REGISTERED NUMBER: 07895367 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Audited |
Consolidated Financial Statements |
for the Year Ended 30 June 2023 |
for |
Lincoln City Holdings Limited |
REGISTERED NUMBER: 07895367 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Audited |
Consolidated Financial Statements |
for the Year Ended 30 June 2023 |
for |
Lincoln City Holdings Limited |
Lincoln City Holdings Limited (Registered number: 07895367) |
Contents of the Consolidated Financial Statements |
for the Year Ended 30 June 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Consolidated Statement of Comprehensive Income | 11 |
Consolidated Balance Sheet | 12 |
Company Balance Sheet | 14 |
Consolidated Statement of Changes in Equity | 15 |
Company Statement of Changes in Equity | 16 |
Consolidated Cash Flow Statement | 17 |
Notes to the Consolidated Cash Flow Statement | 18 |
Notes to the Consolidated Financial Statements | 20 |
Lincoln City Holdings Limited |
Company Information |
for the Year Ended 30 June 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Newland House |
The Point |
Weaver Road |
LINCOLN |
Lincolnshire |
LN6 3QN |
Lincoln City Holdings Limited (Registered number: 07895367) |
Group Strategic Report |
for the Year Ended 30 June 2023 |
REVIEW OF BUSINESS |
The Holding company is an investment vehicle for the football club. There have been no transactions in the income statement this year and only investment activity on the balance sheet. Therefore the majority of the transactions in this report relate to the subsidiary, Lincoln Football Club Company Limited, and therefore the strategic report is based on this company's year of trading. |
2023 | 2022 | 2021 | 2020 |
£ | £ | £ | £ |
Turnover | 6,527 | 6,981 | 5,567 | 6,548 |
Staff Costs | 5,931 | 6,236 | 5,169 | 5,145 |
Profit/(loss) | (2,636) | (2,052) | (1,404) | (889) |
Net assets | 2,855 | 2,439 | 1,791 | 1,733 |
Final Position (League 1) | 11th | 17th | 5th | 16th |
Average League Attendance | 8,486 | 8,773 | N/A | 8,986 |
Season review |
In our fourth successive season back In League 1, we finished in a credible 11th place under Head Coach Mark Kennedy. League form improved significantly after the close of the winter transfer window with 21 year-old Ethan Erhahon being a notable signing at the end of January for a six-figure sum. That transfer fee however remains below the club record fee paid of £325,000 (including a promotion add-on) for John Akinde in July 2018. |
In cup competitions, we disappointingly exited in the first round of the FA Cup at non-league Chippenham Town but did well to reach the fourth round of the Carabao Cup by knocking out Championship side Bristol City before losing controversially away at Premier League Southampton. Whilst the Carabao Cup run was fantastic for fan engagement, it wasn't as commercially rewarding as we would have hoped from a usual 4th round progression, with our net profit from this run being only £55k. In the EFL Trophy we progressed to the quarter finals before losing on penalties to Accrington Stanley. |
Turnover |
Turnover is analysed into its main components as follows: |
2023 | 2022 |
£ | £ |
Matchday | 2,231 | 2,290 |
Central distributions and grants | 1,719 | 2,127 |
Commercial and hospitality | 1,523 | 1,654 |
Academy grants and fundraising | 699 | 695 |
Football fortune and miscellaneous income | 355 | 215 |
6,527 | 6,981 |
Matchday revenue was down marginally with both league gate receipts and EFL digital revenue reflecting declines. This was offset to some extent by higher gate receipts from cup competitions specifically from the run in the Carabao Cup. |
Central distributions were lower by £400k which was the main reason for the decline in overall turnover. |
Although retail income was unchanged both commercial income and hospitality declined by in excess of 8%. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Group Strategic Report |
for the Year Ended 30 June 2023 |
Football fortune and miscellaneous income was up significantly with higher loan fees received and increased prize money from cup competitions. |
Player Trading |
Overall player trading amounted to just short of £600k. Profits were generated from the sale of Cohen Bramall, Anthony Scully and to a lesser extent from Tom Hopper. A small loss was made on the sale of Jamie Robson. Sell-on fees were received from the transfer of Harry Toffolo and Jorge Grant and a minor add-on was received from the sale of James Jones following Wrexham's promotion. With this latest fee generated from the sale of Harry Toffolo, the total fees received from his transfer amount to approximately £640,000, a record for the club. |
