The directors present the strategic report for the year ended 30 June 2024.
The parent company, ASD Lighting Holdings Limited, does not trade in its own right and the directors therefore present their strategic report split between the company's 2 trading subsidiaries - ASD Lighting PLC and Rotherham United Football Club (RUFC) Limited.
ASD Lighting PLC
The financial statements for the year ended 30 June 2024 for ASD Lighting PLC show turnover of £19.8m (2023 £21.3m).
Sales to the UK were £17.9m (£19.8m 2023), the rest of Europe £1.8m (£1.3m 2023) and the rest of the world £0.1m (£0.2m 2023). Included in the £1.8m to Europe were sales of £1.1m to ASD Lighting Europe Ltd set up to distribute and partner with customers in Europe.
Gross Profit is £7.0m (2023 £8.1m). Against rising material, utility and labour costs the gross profit margin remains strong at 35% (2023 38%).
Administration costs at £7.6m remained the same at last year with increases in staff related costs being reduced by saving in other fixed costs.
The year resulted in an operating loss (before interest and tax) of £0.6m compared to a profit of £0.5m last year.
Profit after interest receivable and tax is £276k (£755k 2023).
Business and employee performance are measured using turnover, gross margin, forecast cash flow, debtors days and stock value.
The company's balance sheet shows that the company remains strong and has maintained its net asset value of £32.0m. Included in this valuation;
£0.2m capital investment (2023 £0.4m) has been made into tooling for new products and essential upgrade to operational processes.
Net stock (after a provision for slow moving stock) has reduced from £3.3m to £2.9m.
Trade debtors have increased to £3.2m from £2.8m last year. Debtors days at 44 remaining strong (46 days 2023).
Creditors have decreased by £0.4m. Included in Creditors are trade creditors of £2.0m (2023 £1.6m) and taxes £0.4m (2023 £0.7m). Creditor days are 68 days (69 days 2023).
Key risks and uncertainties
The key risks faced by ASD Lighting PLC are;
competitive price pressures in the UK and increased competition from overseas where labour and costs are often much lower.
reduced productivity due to illness and labour shortages.
increasing inflation and depressing growth and investment in highways, housing, rail and public development (hospitals, schools, prisons and sports facilities).
new product acceptance in the market as customers continually require new and innovative ways in which to reduce the operating costs of their lighting solutions and reduce their environmental impact.
cost increases enforced by government for minimum wage and cost of living hikes.
ability to retain and recruit staff.
The company manages these risks and maintains this focus by;
continual research into market requirements and technological advancements.
continual investment in research and design to ensure that innovative, efficient products are launched into the market ahead of the competition.
providing value added services to contractors and customers such as a design and specification service.
continual investment in the manufacturing process, automating repetitive jobs to free production staff to work further down the line so as to reduce production times. Also bringing process’ in house so as to reduce delays, costs, materials, handling and carbon footprint.
maintaining a flexible labour structure ensuring efficient and realistic lead times.
maintaining strong relationships with customers and suppliers.
sourcing materials, transport and capital from UK suppliers (93% of purchases 2024, compared to 89% 2023).
continual investment in training, recruitment and wellbeing.
working closely with RUFC management to maximise on advertising, product awareness and shared partners.
working closely with RUFC management on strategy to maintain financial stability.
KPI £m's | 2024 | 2023 | Difference | % |
Turnover | £19.8 | £21.3 | -0.2 | -1% |
Gross Profit | £7.0 | £8.1 | -0.1 | -1% |
Gross Profit Margin | 36% | 38% | 0.0 | -0% |
Administrative Expenses | £7.6 | £7.7 | 0.3 | 4% |
Operating Profit | -£0.6 | £0.5 | -0.2 | -29% |
Capital Investment | £0.2 | £0.4 | -0.2 | -50% |
Stock | £2.9 | £3.3 | 0.2 | 6% |
Debtors | £24.1 | £19.6 | -1 | -5% |
Trade Debtors days | 44 | 46 | -7 | -13% |
Creditors | £2.6 | £3.0 | -1.4 | -32% |
Trade Creditors days | 68 | 69 | -2 | -3% |
Sustainable business practices
The company is committed to developing and implementing sustainable business practices by implementing resource efficient practices and adopting strategies to reduce our environmental footprint. Key initiatives includes waste reduction, energy optimisation and commitment to sourcing materials responsibly.
We have maintained certification in ISO 9001, ISO 14001 and OHSAS 18001. The company’s products are specifically designed to allow customers to reduce energy consumption and operate in a more sustainable manner.
The company continues to focus on introducing products and packaging that are recyclable.
