The directors present the strategic report for the year ended 31 March 2025.
Waterrower Holdings Limited, as a group, continues its role as a manufacturer and retailer of sports equipment worldwide. The group specialises in delivering high-quality products, contributing to an enhanced experience far those involved in sports and recreation across the globe.
During the year ended 31 March 2025, the group navigated economic challenges as it adjusted to a challenging market environment, where cost-of-living pressures affected sales and overall performance. Rising inflation compounded these difficulties, driving up costs and placing additional strain on consumer spending power. Together, these factors created a difficult backdrop for growth and profitability, requiring strategic adjustments to manage the financial pressures. Despite these challenges, the board is pleased to recognise the ongoing fulfillment of its vision, ensuring that it operates as a long-term, sustainable supplier in its principal markets.
The board of directors have worked hard to ensure that it has achieved and maintained its standards. The group continues to deliver high quality goods to all its of clients. The board have implemented thorough control systems and installed an ethos across the group to work towards its mission of delivering outstanding products and services.
Despite a decrease in sales for the financial year ending 31 March 2025, it is important to note that sales were in line with the budget, meeting the group's expectations.
The group carefully considers its principal risks and manages them through continual monitoring and assessment, policy-setting, and compliance with all legal, statutory, and fiduciary obligations. The group's operations expose it to various risks. Policies and safeguards are implemented to limit these risks to negligible levels. The main principal risks can be identified as follows
Challenges of Economic Downturns and Inflationary Pressure:
Facing economic downturns may result in diminished consumer spending, affecting sales, while inflationary pressures can escalate operational costs. To counter these risks, management employs strategies such as diversifying product offerings to appeal to various market segments. Additionally, cost-control measures are implemented, and pricing strategies are regularly reassessed.
Supply Chain Disruptions and Transportation Delays:
The group's reliance on global supply chains exposes it to potential disruptions and delays. In response, management takes proactive steps by establishing alternative suppliers and cultivating strategic partnerships. Maintaining buffer stock levels and vigilantly monitoring supply chain resilience further mitigates these risks. The implementation of advanced forecasting and logistics technologies contributes to enhancing the overall robustness of the supply chain.
Regulatory Compliance, including Health and Safety:
Compliance with health and safety regulations is paramount, as failure to adhere may result in legal and reputational repercussions. To address this, management consistently updates compliance protocols, conducted thorough training for staff, and maintains ongoing communication with regulatory bodies. Stringent quality control measures are implemented throughout the manufacturing process to uphold regulatory standards and safeguard the group's reputation.
Ongoing Research and Development:
The group is dedicated to delivering cutting-edge technology equipment to ensure the best training experience. However, rapid technological changes and shifting consumer preferences may render current products obsolete. In response, the group invests significantly in continuous research and development to stay ahead of market trends. Regular assessments and upgrades to product lines are conducted, and customer feedback is actively sought to drive ongoing innovation.
Currency Risks:
Operating in multiple countries exposes the group to fluctuations in currency exchange rates. To mitigate this risk, management takes proactive measures, maintaining currency balances in various currencies. This approach is designed to minimise realised losses over time, providing a strategic means of navigating currency-related challenges.
For the year under review, turnover decreased to £18,079,381 (2024: £23,487,425), with gross profit reducing to £4,681,910 (2024: £6,060,362). The gross profit margin remained broadly consistent at 26% (2024: 26%), reflecting continued discipline in pricing and cost of sales despite adverse trading conditions. The operating loss increased to £2,327,098 (2024: £1,970,629).
During the year ended 31 March 2025, revenue declined by £5.41 million, primarily as a result of sustained global inflation. Inflationary pressures have continued to erode consumer purchasing power, leading to reduced discretionary spending and lower overall demand. In parallel, increases in operating and input costs have placed further pressure on profitability. Changes in consumer spending behaviour, driven by the wider cost of living environment, have contributed to a more subdued level of trade compared with the prior year. Overall, the results reflect the ongoing impact of inflationary conditions on both revenue generation and cost control during the period.
Overall, the balance sheet remains strong and well-positioned for future growth from both a liquidity and capital perspective.
The group have made excellent progress over the past years, delivering good results with the implementation of its strategy for growth and achieving a reasonable return from its trading performance.
