Company Registration No. 06675240 (England and Wales)
ARENA ONLINE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
ARENA ONLINE LIMITED
COMPANY INFORMATION
Directors
W R Wynne
Mr N Naylor
Mr J Hackett
Secretary
J Szewczyk
Company number
06675240
Registered office
Unit 19
Long Bank
Berry Hill Industrial Estate
Droitwich
WR9 9AN
England
Auditor
HW Fisher Audit
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
ARENA ONLINE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 34
ARENA ONLINE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -
The directors present the strategic report for the year ended 30 April 2024.
Fair review of the business
The principle activity of the business continues to be the marketing and fulfilment of online gifts, primarily comprising of flowers, plants, balloons, alcohol and confectionary. The organisation enjoys longstanding relationships with strategic partners and has continued to invest in operational efficiency.
The financial performance of the Group is summarised below:
2024 2023
(£'000) (£'000)
Revenue 33,933 29,984
Gross profit 12,362 8,462
Gross profit margin 36% 28%
Operating (loss)/profit (895) 166
Operating (loss)/profit margin (-2.64%) 0.55%
Profit/(loss) after tax (979) (37)
Net current assets 1,121 1,640
No of employees 124 105
Despite challenging market conditions, the company has demonstrated resilience and made significant progress in key strategic areas. While revenues continued to be pressured by the macro-economic factors impacting most consumer facing e-commerce businesses and brands we continued to drive growth in our gross profitability through our owned brands. The notable improvements in gross profit margin were necessary to combat increasing operational costs in the period which have impacted our operating margins, resulting in a modest loss for the period. We have implemented comprehensive cost reduction measures and continue to leverage technology to enhance operational efficiency. The Directors are confident that the full impact of these measures will be realised in the coming financial year, returning the business to profitability.
A significant milestone this year has been the successful integration of the Patch business, which continues to make significant progress toward profitability since joining the group. This validates our strategic approach to growth through carefully selected acquisitions and demonstrates our ability to successfully integrate and improve acquired businesses.
Strategic Initiatives and Achievements
Employee Welfare and Social Responsibility
We are proud to have achieved accreditation as a Real Living Wage and Real Living Hours employer, underlining our commitment to providing secure and fair employment. This initiative reflects our investment in our workforce's well-being.
Growth Strategy and Market Position
The company maintains an active approach to growth opportunities through mergers and acquisitions, continuously evaluating potential partnerships that align with our strategic objectives. This disciplined approach to M&A supports our long-term growth strategy while maintaining operational stability.
Future Outlook
The Directors remain optimistic about the company's trajectory, supported by:
- The anticipated positive impact of implemented cost reduction measures
- Continued operational improvements through technological improvement
- The strength of our partnership relationships
- The growth potential of our own brand businesses over the mid term
- Ongoing evaluation of strategic growth opportunities
The Board is confident in the company's strategy and its ability to deliver sustainable growth and improved profitability in the coming financial years.
ARENA ONLINE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
Principal risks and uncertainties
The company continues to monitor and manage key risks including:
- Market volatility and economic conditions
- Cost inflation pressures
- Integration risks associated with acquisitions
- Technology and operational efficiency challenges
The Board actively reviews these risks and maintains appropriate mitigation strategies to ensure the company's continued stability and growth.
Key performance indicators
The board produce and measure financial performance against management accounts. In the opinion of the Board of Directors the Key Performance Indicators of the Group include, but are not limited to, revenue and gross profit margin (as disclosed within the fair review of the business above), which are both closely monitored by the board.
Mr J Hackett
Director
3 April 2025
ARENA ONLINE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company and group continued to be the marketing and fulfilment of online gifts, primarily comprising of flowers, plants, balloons, alcohol and confectionary.
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 further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
W R Wynne
Mr F Blackett
(Resigned 29 April 2024)
Mr N Naylor
Mr J Hackett
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 auditor of the company 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 auditor of the company is aware of that information. The directors seek to promote strong mutually beneficial relationships with suppliers, customers and authorities. Such general principles are critical in the delivery of the company's strategy.
