Company registration number 03045215 (England and Wales)
XLR8 SPORTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
XLR8 SPORTS LIMITED
COMPANY INFORMATION
Directors
R Schultz
D Platt
(Appointed 16 October 2023)
L Bagnall
(Appointed 7 February 2024)
Secretary
T Casey
Oakwood Corporate Secretary Limited
Company number
03045215
Registered office
Hollinsbrook Way
Pilsworth
Bury
Lancashire
BL9 8RR
Auditor
JS. Audit Limited
James House
Stonecross Business Park
Yew Tree Way
Warrington
Cheshire
WA3 3JD
Business address
Unit 1
Osprey Place
Titan Way
Leyland
Lancashire
PR26 7EW
XLR8 SPORTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
XLR8 SPORTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -

The directors present the strategic report for the year ended 31 January 2024.

Review of the business

We have again generated some good profit this year in a particularly challenging market.

 

After being acquired by the JD Sports Fashion plc group we plan to expand our number of stores by opening concessions within Go Outdoors in the coming years.

 

A number of high profile retailers and distributors have ceased trading this year.  We are trading within a very volatile market with huge pressures on margin, caused by many of our suppliers being overstocked.  This has forced them to enter a sale putting pressures on margins.  We foresee that these pressures will continue for the next 9 to 12 months but we are seeing improved margins through great strategic purchases allowing us to offer amazing prices with increased finance options to our customers.

 

The company's net assets have increased from £10.2m to £10.6m.

Principal risks and uncertainties

The directors have assessed the main risks facing the company as being competition within the market and the increase in internet price matching. However, the directors consider that the quality of service and continued investment will enable the business to maintain a strong position.

Development and performance

The directors monitor performance through the production of detailed monthly management accounts and comparison of actual performance against monthly budgeted forecasts.

Key performance indicators

 

 

 

 

 

2024

 

2023

 

 

 

 

Turnover

£24,598,342

 

£22,788,487

Gross margin

30.0%

 

32.4%

Net assets

£10,627,609

 

£10,198,654

Earnings before interest, tax, depreciation and amortisation

 

£579,411

 

 

£1,130,164

 

 

 

 

The directors are satisfied with the performance of the business during the year. Turnover increased in the year due to an improved retail presence. However, EBITDA for the year has been impacted by the increased pressure on gross margins.

 

Position at the end of the period

At the year end the company has shareholders' funds of £10,627,609 (2023: £10,198,654) of which distributable reserves are £10,627,409 (2023: £10,198,454).

 

Financial risk management

The company makes very little use of financial instruments other than an operational bank account. We consider that our exposure to price risk, credit risk, liquidity risk and cash flow risk is not material for the assessment of the financial position or results of the company.

XLR8 SPORTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
Statement by the directors in performance of their statutory duties in accordance with S172(1) Companies Act 2006

The board of directors of XLR8 Sports Limited considers, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a)-(f) of the Act) in the decisions taken during the period ended 31 January 2024.

 

- Our strategy is designed to have a long-term beneficial impact on the company and to contribute to its success.

- Our team members are fundamental to the delivery of our plan. The health, safety and well-being of our team members is one of our primary considerations in the way we do business.

- Engagement with suppliers and customers is key to our success.

- Our strategy takes into account the impact of the company's operations on the community and environment and our wider social responsibilities.

- As the board of directors, our intention is to behave responsibly and ensure that the management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours.

- As the board of directors, our intention is to behave responsibly towards our shareholders and treat them fairly and equally, so they too may benefit from the successful delivery of our strategy.

On behalf of the board

D Platt
Director
5 September 2024
XLR8 SPORTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 January 2024.

Principal activities

The principal activity of the company continued to be that of sports and leisure retailing.

Results and dividends

The results for the year are set out on page 8.

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:

N J Greenhalgh
(Resigned 3 October 2023)
R Schultz
D Platt
(Appointed 16 October 2023)
L Bagnall
(Appointed 7 February 2024)
Auditor

The auditor, JS. Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

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:

 

 

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.

Information provided in the strategic report

The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

XLR8 SPORTS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 4 -
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.

