Company registration number 03706046 (England and Wales)
NEWCASTLE RUGBY LIMITED
ANNUAL REPORT AND GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NEWCASTLE RUGBY LIMITED
COMPANY INFORMATION
Directors
I Kurdi
D R T Thompson
M J Thompson
Company number
03706046
Registered office
Newcastle Falcons RFU
Kingston Park
Brunton Road
Newcastle upon Tyne
NE13 8AF
Auditor
Sumer Auditco Limited
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
Bankers
Barclays Bank
49-51 Northumberland Street
Haymarket
Newcastle Upon Tyne
NE1 7AF
Solicitors
Ward Hadaway
Sandgate House
102 Quayside
Newcastle upon Tyne
NE1 3DX
NEWCASTLE RUGBY LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Profit and loss account
10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 31
NEWCASTLE RUGBY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -

The directors present the strategic report for the year ended 30 June 2023.

Principal activities

The principal activity of the parent company is the operation of a professional rugby union club, Newcastle Falcons.

 

Newcastle Rugby Limited is the 100% parent of Thunder Rugby Limited and Newcastle Falcons Limited.

 

The principal activity of Thunder Rugby Limited is the operation of Newcastle Thunder Rugby League Club.

 

Newcastle Falcons Ltd is a dormant company.

Review of the business

The Group made a loss for the year of £2.4m (2022 – £2.5m).

 

Off the field we continue to develop both our commercial and conference & events activities and would like to thank the ongoing support of our incumbent and new commercial partners. Our conference & events business continued to expand in 2022/23 and furthermore in 2023/24 with events being hosted at Kingston Park, Hexham Racecourse and beyond.

 

We also welcome our blossoming relationship with Newcastle United Women’s Football Club as we host both the day-to-day operations and matchdays throughout their season.

 

Newcastle Rugby Foundation, our charitable arm, continues to develop and expand its work to make rugby the positive difference that changes lives for good, and this is something that the club will continue to support wholeheartedly.

 

Newcastle Falcons RFC - The 2022/23 season

On the field, Newcastle Falcons had an incredibly tough year, finishing 11th in the Premiership table, with 6 wins. The club continues to have a young and ambitious squad with international representation across all age groups.

 

Newcastle Thunder RFC - The 2022/23 season

The 2023 season has been a further season of challenges for Thunder. Having competed in the championship, the club finished in last placed and were therefore relegated to RFL Betfred League One. Despite a number of years of support from the group and tireless effort from club staff, fan engagement has continued to show little growth and as such the decision to part company with Newcastle Thunder was made.

 

On a positive note, this has allowed the Group to concentrate efforts on the core business of Newcastle Falcons RFC and our conference & events business. Furthermore, Newcastle Thunder have been re-admitted to RFL Betfred League One under new ownership. As a Group, we welcome the opportunity to host their forthcoming seasons games, and wish the new ownership every success for the future.

NEWCASTLE RUGBY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
Future developments

The structure of the Gallagher Premiership competition had been confirmed for the 2023/24 season, with a total of 11 clubs due to compete in the top division.

 

This season has seen one of the largest changes to the Premiership, with the incredibly sad demise of two premiership clubs; Wasps and Worcester. Prior to the beginning of the season, in June 23, London Irish also went into administration and has subsequently folded.

 

This has been an incredibly hard time for players, employees and fans of these clubs and we have huge sympathy for those associated with Wasps, Worcester and London Irish.

 

This meant the Gallagher Premiership is now competed for by 10 clubs.

 

This has caused others to take a hard look at club finances and Newcastle Rugby has taken significant steps towards a more self sustaining model. This will continue to come into fruition in the 2023/24 season and beyond. Management believe this emphasis on financial sustainability coupled with the continued investment into young, home grown talent will be something our faithful support can rally behind in the future months and years.

 

Our Academy continues to flourish, and we are incredibly proud of our academy programme. We continue to nurture and develop young talent in the region. Our record of producing home-grown players who are ready to succeed, both on and off the pitch, continues through the work of our experienced, skilled, and enthusiastic Academy team.

 

Principal risks and uncertainties

The management of the group and the execution of the group's strategy are subject to a number of risks. The board reviews these risks and puts in place policies to mitigate them.

