Company registration number 14513443 (England and Wales)
COVCITYCO LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
COVCITYCO LTD
COMPANY INFORMATION
Director
Douglas Richard John King
Secretary
BCS Cosec Limited
Company number
14513443
Registered office
C/O Bcs, Windsor House Station Court
Station Road
Great Shelford
Cambridge
England
CB22 5NE
Auditor
Edwards
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
COVCITYCO LTD
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Director's responsibilities statement
5
Independent auditor's report
6 - 8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 34
COVCITYCO LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -

The director presents the strategic report for the year ended 31 May 2024.

 

The result for the year for the group is set out in the group statement of comprehensive income. The director does not recommend payment of a dividend.

 

The director considers the key performance indicators of the group to be league status, finishing position of Coventry City Football Club ("the Club"), and the year's operating result.

Season review

From a business point of view, the following financial performance results are highlighted, noting that period end 31 May 2023 was for a period of 5 months

 

Turnover increased by £18.184M to £29.306M (PE23 £11.122M).

 

There was an increase of £5.335M in match receipts as result of increased seasonal sales, coupled with improved attendances and increased cup income through reaching the FA Cup semi-final at Wembley. Income from Broadcasting increased by £6.047M through a combination of League distribution income and enhanced TV fees received through coverage of FA Cup fixtures.

 

Other commercial income showed an increase of £6.801M which arose mainly through increased Retail revenue (having taken the retail operation fully in house), together with prize money attributable to the success achieved in the lengthy FA Cup run.

 

Accordingly, due to related costs incurred from the additional FA Cup fixtures, plus costs from taking the retail operation in-house, the Cost of Sales increased by £4.924M to £7.920M (PE23 £2.996M).

 

Operating administrative expenses, excluding amortisation and depreciation, have increased by £17.328M to £27.214M (YE23 £9.886M) – the majority of this increased expenditure was on player wages through the continued investment in the playing squad.

 

Profit on sale of players showed a significant increase of £23.642M (YE24 £23.678M; PE23 £36K) – this arose mainly from the sale of Viktor Gyokeres and Gus Hamer.

 

Exceptional income of £540K arose for PE23 and this related mainly to the write back of a withholding tax provision no longer being repayable in relation to loans owed to the previous overseas parent company.

 

Tax credit of £192K in PE23 relates to research and development tax credit claims for YE 31 May 2022 expenditure – claims in respect of the years ended 31 May 2023 & 2024 are in process at present.

 

As a result of the significant increase in profit on the sale of players, a profit before tax of £5.008M was achieved for YE 24 (PE23 a loss of £4.246M).

 

Season 2023/24 reflected the first full year of trading following the change in the ownership of the club during January 2023.

 

The change in ownership continues to be an exciting venture for the club, and with the debt restructure that took place, the club will, and have, benefitted in many financial aspects, especially with the club no longer being tied to either interest or management charges.

 

The licence agreement that was negotiated to secure the clubs future of playing its home fixtures at the CBS Arena through to the end of season 2027/28, has given the club a stable base to allow confidence in implementation of the Boards future strategic plans.

COVCITYCO LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -

Season Review (continued)

Continued infrastructure improvements have been implemented, and the Club can now be proud that they have Training Ground facilities that will encourage future players to join the club, and enhance the improvement of the existing squad. Additionally, the investment in the new pitch installed at the stadium has ensured that the inherited EFL sanction of a 5 points deduction suspended through to the end of 2023/24 season (a situation that arose due to the cancellation of home fixtures at the start of the 2022/23 season as a direct consequence from the playing of Commonwealth Games Rugby Seven fixtures) was successfully avoided.

 

Although the club were competitive deep into the 2023/24 season, they were unable to repeat the 2022/23 feat of reaching the play-off final, and eventually finished in 9th place. However, through a successful run in the FA Cup, the club were once again able to provide our loyal and passionate supporters with another memorable day at Wembley. The semi-final against Manchester United was truly a memorable day, but unfortunately a day that ultimately ended in disappointment, with the team suffering the heartbreak of another defeat on penalties. Despite the defeat, the players, staff and supporters should all be truly proud of their performance over the 2023/24 season.

 

Following the disappointment at Wembley, the board have wasted no time in actioning plans that it feels will help achieve the clubs’ ultimate goal of achieving promotion to the Premier League.

