TIDMWFC
RNS Number : 6978D
Watford Leisure PLC
28 March 2011
28 March 2011
Watford Leisure PLC
("Watford Leisure" or the "Company")
Unaudited Interim Results for the six months ended 31 December
2010
Chairman's Statement
Introduction
On behalf of the Board of Directors, I have pleasure in
presenting the Interim Report and Financial Statements of Watford
Leisure PLC for the six months ended 31 December 2010.
The period of time from 1 July 2010 to 31 December 2010 has seen
some genuine stability at Board and operational leadership levels
at our principal operating subsidiary, The Watford Association
Football Club Limited ("the Club), both on and off the field of
play.
I feel it important, right at the start of my report, that I
should once again place on record the Club's gratitude to the
Club's major shareholder, Fordwat Limited - and Lord Ashcroft in
particular, for continued support during a time when the Club is
certainly attempting to live to the values set out in its five-year
rolling business plan 'The Watford Way'.
Background
It should not be a surprise to anyone to read that our half-year
figures state a deficit. This last six-month period does not
include any instances of player sales, which is a key part of the
model that underpins our stated aim to be a sustainable business.
The Company last raised funding in July 2010 through the issue of
secured bonds, the proceeds of which were used to consolidate and
replace GBP9,207,000 million of existing indebtedness with the
balance of GBP935,000 million being available for working capital
purposes. However, the Company remained dependent on the continued
financial support of certain shareholders and a director and/or
alternative sources of funding including most importantly player
sales. Given the nature of the two-part football transfer market,
(the summer and January trading windows), our focus on ensuring we
remain true to our business plan means that failure to trade in
either window inevitably leads to the need for a working capital
injection from alternative sources. This working capital
requirement for the remainder of the current financial year is
approximately GBP3.5 million.
As everyone concerned with the Club will be aware the board has
been in discussions recently with Lawrence Bassini and Watford FC
Limited ("WFCL"). An announcement was made on 10 March 2011 setting
out the terms and conditions of an offer for Watford Leisure and a
formal document was posted on 25 March 2011 to shareholders, which
makes the offer to shareholders in accordance with the previously
announced terms (the "Offer" or the "WFCL Offer"). WFCL has
undertaken to provide GBP3.5 million of funds for working capital
purposes subject to the Offer becoming or being declared
unconditional, such that the above mentioned working capital
requirement can be satisfied.
Financial Overview
The key financial and performance indicators are as follows:
Unaudited Unaudited
half year
half year ended ended
31 December 31 December
2010 2009
GBP'000 GBP'000
Revenue 5,437 5,163
Cost of sales (5,935) (7,444)
Administrative expenses (1,563) (1,860)
Other income 308 265
Operating loss before interest, player trading,
amortisation and exceptional
items (1,753) (3,876)
Lossbefore taxation (2,505) (172)
Financial Review
Revenue for the first six months of the year was GBP5,437,000
(2009: GBP5,163,000) whilst the loss on ordinary activities after
taxation was GBP2,505,000 (2009 : GBP172,000).
Matchday revenue to 31 December 2010 is GBP2,001,000 compared to
GBP2,043,000 to the same date in 2009. Season Ticket income for the
period is GBP49,000 down; with over 1,500 fewer season ticket
holders than the previous season, a restructuring of the pricing
model has minimised the financial loss. League match income is up
GBP93k at GBP591,000; the average income per game has increased to
GBP54k from GBP41k (12 league home fixtures to 31 December 2009, 11
home league fixtures to 31 December 2010) due to a combination of
increased match by match ticket sales and increased ticket
prices.
Carling Cup income is included within matchday revenue, and to
31 December 2009 GBP75,000 was generated from two away fixtures to
Barnet and Leeds. This compares to a net position to 31 December
2010 of GBP17,000, generated by an away fixture at Aldershot and a
home fixture against Notts County. Public catering income has
reduced by GBP12k due to reduced actual attendances; the actual
average attendance for the 12 home matches (including one cup
fixture against Notts County at 6,183) played to 31 December 2010
is 10,503, compared to 10,970 for the 12 home league fixtures
played to 31 December 2009. Match related commercial income has
reduced by GBP15,000, due to there being one less league match in
the period.
