The directors present the strategic report for the year ended 30 June 2022.
Principal activities
The principal activity of Saracens Limited (‘the Company’) are those of a professional rugby union football club including entertainment, ticket sales, hospitality and merchandise. Saracens Limited is part of the wider Saracens Group (‘Group’), the parent company being Saracens Group Holdings Limited. The Group also includes: Saracens Copthall LLP which holds the stadium assets and business; Premier Team Promotions Limited which stages entertainment and business events; and an investment in Saracens Mavericks Limited who are part of the Netball Super League. Additionally, affiliated to the Group are The Saracens Foundation which is the club’s charitable arm and the Saracens Multi-Academy Trust which operates the Saracens High School. Accordingly, the description of activities below embraces the whole of the Group as well as explaining the strategic position of the Company.
We assess progress towards our long-term goals with a series of KPI’s, which in this reported year focussed on:
Safeguarding our people first, caring, high-performance culture
Retention of our key people and continuity
Managing cash flow and meeting our financial targets
Completing the Investment Agreement and as such securing new long term shareholder investment and financial sustainability
Achieving entertaining, high sports performance
Remaining at the forefront of women’s sport
Constructing the new West Stand at StoneX Stadium on time and budget
Commitment to the community and having a substantial socio-economic impact
Growing our audience
Establishing leading Governance processes
Putting people first
Our Group vision is: “Putting people first and enriching people’s lives through sport and entertainment.” This drives us every day to make a positive impact on people’s lives. Or in the words of the far more eloquent Nelson Mandela: “What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others.”
We believe that our greatest impact is to make a difference to people’s lives, be they our direct employees, our volunteers, our supporters or the wider community. We believe that getting cared for and developed on a day-to-day basis so that our players and staff can fulfil their ambitions and develop as people , is a vital part of our high-performance culture.
We endeavour to provide our athletes with; a world class coaching, physical training, and medical environment, and by taking pro-active interest in the person, their family, and their life away from the game. Overall, our environment is sustained by being an enjoyable, positive, and caring place to be and work.
In addition to providing sporting pathways and the support of our Saracens Foundation and Multi-academy Trust (as below), we have invested in a Head of People to develop our people strategy, retention, recruitment, development pathways, mental health provision and to provide a focus on implementing EDI best practice.
Group financial position
Saracens Group Holdings Limited acquired its investments in its subsidiary undertakings, including Saracens Limited, in February 2022. The shareholders of Saracens Group Holdings Limited agreed to invest £32m of funds into Saracens Group Holdings Limited over the period to June 2024. These funds are intended primarily to be used to fund the working capital requirements of Saracens Limited (rugby activities), Saracens Copthall LLP (stadium asset holder) and other Group entities. As such, Saracens rugby and the wider Group are in an improved financial position and operate as going concerns .
The Group had consolidated net asset position of £6 . 2m as at June 2022, including £7m of cash in bank . Saracens Group Holdings Limited itself had a net asset position of £1.6m as at June 2022.
The Group has sufficient funds for working capital purposes as well as functioning its third-party debt and none of the Group entities have overdue payables to HMRC .
Saracens Ltd financial performance
The Company’s balance sheet improved materially during the year with the net position improving by £16. 8 m.
Units (GBP) £m £m £m
Titles/ dates 21/22 20/21 Variance
Revenues 21.4 12.3 9.1
Operating loss 5.1 8.4 3.3
Revenues of Saracens Ltd recovered well following the impact of Covid and a year in the Championship. Revenues of £21.4m represent a £9.1m increase year on year. We are very pleased with the quick recovery, after an extremely challenging few years, and the return of revenues comparable to the 18/19 season.
The growth in revenues were primarily from commercial activities and there were many achievements during the year. The sponsorship team continued to achieve significant growth. Ticketing and Hospitality sales increased, and our first ‘Showdown’ game at Tottenham Hotspur was a success and one we are looking to build on in the 2022/23 season.
The £5.1m operating loss for the period was a £3. 3 m improvement year on year and we expect to reduce operating losses further in 2022/23. We forecast continued commercial growth in 2022/23: the recently completed West Stand is available for the whole season rather than only part of the season as was the case in 2021/22; Sponsorship revenues are expected to continue to grow, some of which is already contractually secured; and we expect further growth in our other commercial areas including events at StoneX Stadium.