On behalf of the board
Mr J Hackett
Director
3 April 2025
ARENA ONLINE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2024
- 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 group and company, and of the profit or loss of the group 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 on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ARENA ONLINE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ARENA ONLINE LIMITED
- 5 -
Opinion
We have audited the financial statements of Arena Online Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company 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 FRS 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 group's and the parent company's affairs as at 30 April 2024 and of the group's loss 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 group's and parent 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.
ARENA ONLINE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ARENA ONLINE LIMITED
- 6 -
Matters on which we are required to report by exception
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 strategic report and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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 parent 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.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates.
Performing a physical verification of key assets and stock items.
Testing revenue, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank balances.
Documenting and verifying all significant related party balances and transactions.
Reviewing the company board minutes for discussions of irregularities including fraud.
Testing all material consolidation adjustments.
ARENA ONLINE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ARENA ONLINE LIMITED
- 7 -
Owing 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. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
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.
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.
Simon Mott-Cowan (Senior Statutory Auditor)
For and on behalf of HW Fisher Audit
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
3 April 2025
ARENA ONLINE LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
33,933,013
29,983,986
Cost of sales
(21,570,530)
(21,522,421)
Gross profit
12,362,483
8,461,565
Distribution costs
(1,050,789)
(293,163)
Administrative expenses
(12,297,997)
(8,249,209)
Other operating income
91,139
246,698
Operating (loss)/profit
4
(895,164)
165,891
Interest receivable and similar income
8
1,438
36
Interest payable and similar expenses
9
(88,471)
(65,752)
(Loss)/profit before taxation
(982,197)
100,175
Tax on (loss)/profit
10
2,487
(137,655)
Loss for the financial year
(979,710)
(37,480)
Loss for the financial year is all attributable to the owners of the parent company.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ARENA ONLINE LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 9 -
2024
2023
£
£
Loss for the year
(979,710)
(37,480)
Other comprehensive income
Currency translation differences
(2,194)
Total comprehensive income for the year
(981,904)
(37,480)
Total comprehensive income for the year is all attributable to the owners of the parent company.
ARENA ONLINE LIMITED
GROUP BALANCE SHEET
AS AT 30 APRIL 2024
30 April 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
5,640,602
6,288,327
Other intangible assets
11
316,715
397,754
Total intangible assets
5,957,317
6,686,081
Tangible assets
12
1,328,713
1,570,661
7,286,030
8,256,742
Current assets
Stocks
15
1,729,736
2,359,984
Debtors
16
2,427,444
4,483,389
Cash at bank and in hand
2,553,160
779,575
6,710,340
7,622,948
Creditors: amounts falling due within one year
17
(5,589,551)
(5,982,906)
Net current assets
1,120,789
1,640,042
Total assets less current liabilities
8,406,819
9,896,784
Creditors: amounts falling due after more than one year
18
(228,928)
(696,122)
Provisions for liabilities
Deferred tax liability
21
85,361
126,228
(85,361)
(126,228)
Net assets
8,092,530
9,074,434
Capital and reserves
Called up share capital
24
132
132
Share premium account
5,063,558
5,063,558
Capital redemption reserve
27
27
Other reserves
99,999
99,999
Profit and loss reserves
2,928,814
3,910,718
Total equity
8,092,530
9,074,434
The financial statements were approved by the board of directors and authorised for issue on 3 April 2025 and are signed on its behalf by:
03 April 2025
Mr J Hackett
Director
ARENA ONLINE LIMITED
COMPANY BALANCE SHEET
AS AT 30 APRIL 2024
30 April 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
11
314,926
395,476
Tangible assets
12
1,313,798
1,562,118
Investments
13
5,676,000
5,676,000
7,304,724
7,633,594
Current assets
Stocks
15
1,252,781
1,462,045
Debtors
16
3,187,342
4,250,616
Cash at bank and in hand
2,186,756
335,094
6,626,879
6,047,755
Creditors: amounts falling due within one year
17
(4,226,471)
(3,911,047)
Net current assets
2,400,408
2,136,708
Total assets less current liabilities
9,705,132
9,770,302
Creditors: amounts falling due after more than one year
18
(49,441)
(209,909)
Provisions for liabilities
Deferred tax liability
21
85,361
126,228
(85,361)
(126,228)
Net assets
9,570,330
9,434,165
Capital and reserves
Called up share capital
24
132
132
Share premium account
5,063,558
5,063,558
Capital redemption reserve
27
27
Other reserves
99,999
99,999
Profit and loss reserves
4,406,614
4,270,449
Total equity
9,570,330
9,434,165
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £136,165 (2023 - £322,251 profit).
