WBA Football Development Limited is a private company limited by shares incorporated in England and Wales . The registered office is The Hawthorns, West Bromwich, United Kingdom, B71 4LF. The principal activity of the company is that of operating a professional football development centre.
The company's ultimate parent company is Yunyi Guokai (Shanghai) Sports Development Limited, a company registered in China. The largest company for which group financial statements as at 30 June 2022 have been prepared is West Bromwich Albion Holdings Limited, a company incorporated in England and Wales, whose accounts are available at Companies House, Cardiff.
The financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £. The comparative information is for a period of 11 months.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements , including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group . T he company has therefore taken advantage of e xemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues : Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ : Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements ;
Section 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
The financial statements of the company are consolidated in the financial statements of West Bromwich Albion Holdings Limited . These consolidated financial statements are available from its registered office The Hawthorns, West Bromwich, West Midlands, B71 4LF.
These financial statements are prepared on the going concern basis. The directors assess going concern on a group wide basis. The directors have a reasonable expectation that the group and company will continue in operate for the foreseeable future. This being at least 12 months from the approval of the financial statements. However, the directors are aware of certain material uncertainties, such as forecasted player trading not being achieved, which may cause doubt on the group and company’s ability to continue as a going concern.
Following relegation to the English Football League Championship in season 20/21, and the resultant reduction in revenues as compared to the English Premier League over subsequent seasons, the Board have paid due consideration to the overall club’s strategy, playing squad, and operating and financing cash flows, including all significant revenue streams, the operating cost base of the club, player trading and sources of finance.
The group prepares detailed cash flow forecasts each financial year considering a range of reasonable foreseeable potential scenarios and material uncertainties in relation to income and costs, and has done so until the conclusion of season 23/24 – to 30 June 2024.
In December 2022, the group secured a 4-year £20m loan from MSD Holding UK Limited, which combined with the ability of the group to generate additional funds through reasonably foreseeable player trading, leads the directors to believe that the group should be able to meet its liabilities as they fall due for a period of at least 12 months from the date of signing the financial statements. However, should the forecasted player trading not be achieved, the group would need to both maintain existing and find further sources of funding or investment in order bridge its cash flow position until appropriate player transactions are fulfilled. Given that such funding or player trading is not guaranteed there is a material uncertainty present which may cast significant doubt about the group and company’s ability to continue as a going concern.
The club retains a level of flexibility in its playing squad options and the directors will balance its financial needs with a squad that has the ability to still strive for promotion.
Based on the forecasts, which includes expectations for net player trading and the availability and use of external finance, and other cost reductions, the directors remain confident the group will generate sufficient resources to meet its liabilities as they fall due for a period of at least 12 months and the Board has therefore concluded that it is appropriate for the financial statements to be prepared on a going concern basis.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss .
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors , bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. A m ounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
There are no key estimates or judgements.
The average monthly number of persons (including directors) employed by the company during the year was:
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
As the income statement has been omitted from the filing copy of the financial statements , the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006 :
The auditor's report was unqualified, but contained the following material uncertainty related to going concern section:
"We draw attention to note 1.2 in the financial statements, which indicates that should forecasted player trading be insufficient to enable the company to meet it's liabilities as they fall due, the group of which the company is a member of, would need to both maintain existing and find further sources of funding or investment in order bridge its cash flow position until appropriate player transactions are fulfilled. As stated in note 1.2, given that such funding or player trading is not guaranteed, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. "
In December 2022, West Bromwich Albion Group Limited secured a £20m loan facility from MSD UK Holdings Limited, which has been fully drawn down. The loan is secured by a fixed and floating charge over all of the assets of West Bromwich Albion Group Limited, West Bromwich Albion Football Club Limited, WBA Football Development Limited and West Bromwich Albion Heritage Limited. The loan is repayable over a 4-year term and carries a floating interest charge against the draw down amount being the daily non-cumulative compounded SONIA rate + 9.75%.
The company's ultimate parent company is Yunyi Guokai (Shanghai) Sports Development Limited, a company registered in China. The largest company for which Group financial statements are available is West Bromwich Albion Holdings Limited, a company incorporated in England and Wales. These accounts can be obtained from Companies House. The company's immediate parent, and also the smallest company for which Group financial statements are prepared and available at Companies House is West Bromwich Albion Group Limited, a company incorporated in England and Wales. The registered office of West Bromwich Albion Holdings Limited and West Bromwich Albion Group Limited is the Hawthorns, West Bromwich, West Midlands, B71 4LF.
The ultimate controlling party of Yunyi Guokai (Shanghai) Sports Development Limited is G Lai by virtue of control over various trusts in place.