The directors present the strategic report for the year ended 30 June 2023.
Business Review - Group
The group's performance is a combination of the performance of the subsidiaries, Commercial Power Limited, Fleetwood Wanderers Limited and Poolfoot Sports Complex Limited.
Business Review - Commercial Power Limited
From a trading perspective, excluding exceptional items, Commercial Power Limited has delivered another successful year with the overall business performance being in line with the Directors’ expectations. Turnover for the year was £12.4m (2022: £7.34m) an increase of 68.9%. Reported trading profit prior to exceptional costs totals £7.5m (2022: £1.2m). This increased income and profit has arisen on a revised service offering to a related company, being a monthly retainer for services, rather than on a % commission basis.
The target market remains consistent with the prior year, and the business offers an independent commercial energy aggregation service, specialising in commercial gas and electricity to a predominantly SME and small corporate businesses. The business model has evolved since the previous year with more focus on debt collection which has increased additional revenue streams. However, energy aggregation service sales to third parties has decreased in the year with the main bulk of these sales being to related companies instead.
During the year, the company has incurred significant exceptional costs totalling £25.1m, which ultimately have resulted in the loss reported for the year and the shareholders deficit reported as at 30 June 2023.
The exceptional costs are explained in further detail in note 4 to the financial statements. Fundamentally the provisions made for group/ related company debts are based on potential non-recovery of historic balances. The exceptional group debt written off is based on a contractual debt reassignment of old, potentially irrecoverable debts to a related company, in which the company secured income on the reassignment for 10% of the debt value.
Post year end, sales with 3rd parties have further declined and as such the company is primarily only providing services to a related company. The directors consequently decided to cease new business and to transfer employees to the related company on 1 November 2023. The company will continue only to receive legacy income on historic arrangements/ contracts and will recover debts and pay 3rd party liabilities.
The exceptional costs and resultant loss for the year has resulted in a net liabilities position of (£12.2m). At the year end, creditors: amounts falling due within one year include debts owed to related companies of £13.7m. Agreement has been reached with these related companies that although the debt is technically considered due on demand (on the basis no formal loan agreement is in place), repayment will not be sought until cash flow permits. Based on this agreed financial support, the financial statements have been prepared on the going concern basis.
Key Performance Indicators - Commercial Power Limited
The board reviews the Company’s KPIs at the monthly board meetings. These include operational and financial measurements.
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|
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| 2023 |
| 2022 |
Turnover |
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| £12.4m |
| £7.3m |
Gross profit margin |
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| 89.75% |
| 62.67% | |
Profit before tax and exceptional | £7.5m |
| £1.2m | |||
(Loss)/ profit before tax |
| (£17.6m) |
| £266k | ||
Shareholder/ (deficit) funds: |
| (£12.3m) |
| £5.3m | ||
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|
|
|
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The above illustrates that prior to exceptional items, the company was trading profitably.
The exceptional items incurred in 2023 have resulted in the shareholder deficit.
Under the management of Scott Brown, the year saw the club compete for the ninth successive season (the current longest serving club) in the Sky Bet League One, the third tier of English professional football. The club finished 13th out of 24 clubs in the 2022/2023 season. The club also made it to the 5th Round in the FA Cup, the furthest in the club’s history.
The club continued to invest strongly in the academy and applied to achieve a Category 2 academy status, the second highest category in English football, with the intention of achieving this status for the 2023/2024.
In line with the club’s business model of investing into the academy through personnel and infrastructure (including a significant investment into the refurbishment of a local hotel, held on long term lease) the club continues to realise income from the sale of academy players and negotiated transfer clauses on those players, allowing for significant future sell on percentages, and other ongoing payments contingent on the performances of those players at their new clubs.
The expectations are that this income stream will continue and will benefit the club year on year, both from the future movements of players sold and with more academy players playing for the 1st team, through this continued investment and development of new young talent at the club.
Seven academy players made their first team debuts, illustrating the ongoing success of the commitment to invest in the development of the club and its players.
The club also joined forces with Waterford FC, Ireland, in a collaboration to extend the recruitment and development options for the club. The link saw two players transfer from the Irish club to Fleetwood during the season.
The club ended the season with Scott Brown in the post as manager.
Key Performance Indicators - Fleetwood Wanderers Limited
The Directors have, and will continue to, monitor all of the KPIs and daily operating controls and maintain a strong focus on increasing performance of the company.
