Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
COMPANY INFORMATION
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ESCAPE FITNESS LIMITED
CONTENTS
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ESCAPE FITNESS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their Strategic report on the affairs of Escape Fitness Limited and its subsidiaries (the 'Group') for the year ended 31 December 2023.
The principal activity of the Group during this period remains as in previous years, being that of the development and manufacture of innovative commercial fitness products with the emphasis on reducing the carbon footprint of the Escape Fitness product range wherever possible. Recognising that this can only be achieved in steps over a given period of time.
The Group’s financial performance has suffered during the years since the pandemic. However, it should be recognised that the fitness industry, in line with the leisure industry as a whole, has also suffered during the years since Covid and this would, to some extent, have made an impact on the Group’s performance. It should also be noted that prior to the post pandemic years, the Group had returned significant growth and profit margins and therefore recent losses have been out of character. Therefore, the Group has embarked on an in-depth analysis of Business Operations from the time immediately prior to the pandemic. Indications to date have pointed to a level of overspend that may have been unnecessary given normal Return on Investment (ROI) metrics, even though significant cost savings have been made over the past few years. The overspends that have been identified are now being scrutinised in depth, and it is apparent that savings can be made during 2025 without impacting the Group’s ability to deliver on its forecasted revenue. In addition, and as a result of the analysis, it is recognised that embarking on a cost reduction exercise alone across the board will not be enough to support the business’s profitability and growth plans during the next twelve months and beyond. It has been identified that during this recent period of time when Group revenues and profits have reduced, the Group had embarked on a different marketing strategy employing new techniques and technologies that were not used in the past. This will now change, and the Group will revert to its original, well proven marketing strategies. Continued investment to ensure future growth As mentioned in the past, the Group has always invested heavily in product development, and this has always been the lifeblood of the Business. In the years since the pandemic, the level of development has been accelerated with the new Innovation Centre being used to enable faster development and testing of products in order to prepare the Group for growth and new business opportunities as the leisure industry returns to normal. The Group has continued its ongoing development of the new range of Octagon Evolution strength machines, incorporating unique features to enhance the user’s experience. This now includes lower cost, lightweight options under the Octagon Lite banner. Escape’s user training strategy is based on the MARS 2.0 digital touchscreen system, which has been further enhanced with additional features and can now be incorporated into other Escape products such as fitness frames. All at a lower cost to the operator. Finally, an added improvement to the successful Octagon fitness frame range has been the Octagon Configurator, which simplifies the bespoke design process for potential customers.
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ESCAPE FITNESS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Economic uncertainty continues because of the effects of wars in Europe and new government policies in UK and US, which could affect exchange and interest rates adversely. However, opportunities do exist because of the significant improvements and additions to the Escape Fitness product range as described above. The planned product development strategies to support growth are mostly completed and on target, and prospects for the forthcoming year are looking more promising than in the past.
Areas of specific opportunity have been identified to fuel growth, primarily due to the fact that Escape Fitness has been re-inventing itself and its product range. This now means that Escape is no longer just a supplier of accessories – it is a global supplier of a complete range of commercial fitness products. Financial audits by the Group’s lenders have been carried out over the past few weeks confirming the facilities employed are operating as required and will continue to support the working capital requirements of the business into the new year and beyond.
The management of the business and the execution of the Group's strategy remains subject to a number of risks as always, which are discussed further below. However, it is important to note that the strategic plan is evolving based on significant R&D investment ensuring that Escape Fitness continues as the market leader in the commercial fitness accessories industry. European economic conditions still remain uncertain, and sections of this territory remain difficult to penetrate, but markets further afield, including the Americas, are expanding and offsetting risk to the Business.
Raw materials and fuel costs rose during the period, since Covid. Importantly, there were massive increases in sea-freight and transport costs, which severely affected profitability even though short-term transport levies were agreed with customers. All of these are now beginning to level out to pre-Covid levels. This a significant risk factor reduction for the Business. Currency exchange risks have been recently reduced by strategic planning and by the Group’s key trading policies. Competitive pressure in the UK and Europe continues mainly from cheap copies of the Group's product lines and its innovative concepts. This is expected to continue as always because of the apparent lack of investment and the continued demand for lower prices even though inflation is out of control. But now the Group has engaged the services of full time Intellectual Property (IP) professionals to aggressively protect its intellectual property.
