Cheltenham Town Association Football Club Limited - Period Ending 2020-05-31

Cheltenham Town Association Football Club Limited

Contents

Company Information	1
Balance Sheet	2
Notes to the Financial Statements	3 to 9

Cheltenham Town Association Football Club Limited

Company Information

Directors

P Godfrey J Murphy D Bloxham C Gowing P Bence A Wilcox D Beesley R Lewis

Company secretary

P Godfrey

Registered office

Whaddon Road Cheltenham Gloucestershire GL52 5NA

Auditors

Hazlewoods LLP Staverton Court Cheltenham Gloucestershire GL51 0UX

Cheltenham Town Association Football Club Limited

(Registration number: 00324807)
Balance Sheet as at 31 May 2020

	Note	2020  £	2019  £
Fixed assets
Intangible assets	4	17,439	23,897
Tangible assets	5	1,800,787	1,843,014
		1,818,226	1,866,911
Current assets
Stocks	6	28,440	33,272
Debtors	7	84,251	402,127
Cash at bank and in hand		1,024,518	438,175
		1,137,209	873,574
Creditors: Amounts falling due within one year	8	(410,749)	(818,087)
Net current assets		726,460	55,487
Total assets less current liabilities		2,544,686	1,922,398
Creditors: Amounts falling due after more than one year	8	(1,225,925)	(1,164,501)
Net assets		1,318,761	757,897
Capital and reserves
Called up share capital		943,208	943,208
Share premium reserve		1,919,210	1,919,210
Revaluation reserve		72,699	74,257
Profit and loss account		(1,616,356)	(2,178,778)
Total equity		1,318,761	757,897

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 21 May 2021 and signed on its behalf by:
 

.........................................

C Gowing
Director

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Whaddon Road
Cheltenham
Gloucestershire
GL52 5NA

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

The directors have considered the trading results as disclosed in management information after 31 May 2020 and have prepared financial budgets for the year ending 31 May 2022. The budgets for the year ending 31 May 2022 have been prepared on the assumption that spectators will be permitted to attend sporting stadia following the closures that have been imposed as a result of the Covid-19 pandemic during 2020 and 2021. The Company has financial resources available if some limited restrictions were imposed when the football season re-commences but an extended and extensive closure would, as with many other sporting clubs lead to uncertainties as to the ability of the Company to continue trading without further external financial support. This situation will continue to be closely monitored by the Board and cash resources managed appropriately. The directors believe it is appropriate to prepare the financial statements on a going concern basis on the assumption that there will not be further extended disruption to operations caused by the pandemic.

Judgements

No significant judgements have been made by management in preparing these financial statements.

Revenue recognition

Turnover represents net gate income, Football League subscriptions, Football League distributions, commercial income, media income, player transfer fees, fees for player loans and donations net of Value Added Tax.

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Intangible assets

The costs associated with acquiring players’ registrations, including agents’ fees, are capitalised and amortised, in equal instalments, over the period of the respective players’ contracts. Where the acquisition of a player registration involves a non-cash consideration, such as an exchange for another player registration, the transaction is accounted for using an estimate of the market value for the non-cash consideration. Provision is made for any impairment and player registrations are written down for impairment when the carrying amount exceeds the amount recoverable through use or sale.

Under the conditions of certain transfer agreements or contract renegotiations, further fees will be payable in the event of the players concerned making a certain number of First Team appearances or on the occurrence of certain other specified future events. Liabilities in respect of these additional fees are accounted for, as provisions, when it becomes probable that the number of appearances will be achieved or the specified future events will occur.

Profits or losses on the sale of players represent the transfer fee receivable, net of any transaction costs, less the unamortised cost of the player’s registration.

Remuneration of players is charged in accordance with the terms of the applicable contractual arrangements and any discretionary bonuses when there is a legal or constructive obligation.

Tangible assets

Tangible assets are stated in the balance sheet at cost or valuation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Long leasehold land and buildings	2% straight line
Plant and machinery	10% - 20% straight line

An amount equal to the excess of the annual depreciation charge on revalued assets over the notional historical cost depreciation on these assets is transferred annually from the revaluation reserve to the profit and loss reserve.
 

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits.