Media revenue has increased by GBP324,500 to GBP2,573,500 (2009:
GBP2,249,000). The Premier League solidarity payment for the period
has increased by GBP508,000, with the Football League Award
distributions reduced by GBP7,000, including a final payment of
GBP50,000 relating to the prior financial year. TV income in the
year is reduced to GBP20,000, with two away games having been
televised. In 2009 GBP200,000 had been received following two home
televised fixtures.
Commercial revenues are slightly reduced against the same period
last year with income of GBP862,000 against GBP871,000, with
shortfalls in revenue generated from retail, conference &
banqueting and Saracens matchday catering being mainly offset by
increases in other commercial revenues.
Cost of sales has reduced by GBP1,509,000. The reduction is
continued evidence of the restructuring of football costs, with
player salaries reduced by GBP877,000 and other football related
salaries reduced by GBP129,000. With no loan fees payable in the
period to 31 December 2010, there is a reduction of GBP363,000
against the previous half year.
Administrative expenses have also reduced by GBP297,000. This
reduction includes a saving of GBP141,000 relating to the cost of
off-site offices at Wolsey Park and GBP70,000 reduction in
salaries.
The profit on player disposals in the period is GBP135,000 (from
clauses relating to players sold in previous transfer windows)
compared to GBP4,484,000 for the same period in 2009. The profit
generated comprises amounts arising from appearance and sell-on
clauses relating to the sales of T Priskin, T Robinson, A McNamee
and P Robinson and is significantly lower than in the previous
period as no new player sales were made during the Summer 2010
transfer window.
Financing costs are increased by GBP313,000. The cost in the
period of GBP496,000 includes GBP450,000 of costs relating to the
364 day Secured Bond issue completed on 13 July 2010. Interest for
the period to 31 December 2010 is GBP234,000 and the total costs of
completion of the Bond of GBP447,000 are being released on a
straight line basis over the term of the Bond, so a charge of
GBP211,000 has been made to 31 December 2010.
The business's costs are continuing to reduce as we work towards
creating a sustainable business model and the operating loss before
interest, player trading, amortisation and exceptional items of
GBP1,753,000 is evidence of this, with a loss movement of
GBP2,123,000 from the 31 December 2009 position. The improved
Premier League solidarity payment has also contributed towards this
reduced loss. However, the fact that no new player sales were made
during the Summer 2010 transfer window, coupled with the financing
costs of the 364 day Secured Bond issue, which was completed on the
13 July 2010, have contributed to a loss for the period of
GBP2,505,000 compared with a loss of GBP172,000 for the same period
last year. The GBP4,484,000 profit on player disposals all but
absorbed losses for the period to 31 December 2009 and as
previously stated, player sales are a key part of maintaining a
sustainable business for Watford.
Cash absorbed by operations was GBP2,191,000. Cash generated by
player sales in the period totalled GBP1,715,000, of which
GBP1,375,000 relates to transfer receipts from the sales of T
Priskin, M Williamson, T Smith and J J O'Toole. The balance of
GBP340,000 relates to appearance and sell-on clauses from player
transfer agreements. Cash absorbed by player purchases was
GBP839,000, this includes transfer, appearance and sell-on amounts
of GBP430,000 payable relating to players purchased in previous
years and GBP330,000 payable relating to players purchased during
the Summer 2010 transfer window and agent fees and levy payable of
GBP79,000. Cash absorbed by the purchase of property, plant and
equipment includes GBP499,000 relating to the fit-out of the
Vicarage Road Stadium offices. Net cash generated by financing
activities totals GBP2,138,000 and includes cash amounts generated
by the 364 day Secured Bond issue and a ticketing purchase
agreement relating to ticket sales for the 2011/2012 season.
Overall there was a net cash inflow of GBP230,000 against an
outflow of GBP1,036,000 for the same period last year.
On the Field
Our Football Manager, Malky Mackay, has engendered a vibrant
environment for learning and development amongst the Club's playing
staff, the results of which are currently being enjoyed by those
who attend the Club's first-team games on a regular basis.