2021/2022 season overview
From a Saracens Men’s perspective, over 2,000 minutes were played in the 21/22 Premiership season, and it came down to three points in the last two minutes of the final. It was painful to lose at the final hurdle to a very good Leicester Tigers team but that does not define a season. Or in the words of our main club partner City Index and StoneX: “We simply couldn’t be prouder of Saracens for giving it their all today. And knowing this team of winners, the rebuilding and preparation for next season starts now. It’s been an epic season with so many memorable moments and we couldn’t be more honoured to have been with you all the way.” We have an incredibly special group with phenomenally special people who firmly believe that this is just the start of the next decade of memories.
On to our Saracens Women’s team... Four successive Premier 15’s finals and three times champions! But again, this is just the start of the journey and an even bigger legacy to build. We are so proud of how our women’s team showed up against a talented Exeter team to win the final 43-21. Ruthless defence, immense resilience, moments of brilliance and they did it together. With regards to women’s rugby, it feels like we are part of something very special, a massive turning point for the women’s game where people are starting to sit up and notice.
Our players are incredible role models for future generation s , and they are paving the way for a seismic shift in the journey towards professionalism. All the coaching and support team deserve huge credit for enabling the team to play their best rugby at the business end of the season.
The live and digital audience of our Saracens Women’s Rugby matches continued to grow, with an average of 559 spectators attending our home games and 57,767 watching the final digitally. Our growing audiences have enabled us to generate more income through significant sponsorship deals.
One of our key priorities is the support for our female athletes. This year, we started the journey of integrating our performance departments across our Saracens Men’s, Saracens Women’s Rugby, and Saracens Mavericks Netball teams. It’s clear that by providing shared resources across these teams we can significantly improve the health, wellbeing and performance of our women’s players. This has included providing full-time physiotherapy, strength and condition, psychology, and medical support for our Saracens Women’s Rugby players, which has enabled us to improve their health and wellbeing.
Our Saracens Mavericks netball team had a season of ups and downs with some narrow losses which cost us the top four finish and a place in the play offs. There have been some changes for next season with Tamsin Greenway coming in as our Head of Strategic Performance and Camilla Buchanan stepping up to Head Coach. When Saracens decide to do something, we commit 100% and want to give it everything. Our desire for the Mavericks to become standard setters is absolute.
Saracens Mavericks continued to see over 700 people regularly attend our home fixtures at the Herts Sports Village. Unfortunately, our two games at the Essex Arena were not as popular with just over 400 people in attendance. We will review our home game venues moving forwards to ensure they are accessible to our regular fans and season ticket holders.
Our pathway programme continues to provide an exceptional route into professional netball for young girls with over 25 players moving into the vitality netball super league in the last five years, with more than half our senior team coming through our academy.
Entertaining events
As an entertainment and sports business, Saracens Group Holdings Limited took ownership of the subsidiaries Premier Team Promotions (PTP) and UK Investor Show Ltd in February 2022, which have continued to provide a range of high-quality events such as Rugby Speaker of the Year, a London Christmas Sporting Lunch, player testimonial events and charitable dinners. After nearly two years of no events, it was amazing to see people interacting face to face with big smiles on their faces. It was a rebuilding year which saw the revenue for PTP rise back to £2.7m. The UK Investor Show, the UK’s biggest one day investor event, came back in May 2022 after a two-year absence. As well as the launch of a smaller UK Investor Summit event which was held at StoneX Stadium. We believe it will take a further 12+ months (from the time of writing) for events business to fully recover from the pandemic and now the cost-of-living crisis. Given the economic backdrop, we are really pleased with the results the team managed to deliver. PTP delivered a net contribution to the Saracens Group of £0.6m.
West Stand Project
The stadium asset itself sits in Saracens Copthall LLP, another Group entity, but Saracens Limited benefits from use of the stadium. The West Stand project continued to face enormous challenges throughout the year due to increases in the price of materials and turbulence within the construction labour market, making it very difficult to keep skilled labourers on site in the face of offers of more money on other projects. Despite these challenges the project remained on time and on budget.
Saracens were able to start using the lower seating bowl in the new stand from February 2022, earlier than originally expected, to the great joy of Saracens supporters. Completion of most of the external track and pitch facing works by June 2022 meant that the stadium was able to host a full schedule of athletics events during the summer of 2022.
At the time of writing this report we have held several Men’s and Women’s home matches at StoneX Stadium with the full range of West Stand facilities available to us, and the positive impact on the spectator experience has been tremendous. New hospitality facilities such as The Park and the W Club have further enhanced our hospitality offering, whilst our players are now able to enjoy some of the best changing facilities in professional sport. As well as completing construction of the West Stand, we have also invested in a new covered area for our supporters behind the North Stand, fitted new television screens across the stadium, and enhanced our food and beverage offering, all of which has resulted in very positive feedback from our supporters and an excellent net promotor score which is measured at all home games at StoneX Stadium.
