The Directors present the strategic report and financial statements for the year ended 30 June 2024. The company is the non-trading holding company of The Dundee United Football Club Limited, and the report below reflects the activities of the trading company.
Strategy and Business Model
Dundee United Football Club (the “company” and the “club”) is committed to being a sustainable and leading competitor within the upper echelons of the Scottish Professional Football League.
The club aims to achieve success in league and cup competitions. Its philosophy, both on and off the field, is continuous personal growth and team development supported by first-class facilities, staff, coaching, youth development, and club infrastructure.
It aims to be the club of choice for highly talented players and aspiring youngsters, and through a thriving senior football and Academy set-up it will ensure our players are developed to their highest level possible.
We are a club that continues to work alongside Dundee United Community Trust (DUCT) within our local community to improve the lives of people within Dundee and the surrounding areas.
Review of the business
Financial Overview
In the year ended 30 June 2024, Dundee United Football Club reduced its total costs by £3.8 million; a 29% reduction compared to the previous year. Through strict, robust budgetary control, improved processes and communication, the club made significant strides towards financial sustainability by reducing its loss to £1.6m (EBITDA). This was despite the increased challenges and economic consequences of dropping to the Championship.
Whilst never satisfied with a loss, the Board recognise the significant improvement in the financial performance compared to the prior year. It is a further belief that the economic, operational and cost management processes now in place will help drive the club towards the goal of financial sustainability moving forward into 2024-25.
The operating loss before interest and profit on the sale of players was reduced by 45% compared to the prior year despite the reduction in income that comes with relegation to the Championship. The loss, excluding player gains, was £2.3m compared to a £4.3m loss in the prior year. Achieved by the above-mentioned robust budgetary controls, enhanced operational processes and improved communication across the business, it is important to acknowledge the tireless hard work from all staff at Dundee United FC to achieve this reduction thus further aiding a strong foundation for our Premiership return. Total wage costs decreased by £1.7m (25%) to £5.2m and the wages/turnover ratio decreased to 81% from 86% in the prior year.
The net present value loan liability to OPG-4 UK dropped 34% from £10.1m to £6.6m strengthening the balance sheet.
Turnover held high at 6.4m although this was down from £8.1m in the prior year. The drop was largely down to a significant reduction in prize money and lower match attendances due to the substantially smaller away travelling supports in the Championship. The fantastic support of our fans continued, with season ticket sales remaining high and generating over £1m. Home matchday ticket sales also remained strong, with our fans showing great loyalty during a challenging time.
It is also important to note that the club continued to perform strongly in retail, commercial and across all other income streams to ensure that the turnover remained one of the highest in Scottish football despite relegation.
The profit on sale of player registrations was £0.7m with nearly £1m in transfer fee income generated.
Interest payable of £0.5m relates entirely to a notional interest charge on Mark Ogren’s loan account and the Scottish Government Covid-19 loan, as both these loans are provided interest-free and financial reporting standards require notional interest to be charged on them through the Profit & Loss Account. This charge is added back through Other Reserves to the P&L Reserve. The club do not pay out this interest.
The club expects a significant increase in turnover for season 2024-25 after gaining promotion back to the Scottish Premiership. The additional income combined with our improved financial management and controls has given the club a strong financial forecast for the 2024-25 Profit & Loss Account.
Review of Football Operations
Following relegation to the Scottish Championship at the end of the 2022/23 Season, the club committed to the retainment of the management team and extended the contracts of both first-team manager Jim Goodwin and assistant manager, Lee Sharp to lead the team into the following season with the sole objective of winning the league and gaining promotion back to the Scottish Premiership.
The club also obtained the services of experienced goalkeeping coach Paul Mathers ahead of the new season, with club legend Dave Bowman completing the first-team coaching staff.
As a result of the club’s relegation to the Scottish Championship, there was a serious requirement for the cost of the playing squad to be addressed. Following the substantial 2022/23 investment in player registrations and contractual obligations therein, the requirement to transfer the registration of several senior players became paramount.
Despite being faced with the consequential task of offloading costly player registrations in a difficult trading market position, the club were able to obtain transfer income totalling over £1m for several senior players.
