Company registration number: 03001918
COMPANY INFORMATION
CONTENTS
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present the strategic report for the year ended 31 December 2024.
Extra (UK) Ltd "Extra" is a B2B distributor of high-quality branded products in the UK and Ireland. The core business is in the bicycle parts and accessories market, but the company also does business in the outdoor, health and sports sectors. The company offers a portfolio of leading high-profile brands working in nearly all cases on an exclusive basis with suppliers from across the globe.
Extra’s product range is sought after and has broad appeal to its customer base and consumers nationwide across the UK and the Republic of Ireland. Customers include a large number of quality dealers serving all sectors of the market, as well as sector-independent specialists, major retailers and internet retailers.
The company employs dedicated sales, marketing, brand and customer service teams focused on the long-term growth of its business and brand partnerships. Warehousing, dispatch and some administrative duties are outsourced through a long-established relationship with a centrally located third-party logistics company.
Extra’s product range is sought after and has broad appeal to its customer base and consumers nationwide across the UK and the Republic of Ireland. Customers include a large number of quality dealers serving all sectors of the market, as well as sector-independent specialists, major retailers and internet retailers.
The company employs dedicated sales, marketing, brand and customer service teams focused on the long-term growth of its business and brand partnerships. Warehousing, dispatch and some administrative duties are outsourced through a long-established relationship with a centrally located third-party logistics company.
Turnover was up 10.0% this period to £20.1m (2023: £18.3m). The gross margin during the year was 30.1% (2023: 31.1%). Profit before tax was £778k (2023: £113k), which the directors consider a pleasing result considering the limited market recovery and customer disruption experienced. Overall, 2024 remained another challenging year throughout the supply chain for the whole cycling industry, but based on the sales data issued by the Bicycle Association of Great Britain, Extra continued to outperform the market in parts, accessories and component sales volume and revenue.
Amidst the continued post-pandemic market disruption, 2024 continued to see a higher than normal proportion of administration and insolvency within its customer base. Extra continued to manage this potential risk well and reduced their exposure to these events through careful and thorough credit checking, credit control management and effective use of our robust retention of title clauses within their terms and conditions of trade.
2024 saw a continuation of stringent business cost controls put in place during their 2023 restructuring. They remained agile and aligned with the changing needs of the industry, the business and its brand partners. The business has become quite sought after as a brand distribution partner for their territory and 2024 saw a continuation of this theme with the introduction of several key new partnerships, replacing previously distributed smaller brands within their curated portfolio.
Extra saw some green shoots of recovery in 2024 across many brands and categories, but with dealers still heavily stocked in key categories, or with cash flow tied up in complete bicycles, there remains a lot of discounting expected to clear excess stock throughout the industry chain. The business took advantage of this environment, taking the opportunity to continue to reduce its stocks within clearance and discontinued products, explaining the slight drop in gross margin for the period.
The medium to long-term outlook for the industry remains strong at both enthusiast and transport levels - the demand for cycling products is expected to be strong, driven by growing trends towards healthier and greener lifestyles, rising costs of fuel, disincentives to commute by car and government-supported schemes. This is especially true for parts and accessories, especially the workshop-oriented products; where Extra has built a strong exclusive portfolio that has proved to be very resilient even during market downturns. Extra has a strong and growing position of importance within the industry and within the supply base of both key accounts and smaller independent retailers.
Amidst the continued post-pandemic market disruption, 2024 continued to see a higher than normal proportion of administration and insolvency within its customer base. Extra continued to manage this potential risk well and reduced their exposure to these events through careful and thorough credit checking, credit control management and effective use of our robust retention of title clauses within their terms and conditions of trade.
2024 saw a continuation of stringent business cost controls put in place during their 2023 restructuring. They remained agile and aligned with the changing needs of the industry, the business and its brand partners. The business has become quite sought after as a brand distribution partner for their territory and 2024 saw a continuation of this theme with the introduction of several key new partnerships, replacing previously distributed smaller brands within their curated portfolio.
Extra saw some green shoots of recovery in 2024 across many brands and categories, but with dealers still heavily stocked in key categories, or with cash flow tied up in complete bicycles, there remains a lot of discounting expected to clear excess stock throughout the industry chain. The business took advantage of this environment, taking the opportunity to continue to reduce its stocks within clearance and discontinued products, explaining the slight drop in gross margin for the period.
