A28
A51G208B*
24/02/2016 ;
COMPANIES HOUSE
#230
CONTENTS
PAGE
Strategic report
Directors' report
Balance sheet
M Cellino
Ercole Cellino
Edoardo Cellino
DArty
5 Patel
J Patel
G Caboni
REGISTERED OFFICE
Elland Road
Leeds
LS11 OES
AUDITOR
Gibson Booth
Chartered Accountants
6 Statutory Auditor
New Court
Abbey Road North
Shepley
Huddersfield
HD8 BBJ
BANKERS
SOLICITORS
Chadwick Lawrence
8-16 Dock Street
Leeds
LS101LX
Ward Hadaway
Wellington Street
Leeds
LS1 4DL
-1 -
The major positives on the footballing side came through our exciting homegrown talent, particularly the emergence of eventual
Young Player of the Year Lewis Cook in his breakthrough season. 2014/15 saw Alex Mowatt, another Academy graduate,
vf establish himself as a key figure as he went on to claim the Player of the Year award, while Charlie Taylor also cemented his
place in the side. Sam Byram continued to impress, scoring three times and attracting Premier League interest along the way,
" o^c v
and it was the season which saw Kalvin Phillips make the step up for his first-team debut.
*" fS
In financial terms the 2014/15 season saw the company make enormous strides towards stability Whilst there was a 3.55%
decrease in turnover from 25.3m to 24.4m we can attribute this almost entirely to the decline in merchandising income.
However, gate receipts increased slightly from 8.6m to 8.8m and following a period of restructuring the salary costs reduced
from 22.4m to 20.2m, a decrease of 9.8%.
"r^r^
I am very pleased to announce a 91% reduction of post tax losses for the financial year. In monetary terms, the 2014/15 result
of 2,012,342 loss represented a saving of 20,874,122 on the 2013/14 season. Of course, player trading made a major
contribution to the year on year savings with Ross McCormack departing in early July 2014 but this was necessary for the long
term benefit of the club.
The Board has worked tirelessly to strengthen the balance sheet with an additional 14,500,000 Ordinary Shares issued. The
balance sheet showed a surplus of 1,009,875 as at the 30 June 2015, an improvement on the 30 June 2014 deficit figure of
13,477,783.
FUTURE DEVELOPMENTS
The strategic review that commenced in April 2014 continues into the 2014/15 season. Following lengthy discussions the Club
took the decision to buy back all catering operations from Compass Contract Services (UK) Limited in order to widen the income
base and to take a more long term approach to financial stability. On 3 July 2015 all catering operations at Elland Road returned
in house and a programme of renovation to the hospitality areas has commenced in the West Stand and will continue until all
areas have been comprehensively modernised.
1
The club will continue to make sensible and cost effective changes to the playing squad to ensure that the burden of salary
costs remains manageable. However, whilst cost management is considered crucial we recognise the importance of investing in
the club's home, Elland Road. All areas of the business have benefited from a conservative capital improvement scheme with V
updates made to the retail shop, new 3G edging and lighting systems to the Elland Road pitch. Match day hospitality has
benefited from refurbishment of the private boxes and office areas have been modernised to exacting standards. Further
programmes will continue as and when our finances allow it.
I have openly voiced my opinion on the increased number of League games that are shown on live TV and will continue to work
~^\to ensure that the club is treated fairly, shown no more or no less than every other team within our League. It is my intention to
work to safeguard the future of Leeds United.
i ////Hi
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MCELtfNO P"SL/ V / / /
Director
/ jfd^iI (1
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A M Cellino
. Ercole Cellino
*EdoardoCe,,in,
!ppat,' 'i
A Umbers served as a director from 1 January 2015 until 12 October 2015.
G Caboni was appointed as a director on 21 January 2015.
M Cellino resigned as a director on 21 January 201 5 and was re-appointed on 6 May 2015.
DISABLED EMPLOYEES
Applications for employment by disabled persons are always fully considered. In event of members of staff becoming disabled,
every opportunity is made to ensure their employment with the company continues and that appropriate training is arranged. It is
the policy of the company that the training, career development and promotion of disabled persons should, as far as possible.
be identical to that of other employees.
EMPLOYEE INVOLVEMENT
The company's employment policies are designed to attract, retain and motivate the best people. The company involves
employees at all levels of the organisation through a broad base of regular communication, meetings and briefing sessions to
understand current performance and communicate future developments.