It has been a very encouraging first half of the 2010-11
football season from the Club's football personnel; that's the
management, coaching and medical staff working in support of the
players, whose attitude and application has reflected the
dedication with which Malky Mackay undertakes his role.
'To develop and maintain a high-performing player talent base'
is one of the three pillars supporting our business plan. Given the
level of first-team involvement from our home-grown talent and the
continuing progress of senior professionals - many of whom signed
for modest sums from lower-division Clubs - I think we can argue
with justifiable optimism that our football staff are doing an
admirable job in what continue to be challenging circumstances.
Off the Field
As I note above, the WFCL Offer formally made on 25 March 2011
and shareholders will shortly receive a document setting out the
full terms and conditions of the Offer, together with the views of
the Watford Leisure directors who are considered to be independent
for the purposes of the Offer.
The issue of stadium development goes hand-in-hand with the
question of new ownership and investment, with the south-west
corner and pitch along with the east side of the Vicarage Road
Stadium the obvious areas of priority for the Board.
Away from the Boardroom, I strongly believe that the Club
continues to hold true to its aim of being 'a true Community
partner'. The reach and depth of the work of the Club's Community
Trust continues to strengthen links with key personnel in and
around our locale.
And our partnership with our neighbours at the hugely impressive
The Harefield Academy continues to flourish. The outstanding work
delivered by the Club's Academy staff, both in conjunction with The
Harefield Academy and at various other venues, means that we can
all look forward to the Club's tradition of 'growing its own'
develop still further.
To the Future
I make no apology at all for reiterating my sentiments in my
previous Chairman's statement in June, where I placed on record the
Board's thanks to all members of the Club's staff for their
outstanding commitment and dedication each and every day.
We remain certain that the provision of open - and, where
possible, informal - communication between key Club figures and
supporters is fundamental to generating a feeling of togetherness
and unity, the like of which this Club has used to its advantage in
previous years.
Once again, on behalf of the Club, I'd like to offer gratitude
to those of you who have, in whatever way, backed Watford and its
aims.
Thank you in advance for your continued support.
Graham Taylor
Chairman
25 March 2011
WATFORD LEISURE PLC
Consolidated income statement for the half year ended 31 December
2010
Notes Unaudited Unaudited Audited
half year half year
ended ended year ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 2 5,437 5,163 11,258
Cost of sales (5,935) (7,444) (15,049)
Gross loss (498) (2,281) (3,791)
Administrative expenses (1,563) (1,860) (4,181)
Other operating income 5 308 265 551
(1,753) (3,876) (7,421)
Amortisation and impairment
of costs of
players' registrations (393) (597) (1,371)
Profit on disposal of players'
registrations 135 4,484 5,129
Operating (loss) / profit (2,011) 11 (3,663)
Financing income 6 2 - 7
Financing costs 6 (496) (183) (407)
Loss before taxation (2,505) (172) (4,063)
Taxation 3 - - -
Loss for the period 15 (2,505) (172) (4,063)
Attributable to :
Equity holders of the parent (2,422) (166) (3,908)
Minority interests (83) (6) (155)
Loss for the period 15 (2,505) (172) (4,063)
Earnings per 1p share (basic
and diluted) 4 (5.5p) (0.4p) (8.9p)
Consolidated balance sheet at 31 December 2010
Notes Unaudited Unaudited Audited
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 7 13,152 12,662 13,074
Intangible assets 8 1,118 970 819
14,270 13,632 13,893
Current assets
Inventories 9 144 176 113
Trade and other receivables 10 1,808 5,714 3,828
Cash and cash equivalents 230 22 686
2,182 5,912 4,627
Total assets 16,452 19,544 18,520
Current liabilities
Interest bearing loans
and other borrowings 11 12,644 6,233 10,590
Trade and other payables 12 3,392 2,736 4,319
Deferred revenue 13 1,644 2,772 2,272
