Company Registration No. 10211408 (England and Wales)
MERLIN CYCLES GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2024
31 December 2024
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MERLIN CYCLES GROUP LIMITED
COMPANY INFORMATION
Directors
Mr A Oldham
Cyclefusion Gmbh
Company number
10211408
Registered office
Unit 4A-A5 Buckshaw Link
Ordnance Road
Buckshaw Village
Chorley
Lancashire
PR7 7EL
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
MERLIN CYCLES GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Group statement of income and retained earnings
8
Group balance sheet
9
Company balance sheet
10
Group statement of cash flows
11
Notes to the financial statements
12 - 25
MERLIN CYCLES GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

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

Fair review of the business

The directors of the group are pleased to report a successful year, especially considering the difficult current trading conditions. Due to the rise in inflation and cost of living crisis, we are pleased that turnover has remained relatively stable in comparison to 2023.

 

Turnover achieved was £24,500k in comparison to £25,432k in the period to 31 December 2023. Gross profit achieved was £5,787k compared to £4,433k.

 

The group's gross profit margin has increased over the previous year. This is due mainly to lower cost of sales, increasing sale prices and decreased administrative expenses.

 

The group's profit before tax was £3,108k in comparison to the previous year of £1,250k. The group continues to recruit and invest in its staff, whilst attempting to secure market share with targeted advertising. The group also invests in technology to ensure it maintains its market competitive edge.

The levels of stock held by the group have decreased during the period, with a focus on reduced overstocks and slow selling items. The group continues to hold significant levels of stock, which puts us in a strong position in a fast paced, competitive market.

The net assets have increased in the period from £13,595k to £15,934k. The performance of the group is in line with director’s expectations.

Principle risks and uncertainties

There are no reasonable concerns over the group's ability to continue trading for the foreseeable future, however, there is uncertainty over the ongoing cost of living crisis, the wider economy, and the effect this could have on the group.

The group is also facing uncertainty related to the impact of the UK's exit from the EU in the medium to long term. It is anticipated that any increase in purchase costs from other EU countries will also impact the group’s major competitors in the UK.

Development and performance

The group has worked hard during 2024 to significantly reduce stock levels which had increased due to late delivery of forward orders placed during the pandemic. Margin improved significantly during 2024 due to stock returning to pre pandemic levels.

On behalf of the board

Mr A Oldham
Director
18 July 2025
MERLIN CYCLES GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -

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

Principal activities

The principal activity of the company and group continued to be that of a holding company and the principal activity of the group continued to be that of the retailing of cycles and cycle accessories.

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:

Mr A Oldham
Cyclefusion Gmbh
Financial instruments
Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Auditor

The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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:

 

 

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.

MERLIN CYCLES GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr A Oldham
Director
18 July 2025
MERLIN CYCLES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MERLIN CYCLES GROUP LIMITED
- 4 -
Opinion

We have audited the financial statements of Merlin Cycles Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of income and retained earnings, the group balance sheet, the company balance sheet, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

MERLIN CYCLES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MERLIN CYCLES GROUP LIMITED
- 5 -
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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 parent 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

 

MERLIN CYCLES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MERLIN CYCLES GROUP LIMITED
- 6 -

Identifying and assessing potential risks related to irregularities

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:

 

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Group's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

 

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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

 