 

The key group and financial risks are:

 

Employees

The group's performance depends largely on its employees, the loss of a key squad member could have potentially adverse effects on the business. Players are encouraged to remain at the club, with a competitive pay and benefits package. Strict training regimes and diets are put in place and in order to reduce the risk of injuries throughout the squad, physiotherapists and sports scientists are employed.

 

Environment, health and safety incidents

Appropriate measures are implemented to minimise the risk of any environmental and health and safety issues.

 

Interest rate risk

The maturity profile of the group's financial instruments that are exposed to interest rate risk is disclosed in the financial statements.

 

Liquidity risk

The directors regularly monitor the financial information to ensure that any risks in this area are considered on a timely basis.

Key performance indicators

The group measures performance using both financial and non-financial KPIs. The directors consider the following to be the key measure of the group's performance:

 

 

The directors are satisfied with the KPI's achieved given the current economic climate.

NEWCASTLE RUGBY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
s172(1) statement

The directors of the Group must act in the way they consider, in good faith, would most likely promote the success of the Group for the benefit of its members as a whole, and in doing so have regard (amongst other matters), to:

 

 

In discharging their Section 172 duties, the directors of the Group consider that they have had regard in material respects to the factors set out above.

 

The key stakeholders of the Group are our fan and customer base, the local community, our suppliers, employees, and the Group’s shareholders.

 

The directors are committed to creating a sustainable business whilst delivering the best experience for fans, and to compete at the highest level of English Rugby. The relationships between suppliers, partners and customers is key to the success of Newcastle Rugby, with regular dialogue to ensure that the relationships are working for all parties. Fan forums are held to ensure that improvements are continually made so the best experience is delivered to our suppliers and customers.

 

In considering items of business, the Group makes autonomous decisions on each transaction’s own merits, after due consideration of the long-term success of the Group, Section 172 factors, where relevant, and the stakeholders impacted.

On behalf of the board

I Kurdi
Director
22 April 2024
NEWCASTLE RUGBY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -

The directors present their annual report and financial statements for the year ended 30 June 2023.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

I Kurdi
D R T Thompson
M J Thompson
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Auditor

In accordance with the company's articles, a resolution proposing that Sumer Auditco Limited be reappointed as auditor of the group will be put at a General Meeting.

Energy and carbon report

The SECR disclosure presents our carbon footprint within the United Kingdom, an appropriate intensity metric, the total energy used of electricity and gas, along with an efficiency actions summary taken during the relevant financial year.

Year to 30 June 2023
Year to 30 June 2022
Energy consumption used to calculate emissions (kWh)
2,091,914
2,238,257
Emissions from combustion of gas (tCO2e)
255.93
268.4
Emissions from purchased electricity, location-based (tCO2e)
143.47
148.5
Total gross tCO2e based on above
399.4
416.9
Stadium capacity
10,200
10,200
Intensity ratio (tCO2e/stadium capacity)
0.04
0.04
*where tCO2e is the metric tonne of Carbon Dioxide equivalent
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per head of stadium capacity of 10,200.

NEWCASTLE RUGBY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 5 -
Measures taken to improve energy efficiency

The Group continues to achieve direct savings in energy and associated carbon emissions, through operational and technological improvements, including:

Statement of directors' responsibilities

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and principal risks and uncertainties.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the group is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the group is aware of that information.

NEWCASTLE RUGBY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 6 -
Going concern

At the year end the Group had net liabilities of £20.6m, however in excess of £20.3m is due to the majority shareholder, I Kurdi, who confirmed his willingness not to call on this debt, to meet the day to day working requirements of the Group and also to continue to invest in the long term future of the Group.

 

The financial forecasts to the year ending 30 June 2025 have been reviewed by the Directors and they have concluded that there is a risk in respect of going concern due to the Group's historic and forecast trading performance and the consequential impact on operational cashflow. The Directors firmly believe however that the Group remains a going concern due to the continued support of the majority shareholder and the Group's move to a more sustainable financial model and that this would be sufficient to meet any possible shortfall arising from operating activities, therefore the financial statements have been prepared on a going concern basis.

On behalf of the board
I Kurdi
Director
22 April 2024
NEWCASTLE RUGBY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NEWCASTLE RUGBY LIMITED
- 7 -
Opinion

We have audited the financial statements of Newcastle Rugby Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the group profit and loss account, 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 significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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.