17,680 11,741 17,181
Non-current liabilities
Interest bearing loans
and other borrowings 11 753 3,563 836
Trade and other payables 12 511 330 488
Deferred revenue 13 23 29 25
1,287 3,922 1,349
Total liabilities 18,967 15,663 18,530
Net assets GBP(2,515) GBP3,881 GBP(10)
Equity
Capital and reserves
Called up share capital 14 439 439 439
Special reserve 15 2,194 10,409 2,194
Accumulated deficit 15 (4,910) (6,961) (2,488)
Equity attributable to equity
holders of the parent (2,277) 3,887 145
Minority interests (238) (6) (155)
Total equity GBP(2,515) GBP3,881 GBP(10)
Consolidated cash flow statement for the half year ended 31 December
2010
Unaudited Unaudited Audited
half year half year year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Operating activities
Loss before tax (2,505) (172) (4,063)
Amortisation of intangible
fixed assets 393 597 1,371
Depreciation of property, plant
and equipment 264 286 655
Profit on disposal of players'
registrations (135) (4,484) (5,129)
Financing income (2) - (7)
Financing costs 496 183 407
(Increase) / decrease in inventories (31) (56) 7
Decrease in receivables 440 519 761
Decrease in payables and deferred
income (1,111) (792) (657)
Cash absorbed by operations (2,191) (3,919) (6,655)
Cash flows from investing activities
Purchase of intangible fixed
assets (839) (1,507) (1,950)
Purchase of property, plant
and equipment (552) (68) (158)
Proceeds from sale of intangible
fixed assets 1,715 1,767 4,056
Proceeds from sale of tangible
fixed assets - - 111
Net cash generated by investing
activities 324 192 2,059
Financing activities
Advances of debt 2,330 3,466 5,978
Repayments of debt (82) (85) (636)
Interest received 2 - 7
Interest paid (112) (134) (238)
Net cash generated by financing
activities 2,138 3,247 5,111
Net increase / (decrease) in
cash
and cash equivalents 271 (480) 515
Cash and cash equivalents at
start of period (41) (556) (556)
Cash and cash equivalents at
end of period GBP230 GBP(1,036) GBP(41)
Cash and cash equivalents 230 22 686
Bank overdraft - (1,058) (727)
Cash and cash equivalents at GBP230 GBP(1,036) GBP(41)
end of period
Consolidated statement of changes in equity for the half year ended
31 December 2010
Attributable to equity holders
of the parent Minority Total
Share Special Retained interest
capital reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Equity
shareholders
funds at 1
July 2009 439 10,409 (6,795) 4,053 - 4,053
Loss for the
period - - (166) (166) (6) (172)
Equity
shareholders
funds at 31
December 2009 439 10,409 (6,961) 3,887 (6) 3,881
Loss for the
period - - (3,742) (3,742) (149) (3,891)
Losses
extinguished - (8,215) 8,215 - - -
Equity
shareholders
funds at 30
June 2010 439 2,194 (2,488) 145 (155) (10)
Loss for the
period - - (2,422) (2,422) (83) (2,505)
Equity
shareholders
funds at 31
December 2010 439 2,194 (4,910) (2,277) (238) (2,515)
Notes to the unaudited interim financial information for the six
month period ended 31 December 2010
1 Basis of Preparation
These interim financial statements for the six month period
ended 31 December 2010, comprising the Consolidated Income
Statement, Consolidated Balance Sheet, Consolidated Cash Flow
Statement and Consolidated Statement of Changes in Equity and
accompanying notes, have been prepared using the historical cost
convention. They are in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
("IFRS") as adopted by the European Union and the AIM Rules for
companies, save that the Group has elected not to adopt IAS34
'Interim Financial Reporting'. These IFRS interim financial
statements do not include all the information required for full
IFRS annual financial statements.
The interim results do not constitute the statutory accounts
within the meaning of s435 of the Companies Act 2006. The financial
information in this report for the six months to 31 December 2010
and 31 December 2009 has not been audited. The comparative figures
for the year ended 30 June 2010 are extracted from the Group's
audited financial statements for that period as delivered to the
Registrar of Companies and filed at Companies House and prepared in
accordance with the Companies Act 2006. They do not constitute the
financial statements for that period.