 

The Summer 2022/23 transfer window saw both Viktor Gyokeres and Gus Hamer leave the club, but the transfer fees obtained from their disposals were immediately re-invested into the acquisition of several quality player acquisitions, with the aim of achieving an overall stronger playing squad capable of challenging for promotion to the Premier League on a regular basis.

 

In order to continue the improvement of the playing squad, further player acquisitions have been made during the Summer 2024/25 transfer window. Despite the player investment made, the finish to the latter Championship games in season 2023/24 and to the disappointing start made in season 2024/25, resulted in the difficult decision to part company with our long serving manager Mark Robins – there is no doubt that Coventry City would not be where it is today without the inspired actions of Mark and his team, and we wish him every success for the future.

 

The club have moved quickly to bring in Frank Lampard as its new Head Coach, together with Joe Edwards and Chris Jones as his new backroom team. Their combined experiences will ensure they bring to our talented squad, clear understanding of exactly what is needed to succeed at the very top level that we as a Club are striving to reach.

 

Together with our remarkable fan base we look forward to continuing this exciting journey together.

Principal risks and uncertainties

The Board acknowledges that there are a number of risks and uncertainties which could have a material impact on the group's performance. The group's future income is affected by the club’s performance because significant revenues are dependent upon team performance in the Football League and domestic cup competitions.

 

In order for the team to remain competitive, significant investment is required on an ongoing basis in both financial and non-financial terms. This investment needs to be balanced with the most important Board responsibility, which is to maintain a financially secure professional football club.

 

The Board maintains the financial discipline throughout the group to ensure that it is able to continue to operate within its existing facilities.

 

The group prepares annual budgets and forecasts, and maintains a close working relationship with its financiers and shareholders and is dependent on the continuing support from shareholders. Further detail of the going concern position of the group is set out in note 1.

On behalf of the board

Douglas Richard John King
Director
19 December 2024
COVCITYCO LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -

The director presents his annual report and financial statements for the year ended 31 May 2024.

Principal activities

The principal activity of the group continued to be that of running a professional football club.

Results and dividends

The results for the year are set out on page 9. A review of the business and its principal risks and uncertainties is set out in the strategic report.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

Director

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

Douglas Richard John King
Financial instruments

The group finances its operations through Director loans and day-to-day through the use of operational bank accounts. The group makes use of financial instruments principally through its operational bank accounts. The director's objectives are to retain sufficient liquid funds to enable the group to meet its day to day requirements as they fall due and to maximise returns on surplus funds where possible. The director believes that this gives the flexibility to release cash resources at short notice and allows the group to take advantage of changing economic conditions as they arise.

Research and development

The group continues to invest in research and development to enhance our knowledge of injury rehabilitation and performance tracking.

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.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and 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.

Post reporting date events

Transfers of player registrations subsequent to 31 May 2024, taking into account applicable costs and player acquisitions, resulted in a net £10,962,266 (2023 - £8,918,219) payable by the club.

 

In addition to the above, subsequent to 31 May 2024, the club received £50,000 (2023: £464,000) and paid £362,015 (2023 - £25,000) in relation to sell-on and contingent contractual clauses for ex-players.

 

On 7 November 2024, the Club announced the termination of the contract of First Team Manager, Mark Robins. On 28 November 2024, the Club announced Frank Lampard as the new First Team Manager.

COVCITYCO LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
Auditor

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

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 company 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 company is aware of that information.

Going concern

The director has formed a judgement that the group has adequate resources available to continue operating and to discharge all financial obligations as they fall due for a period of at least 12 months from the date of approval of the financial statements.

 

The group made a profit for the financial year of £5,007,726 (2023 - £4,053,776 loss), had net current assets of £6,090,175 (2023 - £3,188,708 net current liabilities) and net assets of £34,684,210 (2023 - £29,676,484) at 31 May 2024.

 

The director has confirmed he will continue to provide such financial support as the group requires to enable it to meet its liabilities as they fall due, for a period of at least 12 months from the date that these financial statements are approved.

 

The director has prepared detailed cashflow forecasts to assess potential funding requirements for the period to 31 December 2025 which model the impact of the new credit facility provided to the club, and further funds being made available should they be required. The director is confident in his assumption that cash flow forecasts should be based upon the club’s continued participation in the EFL Championship. The director is also confident that there are sufficient resources available to mitigate the additional funding requirements in the remote event that the club is relegated to EFL League One including the procurement of further financial support from the director and the option to generate funds from player sales.