Material uncertainty related to a going concern

In forming our opinion on the Group and parent company financial statements, which are not modified, we have considered the adequacy of the disclosure made in note 1.3 to the financial statements concerning the Group’s and the parent company’s ability to continue as a going concern. The Group and the parent company are dependent on the continuing support of the majority shareholder in order to meet their day to day working capital commitments. The uncertainties surrounding operating profitability and cashflows, as explained in note 1.3, indicate the existence of a material uncertainty which may cast significant doubt about the Group’s and the parent company’s ability to continue as a going concern. The Group financial statements do not include the adjustments that would result if the Group and the parent company were unable to continue as a going concern. Our opinion is not modified in respect of this matter.

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:

NEWCASTLE RUGBY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWCASTLE RUGBY LIMITED
- 8 -
Matters on which we are required to report by exception

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:

Responsibilities of directors

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.

Auditor's responsibilities for the audit of the financial statements

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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

NEWCASTLE RUGBY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWCASTLE RUGBY LIMITED
- 9 -
Capability of the audit in detecting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

 

The following laws and regulations were identified as being of significance to the entity:

 

 

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

 

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

Maxine Pott (Senior Statutory Auditor)
For and on behalf of Sumer Auditco Limited
Statutory Auditor
Unit 2
Gosforth Park Avenue
Newcastle Upon Tyne
NE12 8EG
22 April 2024
NEWCASTLE RUGBY LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
11,221,079
12,221,277
Administrative expenses
(13,354,269)
(14,456,968)
Other operating income
21,500
310,450
Operating loss
4
(2,111,690)
(1,925,241)
Interest payable and similar expenses
7
(248,466)
(322,395)
Other gains and losses
8
-
(267,226)
Loss before taxation
(2,360,156)
(2,514,862)
Tax on loss
9
-
0
-
0
Loss for the financial year
(2,360,156)
(2,514,862)
Loss for the financial year is all attributable to the owners of the parent company.

The Profit And Loss Account has been prepared on the basis that all operations are continuing operations.