The financial statements were approved by the board of directors and authorised for issue on 3 April 2025 and are signed on its behalf by:
03 April 2025
Mr J Hackett
Director
Company Registration No. 06675240
ARENA ONLINE LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
Share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 May 2022
98
392,345
27
-
3,811,074
4,203,544
Year ended 30 April 2023:
Loss and total comprehensive income for the year
-
-
-
-
(37,480)
(37,480)
Issue of share capital
24
34
171,233
-
-
-
171,267
Credit to equity for equity settled share-based payments
23
-
-
-
-
137,124
137,124
Transfers
-
-
-
99,999
-
99,999
Other movements
-
4,499,980
-
-
-
4,499,980
Balance at 30 April 2023
132
5,063,558
27
99,999
3,910,718
9,074,434
Year ended 30 April 2024:
Loss for the year
-
-
-
-
(979,710)
(979,710)
Other comprehensive income:
Currency translation differences
-
-
-
-
(2,194)
(2,194)
Total comprehensive income for the year
-
-
-
-
(981,904)
(981,904)
Balance at 30 April 2024
132
5,063,558
27
99,999
2,928,814
8,092,530
ARENA ONLINE LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 13 -
Share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 May 2022
98
392,345
27
-
3,811,074
4,203,544
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
-
-
-
322,251
322,251
Issue of share capital
24
34
171,233
-
-
-
171,267
Credit to equity for equity settled share-based payments
23
-
-
-
-
137,124
137,124
Transfers
-
-
-
99,999
-
99,999
Other movements
-
4,499,980
-
-
-
4,499,980
Balance at 30 April 2023
132
5,063,558
27
99,999
4,270,449
9,434,165
Year ended 30 April 2024:
Profit and total comprehensive income for the year
-
-
-
-
136,165
136,165
Balance at 30 April 2024
132
5,063,558
27
99,999
4,406,614
9,570,330
ARENA ONLINE LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
2,189,586
(587,680)
Interest paid
(88,471)
(65,752)
Income taxes paid
(18,161)
(334,190)
Net cash inflow/(outflow) from operating activities
2,082,954
(987,622)
Investing activities
Purchase of business
-
911,434
Purchase of intangible assets
(36,009)
(59,809)
Purchase of tangible fixed assets
(159,095)
(207,557)
Proceeds on disposal of tangible fixed assets
2,441
43,302
Interest received
1,438
36
Net cash (used in)/generated from investing activities
(191,225)
687,406
Financing activities
Proceeds from borrowings
-
789,573
Repayment of borrowings
3,109
-
Payment of finance leases obligations
(119,059)
(171,735)
Net cash (used in)/generated from financing activities
(115,950)
617,838
Net increase in cash and cash equivalents
1,775,779
317,622
Cash and cash equivalents at beginning of year
779,575
461,953
Effect of foreign exchange rates
(2,194)
Cash and cash equivalents at end of year
2,553,160
779,575
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 15 -
1
Accounting policies
Company information
Arena Online Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Unit 19, Long Bank, Berry Hill Industrial Estate, Droitwich, England, WR9 9AN.