 

Additionally, the director would not commit the group to any further spend above the current forecasted levels, particularly in relation to the acquisition of players, without first confirming availability of sufficient funding.

 

Based upon current expectations and with the continued support of the director, the group are forecast to have sufficient resources to meet their liabilities for the period to 31 December 2025.

 

As such, the director does not consider there to be a material uncertainty in relation to the ability of the group to continue as a going concern and believes that preparing the financial statements on the going concern basis is appropriate.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Douglas Richard John King
Director
19 December 2024
COVCITYCO LTD
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 5 -

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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.

COVCITYCO LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF COVCITYCO LTD
- 6 -
Opinion

We have audited the financial statements of Covcityco Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 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 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 director 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 director is 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:

COVCITYCO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COVCITYCO LTD
- 7 -
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 director's 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 director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the parent company or to cease operations, or has 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.

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 obtained an understanding of the legal and regulatory frameworks within which the group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, employment law, health and safety regulations and compliance with the EFL handbook, Football League rules and Financial Fair Play.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be in the following areas: timing of recognition of income, the override of controls by management, inappropriate treatment of non-routine transactions and areas of estimation uncertainty specifically recognition of player transfer liabilities and fixed asset valuations. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, review and discussion of non-routine transactions, sample testing on the posting of journals and income transactions and review of accounting estimates for biases.

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. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

COVCITYCO LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF COVCITYCO LTD
- 8 -

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.

Robert Kempson ACA (Senior Statutory Auditor)
For and on behalf of Edwards
20 December 2024
Chartered Accountants
Statutory Auditor
34 High Street
Aldridge
Walsall
West Midlands
WS9 8LZ
COVCITYCO LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
29,306,522
11,122,691
Cost of sales
(7,920,655)
(2,996,736)
Gross profit
21,385,867
8,125,955
Administrative expenses
(40,030,273)
(12,946,455)
Operating loss
5
(18,644,406)
(4,820,500)
Interest receivable and similar income
8
1,755
101
Interest payable and similar expenses
9
(28,098)
(1,343)
Profit on player sales
10
23,678,475
35,995
Exceptional income
4
-
0
539,912
Profit/(loss) before taxation
5,007,726
(4,245,835)
Tax on profit/(loss)
11
-
0
192,059
Profit/(loss) for the financial year
5,007,726
(4,053,776)

The group statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

COVCITYCO LTD
GROUP BALANCE SHEET
AS AT
31 MAY 2024
31 May 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
12
31,575,641
35,254,356
Other intangible assets
12
27,936,760
1,753,352
Total intangible assets
59,512,401
37,007,708
Tangible assets
13
7,312,085
1,954,198
66,824,486
38,961,906
Current assets
Stocks
16
531,411
88,098
Debtors
17
24,140,255
6,260,236
Cash at bank and in hand
4,114,400
1,702,773
28,786,066
8,051,107
Creditors: amounts falling due within one year
18
(22,695,891)
(11,239,815)
Net current assets/(liabilities)
6,090,175
(3,188,708)
Total assets less current liabilities
72,914,661
35,773,198
Creditors: amounts falling due after more than one year
19
(38,230,451)
(6,096,714)
Net assets
34,684,210
29,676,484
Capital and reserves
Called up share capital
23
110,000
110,000
Share premium account
33,620,260
33,620,260
Profit and loss reserves
953,950
(4,053,776)
Total equity
34,684,210
29,676,484

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved and signed by the director and authorised for issue on 19 December 2024
19 December 2024
Douglas Richard John King
Director
Company registration number 14513443 (England and Wales)
COVCITYCO LTD
COMPANY BALANCE SHEET
AS AT 31 MAY 2024
31 May 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
14
33,730,260
33,730,260
Current assets
Debtors
17
30,000,000
6,000,000
Cash at bank and in hand
47,978
49,730
30,047,978
6,049,730
Net current assets
30,047,978
6,049,730
Total assets less current liabilities
63,778,238
39,779,990
Creditors: amounts falling due after more than one year
19
(30,050,000)
(6,050,000)
Net assets
33,728,238
33,729,990
Capital and reserves
Called up share capital
23
110,000
110,000
Share premium account
33,620,260
33,620,260
Profit and loss reserves
(2,022)
(270)
Total equity
33,728,238
33,729,990

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 £1,752 (2023 - £270 loss).