Compensation was also received for a very young academy player signed by a Premier League club. |
Operating loss |
The operating loss for the year increased further from £2.0m to £2.6m with administrative expenses up by £343k. |
With continued inflationary pressures, operating costs across the club were significantly higher again. Although staff costs reflect a decrease of £305k over the previous year, when related items such as amortisation, agent fees and net loan fees are included there was only a small decline over the previous year. |
Balance sheet |
In order to fund the operating losses, player signings and capital expenditure, the company issued shares for cash amounting to £3.05million. |
Capital expenditure was down on last year's very significant outlay but still amounted to just short of £300k. Among the major items targeted was the completion of the stadium-wide IT and network upgrade, pitch frost covers, upgrades to the Legends Lounge, EPC pitch improvements and the fit-out of the new catering concessions zone. |
Transfer fees for players exceeded £400k during the year. This included fees for Ethan Erhahon, Danny Mandroiu, Dylan Duffy and Jay Benn as well as contingent payments for players signed in previous years. Also included was a fee for Reeco Hackett, signed on the opening of the 2023/24 summer transfer window on 14 June and therefore falling within the current financial year. |
Cash at the year-end increased to £1.7million with nearly £0.9million of that ring-fenced towards the Stacey West redevelopment. Net assets were higher by £0.4million at £2.9million. |
The increase in long term creditors was attributable to the receipt of capital grants for the Stacey West project. Bonds previously issued to fans for various capital projects continued to mature and in excess of £100k was repaid during the year. Outstanding bonds at year end, including for the Stacey West project, amounted to approximately £800k. |
POST BALANCE SHEET AND FUTURE DEVELOPMENTS |
Lincoln City Holdings Limited (Registered number: 07895367) |
Group Strategic Report |
for the Year Ended 30 June 2023 |
The £2.6million Stacey West Community Hub development commenced in May 2023 and is anticipated to be completed in May 2024. The two-tier development will see the club develop its infrastructure and increase its social impact in the community, working in partnership with Lincoln City Foundation and other community groups. |
The club has invested significantly in infrastructure upgrades as part of this project - most notably mains water, power and a pitch water recycling system. Its application to trial safe-standing was also successful and the LNER Stadium now boasts a safe standing section in GBM U7, and is exploring plans to expand standing options in other areas. |
Investment also continues into the University of Lincoln Fan Village and other concession areas, as well as the ongoing improvement of facilities at the Soper of Lincoln EPC. |
Head Coach Mark Kennedy and his assistant Danny Butterfield departed the club on 18 October. After an extensive recruitment process, the Leeds United U21 Coach Michael Skubala was appointed on 13 November as the new Head Coach on a contract through to the end of the 2026/27 season. |
Since the financial year-end we have paid another six-figure transfer fee, with Ethan Hamilton joining from Accrington Stanley. This is the ninth time we have done so since returning to the EFL in 2017. As in the previous year, total player salary costs will be around the mid-table although still below the average costs for League 1. |
Despite ongoing inflationary pressures on costs, season ticket prices were limited to low single-digit increases. We anticipate that the operating loss for the forthcoming financial year to exceed £3million. |
Directors and key investors continue to support the club with ongoing investment, and shares amounting to £2.2million have been issued since the year-end. We are particularly grateful to the Jabara family for their significant and regular contributions since first becoming involved with the club in June 2021. As a result, HJ-LCFC Holdings LLC is now the largest shareholder in Lincoln City Holdings. |