NEWCASTLE RUGBY LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
2023
2022
£
£
Loss for the year
(2,360,156)
(2,514,862)
Other comprehensive income
-
-
Total comprehensive income for the year
(2,360,156)
(2,514,862)
Total comprehensive income for the year is all attributable to the owners of the parent company.
NEWCASTLE RUGBY LIMITED
GROUP BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
623,267
714,996
Investments
11
17,551,655
19,220,768
18,174,922
19,935,764
Current assets
Stocks
116,772
109,869
Debtors
13
226,287
1,073,148
Cash at bank and in hand
25,849
57,952
368,908
1,240,969
Creditors: amounts falling due within one year
14
(4,944,111)
(6,194,966)
Net current liabilities
(4,575,203)
(4,953,997)
Total assets less current liabilities
13,599,719
14,981,767
Creditors: amounts falling due after more than one year
15
(34,178,773)
(33,250,279)
Net liabilities
(20,579,054)
(18,268,512)
Capital and reserves
Called up share capital
19
495
495
Share premium account
4,964,575
4,964,575
Other reserves
1,676,388
1,626,774
Non-distributable profits reserve
20
17,481,081
17,481,081
Distributable profit and loss reserves
(44,701,593)
(42,341,437)
Total equity
(20,579,054)
(18,268,512)
The financial statements were approved by the board of directors and authorised for issue on 22 April 2024 and are signed on its behalf by:
I Kurdi
Director
Company registration number 03706046 (England and Wales)
NEWCASTLE RUGBY LIMITED
COMPANY BALANCE SHEET
AS AT
30 JUNE 2023
30 June 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
616,997
710,173
Investments
11
17,551,880
19,220,993
18,168,877
19,931,166
Current assets
Stocks
104,482
91,994
Debtors
13
190,892
1,033,550
Cash at bank and in hand
21,324
43,400
316,698
1,168,944
Creditors: amounts falling due within one year
14
(4,855,755)
(6,062,491)
Net current liabilities
(4,539,057)
(4,893,547)
Total assets less current liabilities
13,629,820
15,037,619
Creditors: amounts falling due after more than one year
15
(34,046,039)
(33,080,515)
Net liabilities
(20,416,219)
(18,042,896)
Capital and reserves
Called up share capital
19
495
495
Share premium account
4,964,575
4,964,575
Other reserves
1,676,388
1,626,774
Non-distributable profits reserve
20
17,481,081
17,481,081
Distributable profit and loss reserves
(44,538,758)
(42,115,821)
Total equity
(20,416,219)
(18,042,896)
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes.
The financial statements were approved by the board of directors and authorised for issue on 22 April 2024 and are signed on its behalf by:
I Kurdi
Director
Company registration number 03706046 (England and Wales)
NEWCASTLE RUGBY LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 14 -
Share capital
Share premium account
Other reserves
Non-distri-butable profits
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 28 June 2021
495
4,964,575
1,547,598
17,748,307
(40,093,801)
(15,832,826)
Year ended 30 June 2022:
Loss and total comprehensive income for the year
-
-
-
(267,226)
(2,247,636)
(2,514,862)
Movement on capital contribution
-
-
79,176
-
-
79,176
Balance at 30 June 2022
495
4,964,575
1,626,774
17,481,081
(42,341,437)
(18,268,512)
Year ended 30 June 2023:
Loss and total comprehensive income for the year
-
-
-
-
(2,360,156)
(2,360,156)
Movement on capital contribution
-
-
49,614
-
-
49,614
Balance at 30 June 2023
495
4,964,575
1,676,388
17,481,081
(44,701,593)
(20,579,054)
NEWCASTLE RUGBY LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 15 -
Share capital
Share premium account
Other reserves
Non-distri-butable profits
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 28 June 2021
495
4,964,575
1,547,598
17,748,307
(38,188,607)
(13,927,632)
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
-
-
(267,226)
(3,927,214)
(4,194,440)
Movement on capital contribution
-
-
79,176
-
-
79,176
Balance at 30 June 2022
495
4,964,575
1,626,774
17,481,081
(42,115,821)
(18,042,896)
Year ended 30 June 2023:
Loss and total comprehensive income for the year
-
-
-
-
(2,422,937)
(2,422,937)
Movement on capital contribution
-
-
49,614
-
-
49,614
Balance at 30 June 2023
495
4,964,575
1,676,388
17,481,081
(44,538,758)
(20,416,219)
NEWCASTLE RUGBY LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
25
(2,435,458)
(5,720,982)
Interest paid
(248,466)
(322,395)
Net cash outflow from operating activities
(2,683,924)
(6,043,377)
Investing activities
Purchase of tangible fixed assets
(87,652)
(117,574)
Proceeds from disposal of investments
1,669,113
338,266
Net cash generated from investing activities
1,581,461
220,692
Financing activities
Increase in borrowings
1,085,359
4,420,412
Repayment of bank loans
(7,067)
(2,877)
Payment of finance leases obligations
(7,932)
(15,300)
Net cash generated from financing activities
1,070,360
4,402,235
Net decrease in cash and cash equivalents
(32,103)
(1,420,450)
Cash and cash equivalents at beginning of year
57,952
1,478,402
Cash and cash equivalents at end of year
25,849
57,952
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
1
Accounting policies
Company information

Newcastle Rugby Limited (“the parent company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Newcastle Falcons RFU, Kingston Park, Brunton Road, Newcastle upon Tyne, NE13 8AF.

 

The group consists of Newcastle Rugby Limited and all of its subsidiaries.

1.1
Accounting convention

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 modified to include the revaluation of investments. The principal accounting policies adopted are set out below.

Newcastle Rugby Limited, as an individual entity, meets the definition of a qualifying entity per FRS 102 and has taken advantage of the exemption available in paragraph 1.12 of FRS 102 from presenting a company-only statement of cash flows. These consolidated financial statements include a consolidated statement of cash flows which include the cash flows of Newcastle Rugby Limited.

 

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes.

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Newcastle Rugby Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

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.

1.3
Going concern

At the year end the Group had net liabilities of £20.6m, however in excess of £20.3m is due to the majority shareholder, I Kurdi, who confirmed his willingness not to call on this debt, to meet the day to day working requirements of the Group and also to continue to invest in the long term future of the Group.

 

The financial forecasts to the year ending 30 June 2025 have been reviewed by the Directors and they have concluded that there is a risk in respect of going concern due to the Group's historic and forecast trading performance and the consequential impact on operational cashflow. The Directors firmly believe however that the Group remains a going concern due to the continued support of the majority shareholder and the Group's move to a more sustainable financial model and that this would be sufficient to meet any possible shortfall arising from operating activities, therefore the financial statements have been prepared on a going concern basis.

NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 18 -
1.4
Turnover

Turnover represents income receivable from the group's principal activities and is exclusive of value added tax.

