Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
COMPANY INFORMATION
Directors
Mr J I Parker
Mr S Harrison
Company number
09476649
Registered office
Unit 6, Temple Point
Bullerthorpe Lane
Leeds
West Yorkshire
LS15 9JL
Auditors
Buckle Barton Ltd
Sanderson House
Station Road
Horsforth
Leeds
West Yorkshire
LS18 5NT
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Notes to the financial statements
13 - 22
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
The company trades via a direct-to-consumer website and via a wholesale model into high quality retail partners and international online platforms.
Review of Business
We aim to present a balanced and clear review of the year, the development and performance of the business, and its position at the year end. Our review is consistent with the size and nature of the business and the performance was in line with management expectations.
Turnover
Turnover for the year ended 31 December 2023 was £17,556,035 which was £6,797,867 lower than the prior year.
Gross Profit
Gross profit of £7,544,680 was £1,454,004 lower than the prior year. Gross profit margin of 43% was 6 percentage points higher due to cost price management and less aggressive mark-downs.
Operating Profit
Operating profit of £893,606 was £444,289 higher than the prior year due to improved cost control and efficiency.
Dividends
During the year dividends paid to the parent company were nil compared to £1,000,000 in the prior year.
Financial Position
The balance sheet remained strong with net assets of £4,573,985 at 31 December 2023.
Cash at bank and in hand decreased by £1,012,464 to £4,207,646 at 31 December 2023. This reflects movement of cash within the group.
Stocks increased from £2,801,781 to £3,308,227 due to the timing of new product arrivals.
Trade debtors reduced from £2,067,191 to £283,138 due to the timing of sales made to large wholesale partners, debtor days decreased from 31 days to 6 days.
The company's strategy was underpinned by focusing on several key financial performance measures. We consider our key financial performance indicators are those that communicate the overall financial performance and strength of the company being turnover, gross margin and earnings before interest, depreciation and amortisation (EBITDA) as a proxy for statutory operating profit. Secondary measures relate to cash generated and overall working capital.
Principle Risks and Uncertainties
As with all businesses reliant on global trade flows for supplies and sales opportunities we are acutely aware of the challenges presented by current economic and geopolitical uncertainty. We continue to show flexibility and respond to the market conditions and opportunities as they arise.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Financial Risk Management and Policies
The main financial risks of the company relate to direct-to-consumer platform resilience, stock management and foreign currency management.
Direct-to-consumer platform resilience
The business utilises best in class technology to support scalable and resilient growth. We continue to evaluate industry leading solutions to ensure we work with best possible partners.
Stock management
The business is based on selling great product and to do so we cultivate long-term relationships with our suppliers and invest in our buying and product development expertise.
Foreign currency management
To manage our exposure to purchasing supplies in US dollars we operate a hedging mechanism, as appropriate, during periods within the year.
Future Developments
The company aims to drive profitable growth via product development, stronger relationships with retail partners and expansion into new territories.
Mr J I Parker
Director
12 September 2024
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of distribution and sale of own branded athleisure wear and associated accessories.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J I Parker
Mr P Cowgill
(Resigned 22 March 2023)
Mr N Greenhalgh
(Resigned 30 January 2024)
Mr S Harrison
Mr D Platt
(Appointed 30 January 2024 and resigned 28 June 2024)
Auditor
In accordance with the company's articles, a resolution proposing that Buckle Barton Ltd be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr J I Parker
Director
12 September 2024
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THE GYM KING LIMITED
- 5 -
Opinion
We have audited the financial statements of The Gym King Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including 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 December 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE GYM KING LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE GYM KING LIMITED
- 7 -
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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. - We obtained an understanding of laws and regulations that affect the company, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and regulations that we identified included the UK Companies Act, tax legislation and occupational health and employment legislation. - We enquired of the directors for evidence of non compliance with relevant laws and regulations. We also reviewed controls the directors have in place to ensure compliance. - We gained an understanding of the controls that the directors have in place to prevent and detect fraud. We enquired of the directors about any instances of fraud that had taken place during the accounting period. - The risk of fraud and non-compliance with laws and regulations and fraud was discussed within the audit team and tests were planned and performed to address these risks. - We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above. - We enquired of the directors about actual and potential litigation and claims. - We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud. |
|
- In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias. Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non compliance with laws and regulations and cannot be expected to detect all fraud and non compliance with laws and regulations. |
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THE GYM KING LIMITED
- 8 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Ian Meek ACA FCCA (Senior Statutory Auditor)
For and on behalf of Buckle Barton Ltd
12 September 2024
Chartered Accountants
Statutory Auditor
Sanderson House
Station Road
Horsforth
Leeds
West Yorkshire
LS18 5NT
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
17,556,035
24,353,902
Cost of sales
(10,011,355)
(15,355,218)
Gross profit
7,544,680
8,998,684
Administrative expenses
(6,651,074)
(8,549,367)
Operating profit
4
893,606
449,317
Interest payable and similar expenses
8
(11,602)
Profit before taxation
882,004
449,317
Tax on profit
10
(232,119)
