NPS) of training delegates attending the company's programmes.

ON BEHALF OF THE BOARD:





S C Asker - Director


29 August 2024

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

REPORT OF THE DIRECTORS
for the year ended 31 August 2023

The directors present their report with the financial statements of the company for the year ended 31 August 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of a provider of learning and performance solutions for professionals and organisations.

DIVIDENDS
No dividends will be distributed for the year ended 31 August 2023.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 September 2022 to the date of this report.

S C Asker
S W Sumsion
S D Young

DISCLOSURE IN THE STRATEGIC REPORT
Information on the company's review of the business, principal risks and uncertainties and future developments is not shown in the directors' report as it is shown in the strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the 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 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 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 transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

REPORT OF THE DIRECTORS
for the year ended 31 August 2023


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 company'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 company's auditors are aware of that information.

ON BEHALF OF THE BOARD:




S C Asker - Director


29 August 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
FRANKLIN COVEY EUROPE LIMITED

Opinion
We have audited the financial statements of Franklin Covey Europe Limited (the 'company') for the year ended 31 August 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 August 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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 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 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 Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
FRANKLIN COVEY EUROPE LIMITED


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 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, 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 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 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.

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:

The audit process includes an assessment of the entity's risk environment, through enquiry of and discussion with management, including an assessment of any key laws and regulations with which the company must comply in the ordinary course of its business.

Additionally, the overall risks of irregular transactions occurring are assessed following our observations and confirmation of the design and implementation of management's controls. Whilst we are mindful of these risks, our audit focus is geared towards the risk of material misstatement in the financial statements as a whole.

As such, our procedures cannot guarantee that all transactions have been fully compliant with all relevant laws and regulations, including those regulations relating to fraud, as our procedures are not designed to detect all instances of non-compliance. By definition, the risk of our detection of non-compliance is greater where compliance with a law or regulation is removed from the events and transactions reflected in the financial statements. The risk is also greater regarding irregularities 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 Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
FRANKLIN COVEY EUROPE LIMITED


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.




Mark Ashfield BA FCA (Senior Statutory Auditor)
for and on behalf of Harrison Beale & Owen Limited
Chartered Accountants and Statutory Auditor
Highdown House
11 Highdown Road
Leamington Spa
Warwickshire
CV31 1XT

29 August 2024

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

INCOME STATEMENT
for the year ended 31 August 2023

2023 2022
Notes £    £   

TURNOVER 3 9,302,820 8,722,464

Cost of sales 3,331,333 3,057,829
GROSS PROFIT 5,971,487 5,664,635

Administrative expenses 5,336,657 5,154,305
OPERATING PROFIT 5 634,830 510,330

Interest receivable and similar income - 97
634,830 510,427

Interest payable and similar expenses 6 76,014 22,108
PROFIT BEFORE TAXATION 558,816 488,319

Tax on profit 7 110,457 104,930
PROFIT FOR THE FINANCIAL YEAR 448,359 383,389

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

OTHER COMPREHENSIVE INCOME
for the year ended 31 August 2023

2023 2022
Notes £    £   

PROFIT FOR THE YEAR 448,359 383,389


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

448,359

383,389

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

BALANCE SHEET
31 August 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 8 292,669 -
Tangible assets 9 145,823 152,153
Investments 10 126,790 126,790
565,282 278,943

CURRENT ASSETS
Stocks 11 65,184 59,307
Debtors 12 4,631,604 4,703,771
Cash at bank and in hand 1,339,950 1,759,976
6,036,738 6,523,054
CREDITORS
Amounts falling due within one year 13 2,649,765 3,252,125
NET CURRENT ASSETS 3,386,973 3,270,929
TOTAL ASSETS LESS CURRENT
LIABILITIES

3,952,255

3,549,872

CREDITORS
Amounts falling due after more than one year 14 (2,139,840 ) (2,259,621 )