The board receives monthly updates from all divisions across the group to track and assess KPI’s against targets set each and every year. Non financial KPI’s include the satisfaction levels of our customers are also reported to the board.
Monthly financial KPI’s include turnover, gross profit (value and percentage) and net profit.
For the year under review, the results were as follows:
Turnover £18,079,381 (2024: £23,487,425)
Gross profit £4,681,910 (2024: £6,060,362)
Gross profit margin: 26% (2024: 26%)
Operating loss £2,327,098 (2024: £1,970,629)
Waterrower Holdings Limited and its subsidiaries is a manufacturer and provider of high quality rowing exercise machines, hand built using ethically sourced materials, with clientele based all around the world.
The group has considerable financial resources, with substantial working capital cash balances available to invest in developing new innovative products, maintaining the supply of exceptional products and services, and providing innovative solutions to its clients.
The directors recognise that employees are fundamental to the group’s success and are committed to the involvement and development of employees at all levels. We will continue to invest in and develop our employees. Our aim is to be an employer of choice, to provide our employees with challenges and to support career progression, to reward and recognise their contribution, whilst ensuring diversity across the workforce.
We constantly try to develop long term relationships with our suppliers without whom the group would not be where it is today.
Our commitment to delivering outstanding service and unique products to our clients has resulted in the group’s exceptional reputation for quality and service. The reliability, quality, efficacy of solution, pricing strategy, the depth of products and services offered, the customer experience, the technical expertise and security of our products makes our group an important competitor in this sector.
We understand the impact we have on our environment. We are trying hard to be a responsible business and to control our environment footprint, investing in ethically sourced materials, consistently making efforts to recycle and reuse. We are subject to various local laws and regulations, administrative practices regulating matters such as data privacy, consumer protection, procurement, equal employment, the national minimum wage and the environment, amongst others.
Economic conditions are expected to remain challenging, notwithstanding a modest easing in interest rates. Persistent inflation continues to have a significant impact on consumer purchasing power and business costs and remains the principal contributor to the difficult economic environment. Although inflationary pressures are forecast to moderate over time, they are still expected to constrain discretionary spending. In addition, global uncertainties, including geopolitical tensions and ongoing supply chain disruption, may continue to affect market stability and contribute to price volatility and operational risk. Against this backdrop, the Group is likely to adopt a cautious approach, focusing on effective cost control while making considered strategic investments to navigate the prevailing economic conditions.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2025.
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the group’s activities.
The group’s principal financial instruments could include derivative financial instruments, the purpose of which is to manage currency risks and interest rate risks arising from the group’s activities, and bank overdrafts, loans and corporate bonds, the main purpose of which is to raise finance for the group’s operations. In addition, the group has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations. In accordance with group’s treasury policy, derivative instruments are not entered into for speculative purposes.
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.
The group is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The group could use interest rate derivatives to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.
The group’s principal foreign currency exposures arise from trading with overseas companies. Group policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board. All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
The group has invested £557,300 (4£212,491) in research and development activities on projects in the course of seeking and delivering innovative solutions for our clients.
The Strategic Report contains details of our business relationships with our customers, employees and suppliers.
There are no events occurring after the reporting date.
The Strategic Report contains details of likely future developments within the group.
The auditor, PK Audit LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The company and its subsidiaries are exempt from the carbon and energy reporting requirements, as they do not meet the applicable threshold.
We have audited the financial statements of Waterrower Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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 irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the Statutory Senior Auditor ensured that the engagement team, including the component auditors, collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the group through discussions with the directors and from our commercial knowledge and experience of the sector; we focused on those laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through enquiries of management;
we enquired the group's solicitor as to whether there has been any litigation and claims;
identified laws and regulations were communicated within the audit team who remained alert to instances of non-compliance throughout the audit;
we assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud; and
we considered the worldwide controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
Based on our understanding of the group and industry, and through discussion with the directors and other management, we identified that the principal risks were in relation to:
management bias in relation to the risk of management override of controls and transactions;
the risk of not identifying related party transactions and performance of transactions outside the normal course of business;
revenue recognition and cut off;
existence and valuation of the stock;;
management judgements applied to the recoverability of intercompany and related party balances; and
completeness and accuracy of component entity financial information consolidated into the group financial statements and the consolidated journals.