The main KPIs and corresponding results are as follows:
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|
| 2023 |
| 2022 |
Turnover |
|
| £6.1m |
| £7.3m |
Loss after taxation | (£6.0m) |
| (£1.7m) | ||
Shareholder’s deficit | (£30.9m) |
| (£24.9m) |
Turnover has decreased by 18% during the year. This decrease principally relates to £1.6m reduction in income from player fees, which does vary year-on-year dependent on player loans and trading agreed. Funding from the EFL which has decreased by £0.4m post COVID. Positively, gate sales, bar sales, merchandise sales, prize money, facility hire and academy funding has all increased when compared to 2021/22.
The increased loss for the year is partially due to decreased income, as explained above, but also due to increased costs fundamentally relating to investment in the academy, the players and the club facilities.
The company remains in a net liabilities position, however financial support is provided by both group and related companies to ensure the future stability of the club.
Poolfoot Farm is home to a number of professionally prepared grass pitches, two full size artificial grass pitches, four artificial grass 5-a-side pitches, gymnasium, classrooms, physiotherapy suite, changing rooms and offices. A new Air Dome was opened during the year housing another gymnasium area and a further three quarter size artificial grass pitch. A full public bar, restaurant and retail facility services the entire site.
The site continues to trade its bar, restaurant, retail outlet and hire of its football pitches and runs internationally focussed commercial football programmes and is the central training base for Fleetwood Town Football Club's First Team and Academy teams.
Business Review - Jaymel Limited
The company has built an elite sports and leisure complex, located a short distance from Fleetwood Town football club. The complex is mainly used by the football club for training but also a venue for local grassroots clubs to train and participate in local youth leagues. The emphasis on this complex is for community use. The operation of this complex is undertaken by Poolfoot Sports Complex Limited.
The group seeks to manage risk through a combination of Board oversight, operational routines, and policies and the principal risks are aggregated as follows:
Liquidity risk - Group
The company seeks to manage financial risk by ensuring liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. For short to medium term flexibility, from time to time the other related party trading companies provide cash loans.
Credit risk- Commercial Power Group
The principal credit risk arises from the company's trade debtors.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
From time to time the business will issue its brokers with cash advances to support their cash flow, the use of these advances is monitored closely by the board so that the business does not take on undue risk.
Industry specific risks- Commercial Power Limited
The directors' consider the greatest risk to be the threat of increased regulation in the energy market. The business has continued to mitigate this risk by ensuring the business has the right skills and capabilities to monitor and maintain compliance with any arising regulatory requirements.
Industry specific risks- Fleetwood Wanderers Limited
The principal risk to the business is poor on field performance which could result in relegation that would potentially damage the income levels. Management are aware of this and are working towards a restructuring of the business model to mitigate such risk.
The club is impacted directly by the regulations and rules set by the FA, EFL, UEFA, and FIFA. The board monitors any changes within these regulations and ensure compliance to them.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2023.
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Going concern
The group is in a significant net current liabilities position and the going concern basis is entirely based on financial support provided by related companies. At the year end, net liabilities amounts to £40.2m (2022: £8.5m) which has increased in the year due to the accounting loss incurred.
At the year end, the group has related company debts of £52.9m, which are included within other creditors: amounts falling due within one year. This is on the basis that there are no formal loan agreements in place and as such by default are deemed repayable upon demand. Signed confirmations have been obtained, confirming that repayment of these loans will not be sought until cash flow permits.
Additionally, it has been agreed that certain profitable related trading companies, will financially support the group for a period of more than 12 months from the signature of these accounts. This will cover the ongoing costs of operating the various activities of the group as required. Financial forecasts have been prepared by these related companies and adequate financial funds are available to cover any shortfall of the group, based on budgets set for 2023/24.
Based on the financial forecasts prepared, the directors are satisfied that, for the foreseeable future, the group can meet its projected working capital requirements. Implicit within these projections is the assumption that there will be continued support from related party companies. Consequently, the financial statements have been prepared on a going concern basis.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Fleetwood Wanderers Limited
The club is committed to improving the facilities and commenced work on new hospitality areas, providing state of the art facilities for home and visiting directors, and a further area for other guests of the club. Installation of a brand new set of floodlights commenced in June, using more efficient LEDs, with the intention for these to be ready for the new 2023/2024 season. Other stadium works including brand new press seating, full replacement of the artificial grass surrounding the pitch, CCTV/PA system improvements and the installation of LED advertising screens behind both goals, helping deliver increased sponsorship revenue. The club continues to invest to ensure the stadium meets the highest standards both from safety perspective and a supporter experience with further investment planned for the 2023/2024 season. There is also further investment intended on the hotel which will open up considerably more rooms to accommodate club personnel and will also provide opportunities to monetise the club's brand through international football programmes and touring groups to the area.