 

Match day receipts are recognised on the day of the game, with season ticket and hospitality box income being spread over the course of the season.

 

Sponsorship and similar income is recognised over the duration of the respective contracts.

 

Centrally distributed income arising from broadcasting revenue is recognised over the duration of the playing season. During the prior year the group received funds relating to the group's share of commercial income for the following 4 year period. This is recognised within income evenly over this period, which is in line with the group's legal entitlement.

 

Commercial income is recognised as goods and services are supplied. Amounts relating to future accounting periods are carried forward within accruals and deferred income.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Property improvements
50 years straight line
Fixtures, fittings & equipment
3-20 years straight line
Motor vehicles
5 years straight line

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.

1.6
Fixed asset investments

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities 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.

1.7
Impairment of fixed assets

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).

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 19 -
1.9
Financial instruments

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

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

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.

Impairment of financial assets

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.

Derecognition of financial assets

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.

Classification of financial liabilities

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.

NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 20 -

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and other loans 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 receipts 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.10
Taxation

The tax expense represents the sum of deferred tax.

Deferred tax

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.

1.11
Employee benefits

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, if considered material to the financial statements.

 

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.

1.12
Retirement benefits

The group operates a defined contribution pension scheme covering a number of its permanent employees. The scheme funds are administered by trustees and are independent of the company's finances. The group's contributions are charged against profit in the year in which contributions are made.

1.13
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases are charged to profit and loss as they fall due.

NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 21 -
1.14
Government grants

Government 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.

2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

The following judgements (apart from those involving estimates) that have had the most significant effect on amounts recognised in the financial statements.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment in assets, including fixed asset investments, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year, in particular with regards to the investment in shares held in PRL Investor Limited.

Recognition of CVC transaction proceeds

An agreement to sell a significant minority interest in Premier Rugby Limited to certain funds advised or managed by CVC Capital Partners was signed on 29 March 2019 and the club received proceeds of £12.9m as a result of the transaction. The income is being recognised in the profit and loss account over 48 months, with amounts relating to future periods being recognised as deferred income.

 

At the reporting end date the amounts held in deferred income in relation to this were £nil (2022 - £2,368,619).

NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 22 -
Key sources of estimation uncertainty

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.

Determining residual values and useful economic lives of tangible fixed assets

The group depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

 

Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the group would currently obtain for disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices. The carrying amount of group tangible fixed assets at the reporting end date was £623,267 (2022 - £714,996).

Recoverability of debtors

The group establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the debtors and past experience of recoverability. The directors have determined that no such provision is considered necessary as at year end.

Valuation of investments

The group holds it's investment in PRL Investor Limited ("PRL") at fair value as required under section 12 of FRS 102.

 

Judgement has been applied when determining the fair value of the investment, which has been based on the present value of expected future cash flows. This involves the estimation of the discount rate to be used, as well as the estimation of expected future distributions from PRL, based on both historical and expected future cash inflows. The valuation was initially provided by PRL based upon independent advice, and since been amended to reflect an update to the License, Services and Commercial Rights Agreement ("LSCRA") which has increased the proportion of overall PRL revenue distributions.

 

The carrying amount of the investment in PRL Investor Ltd at the reporting end date was £17,551,655 (2022 - £17,551,655).

Long term creditors

Debt instruments are carried at amortised cost which, for certain long term creditors, requires the directors to estimate a market rate of interest. Variations in the estimate could result in change to value of liability recognised in the financial statements. The estimate of this rate is based on numerous factors such as current market conditions.

 

At the reporting end date the discounted 'other loans' have a carrying value of £20,976,687 (2022 - £20,266,252).

NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 23 -
3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Premier Rugby, RFU and RFL income
7,010,321
7,850,835
Sponsorship
648,113
735,729
Marketing and tickets
895,371
1,267,122
Corporate
484,963
612,358
Events
350,829
101,879
Conference, banqueting and bars
1,379,020
1,374,484
Retail
270,262
278,870
Sundry income
182,200
-
11,221,079
12,221,277
2023
2022
£
£
Other revenue
Grants received
-
279,200

Turnover has arisen wholly within the UK.

 

See note 6 for further information on grants received.