On promoting resource efficiency the company have a number of energy/resource saving incentives including significant sections of the factory roof covered in photovoltaic cells to generate energy using solar. The factory also operates with energy saving LED lighting and control systems to maximise those savings through presence detection and daylight sensors. We will continue to maximize energy efficiency by capturing and repurposing waste heat from our powder coating facility through a heat exchange system, which directly heats the warehouse area. We monitor our energy and water consumption;
Gas and electricity usage has decreased by 5% and costs have decreased by 22%.
Solar power recovery was down year on year – (11% less units recovered) but still generating a significant energy cost saving.
Water (inc sewage) billed in 2023 increased from 2038 cubic meters to 8421 cubic meters in 2024. Whilst this is still being investigated some of this was due to a huge leak.
We continue to comply with WEEE directive of 2003. Cost for 2024 £36k, compared to £41k 2023. The company incurred costs to dispose of other waste of £23k in 2024 (£19k, 2023).
Quality continues to be measured using customer feedback and credit note analysis (credit value is 2.1% of total turnover 2024 compared to 1.9% 2023).
We have maintained total headcount at 162 (average).
| 2024 | 2023 |
Production & Sales | 106 | 108 |
Admin & other | 56 | 55 |
| 162 | 163 |
The directors continue to develop the company’s trading activities, maintain UK sales and market share, whilst looking at opportunities to;
develop overseas markets in partnership with our European partners ASD Lighting Europe.
increase sales in Highway range.
increase sales in new markets such as health, education, rail and cctv.
increase sales with enhanced lighting controls.
develop new online marketing and means of maintaining customer and supplier relationships.
increased flexibility in working patterns.
increased engagement, training and development of employees.
With continuous research and development the directors and management will focus on high quality products and leadership in technology. We will continue to source materials responsibly by regularly assessing our supply chain and continue to monitor and improve sustainability metrics.
An agreement is in place for the company to continue to sponsor RUFC into 2025.
The directors believe that the company is able to respond to ongoing economic uncertainty and government instability.
The 2023-24 season is Rotherham United's (RUFC) 99th season in their existence.
After managing to avoid relegation in 2022/23, hopes were high that the club would consolidate in the Championship. The season has been a struggle both on and off the pitch. The primary aim was around survival, competing with larger clubs with significant foreign investment and parachute payments.
Despite changes in management the season culminated in relegation to League One.
Turnover including income from player trading was £19.2m compared to last season £15.7m. Central Funding increased from £8.5m the previous season to £9.2m this year due to maintaining Championship status. Football income from season tickets, gate receipts and prize money increased from £2.6m to £2.9m (ie. up 11.7% year on year). Commercial income increased by 3% (£3.2m v £3.1m previous season). Merchandising income (including retail, website, programme and car park revenue) has marginally increased year on year (£836k v £830k). Income from media has reduced from £435k to £357k due to less TV coverage this season. Income from player trading was £2.5m (£95k 2023).
Cost of sales has increased by 11.7 % from £14.7m to £16.4m due to increased Championship wage pressures and match day operational costs.
Administration(including profit from disposal of assets) costs of £4.5m increased from £2.1m. last season mainly due to restructuring cost, pitch repairs and increased utility costs. Profit on disposal of assets was £268k this season compared to £870k last season 2022/23.
In a challenging season the loss before tax was £1.7m (compared to loss £1.1m 2023).
Business risk
The nature of the principal activities of the business are such that the company's revenues are somewhat dependent on the 'on-pitch' performance of the football team and getting fans and sponsors back into the stadium.
Relegation will result in a significant loss of revenue, including broadcasting and sponsorship income. The club will continue to focus on financial health, balancing investment in players and facilities against mandatory increased costs. The club will continue to manage costs through stringent financial planning.
We must continue to engage with fans, maintain and build relationships with sponsors and research any commercial opportunities that may create additional revenue for the club.
In order to compete in highly competitive leagues, significant and continued investment is required in the playing squad. Acquisition of new players and renewal of current key player contracts is essential to the long term playing and financial health of the club. Our existing squad includes a mix of domestic and international players. Recruitment of international players comes with visa and work permit issues which are mitigated by working closely with our legal partners to navigate the process. We will need to continue to widen our search for new talent using data analysis and increased scouting in the UK and Europe.
A major risk for the club is the potential loss of crucial staff, especially during a turbulent season. We will continue to offer competitive contracts and incentives to retain talent, ensuring a positive working environment.
With rising inflation and increases in minimum wage the club will need to continue to budget carefully to accommodate these increases without compromising investment in players. Streamlining operations and using technology for efficiency (eg digital ticketing and automation) could help manage these costs in 2024/25.