The financial statements were approved and signed by the director and authorised for issue on 19 December 2024
19 December 2024
Douglas Richard John King
Director
Company registration number 14513443 (England and Wales)
COVCITYCO LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 29 November 2022
-
0
-
0
-
0
-
Year ended 31 May 2023:
Loss and total comprehensive income
-
-
(4,053,776)
(4,053,776)
Issue of share capital
23
110,000
33,620,260
-
33,730,260
Balance at 31 May 2023
110,000
33,620,260
(4,053,776)
29,676,484
Year ended 31 May 2024:
Profit and total comprehensive income
-
-
5,007,726
5,007,726
Balance at 31 May 2024
110,000
33,620,260
953,950
34,684,210
COVCITYCO LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 29 November 2022
-
0
-
0
-
0
-
Year ended 31 May 2023:
Loss and total comprehensive income for the year
-
-
(270)
(270)
Issue of share capital
23
110,000
33,620,260
-
33,730,260
Balance at 31 May 2023
110,000
33,620,260
(270)
33,729,990
Year ended 31 May 2024:
Loss and total comprehensive income
-
-
(1,752)
(1,752)
Balance at 31 May 2024
110,000
33,620,260
(2,022)
33,728,238
COVCITYCO LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
30
717,804
(2,675,830)
Interest received
1,755
101
Interest paid
(28,098)
(1,343)
Income taxes refunded
192,059
-
0
Net cash inflow/(outflow) from operating activities
883,520
(2,677,072)
Investing activities
Purchase of intangible assets
(20,639,547)
(567,333)
Proceeds from disposal of intangibles
5,918,726
13,350
Purchase of tangible fixed assets
(6,567,966)
(747,888)
Proceeds from disposal of tangible fixed assets
17,800
-
Purchase of subsidiaries, net of cash acquired
-
249,932
Net cash used in investing activities
(21,270,987)
(1,051,939)
Financing activities
Proceeds from borrowings
24,000,000
6,050,000
Repayment of borrowings
(1,172,878)
(608,873)
Payment of finance leases obligations
(28,028)
(9,343)
Net cash generated from financing activities
22,799,094
5,431,784
Net increase in cash and cash equivalents
2,411,627
1,702,773
Cash and cash equivalents at beginning of year
1,702,773
-
0
Cash and cash equivalents at end of year
4,114,400
1,702,773
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 15 -
1
Accounting policies
Company information

Covcityco Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O Bcs, Windsor House Station Court, Station Road, Great Shelford, Cambridge, England, CB22 5NE.

 

The group consists of Covcityco Ltd 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. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Covcityco Ltd 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 31 May 2024. 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.

1.4
Going concern

The director has formed a judgement that the group has adequate resources available to continue operating and to discharge all financial obligations as they fall due for a period of at least 12 months from the date of approval of the financial statements.

 

The group made a profit for the financial year of £5,007,726 (2023 - £4,053,776 loss), had net current assets of £6,090,175 (2023 - £3,188,708 net current liabilities) and net assets of £34,684,210 (2023 - £29,676,484) at 31 May 2024.

 

The director has confirmed he will continue to provide such financial support as the group requires to enable it to meet its liabilities as they fall due, for a period of at least 12 months from the date that these financial statements are approved.

 

The director has prepared detailed cashflow forecasts to assess potential funding requirements for the period to 31 December 2025 which model the impact of the new credit facility provided to the club, and further funds being made available should they be required. The director is confident in his assumption that cash flow forecasts should be based upon the club’s continued participation in the EFL Championship. The director is also confident that there are sufficient resources available to mitigate the additional funding requirements in the remote event that the club is relegated to EFL League One including the procurement of further financial support from the director and the option to generate funds from player sales.

 

Additionally, the director would not commit the group to any further spend above the current forecasted levels, particularly in relation to the acquisition of players, without first confirming availability of sufficient funding.

 

Based upon current expectations and with the continued support of the director, the group are forecast to have sufficient resources to meet their liabilities for the period to 31 December 2025.

 

As such, the director does not consider there to be a material uncertainty in relation to the ability of the group to continue as a going concern and believes that preparing the financial statements on the going concern basis is appropriate.