AUDITOR
Gibson Booth are deemed to be re-appointed under section 487(2) of the Companies Act 2006.
Each of the persons who is a director at the date of approval of this report confirm that:
so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and
each director has taken all steps that they ought to have taken as a director to make themself aware of any relevant audit
information and to establish that the company's auditor is aware of that information.
Registered office:
Elland Road
Leeds
LS11 OES
Signed on behalf of
-3-
The directors are responsible for preparing the Strategic Report, Directors' Report 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 of the profit or
loss of the company for that year.
In preparing these financial statements, the directors are required to:
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
-4-
statements
is
provided on
the
FRC's
website
at.
give a true and fair view of the state of the company's affairs as at 30 June 201 5 and of its 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.
adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
we have not received all the information and explanations we require for our audit.
New Court
Abbey Road North
Shepley
Huddersfield
HD8 8BJ
-5-
2015
24,418,955
2014
25,290,530
Cost of sales
(3,937,295)
(6,224,396)*^^^
GROSS PROFIT
20,481,660
19,066,134
(33,324,254)
201,918
(37,212,169)
304,471
(12,640.676)
(17.841,564)
jT) 9,815,148
(392,510)
813,186
(2,066,860)
Note
2
TURNOVER
Administrative expenses
Other operating income
OPERATING LOSS
(2,012,342)
(2,585,530)
(2,012,342)
(22,886,464)
feo^
The notes on pages 9 to 19 form part of these financial statements.
-6-
(20,300,934)
Note
FIXED ASSETS
Intangible assets
Tangible assets
8
9
CURRENT ASSETS
Stocks
Debtors due within one year
Debtors due after one year
Cash at bank
10
11
11
12
13
20
21
21
SHAREHOLDERS' FUNDS/(DEFICIT)
21
These accounts
7,891,935
11,412,700
20,505,412
19,304,635
646,015
8,536,446
4,022,701
10,937,672
637,982
8,836,720
12,113,047
24,342,834
(19,797,406)
21,587,749
(18,734,657)
4,545,428
2,853,092
25,050,840
22,157,727
(24,040,965)
19,000,000
6,000,000
(23,990,125)
1,009,875
-7-
(35,635,510)
(13,477,783)
4,500,000
4,000,000
(21,977,783)
(13,477,783)
M Cellii
Direct
Compai
9,876,418
10,628,994
1,009,875
CAPITAL AND RESERVES
Called-up equity share capital
Share premium account
Profit and loss account
2014
Note
22
(7,538,344)
(45,465)
(65,882)
(496,884)
(63.774)
(111,347)
(560,658)
(6,143,390)
(563,804)
10,459,676
(2,302,432)
(666,141)
174,750
3,752,482
(2,793,823)
(6,435,622)
(10,892,825)
8,000,000
2,000,000
4,000,000
4,000,000
75,437
10,967,560
(10,076,757)
CAPITAL EXPENDITURE
Payments to acquire intangible fixed assets
Payments to acquire tangible fixed assets
Receipts from sale of fixed assets
2014
(325,446)
23
(4,274,581)
(139.726)
5,374,581
(1,572,000)
(98,595)
5,260,247
22,746,983
(1,175,375)
11,854,158
-8-
ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared under the historical cost convention and in accordance with applicable
accounting standards.
At 30 June 2015 the company had net assets of 1,009,875 (2014 13,477,783 net liabilities) and net current assets after
deducting debtors due after more than one year of 522,727 (2014: 2,853,092). The directors have prepared and
reviewed forecasts and, as part of their assessment of the going concern status of the company, they have received
written confirmation from both Mr Massimo Cellino and other group companies stating that amounts payable will not be
called in for a period of no less than twelve months from approval of the financial statements. As a result, the directors
consider that it is appropriate to prepare the accounts on the going concern basis.
Turnover
Turnover represents income receivable from football and related commercial activities, exclusive of VAT. Gate receipts
and other match day revenue are recognised as the games are played. The club also receives central distributions from
the Football League and a solidarity payment from the Premier League that are beyond the direct control of the officers of
the club. These distributions are recognised evenly over the course of the financial year.
Revenue derived from season tickets is credited to income in the period to which it relates. Amounts received in advance
are credited to deferred income in the balance sheet.
Sponsorship, advertising and similar commercial income is recognised over the duration of the respective contracts.
Amounts received in advance are credited to deferred income in the balance sheet.
Facility fees received for live coverage or highlights are taken when earned.
