September 29th, 2016

Coventry City Football Club new accounts show £1.9m loss at Ricoh

Coventry City Football Club new accounts show £1.9m loss at Ricoh Coventry City Football Club new accounts show £1.9m loss at Ricoh

COVENTRY City Football Club’s new accounts show annual losses of just under £2million after returning to the Ricoh Arena, the Observer can reveal.

The latest accounts – for the year up to May last year – reveal operating losses of £1.9million, down from an adjusted figure of £4.4million in 2013/14, when the club played ‘home’ games for almost the entire season at Sixfields stadium in Northampton.

Crucially, revenues were up by £1million to £4.7million, with extra income from better Ricoh attendances than at Sixfields. Income also came with cash raised by catering around the Ricoh Arena stadium concourse, excluding corporate catering.

The club’s operating company Otium Entertainment Group’s accounts up to May 2015, and those of parent company Sky Blue Sports and Leisure, are set to be published on the Companies House website.

The club says they reveal “a significant improvement in the overall performance and financial stability of the business, achieved through the hard work of the staff over the last twelve months.”

Attendances have risen again this season – since the period of the newly published accounts – to regularly above 11,000, with the club under team manager Tony Mowbray challenging for promotion.

But, with Football League ‘financial fair play’ restrictions limiting what clubs can spend on the team to 60 per cent of revenue, the picture suggests the club will not have much scope to invest much more in players next year. The team budget for League One this year is around £2.5million, lower then other clubs which own their own stadium.

The club is unable to access commercial revenues such as from conferencing and events and other around-the-clock stadium activities.

Those funds go to the Ricoh’s owners, rugby club Wasps. Arena Coventry Limited was sold to London Wasps Holding Limited in October 2014 by Ricoh freeholders Coventry City Council and the Alan Edward Higgs Charity of a 250-year lease deal not offered to the football club.

The club under new boss Chris Anderson has said it is keeping options open between building a new stadium “in Coventry” or staying at the Ricoh  – where as tenants they would hope to negotiate a better deal over revenues with the Wasps, which have reported £35million debts and last year transferred debts to retail bond holders, as the Observer exclusively revealed.

The club says total turnover between June 1, 2014 and May 31, 2015 was £4,763,515 – up from £3,755,049 in the previous accounts.

The club also says direct operating costs – such as policing and stewarding – rose from the previous year from £1,110,753 to £1,517,404.

The accounts show an annual operating loss of £1,951,233, down from a £4.4 million (as adjusted for the exceptional charge related to the impairment of goodwill), the club states.

The club says auditor BDO has now dropped its previous concerns about whether the club can continue to operate as a going concern for the following financial year.

It says the clubs ‘owners’/funder – the Sisu/Arvo group of companies – will not call in interest payments or downpayment on debts, with interest payments down £2.7m to £1.37m year-on-year because debt was converted into shares by the owners last year, the club says.

The club adds: “The directors have produced forecasts which demonstrate the group can operate within its means without reliance on the owners and without any material uncertainties.”

Legal costs for the Judicial Review legal actions were not paid by either Otium or SBSL, it adds.

CCFC chairman Tim Fisher said: “The latest set of accounts represent a significant improvement in the financial performance and consequent financial stability of the football club. We are pleased with the continued direction of travel of the club’s financials.

“The directors are pleased to be able to present a set of accounts which are showing a more stable financial footing including the removal of any uncertainties which no longer require the auditors to make reference to.

“The accounts highlight that the football club is financially more stable than ever and clearly illustrates our continued shift away from financial dependence on our shareholder creditor-investors.

“Overall, I’m particularly pleased that the accounts  illustrate the clear impact of the necessary combined effort and team work of everyone at the club which has been and remains critical as we continue to drive this club forward.”

Executive Vice Chairman Mr Anderson said: “The latest set of accounts give the club a great platform from which to grow on in the future.

“This set of accounts records the progress made by the club in the 2014/15 season and I’m expecting the progress to continue into the next year as our matchday attendances have risen by 40 per cent during the 2015/16 campaign.

“However, the accounts also highlight the need to increase our commercial revenues as they’re crucial to the ongoing turnaround, and success of the club. Work is continuing on delivering a best-in-class football model which has seen significant progress under the stewardship of Tony Mowbray and Mark Venus.

“Our supporters should take great pride in their football club, as significant progress has been made on and off the pitch, and we are working hard to make sure that’ll only continue going forward.”

The accounts show a significant on-going investment in the academy, the club says. Under rules, the club had to commit to a minimum contribution to Category Two Academy status of £512,000. For the period 2014-2015, the club committed in excess of £600,000.

 

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