MERLIN CYCLES GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MERLIN CYCLES GROUP LIMITED
- 7 -

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Simon Read BA(Hons) BFP ACA (Senior Statutory Auditor)
For and on behalf of PM+M Solutions for Business LLP, Statutory Auditor
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
18 July 2025
MERLIN CYCLES GROUP LIMITED
GROUP STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
24,500,863
25,432,477
Cost of sales
(18,713,362)
(20,999,392)
Gross profit
5,787,501
4,433,085
Administrative expenses
(3,172,353)
(3,345,131)
Other operating income
80,003
14,955
Operating profit
4
2,695,151
1,102,909
Interest receivable and similar income
8
413,808
148,550
Interest payable and similar expenses
9
(751)
(1,655)
Profit before taxation
3,108,208
1,249,804
Tax on profit
10
(777,678)
(294,115)
Profit for the financial year
2,330,530
955,689
Retained earnings brought forward
13,654,453
12,698,764
Retained earnings carried forward
15,984,983
13,654,453
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
MERLIN CYCLES GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
45,241
53,537
Investments
13
11,500
11,500
56,741
65,037
Current assets
Stocks
15
5,180,765
6,652,920
Debtors
16
11,876,954
7,812,984
Cash at bank and in hand
958,961
831,967
18,016,680
15,297,871
Creditors: amounts falling due within one year
17
(2,082,170)
(1,701,040)
Net current assets
15,934,510
13,596,831
Total assets less current liabilities
15,991,251
13,661,868
Provisions for liabilities
Deferred tax liability
19
5,768
6,915
(5,768)
(6,915)
Net assets
15,985,483
13,654,953
Capital and reserves
Called up share capital
21
500
500
Profit and loss reserves
15,984,983
13,654,453
Total equity
15,985,483
13,654,953

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 18 July 2025 and are signed on its behalf by:
18 July 2025
Mr A Oldham
Director
Company registration number 10211408 (England and Wales)
MERLIN CYCLES GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
31 December 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
11
1
1
Investments
13
500
500
501
501
Current assets
-
-
Creditors: amounts falling due within one year
17
(1)
(1)
Net current liabilities
(1)
(1)
Net assets
500
500
Capital and reserves
Called up share capital
21
500
500

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 £0 (2023 - £0 profit).

The financial statements were approved by the board of directors and authorised for issue on 18 July 2025 and are signed on its behalf by:
18 July 2025
Mr A Oldham
Director
Company registration number 10211408 (England and Wales)
MERLIN CYCLES GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
4,328,941
3,272,872
Interest paid
(751)
(1,655)
Income taxes paid
(560,199)
(677,124)
Net cash inflow from operating activities
3,767,991
2,594,093
Investing activities
Purchase of tangible fixed assets
(1,309)
(16,456)
Proceeds from disposal of investments
2,198
-
Loans advanced
(3,647,768)
(2,359,559)
Interest received
16,360
8,779
Net cash used in investing activities
(3,630,519)
(2,367,236)
Financing activities
Payment of finance leases obligations
(10,478)
(4,709)
Net cash used in financing activities
(10,478)
(4,709)
Net increase in cash and cash equivalents
126,994
222,148
Cash and cash equivalents at beginning of year
831,967
609,819
Cash and cash equivalents at end of year
958,961
831,967
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
1
Accounting policies
Company information

Merlin Cycles Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 4A Buckshaw Link, Ordnance Road, Buckshaw Village, Chorley, Lancashire, PR7 7EL.

 

The group consists of Merlin Cycles Group 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:

 

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.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Merlin Cycles Group Limited and its subsidiary company.

 

All financial statements are made up to 31 December 2024.

 

All intra-group transactions and balances between group companies are eliminated on consolidation.

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

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. The group remains profitable and cash generative post year end. The directors of Cyclefusion GMBH, the parent undertaking has provided a letter of support where they confirm that they will not withdraw cash from the group to the extent that may cause uncertainty over the ability of the group to continue as a going concern. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -
1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets other than goodwill

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

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

Website development
20% straight line
1.7
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 improvements
over the length of the lease
Plant and equipment
15% reducing balance
Computers
20% straight line
Motor vehicles
25% reducing balance

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.

1.8
Fixed asset investments

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.

1.9
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.

MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand.

1.12
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances and loans due from group companies, 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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
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.

1.14
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.

 

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.

MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
1.15
Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.16
Retirement benefits

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

1.17
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.

1.18
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.19
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. The main area of judgement that has a risk of causing material adjustment to the carrying amounts of assets and liabilities is in relation to stock where a provision is made by the directors by assessing sales patterns and the current market prices.

MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 17 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Retail sales of bicycles and bicycle accessories
24,500,863
25,432,477
2024
2023
£
£
Turnover analysed by geographical market
UK
22,613,164
22,793,591
Europe
149,531
274,076
Rest of the world
1,738,168
2,364,810
24,500,863
25,432,477
2024
2023
£
£
Other revenue
Interest income
413,808
148,550
Grants received
-
0
14,955
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
99,237
(224,073)
Government grants
-
0
(14,955)
Fees payable to the group's auditor for the audit of the group's financial statements
2,500
2,500
Depreciation of owned tangible fixed assets
7,700
11,384
Depreciation of tangible fixed assets held under finance leases
1,905
2,753
Stocks impairment losses recognised or reversed
170,000
100,000
Operating lease charges
280,619
271,029
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
2,500
2,500
Audit of the financial statements of the company's subsidiaries
35,550
23,425
38,050
25,925
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 18 -
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
Administration & management
12
11
2
2
Warehouse & distribution
25
25
-
-
Total
37
36
2
2

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
966,674
949,451
-
0
-
0
Social security costs
90,007
84,519
-
0
-
0
Pension costs
30,668
28,982
-
0
-
0
1,087,349
1,062,952
-
0
-
0
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
91,709
91,709
Company pension contributions to defined contribution schemes
11,791
11,791
103,500
103,500
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
16,360
15,885
Interest receivable from group companies
397,448
132,665
Total income
413,808
148,550
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on finance leases and hire purchase contracts
751
1,260
Other interest
-
395
Total finance costs
751
1,655
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
778,825
293,149
Deferred tax
Origination and reversal of timing differences
(1,147)
966
Total tax charge
777,678
294,115

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
3,108,208
1,249,804
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
777,052
293,954
Tax effect of expenses that are not deductible in determining taxable profit
54
95
Permanent capital allowances in excess of depreciation
572
-
0
Remeasurement of deferred tax for changes in tax rates
-
0
66
Taxation charge
777,678
294,115
11
Intangible fixed assets
Group
Website development
£
Cost
At 1 January 2024 and 31 December 2024
130,824
Amortisation and impairment
At 1 January 2024 and 31 December 2024
130,824
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
11
Intangible fixed assets
(Continued)
- 20 -
Carrying amount
At 31 December 2024
-
0
At 31 December 2023
-
0
Company
Patents & licences
£
Cost
At 1 January 2024 and 31 December 2024
1
Amortisation and impairment
At 1 January 2024 and 31 December 2024
-
0
Carrying amount
At 31 December 2024
1
At 31 December 2023
1
12
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2024
62,578
234,472
39,778
48,370
385,198
Additions
-
0
-
0
1,309
-
0
1,309
At 31 December 2024
62,578
234,472
41,087
48,370
386,507
Depreciation and impairment
At 1 January 2024
62,578
196,241
39,778
33,064
331,661
Depreciation charged in the year
-
0
5,733
44
3,828
9,605
At 31 December 2024
62,578
201,974
39,822
36,892
341,266
Carrying amount
At 31 December 2024
-
0
32,498
1,265
11,478
45,241
At 31 December 2023
-
0
38,231
-
0
15,306
53,537
The company had no tangible fixed assets at 31 December 2024 or 31 December 2023.
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
12
Tangible fixed assets
(Continued)
- 21 -

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
£
£
£
£
Motor vehicles
-
0
7,619
-
0
-
0
13
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
500
500
Unlisted investments
11,500
11,500
-
0
-
0
11,500
11,500
500
500

The group's other investment relates to an investment in sporting memorabilia, which is shown at cost.

Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 January 2024 and 31 December 2024
11,500
Carrying amount
At 31 December 2024
11,500
At 31 December 2023
11,500
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2024 and 31 December 2024
500
Carrying amount
At 31 December 2024
500
At 31 December 2023
500
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2024 are as follows:

MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
14
Subsidiaries
(Continued)
- 22 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Merlin Cycles Limited
Unit A4 Buckshaw Link, Ordnance Road Buckshaw Village, Chorley, Lancashire, PR7 7EL
Ordinary
100.00
15
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
5,180,765
6,652,920
-
0
-
0
16
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
31,470
64,254
-
0
-
0
Amounts owed by group undertakings
45,562
-
-
-
Other debtors
11,734,397
7,682,847
-
0
-
0
Prepayments and accrued income
65,525
65,883
-
0
-
0
11,876,954
7,812,984
-
-

Other debtors relates to loans due from fellow group undertakings. At 31 December 2024 one group company loan totalled £4,006,271 (2023: 3,887,695) and is subject to interest at 3% p.a. and is repayable on demand.

 

Also within other debtors at 31 December 2024 is a group company loan totalling £7,719,593 (2023: 3,803,521) and is subject to interest at 5% and is repayable on demand. During the year the agreement was reworked to extend the facility to a maximum of 10,000,000 Euros.

 

Please refer to the subsequent events note for more detail on the amounts owed by group undertakings.

17
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
18
-
0
10,478
-
0
-
0
Trade creditors
769,216
932,772
-
0
-
0
Amounts owed to group undertakings
517,201
66,166
-
0
-
0
Corporation tax payable
275,063
56,437
-
0
-
0
Other taxation and social security
302,672
313,760
-
-
Other creditors
1,055
4,106
1
1
Accruals and deferred income
216,963
317,321
-
0
-
0
2,082,170
1,701,040
1
1
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
17
Creditors: amounts falling due within one year
(Continued)
- 23 -

Amounts owed to group undertakings are interest free and repayable on demand.

18
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
-
0
10,478
-
0
-
0

Finance lease payments represent rentals payable by the company for certain items of motor vehicles.

Finance lease obligations are secured upon the assets to which they relate.

 

19
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
6,224
7,365
Short term timing differences
(456)
(450)
5,768
6,915
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 January 2024
6,915
-
Credit to profit or loss
(1,147)
-
Liability at 31 December 2024
5,768
-
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
30,668
28,982

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.

At year end there was a liability payable for pension contributions of £4,254 (2023: £4,198).

21
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500
500
500
500
22
Financial commitments, guarantees and contingent liabilities

The directors believe there to be a contingent liability amounting to £607,000, in relation to historical overseas VAT compliance costs which were paid incorrectly. This is currently assessed as unlikely to materialise, with the company also indemnified against any possible outflow which is higher than the previously stated amount.

23
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
293,244
287,754
-
-
Between two and five years
656,043
926,255
-
-
949,287
1,214,009
-
-
24
Events after the reporting date

Following the year-end, a significant dividend is planned by the directors. The intention of group management is that the proceeds from the dividend can be used to offset and effectively settle a substantial proportion of the intercompany group debtor balance (included in other debtors), this is a non adjusting event. This action is expected to lead to a substantial reduction in the net assets of the group.

25
Controlling party
MERLIN CYCLES GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
25
Controlling party
(Continued)
- 25 -

The parent undertaking is Cyclefusion GmbH whose registered office is Robert-Bosch-Strasse 17, Ostfildern, Germany, 73760. The smallest group in which the group is consolidated is CycleFusion GmbH and the largest group is M.C.L. van der Velden Beheer B.V.

 

The ultimate controlling party is M.C.L. van der Velden.

26
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
2,330,530
955,689
Adjustments for:
Taxation charged
777,678
294,115
Finance costs
751
1,655
Investment income
(413,808)
(148,550)
Depreciation and impairment of tangible fixed assets
9,605
14,137
Movements in working capital:
Decrease in stocks
1,472,155
2,525,626
(Increase)/decrease in debtors
(20,952)
222,762
Increase/(decrease) in creditors
172,982
(592,561)
Cash generated from operations
4,328,941
3,272,873
27
Analysis of changes in net funds - group
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
831,967
126,994
958,961
Obligations under finance leases
(10,478)
10,478
-
821,489
137,472
958,961
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