The group consists of Arena Online Limited and all of its subsidiaries.
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.
The 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 for parent company information presented within the consolidated financial statements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
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’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Arena Online Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
1.4
Going concern
The group has generated a loss for the year, however the parent company itself is profit generating. The group and company is in a net current asset and net asset position at 30 April 2024, therefore at the time of approving the financial statements, the directors have a reasonable expectation that the group 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.
1.5
Turnover
Turnover is recognised at the fair value of the consideration receivable for goods and services provided in the normal course of business, and is shown net of VAT.
1.6
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.7
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business 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 and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.8
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.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
Amortisation 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:
Web development
5 years
Patents & licences
20 years
Trademarks, Patents and Licenses
10 years
1.9
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:
Leasehold land and buildings
10 years
Leasehold improvements
25% straight line
Plant and machinery
15%, 25% and 33% straight line
Office equipment
20%, 25% and 33% straight line
Computer equipment
33% straight line
Motor vehicles
20% and 25% straight line
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 recognised in the profit and loss account.
The useful economic life of certain assets within plant and machinery changed during the year from 4 years to 7 years.
1.10
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.11
Impairment of fixed assets
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 18 -
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.
1.12
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises of direct materials.
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.
1.13
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.14
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.
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 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.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 19 -
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 group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and loans, 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.
1.15
Equity instruments
Equity instruments issued by the group 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 group.
1.16
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 group’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 if, and only if, there is 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.
1.17
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.18
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.19
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the 'Black-scholes' model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 20 -
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.20
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.21
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 group’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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Recoverability of loans to officers and participators
As described in note 26, the group has made loans to certain officers of the group. The directors have exercised judgement when considering the recoverability of such loans, and do not consider the loans to be impaired.
Impairment of goodwill
Goodwill is tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill could be impaired. In order to determine if the value of goodwill has been impaired, the group relies on a number of factors, including historical data, business plans, forecasts and market data as well as considering any synergies arising from business combinations. Changes in the conditions for these judgements can significantly affect the assessed value of goodwill and its recoverable amount.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 21 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Valuation of share options
The directors have been unable to directly measure the fair value of share options granted during prior years. The Black-Scholes model has been used to determine their fair value indirectly. The model uses a number of assumptions, which the directors consider to be reasonable based on the current size and condition of the company and the sector it operates in. As a result, the valuation is subject to a degree of uncertainty and is made on the basis of assumptions that may not prove to be accurate.
There are no outstanding options at 30 April 2024.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
33,933,013
29,983,986
2024
2023
£
£
Other significant revenue
Interest income
1,438
36
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
33,933,013
29,983,986
4
Operating (loss)/profit
2024
2023
£
£
Operating (loss)/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
20,879
(128,496)
Research and development costs
1,188
71
Depreciation of owned tangible fixed assets
398,622
600,322
Depreciation of tangible fixed assets held under finance leases
-
176,409
Profit on disposal of tangible fixed assets
(20)
(2,952)
Amortisation of intangible assets
764,773
297,319
Share-based payments
-
137,124
Operating lease charges
993,767
1,129,926
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
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 group and company
55,412
32,800
Audit of the financial statements of the company's subsidiaries
23,680
18,000
79,092
50,800
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Administrative
40
38
33
28
Cost of sales
80
65
71
56
Management
4
2
3
1
Total
124
105
107
85
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
4,950,222
3,512,244
4,083,787
3,162,802
Social security costs
497,853
327,513
390,595
289,722
Pension costs
117,380
78,861
89,188
69,139
5,565,455
3,918,618
4,563,570
3,521,663
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
497,647
119,146
Company pension contributions to defined contribution schemes
10,215
-
Compensation for loss of office
243,500
-
Sums paid to third parties for directors' services
1,609
2,250
752,971
121,396
The number of directors who exercised share options during the year was 0 (2023 - 2).