1.5
Turnover

Turnover, which all arises in the United Kingdom, represents match receipts, executive box rentals and income from commercial activities receivable by the group, excluding VAT and trade discounts. Turnover is recognised for match related income in accordance with the matches played. Sponsorship and similar commercial income is recognised over the duration of the respective contracts in line with the contractual terms. Income arising from the fixed element of TV receipts is recognised over the course of the playing season. The non-fixed element of TV receipts relating to match coverage are recognised as the matches are played.

 

Income from match receipts, sponsorship and commercial contracts, which has been received prior to the year end in respect of future football seasons, is treated as deferred income.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 17 -
1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred.

1.7
Intangible fixed assets - goodwill

Goodwill arising on an acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair value of the assets and liabilities acquired. Positive goodwill is capitalised and amortised through the profit and loss account over the directors' estimate of its useful economic life of 10 years. Impairment tests on the carrying value of goodwill are undertaken:

 

 

The profit or loss on disposal of a business includes any attributable goodwill arising on the acquisitions.

1.8
Intangible fixed assets other than goodwill

The group capitalises as an intangible asset the element of a player's transfer fee which relates to his registration together with associated costs and amortises that element over the period of his contract including any subsequently agreed extensions. Players' registrations are written down for impairment when the carrying amount exceeds the amount recoverable through use or sale.

 

Trade marks purchased separately from a business are included at cost and amortised over their useful economic lives of 10 years.

1.9
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 estimated useful lives, using the straight-line method and on the following basis:

Freehold buildings
2% per annum
Leasehold improvements
10% to 33.3% per annum
Plant, fixtures and equipment
7.5% to 33.3% per annum

Freehold land is not depreciated.

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 credited or charged to profit and loss.

 

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 18 -
1.10
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). 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.

Where a reasonable and consistent basis of allocation can be identified, assets are allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

1.11
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

1.13
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

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Basic financial liabilities

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

1.14
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 19 -
1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current 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

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.

1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

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.

1.17
Retirement benefits

The pension costs charged against profits represent the amount of the benefit payable to the scheme in respect of the accounting period.

 

Certain employees are members of the Football League Pension and Life Assurance (FLPLA) Scheme and the Football League Players' Benefit Scheme (the "schemes"). The company continues to make contributions in respect of its share of the deficit of these defined benefit pension schemes. Accrual of the benefits on a final salary basis was suspended with effect from 31 August 1999, when actuarial review showed a substantial deficit. As one of the number of participating employers the company is advised only of its share of the scheme's deficit and recognises a liability in respect of this. Contributions payable to the scheme reduce this liability.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 20 -
1.18
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, 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.

1.19
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.20

Finance costs

Finance costs are charged to the consolidated statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

1.21

Investment in subsidiaries

Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements.

1.22

Corresponding amounts

The director has re-analysed certain corresponding amounts within the profit and loss account to make their disclosure more meaningful.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
2
Judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses, The nature of the company's business is such that there can be unpredictable variation and uncertainty regarding its business, The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources, Actual results may differ from these estimates.

 

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.

 

Player transfer costs

The director has to make certain judgements as to whether a liability should be recognised under the terms of the contracts with other football clubs in respect of player transfers. These judgements include the directors' opinion, at the balance sheet date, on the likely league status in the next season. It also requires certain judgements as to whether a player will continue to make the contractually agreed number of first team appearances. Based on these judgements, the director decides on an individual player by player basis as to whether the liability is disclosed as a contingent liability or whether it becomes recognised as a liability in trade creditors in the balance sheet.

 

Intangible assets, tangible assets and impairment

The director is required to test whether intangible and tangible assets have suffered any impairment. The recoverable amount of cash generating units connected to the recorded value of these assets has been determined based on value in use estimates and compared to the book value to determine if an impairment provision is needed.

 

3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Match receipts
10,041,407
4,705,852
Broadcasting
10,122,037
4,074,704
Other commercial income
9,143,078
2,342,135
29,306,522
11,122,691
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
4
Exceptional income
2024
2023
£
£
Income
Exceptional Income
-
539,912

Exceptional income in the previous period represents the write back of accrued withholding taxes in relation to loans previously owed to an overseas parent company.

