COVENTRY City have filed their latest accounts for the period to June last year which show player sales contributed to a profit of £600,000.
But, although auditors say the club is a going concern given a non-contractual commitment from the Sisu group of companies to waive repayment of loans and continue funding arrangements with the club for another year, a club statement today expressed concern about the impact of relegation from League One.
A statement from the club on its website about the accounts for a year which covered better revenue from improved Ricoh Arena gate receipts, states:
– The accounts show an annual operating profit after sale of player registrations of £601,756 for the period 1 June 2015 and 31 May 2016, compared to a loss of £1,938,126 in the prior year.
– The total club turnover during this period was £5,445,427 – up from £4,763,515 in the previous accounts covering the 2014/15 financial year.
– During this time, direct operating costs decreased from the previous year from £1,517,404 to £1,122,123. This is predominately due to the outsourcing of retail and change in the mechanics of the programme operations.
– Staff costs decreased from the previous year from £5,035,061 to £4,306,746. This is due to an exceptional revaluation of the pension scheme in the prior year, along with changes to the player bonus structure and reductions on administration staff head count.
– Interest payable has increased in the period from £1,369,689 to £2,470,973. This is a result of additional withholding tax due on the interest owed to ARVO. During this period a value of £25,000 was paid in interest, so the value in the accounts is predominately accrued interest not paid.
– The accounts show a significant on-going investment in the club’s Academy. Under EPPP rules, the club must commit a minimum contribution of £510,000 to maintain Category Two Academy status. For the period 2015-2016, the club committed in excess of £600,000.
Coventry City FC Chairman Tim Fisher said: “The football club is satisfied with the positive nature of the financial results; however, we are extremely concerned to be in the relegation zone at this point in the season. Irrespective of the size of the task ahead, League One status is the priority focus for the club.”
Mr Fisher revealed towards the end of last year that £1million profit before tax had been made in 2015/6 because of player sales, which included former CCFC academy product James Maddison. He has said it is a poor business model, but the club has to balance the books after years of annual losses and debt, while being deprived of commercial stadium revenues.
The club retained its young stars Jordan Willis, Ben Stevenson and Ryan Haynes this January, claiming offers from other clubs had been under value.
Many fans have raised concerns over the extent to which any profit from sales of players is being re-invested in the team, who are bottom of League One, 14 points from safety.