On behalf of the board
D Platt
Director
5 September 2024
XLR8 SPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF XLR8 SPORTS LIMITED
- 5 -
Opinion

We have audited the financial statements of XLR8 Sports Limited (the 'company') for the year ended 31 January 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows 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:

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 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.

Other information

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:

XLR8 SPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF XLR8 SPORTS LIMITED (CONTINUED)
- 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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, included within the directors' report, 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.

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.

Based on our understanding of the company and sector, we identified that the principal risks of non-compliance with laws and regulations related to, but were not limited to, the Companies Act 2006, UK tax, employment, pension and health and safety legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.

 

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgements and the risk of fraud in revenue recognition.

XLR8 SPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF XLR8 SPORTS LIMITED (CONTINUED)
- 7 -

Our procedures to respond to risks identified included the following:

 

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

 

A further description of our responsibilities 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.

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 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.

Christopher Moss BSc F.C.A.
Senior Statutory Auditor
For and on behalf of JS. Audit Limited
13 September 2024
Chartered Accountants
Statutory Auditor
James House
Stonecross Business Park
Yew Tree Way
Warrington
Cheshire
WA3 3JD
XLR8 SPORTS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JANUARY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
24,598,342
22,788,487
Cost of sales
(17,214,775)
(15,399,670)
Gross profit
7,383,567
7,388,817
Distribution costs
(661,768)
(689,990)
Administrative expenses
(6,218,440)
(5,734,449)
Other operating income
4,167
4,167
Operating profit
4
507,526
968,545
Interest receivable and similar income
7
67,647
7,575
Profit before taxation
575,173
976,120
Tax on profit
8
(146,218)
(183,275)
Profit for the financial year
428,955
792,845
Retained earnings brought forward
10,198,454
9,405,609
Retained earnings carried forward
10,627,409
10,198,454

The profit and loss account has been prepared on the basis that all operations are continuing operations.

XLR8 SPORTS LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
9
59,089
66,176
Tangible assets
10
475,251
209,008
534,340
275,184
Current assets
Stocks
11
7,091,105
7,819,021
Debtors
12
682,177
467,045
Cash at bank and in hand
4,682,833
3,374,735
12,456,115
11,660,801
Creditors: amounts falling due within one year
13
(2,313,964)
(1,703,845)
Net current assets
10,142,151
9,956,956
Total assets less current liabilities
10,676,491
10,232,140
Provisions for liabilities
Deferred tax liability
14
48,882
33,486
(48,882)
(33,486)
Net assets
10,627,609
10,198,654
Capital and reserves
Called up share capital
16
200
200
Profit and loss reserves
10,627,409
10,198,454
Total equity
10,627,609
10,198,654
The financial statements were approved by the board of directors and authorised for issue on 5 September 2024 and are signed on its behalf by:
D Platt
Director
Company registration number 03045215 (England and Wales)
XLR8 SPORTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
1,899,387
(420,655)
Income taxes paid
(327,895)
(891,437)
Net cash inflow/(outflow) from operating activities
1,571,492
(1,312,092)
Investing activities
Purchase of tangible fixed assets
(361,741)
(57,066)
Proceeds from disposal of tangible fixed assets
30,700
-
0
Interest received
67,647
7,575
Net cash used in investing activities
(263,394)
(49,491)
Net increase/(decrease) in cash and cash equivalents
1,308,098
(1,361,583)
Cash and cash equivalents at beginning of year
3,374,735
4,736,318
Cash and cash equivalents at end of year
4,682,833
3,374,735
XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
1
Accounting policies
Company information

XLR8 Sports Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hollinsbrook Way, Pilsworth, Bury, Lancashire, BL9 8RR.

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. The principal accounting policies adopted are set out below.

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

The turnover shown in the profit and loss account represents the value of all sports and leisure goods sold during the period, less returns received, along with value of repair and maintenance work performed during the period, at selling price exclusive of Value Added Tax.

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
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

Goodwill is reviewed for impairment at the end of the first full financial year following the acquisition and in other periods, if events or changes in circumstances indicated that the carrying value may not be recoverable.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Software
6.5% per annum on a straight line basis
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 12 -

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
20% per annum on a straight line basis
Fixtures and fittings
25% per annum on a reducing balance basis
Motor vehicles
25% per annum on a reducing balance basis

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.