Those financial statements received an unqualified audit report
which did not contain any statement under sections 498 (2) or (3)
of the Companies Act 2006 but did include an emphasis of matter
paragraph in the auditor's report relating to going concern. In
this context the Group has prepared cash flow forecasts for the
period to 30 June 2015. These have been updated and now show that
additional funding of GBP3.5 million will be required in the period
to 30 June 2011. This is expected to be satisfied by the working
capital facility to be provided by WFCL, subject to the Offer
becoming or being declared unconditional and therefore, the
Directors consider it appropriate to prepare the interim results on
a going concern basis. The interim results do not include any
adjustments that would result should this not be the case.
The interim results have also been prepared on a consistent
basis with the accounting policies expected to be applied for the
year ending 30 June 2011, and which are also consistent with the
accounting policies for the year ended 30 June 2010 except for the
adoption of new standards and interpretations.
2 Revenue
Unaudited Unaudited Audited
half year half year year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Matchday 2,001 2,043 4,351
Media 2,573 2,249 4,090
Commercial 863 871 1,464
Other - - 1,353
GBP5,437 GBP5,163 GBP11,258
Revenue streams comprise:
Matchday - season and matchday tickets, corporate hospitality
income and matchday catering
Media - television and broadcasting income, including distributions
from the FA Premier League broadcasting agreements, Football
League funding, cup competitions and local radio
Commercial - sponsorship income, merchandising, conference
and banqueting and other sundry income
Other - Elton John Concert revenue
3 Taxation
After taking into account the projected performance for the
next six months and unutilised tax losses, no provision for
taxation is required.
4 Loss per share
Loss per ordinary share has been calculated
as follows: Unaudited Unaudited Audited
half year half year year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Loss for the period GBP(2,422) GBP(166) GBP(3,908)
Weighted average
number of shares in
issue 43,885,693 43,885,693 43,885,693
Loss per ordinary
share (5.5p) (0.4p) (8.9p)
5 Other operating income
Unaudited Unaudited Audited
half year half year
ended ended year ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Rent receivable 291 265 519
Contribution to
capital expenditure 1 - -
Release of capital
grants 1 - 4
Other 15 - 28
GBP308 GBP265 GBP551
6 Financing
Unaudited Unaudited Audited
half year half year
ended ended year ended
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Financing income:
Bank deposit interest GBP2 GBPNil GBP7
Financing costs:
Bank loan and overdraft 5 6 12
Other interest 491 177 395
GBP496 GBP183 GBP407
7 Property, plant and equipment - group
Motor
Freehold Leasehold vehicles,
Assets ground, property equipment,
premises
under and and fixtures
construction improvements improvements and Total
fittings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost :
At 1 July
2009 - 12,659 879 2,700 16,238
Additions - - - 68 68
At 31 December
2009 - 12,659 879 2,768 16,306
Additions 868 11 1 12 892
Disposals - - (662) (603) (1,265)
At 30 June
2010 868 12,670 218 2,177 15,933
Additions - 317 - 25 342
Transfer (289) 289 - - -
At 31 December
2010 579 13,276 218 2,202 16,275
Depreciation:
At 1 July
2009 - 1,105 527 1,726 3,358
Charge for
the half year - 116 123 47 286
At 31 December
2009 - 1,221 650 1,773 3,644
Charge for
the half year - 117 114 138 369
Disposals - - (636) (518) (1,154)
At 30 June
2010 - 1,338 128 1,393 2,859
Charge for
the half year - 143 21 100 264
At 31 December
2010 - 1,481 149 1,493 3,123
Net book value
:
At 31 December GBP579 GBP11,795 GBP69 GBP709 GBP13,152
2010
At 30 June GBP868 GBP11,332 GBP90 GBP784 GBP13,074
2010
At 31 December GBPNil GBP11,438 GBP229 GBP995 GBP12,662
2009
At 30 June GBPNil GBP11,554 GBP352 GBP974 GBP12,880
2009
8 Intangible assets - group
Pouring Players'
rights registrations Total
GBP'000 GBP'000 GBP'000
Cost :
At 1 July 2009 752 9,756 10,508
Additions - 385 385
Disposals - (3,720) (3,720)
At 31 December
2009 752 6,421 7,173
Additions - 623 623
Disposals - (871) (871)
At 30 June 2010 752 6,173 6,925
Additions - 692 692
At 31 December
2010 752 6,865 7,617
Amortisation :
At 1 July 2009 752 7,538 8,290
Charge for the
half year - 597 597
Disposals - (2,684) (2,684)
At 31 December
2009 752 5,451 6,203
Charge for the
half year - 544 544
Impairment - 230 230
Disposals - (871) (871)
At 30 June 2010 752 5,354 6,106
Charge for the
half year - 393 393
At 31 December
2010 752 5,747 6,499
Net book value
:
At 31 December GBPNil GBP1,118 GBP1,118
2010
At 30 June 2010 GBPNil GBP819 GBP819
At 31 December GBPNil GBP970 GBP970
2009
At 30 June 2009 GBPNil GBP2,218 GBP2,218
9 Inventories
Unaudited Unaudited Audited
31 31
December December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Goods for resale GBP144 GBP176 GBP113
The estimated replacement cost of stocks does not materially
differ from their balance sheet value.