In addition to providing Saracens with excellent facilities, the new West Stand also provides a new home for Middlesex University who have signed a long-term lease and now occupy a significant proportion of the floor space within the building. The university have created a new home for their London Institute of Sport, School of Health Education and Natural Sciences departments, providing state of the art facilities for their staff and students. The potential of this partnership between Saracens Group and Middlesex University is extremely exciting and the process of knowledge sharing and exploring opportunities for shared value has begun and will be a focus for us as we move forwards.
We are extremely thankful for the continued support and positive partnership approach of both Barnet Council and Middlesex University.
Saracens Foundation & Socio-Economic Report
This year, Saracens published an Ernst & Young report which has, for the very first time, enabled Saracens Foundation and the wider group to demonstrate our considerable economic and social impact on our communities. This independent report, commissioned by the Saracens Group, found that in the year prior to the COVID-19 pandemic, close to £1m was invested by the Saracens Foundation in health and wellbeing, education, and community initiatives, engaging over 12,600 diverse participants, delivering over 16,600 hours of community programming; this activity generated a social value of £5.9m.
The Saracens Foundation and wider Saracens Group showed a social return on investment (SROI) of £6.60 for every £1.00 invested. By comparison, the average SROI across sport is estimated at just £3.28. It’s therefore clear that the Saracens Group provide more than double the SROI than similar sports organisations.
The EY report also showed the diverse demographics that access our charities projects with 43% being female, 29% having a disability and 43% from minority ethnic groups. We are proud that our programmes can reach and support people from a range of different backgrounds.
The report also highlighted that the Saracens Group made a £37m contribution to Gross Value Added in the UK and supported over 700 jobs. This is a vital economic impact on local people and communities. There were over 216,000 total visitors to StoneX Stadium (over the 12-month period measured), with visitors to Saracens Men’s match days contributing £5.4m to the local tourist economy.
The Saracens Foundation continued to have a significant impact on the health, education, and employability of local people. The charity had a measurable impact on 13,475 local people in 2021/22, with over 57,404 secondary impacts on the wellbeing of family and friends of beneficiaries.
The Saracens Foundation launched a new project called ‘Empower Her’ which aimed to develop female business leaders of the future. The project, funded by Shawbrook Bank, supported 16 female professional athletes from our Saracens Women’s Rugby and Saracens Mavericks Netball teams to achieve mentoring qualifications. These professional athletes mentored 16 girls and women aged between 16 and 24 from local grass roots clubs. These participants were then tasked with growing female participation in rugby and netball across their local clubs while also building up their work experience.
Our Foundation also launched ' Project Breakdown ' which supports young people in Pupil Referral Units. These young people are often some of the most disengaged and disadvantaged, with less than 1% achieving six GCSEs. The charities project aims to support these young people to transition back to traditional secondary schools where they will build better lives for themselves through increased educational attainment.
Saracens Multi-Academy Trust
The Saracens High School has enjoyed an eventful and extremely positive period during 2021-22. Having started its fourth academic year in September 2021, the school moved into its brand new £32m building during the October half-term break. Having had to open and run the school from an old run-down primary school building for three years, it was with great relief and excitement that pupils, teachers, and staff entered the new school building. A fantastic spacious new building doesn’t guarantee great education practice, but it does inspire and motivate pupils and teachers to perform to their best, a central focus of the school. At the time of producing this report work is ongoing to provide equally impressive sports pitches and accompanying facilities circa 700 meters away from the main school building.
To say that we are proud of what is being achieved at the Saracens High School would be a huge understatement. The school was founded and operates under the guidance of the four Saracens values – Discipline, Hard Work, Honesty and Humility, and when visiting the school these values and resulting behaviours by pupils and teachers is tangible. The school has sparked the imagination of Saracens supporters, players, coaches, and partners, many providing direct or indirect support to the school to enable activities and support services that otherwise wouldn’t be affordable to the school.
Principal risks and uncertainties
The Directors consider that the principal risks to the Group are changes to the competition structures, the financial sustainability of other Premiership clubs, the European Rugby commercial performance, the cost-of-living crisis negatively impacting ticket, hospitality and event sales and rising energy costs.
Governance
One of our board goals at the start of the year was to establish leading governance processes. These include: risk management, ensuring no breaches in regulatory requirements, optimised business processes and systems, regular meetings of the risk and audit committee, having a clear vi si on and three year financial plan refreshed. I am pleased to say this board goal was met. Our Audit and Risk Committee as well as our Salary Cap Committee meet quarterly and are now well established.