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
7
Directors' remuneration
(Continued)
- 23 -
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
200,000
-
Company pension contributions to defined contribution schemes
4,183
-
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
1,438
36
9
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
66,403
35,906
Interest on finance leases and hire purchase contracts
22,068
29,846
Total finance costs
88,471
65,752
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
38,380
260,406
Deferred tax
Origination and reversal of timing differences
(40,867)
(122,751)
Total tax (credit)/charge
(2,487)
137,655
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
10
Taxation
(Continued)
- 24 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(982,197)
100,175
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(245,549)
19,033
Tax effect of expenses that are not deductible in determining taxable profit
4,516
79,195
Unutilised tax losses carried forward
30,519
Permanent capital allowances in excess of depreciation
196,530
121,225
Other permanent differences
1,149
Effect of overseas tax rates
(15,497)
Under/(over) provided in prior years
89,601
Deferred tax
40,867
(122,751)
Share scheme deduction
(53,158)
Tax provision for research and development repayment
63,500
Loans to participators S455
15,589
Taxation charge
87,114
137,655
Taxation (credit)/charge in the financial statements
(2,487)
137,655
Reconciliation - the current year tax charge does not reconcile to the above analysis. Please review figures in the database.
89,601
-
Factors that may affect future tax charges
Changes to the UK corporation tax rates were substantially enacted as part of the 2021 budget on 3 March 2021. This included an increase to the main rate from 19% to 25% from April 2023. The company will be taxed at a rate of 25% unless its profits are sufficiently low enough to qualify for a lower rate of tax, the lowest being 19%.
Where applicable, deferred taxes at the balance sheet date have been measured using a tax rate of 25% to reflect the rate that the timing differences are likely to unwind and are reflected in the financial statements.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 25 -
11
Intangible fixed assets
Group
Goodwill
Web development
Patents & licences
Trademarks, Patents and Licenses
Total
£
£
£
£
£
Cost
At 1 May 2023
6,737,487
1,016,363
63,379
2,439
7,819,668
Additions
31,937
4,072
36,009
At 30 April 2024
6,737,487
1,048,300
67,451
2,439
7,855,677
Amortisation and impairment
At 1 May 2023
449,160
671,542
12,724
161
1,133,587
Amortisation charged for the year
647,725
113,258
3,301
489
764,773
At 30 April 2024
1,096,885
784,800
16,025
650
1,898,360
Carrying amount
At 30 April 2024
5,640,602
263,500
51,426
1,789
5,957,317
At 30 April 2023
6,288,327
344,821
50,655
2,278
6,686,081
Company
Goodwill
Web development
Patents & licences
Total
£
£
£
£
Cost
At 1 May 2023
260,240
1,016,363
63,379
1,339,982
Additions
31,937
4,072
36,009
At 30 April 2024
260,240
1,048,300
67,451
1,375,991
Amortisation and impairment
At 1 May 2023
260,240
671,542
12,724
944,506
Amortisation charged for the year
113,258
3,301
116,559
At 30 April 2024
260,240
784,800
16,025
1,061,065
Carrying amount
At 30 April 2024
263,500
51,426
314,926
At 30 April 2023
344,821
50,655
395,476
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 26 -
12
Tangible fixed assets
Group
Leasehold land and buildings
Leasehold improvements
Plant and machinery
Office equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 May 2023
139,955
376,588
2,597,782
323,051
8,424
253,151
3,698,951
Additions
120,271
38,824
159,095
Disposals
(2,421)
(2,421)
At 30 April 2024
139,955
376,588
2,718,053
361,875
6,003
253,151
3,855,625
Depreciation and impairment
At 1 May 2023
27,992
65,290
1,615,018
217,667
2,980
199,343
2,128,290
Depreciation charged in the year
327,430
51,003
3,445
16,744
398,622
At 30 April 2024
27,992
65,290
1,942,448
268,670
6,425
216,087
2,526,912
Carrying amount
At 30 April 2024
111,963
311,298
775,605
93,205
(422)
37,064
1,328,713
At 30 April 2023
111,963
311,298
982,764
105,384
5,444
53,808
1,570,661
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 27 -
Company
Leasehold land and buildings
Leasehold improvements
Plant and machinery