Commercial Power Limited
On 1 November 2023, the directors have decided not to undertake any new business with 3rd parties and as such the company employees were transferred to a related company. The company will continue to collect legacy income based on contractual agreements and will have minimal future costs.
The auditor, Sumer Auditco Limited, is was appointed during the year and is deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Jaymel Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the company's license to operate. We identified the following areas as those most likely to have such an effect: laws related to regulations concerning property rental, health and safety and data protection. The trading subsidiaries also include laws related to the regulatory nature of brokerage, employment law and the operation of a football team.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud;
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,312,398 (2022 - £198,347 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Jaymel Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Poolfoot Farm, Butts Road, Thornton-Cleveleys, FY5 4HX.
The group consists of Jaymel Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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 financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purpose of FRS102 and has elected to take exemption under FRS102 paragraph 1.12 (b) not to present the company statement of cashflows.
The consolidated group financial statements consist of the financial statements of the parent company Jaymel Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future, based on continued financial support by related companies. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Due to both current and historic trading losses, the group's balance sheet shows net current liabilities of £53,906,709 (2022: £20,691,222) and net liabilities of £40,187,363 (2022: £8,542,366).
The group requires continued financial support from related companies, namely the agreement that related company debts will not be sought for repayment unless group cash flow permits. Financial support from related companies also includes support for on-going working capital funding as required, to ensure the group has adequate financial funds available to ensure costs of operating the various trading companies. This financial support has been confirmed for a period of at least 12 months from the signature of the accounts, supported by the preparation of financial forecasts and budgets set for 2023/24.
As at 30 June 2023, the group owed related companies £52,902,063. These balances are included within other creditors: amounts falling due with one year, on the basis that there are no formal loan agreements and therefore by default are deemed to be repayable upon demand, from a statutory financial statement’s presentation perspective. This is despite the practical assurances received that these related company balances will not be sought for repayment until cash flow permits.
The directors have considered the future profitability of certain profitable, trading related companies and their ability to financial support the group and are satisfied that adequate resources are available, enabling this group to continue as a going concern. Based on financial forecasts and budgets set for 2023/24, the directors are satisfied that, for the foreseeable future, the group can meet its projected working capital requirements. Implicit within these projections is the assumption that that there will be continued support from related party companies. Consequently, the financial statements have been prepared on a going concern basis.
Turnover from commissions represents the value of commissions receivable from third parties in respect of sales contracts signed up during the accounting period, excluding value added tax. Turnover from commissions is recognised by reference to the date the contract with the end user is confirmed as being approved by the energy provider.
Turnover from Fleetwood Wanderers Limited and Poolfoot Sports Complex Limited is recognised as services and events are provided. Income generated from football matches is recognised as matches are played, this includes seasonal packages which are split equally between league home games. Sponsorship and similar commercial income is recognised over the duration of the football season whilst additional facility fee for live coverage or highlights are taken when earned. Merit awards, where applicable, are accounted for only when known at the end of the season.
Where turnover represents prize money it is recognised in the accounting period in which the prize money is determined.
Merchandise sales are recognised at the fair value of the consideration received for goods sold and is shown net of VAT and other sales related taxes.
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Some leasehold improvements capitalised during the year have not yet been depreciated. They came into use following the year end and will be depreciated in the year to 30 June 2024.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Other fixed asset investments are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in or .
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the group’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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Turnover derived from commission on a pence per unit basis includes an estimate of the amount of utility supplied to end users. This estimate is constantly revised throughout the length of the end users contact and is based on meter readings and industry data. Estimation of the number of units consumed and therefore commissions receivable are revised throughout the contact until final reconciliation data is received.
Similarly commissions paid may also subject to the same degree of estimation, with associated costs dependent on the receipt of final reconciliation data.
The useful economic life of tangible fixed assets has to be estimated by the directors of the company to ensure an appropriate depreciation charge is recognised in the year. The value of the assets ultimately depends on the condition of the assets and whether economic income can be derived from the asset. The directors undertake a periodic review of the assets to ensure the value of the assets is fairly stated within the financial statements. Depreciation charged during the year totalled £515,544 (2022: £516,206).