5
Operating loss
2024
2023
£
£
Operating loss for the year is stated after charging/(crediting):
Exchange losses
279,019
-
Depreciation of owned tangible fixed assets
776,150
71,468
Depreciation of tangible fixed assets held under finance leases
28,029
11,679
(Profit)/loss on disposal of tangible fixed assets
(17,800)
318,033
Amortisation of intangible assets
12,011,877
2,976,974
Operating lease charges
1,382,561
379,414
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
17,750
17,300
For other services
Taxation compliance services
2,000
2,300
All other non-audit services
9,189
2,900
11,189
5,200
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 23 -
7
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Players and management
153
161
-
-
Administrative and commerical
61
35
-
-
Total
214
196
-
0
-
0
During the year, in addition to the above, the group also had available approximately 191 (2023 - 191) temporary staff on match days, the cost of which are included within direct expenses.

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
20,583,748
8,100,193
-
0
-
0
Social security costs
2,617,969
740,227
-
-
Pension costs
204,130
48,341
-
0
-
0
23,405,847
8,888,761
-
0
-
0

Eligible staff are members of the Football League Limited Pension and Life Assurance Scheme. The latest valuation of the scheme deficit has shown an underfunding of the scheme and accordingly the group's current share of the liability stands at £334,298 (2023 - £319,032). This is included within creditors.

 

The group operates a defined contribution pension scheme for the benefit of the employees. The assets of the scheme are administered by trustees in a fund independent from those of the group.

 

The directors are considered to be the key management personnel. No remuneration was paid in respect of these services provided to the group.

8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
1,755
101
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 24 -
9
Interest payable and similar expenses
2024
2023
£
£
Interest on finance lease obligations
4,033
1,343
Late repayment interest
24,065
-
Total finance costs
28,098
1,343
10
Profit on player sales
2024
2023
£
£
Profit on player sales
23,678,475
35,995
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 25 -
11
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
-
0
(192,059)
Total current tax
-
(192,059)
Deferred tax
Total deferred tax
-
0
-
0
Total tax charge/(credit)
-
(192,059)

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit/(loss) before taxation
5,007,726
(4,245,835)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
1,251,932
(1,061,459)
Tax effect of expenses that are not deductible in determining taxable profit
-
0
1,741
Depreciation on assets not qualifying for tax allowances
53,966
15,630
Amortisation on consolidated goodwill
919,679
383,200
R&D tax credit related to prior years
-
0
(192,059)
Deferred tax not recognised
(2,225,577)
668,816
Tax effect of enhanced capital allowances
-
0
(7,928)
Taxation charge/(credit)
-
(192,059)

Factors that may affect future tax charges

The group has an unrecognised deferred tax asset of £7,535,733 (2023 - £9,847,194). This has not been recognised as its future recoverability is uncertain.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 26 -
12
Intangible fixed assets
Group
Goodwill
Trademarks
Player registrations
Total
£
£
£
£
Cost
At 1 June 2023
39,011,192
6,570
8,754,593
47,772,355
Additions
-
0
-
0
35,442,395
35,442,395
Disposals
-
0
-
0
(5,801,108)
(5,801,108)
At 31 May 2024
39,011,192
6,570
38,395,880
77,413,642
Amortisation and impairment
At 1 June 2023
3,756,836
4,530
7,003,281
10,764,647
Amortisation charged for the year
3,678,715
275
8,332,887
12,011,877
Disposals
-
0
-
0
(4,875,283)
(4,875,283)
At 31 May 2024
7,435,551
4,805
10,460,885
17,901,241
Carrying amount
At 31 May 2024
31,575,641
1,765
27,934,995
59,512,401
At 31 May 2023
35,254,356
2,040
1,751,312
37,007,708
The company had no intangible fixed assets at 31 May 2024 or 31 May 2023.

Any players whom the group do not consider to be a long term part of the first team squad and who will therefore not contribute to future cash flows earned by the group are assessed for impairment by considering the carrying value with the group’s best estimate of fair value (being post year-end sales proceeds or expected sales proceeds) less costs to sell. The director is satisfied that no further provision is required.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 27 -
13
Tangible fixed assets
Group
Freehold buildings
Leasehold improvements
Plant, fixtures and fittings
Total
£
£
£
£
Cost
At 1 June 2023
359,999
-
0
2,242,581
2,602,580
Additions
2,076,584
796,105
3,289,377
6,162,066
At 31 May 2024
2,436,583
796,105
5,531,958
8,764,646
Depreciation and impairment
At 1 June 2023
56,737
-
0
591,645
648,382
Depreciation charged in the year
5,432
87,530
711,217
804,179
At 31 May 2024
62,169
87,530
1,302,862
1,452,561
Carrying amount
At 31 May 2024
2,374,414
708,575
4,229,096
7,312,085
At 31 May 2023
303,262
-
0
1,650,936
1,954,198
The company had no tangible fixed assets at 31 May 2024 or 31 May 2023.