Eleven other senior players also left the club for various reasons including the end of current deals, returning to parent clubs or termination of contracts.
The significant overhaul of the playing squad for a season in which there was only one objective meant that a targeted recruitment strategy was required to find players who were capable of achieving the principal objective the club had.
The permanent registrations of Ross Docherty, Kevin Holt, Louis Moult, Declan Gallagher and Liam Grimshaw, coupled with a number of senior players – including Scott McMann, Glenn Middleton, Craig Sibbald, Ross Graham and Tony Watt – who had been retained by the club meant that a competitive and strong squad had been assembled for the above challenge.
Several exciting young players already at the club were given the opportunity to play a part in the first-team squad that season. Kai Fotheringham, Miller Thomson, Chris Mochrie, Archie Meekison and Mathew Cudjoe-Anim all grasped the opportunity and played their parts in the successful campaign.
The club also secured the temporary registration of Jack Walton from English Premier League side Luton Town ahead of the new season.
The competitive season resumed on 15th July 2023 in the Scottish League Cup group stages. Disappointing results against The Spartans and Partick Thistle meant that the club did not qualify for the knock-out stages of the competition.
Subsequently, the team had a tremendous start to the league campaign, remaining unbeaten until mid-December and remaining top of the league for 32 out of 36 match weeks – including a continuous run at the top from match week 19 to the end of the season.
Losing only five matches across the 36-match campaign, the notoriously tough challenge of winning the Scottish Championship was met head-on by everyone across the club. All statistical targets and league-winning benchmarks set by the club and management before the start of the season were surpassed. The team finished the season with seventy-five points, six clear of the nearest challengers. A positive goal difference of fifty, thirty-four goals better off than the next best, a record number of clean sheets in the league (nineteen), and an average of more than two goals scored per game were some of the highlight statistics as the club secured the league title, officially confirming their status as Champions with one game to spare.
Domestic cup competition, against objective, yielded a disappointing return. Alongside the inability to reach the knock-out stage of the Scottish League Cup, a third-round exit at the hands of Queen of the South in the Scottish Cup ended our domestic cup hopes for the season. In the Scottish Challenge Cup, the club exited at the quarter-final stage.
Prior to the season and following the club’s relegation at the end of season 2022/23 to the Scottish Championship, a substantial review of the club’s football operations was carried out by senior leadership.
Review of Football Operations (continued)
The review concluded that the football department service level could continue to operate at a Premiership standard and potentially become enhanced by a more cohesive and prudent approach to expenditure, together with pragmatic budgeting, robust expenditure control and a regular reporting process.
Relegation to the Scottish Championship would mean an obvious and significant reduction in revenue generated from gate receipts and centralised income, however, the comprehensive review identified several expenditure lines that had become excessive and set out action points to control these moving forward, resulting in:
Consultancy Fees reduced by 84%;
Football Agent Fees reduced by 85%;
Football Department expenses excluding staff costs dropped by £1m
Significant reduction in playing budget whilst operating with legacy contracts and within the constraints of Championship expectations.
Other relevant football department expenditure was brought under tighter control through clear lines of communication, budget management and an improved reporting and accountability structure.
The club committed in Summer 2023 to renew our agreement with the University of St Andrews to remain as our training base for a further three seasons at least.
As part of the review of football operations, the club felt it was vital that the training centre remained a core pillar in the service and provision to our players and staff. The review and management of costs meant that protecting this service remained a viable option.
In addition, the review concluded that it was important for the club’s under-18 squad to return to the training centre in St Andrews permanently with the belief that the club’s young players benefit from utilising the same facilities as the men’s first team, including grass pitches, physical performance, analysis and nutrition – all key development tools for their future prospects. The alignment also allowed for greater communication and best practice sharing among the club’s full-time professional football staff and enabled the young players to benefit from the advice and guidance of senior players.
Overall, the decisions taken to address the significant previous over-expenditure in the football department resulted in the subsequent management of budgets and reduction in unnecessary costs.
Coupled with strong performance on the pitch, this approach has continued into the new season as the club aims to become a financially sustainable and successful organisation both on and off the pitch.