Intangible fixed assets - goodwill
Goodwill relating to the football club is being amortised in equal instalments over 50 years based on the longevity of the
club and the strength of the brand, all other goodwill is amortised over a 20 year period. Goodwill is reviewed annually to
ensure that it is not impaired.
Intangible fixed assets - player registrations
In line with FRS 10: Goodwill and intangible assets, the costs associated with the acquisition of players' registrations are
capitalised as intangible fixed assets and amortised, in equal annual instalments, over the period of the respective
players' contract. The transfer fee levy refund received during the year is credited against additions to intangible assets.
Players' registrations are written down for impairment when the carrying amount exceeds the amount recoverable
through use or sale.
Intangible fixed assets - trademarks
Trademarks are being amortised in equal annual instalments over 10 years.
Tangible fixed assets
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful
economic life of that asset as follows:
Alterations and improvements
Fixtures and fittings
Leasehold land and buildings
Assets under the course of construction are not depreciated until they are brought into productive use.
Stocks
Stocks, which comprise goods for resale, are stated at the lower of cost and net realisable value.
Leases
Assets under finance leases and hire purchase contracts are capitalised at their fair value on the inception of the lease
and depreciated over their estimated useful life. Finance charges are allocated evenly over the period of the lease in
proportion to the capital amount outstanding.
Operating lease rentals are charged to profit and loss in equal amounts over the term of the lease.
-9-
2.
TURNOVER
All relates to the principal activity of operating a professional football club and arises from activities within the UK.
Gate receipts
Television and broadcasting income
Merchandising income
Central distributions
Other commercial revenue
10-
2015
8,761,296
270,400
4,656,646
4,098,500
6,632,113
2014
8,561,702
406,750
5,513,681
4,127,800
6,680,597
24,418,955
25,290,530
OPERATING LOSS
Operating loss is stated after charging/(crediting):
2015
3,160,653
353,727
1,277,723
69,000
2014
786
2,949,634
770,372
1,299,878
92,000
(5,549)
1,983,583
(181,910)
11,950
19,500
27,617
8,000
1,945,914
(120,057)
154,070
19.500
12,750
2014
19,500
19,500
13,885
5,330
5,000
3,402
1,000
2015
27,617
4.
11,750
12,750
PARTICULARS OF EMPLOYEES
The average number of staff employed by the company during the financial year amounted to:
2015
No
Players
Apprentices
Football team management"itxc
Management/administration ''Oo '
Casual match day staff
2014
No
44
52
12
12
69
351
382
496
564
19
12
107
11.
2014
17,781,412
2,039,694
26,633
20,117,561
2,192,700
59,845
19,847,739
22,370,106
DIRECTORS' REMUNERATION
The directors' aggregate remuneration in respect of qualifying services were:
Aggregate remuneration
Pension contributions
2015
16,667
2014
514,397
7,500
16,667
.s fvc^r^
Or-O*^ ^ ^^Ss Vs^^-T=
521,897
OrAsA
^
* "V
e-ost
f>c ^ cA>r<*<
\>-r ?Sc
^pf^^uL
*
2015
t ^A^,
Aggregate remuneration (excluding pension ^^
contributions) Vs*^
2014
394,043
16,667
None of the directors were accruing benefits under a defined contribution pension scheme (2014: one).
6.
Finance charges
Interest on other loans
<^vvVX^
GjPr\5
65,882
(879,068)
2014
63,774
2,003,086
(813,186)
2,066,860
During the year, the loans from GFH Capital Limited were restated, and interest of 914,369 previously accrued was
reversed.
7.
2015
2014
2,585,530
2015
2014
(2,012,342)
(20,300,934)
(417,561)
10,531
(4,567,710)
173,368
186,993
220,037
850,474
34,666
3,509,202
,'v-
-12-
Goodwill
Trademarks
COST
AtUuly2014
Additions
Disposals
5,984,321
10,398
6,605,070
6,143,390
(3,094,497)
12,600,419
6,143,390
(3,094,497)
At 30 June 201 5
5,984,321
10,398
9,654,593
15,649,312
AMORTISATION
At 1 July 201 4
Charge for the year
Impairment for the year
On disposals
815,276
119,955
4,506
1,040
3,888,702
3,039,658
353,727
(2,449,970)
4,708,484
3,160,653
353,727
(2,449,970)
At 30 June 201 5
935,231
5,546
4,832,117
5,772,894
5,049,090
4,852
4,822,476
9,876,418
At 30 June 201 4
5,169,045
5,892
2,716.998
7,891,935
Total
Following a review of the playing squad at the year end and the subsequent release of several players the Directors have
taken the decision to impair the value of several members of the First Team squad. A total of 353,727 (2014: 770,372)
has been charged to the profit and loss in respect of this impairment.