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ESCAPE FITNESS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group uses financial instruments such as cash, bank, invoice discount facilities, hire purchase and other loan facilities in order to raise finance for the Group's operations. The existence of these instruments exposes the Group to financial risks which are detailed below:
Price risk Wherever possible, the Group look to pass on any increases in costs, where an increase can be foreseen and consideration is given to bulk buying at favourable prices. Interest rate risk The Group is exposed to interest rate fluctuations on its bank borrowings and other associated lending. The review of these facilities depends on the nature of the asset on which they are secured and management's view of the future direction of interest rates. Credit risk The principal credit risk for the Group arises from its trade debtors. In order to manage credit risk, the directors set limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt aging and collection history. In additional aged debtors are reviewed by the board on a monthly basis. Liquidity risk The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet its foreseeable needs. Foreign exchange risk The Group is exposed to currency exchange rate risk due to a significant proportion of its receivables and operating expenses being denominated in non-Sterling currencies. Currency exchange risks have been recently reduced by strategic planning and by the Group’s key trading policies. The net exposure of each currency is monitored and managed by matching foreign currency receipts with payments for goods and services.
The Group uses Key Performance Indicators, financial and statistical, to provide up-to-date and comprehensive reviews of the Group's overall performance on a daily, weekly and month basis. KPIs are monitored in a number of financial areas and include daily sales analysis, weekly stock analysis, monthly profit margin reporting, and cash flow forecast.
Please refer to note 2.3 in the financial statements, which describes the material uncertainty related to the Group's reliance on a key supplier for operational and financial support and the risks associated with the recovery of product demand and new product implementation. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.
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ESCAPE FITNESS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board and signed on its behalf.
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ESCAPE FITNESS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £76,109 (2022 - loss £267,029).
Details of dividends paid can be found in note 13.
The directors who served during the year were:
Details concerning principal activities, business review, future outlook, principal risks and uncertainties, financial risk management objectives and policies, going concern and financial key performance indicators (KPIs) can be found in the Group Strategic Report.
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ESCAPE FITNESS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Post year end, the Group has sold one of the Freehold properties to the Escape Fitness Limited Retirement Benefit Scheme and are leasing it back. There have been no other significant events affecting the Group since the year end.
Under section 487(2) of the Companies Act 2006, MHA will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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ESCAPE FITNESS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESCAPE FITNESS LIMITED
We have audited the financial statements of Escape Fitness Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated profit and loss account, the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Company balance sheet, the Consolidated statement of changes in equity, the Company statement of changes in equity, the Consolidated statement of cash flows and the 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).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our 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.
We draw attention to Note 2.3 in the financial statements, which describes the material uncertainty related to the Group's reliance on a key supplier for operational and financial support, a net current liability position and the risks associated with the recovery of product demand and new product implementation. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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ESCAPE FITNESS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESCAPE FITNESS LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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ESCAPE FITNESS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESCAPE FITNESS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 Group 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 specific procedures for this engagement and the extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• Enquiry of management and those charged with governance around actual and potential litigation and claims; • Enquiry of entity staff to identify and instances of non-compliance with laws and regulations; • Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness and reviewing accounting estimates for bias; • Reviewing minutes of meetings of those charged with governance; • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's report.
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ESCAPE FITNESS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ESCAPE FITNESS LIMITED (CONTINUED)
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.
for and on behalf of MHA, Statutory Auditors
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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ESCAPE FITNESS LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
REGISTERED NUMBER: 04215703
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
REGISTERED NUMBER: 04215703
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 22 to 48 form part of these financial statements.
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ESCAPE FITNESS LIMITED
REGISTERED NUMBER: 04215703
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
REGISTERED NUMBER: 04215703
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 22 to 48 form part of these financial statements.
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ESCAPE FITNESS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Escape Fitness Limited ("the Company") is a private company limited by shares, and incorporated in England and Wales under the Companies Act.
The registered number and the address of the registered office is given in the Company information. The nature of the Group and Company's operations and its principal activities are set out in the Group Strategic Report on page 1. The functional and presentational currency of the Group and Company is pounds sterling (£) and is rounded to the nearest whole pound.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and loss account in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated profit and loss account from the date on which control is obtained. They are deconsolidated from the date control ceases.
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
These financial statements have been prepared on a going concern basis. In making their assessment, the Directors have considered all relevant information, including the annual budgets, forecasted revenues, future cash flows, the possibilities of unplanned events and the impact of significant product development initiatives that have been recently completed or are near completion.
