TIDMWFC
RNS Number : 4173V
Watford Leisure PLC
02 November 2010
2 November 2010
Watford Leisure PLC
("Watford Leisure" or the "Company")
Final Results for the year ended 30 June 2010
Chairman's Statement
Introduction
On behalf of the Board of Directors ("the Board"), I have pleasure in presenting
the Annual Report and Financial Statements of Watford Leisure PLC for the year
ended 30 June 2010.
The period of time from 1 July 2009 to 30 June 2010 has seen a vast amount
happen at our principal operating subsidiary, The Watford Association Football
Club Limited ("the Club"), both on the pitch and, perhaps more pertinently, off
it.
The Company and Club came very close to being placed into administration in
December 2009, and we remain grateful not only to our major shareholder, Fordwat
Limited - and Lord Ashcroft in particular - but also to David Fransen and Graham
Simpson, for the part they played in ensuring that we are now able to look to
the future with some months of genuine stability behind us.
I have reaffirmed my commitment to the Company by stating that I would continue
as Chairman on a permanent basis.
Background
The Company continues to operate with a four-man Board, independent of its major
shareholders. It consists of myself as Non-Executive Chairman, David Fransen and
Professor Stuart Timperley as Non-executive Directors and Julian Winter as
Director and Chief Executive Officer.
Having accepted the Chairmanship on an interim basis in December 2009, evidence
of the subsequent actions of the CEO and fellow Board members, and other key
staff members leads me to believe that the group can continue to progress,
aligned to three key pillars which support our five-year rolling business plan
called 'The Watford Way':
1) 'To develop and maintain a high-performing player talent base'
2) 'To develop and maintain a profitable and sustainable business'
3) 'To be a true community partner'
These aims fall under our mission statement which is:
'To be a profitable top 30 club in English football'.
Unquestionably, it has been a very challenging year, with the resignations of
Chairman and Vice Chairman, Jimmy and Vince Russo, and Robin Williams, from the
Board at the Company's AGM held on 15 December 2009, and the subsequent
refinancing via the Bond placement completed in July 2010. Having fought hard
for the stability we have achieved in recent months, we are well aware that
maintaining financial stability will continue to be of paramount importance to
the Board as we move forward.
The Bond placement has provided a platform to work from and could be described
as a watershed point in terms of addressing the relative turmoil of the past two
years.
Despite this, 'The Watford Way' has remained a key focus for the Board, the CEO
and his staff. Set against a tough macro economic climate, this plan is exactly
what the group needs to continue to deliver against and stand behind.
Financial Overview
The 12-month period under review has been a difficult one financially; the loss
of GBP11 million of broadcast revenue representing an obvious challenge.
Whilst the beneficial impact of the business restructuring is evident, we still
had a number of contracted players whose costs did not fall within the shape of
our current business model. Therefore, player salary costs are higher than we
would expect to incur in future years.
We are committed to reducing the wages-to-revenue ratio in order 'To develop and
maintain a profitable and sustainable business'. It was also a difficult year
commercially with the adverse economic climate resulting in revenues reducing
across the business.
The astute trading of players is critical to the business and the summer 2009
transfer window was very positive in this regard, with the group generating a
significant surplus on player trading. The in-flow of cash achieved from these
sales has been of vital importance to the business in the period since that
transfer window.
We continue to be very fortunate that directors and shareholders have supported
the group during these difficult times. As these financial results show, loans
from G Russo and Valley Grown Salads were received during the first six months
of the financial year. These were repaid via a loan from Fordwat Limited, and
further amounts were drawn down against this loan facility, culminating in a
total loan amount from Fordwat Limited of GBP6,478,168 as at 30 June 2010. An
amount of GBP500,000 was also loaned by a director, David Fransen. These loans
and the subsequent refinancing by way of the Bond placement, coupled with player
trading and cost reductions, have enabled the business to move to a more secure
foundation.
During the year ahead we will continue to face financial challenges, but slowly
things are moving towards stability and sustainability.
The Board understands clearly the difficult task which lies ahead of them, as
regards the scheduled maturity date of the secured Bonds.
The key financial and performance indicators are as follows:
+----------------------------------+----------+----------+----------+----------+
| | | 2010 | | 2009 |
| | | GBP000 | | GBP000 |
+----------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------+----------+----------+----------+----------+
| Revenue | | 11,258 | | 23,079 |
+----------------------------------+----------+----------+----------+----------+
| Cost of sales | | (15,049) | | (19,792) |
+----------------------------------+----------+----------+----------+----------+
| Administrative expenses | | (4,181) | | (5,348) |
+----------------------------------+----------+----------+----------+----------+
| Other operating income | | 551 | | 1,115 |
+----------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------+----------+----------+----------+----------+
| Operating loss before interest, | | | | |
| player trading, amortisation and | | (7,421) | | (946) |
| exceptional items | | | | |
+----------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------+----------+----------+----------+----------+
| | | | | |
+----------------------------------+----------+----------+----------+----------+
| Loss before taxation | | (4,063) | | (1,987) |
+----------------------------------+----------+----------+----------+----------+
| Cash absorbed by operations | | (6,655) | | (1,994) |
+----------------------------------+----------+----------+----------+----------+
| Wages to revenue ratio | | 99% | | 68% |
+----------------------------------+----------+----------+----------+----------+
| League position | | 16th | | 13th |
+----------------------------------+----------+----------+----------+----------+
Financial Review
The financial year saw a reduction in revenue of GBP11,821,000. Media revenue in
total fell by GBP10,414,000 reflecting a reduction in the amounts received from
the FA Premier League of GBP11,305,000. The amount received in 2009 totalled
GBP12,298,000 in parachute payments whereas in 2010 an amount of only GBP993,000
was received relating to the Premier League Solidarity payments and reconciling
parachute payments. The League Basic Award increased from GBP1,178,000 in 2009
to GBP2,527,000 in 2010. Televised match income also increased from GBP70,000 in
2009 to GBP200,000 in 2010 due to two home league matches being televised in the
year as against one home and one away match in the previous year; home matches
attract a higher fee. Cup Match related media income fell from GBP566,000 in
2009 to GBP8,000 in 2010 - matches versus Tottenham in the Carling Cup and
Chelsea in the FA Cup were televised in the previous year with associated income
of GBP375,000 and progression through to the 5th round of the FA Cup with wins
against Scunthorpe and Crystal Palace achieved prize money of GBP175,000.