PROVISIONS FOR LIABILITIES 16 (73,805 ) -
NET ASSETS 1,738,610 1,290,251

CAPITAL AND RESERVES
Called up share capital 17 2 2
Retained earnings 18 1,738,608 1,290,249
SHAREHOLDERS' FUNDS 1,738,610 1,290,251

The financial statements were approved by the Board of Directors and authorised for issue on 29 August 2024 and were signed on its behalf by:





S C Asker - Director


FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

STATEMENT OF CHANGES IN EQUITY
for the year ended 31 August 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 September 2021 2 906,860 906,862

Changes in equity
Total comprehensive income - 383,389 383,389
Balance at 31 August 2022 2 1,290,249 1,290,251

Changes in equity
Total comprehensive income - 448,359 448,359
Balance at 31 August 2023 2 1,738,608 1,738,610

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

CASH FLOW STATEMENT
for the year ended 31 August 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 108,282 1,122,863
Interest paid (76,014 ) (22,108 )
Tax paid (100,862 ) -
Taxation refund - 14,957
Net cash from operating activities (68,594 ) 1,115,712

Cash flows from investing activities
Purchase of intangible fixed assets (252,000 ) -
Purchase of tangible fixed assets (99,432 ) (65,353 )
Interest received - 97
Net cash from investing activities (351,432 ) (65,256 )

(Decrease)/increase in cash and cash equivalents (420,026 ) 1,050,456
Cash and cash equivalents at beginning of
year

2

1,759,976

709,520

Cash and cash equivalents at end of year 2 1,339,950 1,759,976

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE CASH FLOW STATEMENT
for the year ended 31 August 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Profit before taxation 558,816 488,319
Depreciation charges 65,093 63,288
Finance costs 76,014 22,108
Finance income - (97 )
699,923 573,618
(Increase)/decrease in stocks (5,877 ) 47,638
Decrease/(increase) in trade and other debtors 113,803 (1,114,806 )
(Decrease)/increase in trade and other creditors (699,567 ) 1,616,413
Cash generated from operations 108,282 1,122,863

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 31 August 2023
31.8.23 1.9.22
£    £   
Cash and cash equivalents 1,339,950 1,759,976
Year ended 31 August 2022
31.8.22 1.9.21
£    £   
Cash and cash equivalents 1,759,976 709,520


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.9.22 Cash flow At 31.8.23
£    £    £   
Net cash
Cash at bank and in hand 1,759,976 (420,026 ) 1,339,950
1,759,976 (420,026 ) 1,339,950
Total 1,759,976 (420,026 ) 1,339,950

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 August 2023

1. STATUTORY INFORMATION

Franklin Covey Europe Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The accounts have been prepared in accordance with applicable accounting standards. The principal accounting policies adopted in the preparation of the financial statements are set out below and remain consistent with the prior year.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23.

This information is included in the consolidated financial statements of Franklin Covey Co Inc. as at 31 August 2023 and these financial statement may be obtained from 2200 West Parkway Boulevard, Salt Lake City, Utah 84119, USA.

Preparation of consolidated financial statements
The financial statements contain information about Franklin Covey Europe Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Franklin Covey Co Inc, 2200 West Parkway Boulevard, Salt Lake City, Utah 84119, USA.

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.

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

2. ACCOUNTING POLICIES - continued

Critical accounting judgements and key sources of estimation uncertainty
The company makes estimates and assumptions concerning the future. The resulting accounting 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.

Accounting estimates:
i) Inventory provisioning
The company holds training and course materials which can become out of date or else superseded. When calculating the inventory provision, management consider both the historic movement of individual lines and their expected usage in future accounting periods when determining the associated provisioning required. See note 11 for the net carrying amount of inventory and associated impact of the changes in the impairment provision in the year.

ii) Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. See note 12 for the net carrying amount of the debtors and associated impairment provision.

Turnover
Turnover from the sale of goods and services is recognised when significant risks and rewards of ownership of the goods or benefits of the service have transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. This is usually on despatch of the goods, or delivery of the service.

Where subscription and similar income is invoiced in advance, income is initially deferred and released to the income statement over the period to which the underlying agreement relates.