4
Operating loss
2023
2022
£
£
Operating loss for the year is stated after charging:
Depreciation of owned tangible fixed assets
174,327
189,895
Depreciation of tangible fixed assets held under finance leases
5,054
10,082
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
12,500
12,500
Audit of the financial statements of the company's subsidiaries
2,500
2,500
15,000
15,000
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Playing and coaching staff
99
138
99
100
Bar and catering staff
105
144
105
144
Administrative staff and directors
13
15
13
10
Total
217
297
217
254

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
8,180,373
9,031,601
7,401,064
8,113,539
Social security costs
905,980
1,006,863
839,291
943,178
Pension costs
102,774
120,119
89,676
92,468
9,189,127
10,158,583
8,330,031
9,149,185

Wages costs include amounts of £nil (2022 - £279,200) paid through the government coronavirus job retention scheme.

7
Interest payable and similar expenses
2023
2022
£
£
Interest on other loans
248,466
320,414
Interest on finance leases and hire purchase contracts
-
1,981
Total finance costs
248,466
322,395
8
Other gains and losses
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
-
(267,226)
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 25 -
9
Taxation

The actual 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:

2023
2022
£
£
Loss before taxation
(2,360,156)
(2,514,862)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(448,430)
(477,824)
Gains not taxable
-
0
50,773
Unutilised tax losses carried forward
448,430
427,051
Taxation charge for the year
-
-
10
Tangible fixed assets
Group
Property improvements
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2022
112,342
2,493,968
142,923
2,749,233
Additions
-
0
87,652
-
0
87,652
At 30 June 2023
112,342
2,581,620
142,923
2,836,885
Depreciation and impairment
At 1 July 2022
22,509
1,904,061
107,667
2,034,237
Depreciation charged in the year
2,247
155,438
21,696
179,381
At 30 June 2023
24,756
2,059,499
129,363
2,213,618
Carrying amount
At 30 June 2023
87,586
522,121
13,560
623,267
At 30 June 2022
89,833
589,907
35,256
714,996
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
10
Tangible fixed assets
(Continued)
- 26 -
Company
Property improvements
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2022
112,342
2,483,180
142,923
2,738,445
Additions
-
0
86,342
-
0
86,342
At 30 June 2023
112,342
2,569,522
142,923
2,824,787
Depreciation and impairment
At 1 July 2022
22,509
1,898,096
107,667
2,028,272
Depreciation charged in the year
2,247
155,575
21,696
179,518
At 30 June 2023
24,756
2,053,671
129,363
2,207,790
Carrying amount
At 30 June 2023
87,586
515,851
13,560
616,997
At 30 June 2022
89,833
585,084
35,256
710,173

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
-
0
3,309
-
0
3,309
Fixtures, fittings & equipment
-
0
1,745
-
0
1,745
-
5,054
-
5,054
11
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
12
-
0
-
0
225
225
Unlisted investments
17,551,655
19,220,768
17,551,655
19,220,768
17,551,655
19,220,768
17,551,880
19,220,993
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
11
Fixed asset investments
(Continued)
- 27 -

Unlisted investment

The group's unlisted investments include an investment in PRL Investor Limited ("PRL"). In line with other shareholding clubs, the group has valued it's investment in PRL based on the income stream that the investment provides.

 

Basis of valuation

The valuation is based on the discounted value of expected future distributions, assuming a discount rate of 8%. This valuation methodology has been approved by the PRL board. During the year there was an update to the License, Services and Commercial Rights Agreement ("LSCRA") which has increased the proportion of overall PRL revenue distributions. The original valuation was based on a distribution allocation rate of 33.33%. This has been increased to 50%, in line with updated LSCRA. The valuation has been amended to reflect this change. The directors consider this to represent fair value at year end.

 

The group has disposed of its 'co-investment' minority shareholding in PRL which was held by Cobalto-co Investment Limited.