As the Business operates in multiple territories around the world, has a diverse customer base and given the investment in R&D and ongoing gains in the new territories, such as the Middle East, together with new and innovative UK based manufacturing processes, the Directors are firmly of the opinion that this will provide a broader reach into both corporate and possibly new home fitness environments, thereby increasing revenue and profitability in the near future. Demand for commercial fitness equipment is gradually returning to pre-pandemic levels in the key markets in which the Business operates. This recovery, alongside strong customer feedback regarding the Group's updated and rationalized product range, provides clarity and confidence for future trading prospects across all territories. It is important to note that the current order book remains strong, providing a positive and stable base for 2025. The Directors are aware of a material uncertainty regarding a key supplier in the Far East. The balance with this supplier has accumulated to a level exceeding standard trading terms and repayment is being made over an extended period, with the supplier’s support. This has resulted in a net current liability position. The supplier has indicated their ongoing support by agreeing to extended terms, and the Directors are confident of maintaining a positive relationship with them, which has now been ongoing for well over two decades. However, in the unlikely event that the supplier was to demand repayment in full at short notice, the Group would face challenges in meeting such an obligation. Also, if the demand for commercial fitness equipment does not return to pre-pandemic levels as quickly as forecasted, or if there are delays in the implementation of new product ranges, then this would have a negative impact on the forecasted revenues and future cash flows. In such circumstances, the Directors would need to take steps in order to raise further funds in order to meet cash outflows. Whilst plans are in place, there is still uncertainty over how quickly these plans can be implemented. While these circumstances represent a material uncertainty that could cast significant doubt on the Group’s ability to continue as a Going Concern, the Directors are jointly developing new product ranges with their key supplier in the Far East, as has always been the case in the past, whilst monitoring the situation on a regular basis and exploring contingency options to mitigate any potential impact. Based on these assessments, the Directors have concluded that they can continue to adopt the Going Concern basis in preparing the annual report and accounts.
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Turnover is recognised when the risks and rewards of ownership have passed to the customer.
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Research and development costs are expensed to the profit or loss account as incurred.
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Page 26
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Page 27
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on both a straight line and a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
Page 28
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Balance sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the
Page 29
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Page 30
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Key source of estimation uncertainty - Determining residual values and useful economic lives of tangible fixed assets The Group depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes. Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value, management aim to asses the amount that the Group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices. Key source of estimation uncertainty – Recoverability of debtors Trade and other debtors are recognised to the extent that they are judged recoverable. Management performs reviews to estimate the level of irrecoverable debt, and provisions are made specifically against invoices where recoverability is uncertain. Management makes allowances for doubtful debts based on an assessment of the recoverability of debtors. Allowances are applied to debtors where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyse historical bad debts when making a judgement to evaluate the adequacy of the provision for doubtful debts. Where the expectations are different from the original estimate, such differences will impact the carrying value of debtors and the charge in the profit and loss account. Key source of estimation uncertainty – Stock obsolescence The Group establishes a provision for obsolescent stock. When assessing the stock value, the directors consider factors such as the nature, condition and aging of the stock, as well as past experience of saleability.
Page 31
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The analysis of turnover by geographical market required by paragraph 68 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 has not been provided as, in the opinion of the directors, such disclosure would be seriously prejudicial to the interests of the Group.
The whole of the turnover is attributable to the principal activities of the group, and all of this turnover is derived from the sale of goods.
Page 32
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 33
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 34
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 35
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
12.Taxation (continued)
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (rather than remaining at 19%, as previously enacted). This new law was substantively enacted on 24 May 2021. For the financial year ended 31 December 2023, the current weighted averaged tax rate was 23.5%.
Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
Page 36
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and loss account in these financial statements. The profit after tax of the parent Company for the year was £
Page 37
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 38
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.Tangible fixed assets (continued)
The land and buildings were revalued at 31 December 2022 by a professional valuer on an open market for existing use basis. Land and buildings were revalued to £1,798,000 at this point.
Page 39
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.Tangible fixed assets (continued)
Page 40
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 41
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 42
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 43
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
.Creditors: Amounts falling due within one year (continued)
Page 44
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 45
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 46
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Revaluation reserve
Foreign exchange reserve
Profit and loss account
The Group contributes to a defined contribution scheme for its directors and employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. The charge for the year is £47,772 (2022: £53,312). There were no outstanding or prepaid contributions at the Balance sheet date (2022: £Nil).
Page 47
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ESCAPE FITNESS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
During the year advances totalling £144,786 (2022: £70,043) were made to a director, of which £Nil (2022: £74,738) was repaid. At the year end £
During the year advances totalling £67,378 (2022: £28,357) were made to another director, of which £48,114 (2022: £45,141) was repaid. At the year end £ During the year advances totalling £19,600 (2022: £41,519) were made to another director, of which £nil (2022: £30,198) was repaid. At the year end £ During the year advances totalling £32,918 (2022: £34,424) were made to another director, of which £Nil (2022: £16,732) was repaid. At the year end £ During the year advances totalling £32,797 (2022: £36,112) were made to another director, of which £Nil (2022: £40,189) was repaid. At the year end £
Page 48
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