Commercial revenues decreased by GBP282,000 mainly relating to a reduction in
sponsorship income. Matchday revenues reduced by GBP556,000 mainly relating to
Season Ticket income. Season Ticket prices were reduced by an average of 16% -
20% and the total number issued fell by circa 600 resulting in a significant
reduction in income. Catering revenue (split between commercial and matchday
revenues) reduced by GBP372,000, due to a combination of fewer fixtures at
Vicarage Road (46 matches were played in the 08/09 season compared to 39 matches
in the 09/10 season), and the impact of lower attendances across both Watford
and Saracens' fixtures - the average actual attendance across all fixtures was
over 2,000 lower in the 09/10 season.
Revenue generated by the Elton John Concert totalled GBP1,353,000. In the
previous year GBP1,550,000 of revenue was generated by player loan income, so
the movement in other revenue shows a reduction of GBP197,000.
Cost of sales and administrative expenses show a total reduction of
GBP5,910,000, of which GBP4,121,000 has been generated by reduced salary costs.
Evidence of the business and football restructuring is reflected in total
salaries reducing from GBP14,997,000 in 2009 to GBP10,876,000 in 2010, with
player salaries having been reduced by GBP2,744,000 from GBP10,500,000 in 2009
to GBP7,756,000 in 2010. Football Management, Commercial, Stadium and
Administrative salaries have been reduced by GBP1,377,000. Further, following
the comprehensive business review and cost reduction programme, cost savings
have been achieved across the business, most notably within football where
savings of GBP1,065,000 have been implemented and within stadium and
administrative areas, where cost savings of GBP582,000 have been achieved.
Retail and catering costs have fallen by GBP553,000 in line with reduced income
in the year. Additional costs of GBP721,000 were incurred in relation to the
Elton John Concert, with this event generating a profit of GBP632,000.
Other operating income includes the rent receivables from the stadium leases to
Saracens Rugby Club and Kier London, who leased the office space at the Vicarage
Road Stadium. Kier London were the construction company involved in the key
worker housing development at the Stadium. Other operating income in the prior
year included amounts payable as compensation from Reading FC for their
employment of Brendan Rodgers.
The profit on disposal of players' registrations comprises total profits of
GBP4,111,000 from the sales of T Smith, M Williamson and T Priskin and several
smaller profits generated by appearances, promotion and sell-on clauses from
players sold, mainly in previous years, totalling GBP1,018,000.
Amortisation and impairment costs have been reduced from GBP4,293,000 to
GBP1,371,000. The prior year included GBP1,500,000 of amortisation relating to N
Ellington; the player's book value had been previously impaired to a level
relative to the known loan income which has been generated. This book value was
then fully amortised over the year long loan in last year's financial
statements. The remaining reduction is relative to the significantly lower net
book value of our player registrations.
Football Team
Manager Malky Mackay and his coaching staff must rightly receive praise for
continuing to show flexibility and adaptability in dealing with all the
challenges the Club has faced.
The squad of playing staff has experienced another year of transition, as a
result of the Club's need to move towards sustainability and we thank all the
players for their on and off the field contributions.
Competitive is a word often used in terms of a game-by-game target for his team
by Malky Mackay - and I like that description, because it accurately reflects
our aim under the pillar 'To develop and maintain a high-performing player
talent base'.
We will continue to exercise control over football costs, and we do that in the
knowledge that we are lucky to have a manager who fully understands and
appreciates the wider picture at the Club and how what he does is playing such a
key role in our aim 'To develop and maintain a profitable and sustainable
business'.
Academy
Intrinsically linked to the success of our senior football operation is the
truly outstanding partnership we continue to enjoy with The Harefield Academy.
We are this season beginning to see the emergence of some of the first crop of
players to have been nurtured through this unparalleled mix of academic study
and coaching contact time which far exceeds that of any other club in the UK.
Our aim 'To develop and maintain a high-performing player talent base' finds its
natural starting point at The Harefield Academy, where the staff we work with -
as part of what is a burgeoning partnership - are a credit to a vibrant place of
learning.