The carrying value of land and buildings comprises:

Group
Company
2024
2023
2024
2023
£
£
£
£
Freehold
118,573
118,573
-
0
-
0

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
2024
2023
2024
2023
£
£
£
£
Plant and equipment
44,378
72,407
-
0
-
0
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 28 -
14
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
15
-
0
-
0
33,730,260
33,730,260
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2023 and 31 May 2024
33,730,260
Carrying amount
At 31 May 2024
33,730,260
At 31 May 2023
33,730,260
15
Subsidiaries

Details of the company's subsidiaries at 31 May 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Coventry City Football Club Limited
Sky Blue Lodge Leamington Road, Ryton On Dunsmore, Coventry, CV8 3FL
Ordinary and preference
100.00
16
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
531,411
88,098
-
0
-
0
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 29 -
17
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
12,098,923
1,049,233
-
0
-
0
Corporation tax recoverable
-
0
192,059
-
0
-
0
Other debtors
861,248
2,739,172
-
0
-
0
Prepayments and accrued income
3,753,294
2,279,772
-
0
-
0
16,713,465
6,260,236
-
-
Amounts falling due after more than one year:
Trade debtors
7,426,790
-
0
-
0
-
0
Amounts owed by subsidiary
-
-
30,000,000
6,000,000
7,426,790
-
30,000,000
6,000,000
Total debtors
24,140,255
6,260,236
30,000,000
6,000,000

Included within trade debtors is £17,815,931 (2023 - £30,000) and included within accrued income is £904,906 (2023 - £5,263) in respect of transfer fees receivable (exclusive of VAT).

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 30 -
18
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
21
28,028
28,028
-
0
-
0
Trade creditors
9,799,360
3,456,435
-
0
-
0
Other taxation and social security
1,276,986
1,058,330
-
-
Other creditors
371,495
1,514,614
-
0
-
0
Accruals and deferred income
11,220,022
5,182,408
-
0
-
0
22,695,891
11,239,815
-
0
-
0

Included within creditors due within one year are trade creditors of £6,516,285 (2023 – £580,000) and accruals of £2,406,016 (2023 - £483,528) in respect of actual and probable transfer fees payable (exclusive of VAT).

 

Included within other creditors due within one year is an amount of £Nil (2023 - £61,200) in respect of a loan advanced by the English Football League ("EFL"). This loan is unsecured and is interest free. In the event of the group defaulting on payment terms, interest will be charged at a rate of 2% above the base rate of the EFL's bankers. In addition, in the event of the Club being promoted or relegated out of the Football League the amount becomes repayable immediately.

 

Included within other creditors due within one year is an amount of £Nil (2023 - £1,066,668) in respect of a "PAYE" loan advanced by the EFL. This loan is unsecured and is interest free. In the event of the Club being promoted to the Premier League the amount becomes repayable immediately.

19
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Obligations under finance leases
21
18,686
46,714
-
0
-
0
Other borrowings
20
30,050,000
6,050,000
30,050,000
6,050,000
Trade creditors
7,306,140
-
0
-
0
-
0
Accruals and deferred income
855,625
-
0
-
0
-
0
38,230,451
6,096,714
30,050,000
6,050,000

Included within creditors due after more than one year are trade creditors of £6,088,450 (2023 – £Nil) and accruals of £855,625 (2023 - £Nil) in respect of actual and probable transfer fees payable (exclusive of VAT).

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 31 -
20
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Other loans
30,050,000
6,050,000
30,050,000
6,050,000
Payable after one year
30,050,000
6,050,000
30,050,000
6,050,000

Included within other loans is an amount of £30,050,000 (2023 - £6,050,000) due to the director, Douglas Richard John King. The loan is under the terms of a credit facility agreement. This facility is unsecured, is interest free and has a maturity date of 28 February 2027.

21
Finance lease obligations
Group
Company
2024
2023
2024
2023
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
28,028
28,028
-
0
-
0
In two to five years
18,686
46,714
-
0
-
0
46,714
74,742
-
-

Net obligations under finance leases are secured on the assets to which they relate.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 32 -
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
204,130
48,341

Certain employees of the group participate in the Football League Pension and Life Assurance (FLPLA) Scheme and the Football League Player' Benefit Scheme. Both schemes are defined benefit schemes co-sponsored by the FA Premier League and the Football League.