In response to the risk of irregularities, including fraud and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
performing analytical procedures to identify any unusual or unexpected relationships and transactions;
auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business;
assessing whether judgments and assumptions made in determining the accounting estimates were indicative of potential bias;
agreeing disclosures within the financial statements to underlying supporting documentation;
requesting the minutes of meetings of those charged with governance;
enquiring of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims;
for an appropriate sample of transactions, identifying the revenue recognition point for the sales of goods, and testing for completeness by ensuring the transaction was properly recorded in the sales nominal ledger account;
reviewing correspondence with HM Revenue and Customs, bankers and the company’s relevant costs;
discussing the existence of related parties with management and obtaining confirmation of inter-company balances;
attend stocktakes and physically inspect and check quantities to items on the premises; and
evaluating whether all component entities have been included within the group financial statements and ensuring completeness and accuracy of consolidation journals.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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 parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by section 408 of the 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 (2024 - £85,564 profit).
Waterrower Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 4 The Valley Centre, Gordon Road, High Wycombe, Bucks, HP13 6EQ.
The group consists of Waterrower Holdings Limited and all of its subsidiaries.
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 consolidated group financial statements consist of the financial statements of the parent company Waterrower Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other ventures under a contractual arrangement are treated as joint ventures. In the group financial statements, joint ventures are accounted for using the equity method.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from royalty income is recognised on an accrual basis in accordance with the terms of the underlying agreements and is based on worldwide sales. The company recognises royalty income when it is earned, typically when the right to receive the royalty is established. This occurs based on actual sales, once the significant risks and rewards of ownership of the goods have transferred to the buyer, usually upon dispatch of the goods.
Dividend income from investments is recognised when the shareholder's right to receive payment has been established.
Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
Research expenditure is written off against profits in the year in which it is incurred.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities 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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
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.
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, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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.
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.
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The group offers its customers the right to return defective products under the standard base warranty. During a financial period, the group may receive product returns from customers for various reasons. All costs to repair under the standard warranty are absorbed by the group. The group provides a provision for expected costs of returns under warranty, the calculation of which requires judgements to be made. The provision is calculated using the average historical rate of combined warranty components, service and freight costs as a percentage of sales. The group does not offer extended warranties.
Legal provisions
The group may be involved in legal where the outcome is difficult to estimate. Specifically, the subsidiary, Waterrower Inc, is currently facing a legal claim alleging copyright infringement. The group is vigorously contesting the claim and believes it has a strong basis for defending its position.
As at 31 March 2025, and up to the date of approval of these accounts, the case remains ongoing, and no reliable estimate of the outcome or any potential financial impact can be made. Accordingly, no provision has been recorded in the financial statements in relation to this claim. The group will continue to closely monitor developments and will recognise a provision if it becomes probable that an outflow of economic resources will be required to settle the claim and a reliable estimate can be determined.
An analysis of the group's turnover is as follows:
Turnover by geographical markets has not been disclosed, as in the opinion of the directors the disclosure of any of this information would prejudicial to the commercial interests of the group.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The carrying value of land and buildings comprises:
Details of the company's subsidiaries at 31 March 2025 are as follows:
Details of associates at 31 March 2025 are as follows:
The Group holds money on deposit on behalf of Waterrower International LLC. Such amounts are included as part of cash at bank and in hand and, as at 31 March 2025 amounted to amounted to £2,842,290 (2024: £4,586,856). The corresponding liability to Waterrower International LLC is included as part of other creditors stated above and is repayable on demand.
Provisions are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date.
The Group provides base warranties on sold products that allows customers to return defective products and parts. Pursuant to these warranties, the Group repairs or replaces products and parts that are considered defective at its own expense. The estimated cost of warranty components expense as well as of related service costs and freight expenses is accrued based on historical information regarding the costs of products returned under warranty and their relationship to the sales revenue.
Other provisions
Other legal provisions includes all estimated amounts related to legal cases, provided it becomes probable that an outflow of economic resources will be necessary to settle the claim and a reliable estimate can be made. As at 31 March 2025, the group recognised provisions of £Nil (2024: £12,500 and £60,000). Additional information regarding other contingent liabilities is presented within the contingent liability note.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
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.