1.7
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.

1.8
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, those overheads that have been incurred in bringing the stocks to their present location and condition.

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.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

1.10
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 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.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 13 -
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.

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.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
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.

1.11
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.

1.12
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 profit and loss account 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.

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 profit and loss account, 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.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 15 -
1.13
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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
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 leased asset are consumed.

1.16
Foreign exchange

Transactions in currencies other than pounds 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.

 

The critical estimates made by the directors in preparing the financial statements relate to the assessment of the useful economic lives of the company's intangible and tangible fixed assets when determining the appropriate amortisation and depreciation policies as disclosed in Notes 1.4, 1.5 and 1.6 respectively, and the judgement applied in determining the level of any stock provisions required to ensure that stock is valued at the lower of cost and net realisable value at the balance sheet date.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Retail
21,333,890
20,321,553
Insurance
19,158
48,850
Cycle to work
2,824,852
2,327,100
Trade
420,442
90,984
24,598,342
22,788,487
XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
3
Turnover and other revenue
(Continued)
- 16 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
24,598,342
22,788,487
2024
2023
£
£
Other revenue
Interest income
67,647
7,575
Rental income
4,167
4,167
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
2,281
16,485
Depreciation of owned tangible fixed assets
84,867
94,312
Profit on disposal of tangible fixed assets
(20,069)
-
Amortisation of intangible assets
7,087
67,307
Operating lease charges
494,735
443,804
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,325
10,765
For other services
Taxation compliance services
1,590
3,800
All other non-audit services
2,980
3,133
4,570
6,933
XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Administrative staff
10
12
Management
14
14
Shop staff
128
120
Total
152
146

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
3,365,620
2,950,562
Social security costs
273,972
243,953
Pension costs
78,434
89,629
3,718,026
3,284,144

Directors' remuneration

 

During the current and prior period, the Directors received no remuneration from the company in respect of qualifying services. The current Directors are employed by JD Sports Fashion Plc, the parent company, and therefore any remuneration is borne by that company. No remuneration is given in respect of acting as a Director of this entity as it is incidental to their overall responsibilities to the Group.

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
67,647
7,575
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
67,647
7,575
XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 18 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
130,822
207,906
Adjustments in respect of prior periods
-
0
(4,456)
Total current tax
130,822
203,450
Deferred tax
Origination and reversal of timing differences
15,396
(5,778)
Adjustment in respect of prior periods
-
0
(14,397)
Total deferred tax
15,396
(20,175)
Total tax charge
146,218
183,275

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:

2024
2023
£
£
Profit before taxation
575,173
976,120
Expected tax charge based on the standard rate of corporation tax in the UK of 24.03% (2023: 19.00%)
138,214
185,463
Tax effect of expenses that are not deductible in determining taxable profit
8,315
3,349
Adjustments in respect of prior years
-
0
(4,456)
Effect of change in corporation tax rate
-
0
(1,543)
Permanent capital allowances in excess of depreciation
(311)
(1,643)
Depreciation on assets not qualifying for tax allowances
-
0
16,502
Deferred tax adjustments in respect of prior years
-
0
(14,397)
Taxation charge for the year
146,218
183,275

An increase in the UK corporation tax rate from 19% to 25% (which applied from 1 April 2023) was announced in the Chancellor's Budget of 3 March 2021. Deferred tax has been calculated at this rate.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
9
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 February 2023 and 31 January 2024
2,812,316
118,517
2,930,833
Amortisation and impairment
At 1 February 2023
2,812,316
52,341
2,864,657
Amortisation charged for the year
-
0
7,087
7,087
At 31 January 2024
2,812,316
59,428
2,871,744
Carrying amount
At 31 January 2024
-
0
59,089
59,089
At 31 January 2023
-
0
66,176
66,176

The amortisation charge above is included within administrative expenses.