(50,416)
Profit for the financial year
649,885
398,901
The income statement has been prepared on the basis that all operations are continuing operations.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
649,885
398,901
Other comprehensive income
-
-
Total comprehensive income for the year
649,885
398,901
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
206,610
290,511
Current assets
Stocks
12
3,308,227
2,801,781
Debtors
13
1,023,599
2,577,826
Cash at bank and in hand
4,207,646
5,220,110
8,539,472
10,599,717
Creditors: amounts falling due within one year
14
(4,172,097)
(6,966,128)
Net current assets
4,367,375
3,633,589
Net assets
4,573,985
3,924,100
Capital and reserves
Called up share capital
17
2
2
Profit and loss reserves
4,573,983
3,924,098
Total equity
4,573,985
3,924,100
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 12 September 2024 and are signed on its behalf by:
Mr J I Parker
Director
Company registration number 09476649 (England and Wales)
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
2
4,525,197
4,525,199
Year ended 31 December 2022:
Profit and total comprehensive income
-
398,901
398,901
Dividends
9
-
(1,000,000)
(1,000,000)
Balance at 31 December 2022
2
3,924,098
3,924,100
Year ended 31 December 2023:
Profit and total comprehensive income
-
649,885
649,885
Balance at 31 December 2023
2
4,573,983
4,573,985
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
The Gym King 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.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of The Gym King (Holdings) Limited. These consolidated financial statements are available from its registered office, Unit 6, Temple Point, Bullerthorpe Lane, Colton, Leeds, West Yorkshire, LS15 9JL being that of the company.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Long leasehold
25% on cost
Plant and machinery
33% on cost
Fixtures and fittings
20% on cost
Computer equipment
33% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Foreign exchange
Transactions in currencies other than sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,258,419
22,448,597
Rest of World
1,297,616
1,905,305
17,556,035
24,353,902
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Exchange losses
25,249
68,107
Depreciation of owned tangible fixed assets
146,000
131,513
Loss on disposal of tangible fixed assets
321
5,340
Operating lease charges
388,041
333,063
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
13,875
10,875
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
31
42
Warehouse and distribution
17
16
Total
48
58
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,795,164
2,096,305
Social security costs
167,146
218,132
Pension costs
78,850
78,890
2,041,160
2,393,327
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
199,500
164,167
Company pension contributions to defined contribution schemes
12,800
7,500
212,300
171,667
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The highest paid director received remuneration of £160,000 (2022: £160,000).
8
Interest payable and similar expenses
2023
2022
£
£
Other interest
11,602
9
Dividends
2023
2022
£
£
Interim paid
1,000,000
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current year
232,119
50,416
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
882,004
449,317
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
207,271
85,370
Tax effect of expenses that are not deductible in determining taxable profit
5,636
1,652
Permanent capital allowances in excess of depreciation
(36,550)
Under/(over) provided in prior years
203
(1,071)
Depreciation in excess of capital allowances
18,934
Profit/(Loss) on asset disposal
75
1,015
Taxation charge for the year
232,119
50,416
11
Tangible fixed assets
Long leasehold
Plant and machinery
Fixtures and fittings
Computer equipment
Total
£
£
£
£
£
Cost
At 1 January 2023
136,550
21,839
153,038
390,820
702,247
Additions
9,362
21,823
32,025
63,210
Disposals
(2,650)
(18,683)
(2,899)
(24,232)
At 31 December 2023
145,912
19,189
156,178
419,946
741,225
Depreciation and impairment
At 1 January 2023
78,584
20,513
124,256
188,383
411,736
Depreciation charged in the year
23,516
995
18,807
102,682
146,000
Eliminated in respect of disposals
(2,650)
(18,683)
(1,788)
(23,121)
At 31 December 2023
102,100
18,858
124,380
289,277
534,615
Carrying amount
At 31 December 2023
43,812
331
31,798
130,669
206,610
At 31 December 2022
57,966
1,326
28,782
202,437
290,511
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,308,227
2,801,781
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
283,138
2,067,191
Other debtors
501,410
177,879
Prepayments and accrued income
239,051
332,756
1,023,599
2,577,826
14
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
839,474
883,597
Corporation tax
243,722
51,458
Other taxation and social security
994,732
1,198,846
Other creditors and accruals
2,094,169
4,832,227
4,172,097
6,966,128
15
Secured Debts
During the period The Gym King Limited provided a Fixed and Floating Charge in favour of The Gym King (Holdings) Limited. At 31 December 2023 the balance due from The Gym King (Holdings) Limited was £418,756 (2022 - payable to The Gym King (Holdings) Limited £3,277,063).
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
78,850
78,890
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 0.2p each
1,000
1,000
2
2
The company has one class of ordinary shares which carry no right to fixed income or restrictions on the distribution of dividends.
Registered Number: 09476649 (England and Wales)
THE GYM KING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
264,882
116,998
Between two and five years
258,602
367,515
523,484
484,513
19
Events after the reporting date
On 28 June 2024, GKH Ventures Limited (a company registered in England and Wales, Company Number 15801292) acquired 40% (forty percent) of the issued share capital in The Gym King (Holdings) Limited. GKH Ventures Limited is controlled by Mr J I Parker. By virtue of his existing shareholding, along with the shares held by GKH Ventures Limited, Mr J I Parker now has 100% (one hundred percent) of the rights attached to the issued share capital of the company.
20
Directors' transactions
The Gym King (Holdings) Limited, being the parent of The Gym King Limited, is the smallest and largest company for which consolidated accounts including The Gym King Limited are prepared.
The registered office address for The Gym King (Holdings) Limited is Unit 6, Temple Point, Bullerthorpe Lane, Colton, Leeds, LS15 9JL.
Mr J I Parker has been the ultimate controlling party of The Gym King (Holdings) Limited since the entity was incorporated on 24 April 2017.
Mr J I Parker has been the ultimate controlling party of The Gym King Limited since 1 May 2017.
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