 

Accrual of the benefits on a final salary basis was suspended with effect from 31 August 1999, when actuarial review showed a substantial deficit. As one of the number of participating employers the group is advised only of its share of the scheme's deficit and recognises a liability in respect of this.

 

The latest valuation of the scheme deficit has shown an understanding of the scheme and accordingly the group's current share of the liability stands at £334,298. This is included within creditors.

23
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
11,000,000
11,000,000
110,000
110,000
24
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2024
2023
2024
2023
£
£
£
£
Acquisition of tangible fixed assets
1,076,502
1,818,918
-
-
25
Operating lease commitments
Lessee

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
2024
2023
2024
2023
£
£
£
£
Within one year
1,103,427
740,008
-
-
Between two and five years
4,557,908
4,537,663
-
-
In over five years
5,259
-
-
-
5,666,594
5,277,671
-
-
COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 33 -
26
Related party transactions

The company has taken advantage of the exemption conferred within FRS102 section 33.1A not to disclose transactions between wholly owned members of the same group.

 

Douglas Richard John King, director, is also a director and shareholder of several related parties with which the group have traded.

 

During the year, the group made sales of £46,018 (2023 - £Nil), made purchases of £2,663 (2023 - £Nil) and received sponsorship of £300,000 (2023 - £Nil) to and from these related parties. At the 31 May 2024, included within trade debtors are amounts of £25,096 (2023 - £Nil) due from these related parties. No amounts owed to these related parties were outstanding at 31 May 2024 (2023 - £Nil).

 

As at 31 May 2024 a balance of £30,050,000 (2023 - £6,050,000) was due by the company to the director. The loan is unsecured, is interest free and has a maturity date of 28 February 2027.

27
Events after the reporting date

Transfers of player registrations subsequent to 31 May 2024, taking into account applicable costs and player acquisitions, resulted in a net £10,962,266 (2023 - £8,918,219) payable by the club.

 

In addition to the above, subsequent to 31 May 2024, the club received £50,000 (2023: £464,000) and paid £362,015 (2023 - £25,000) in relation to sell-on and contingent contractual clauses for ex-players.

 

On 7 November 2024, the Club announced the termination of the contract of First Team Manager, Mark Robins. On 28 November 2024, the Club announced Frank Lampard as the new First Team Manager.

28
Contingent liabilities

The group has, under transfer agreements, a liability to pay additional sums dependent on players' attainment of agreed numbers of first team appearances and any subsequent transfer value. No provision has been made in these accounts for such liabilities as the conditions are not met at the balance sheet date and no reliable estimates can be made of any subsequent transfer values.

2024
2023
£
£
Maximum amounts payable:
559,028
150,000
29
Contingent assets

Based on transfer agreements signed prior to the year-end the company could potentially receive additional amounts of at least £782,186 (2023 - £190,000). These sums are dependent on the attainment of certain objectives by the player and the club they are now employed by. Conditions have not been met at the balance sheet date and no asset has been recognised.

COVCITYCO LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 34 -
30
Cash generated from/(absorbed by) group operations
2024
2023
£
£
Profit/(loss) for the year after tax
5,007,726
(4,053,776)
Adjustments for:
Taxation charged/(credited)
-
0
(192,059)
Finance costs
28,098
1,343
Investment income
(1,755)
(101)
(Gain)/loss on disposal of tangible fixed assets
(17,800)
318,033
Amortisation and impairment of intangible assets
12,011,877
2,976,974
Depreciation and impairment of tangible fixed assets
804,179
83,147
Profit on player sales
(23,678,475)
(35,995)
Movements in working capital:
Increase in stocks
(443,313)
(3,098)
Decrease/(increase) in debtors
613,496
(1,664,665)
Increase/(decrease) in creditors
6,393,771
(105,633)
Cash generated from/(absorbed by) operations
717,804
(2,675,830)
31
Analysis of changes in net debt - group
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
1,702,773
2,411,627
4,114,400
Borrowings excluding overdrafts
(6,050,000)
(24,000,000)
(30,050,000)
Obligations under finance leases
(74,742)
28,028
(46,714)
(4,421,969)
(21,560,345)
(25,982,314)
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