The directors present their annual report and financial statements for the year ended 31 May 2023.
The results for year ended 31 May 2023 are set out in the financial statements.
The weak performance on the field had a negative effect on gate receipts and on the ability to fundraise, and whilst costs were well controlled and slightly down on the previous year, this has led to a deterioration in financial performance which had been improving since the move back to Worcester.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The 2022/23 season was a difficult one on the pitch and this in turn was reflected in the financial results for the year. During the year and after the year end, the company has appointed additional directors with significant business experience to help drive the company forward and maximise the marketing potential of the club's main asset, its well supported name in the community. A full-time commercial manager has been appointed to increase the income earning potential. The directors are confident that this will return the club to a break-even situation. Since the year end, one of the directors, Mr S J Lancaster, has acquired a controlling interest in the company and has committed to investing significant sums into the development of the club. This money will help solidify the club's status in the English football pyramid system and enable it to climb that pyramid and in so doing enhance its potential to generate income. Whilst no longer a community owned club, the ethos of commitment to the community and working with it to the benefit of all continues.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Worcester City Football Club Limited for the year ended 31 May 2023 which comprise the income statement, the statement of financial position and the related notes from the company’s accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at https://www.icaew.com/regulation.
The income statement has been prepared on the basis that all operations are continuing operations.
Worcester City Football Club Limited is a private company limited by shares incorporated in England and Wales. The registered office is The County Sports Ground, Claines Lane, Worcester, WR3 7SS.
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 company has sustained a loss on its operations during the year under review, but the situation is predicted to stabilise to breakeven.
The company still retains significant cash reserves, principally derived from the ground disposal in 2013. Whilst those reserves were initially depleted quite rapidly the rate has decreased in recent seasons, and the input of funds from the new majority share holder will further stabilise the situation.
The directors have continued to take steps to place the company in a better trading position, but nevertheless the uncertainties that are inevitable in the sector that it operates mean that there will be always be an element of doubt on the company’s ability to continue as a going concern in the years to come.
After making full enquiries and considering these uncertainties, the directors consider it appropriate to prepare the financial statements on a going concern basis for this year. Further information in respect of this is set out in the Directors’ Report.
Basic financial assets, which include trade and other receivables 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 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 company after deducting all of its liabilities.
Basic financial liabilities, including trade and other payables, 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.
Trade payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the company 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 company.
In the application of the company’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 average monthly number of persons (including directors) employed by the company during the year was:
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
Since the year end the shares held by Worcester City Football Club Supporters Ltd were acquired by Simon Lancaster, and he now owns the controlling interest. The contractual agreement for the acquisition requires Mr Lancaster to provide funding of £500,000 over the course of the next 5 seasons, these funds are by way of donation to the company and are not repayable.
At 31 May 2023, Worcester City Football Club Supporters Ltd owned 51.81% of the company's ordinary share capital, however on review of their shareholding structure the company's directors are of the view that that there was no individual controlling party of this entity.
As outlined in note 8, subsequent to the year end 153,000 shares held by Worcester City Football Club Supporters Ltd were acquired by Simon Lancaster, and he now owns a controlling interest in the company.