We welcome the Government's intention to bring forward legislation for an Independent Financial Regulator and hope that despite frustrating delays, the Premier League and EFL will ultimately come to an agreement on a fairer redistribution of revenue across the English football pyramid. Any additional income will come with strict financial controls on player spending limiting the ability of owners to boost that through equity or loan injections. Our ability to succeed will thus be even more dependent on the ability to punch above weight through astute processes and decision making and maximising turnover of which fan and partner support will be a major component. |
ON BEHALF OF THE BOARD: |
Lincoln City Holdings Limited (Registered number: 07895367) |
Report of the Directors |
for the Year Ended 30 June 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 30 June 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of that of a holding company. |
The principal activity of the subsidiary company was that of running a professional football club together with related and ancillary operations. |
DIVIDENDS |
No dividends will be distributed for the year ended 30 June 2023. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 July 2022 to the date of this report. |
Other changes in directors holding office are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Report of the Directors |
for the Year Ended 30 June 2023 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Nicholsons Audit (Statutory Auditor), will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Lincoln City Holdings Limited |
Opinion |
We have audited the financial statements of Lincoln City Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 30 June 2023 and of the group's loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 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 group's and the parent 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 |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Report of the Independent Auditors to the Members of |
Lincoln City Holdings Limited |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on pages five and six, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Lincoln City Holdings Limited |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The objectives of our audit, in respect to 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; and to respond appropriately to fraud or suspected fraud identified during the audit. |
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. |
Our approach was as follows: |
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant of those that relate to the reporting framework FRS102 and the Companies Act 2006. |
We understood how the Company is complying with those frameworks by making enquiries of management and those charged with governance, and we corroborated our enquiries by reviewing third party correspondence, including with HMRC and Companies House. |
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur by meeting with management from various parts of the business to understand where they considered there was susceptibility to fraud. We considered the controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud. |
Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included assessing the appropriateness of presentation of separately disclosed items and testing manual journals. These procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. |
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified in the paragraphs above. Our procedures involved journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the business. |
We also considered the risk associated with transacting in player trading, and the valuation of players at the balance sheet date year as this could have a material impact on the financial statements and therefore work was targeted on these transactions. |
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The audit was planned to ensure that the more complex areas were audited by more experienced members of the audit team and there were no areas of the audit which were considered to require external experts to be appointed by the audit team. |
Report of the Independent Auditors to the Members of |
Lincoln City Holdings Limited |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
Newland House |
The Point |
Weaver Road |
LINCOLN |