Community
I referred above to our aim 'To be a true community partner' and while it is
clearly for the community around us to tell us whether we are truly living that
value, to be chosen as 'Community Club of the Year' for two out of the past
three seasons at the Football League awards is certainly testament to the depth
and reach of the work of Watford FC's Community Sports & Education Trust.
The Club is rightly proud of the Trust and the never-ending hours invested into
local communities. The Trust's mission statement, which is worthy of mention
here, reads 'Making a positive difference for all through sport and learning'.
I feel that statement resonates as strongly today as it did at the Trust's
inception.
Stadium
With a lack of access to ready capital, Vicarage Road Stadium continues to
endure with a poorer profile than the Club would wish.
The Board continues to look at alternative means of funding works, which are
prioritised by both the south-west corner and the east side of the ground.
It may be that partnership agreements offer the best way forward to realise the
necessary working/development capital. However, all such ideas and proposals
will be considered with Watford football fans firmly at the forefront of the
Club's thinking.
To the future
I mentioned in my interim report the need for the Club to feel that it can
pursue its key business and community objectives with confidence - and that is
never truer than now.
However to do this requires a staffing infrastructure that is as together a unit
as that which exists within the football team management and playing squad.
We currently have that tight unit of staff, leaner than in recent years, but
fully focused under the leadership of our Chief Executive Officer, Julian Winter
and everyone is now located back at the Vicarage Road Stadium.
It is right and proper of me that I should offer my sincerest thanks to this
group of staff, who have emerged from a period of considerable uncertainty with
a vigour to continue to serve the Club and its community with unswerving
dedication.
Supporters may have recently taken advantage of opportunities to hear from Malky
Mackay, Julian Winter and some of the playing staff at planned informal
evenings. It is this willingness to make the Club feel ever more accessible that
is integral to any future success we may enjoy together.
The Board would like formally to express its thanks to all shareholders and
supporters for placing trust in its members to continue to develop and deliver
to the best of our abilities.
I would like to close by re-iterating our three key pillars supporting 'The
Watford Way':
1) 'To develop and maintain a high-performing player talent base'
2) 'To develop and maintain a profitable and sustainable business'
3) 'To be a true community partner'
We hope that we will continue to enjoy the warmth of your support.
Graham Taylor
Chairman
31 October 2010
+------------------------------+----------+--------+----------+--+----------+
| Consolidated income statement for the year ended 30 June 2010 |
| |
+---------------------------------------------------------------------------+
| | | | 2010 | | 2009 |
| | | | GBP'000 | | GBP'000 |
+------------------------------+----------+--------+----------+--+----------+
| Continuing Operations | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Revenue | | | 11,258 | | 23,079 |
+------------------------------+----------+--------+----------+--+----------+
| Cost of sales | | | (15,049) | | (19,792) |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Gross (loss) / profit | | | (3,791) | | 3,287 |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Administrative expenses | | | (4,181) | | (5,348) |
+------------------------------+----------+--------+----------+--+----------+
| Other operating income | | | 551 | | 1,115 |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | (7,421) | | (946) |
+------------------------------+----------+--------+----------+--+----------+
| Amortisation and impairment | | | | | |
| of costs of | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| players' registrations | | | (1,371) | | (4,293) |
+------------------------------+----------+--------+----------+--+----------+
| Profit on disposal of | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| players' registrations | | | 5,129 | | 3,774 |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Operating loss | | | (3,663) | | (1,465) |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Financing income | | | 7 | | 44 |
+------------------------------+----------+--------+----------+--+----------+
| Financing costs | | | (407) | | (566) |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Loss before taxation | | | (4,063) | | (1,987) |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Taxation | | | - | | - |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Loss for the year | | | (4,063) | | (1,987) |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Attributable to: | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Equity holders of the parent | | | (3,908) | | (1,987) |
+------------------------------+----------+--------+----------+--+----------+
| Minority interests | | | (155) | | - |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Loss for the year | | | (4,063) | | (1,987) |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| Loss per 1p share | | | | | |
| (basic and diluted) | | | (8.9p) | | (4.5p) |
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------+
+------------------------------+----------+--------+---------+--+---------+
| Consolidated balance sheet at 30 June 2010 |
+-------------------------------------------------------------------------+
| | | | 2010 | | 2009 |
| | | | GBP'000 | | GBP'000 |
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Non-current assets | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Property, plant and | | | 13,074 | | 12,880 |
| equipment | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Intangible assets | | | 819 | | 2,218 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | 13,893 | | 15,098 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Current assets | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Inventories | | | 113 | | 120 |
+------------------------------+----------+--------+---------+--+---------+
| Trade and other receivables | | | 3,828 | | 2,480 |
+------------------------------+----------+--------+---------+--+---------+
| Cash and cash equivalents | | | 686 | | 59 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | 4,627 | | 2,659 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Total assets | | | 18,520 | | 17,757 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Current liabilities | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Interest bearing loans and | | | 10,590 | | 3,587 |
| other borrowings | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Trade and other payables | | | 4,319 | | 4,880 |
+------------------------------+----------+--------+---------+--+---------+
| Deferred revenue | | | 2,272 | | 2,234 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | 17,181 | | 10,701 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Non-current liabilities | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Interest bearing loans and | | | 836 | | 2,385 |