Review of Our Academy
The Chairman’s significant financial investment to the Academy continued in the 2023-24 season despite relegation to the Scottish Championship, our Elite CAS status has again been maintained, and the overall investment in the Academy Facilities and Football Operations since Mr Ogren acquired the club in December 2018 now nears £4.5million.
As evidenced by the ongoing financial investment being made, the Board continues to view DUFC Academy as the “Cornerstone” of the Club’s future success and we are very excited at the high quality of the young players who have made first-team appearances or are on track to graduate to the first team.
In the 2023-24 Season, Academy Graduates Kai Fotheringham, Ross Graham, and Miller Thomson were regular first-team squad members in the Scottish Championship, with Kai Fotheringham posting 22 goal contributions (15 goals and 7 assists). The club also handed 16-year-old Academy graduates Owen Stirton and Scott Constable their senior competitive debuts. The total minutes played by Academy graduates in the Championship-winning 2023-24 Season was 33% of our team total.
Dundee United FC Academy players have also been selected regularly across the Scotland National youth squads. Jamie Forrest and Marcus Buchanan were selected to represent the Men’s U15 Squad, while Keir Gilligan was selected to represent Scotland U16s in June 2024.
At the Under-21 level, the club enjoyed healthy representation throughout the 2023-24 Season. Kai Fotheringham, Jack Newman and Archie Meekison were all called up throughout the campaign during the Under-21s UEFA European Championships 2025 qualifying campaign.
Review of Our Academy (continued)
Owen Stirton and Scott Constable, now featuring regularly in first-team matchday squads in the Scottish Premiership, also represented Scotland U17s during Season 2023-24.
The Board are delighted that the substantial investment being made in the Academy continues to reap benefits for the club with many youth team players graduating to the first team and aims to continue the long-term financial investment within the Academy to develop & attract the best talent around the country.
Dundee United Women’s Team
The Dundee United FC Women’s team retained their status as a top-flight side following a play-off victory over Kilmarnock FC Women in May 2024 – achieving the pre-season objective.
Season 2023-24 was the second season of the Womens team being held under the official umbrella of the club. It was also the teams second season in the Scottish Women’s Premier League.
The season was a challenging one overall with the team battling it out against Hamilton, Montrose and Spartans for survival, in an ever-growing professional league where several teams enjoy significant financial investment against a backdrop of diminutive, centralised revenues.
This has created a chasm between the sides competing against one another in the top division.
Head coach Graeme Hart left his post in January 2024 and was replaced by Suzanne Shepherd, who guided the team to survival, picking up crucial points across the post-split fixtures.
Significant progress was made across the team to professionalise the level of service provided to the players in order to become more competitive.
New revenue streams were opened up through the introduction of admission fees for match tickets, as well as enhancing the supporter experience through the use of the newly installed 200-seated stand at Foundation Park and the sale of matchday concessions.
The foundations have been laid for the team to continue on a journey of steady growth over the coming years, with the objective to remain in the top flight of Scottish Women’s Football in Season 2024/25.
Commercial
The Board and senior management team continue to explore new commercial opportunities and maintain our current strong relationships with our sponsors, associate and partners.
Commercial income continued to be a key strength of the business during 2023-24 with the club maintaining Premiership level revenues at £2.4m for the year. The growth of the commercial side of the business has been a major positive over the past five years with revenue increasing from £0.9m in 2019 to £2.4m in 2024, an increase of £1.5m.
The Board were pleased with the continued support of long-standing partners, with JF Kegs, QuinnBet and Paint-Tec remaining as kit sponsors and Clayton Caravan as the front of the Academy kit. A new, improved partnership strategy was implemented, with the club adopting many new partners and sponsors while building on the strong relationships with previous and current partners.
It is also important to note that in June 2024, the club entered a new partnership with the announcement of CalForth Construction as our stadium naming rights partner marking one of the most lucrative partnerships in our history.
As part of the agreement, our stadium will now be known as the CalForth Construction Arena at Tannadice Park until at least the summer of 2026.
The hospitality area of the club endured change during the summer of 2023 as we reached an agreement with highly renowned caterers, Regis Banqueting, to supply all hospitality food provisions for at least the next two seasons. The enhanced service and offerings provided alongside significant cost control reviews led to a far stronger operation within this sector during the financial year.