10 Trade and other receivables
Unaudited Unaudited Audited
31 31
December December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Trade receivables 824 949 952
Less: Provision for
impairment (167) (71) (160)
Trade receivables -
net 657 878 792
Transfer fees
receivable 685 3,909 2,265
Other receivables 10 111 10
Prepayments and accrued
income 456 816 761
GBP1,808 GBP5,714 GBP3,828
Other receivables includes GBP10,183 which falls due after
more than one year.
Prepayments and accrued income includes GBP97,524 which
falls due after more than one year.
11 Interest bearing loans and other borrowings
Current liabilities
Unaudited Unaudited Audited
31 31
December December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Convertible Loan Notes
2009 - - 592
364 Day Secured
Bonds 2010 10,145 - -
Bank overdraft - 1,058 727
Directors' loans 500 - 2,550
Other loans 1,999 5,175 6,721
GBP12,644 GBP6,233 GBP10,590
Non-current
liabilities
2010 2009 2010
GBP'000 GBP'000 GBP'000
Convertible Loan
Notes 2009 - 592 -
Other loans 753 2,971 836
GBP753 GBP3,563 GBP836
The maturity of total debt may be analysed as follows:
2010 2009 2010
GBP'000 GBP'000 GBP'000
In one year or less 12,644 6,233 10,590
Between one and two
years 84 844 167
Between two and five
years 669 2,719 669
GBP13,397 GBP9,796 GBP11,426
Current liabilities include GBP9,906,000 which represents the
fair value of the 364 day Secured Bond which was issued for a total
of GBP10,142,000 on 13 July 2010. The Bond is secured by a second
charge over the Vicarage Road Stadium and attracts interest at 4.5%
above the Barclays Bank base rate; to 31 December 2010 an amount of
GBP239,000 has been accrued. Each GBP1 of the bond has 20
detachable warrants (each to subscribe for one new Ordinary Share
at a subscription price of 4 pence), these warrants are considered
not to have any material value. Costs relating to the Secured Bond
totalled GBP447,000 and are being released as an interest charge on
a straight line basis against the 364 day period, to 31 December
2010 this release totals GBP211,000. If the WFCL Offer becomes or
is declared unconditional the new terms of the bonds, as set out in
the offer document posted to shareholders on 25 March 2011, become
effective from 10 March 2011.
Directors' loans in current liabilities include a loan from
David Fransen of GBP500,000. The loan was due for repayment on 31
January 2011, but has been deferred until 31 March 2011. The loan
is unsecured and attracts interest at 3.5% above the Barclays Bank
base rate. Interest of GBP10,000 has been accrued for the period 01
July 2010 to 31 December 2010.
Other loans of GBP1,999,000 includes an amount of GBP1,506,000
secured against the sale of future tickets and is fully repayable
before the end of June 2011, an unsecured amount of GBP168,000 from
The Football League and an unsecured amount of GBP250,000,
attracting interest at 0.5% above Barclays Bank base rate, which is
repayable by 31 August 2011.