| other borrowings | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Trade and other payables | | | 488 | | 589 |
+------------------------------+----------+--------+---------+--+---------+
| Deferred revenue | | | 25 | | 29 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | 1,349 | | 3,003 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Total liabilities | | | 18,530 | | 13,704 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Net assets | | | (10) | | 4,053 |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Equity | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Capital and reserves | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Called up share capital | | | 439 | | 439 |
+------------------------------+----------+--------+---------+--+---------+
| Special reserve | | | 2,194 | | 10,409 |
+------------------------------+----------+--------+---------+--+---------+
| Profit and loss account | | | (2,488) | | (6,795) |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
| Equity attributable to equity holders of the | 145 | | 4,053 |
| parent | | | |
+--------------------------------------------------+---------+--+---------+
| Minority interests | (155) | | - |
+--------------------------------------------------+---------+--+---------+
| | | | |
+--------------------------------------------------+---------+--+---------+
| | | | |
+--------------------------------------------------+---------+--+---------+
| Total equity | (10) | | 4,053 |
+--------------------------------------------------+---------+--+---------+
| | | | | | |
+------------------------------+----------+--------+---------+--+---------+
+------------------------------+----------+--------+----------+--+----------------+
| Consolidated statement of cash flows for the year ended 30 June 2010 |
+---------------------------------------------------------------------------------+
| | | | 2010 | | 2009 |
| | | | GBP'000 | | GBP'000 |
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Operating activities | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Loss before taxation | | | (4,063) | | (1,987) |
+------------------------------+----------+--------+----------+--+----------------+
| Amortisation of intangible | | | 1,371 | | 4,293 |
| fixed assets | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Depreciation of property, plant and equipment | 655 | | 1,340 |
+--------------------------------------------------+----------+--+----------------+
| Net profit on disposal of | | | - | | 1 |
| sundry fixed assets | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Profit on disposal of | | | (5,129) | | (3,774) |
| players' registrations | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Financing income | | | (7) | | (44) |
+------------------------------+----------+--------+----------+--+----------------+
| Financing costs | | | 407 | | 566 |
+------------------------------+----------+--------+----------+--+----------------+
| Decrease in inventories | | | 7 | | 17 |
+------------------------------+----------+--------+----------+--+----------------+
| Decrease in receivables | | | 761 | | 68 |
+------------------------------+----------+--------+----------+--+----------------+
| Decrease in payables and | | | (657) | | (2,474) |
| deferred income | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Net cash used in operations | | | (6,655) | | (1,994) |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Purchase of intangible fixed | | | (1,950) | | (3,424) |
| assets | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Purchase of property, plant | | | (158) | | (424) |
| and equipment | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Proceeds from sale of | | | 4,056 | | 8,538 |
| intangible fixed assets | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Proceeds from sale of | | | 111 | | 1 |
| tangible fixed assets | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Net cash generated by | | | 2,059 | | 4,691 |
| investing activities | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | |
+--------------------------------------------------+----------+--+----------------+
| | (4,596) | | 2,697 |
+--------------------------------------------------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Financing activities | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Advances of debt | | | 5,978 | | 4,373 |
+------------------------------+----------+--------+----------+--+----------------+
| Repayments of debt | | | (636) | | (9,133) |
+------------------------------+----------+--------+----------+--+----------------+
| Interest received | | | 7 | | 53 |
+------------------------------+----------+--------+----------+--+----------------+
| Interest paid | | | (238) | | (585) |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Net cash generated by / (used in) financing | 5,111 | | (5,292) |
| activities | | | |
+--------------------------------------------------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Net increase / (decrease) in cash and cash | 515 | | (2,595) |
| equivalents | | | |
+--------------------------------------------------+----------+--+----------------+
| Cash and cash equivalents at | | | (556) | | 2,039 |
| start of year | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Cash and cash equivalents at | | | (41) | | (556) |
| end of year | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Cash and cash equivalents | | | | | |
| consist of: | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Cash and cash equivalents | | | 686 | | 59 |
+------------------------------+----------+--------+----------+--+----------------+
| Bank overdraft | | | (727) | | (615) |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
| Total | | | (41) | | (556) |
+------------------------------+----------+--------+----------+--+----------------+
| | | | | | |
+------------------------------+----------+--------+----------+--+----------------+
Notes forming part of the financial information for the year ended 30 June 2010
1. Status of Financial Information
While the financial information included in this final results announcement has
been prepared in accordance with International Financial Reporting Standards
(IFRS's) as adopted by the European Union and with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS, this announcement does
not itself contain sufficient information to comply with IFRS.
The audited financial information set out above does not constitute the
Company's full financial statements for the year ended 30 June 2010 or 2009, but
is derived from those financial statements, approved by the board of directors.
The auditors' report on the 2010 accounts was unqualified and did not contain
any statement under section 498(2) or (3) of the Companies Act 2006, but did
include an emphasis of matter paragraph relating to going concern. The full
audited financial statements for the year ended 30 June 2010 will be delivered
to the Registrar of Companies and filed at Companies House following the
Company's forthcoming annual general meeting.
The financial information has been prepared in accordance with the going concern
basis of accounting (see note 2b below) taking into consideration the Group's
current and forecast financing position.
2. Accounting Policies
Watford Leisure PLC is a company incorporated in the United Kingdom.