Lincolnshire |
LN6 3QN |
Lincoln City Holdings Limited (Registered number: 07895367) |
Consolidated |
Statement of Comprehensive |
Income |
for the Year Ended 30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ |
TURNOVER | 6,526,835 | 6,980,583 |
Cost of sales | 410,915 | 403,317 |
GROSS PROFIT | 6,115,920 | 6,577,266 |
Administrative expenses | 9,348,705 | 9,005,531 |
(3,232,785 | ) | (2,428,265 | ) |
Other operating income | 30,984 | 54,669 |
Player trading | 599,108 | 350,000 |
OPERATING LOSS | 4 | (2,602,693 | ) | (2,023,596 | ) |
Interest payable and similar expenses | 5 | 33,371 | 28,166 |
LOSS BEFORE TAXATION | (2,636,064 | ) | (2,051,762 | ) |
Tax on loss | 6 | - | - |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(2,636,064 |
) |
(2,051,762 |
) |
Loss attributable to: |
Owners of the parent | (2,636,064 | ) | (2,051,762 | ) |
Total comprehensive income attributable to: |
Owners of the parent | (2,636,064 | ) | (2,051,762 | ) |
Lincoln City Holdings Limited (Registered number: 07895367) |
Consolidated Balance Sheet |
30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 | 379,604 | 320,717 |
Tangible assets | 9 | 4,602,270 | 4,472,550 |
Investments | 10 | 3 | 3 |
4,981,877 | 4,793,270 |
CURRENT ASSETS |
Stocks | 11 | 20,474 | 2,250 |
Debtors | 12 | 1,029,438 | 961,446 |
Cash at bank and in hand | 1,687,335 | 930,178 |
2,737,247 | 1,893,874 |
CREDITORS |
Amounts falling due within one year | 13 | 3,472,885 | 3,240,141 |
NET CURRENT LIABILITIES | (735,638 | ) | (1,346,267 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
4,246,239 |
3,447,003 |
CREDITORS |
Amounts falling due after more than one year |
14 |
1,391,541 |
1,007,681 |
NET ASSETS | 2,854,698 | 2,439,322 |
CAPITAL AND RESERVES |
Called up share capital | 17 | 2,835,500 | 2,076,277 |
Share premium | 18 | 9,586,324 | 7,306,979 |
Revaluation reserve | 18 | 722,470 | 694,132 |
Interest reserves | 18 | 4,056 | 12,651 |
Non controlling interest | 18 | 370,437 | 399,804 |
Retained earnings | 18 | (10,664,089 | ) | (8,050,521 | ) |
SHAREHOLDERS' FUNDS | 2,854,698 | 2,439,322 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Consolidated Balance Sheet - continued |
30 June 2023 |
The financial statements were approved by the Board of Directors and authorised for issue on 29 February 2024 and were signed on its behalf by: |
C H Nates - Director |
Lincoln City Holdings Limited (Registered number: 07895367) |
Company Balance Sheet |
30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 8 |
Tangible assets | 9 |
Investments | 10 |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 17 |
Share premium |
Retained earnings | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | - | - |
The financial statements were approved by the Board of Directors and authorised for issue on |
Lincoln City Holdings Limited (Registered number: 07895367) |
Consolidated Statement of Changes in Equity |
for the Year Ended 30 June 2023 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£ | £ | £ |
Balance at 1 July 2021 | 1,689,777 | (5,990,484 | ) | 5,923,479 |
Changes in equity |
Share subscriptions | 386,500 | - | 1,383,500 |
Total comprehensive income | - | (2,060,037 | ) | - |
Balance at 30 June 2022 | 2,076,277 | (8,050,521 | ) | 7,306,979 |
Changes in equity |
Share subscriptions | 759,223 | - | 2,279,345 |
Non controlling interest | - | (328,680 | ) | - |
Total comprehensive income | - | (2,284,888 | ) | - |
Balance at 30 June 2023 | 2,835,500 | (10,664,089 | ) | 9,586,324 |
Non |
Revaluation | Interest | controlling | Total |
reserve | reserves | interest | equity |
£ | £ | £ | £ |
Balance at 1 July 2021 | 653,978 | 33,820 | 380,098 | 2,690,668 |
Changes in equity |
Share subscriptions | - | - | - | 1,770,000 |
Non controlling interest | - | - | 19,706 | 19,706 |
Total comprehensive income | 40,154 | (21,169 | ) | - | (2,041,052 | ) |
Balance at 30 June 2022 | 694,132 | 12,651 | 399,804 | 2,439,322 |
Changes in equity |
Share subscriptions | - | - | - | 3,038,568 |
Non controlling interest | 28,338 | 516 | (29,367 | ) | (329,193 | ) |
Movement in interest reserve | - | (9,111 | ) | - | (9,111 | ) |
Total comprehensive income | - | - | - | (2,284,888 | ) |
Balance at 30 June 2023 | 722,470 | 4,056 | 370,437 | 2,854,698 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Company Statement of Changes in Equity |
for the Year Ended 30 June 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 July 2021 | ( |