Non current loans include the balance of The Football League
loan at GBP84,000 which will be repayable during the period 1
January 2012 to 30 June 2012 and a secured loan from Watford FC's
Community Sports & Education Trust of GBP669,000 which is
repayable in June 2013.
12 Trade and other payables
Current liabilities
Unaudited Unaudited Audited
31 December 31 December 30 June
2010 2009 2010
GBP\'000 GBP'000 GBP'000
Trade payables 1,066 889 1,754
Players' registration
costs 353 351 531
Other taxes and social
security 420 266 236
Accruals 1,553 1,230 1,798
GBP3,392 GBP2,736 GBP4,319
Non-current liabilities
2010 2009 2010
GBP'000 GBP'000 GBP'000
Players' registration
costs 31 - -
Accruals 480 330 488
GBP511 GBP330 GBP488
13 Deferred revenue
Current liabilities
Unaudited Unaudited Audited
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Deferred revenue 1,654 2,772 2,272
Non-current liabilities
2010 2009 2010
GBP'000 GBP'000 GBP'000
Capital grants 21 26 22
Contributions to capital
expenditure 2 3 3
GBP23 GBP29 GBP25
Deferred revenue includes income, mainly from season
ticket sales, received in advance in respect of the 2010/11
season. These amounts are released evenly throughout
the year.
Capital grants comprise grants received (principally
from the Football Stadia Improvement Fund), towards the
costs of stadium re-development.
Contributions
Capital to capital
grants expenditure Total
GBP'000 GBP'000 GBP'000
At 1 July 2010 22 3 25
Credited to the profit
and loss account (1) (1) (2)
At 31 December 2010 GBP21 GBP2 GBP23
14 Share capital
Unaudited Unaudited Audited
31 December 31 December 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
Allotted, called up and
fully paid :
Ordinary shares of 1p GBP439 GBP439 GBP439
each
15 Reserves
Special Profit and
Group reserve loss account
GBP'000 GBP'000
At 1 July 2010 2,194 (2,488)
Minority interest - 83
Loss for the half year - (2,505)
At 31 December 2010 GBP2,194 GBP(4,910)
16 Contingent liabilities and assets
a) Players' transfer costs payable
Under the terms of certain contracts with other football clubs
in respect of player transfers, additional amounts would become
payable if certain specific performance conditions are met. The
maximum that would be payable in respect of transfers to 31
December 2010 is GBP1,825,333. Since the half year end and to the
date of approval of these financial statements GBP30,000 of this
has become payable. Of the contingent amount, GBP1,222,500 relates
to clauses linked to promotion to the Premiership or international
appearances, the remainder relates to appearance fees.
b) Player transfer fees receivable from Portsmouth FC
Of the amount outlined at note 10 relating to transfer fees
receivable, GBP500,000 is due from Portsmouth FC. These payments
are expected to be made direct to the Club by the Premier League in
accordance with Premier League rules C51 and C53 (since 31 December
2010, GBP500,000 has been received). However, the payments have
been received conditional upon the Premier League being able to
recoup them should any third parties be able successfully to
challenge the so called Football Creditor rule. The directors are
confident that whilst a contingent liability totalling GBP1,450,000
does exist, it appears unlikely that these monies will need to be
repaid (this total amount includes all amounts received from the
Premier League since 30 June 2010).
c) Signing-on-fees
The maximum possible commitments in respect of signing-on-fees
due to players under contracts at the half year end, which are
payable on future dates specified in their contracts and not
provided for in the accounts, amounted to GBP256,000.
d) Player transfer costs receivable
At 31 December 2010 the Club has sums receivable from other
clubs in respect of players under contract, dependent upon the
number of first team appearances. Due to the uncertainty of receipt
of these contingent assets, it is not practical to disclose the
amount likely to be received.
17 Related party and directors' transactions
A director, J Winter is a director of Watford FC's Community
Sports & Education Trust, a charitable company. At 31 December
2010, in addition to the loan shown in note 11, GBP25,781 was owed
by the Trust to the Club. The movement since the 30 June 2010 where
the Club owed the Trust GBP8,779 includes interest payable by the
Club to the Trust of GBP6,745, offset by invoices paid on behalf of
the Trust by the Club totalling GBP41,305.