The Group financial statements consolidate those of the Company and its
subsidiaries (together referred to as 'the Group').
The accounting policies set out below have, unless otherwise stated, been
applied consistently for the Group to all periods presented in this consolidated
financial information. The financial statements have been prepared under the
historical cost convention.
a) Basis of Consolidation
Subsidiaries are entities controlled by the Group. Control exists where the
Group has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that are currently exercisable or
convertible are taken into account. The financial statements of subsidiaries are
included in the Group financial statements from the date that control commences
until the date that control ceases. Transactions between Group companies are
eliminated on consolidation.
b) Going Concern
The financial statements have been prepared on a going concern basis which the
directors of the Company believe to be appropriate for the reasons outlined
below.
The directors acknowledge that the Club, similar to many other Championship
clubs, will be likely to continue making operating losses. Therefore the Group
and Company remain reliant upon their ability to raise finance through other
means.
The support of the Group's directors and shareholders has been evident in the
past and continues to be of significant importance. During the year to 30 June
2010 loans totalling GBP6,978,168 were made available by certain directors and a
shareholder of the Company. GBP6,478,168 of these loans, in addition to
GBP2,642,000 of existing loans, were converted into secured bonds after the year
end. The directors will be working to ensure that the Group is able to satisfy
the repayment terms of the Bond upon expiry, or otherwise seek to ensure the
continued support of the Bond holders.
The Group's bankers have indicated that, so long as the Group continues to
operate within its financial plan, regular renewal of the GBP1m overdraft
facility will be available and extensions to this will be considered to bridge
gaps in cash flow.
The Group has prepared detailed cash flow forecasts for the period to 30 June
2015. Those forecasts show that the Group and Company do not currently have
facilities in place to fund all of the projected cash requirements over the next
twelve month period. The directors acknowledge that as a football club which
invests significantly in its youth and recruitment policies, the trading of
players is critical to the business model of the Company. The directors are
confident that through a combination of player sales and directors and/or
shareholder support the requirement to 30 June 2011 will be satisfied.
The directors consider that new investment into the business is absolutely vital
in order to allow the Group to move forward from what has been a difficult time
financially. The directors will continue to manage the Group's resources and
seek to increase income and control costs at all times. These financial
statements show the dramatic cost reductions that have already been made to
ensure that the impact of the loss of GBP12 million of revenue has been
minimised and the current period will show further reductions as many players'
contracts expired and new contracts were signed with costs fitting within the
business structure necessary to enable sustainability.
The directors are confident that the going concern basis is appropriate, and
believe that new investment will be forthcoming in the period required and that
otherwise bond holder support will enable the Group more time to secure such
investment.
c) Revenue
Revenue represents income arising from sales to third parties and excludes
transfer fees receivable (which are dealt with in the profit on disposal of
players' registrations) and value added tax.
i) Season ticket and corporate hospitality revenue is recognised over the
period of the football season as home matches are played.
ii) Fixed elements of FA Premier League and Football League central
broadcasting contracts are recognised over the period of the football season as
league matches (home and away) are played and Football League appearance fees
are accounted for as earned.
iii) Sponsorship contracts are recognised over the duration of the contract,
either on a straight-line basis, or over the period of the football season, as
appropriate based on the terms of the contract. Catering revenues are recognised
on an earned basis. Revenue from the sale of branded products is recognised at
the point of dispatch when significant risks and rewards of ownership are deemed
to have been transferred to the buyer.
d) Financial expenses
Operating lease expenses
Payments made under operating leases are recognised in the income statement on a
straight-line basis over the term of the lease. Lease incentives are recognised
in the income statement as an integral part of the total lease expense.
Net financing costs
Net financing costs comprise interest payable and interest receivable on funds
invested. Interest income and interest payable is recognised in the income
statement as it accrues, using the effective interest method.
e) Rent receivable
Rental receipts are recognised in the income statement on a straight-line basis
over the term of the lease.
f) Taxation
Tax on the result for the period comprises current and deferred tax. Tax is
recognised in the income statement except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period,
using tax rates enacted or substantially enacted at the balance sheet date, and
any adjustment to tax in respect of the previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided for:
the initial recognition of goodwill, the initial recognition of assets and
liabilities that affect neither accounting nor taxable profit other than in a
business combination and differences relating to investments in subsidiaries to
the extent that they will probably not reverse in the future. The amount of
deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amounts of assets and liabilities, using tax rates
enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profit will be available against which the asset can be utilised.
g) Intangible assets
i) Acquired players' registrations
The costs associated with the acquisition of players' registrations are
initially recorded at their fair value at the date of acquisition as intangible
fixed assets. These costs are fully amortised over the period of the relevant
player's contract.
Intangible assets are tested for impairment at each balance sheet date. An
impairment loss is recognised for the amount by which the asset's carrying value
exceeds its recoverable amount. The directors' valuation of a player's
registration is arrived at by reference to market conditions and comparative
data of recent transactions. Impairment losses are recognised in the Income
Statement.