) |
Changes in equity |
Issue of share capital | - |
Balance at 30 June 2022 | ( |
) |
Changes in equity |
Issue of share capital | - |
Balance at 30 June 2023 | ( |
) |
Lincoln City Holdings Limited (Registered number: 07895367) |
Consolidated Cash Flow Statement |
for the Year Ended 30 June 2023 |
30/6/23 | 30/6/22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | (2,238,175 | ) | (2,048,931 | ) |
Finance costs paid | (33,371 | ) | (28,166 | ) |
Net cash from operating activities | (2,271,546 | ) | (2,077,097 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (425,375 | ) | (297,000 | ) |
Purchase of tangible fixed assets | (281,072 | ) | (914,958 | ) |
Sale of players | 729,125 | 350,000 |
Sale of tangible fixed assets | 4,916 | - |
Net cash from investing activities | 27,594 | (861,958 | ) |
Cash flows from financing activities |
EFL discounted loan interest | 10,470 | 15,825 |
Capital repayments in year | (60,800 | ) | (86,946 | ) |
Share issue | 3,051,439 | 1,800,416 |
Net cash from financing activities | 3,001,109 | 1,729,295 |
Increase/(decrease) in cash and cash equivalents | 757,157 | (1,209,760 | ) |
Cash and cash equivalents at beginning of year |
2 |
930,178 |
2,139,938 |
Cash and cash equivalents at end of year |
2 |
1,687,335 |
930,178 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 30 June 2023 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
30/6/23 | 30/6/22 |
£ | £ |
Loss before taxation | (2,636,064 | ) | (2,051,762 | ) |
Depreciation charges | 140,602 | 176,065 |
Loss on disposal of fixed assets | 5,834 | 27,100 |
Amortisation | 243,187 | 227,094 |
Player Trading | (599,108 | ) | (350,000 | ) |
Profit on intangible fixed assets | 3,284 | - |
Finance costs | 33,371 | 28,166 |
(2,808,894 | ) | (1,943,337 | ) |
(Increase)/decrease in stocks | (18,224 | ) | 18,275 |
(Increase)/decrease in trade and other debtors | (67,992 | ) | 40,069 |
Increase/(decrease) in trade and other creditors | 656,935 | (163,938 | ) |
Cash generated from operations | (2,238,175 | ) | (2,048,931 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 30 June 2023 |
30.6.23 | 1.7.22 |
£ | £ |
Cash and cash equivalents | 1,687,335 | 930,178 |
Year ended 30 June 2022 |
30.6.22 | 1.7.21 |
£ | £ |
Cash and cash equivalents | 930,178 | 2,139,938 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 30 June 2023 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.7.22 | Cash flow | At 30.6.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 930,178 | 757,157 | 1,687,335 |
930,178 | 757,157 | 1,687,335 |
Debt |
Debts falling due within 1 year | (50,330 | ) | (6,209 | ) | (56,539 | ) |
Debts falling due after 1 year | (56,539 | ) | 56,539 | - |
(106,869 | ) | 50,330 | (56,539 | ) |
Total | 823,309 | 807,487 | 1,630,796 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements |
for the Year Ended 30 June 2023 |
1. | STATUTORY INFORMATION |
Lincoln City Holdings Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The group financial statements consolidate the financial statements of Lincoln City Holdings Limited and its subsidiary undertakings drawn up to 30 June each year. Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities. |
All other subsidiary undertakings have been excluded from consolidation on the basis of having an immaterial impact to the group consolidated financial statements. |
Critical accounting judgements and key sources of estimation uncertainty |
The financial statements are prepared to generally accepted accounting principles which requires management to make estimates and assumptions that affect assets and liabilities. Actual results could be different due to these estimates. The effect of any differences are reported at the time the information becomes available. Potential assets and liabilities can only be realised once they become due, because of the uncertain nature of football. These include add-on fees relating to but are not limited to sell on clauses, appearances, goals, clean sheets and promotions. |
Turnover |
Turnover represents gate monies, league levy and cup pool, advertising and sponsorship income, bar and catering, retail shop and all weather pitch income, excluding Value Added Tax. |
Income from commercial contracts and season ticket sales received prior the year end but for the following season is classed as deferred income. |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. |