During the year, certain costs which are directly attributable to operating a football club and delivering the FTIFA experience, have been reclassified from administrative costs to cost of sales. Costs include player wages (including social security costs and pension contributions), loan player fees, agents fees and club fines. As well as travelling expenses and professional fees for coaches and other football professionals, that are directly attributable to FTIFA income. A prior year adjustment has been processed to ensure costs for 2022 are presented on a comparable basis.
As a result of the prior year adjustment, cost of sales for 2022 has increased by £4,610,529 and administrative expenses have decreased equally by £4,610,529. There has been no change to the previously report loss or net liabilities as at 30 June 2022.
Exceptional items in the current year represents a full provision for non-recoverability of an intercompany loan, with its related parties Smart Choice Metering Limited, Utilisearch Limited and Power Grade Ltd.
Also in the current year, an exception loss was incurred on group debt reassignment to a related company.
Government grants received in the prior year relate to claims made for the Coronavirus Job Retention Scheme and the Restart Grant Scheme.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Remuneration paid to directors during the year was £Nil (2022: £Nil).
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Deferred tax has been recognised at a rate of 25%. In October 2022, the government announced an increase in the corporation tax main rate from 19% to 25% for companies with profit over £250,000. There is a small company rate of 19% for taxable profits under £50,000 and marginal relief available for profits falling between £50,000 - £250,000 with effect from 1 April 2023.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
More information on impairment movements in the year is given in note 14.
More information on impairment movements in the year is given in note 14.
Some leasehold improvements capitalised during the year have not yet been depreciated. They came into use following the year end and will be depreciated in the year to 30 June 2024.
Fixed assets comprise of an elite sports and leisure complex, which the directors estimate has a fair value of £10,000,000 as at 30 June 2023 (2022: £10,000,000). This is based on a rebuild land and building cost assessment of £8,833,355 plus additional in-built operational facilities included in fixtures and fittings. The rebuild cost valuation was undertaken on 28th April 2022 by RebuildCostASSESSMENT.com, who are not connected with the company.
Details of the company's subsidiaries at 30 June 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Other borrowings in absolute terms includes an unsecured, non-interest bearing loan from the EFL of £666,667 (2022: £1,333,334). For accounting purposes an interest rate of 2.5% p.a. has been applied to discount this loan as required by accounting standard for non-market rate loans. Repayments of £333,333 commenced on 13 August 2021, twice yearly and full repayment due by 15 January 2024. After discounting the loan balance at year end amounted to £656,516 (2022: £1,305,770).
Other borrowings also includes a £61,200 (2022: £122,000) total unsecured, non-interest bearing advance from the EFL. On the grounds of immateriality, no discounting has been applied for this loan. Repayments of £30,400 commenced on 1 October 2021, twice yearly and full repayment due by 1 April 2024.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset, set out above, fundamentally relates to accelerated capital allowances claimed on the purchase of fixed assets, and is expected to release over the useful economic life of the associated fixed asset. The other short term timing differences and pension contributions will affect tax relief when paid.
The deferred tax liability, set out above, fundamentally relates to the net expected future tax liability payable after considering unutilised tax losses and the expected gain on a revalued property. Also there are accelerated capital allowances claimed on the purchase of fixed assets, which will release over the useful economic life of the associated asset acquired.
Deferred income is included in the financial statements as follows:
The grants are secured by way of a negative pledge over leasehold property assets of the company.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
As at the year-end, contributions due to the schemes in respect of the current reporting year were £47,782 (2022: £47,649).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company has taken advantage of the exemption available in accordance with Financial Reporting Standard 102 Section 33, not to disclose transactions entered into between two or more members of a group, where any subsidiary party to the transaction is wholly owned.
During the year the group has recognised sales of £11,173,529 (2022: £2,732,688) to and recharges of other administrative expenses of £549,055 (2022: £312,351) from Business Energy Solutions Ltd, a company under common control. During the year £Nil (2022: £1,203) was repaid to Business Energy Solutions Ltd. At the year-end an amount of £15,775,832 (2022: £13,647,299) was owed to Business Energy Solutions Ltd, this amount is included within other creditors.
During the year the group has recognised sales of £1,994,132 (2022: £4,697,747) to and recharges of other administrative expenses of £139,151 (2022: £103,655) from BES Commercial Electricity Ltd, a company under common control. At the year-end an amount of £6,097,298 (2022: £6,222,799) was owed to BES Commercial Electricity Ltd, this amount is included within other creditors.