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 May 2023
139,955
376,588
2,597,782
319,529
253,151
3,687,005
Additions
106,771
38,824
145,595
At 30 April 2024
139,955
376,588
2,704,553
358,353
253,151
3,832,600
Depreciation and impairment
At 1 May 2023
27,992
65,290
1,615,018
217,244
199,343
2,124,887
Depreciation charged in the year
327,430
49,741
16,744
393,915
At 30 April 2024
27,992
65,290
1,942,448
266,985
216,087
2,518,802
Carrying amount
At 30 April 2024
111,963
311,298
762,105
91,368
37,064
1,313,798
At 30 April 2023
111,963
311,298
982,764
102,285
53,808
1,562,118
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2024
2023
2024
2023
£
£
£
£
Plant and machinery
145,534
273,548
145,534
273,548
13
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
14
5,676,000
5,676,000
Movements in fixed asset investments
Company
Shares in group undertakings
£
Cost or valuation
At 1 May 2023 and 30 April 2024
5,676,000
Carrying amount
At 30 April 2024
5,676,000
At 30 April 2023
5,676,000
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 28 -
14
Subsidiaries
Details of the company's subsidiaries at 30 April 2024 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Patch Gardens Ltd
United Kingdom
Ordinary
100.00
-
Patch Gardens BV
Netherlands
Ordinary
0
100.00
15
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
1,729,736
2,359,984
1,252,781
1,462,045
16
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
389,112
2,411,174
366,079
2,378,976
Corporation tax recoverable
99,788
146,427
97,500
146,427
Amounts owed by group undertakings
-
-
-
152,817
Other debtors
604,147
1,020,379
502,858
801,452
Prepayments and accrued income
936,257
807,269
769,170
672,804
2,029,304
4,385,249
1,735,607
4,152,476
Amounts falling due after more than one year:
Amounts owed by group undertakings
-
-
1,053,595
-
Other debtors
398,140
98,140
398,140
98,140
398,140
98,140
1,451,735
98,140
Total debtors
2,427,444
4,483,389
3,187,342
4,250,616
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 29 -
17
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
20
152,863
111,454
152,863
111,454
Other borrowings
19
306,469
303,360
Trade creditors
1,980,437
2,495,294
1,758,098
1,895,938
Corporation tax payable
295,768
322,188
248,141
258,688
Other taxation and social security
467,415
520,024
88,068
102,678
Other creditors
1,490,233
1,351,090
1,453,600
1,317,322
Accruals and deferred income
896,366
879,496
525,701
224,967
5,589,551
5,982,906
4,226,471
3,911,047
18
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
20
49,441
209,909
49,441
209,909
Other creditors
179,487
486,213
228,928
696,122
49,441
209,909
19
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Other loans
306,469
303,360
Payable within one year
306,469
303,360
Other borrowings are secured by a fixed and floating charge over the assets of the subsidiary company, Patch Gardens Ltd. Other borrowings are also secured by the legal assignment of key-person assurance policies in the name of Patch Gardens Ltd covering the life of a director.
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 30 -
20
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
152,863
111,454
152,863
111,454
In two to five years
49,441
209,909
49,441
209,909
202,304
321,363
202,304
321,363
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery and motor vehicles. No restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
90,722
128,101
Short term timing differences
(5,361)
(1,873)
85,361
126,228
Liabilities
Liabilities
2024
2023
Company
£
£
Accelerated capital allowances
90,722
128,101
Short term timing differences
(5,361)
(1,873)
85,361
126,228
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 May 2023
126,228
126,228
Credit to profit or loss
(40,867)
(40,867)
Liability at 30 April 2024
85,361
85,361
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 31 -
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
117,380
78,861
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
23
Share-based payment transactions
Group
Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 May 2023
-
1,389
-
70,158.00
Outstanding - business combinations
-
3,645,059
-
193,553.00
Exercised
-
(1,855,376)
-
168,605.00
Expired
-
(1,791,072)
-
95,106.00
Outstanding at 30 April 2024
-
-
-
-
Exercisable at 30 April 2024
-
-
-
-
There are no outstanding options at 30 April 2024.