Property | - Varying rates between 0% and 20% on Cost |
Equipment | - 20% on Cost |
Motor vehicles | - 20% on Cost |
Due to the repairs and maintenance carried out in the year certain property assets have not been depreciated. In these circumstances the directors undertake an annual impairment review of these assets. |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost less any provision for impairments. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Financial instruments |
Only basic financial instruments as defined in FRS 102 are held. Financial assets and financial liabilities are recognised in the accounts only when the entity becomes party to the contractual provisions of the instrument and their measurement basis is as follows: |
Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. |
Cash at bank is classified as a basic financial instrument and is measured at transaction price. |
Deferred income is not deemed to be a financial liability, as the cash settlement has already taken place and there is an obligation to deliver services rather than cash or another financial instrument. |
Basic financial liabilities |
Basic financial liabilities, including creditors, loans 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred that does not meet the criteria for capitalisation. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
2. | ACCOUNTING POLICIES - continued |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Pensions are paid to some employees' personal pension plans. These costs are charged to the profit and loss account as they occur. |
Government grants |
Government grants received are treated as deferred creditors and credited to the profit and loss account over the estimated useful life of the relevant fixed assets. |
Deferred income |
Deferred income comprises amounts received from sponsorship, season tickets and other income which is released to the profit and loss on a straight line basis over the period to which it relates. |
Intangible assets - player and management registration |
Transfer fees and other costs associated with the acquisition of players, management and professional department support team' registrations are capitalised as intangible fixed assets. These costs are amortised over the period of the players, management and professional department support team contracts adjusted for any agreed extensions. These costs are adjusted when the amortised value exceeds the amount recoverable through use or sale. Future costs which may become due are recognised within the original cost of acquisition if, in the opinion of the directors, it is probable that these costs will be incurred. |
Where proceeds are received from the disposal of players, management and professional department support team these future receipts are not recognised as part of the proceeds of disposal until such time as the events upon which these receipts are dependent, are known to have occurred. No value is recognised in the financial statements for players, management and professional department support team developed within the company. |
Going Concern |
The Directors and underlying investors have indicated their intention to support the company by providing funding until the end of the current season and beyond if that is necessary. The Directors continue to take a proactive and broad approach to seeking further investment. The Directors have undertaken a review of the business plan and likely cash flow requirements covering a period of at least twelve months from the date of approval of these accounts and have concluded that it is appropriate for the financial statements to be prepared on the going concern basis. |
Rental |
Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease. |
Disclosure Adjustment to Comparative Figures |
During the year an exercise was undertaken to re-map certain income types in the financial statements to present a fairer representation of the results for the 2022 financial year. There has been no adjustment to the reported profit. Capital and reserves have also been updated to reflect non-controlling interest. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
3. | EMPLOYEES AND DIRECTORS |
30/6/23 | 30/6/22 |
£ | £ |
Wages and salaries | 5,261,489 | 5,507,418 |
Social security costs | 552,611 | 589,438 |
Other pension costs | 116,780 | 139,110 |
5,930,880 | 6,235,966 |
The average number of employees during the year was as follows: |