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.

Computer software will be amortised evenly over an estimated useful life of 5 years, once it has come fully into use.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Leasehold improvements - over the lease term
Fixtures and fittings - Straight line over 5 years
Computer equipment - Straight line over 3 years

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended.

Investments in subsidiaries
Investments in subsidiary undertakings are recognised at cost, less impairment.

Stocks
Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase and other costs incurred in bringing stock to its present location and condition.

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

2. ACCOUNTING POLICIES - continued

Financial instruments
Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, financial instruments are measured at amortised cost using the effective interest rate method, less impairment.

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments
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 company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Share based payments
Incentives in the form of shares are provided to certain employees of Franklin Covey Europe Limited under share option and share award schemes that are established by the ultimate parent company Franklin Covey Co Inc. As the scheme is administered by a fellow group company with stock issues being made from the parent company the costs of the awards and the issues of any shares are accounted for in the financial statements of Franklin Covey Co Inc.

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2023 2022
£    £   
United Kingdom 7,111,418 7,378,341
Europe 1,919,066 701,625
Rest of the World 272,336 642,498
9,302,820 8,722,464

4. EMPLOYEES AND DIRECTORS
2023 2022
£    £   
Wages and salaries 4,433,181 4,157,355
Social security costs 472,352 551,059
Other pension costs 135,509 119,093
5,041,042 4,827,507

The average number of employees during the year was as follows:
2023 2022

Sales 22 22
Consultants 7 5
Administration 20 19
49 46

2023 2022
£    £   
Directors' remuneration 152,616 161,986
Directors' pension contributions to money purchase schemes 5,772 5,477

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 1 1

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Other operating leases 152,131 101,903
Depreciation - owned assets 65,093 63,288
Auditors' remuneration 12,000 12,000
Taxation compliance services 2,200 2,200
Operating leases - other 18,557 23,508
Operating leases - land and buildings 65,275 65,275
Foreign exchange differences 42,173 (73,892 )

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Other interest 76,014 22,108

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 28,212 22,574

Deferred tax 82,245 82,356
Tax on profit 110,457 104,930

UK corporation tax has been charged at 25% .

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

7. TAXATION - continued

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 558,816 488,319
Profit multiplied by the standard rate of corporation tax in the UK of 25%
(2022 - 19%)

139,704

92,781

Effects of:
Expenses not deductible for tax purposes (17,844 ) 17,542
Capital allowances in excess of depreciation (6,833 ) -
Depreciation in excess of capital allowances - 2,952
Other tax adjustments (4,570 ) (8,345 )
Total tax charge 110,457 104,930

From April 2023 the UK corporation tax rate increased from 19% to 25% and is set to remain at 25% for the foreseeable future.

8. INTANGIBLE FIXED ASSETS
Computer
software
£   
COST
Additions 252,000
Reclassification/transfer 40,669
At 31 August 2023 292,669
NET BOOK VALUE
At 31 August 2023 292,669

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

9. TANGIBLE FIXED ASSETS
Fixtures
Leasehold and Computer
improvements fittings equipment Totals
£    £    £    £   
COST
At 1 September 2022 120,010 45,727 411,063 576,800
Additions 2,980 4,732 91,720 99,432
Disposals - (2,800 ) (91,558 ) (94,358 )
Reclassification/transfer - - (40,669 ) (40,669 )
At 31 August 2023 122,990 47,659 370,556 541,205
DEPRECIATION
At 1 September 2022 63,832 37,060 323,755 424,647
Charge for year 14,028 3,418 47,647 65,093
Eliminated on disposal - (2,800 ) (91,558 ) (94,358 )
At 31 August 2023 77,860 37,678 279,844 395,382
NET BOOK VALUE
At 31 August 2023 45,130 9,981 90,712 145,823
At 31 August 2022 56,178 8,667 87,308 152,153

10. FIXED ASSET INVESTMENTS
Shares in
group
undertaking
£   
COST
At 1 September 2022
and 31 August 2023 126,790
NET BOOK VALUE
At 31 August 2023 126,790
At 31 August 2022 126,790

Franklin Covey Europe Limited own 100% of the share capital of Franklin Covey Germany GmbH and Franklin Covey Leadership Limited, registered in Ireland. Franklin Covey Germany GmbH owns 100% of the share capital of Franklin Covey Switzerland GmbH and Franklin Covey Austria GmbH.