The medium to long-term outlook for the industry remains strong at both enthusiast and transport levels - the demand for cycling products is expected to be strong, driven by growing trends towards healthier and greener lifestyles, rising costs of fuel, disincentives to commute by car and government-supported schemes. This is especially true for parts and accessories, especially the workshop-oriented products; where Extra has built a strong exclusive portfolio that has proved to be very resilient even during market downturns. Extra has a strong and growing position of importance within the industry and within the supply base of both key accounts and smaller independent retailers.
The directors use a number of measures to monitor and target the performance of the company. They regard the following as the key financial indicators of performance:
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
As most of the company's product range are imported the company is exposed to movements in foreign exchange rates on the USD and the Euro. Exposure to the associated risks is limited by hedging against a large percentage of these purchases.
It is possible that a supplier could decide to change their UK distribution, but the longevity of the relationships with the company's principal suppliers demonstrates the strength of the existing relationships with these companies. The company also holds multi-year distribution contracts with the majority of our suppliers, further reducing this risk.
The structure of the industry has been affected by trends towards online shopping and the company's trading systems are under constant review to ensure that it is best equipped to take advantage of the opportunities presented by the evolving retail environment.
It is possible that a supplier could decide to change their UK distribution, but the longevity of the relationships with the company's principal suppliers demonstrates the strength of the existing relationships with these companies. The company also holds multi-year distribution contracts with the majority of our suppliers, further reducing this risk.
The structure of the industry has been affected by trends towards online shopping and the company's trading systems are under constant review to ensure that it is best equipped to take advantage of the opportunities presented by the evolving retail environment.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £544,814 (2023 - £89,815).
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who served during the year were:
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
The company generated a profit of £544,814 (2023 - £89,815) and had net assets of £12,220,722 (2023 - £11,675,908) and net current assets of £12,109,614 (2023 - £11,618,373) at the balance sheet date. The company has traded positively since the year-end. The directors have prepared forecasts which take account of current economic conditions and determined that the company has or can expect to have sufficient working capital for its need for at least the next 12 months from the date of approval of these financial statements. In view of this, the directors consider it appropriate to prepare the accounts on the going concern basis.
The company generated a profit of £544,814 (2023 - £89,815) and had net assets of £12,220,722 (2023 - £11,675,908) and net current assets of £12,109,614 (2023 - £11,618,373) at the balance sheet date. The company has traded positively since the year-end. The directors have prepared forecasts which take account of current economic conditions and determined that the company has or can expect to have sufficient working capital for its need for at least the next 12 months from the date of approval of these financial statements. In view of this, the directors consider it appropriate to prepare the accounts on the going concern basis.
There have been no significant events affecting the Company since the year end.
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the Company will be put at a General Meeting.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXTRA (UK) LIMITED
We have audited the financial statements of Extra (UK) Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXTRA (UK) LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the 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.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXTRA (UK) LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent 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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
∙We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
∙We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
∙We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXTRA (UK) LIMITED (CONTINUED)
due to fraud and how it might occur, by holding discussions with management and those charged with governance.
∙We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
∙Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
Statutory Auditor
The Shipping Building
The Old Vinyl Factory
Blyth Road
London
UB3 1HA
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 31 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Extra (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is S.6 210 Upper Richmond Road, Hill House, London, England, SW15 6NP.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Extra (UK) Limited is a wholly owned subsidiary of Storskogen UK Limited and the results of Extra (UK) Limited are included in the consolidated financial statements of Storskogen Group AB (publ) which are
available from its registered office, Hovslagargaton 3, 111 48 Stockholm, Sweden, and the company's website.
Extra (UK) Limited is a wholly owned subsidiary of Storskogen UK Limited and the results of Extra (UK) Limited are included in the consolidated financial statements of Storskogen Group AB (publ) which are
available from its registered office, Hovslagargaton 3, 111 48 Stockholm, Sweden, and the company's website.
The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
The company generated a profit of £544,814 (2023 - £89,815) and had net assets of £12,220,722 (2023 - £11,675,908) and net current assets of £12,109,614 (2023 - £11,618,373) at the balance sheet date. The company has traded positively since the year-end. The directors have prepared forecasts which take account of current economic conditions and determined that the company has or can expect to have sufficient working capital for its need for at least the next 12 months from the date of approval of these financial statements. In view of this, the directors consider it appropriate to prepare the accounts on the going concern basis.