30/6/23 | 30/6/22 |
Pro team and management | 31 | 28 |
Academy | 49 | 46 |
Matchday | 65 | 87 |
Commercial | 9 | 7 |
Operations | 35 | 25 |
During the year directors were paid a total of £0 (2022: £0). |
4. | OPERATING LOSS |
The operating loss is stated after charging: |
30/6/23 | 30/6/22 |
£ | £ |
Depreciation - owned assets | 140,602 | 176,064 |
Loss on disposal of fixed assets | 5,834 | 27,100 |
Player and management amortisation | 243,187 | 227,094 |
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
30/6/23 | 30/6/22 |
£ | £ |
Bond interest | 22,901 | 6,703 |
Loan interest | 10,470 | 21,463 |
33,371 | 28,166 |
6. | TAXATION |
Analysis of the tax charge |
No liability to UK corporation tax arose for the year ended 30 June 2023 nor for the year ended 30 June 2022. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
6. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
30/6/23 | 30/6/22 |
£ | £ |
Loss before tax | (2,636,064 | ) | (2,051,762 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 25 % (2022 - 19 %) |
(659,016 |
) |
(389,835 |
) |
Effects of: |
Capital allowances in excess of depreciation | (18,019 | ) | - |
Depreciation in excess of capital allowances | - | 25,707 |
Loss brought forward | (1,970,918 | ) | (1,606,790 | ) |
Loss carried forward | 2,647,953 | 1,970,918 |
Total tax charge | - | - |
Factors that may affect future tax charges |
Losses carried forward amounted to £13,081,393 (2022: £10,373,252). No provision has been made for a deferred taxation asset as the recoverability of these losses against future profits is uncertain. |
7. | INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
8. | INTANGIBLE FIXED ASSETS |
Group |
Player |
and | Computer |
management | software | Totals |
£ | £ | £ |
COST |
At 1 July 2022 | 589,375 | 3,900 | 593,275 |
Additions | 426,625 | - | 426,625 |
Disposals | (486,875 | ) | - | (486,875 | ) |
At 30 June 2023 | 529,125 | 3,900 | 533,025 |
AMORTISATION |
At 1 July 2022 | 268,658 | 3,900 | 272,558 |
Amortisation for year | 243,187 | - | 243,187 |
Eliminated on disposal | (362,324 | ) | - | (362,324 | ) |
At 30 June 2023 | 149,521 | 3,900 | 153,421 |
NET BOOK VALUE |
At 30 June 2023 | 379,604 | - | 379,604 |
At 30 June 2022 | 320,717 | - | 320,717 |
9. | TANGIBLE FIXED ASSETS |
Group |
Motor |
Property | Equipment | vehicles | Totals |
£ | £ | £ | £ |
COST OR VALUATION |
At 1 July 2022 | 5,837,734 | 754,946 | 23,700 | 6,616,380 |
Additions | 221,962 | 59,110 | - | 281,072 |
Disposals | (10,750 | ) | - | - | (10,750 | ) |
At 30 June 2023 | 6,048,946 | 814,056 | 23,700 | 6,886,702 |
DEPRECIATION |
At 1 July 2022 | 1,475,940 | 644,190 | 23,700 | 2,143,830 |
Charge for year | 63,556 | 77,046 | - | 140,602 |
At 30 June 2023 | 1,539,496 | 721,236 | 23,700 | 2,284,432 |
NET BOOK VALUE |
At 30 June 2023 | 4,509,450 | 92,820 | - | 4,602,270 |
At 30 June 2022 | 4,361,794 | 110,756 | - | 4,472,550 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
9. | TANGIBLE FIXED ASSETS - continued |
Group |
Included in property are: |
Freehold property |
EPC |
All weather pitch |
Totals |
£ | £ | £ | £ |
COST OR VALUATION |
At 1 July 2022 | 3,865,042 | 1,538,796 | 433,897 | 5,837,735 |
Additions | 211,962 | 10,000 | - | 221,962 |
Disposals | (10,750 | ) | - | - | (10,750 | ) |
At 30 June 2023 | 4,066,254 | 1,548,796 | 433,897 | 6,048,947 |
DEPRECIATION |
At 1 July 2022 | 1,313,085 | 127,853 | 35,002 | 1,475,940 |
Charge for the year | - | 46,200 | 17,356 | 63,556 |
Eliminated on disposal | - | - | - | - |
At 30 June 2023 | 1,313,085 | 174,053 | 52,358 | 1,539,496 |
NET BOOK VALUE |
At 30 June 2023 | 2,753,169 | 1,374,743 | 381,539 | 4,509,451 |
At 30 June 2022 | 2,551,957 | 1,410,943 | 398,895 | 4,361,795 |
Freehold property is stated at deemed cost, that being the market value at the date of transition (1 June 2017) to new accounting standards FRS102. |
10. | FIXED ASSET INVESTMENTS |
Group |
Shares in |
group |
undertakings |
£ |
COST |
At 1 July 2022 |
and 30 June 2023 | 3 |
NET BOOK VALUE |
At 30 June 2023 | 3 |
At 30 June 2022 | 3 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
10. | FIXED ASSET INVESTMENTS - continued |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 July 2022 |
Additions |
At 30 June 2023 |
NET BOOK VALUE |
At 30 June 2023 |
At 30 June 2022 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiary |
Registered office: LNER Stadium, Sincil Bank, Lincoln, Lincolnshire, LN5 8LD |