11. STOCKS
2023 2022
£    £   
Stocks 65,184 59,307

A reversal of an impairment loss of £40,998 (2022: impairment loss of £23,008) was recognised in cost of sales against stock during the year.

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

12. DEBTORS
2023 2022
£    £   
Amounts falling due within one year:
Trade debtors 1,779,358 2,122,819
Amounts owed by group undertakings 2,473,397 -
Tax 50,076 -
Deferred tax asset - 8,440
Prepayments 328,773 386,111
4,631,604 2,517,370

Amounts falling due after more than one year:
Amounts owed by group undertakings - 2,186,401

Aggregate amounts 4,631,604 4,703,771

Deferred tax asset
2022
£   
Accelerated capital allowances (18,680 )
Tax losses 9,741
Other timing differences 17,379
8,440

An impairment loss of £120 (2022: £62,254) was recognised against trade debtors during the year.

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade creditors 146,038 161,967
Tax - 22,574
Social security and other taxes 100,892 121,001
VAT 250,758 296,558
Accruals and deferred income 2,152,077 2,650,025
2,649,765 3,252,125

14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
£    £   
Amounts owed to group undertakings 2,139,840 2,259,621

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

15. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£    £   
Within one year 76,951 82,906
Between one and five years 174,510 206,704
251,461 289,610

16. PROVISIONS FOR LIABILITIES
2023
£   
Deferred tax
Accelerated capital allowances 90,629
Other timing differences (16,824 )
73,805

Deferred
tax
£   
Balance at 1 September 2022 (8,440 )
Charge to Income Statement during year 82,245
Balance at 31 August 2023 73,805

17. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
2 Ordinary £1 2 2

All ordinary shares rank pari passu with respect to voting rights, the rights to distribution of dividends and the repayment of capital.

FRANKLIN COVEY EUROPE LIMITED (REGISTERED NUMBER: 03282374)

NOTES TO THE FINANCIAL STATEMENTS - continued
for the year ended 31 August 2023

18. RESERVES
Retained
earnings
£   

At 1 September 2022 1,290,249
Profit for the year 448,359
At 31 August 2023 1,738,608

Retained earnings

This reserve represents all current and prior period retained profits and losses.

19. PENSION COMMITMENTS

The company operates a defined contribution pension scheme. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the company and amounted to £135,509 (2022 - £119,093). Included within creditors is a balance due to pension providers of £nil (2022 - £21,858).

20. ULTIMATE PARENT COMPANY

Franklin Covey Co Inc (incorporated in USA ) is regarded by the directors as being the company's ultimate parent company.

21. CONTINGENT LIABILITIES

The company has given a guarantee to HM Revenue and Customs for an amount up to £8,000 (2022 - £8,000).

22. RELATED PARTY DISCLOSURES

Key management are considered to be the directors, whose remuneration is disclosed in the preceding notes to these financial statements.

23. SHARE-BASED PAYMENT TRANSACTIONS

The ultimate parent company Franklin Covey Co Inc, administers the Franklin Covey Equity Compensation Plan as part of its long-term incentive compensation programme. Under the plan, the ultimate parent company has issued restricted stock units to certain employees of the company.

Full details of the Franklin Covey Equity Compensation Plan are available in the published accounts of the ultimate parent company.

24. CONTROLLING INTERESTS

Franklin Covey Europe Limited is a wholly owned Subsidiary of Franklin Covey Co Inc, a company incorporated in the USA. The group financial statements are available to the public from the registered office at:

2200 West Parkway Boulevard
Salt Lake City
Utah 84119
USA