Commercial (continued)
On retail, Errea commenced as the club’s new technical partner with a lucrative agreement running for four years. The new kit designs proved very popular with fans during the 2023-2024 season, with high demand for a wide range of replica and training wear. The club are excited to explore the relationship with Errea as we move into the second year of the agreement.
Dundee United Community Trust (DUCT)
The club continues to partner with Dundee United Community Trust (DUCT). The relationship has been in place for six years, resulting in over £2.0m of action in our local community during this time.
During this financial year, DUCT has again raised the bar in its work alongside the club and within the local community to better the environment. Amongst those successful projects was the launch of the ‘Everyone United’ project, which allowed access to football for almost 2000 fans from 20 local organisations who helped distribute the beneficial access tickets. The strong partnership between the club and DUCT and its donors also ensured the distribution of over 150 hospitality and mascot packages during the 2023/24 season.
Our community trust has also been at the forefront of a new Scottish-wide initiative that saw them pilot a new youth club for people with a range of disabilities during the year, thanks to funding from the SPFL Trust’s Innovation Fund’.
Building on previous success, DUCT once again held the annual ‘Festive Friends’ project, supporting around 300 local people with a Christmas meal and gifts and generating a substantial profile for both the community trust and the club with the first minister’s attendance at the Christmas Eve event.
DUCT broke significant ground in the year through our long-running partnership with The Scottish Football Association by being one of the successful applicants to the ‘Extra Time’ project, funded by The Scottish Government. This project comes with an investment of over £100, 000 over multiple years, and will see the Community Trust provide activities after school and during the school holidays for local primary school children living with a disability or additional support needs. Other significant projects included: ‘Summer Play Para Sports Club Camps’, the long-running ‘CLD United’ peer-led divisionary football opportunity for 100s of young people in the city, and ‘Dundee United Dynamos’ which allowed us to sustain this important area of work and continue to provide opportunities for hundreds of children, young people and adults with a variety of disabilities to take part in sport each week.
The club remains proud of its partnership and community impact with DUCT.
Wage Costs
Total wage costs for the club decreased by 25% from £6.9m in the prior year to £5.2m as a result of robust financial management and budgetary control. Agent fees as previously mentioned were reduced by 85% compared to the 2022-23 season.
Despite the drop in staff costs, the club maintained its high quality of service, achieved Elite status within the Academy and created a competitive squad that went on to achieve promotion by winning the Scottish Championship.
Operational & Administration Costs
As stated in our previous Annual Report for 2022-23, direct and admin cost management was a real focus of the senior leadership team for 2023-24 and beyond. The club implemented fundamental changes in the summer of 2023 to update the controls, processes and structure across all areas of the business to manage costs within.
Direct costs, excluding wages, dropped from £3.5m in the prior year to £2.2m for the current year. Administration costs decreased by £0.3m. Therefore, total operational and administration costs decreased by £1.6m, 28% less than the previous year.
Net Assets
The net assets deficit of £4.5m, as reported in the balance sheet as at 30 June 2024, is distorted by the £6.6m (£7.8m undiscounted value) of funding provided by Mark Ogren to the above date being disclosed within Creditors. This funding has been provided to the club on an interest-free loan basis, with no intention in the short to medium term to seek any repayment of this debt.
Principal risks and uncertainties
Due to the company's principal activity, the business's revenues are inherently linked to on-field performance and the football team's success.
The principal risk to the business is the possibility of the team being relegated to the Championship. However, the owners and Board are committed to providing the required funding and infrastructure for the club to maintain a competitive team and a going concern in the Premiership. The Board will also continue to provide the platform to enhance the long-term prospects of a top-6 finish and qualification for UEFA Competition.
According to the Directors, other principal risks are the wider economy financial issues, which can impact match attendance. To address this, the club offers flexible and cost-effective ways to purchase tickets on a seasonal and match-to-match basis. The club froze season ticket prices for the return to the Premiership for 2024-25 despite a substantial increase in match operation and utility costs.
Since December 2018, when Mark Ogren took control of the club, over £13m has been invested in enhancing the infrastructure, the playing squad, the Academy and facilities.