Nature of business: |
% |
Class of shares: | holding |
30/6/23 | 30/6/22 |
£ | £ |
Aggregate capital and reserves |
Loss for the year | ( |
) | ( |
) |
11. | STOCKS |
Group |
30/6/23 | 30/6/22 |
£ | £ |
Stocks | 20,474 | 2,250 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group |
30/6/23 | 30/6/22 |
£ | £ |
Trade debtors | 330,312 | 410,786 |
Amounts owed by group undertakings | 47 | 47 |
Impfinity Ltd | 3 | - |
Other debtors | 82,470 | 66,662 |
Prepayments and accrued income | 616,606 | 483,951 |
1,029,438 | 961,446 |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
30/6/23 | 30/6/22 | 30/6/23 | 30/6/22 |
£ | £ | £ | £ |
Other loans (see note 15) | 56,539 | 50,330 |
Trade creditors | 691,578 | 355,980 |
Social security and other taxes | 433,421 | 455,065 |
Other creditors | 346,773 | 345,142 |
Deferred capital grant | 17,702 | 18,000 | - | - |
Bonds | 347,956 | 343,331 | - | - |
Accruals and deferred income | 1,578,916 | 1,672,293 |
3,472,885 | 3,240,141 |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group |
30/6/23 | 30/6/22 |
£ | £ |
Other loans (see note 15) | - | 56,539 |
Bonds | 442,751 | 553,285 |
Deferred capital grant | 948,790 | 397,857 |
1,391,541 | 1,007,681 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
15. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
30/6/23 | 30/6/22 |
£ | £ |
Amounts falling due within one year or on | demand: |
Other loans | 56,539 | 50,330 |
Amounts falling due between one and | two years: |
Other loans - 1-2 years | - | 56,539 |
16. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable | operating leases |
30/6/23 | 30/6/22 |
£ | £ |
In more than five years | 190,023 | 238,125 |
The tenancy agreement is for a period of 35 years, starting in 2018. Lincoln City Football Club Company Ltd has the ability to terminate the lease from 2028 on 6 months notice. Rent can be increased in line with the prevailing RPI every 36 months by the landlord. |
17. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 30/6/23 | 30/6/22 |
value: | £ | £ |
Ordinary | 10p | 2,835,500 | 2,076,277 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
17. | CALLED UP SHARE CAPITAL - continued |
Group |
Allocated, issued and fully paid: |
Number: | Class: | Nominal | 30/06/23 | 30/06/22 |
value | £ | £ |
28,355,000 | Ordinary | 10p | 2,835,500 | 2,076,277 |
Total | 2,835,500 | 2.076,277 |
Company |
Allocated, issued and fully paid: |
Number: | Class: | Nominal | 30/06/23 | 30/06/22 |
value | £ | £ |
28,355,000 | Ordinary | 10p | 2,835,500 | 2,076,277 |
7,592,230 Ordinary shares of 10p were issued during the year for cash of £759,223. |
18. | RESERVES |
Group |
Retained | Share | Revaluation |
earnings | premium | reserve |
£ | £ | £ |
At 1 July 2022 | (8,050,521 | ) | 7,306,979 | 694,132 |
Deficit for the year | (2,636,064 | ) |
Cash share issue | 22,496 | - | - |
Interest reserves | 328,680 | - | - |
Share subscriptions | - | 2,279,345 | - |
Non controlling interest | (328,680 | ) | - | 28,338 |
At 30 June 2023 | (10,664,089 | ) | 9,586,324 | 722,470 |
Lincoln City Holdings Limited (Registered number: 07895367) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 30 June 2023 |
18. | RESERVES - continued |
Group |
Non |
Interest | controlling |
reserves | interest | Totals |
£ | £ | £ |
At 1 July 2022 | 12,651 | 399,804 | 363,045 |
Deficit for the year | (2,636,064 | ) |
Cash share issue | - | - | 22,496 |
Interest reserves | - | - | 328,680 |
Share subscriptions | - | - | 2,279,345 |
Non controlling interest | 516 | (29,367 | ) | (329,193 | ) |
Movement in interest reserve | (9,111 | ) | - | (9,111 | ) |
At 30 June 2023 | 4,056 | 370,437 | 19,198 |
19. | CONTINGENT LIABILITIES |
There are potential liabilities and assets in respect of transactions involving players registrations. Due to the variable nature of these amounts it is not possible to calculate the maximum potential liability or asset. |
20. | RELATED PARTY DISCLOSURES |
TRADING RELATIONSHIPS |
During the period the company has traded with other businesses in which individual directors have an interest. |
All of these transactions were carried out under normal commercial terms. |
DIRECTORS |
There were no amounts owing by or to directors at 30 June 2023 or 30 June 2022. |
Key Management Personnel |
Remuneration of £683,316 (2022: £427,297) was paid to key management personnel during the financial year. |
21. | ULTIMATE CONTROLLING PARTY |
No controlling party. |