Ensuring fan safety is a critical issue and the growing trend towards safe standing areas, which allows fans to stand during a match, can raise additional risks if not properly managed. Effective crowd control, appropriate stewarding and compliance with health and safety standards are paramount. The club must continue to work with steward partners to ensure stewards are trained and maintain strong relationships with local authorities. Additionally technology (ie CCTV) and monitoring of ticket sales may help identify risks early.
Changes in governments and legislation can have a significant implications for the club, especially with regards to finance, employment, safety standards and infrastructure. To remain resilient the club will continue to be proactive in monitoring policies and adapting accordingly.
Compliance with the Football League regulations is a key area for the club. Company performance will continue to be monitored in order to comply with the financial constraints of the regulatory framework.
Credit risk
The company's credit risk is relatively low and is mainly attributable to its trade debtors. Credit risk is managed by running credit checks on new customers and by monitoring payments against contractual arrangements. Through conducting regular reviews the company can minimise the risk of exposure.
Liquidity risk
The company is financed by a mixture of central league funding, support from the club's sponsors and revenues raised through the normal business activities. Managing the company's cash and borrowings efficiently reduced the company's exposure to adverse interest expense.
The financial performance of the company is monitored against budget prepared by management. The Club works within the guidelines set by EFL Football League, in the Championship this is Profit & Sustainability.
| 2024 | 2023 | Change | Change |
| £k's | £k's | £k's | % |
Income |
|
|
|
|
|
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|
|
First Team | 8,703 | 7,934 | 769 | 9.7% |
Academy | 538 | 580 | -42 | -7.2% |
Total Funding | 9,241 | 8,514 | 727 | 8.5% |
|
|
|
|
|
Match Day Income | 1,135 | 1,000 | 135 | 13.5% |
Season Tickets | 1,744 | 1,578 | 167 | 10.6% |
Total Match Receipts | 2,879 | 2,578 | 302 | 11.7% |
|
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|
|
Sponsorship, Advertising & Hospitality | 3,232 | 3,133 | 99 | 3.2% |
Merchandising & Other Match Day | 836 | 830 | 6 | 0.7% |
Media | 357 | 435 | -79 | -18.0% |
Other Player Trading | 2,542 | 95 | 2,447 | 2,576.3% |
Other grants | 86 | 101 | -15 | -15.1% |
Total Income | 19,173 | 15,686 | 3,487 | 22.2% |
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Profitability |
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|
|
|
|
|
|
|
|
Profit/(Loss) After Tax | (1,699) | (878) | (821) | 93.4% |
Net current liabilities are £5.7m (£2.7m 2023).
Main movements in the company’s balance sheet are increased debtors by £611k from £1,385k to £1,996k. This includes football debtors £1,655k (£848k 2023).
Total Creditors are £8,836k (£4,253k 2023). Included in Creditors are loans from the EFL to guarantee PAYE payments £946k (£1,728k 2023) as well as other football creditors £907k (£436k 2023). Also included in creditors to be paid in less than 1 year is a group loan from ASD Lighting Plc £5,205k (£929k 2023).
Non-financial performance is benchmarked against other Clubs and used in setting targets for the following season:
| 2024 | 2023 | Change | Change |
|
|
|
|
|
Average League Attendance | 10,677 | 10,148 | 529 | 5.2% |
Season Tickets Sold | 7,225 | 6,711 | 514 | 7.7% |
A huge thank you to our returning season ticket holders and fans that supported us on a match by match basis.
Future Developments
The club must focus on long-term player development, integrating academy graduates, and building a strong scouting network to identify hidden gems from lower leagues or overseas. We need to maximise the use of the loan markets, focus on smart scouting and lean heavily on the Youth Academy to bring through players that can play in League 1.
Our Management team will continue to make use of the facilities at our Roundwood training site whilst identifying innovative ways to measure and improve player’s fitness and skills.
We will continue to be proactive in monitoring changes in law and ensure that policies are updated and training is delivered where necessary.
We will continue to engage with fans and supporters to strengthen community engagement and support our Community Trust which continues to deliver sport, education and confidence to the local community.
We will continue to follow guidance from Public Health England and the EFL and ensure our that the health and safety of our staff, players and fans remains a priority.
Season ticket sales for 2024 are in excess of 6700. ASD Lighting Plc has agreed to sponsor the Club for another season. Other Sponsors secured include AESEAL, Mears, Eric Twigg Foods, KCM, Hughie Construction, our Diamond Partners and many more all secured for another season.
We look forward to an exciting season in League 1. Up the Millers.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 13.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, 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.