During the year the group has recognised sales of £499 (2022: £Nil) to CX Global Holdings FZCO, a company under common control During the year £269,996 (2022: £86,164) was advanced to CX Global Holdings FZCO. At the year-end an amount of £356,759 (2022: £104,805) was owed from CX Global Holdings FZCO, this amount is included within other debtors.
During the year, the group has recognised various management services from JRP Management Services Limited, a company under common control of £1,609,054 (2022: £Nil) and has also made sales to JRP Management Services Limited of £297,110 (2022: £Nil). Additionally, debt totalling £31,296,141 owed by the group to the following companies, was sold to JRP Management Services Limited.
Commercial Power Limited (fellow group company) £29,644,067
BES Commercial Electricity Ltd (related company) £ 644,115
Business Energy Solutions Ltd (related company) £ 1,007,959
At the year-end £30,998,898 (2022: £Nil) was owed to JRP Management Services Limited, this amount is included within other creditors.
During the year the group recognised sales of £63,994 (2022: £17,167) to and has recognised commissions due to CX International (PTY) Ltd, a company under common control, of £287,436 (2022: £868,982). During the year £Nil (2022: £19,294) was advanced to CX International (PTY) Ltd. At the year-end an amount of £19,306 (2022 debtor: £102,030) was owed to CX International (PTY) Ltd as included in other creditors.
During the year the group has recognised sales of £26,859 (2022: £30,885) to and purchases of £Nil (2022: £6,837) from Smart Choice Metering Limited, a company under control. During the year £953,000 (2022: £236,015) was advanced to Smart Choice Metering Limited. During the year a provision has been made for non-recoverability of £3,192,015 (2022: £Nil) for debt owed by Smart Choice Metering Limited. At the year-end an amount of £3,597 (2022: £2,211,975) was owed by Smart Choice Metering Limited.
During the year, the group has recognised various management services from Davidson Family Limited, a company under common control of £180,376 (2022: £Nil). At the year-end £9,324 (2022: £Nil) was owed to Davidson Family Limited, this amount is included within other creditors.
During the year the group has recognised sales of £33,085 (2022: £111,950) to and purchases of £49,325 (2022: £60,441) from Card Saver Limited, a company under common control. At the year-end an amount of £742 (2022 debtor: £36,259) was owed to Card Saver Limited, this amount is included within other creditors.
During the year the group recognised sales of £1,994 (2022: £5,362) to and purchases of £385 (2022: £Nil) from The Leisure Channel Limited, a company under common control. At the year-end an amount of £3,879 (2022: £3,448) was owed by The Leisure Channel Limited, this amount is included within other debtors.
During the year the group has recognised sales of £995 (2022: £Nil) to, and accommodation charges of £105,115 (2022: £93,641) from New Primrose Developments LLP, a partnership under common control. At the year-end an amount of £665 (2022: £5,833) was owed to New Primrose Developments LLP, this amount is included within other creditors.
During the year the group has recognised purchases from Breck Apartments LLP of £11,258 (2022: £12,073), a partnership under common control. At the year-end an amount of £Nil (2022: £3,040) was owed to Breck Apartments LLP, this amount is included within other creditors.
During the year the group has recognised sales of £Nil (2022: £16,200) to and purchases of £114,603 (2022: £638,432) from Utilisearch Ltd, a company under common control. During the year a provision has been made for non-recoverability of £19,440 (2022: £Nil) for debt owed by Utilisearch Ltd. At the year-end an amount of £Nil (2022: £10,457) was owed by Utilisearch Ltd.
During the year £101,418 (2022: £Nil) was donated by the group to Hout Bay Charitable Trust ZSA, a charity under common control.
During the year the group has recognised sales of £2,252 (2022: £Nil) to Power Grade Ltd, a company under control. During the year £880,651 (2022: £Nil) was advanced to Power Grade Ltd and a provision has been made for non-recoverability of £880,651 (2022: £Nil) for the debt owed by Power Grade Ltd. At the year-end an amount of £7 (2022: £Nil) was owed by Power Grade Ltd, this amount is included within other debtors.
All group debts are unsecured, non-interest bearing and repayable on demand.
Included within accruals is interest payable to the director at a rate of 10% p.a. (2022: 10%) on any balances owed to them throughout the year. During the year interest of £21,089 (2022: £1,011) was incurred. As at the year end accrued interest amounted to £41,636 (2022: £20,547).
The overdrawn director's loan balance was fully repaid by 31 March 2024.