Company
Number of share options
Weighted average exercise price
2024
2023
2024
2023
Number
Number
£
£
Outstanding at 1 May 2023
-
1,389
-
70,158.00
Exercised
-
(1,389)
-
70,158.00
Outstanding at 30 April 2024
-
-
-
-
Exercisable at 30 April 2024
-
-
-
-
Group
Company
2024
2023
2024
2023
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
-
137,124
-
137,124
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
23
Share-based payment transactions
(Continued)
- 32 -
The share options granted in 2017 had an exercise price of £50.51 per option and were exercisable in the case of an exit event. The vesting condition for an exit event was fulfilled when the valuation of 100% of the company exceeds £10,000,000; provided that the options shall cease to vest upon the option holder ceasing to be an employee; and the Board may in its absolute discretion accelerate the vesting of an option at any time.
The share options granted on 1 July 2021 had an exercise price of £144.08. The conditions of these options are the same as the options granted in 2017.
The directors estimated the fair value of the options at the grant date using a Black Scholes Model.
All of the company's outstanding options were exercised during the prior year.
24
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.001p each
13,127,060
13,127,060
132
132
25
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
917,000
946,333
912,000
946,333
Between two and five years
912,000
1,824,000
912,000
1,824,000
1,829,000
2,770,333
1,824,000
2,770,333
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 33 -
26
Related party transactions
Transactions with related parties
Other information
At the year end the group was owed £200,000 (2023: £200,000) in respect of an interest bearing loan to a Discretionary Trust, of which one of the directors is a beneficiary.
At the year end the group was owed £55 (2023: £8,972) and £107,314 (2023: £107,314) by a director in respect of two interest bearing loans.
At the year end the group was owed £31,124 (2023: £31,124) by another former director in respect of an interest bearing loan.
At the year-end the group was owed £6,523 (2023: £6,523) by a key management personnel in respect of an interest bearing loan.
At the year end the group was owed £100,000 (2023: £100,000) by A Wynne, company secretary, in respect of an interest bearing loan.
During the year, the total remuneration paid to key management personnel by the group was £492,964 (2023: £264,769).
27
Cash generated from/(absorbed by) group operations
2024
2023
£
£
Loss for the year after tax
(979,710)
(37,480)
Adjustments for:
Taxation (credited)/charged
(2,487)
137,655
Finance costs
88,471
65,752
Investment income
(1,438)
(36)
Gain on disposal of tangible fixed assets
(20)
(2,952)
Amortisation and impairment of intangible assets
764,773
297,319
Depreciation and impairment of tangible fixed assets
398,622
776,731
Equity settled share based payment expense
-
137,124
Decrease in provisions
-
(1,176,000)
Movements in working capital:
Decrease in stocks
630,248
76,711
Decrease/(increase) in debtors
2,009,306
(1,061,383)
(Decrease)/increase in creditors
(718,179)
198,879
Cash generated from/(absorbed by) operations
2,189,586
(587,680)
ARENA ONLINE LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 34 -
28
Analysis of changes in net funds - group
1 May 2023
Cash flows
Exchange rate movements
30 April 2024
£
£
£
£
Cash at bank and in hand
779,575
1,775,779
(2,194)
2,553,160
Borrowings excluding overdrafts
(303,360)
(3,109)
-
(306,469)
Obligations under finance leases
(321,363)
119,059
-
(202,304)
154,852
1,891,729
(2,194)
2,044,387
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