RICOH Arena owner Wasps has recorded a group operating loss of £3.8million with rising debts of £43million, newly published accounts show.
The worse than expected operating losses increased from £2.4million the previous year.
Wasps Holding Limited’s group accounts for the year ended June 30 this year also report a 44 per cent upturn in revenues, to £30.9million.
It includes £11.9m for Wasps; £5.2m from stadium company Arena Coventry Limited (ACL): and £13.8m for IEC Experience Limited (a joint venture on events and conferencing with catering company Compass).
But substantially rising costs – of staging events, management and salaries – explain the negative bottom line position.
Cash balances were recorded at just £300,000.
Pre-tax losses rose from £6.3million to £9.3million. But income tax credit of £7million, not used the previous year, has been used in the accounts to improve the bottom line losses.
Despite the losses and limited cash flow, the company has to pay annual interest payments of £2.3million on £35million of the debt residing in a retail bond scheme.
Wasps state it has retained its covenant pledges to bondholders, including that its assets cover its debts. The Ricoh Arena’s valuation on its 250-year lease is unchanged at £48.5million, based on the company’s own self-assessment this year. A revaluation due this year has been pushed into next year.
Wages and salaries rose by £5million to £17million, with the highest paid director receiving £407,255 for the year.
An accompanying statement in the accounts by chairman Derek Richardson partly attributes the losses to “delays in acquisitions and partnerships” and an “indifferent” MTV Crashes event. There is to be a review of the costs of hosting stadium concerts which “fall below expectation”.
It was also a year of investing “both on and off the pitch”.
Administration expenses, which include the costs of managing the business, nearly doubled to £14million, while investment in players is at the top of the league’s salary cap with the acquisition of players.
Average crowds for a successful season on the pitch – finishing third in the Premiership and semi-finals of European Champions Cup – are recorded in the accounts as up to 16,916, from 11,401 the previous year.
The gates are partly attributed to “solid links with new fans, businesses, clubs and schools”, which received thousands of free tickets.
Season ticket sales were up by a quarter, and hospitality and sponsorship by 86 per cent, the accounts state.
ACL’s highlights are listed as the hotel’s conversion completed to DoubleTree by Hilton, the railway station’s completion, the return of concerts, increased casino trading and tenant Coventry City Football Club’s attendances rising above 10,000 last season.
The accounts statement makes no reference to uncertainty over where the Sky Blues will be playing after 2017/8, or potential legal action by the football club’s owners, Sisu, over the council and Higg’s charity’s Ricoh Arena sale to Wasps in 2014.
Lucrative naming rights for the Ricoh Arena have been delayed but are “nearing completion” for next year, a statement in the accounts claims.
Of ambitions for the team, the accounts state: “Wasps will further take advantage of the fact that the Company now owns its own ground for the first time in over 19 years which will continue to lead to enhanced revenues and profits.”
Net debt from loans (less cash balances) was £43.4million (£27.7million the previous year), which comprised the retail bond scheme’s Wasps Finance Plc £33.8million, Derek Richardson £9.1million, and HSBC Plc £0.7million.