A loan from director D Fransen of GBP2,050,000 was converted
into a Secured 364 Bond on 13 July 2010. Interest on this loan has
been accrued from 1 July 2010 to 13 July 2010 and totalled
GBP2,921. This interest amount along with previously accrued
interest of GBP84,921 remains unpaid. The GBP2,050,000 which has
been transferred to the Secured Bond is attracting interest at 4.5%
above base rate and the amount owed to D Fransen at 31 December
2010 is GBP48,301.
A second unsecured loan from director D Fransen of GBP500,000
made during January and February 2010 was due for repayment on 31
January 2011. Repayment of this loan has been deferred until 31
March 2011. The loan is accruing interest at 3.5% above Barclays
bank base rate and the amount of interest accrued in the period 30
June 2010 to 31 December 2010 is GBP10,082, with the total amount
of accrued, unpaid interest at 31 December 2010 being
GBP18,148.
Amounts of accrued remuneration fees relating to directors G
Taylor and S Timperley for the period February 2009 to 30 June 2010
have been paid during the period 1 July 2010 and 31 December
2010.
The previously accrued amount which has been paid to G Taylor is
GBP8,854 along with remuneration relating to the period 1 July 2010
to 31 December 2010 of GBP12,500. In addition expenses of GBP4,777
have been paid. These relate to the period from February 2009 to 31
December 2010. An amount of accrued remuneration totalling
GBP26,563 remains unpaid and will be paid over the period 01
January 2011 to 30 June 2011.
The previously accrued amount which has been paid to S Timperley
is GBP8,854 along with remuneration relating to the period 1 July
2010 to 31 December 2010 of GBP12,500. In addition expenses of
GBP2,456 have been paid, these relate to the period from February
2009 to 31 December 2010. An amount of accrued remuneration
totalling GBP26,563 remains unpaid and will be paid over the period
01 January 2011 to 30 June 2011.
Further remuneration fees have been accrued during the period 01
July 2010 to 31 December 2010 for director D Fransen, totalling
GBP12,500. Subsequent to 31 December 2010, these amounts in
addition to the previously accrued total of GBP31,250 for the
period April 2009 to 30 June 2010 have been reversed as D Fransen
will not be drawing his remuneration for his services as a director
for the period to date.
Remuneration of GBP79,000 for the period 01 July 2010 to 31
December 2010 has been paid to director, J Winter. In addition
pension contributions of GBP7,750 have been accrued and expenses of
GBP599 paid.
In order to satisfy the terms of the 364 day Secured Bonds which
were issued on 13 July 2010, GBP13,000,000 of the intercompany debt
between Watford Football Club (the 'Club') and Watford Leisure PLC
(the 'Company') was waived, reducing the debt position to
GBP1,166,855. The intercompany debt was subsequently increased by
GBP7,500,000 following the subscription of Bonds by a shareholder,
Fordwat Ltd ('Fordwat'). This amount was loaned to the Club
enabling it to repay the Fordwat loan of GBP6,478,168 and unpaid
accrued interest of GBP86,538, leaving GBP935,294 available for
working capital requirements. Invoices amounting to GBP913,730 have
been paid by the Club on behalf of the Company and interest
receivable amounting to GBP13,162, was charged by the Company to
the Club during the period 01 July 2010 to 31 December 2010. The
intercompany loan position at 31 December 2010 is GBP7,766,268.
18 Availability of Interim Report
A copy of these interim results will be made available for
inspection at the Company's registered office during normal
business hours on any weekday. The registered office is at Vicarage
Road Stadium, Watford, Hertfordshire WD18 0ER. A copy can also be
downloaded from the Company's website at www.watfordleisureplc.com.
Watford Leisure PLC is registered in England and Wales with
registered number 03335610.
Enquiries:
Watford Leisure PLC
Tel: 01923 496 000
Graham Taylor, Chairman
Julian Winter, Chief Executive Officer
Strand Hanson Limited
Tel: 020 7409 3494
Rory Murphy
This information is provided by RNS
The company news service from the London Stock Exchange
END
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