10
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 February 2023
456,780
502,904
159,655
1,119,339
Additions
147,456
148,351
65,934
361,741
Disposals
-
0
-
0
(47,980)
(47,980)
At 31 January 2024
604,236
651,255
177,609
1,433,100
Depreciation and impairment
At 1 February 2023
417,466
396,915
95,950
910,331
Depreciation charged in the year
6,394
49,517
28,956
84,867
Eliminated in respect of disposals
-
0
-
0
(37,349)
(37,349)
At 31 January 2024
423,860
446,432
87,557
957,849
Carrying amount
At 31 January 2024
180,376
204,823
90,052
475,251
At 31 January 2023
39,314
105,989
63,705
209,008
11
Stocks
2024
2023
£
£
Finished goods and goods for resale
7,091,105
7,819,021
XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 20 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
282,437
204,585
Corporation tax recoverable
86,178
-
0
Amounts owed by group undertakings
60,025
73,000
Other debtors
95,189
44,703
Prepayments and accrued income
158,348
144,757
682,177
467,045
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
1,223,809
895,059
Corporation tax
-
0
110,895
Other taxation and social security
422,736
386,107
Other creditors
98,442
21,394
Accruals and deferred income
568,977
290,390
2,313,964
1,703,845
14
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
63,153
34,919
Retirement benefit obligations
(14,271)
(1,433)
48,882
33,486
2024
Movements in the year:
£
Liability at 1 February 2023
33,486
Charge to profit or loss
15,396
Liability at 31 January 2024
48,882
XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
14
Deferred taxation
(Continued)
- 21 -

The deferred tax liability set out above is expected to reverse within four years and relates to accelerated capital allowances that are expected to mature within the same period. The deferred tax asset relates to unpaid pension contributions and is expected to reverse within 12 months.

15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
78,434
89,629

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.

 

Included within other creditors is £57,048 (2023: £14,459) relating to unpaid contributions.

16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
28
28
28
28
B Ordinary shares of £1 each
28
28
28
28
C Ordinary shares of £1 each
28
28
28
28
D Ordinary shares of £1 each
28
28
28
28
E Ordinary shares of £1 each
24
24
24
24
F Ordinary shares of £1 each
24
24
24
24
G Ordinary shares of £1 each
40
40
40
40
200
200
200
200

All shares have attached to them equal voting, dividend and capital distribution (including on winding up) rights: they do not confer any rights of redemption.

17
Equity reserve

Profit and loss reserves

Cumulative profit and loss, net of distributions to owners.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
18
Operating lease commitments
Lessee

Operating lease payments represent rentals payable by the company for certain of its properties in the main. Leases are negotiated for an average term of 5 to 10 years and rentals are fixed for an average of 3 to 5 years.

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:

2024
2023
£
£
Within one year
356,389
336,768
Between two and five years
1,069,728
760,452
In over five years
188,055
126,792
1,614,172
1,224,012
19
Capital commitments

Amounts contracted for but not provided in the financial statements:

2024
2023
£
£
Acquisition of tangible fixed assets
-
42,994
20
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
269,437
243,941
21
Ultimate controlling party

The company's immediate parent company is JD Sports Fashion Plc, a company registered in England and Wales which prepares consolidated financial statements which are publicly available at Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.

 

The ultimate parent undertaking is Pentland Group Holdings Limited (a company registered in Jersey). R S Rubin and his close family are considered the ultimate controlling party by virtue of their control of Pentland Group Holdings Limited. Consolidated financial statements will be prepared by Pentland Group Holdings Limited, which is the parent undertaking of the largest group of undertakings to consolidate these financial statements for the year ended 31 December 2023. The consolidated financial statements of Pentland Group Holdings Limited can be obtained from the company’s registered office at 26 New Street, St Helier, Jersey, JE2 3RA.

XLR8 SPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 23 -
22
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
428,955
792,845
Adjustments for:
Taxation charged
146,218
183,275
Investment income
(67,647)
(7,575)
Gain on disposal of tangible fixed assets
(20,069)
-
Amortisation and impairment of intangible assets
7,087
67,307
Depreciation and impairment of tangible fixed assets
84,867
94,312
Movements in working capital:
Decrease/(increase) in stocks
727,916
(1,430,168)
(Increase)/decrease in debtors
(128,954)
17,353
Increase/(decrease) in creditors
721,014
(138,004)
Cash generated from/(absorbed by) operations
1,899,387
(420,655)
23
Analysis of changes in net funds
1 February 2023
Cash flows
31 January 2024
£
£
£
Cash at bank and in hand
3,374,735
1,308,098
4,682,833
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