Movements in fixed asset investments
Group and company
Unlisted investments
£
Cost or valuation
At 1 July 2022
19,220,768
Disposals
(1,669,113)
At 30 June 2023
17,551,655
Carrying amount
At 30 June 2023
17,551,655
At 30 June 2022
19,220,768
12
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered
Nature of business
Class of
% Held
office key
shares held
Direct
Indirect
Newcastle Falcons Ltd
1
Dormant company
Ordinary
100.00
-
Thunder Rugby Limited
1
Rugby football league club
Ordinary
100.00
-
Registed Office addresses:
1
Kingston Park, Brunton Road, Newcastle upon Tyne, NE13 8AF
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 28 -
13
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
194,212
178,499
158,817
153,918
Corporation tax recoverable
-
0
184,709
-
0
184,709
Other debtors
7,642
709,940
7,642
694,923
Prepayments and accrued income
24,433
-
0
24,433
-
0
226,287
1,073,148
190,892
1,033,550
14
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
16
10,958
4,857
-
0
-
0
Obligations under finance leases
17
2,587
10,519
2,587
10,519
Other borrowings
16
1,069,893
975,810
1,049,779
973,308
Trade creditors
763,208
965,900
731,544
866,900
Amounts owed to group undertakings
-
0
-
0
100
100
Other taxation and social security
467,190
1,165,746
456,075
1,141,946
Other creditors
2,084,488
152,774
2,071,988
153,914
Accruals and deferred income
545,787
2,919,360
543,682
2,915,804
4,944,111
6,194,966
4,855,755
6,062,491

Obligations under finance leases are secured upon the assets to which they relate.

15
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
16
29,098
42,266
-
0
-
0
Other borrowings
16
34,149,675
33,208,013
34,046,039
33,080,515
34,178,773
33,250,279
34,046,039
33,080,515

Obligations under finance leases are secured upon the assets to which they relate.

Amounts included above which fall due after five years are as follows:
Payable by instalments
10,070,250
10,712,978
10,070,250
10,629,708
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 29 -
16
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
40,056
47,123
-
0
-
0
Other loans
35,219,568
34,183,823
35,095,818
34,053,823
35,259,624
34,230,946
35,095,818
34,053,823
Payable within one year
1,080,851
980,667
1,049,779
973,308
Payable after one year
34,178,773
33,250,279
34,046,039
33,080,515

Included within other loans is amount due to The Department for Digital, Culture, Media and Sport ("DCMS"). The loan is repayable over 20 years with no capital repayments due for 3 years. Interest is charged at a rate linked to the Bank of England base rate. The loan is secured by a fixed and floating charge over the assets of the company.

 

See note 23 for further information on other loans.

17
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
2,587
10,519
2,587
10,519

Finance lease payments represent rentals payable by the company or group for certain items of tangible fixed assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
102,774
120,119

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.

19
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
49,500
49,500
495
495
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
19
Share capital
(Continued)
- 30 -

The company has one class of ordinary shares which carry no right to fixed income.

20
Non-distributable profits reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
17,481,081
17,748,307
17,481,081
17,748,307
Non distributable profits in the year
-
(267,226)
-
(267,226)
At the end of the year
17,481,081
17,481,081
17,481,081
17,481,081

Non-distributable profits relate to fair value gains on financial instruments.

21
Operating lease commitments

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:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
400,000
300,000
400,000
300,000
22
Related party transactions

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group and Company
Companies under common control
2,045,126
-

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2023
2022
Balance
Balance
£
£
Group and Company
Companies under common control
-
706,712
NEWCASTLE RUGBY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 31 -
23
Directors' transactions

Included within other loans at the year end, a majority shareholder and director of the Group had a loan account with an outstanding balance of £20,366,893 (2022 - £19,656,156). There are no set terms of repayment of the loan.

 

Included within other loans at the year end, is a loan from a shareholder and director of the Group which is secured by way of a debenture arrangement ranking behind the Sport England loan. The outstanding balance at the year end was £609,794 (2022 - £610,096). The balance is repayable in monthly instalments over 10 years with no fixed terms as to interest on the loan.

24
Controlling party

In the opinion of the directors, I Kurdi was the controlling party of the company by virtue of his majority interest in the issued share capital of the company.

25
Cash absorbed by group operations
2023
2022
£
£
Loss for the year after tax
(2,360,156)
(2,514,862)
Adjustments for:
Finance costs
248,466
322,395
Depreciation and impairment of tangible fixed assets
179,381
199,977
Other gains and losses
-
267,226
Pension scheme non-cash movement
(3,268)
(20,317)
Movements in working capital:
(Increase)/decrease in stocks
(6,903)
5,593
Decrease in debtors
844,033
260,985
Decrease in creditors
(1,337,011)
(4,241,979)
Cash absorbed by operations
(2,435,458)
(5,720,982)
26
Analysis of changes in net debt - group
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
57,952
(32,103)
25,849
Borrowings excluding overdrafts
(34,230,946)
(1,028,678)
(35,259,624)
Obligations under finance leases
(10,519)
7,932
(2,587)
(34,183,513)
(1,052,849)
(35,236,362)
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