The owner remains fully committed and is keen to build on the positives of the 2023-24 season which include winning promotion, streamlining costs, maximising commercial income and maintaining strong relationships with supporters, partners and other stakeholders. During the summer of 2024, the hard work continued as the club focused on building a playing squad that could compete in the Scottish Premiership while looking to achieve long-term financial sustainability.
To conclude, the Board would like to express its thanks to all employees, players, supporters, and associates including sponsors and partners for their continued fantastic support.
| 2024 | 2023 | 2022 |
SPFL Premiership | N/A | 12th | 4th |
SPFL Championship Scottish Cup | 1st 3rd Round | N/A 5th Round | N/A Quarter-Final |
Scottish League Cup | Group stage | Quarter-Final | Quarter-Final |
Turnover | £6.40m | £8.10m | £8.28m |
Operating Loss | £2.30m | £5.0m | £1.90m |
Wages to Turnover Ratio | 81% | 86% | 71% |
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 12.
No ordinary dividends were paid. The directors do not recommend payment of a dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Thomson Cooper were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
We have audited the financial statements of OPG-4 UK 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
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
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, posting of unusual journals along with complex transactions and manipulating the Company’s key performance indicators to meet targets. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, tested a sample of journals to confirm they were appropriate and reviewed areas of judgement for indicators of management bias to address these risks.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the officers and other management (as required by the auditing standards).
We reviewed the laws and regulations in areas that directly affect the financial statements including financial and taxation legislation and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
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.
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 loss for the year was £489,815 (2023 - £399,071 loss).
OPG-4 UK Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 15 Atholl Crescent, Edinburgh, EH3 8HA .
The group consists of OPG-4 UK Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the 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:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company OPG-4 UK 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.
Dundee United Football Club Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Dundee United Football Club Limited for the period from its acquisition on 18 December 2018. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
The group incurred pre tax losses of £2,999,698 (2023: £3,261,076) during the year, has net liabilities of £779,331 (2023: £554,724) and a balance sheet deficit of £10,535,457 (2023: £8,155,293). Excluding the loan from the US parent company the group has net assets of £2,004,790 (2023: £2,995,480).
The current and future cash position of the group has been reviewed by the Board. This included a comprehensive review of the financial projections and cash-flow requirements, covering a period beyond one year from the date of approval of the financial statements. The projections make key assumptions around:
Maintaining at least Scottish Championship status with a view to regaining the club’s Premiership status
Season ticket revenues and match day income being consistent with operating in the SPFL Championship
Sponsorship and commercial income being consistent, subject to inflationary rises
Overheads and payroll costs being reduced to a reflect the division in which the club currently resides whilst pushing for promotion, subject to inflationary rises;
Income from net player transfer activities;
No repayment of Mark Ogren’s loan being made for a period of at least 12 months from the date of approval of the accounts
The directors acknowledge that the group's liquidity position is reliant on the continued support from Mark Ogren and without this a material uncertainty would exist which may cast doubt over the groups's ability to continue as a going concern.
After due consideration of the above, including the potential impact of key assumptions not materialising and having received assurances from the majority shareholder of the group, the Board are satisfied that they consider that the group has adequate resources to continue in operational existence for a period of not less than twelve months from the date of approval of the accounts. Accordingly, the Board consider it appropriate to prepare the financial statements on the going concern basis.
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.
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.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
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 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.
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.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
During the year OPG-4 UK Limited exchanged £5,058,080 of its loan with The Dundee United Football Club Limited for 1,320,000 10p Ordinary shares.
Details of the company's subsidiaries at 30 June 2024 are as follows:
Other borrowings relate to amounts owed to OPG-4 Inc, OPG-4 UK Limited's parent company. These loans are interest free and have been discounted at 3% over Bank of England base rate a period of between 6 and 6½ years in accordance with FRS102 Section 11.
Deferred income is included in the financial statements as follows:
Football grounds improvement grants of £1,275,646 (2023: £1,328,650) are included in deferred income and released to the Income Statement at a rate equal to the depreciation rate of the asset to which the grant relates. Amounts falling due within one year are £53,004 (2023: £53,000).
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.