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

Trade debtors

Trade debtors are amounts due from customers for merchandise sold and services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs of sale; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Leases

Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Financial assets and liabilities are only offset in the balance sheet when, and only when, there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
 

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

Non-financial assets:
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

Financial assets:
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was as follows:

	2020  No.	2019  No.
Average number of employees	91	83

4

Intangible assets

	Costs of acquiring player registrations  £
Cost
At 1 June 2019	32,500
Additions acquired separately	5,250
At 31 May 2020	37,750
Amortisation
At 1 June 2019	8,603
Amortisation charge	11,708
At 31 May 2020	20,311
Carrying amount
At 31 May 2020	17,439
At 31 May 2019	23,897

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

5

Tangible assets

	Land and buildings £	Plant and machinery  £	Total £
Cost or valuation
At 1 June 2019	2,866,845	897,889	3,764,734
Additions	-	58,786	58,786
At 31 May 2020	2,866,845	956,675	3,823,520
Depreciation
At 1 June 2019	1,152,974	768,746	1,921,720
Charge for the year	57,356	43,657	101,013
At 31 May 2020	1,210,330	812,403	2,022,733
Carrying amount
At 31 May 2020	1,656,515	144,272	1,800,787
At 31 May 2019	1,713,871	129,143	1,843,014

Included within the net book value of land and buildings above is £1,656,515 (2019 - £1,713,871) in respect of long leasehold land and buildings.

Historical cost of long leasehold land and buildings included at valuation
This class of asset includes items which have a carrying amount at historical cost of £135,722 (2019 - £135,722). The accumulated depreciation on this historical cost would be £61,390 (2019 - £58,676). They are included in the balance sheet at a valuation less accumulated depreciation of £147,031 (2019 - £151,303).

6

Stocks

	2020  £	2019  £
Goods for re-sale	28,440	33,272

7

Debtors

	2020  £	2019  £
Trade debtors	47,784	345,043
Other debtors	36,467	57,084
	84,251	402,127

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

8

Creditors

Creditors: amounts falling due within one year

	Note	2020  £	2019  £
Due within one year
Loans		39,800	3,000
Trade creditors		153,237	188,000
Other creditors		217,712	615,553
Corporation tax liability		-	11,534
		410,749	818,087
Due after one year
Accruals and deferred income	9	930,925	959,530
Loans		295,000	204,971
		1,225,925	1,164,501

Non adjusting post balance sheet events
Included within loans due after more than one year, are loans from directors and shareholders of £45,000 which are repayable from the revenues of the next match played against a team from the Premier League or Championship and any subsequent payments received by the company by television broadcasting in respect of matches selected for broadcast, or otherwise within a 10 year period from the point it was advanced during the 2018/2019 season. This balance was subsequently repaid post year end after Cheltenham Town played a match against Manchester City in the FA Cup on 23 January 2021.

9

Accruals and deferred income

	Grants  £
Amount advanced
At 1 June 2019 and at 31 May 2020	1,430,299
Amortisation
At 1 June 2019	470,769
Amortisation credit	28,605
At 31 May 2020	499,374
Carrying amount
At 31 May 2020	930,925
At 31 May 2019	959,530

The grants relate to grants advanced by the Football Trust to finance stadium developments.

10

Commitments

Operating lease commitments
The company has future operating lease commitments of £1,763,985 (2019 - £1,791,700). This includes the lease of the stadium at the current rental rate for the term of the lease until 1 January 2105.

Cheltenham Town Association Football Club Limited

Notes to the Financial Statements for the Year Ended 31 May 2020

11

Contingent liabilities

The Company has received a claim in respect of payments allegedly accruing in respect of rights of way granted to a stand at the football club’s stadium, in excess of amounts now reflected as a liability in the company's balance sheet as at 31 May 2020. The claim is disputed and the directors and their legal advisers consider it without merit. They also note that due to the statute of limitations the maximum period to which any such liability would be payable is six years prior to the date on which the claim was lodged in 2019.

An accrual has been recognised for the potential liability along with legal costs incurred to date in the balance sheet at that date and as a cost in the profit and loss account for the year. An ex gratia payment of £25,000 was made during the year ended 31 May 2020 in relation to the above.

The claimant has not accepted this amount, and due to differing methods of calculation has claimed a figure higher than the liability included in the balance sheet. The directors however, do not anticipate any further material liability to arise, though there can be no certainty in respect of this matter until a final settlement has been agreed.

12

Audit report

The Independent Auditor's Report was unqualified and there were no matters to which the auditors drew attention by emphasis. The name of the Senior Statutory Auditor who signed the audit report on 21 May 2021 was David Main, who signed for and on behalf of Hazlewoods LLP.