Acquired players' registrations are classified as 'Assets held for sale' on the
balance sheet if, at any time, it is considered that the carrying amount of a
registration will be recovered principally through a sale. The measurement of
the registration is the lower of (a) fair value (less costs to sell) and (b)
carrying value. Amortisation of the asset is suspended at the time of
reclassification, although impairment charges still need to be made if
applicable.
ii) Amortisation
Amortisation is charged to the income statement on a straight-line basis over
the length of each player's contract.
h) Property, plant and equipment
i) Owned assets
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses. Assets under the course of construction are not
depreciated until they are brought into use.
ii) Depreciation
Depreciation is charged to the income statement, to write off the cost of
property, plant and equipment less estimated residual value, on a reducing
balance basis, over their estimated useful lives as follows:
+-----------------+--------------------------------------------+
| Freehold | - over 25 years and 10 years |
| buildings | |
+-----------------+--------------------------------------------+
| Plant & | - 25% on reducing balance |
| equipment | |
+-----------------+--------------------------------------------+
| Motor vehicles | - 25% on reducing balance |
| | |
+-----------------+--------------------------------------------+
| Leasehold | - over the shorter of the unexpired term |
| improvements | of the lease and 20 years |
+-----------------+--------------------------------------------+
i) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the weighted average principle and includes expenditure incurred in
acquiring the inventories and bringing them to their existing location and
condition. Net realisable value is based on the estimated selling price in the
ordinary course of business. Provision is made for obsolete, slow-moving or
defective items where appropriate.
j) Signing on fees
Signing on fees are charged to the income statement on a straight line basis
over the period of the player's contract. Prepayments/accruals arising at each
period end are included within prepayments and accrued income or accruals within
current assets and liabilities, as appropriate. Where a player's registration is
transferred, any signing on fees payable in respect of future periods are
charged against the profit/(loss) on disposal of players' registrations in the
period in which the disposal is recognised.
3. Revenue
The Group has one main business segment, that of professional football
operations. As a result, no additional business segment information is required
to be provided. It operates in one geographical segment, the United Kingdom, and
accordingly no additional geographical information is required to be provided.
Notwithstanding this, a voluntary analysis of the revenue streams is given below
to assist with an understanding of the business.
+--+---------------------------------------+---------+--+---------+
| | | 2010 | | 2009 |
| | | GBP'000 | | GBP'000 |
| | | | | |
+--+---------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
| Matchday | 4,351 | | 4,986 |
+------------------------------------------+---------+--+---------+
| Media | 4,090 | | 14,504 |
+------------------------------------------+---------+--+---------+
| Commercial | 1,464 | | 2,039 |
+------------------------------------------+---------+--+---------+
| Other | 1,353 | | 1,550 |
+------------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
| | | 11,258 | | 23,079 |
+--+---------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
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 revenue
Other - Elton John Concert revenue (2009 player loan fees receivable)
4. Other operating income
+--+---------------------------------------+---------+--+---------+
| | | 2010 | | 2009 |
| | | GBP'000 | | GBP'000 |
| | | | | |
+--+---------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
| Rent receivable | 519 | | 529 |
+------------------------------------------+---------+--+---------+
| Release of capital grants | 4 | | 4 |
+------------------------------------------+---------+--+---------+
| Compensation receivable | - | | 550 |
+------------------------------------------+---------+--+---------+
| Other | 28 | | 32 |
+------------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
| | | 551 | | 1,115 |
+--+---------------------------------------+---------+--+---------+
| | | | | |
+--+---------------------------------------+---------+--+---------+
5. Loss before taxation
+------------------------------------------+---------+--+---------+
| | 2010 | | 2009 |
| | GBP'000 | | GBP'000 |
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| This is stated after charging: | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| Amortisation of intangible assets | 1,141 | | 4,260 |
+------------------------------------------+---------+--+---------+
| Impairment of intangible assets | 230 | | 33 |
+------------------------------------------+---------+--+---------+
| Depreciation of property, plant and | 655 | | 905 |
| equipment | | | |
+------------------------------------------+---------+--+---------+
| Impairment of property, plant and | - | | 435 |
| equipment | | | |
+------------------------------------------+---------+--+---------+
| Profit on disposal of property, plant | - | | 1 |
| and equipment | | | |
+------------------------------------------+---------+--+---------+
| Inventories consumed | 626 | | 891 |
+------------------------------------------+---------+--+---------+
| Auditors' remuneration: | | | |
+------------------------------------------+---------+--+---------+
| - audit of parent company and | 7 | | 9 |
| consolidated financial statements | | | |
+------------------------------------------+---------+--+---------+
| - audit of subsidiary companies | 16 | | 27 |
+------------------------------------------+---------+--+---------+
| - other services supplied pursuant to | - | | 9 |
| legislation | | | |
+------------------------------------------+---------+--+---------+
| - taxation | 3 | | 3 |
+------------------------------------------+---------+--+---------+
| - other non-audit fees | 15 | | 7 |
+------------------------------------------+---------+--+---------+
| Operating leases - vehicles and | 42 | | 51 |
| equipment | | | |
+------------------------------------------+---------+--+---------+
| Operating leases - property | 529 | | 538 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
The impairment of intangible assets made in the year ended 30 June 2010 of
GBP230,000 related to a player's registration. The impairment was made to reduce
the carrying value of the player's registration to fair value less cost of sale.
The fair value was determined by the directors on the basis of known income.
The impairment of property, plant and equipment made to 30 June 2009 relates to
the Red Lion public house. The impairment was made to reduce the carrying value
of the asset to fair value. The fair value was determined by the directors by
reference to market data available in 2009.