We continue to prioritise strong financial governance processes. We have an experienced finance team who produce high-quality financial information.
The Board and shareholders continue to have a deep commitment to diversity, community, and sustainability. Furthermore, we will continue to maximise Saracens socio-economic impact, caring for our people and community, as well as maintain the stadium’s sector leading environmental standards.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2022.
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The financial statements have been prepared on a going concern basis.
As in previous years, the company met its working capital needs through funds provided from the parent Saracens Group Holdings Limited (previously Premier Team Holdings Limited) and continues to do so going forward until becoming profitable. As at 30 June 2022, Saracens Group Holdings Limited itself had net assets of £1.6m and furthermore we fully expect the injection of additional funds in line with the £32m Investor Agreement completed in February 2022 by new investors, Kimono House Limited and Euroblue Investments Limited , to facilitate the operations of the company over twelve months from the date of the approval of the financial statements.
The business plan assumes the continued absence of prohibition on crowds from coronavirus but were this assumption not to be valid then the directors have contingency plans to reduce the impact on cash flow. Whilst there is some uncertainty over the future structure of the Premiership and there is a challenging general economic environment, both of which could impact the size of the crowds in attendance over a season, the directors are not aware of any other events or conditions beyond the period of their assessment that may cast significant doubt on the entity’s ability to continue as a going concern.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit :
the information given in the Strategic Report and the Directors' R eport for the financial year for which the financial statements are prepared is consistent with the financial statements ; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
As explained more fully in the Directors' R esponsibilities S tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements , the directors are responsible for assessing the company ' s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Saracens Limited is a private company limited by shares incorporated in England and Wales . The registered office is StoneX Stadium, Greenlands Lane, Hendon, United Kingdom, NW4 1RL.
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 £.
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 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
The financial statements of the company are consolidated in the financial statements of Saracens Group Holdings Limited. These consolidated financial statements are available from its registered office, StoneX Stadium, Greenlands Lane, London, NW4 1RL .
Notwithstanding net current liabilities of £ 11.8m as at 30 June 202 2 ( 2021 : £ 25 . 0 m) and a loss for the year then ended of £ 4.9 m (202 1 : £ 5 .3m) the financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
As in previous years, the company met its working capital needs through funds provided from the parent Saracens Group Holdings Limited (previously Premier Team Holdings Limited) and continues to do so going forward until becoming profitable. As at 30 June 2022, Saracens Group Holdings Limited itself had net assets of £ 1.6 m and furthermore we fully expect the injection of additional funds in line with the £32m Investor Agreement completed in February 2022 by new investors, Kimono House Limited and Euroblue Investments Limited, to facilitate the operations of the company over twelve months from the date of the approval of the financial statements.
The business plan assumes the continued absence of prohibition on crowds from coronavirus but were this assumption not to be valid then the directors have contingency plans to reduce the impact on cash flow. Whilst there is some uncertainty over the future structure of the Premiership and there is a challenging general economic environment, both of which could impact the size of the crowds in attendance over a season, the directors are not aware of any other events or conditions beyond the period of their assessment that may cast significant doubt on the entity’s ability to continue as a going concern.
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 .
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss , unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss , except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are s ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value th r ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
In categorising leases as finance leases or operating leases, management makes judgements as to whether the significant risks and rewards of ownership have transferred to the company as a lessee, or to the lessee where the company is a lessor.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The recoverable amount of the deferred tax asset is based on estimates of taxable profits in the foreseeable future. As such, the carrying value of the deferred tax asset is determined to be £nil. Further details are given in note 11 to the financial statements.
The company holds an investment in 'P' shares in Premier Rugby Limited entitling the holder to future income streams. The investment in Premier Rugby Limited is held at the most recent valuation provided by Premier Rugby Limited and in accordance with other clubs in the league as described in note 14.
An agreement to sell a significant minority interest in Premiership Rugby Limited (PRL) to certain funds advised or managed by CVC Capital Partners (CVC Funds) was signed on 29 March 2019 and the club received a cash inflow of £12.8m as a result of this transaction. This income is being recognised in profit or loss over 48 months which is in line with the other major commercial contracts entered into by PRL, with amounts relating to future periods being recognised as deferred income, and this has been reflected in note 17 .