The auditor, Buckle Barton Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of ASD Lighting Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud and the key procedures used included:
- Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
- Enquiry of entity staff in finance and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2023 - £0 profit).
ASD Lighting Holdings Limited (“the company”) is a private company limited by shares, domiciled and incorporated in the UK and registered in England and Wales. The registered office is Mangham Road, Barbot Hall Industrial Estate, Greasbrough, Rotherham, S61 4RJ.
The group consists of ASD Lighting Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company ASD Lighting Holdings 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 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.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
In respect of football club income, gate receipts and other match day revenue are recognised as the games are played. The club also receives central distributions from the Football League and a solidarity payment from the Premier League that are beyond the direct control of the officers of the club. These distributions are recognised evenly over the course of the financial year.
Revenue derived from season tickets is credited to income in the period to which it relates. Amounts received in advance are credited to deferred income in the balance sheet.
Sponsorship, advertising and similar commercial income is recognised over the duration of the respective contracts. Amounts received in advance are credited to deferred income in the balance sheet.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The principal basis used for amortisation other than goodwill is:
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, 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.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
Football club - signing on fees
Signing on fees represent a normal part of the employment cost of the player and as such are to be charged to the profit and loss account in the accounting period in which payment is made. Potential instalments due in the future based on continued service are disclosed as a contingent liability.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The key estimates and judgements made by the directors when preparing the financial statements relate to:
The economic life of fixed assets (tangible and intangible)
Provisions needed for potential bad debts
In addition, in respect of ASD Lighting PLC, that company manufactures and sells security and amenity lighting which is subject to changes in trends and demands and it is therefore necessary to consider the net realisable value of stock held. When calculating stock provisions management considers the nature and condition of stock and the anticipated saleability (or, in the case of raw materials, usage).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £73,391 (2023 - £39,545).
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 30 June 2024 are as follows:
The other loan is a loan from The Football League which is both unsecured and interest free. The loan is repayable in instalments with the final repayment due to be made in December 2025.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
Defined benefit scheme:
Certain employees of one of the group companies (Rotherham United Football Club (RUFC) Limited) participate in the Football League Limited Pension and Life Assurance Scheme. The scheme is a defined benefit scheme co-sponsored by the FA Premier League and the Football League. The club makes contributions to the scheme in accordance with recommendations from the scheme's actuaries.
The club is one of a number of participating employers in the scheme and it is not possible to allocate part of any actuarial rights or deficit owing to the club's employees, only their share of contributions payable to the scheme. Consequently contributions paid in the year and any movement in the club's share of contributions, net of payments made, are charged as an expense in the profit & loss account.
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:
Amounts contracted for but not provided in the financial statements:
The remuneration of key management personnel is as follows.
During the year the group was charged £993,056 (2023: £1,083,333) by RU Estates Limited, a company of which A R Stewart and R P Stewart are directors, for the rent of assets.
Included in other debtors is an amount of £12,961,391 (2023: £13,191,542) due from R U Estates Limited, a company of which A R Stewart and R P Stewart are directors, split between £1,047,447 due within 1 year and £11,913,944 due after more than 1 year. This loan is unsecured and bore interest at 2% above base rate per annum until January 2021 when it began to bear interest at 1.15% above base rate and is repayable over 9 years in instalments.
Included in administrative expenses are management charges of £1,517,698 (2023: £1,307,250) for management and consultancy services provided by ASD Management (Rotherham) LLP, an LLP of which A R Stewart, R P Stewart and S Stewart are members. At 30 June 2024 included within trade debtors was an amount of £16,199 (2023: £176,486) owed by the LLP.
During the year the group leased 4 properties from ASD Lighting PLC Pension Scheme, a scheme of which A R Stewart is a trustee. Rent payable to the scheme during the year was £159,019 (2023: £160,113).
During the year the group made sales of £58,579 (2023: £54,228) to Rotherham United Community Sports Trust, a company of which K Thomas is a Trustee.
During the previous year ended 30 June 2023 ASD Lighting plc made a loan of £50,000 to a director. The loan was unsecured and interest free and was repaid in August 2023, therefore the balance was nil in the current year end figures.
Additional transfer costs of £105,000 (2023: £69,500) will become payable if certain conditions contained within the relevant contracts are met. These payments will be accounted for in the year in which they fall due for payment.
Additional transfer fees of £675,000 (2023: £625,000) will become receivable if certain conditions contained within the relevant contracts are met. These amounts will be accounted for in the year which they become receivable.
The group has provided an unlimited cross guarantee in respect of the banking facilities of ASD Lighting Holdings Limited, ASD Lighting plc and RU Estates Limited. At 30 June 2024 there was a potential liability of £nil (2023: £nil).