The operating leases arrangements are presented below:
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:
The group leases two facilities under operating lease agreements with a related party which expired on 31 December 2022, at which point the leases became month-to-month. Total rent expense for the above leases was £926,355 and £957,840 for the years ended 31 March 2025 and 2024 respectively.
At 31 March 2025, Waterrower Inc was in ongoing litigation with two of its insurance carriers regarding their refusal to provide coverage and defence costs in relation to a copyright infringement lawsuit. The Company sought recovery of legal costs and other amounts under the applicable insurance policies.
At the reporting date, the outcome of these proceedings remained uncertain, as the matters were still ongoing. Following mediation, the parties entered into a settlement agreement in July 2025, pursuant to which WaterRower Inc received £542,943 in October 2025.
The group's subsidiary Waterrower Inc is subject to a legal claim alleging copyright infringement, which also extends to Waterrower (UK) Ltd. The Waterrower group is vigorously contesting the copyright claim and believes that it should be successful in defending its position. As at 31 March 2025, and up to the date of approval of the accounts, the case is ongoing, and the outcome cannot be reasonably estimated.
Subsequent to the year end date, there have been no further developments relating to the court cases referred to in Note 27 above.
In addition, subsequent to the year end WaterRower Inc reached a settlement with its insurance carriers in relation to the insurance recovery dispute described in Note 26. Following mediation, the parties entered into a settlement agreement in July 2025, pursuant to which WaterRower Inc received £542,943 in October 2025.
The remuneration of key management personnel is as follows.
The following amounts are transactions between related parties and the group:
- WaterRower International LLC: Purchases totalling £1,098,614 (2024: £743,333) and sales totalling £6,095,935 (2024: £5,590,658)
- Kingsgrove Investments LLC: Purchases totalling £940,365 (2024: £957,840)
- Parker Mills LLC: Purchases totalling £160,907 (2024: £121,365)
- Pearson Complex LLC: Purchases totalling £174,875 (2024: £160,539)
- Rockland Property Management: Purchases totalling £75,556 (2024: £Nil)
- Wrightman Investments: Purchases totalling £94,037 (2024: £Nil)
- WaterRower Leasing LLC: Sales totalling £13,700 (2024: £Nil)
- WaterRower Investments: Purchases totalling £2,009,664 (2024: £Nil).
The following amounts are due from the related parties to the group at the reporting end date:
- WaterRower International LLC: £ 4,337,113 (2024: £7,319,406)
- WaterRower PTY Ltd.: £Nil (2024: £572)
- WaterRower Sarl.: £ 499,995 (2024: £486,783)
- Pearson Complex LLC: £Nil (2024: £7,000)
- Parker Mills LLC: £4,789 (2024: £4,885)
- Rockland Property Management: £9,999 (2024: £9,060)
- WaterRower Leasing: £11,590 (2024: £5,031)
- Wrightman Investments Inc.: £Nil (2024: £1,033,329)
- WaterRower Scandinavia: £4,667 (2024: £Nil)
- CityRow Interactive: £18,998 (2024: £Nil).
The following amounts are due from the group to the related parties at the reporting end date:
- WaterRower International LLC: £ 2,907,261 (2024: £4,887,490)
- Rockland Property Management: £283 (2024: £Nil)
- Wrightman Investments Inc.: £16,094 (2024: £Nil)
- Kingsgrove Investments Inc: £27,210 (2024: £31,563)
- Pearson Complex LLC: £11,401 (2024: £Nil)
- WaterRower Investments LLC £17,074 (2024: Nil).
As at 31 March 2025, Waterrower Holdings Limited owed to Peter King, a director of the Group, an amount of £3,499,068 (2024: £4,323,022). The loan is repayable on demand and there was no interest charged during the year in respect of the borrowing. The amount is included in other creditors.
As at 31 March 2025, Waterrower UK Limited owed to Peter King, a director of the Group, an amount of £Nil (2024: £3,285).
As at 31 March 2025, an amount of £1,695 (2024: £1,731) was due by Peter King to Waterrower Inc. The amount is included in other debtors.
As at 31 March 2025, an amount of £Nil (2024: £849) was due by Ben Duggan to Waterrower (UK) Limited.
There were no dividends paid the company's directors.