The average monthly number of persons ( ex cluding directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The company has tax losses of approximately £ 88 million (2021: £88 million) to use in future years (after considering the offset against the revaluation gains as detailed in note 21) . The deferred tax asset measured at 25% (2021: 19 %) has not been recognised except for below . On the basis of available evidence, it is more likely than not that there will be no taxable profits in the foreseeable future against which the asset can be recovered.
Amortisation of intangible fixed assets is included within net operating expenses in the statement of comprehensive income.
£17,551,780 (202 1 : £17,551,780) of the above unlisted investments relates to an investment in Premiership Rugby Limited ("PRL").
In line with other shareholding clubs, the Company holds this investment at the most recent valuation provided by PRL which based on the income stream into perpetuity, discounted at a rate of 8%. There is a fixed charge registered in relation to these shares.
The company also holds, along with the CVC funds, an additional minority shareholding in PRL of £2,133,007. The investment is held at cost, which is based on the same valuation methodology.
Amounts due from ticket sales in the current year have been included within trade debtors. To enable this to be comparable with prior years we have restated the prior year figures to reflect this change in treatment, with the overall effect on debtors being £nil.
Included in the above deferred income balance is an amount of £2,349,832 (2021: £3,133,109) that relates to the CVC deal signed on 29 March 2019 where the club received a cash inflow of £12.8m and this is being recognised over 48 months.
Shareholder loan of £ nil (202 1 : £ 175 ,000) was subject to interest cover and capital repayments. Interest wa s payable on these loans at a variable interest rate at 1.5% above LIBOR. The remaining shareholder loan of £ nil ( 2021 : £ 750,000 ) wa s interest-free and repayable on demand.
Other loans amount relates to a DCMS loan under the government scheme, which attracts interest of 2% per annum. The first repayment date is 30 September 2024.
The provisions for liabilities recognised by the company are :
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The above deferred tax liability is not expected to reverse with 12 months of the reporting date. The deferred tax liability is a provision which would only become payable if the company was to sell its unlisted investment, which is currently held at £17,551,780, in Premier Rugby Limited. Given this investment is intrinsically linked to the existence of the Premiership league, this liability is extremely unlikely to become payable.
Unrecognised deferred tax assets , to the extent that they cannot be offset against the unlisted investment noted above, are shown in note 1 1 to the financial statements ,
The company operates a defined contribution pension scheme . The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £44 ,9 48 ( 2021 : £40,368 ) were payable to the fund at the year end and are included in creditors.
During the year the company issued 2,168,148,530 ordinary shares at par value of £0.01 per share.
Each ordinary share entitles the holder to one vote at general meetings. The deferred shares shall rank pari passu with the ordinary shares of 1p each in the capital of the company in respect of dividends and on a return of capital (whether in a winding up or otherwise), save that all of the holders of the deferred shares shall, in aggregate, be entitled to payment of 1p on any dividend and 1p on a return of capital. The deferred shares shall not entitle the holders thereof to receive notice or attend or vote at any general meetings of the company, shall not be redeemable, and shall not be capable of transfer at any time hereafter other than as provided with the consent of the directors of the company.
The special share may only be held or transferred to the amateur club, Saracens Amateur RFC, providing certain rights relating to the name and activities of the club. It confers no voting rights on the holder of the special share.
The profit and loss account represents cumulative profit and loss net of distribution to owners, and the fair value reserve previously shown separately. This reflects the treatment of fair value gains and losses on investments under FRS 102 which requires such gains and losses to be shown in profit or loss. As the gains or losses relate to unlisted investments, they are not distributable until the gains or losses are realised on disposal.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company signed a new lease for stadium rental conditional on the West Stand development completing, which occurred in July 2022 , where the new commitment replaces the current lease. The total annual commitment under the new agreement is £1,000,000 per annum.
The immediate parent company is Saracens Group Holdings Limited, a company incorporated in the UK (2021: Premier Team Holdings Limited, a company incorporated in the UK) and is the parent of the largest and smallest group for which consolidated accounts are prepared. The registered office of Saracens Group Holdings Limited is StoneX Stadium, Greenlands Lane, Hendon, London, NW4 1RL.
The ultimate parent company is Kimono House Limited, a company incorporated in the UK (2021: Premier Team Holdings Limited, a company incorporated in the UK ).
The remuneration of key management personnel is as follows.
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
The amounts owed to/from other related parties which are under common control with the company, or have directors in common, are interest free and have no fixed repayment date.
Saracens Mavericks Limited is a joint venture of Saracens Group Holdings Limited, the parent company. Saracens Copthall LLP is a related entity due to the direct ownership by Saracens Limited .