Maddison’s sale helps City to make a profit
ACCOUNTS SHOW COVENTRY CITY OWES £44m TO OWNERS
COVENTRY City made a profit of £700,000 after player sales during the year up to May 2016.
However, the football club business Otium Entertainment made an operational loss of £1.75million, according to the latest accounts.
The loss is dramatically reduced from the previous set of accounts when the club lost £3.8 million.
According to the accounts, the group has net current liabilities of £44 million, up from £41.94 million the previous year, with £28.5 million owed to Sisu and almost £12.5 million to Sisu’s Cayman Island-based investment vehicle ARVO.
It is also made clear that the company is only able to continue trading with the support of the owners who have issued guarantees that they don’t intend to withdraw financial support or call in loans in the “foreseeable future”. Details of the club’s financial performance for the 12 months up until May 2016 have come as the accounts for Sky Blue Sports and Leisure (the club’s parent company) and Otium Entertainment (the football club business) were published.
The accounts offer figures which give an indication of how CCFC performed financially in the year up to May 2016.
According to the accounts, the 2015/16 period saw a lift in yearon-year turnover of around £700,000 which was attributed to an increase in season ticket and match day ticket revenues.
Turnover was £5.44 million in the year up to May 2016, up from £4.76 million in 2015.
The club suffered an operational loss of £1.75 million, down from a £3.8 million loss the year before.
Operating costs fell from £1.51 million in 2015 to £1.12 million in 2016.
Taking into account player sales, and “primarily the sale of James Maddison”, the club made a profit of £725,558. That compares to a £1.09 million loss in the previous year.
Money from player sales totalled £2.47 million in 2016, compared to £2.71 million in 2015.
The club has net current liabilities of £44 million.
It has no major creditors other than the club’s owners.
Of the debt, £12.45 million is owed to Arvo – a Cayman Island-based Sisu company used to invest in CCFC.
Interest on loans from Arvo to the football club increased from £1.37 million to £2.47 million in the financial year. This was put down to “additional withholding tax due to HMRC”.
A total of £28.5 million is owed to majority shareholder Sisu Capital Ltd. It relates to “amounts advanced under a loan facility”.
A total of £65.2 million of share capital, created when the club wiped out previous debt when it went into administra- tion, still sits on the books.
According to the figures, a total of £4.5 million was paid out in wages, social security and pension costs, down from £5.24 million the previous year.
The company’s directors at SBSL were paid £215,500 – down from £314,000 the previous year.
Directors at Otium received £115,000 - down from £144,000.
The owners have not taken any money out of the club and they have made a commitment not to call in any loans or interest in the “foreseeable future”.
The club is only at risk of going under if Sisu withdraws its support for the club, which they have said they will not do.
The accounts say the company is being run as a “going concern” and that “these forecasts indicate that the group and company are likely to require additional funding from group shareholders within the next six months”.
Independent auditors BDO signed of the accounts as a “true and fair” record.