6. Loss per share
+-----------------------------------------+-------------+----------+-------------+
| | 2010 | | 2009 |
| | GBP'000 | | GBP'000 |
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| Loss per ordinary share has been calculated as | | |
| follows: | | |
+-------------------------------------------------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| Loss for the financial year | (3,908) | | (1,987) |
+-----------------------------------------+-------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| Weighted average number of shares in | 43,885,693 | | 43,885,693 |
| issue | | | |
+-----------------------------------------+-------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| Loss per ordinary share | (8.9p) | | (4.5p) |
| | | | |
+-----------------------------------------+-------------+----------+-------------+
| | | | |
+-----------------------------------------+-------------+----------+-------------+
7. Interest bearing loans and other borrowings
+------------------------------------------+---------+--+---------+
| | 2010 | | 2009 |
| | GBP'000 | | GBP'000 |
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| Current liabilities | | | |
+------------------------------------------+---------+--+---------+
| Convertible Loan Notes 2009 | 592 | | 592 |
+------------------------------------------+---------+--+---------+
| Bank overdraft | 727 | | 615 |
+------------------------------------------+---------+--+---------+
| Directors' loans | 2,550 | | 1,468 |
+------------------------------------------+---------+--+---------+
| Other loans | 6,721 | | 912 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | 10,590 | | 3,587 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | 2010 | | 2009 |
| | GBP'000 | | GBP'000 |
| | | | |
+------------------------------------------+---------+--+---------+
| Non-current liabilities | | | |
+------------------------------------------+---------+--+---------+
| Directors' loan | - | | 2,050 |
+------------------------------------------+---------+--+---------+
| Other loans | 836 | | 335 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | 836 | | 2,385 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| The maturity of total debt may be | | | |
| analysed as follows: | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| In one year or less | 10,590 | | 3,587 |
+------------------------------------------+---------+--+---------+
| Between one and two years | 167 | | 2,217 |
+------------------------------------------+---------+--+---------+
| Between two and five years | 669 | | 168 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
| | 11,426 | | 5,972 |
+------------------------------------------+---------+--+---------+
| | | | |
+------------------------------------------+---------+--+---------+
The Convertible Loan Notes 2009 which were issued to a previous Chairman, G
Simpson, were unsecured and were convertible into Ordinary 1p shares at a price
of 66.5p per share. The repayment date of March 2010 was further deferred until
completion of the 364 day Bond placement on 13 July 2010, at which point these
loan notes were converted into Bonds. Interest of GBP17,760 (2009 - GBP28,521)
was payable during the year.
The bank overdraft of GBP727,000 (2009 - GBP615,000) is due in its entirety
within one year and is secured by a charge over the Vicarage Road Stadium.
Directors' loans in current liabilities include two loans from David Fransen.
The loan for GBP2,050,000 was due for repayment in October 2010, and has been
moved from non-current to current liabilities, but has since been converted into
bonds further to the 364 day Bond placement completed on 13 July 2010. Interest
of GBP81,997 (2009 - GBP68,618) was payable during the year. A second loan of
GBP500,000 was made available during the year and is due for repayment on 31
January 2011. The loan is unsecured and is accruing interest at 3.5% above the
Barclays Bank base rate. Interest of GBP8,066 was payable during the year.
Prior year current directors' loans of GBP1,468,000 were amounts owing to Valley
Grown Salads, a company controlled by G and V Russo, formerly directors of
Watford Leisure PLC. These loans were repaid during the year.
Other loans payable within one year of GBP6,721,000 (2009 - GBP912,000) includes
a loan to the Group by Fordwat Limited of GBP6,478,168 which was secured by a
legal charge over the Vicarage Road Stadium. In July 2010 this loan was
increased to GBP7,500,000 and consolidated into a 364 day Bond with the Company,
attracting interest at 4.5% above base rate. In addition, GBP167,796 of a
GBP503,000 unsecured interest free loan from The Football League is included.
The total amount of the loan outstanding is GBP335,200 with monthly instalments
of GBP13,983 being deducted from the Football League Award. The loan from
Watford FC's Community Sports and Education Trust of GBP668,961 which was
repayable in less than one year in 2009 is now repayable in June 2013 following
the Trustees agreeing to a formal extension of repayment. Both this and the
remaining balance payable on the Football League loan are included in other
non-current loans.
8. Capital commitments
The Group has contracted for, but not provided for in the financial statements,
capital expenditure totalling GBP285,000, which relates to the construction and
fit-out of the Club's offices at the Vicarage Road Stadium.
9. Post balance sheet events
On 13 July 2010, a 364 day Secured Bond was issued for a total of GBP10,142,000.
At that date, the loans from a major shareholder, Fordwat Limited, of
GBP6,478,168 and a director, D Fransen, of GBP2,050,000 plus the Convertible
Loan Notes 2009 of GBP592,000 were all converted into bonds. Unpaid interest on
the Fordwat Limited loan was also converted. A balance of GBP935,294 was
generated for working capital purposes. The bonds are secured by a second charge
over the Vicarage Road Stadium and are due for repayment on 12 July 2011. Each
GBP1 of the bond has 20 detachable warrants (each to subscribe for one new
Ordinary Share at a subscription price of 4 pence). In order to satisfy the
terms of the Bond GBP13,000,000 of the intercompany debt between the Club and
Watford Leisure PLC was waived, leaving the Club with positive net assets.