The company generated a profit of £544,814 (2023 - £89,815) and had net assets of £12,220,722 (2023 - £11,675,908) and net current assets of £12,109,614 (2023 - £11,618,373) at the balance sheet date. The company has traded positively since the year-end. The directors have prepared forecasts which take account of current economic conditions and determined that the company has or can expect to have sufficient working capital for its need for at least the next 12 months from the date of approval of these financial statements. In view of this, the directors consider it appropriate to prepare the accounts on the going concern basis.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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.
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
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.
The estimated useful lives range as follows:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis:
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at are valued 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 are valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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 are valued 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 are valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of financial position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Cashpooling
This interest-bearing bank account sweeping arrangement means that cash balances and overdrafts are physically transferred to Storskogen Group AB header account on a daily basis. The net amount of £298,614 (2023 - £442,307) as at 31 December 2024 is included in ‘Amounts owed by group undertakings’. This amount is repayable on demand with the Company retaining ability to access the cash at any time.
Cashpooling
This interest-bearing bank account sweeping arrangement means that cash balances and overdrafts are physically transferred to Storskogen Group AB header account on a daily basis. The net amount of £298,614 (2023 - £442,307) as at 31 December 2024 is included in ‘Amounts owed by group undertakings’. This amount is repayable on demand with the Company retaining ability to access the cash at any time.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
Classification of financial liabilites
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangement entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities classified as payable within one year are not amortised.
Classification of financial liabilites
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangement entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities classified as payable within one year are not amortised.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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.
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.
Depreciation
The annual depreciation charge for fixed assets is sensitive to changes in the estimated useful economic lives and residue values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 13 for the carrying amount of fixed assets and note 2.15 for the useful economic lives for each class of asset.
Carrying value of stock
When calculating the stock provision, management considers the nature and condition of stock, together with the age of stock, and sales activity. The review of stock in the current year has resulted in a specific stock provision of £324,205 (2023 - £384,089).
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
The entity is within the scope of the OECD Pillar Two model rules. Pillar Two legislation has been enacted in the UK and is effective in 2024.
Under the legislation, the Company is liable to pay a top-up tax in the UK for the difference between the GloBE effective tax rate for each jurisdiction and the 15% minimum rate. In addition, top-up taxes are payable locally where qualifying domestic minimum top-up taxes have been legislated and are in effect.
Transitional relief has been introduced based on the group’s country-by-country reporting obligations. If the criteria are met, no top-up tax will be charged for the tax jurisdiction in question, and there is no need to prepare the full computation of top-up-tax. Based on the preliminary country-by-country reporting for 2024, it has been determined that the UK is within the scope of the transitional relief rule.
The Company applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to FRS 102 section 29 issued in July 2023.
Under the legislation, the Company is liable to pay a top-up tax in the UK for the difference between the GloBE effective tax rate for each jurisdiction and the 15% minimum rate. In addition, top-up taxes are payable locally where qualifying domestic minimum top-up taxes have been legislated and are in effect.
Transitional relief has been introduced based on the group’s country-by-country reporting obligations. If the criteria are met, no top-up tax will be charged for the tax jurisdiction in question, and there is no need to prepare the full computation of top-up-tax. Based on the preliminary country-by-country reporting for 2024, it has been determined that the UK is within the scope of the transitional relief rule.
The Company applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to FRS 102 section 29 issued in July 2023.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Page 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Page 27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Page 29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £94,212 (2023 - £97,804). Contributions totalling £8,823 (2023 - £7,842) were payable to the fund at the reporting date and are included in creditors.
Page 30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The immediate parent company of Extra (UK) Limited is Storskogen UK Limited, a company incorporated in England and Wales. Storskogen UK Limited owns 80% of the issued share capital in Extra (UK) Limited.
Storskogen Group AB (publ), the company's ultimate controlling party, is the parent of the largest and the smallest group of undertakings for which consolidated financial statements are drawn up and of which the company is a member. Storskogen Group AB (publ) is incorporated in Sweden, and its consolidated financial statements are available from its registered office, Hovslagargaton 3, 111 48 Stockholm, Sweden, and the company's website.
Storskogen Group AB (publ), the company's ultimate controlling party, is the parent of the largest and the smallest group of undertakings for which consolidated financial statements are drawn up and of which the company is a member. Storskogen Group AB (publ) is incorporated in Sweden, and its consolidated financial statements are available from its registered office, Hovslagargaton 3, 111 48 Stockholm, Sweden, and the company's website.
Page 31