Player registrations have been acquired at a net cost of GBP475,000. These costs
will be reflected in the financial statements for the current financial year.
10. Related party and directors' transactions
A director, J Winter is a director of Watford FC's Community Sports & Education
Trust, a charitable company. At 30 June 2010, in addition to the loan shown in
note 7 above, GBP8,779 was owed to the Trust (2009 - GBP79,943). The movement in
the year includes additional interest of GBP13,948, a further amount of
sponsorship of GBP34,500 and miscellaneous amounts totalling GBP10,197 offset by
invoices paid on behalf of the Trust by the Club totalling GBP129,809. Since the
year end further amounts have been loaned or paid on behalf of the Trust.
A number of loans were made to the Group by G Russo and Valley Grown Salads
("VGS"), a company controlled by former directors G and V Russo. As at 30 June
2009 loans from VGS totalled GBP1,467,849 and were repayable in less than one
year. This amount included a loan of GBP162,821 which attracted interest of
6.72% per annum and the remainder, an amount of GBP1,305,028, attracted interest
of 9.54% per annum. This latter loan was increased by GBP514,972 on 17 July
2009. In addition, two loans were made available by G Russo, one of GBP650,000
on 21 July 2009 and a second of GBP1,250,000 on 27 August 2009, both attracting
interest at 7% per annum.
The total of the VGS loan of GBP1,982,821 plus the GBP650,000 loan from G Russo
were repaid on the 29 September 2009 and replaced by a single loan from VGS of
GBP2,632,821. This loan was due for repayment upon demand and accrued interest
at an interest rate of Barclays Bank base rate plus 3.5% per annum. This loan
was secured against the stadium, by way of debenture ranking behind existing
secured creditors. This loan was extended with further amounts of GBP1,000,000
on 26 November 2009 and GBP1,250,000 on 30 November 2009. The G Russo loan of
GBP1,250,000 was repaid on 1 December 2009. The interest rate on the VGS loan
changed to 4.5% above Barclays Bank base rate from 26 November 2009.
Following the resignation of G Russo, V Russo and R R Williams from the Board on
15 December 2009, VGS demanded immediate repayment of its total loan of
GBP4,882,821 plus any unpaid interest and fees. The total amount of interest
related to all loans from G Russo and VGS in the period from 1 July 2009 to the
date of repayment was GBP112,682 (2009 - GBP74,046). The GBP4,882,821 loan plus
unpaid interest and fees was repaid and a major shareholder, Fordwat Limited,
loaned the Group the amount of GBP4,933,563 on 21 December 2009. Unpaid interest
of GBP44,605 was added to this loan on 24 February 2010 and further loans of
GBP1,000,000 and GBP500,000 were made on 24 March 2010 and 24 June 2010
respectively. The Fordwat Limited loan was repayable upon demand and accrued
interest at an interest rate of the Barclays Bank base rate plus 4.5% and was
secured against the Vicarage Road Stadium by way of debenture ranking behind
existing secured creditors. The total loan amount as at 30 June 2010 was
GBP6,478,168 and the total amount of interest related to this loan to 30 June
2010 was GBP144,570.
Subsequent to the year end the GBP2,050,000 loan from D Fransen and the
GBP592,000 Convertible Loan Notes 2009, along with the Fordwat loan with accrued
interest to that date, were converted into a 364 day Bond.
A director, D Fransen has loaned to the Group a total of GBP2,550,000. A loan of
GBP2,050,000 which was repayable in October 2011 has, subsequent to the year
end, been converted into bonds. This loan was accruing interest at 3.5% above
the Barclays Bank base rate. A further loan was made available to the Group of
GBP500,000, drawn down in three instalments, GBP200,000 on 22 January 2010,
GBP100,000 on 29 January 2010 and GBP200,000 on 23 February 2010. This loan is
unsecured and repayable on 31 January 2011 and is accruing interest at 3.5%
above the Barclays Bank base rate. The total amount of interest related to these
loans for the period is GBP90,063 - this interest has not been paid and is
provided for in accruals.
Interest receivable amounting to GBP165,000, was charged by the Company to the
Club during the year (2009 - GBP214,000).
11. Availability of Annual Report and Financial Statements
Copies of the Company's full Annual Report and Financial Statements are expected
to be posted to shareholders on 15 November 2010 and, once posted, will also be
made available to download from the Company's website at
www.watfordleisureplc.com.
The Annual Report and Financial Statements will also be made available for
inspection at the Company's registered office during normal business hours on
any weekday. Watford Leisure PLC is registered in England and Wales with
registered number 03335610. The registered office is at Vicarage Road Stadium,
Watford, Hertfordshire WD18 0ER.
12. Annual General Meeting
The Company's next Annual General Meeting ("AGM") will be held on 13 December
2010 and a formal Notice of AGM will be posted to shareholders shortly.
Enquiries:
Watford Leisure PLC
Graham Taylor, Chairman
Julian Winter, Chief Executive Officer
Tel: 01923 496 000
Strand Hanson Limited
Rory Murphy, Director
Tel: 020 7409 3494
This information is provided by RNS
The company news service from the London Stock Exchange
END
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