9.
Alterations and
improvements
Fixtures and
fittings
Total
COST
At 1 July 2014
Additions
Disposals
2,150,654
36,012
12,057,196
290,786
3,812,729
237,006
(1,966)
18,020,579
563,804
(1,966)
At 30 June 2015
2,186,666
12,347,982
4,047,769
18,582.417
DEPRECIATION
At 1 July 2014
Charge for the year
On disposals
217,026
116,649
3,638,780
869,747
2,752,073
360,327
(1.179)
6,607,879
1,346,723
(1,179)
At 30 June 2015
333,675
4,508,527
3,111,221
7,953,423
1,852,991
7,839,455
936,548
10,628.994
At 30 June 2014
1,933,628
8,418,416
1,060,656
11,412,700
The company has an option to acquire land adjacent to Lowfields Road from Leeds City Council that would be required to
complete the East Stand Development for which planning consent is in place. The option will expire on 31 October 2016.
The directors have reviewed the net book value of both the tangible and intangible fixed assets and are satisfied that they
are not impaired other than as described in note 8.
13-
10.
STOCKS
DEBTORS
Trade debtors
Amounts owed by group undertakings
Transfer fee debtors-**^
Other debtors
Prepayments and accrued income , C^0iS^VjV-f ^>
2015
2,824,307
4 4,022,701
Cfi
902,001
^
245,528
f^4,564,610
2014
2,687,019
4,228,250
202,950
298,801
1,419,700
8,836,720
The debtors above include the following amounts falling due after more than one year:
2014
2015
dboVv-;
2,247,294
1,000,000
4,332,939
802,166-V
920,273
86,916
439,616
9,968,202
19,797,406
2014
1,197,658
222,984
4,319,891
688,600
1,860,946
156,239
356,445
9,931,894
18,734,657
-V.C.E
' .-..
Included in accruals and deferred income is 4,969,132 (2014: 7,059,000) representing advance payment of tickets and
sponsorship that would only become a liability of the company should it fail to fulfill all of its fixtures for future seasons.
Included in accruals and deferred income is an advance payment of 900,000 (2014: 1,300,000) which is secured by a
fixed and floating charge over all the company's assets.
Obligations under finance leases are secured on the related assets
As at 30 June 2015 there was a convertible loan due to Sport Capital Limited totalling 160,479 (2014: 147,984). A
conversion notice had not been issued as at 30 June 2015.
-14-
2015
2014
4,142,114
62,597
2,880,802
405,452
16,000,000'
550,000
10,967,560
133,000
129,000
317,000
22,188,950
1,900,000
24,040,965
35,635,510
2015
Amounts repayable:
In more than one year but not more than two years
In more than two years but not more than five years
In more than five years
2014
1,000,000
3,000,000
12,000,000
2,000,000
8,500,000
16,000,000
10,500,000
Amounts owed to related parties represent shareholder loans from GFH Capital Limited of which 3,500,000 is repayable
in annual instalments from June 2016 to June 2019. In the event that the club becomes a member of the FA Premier
League prior to 2019, the remaining 13,500,000 will be repayable. If the club does not become a member of the FA
Premier League, the remaining balance is repayable in annual instalments from June 2019 to June 2032. The loans are
unsecured and interest free.
15.
2015
2014
128,794
100,990
214,999
203,426
229,784
(80,271)
418,425
(129,186)
149,513
289,239
86,916
62,597
156,239
133,000
149,513
289,239
-15-
PENSIONS
Defined contribution schemes
Certain professional footballing staff are members of the Football League Players Retirement Income Scheme, a
non-contributory defined contribution scheme. In addition the company operates a defined contribution scheme open to
all other employees. Costs of all defi ned contribution schemes, totalling 26,633 (2014: 48,000), have been charged to
the profit and loss account in the year.
Defined benefit scheme
Certain other professional footballing staff are members of the Football League Limited Pension and Life Assurance
Scheme ("FLLPLAS"), a defined benefit scheme. Under FRS 17: Retirement Benefits, the FLLPLAS would be treated as
a defined benefit multi-employer scheme. The assets of the scheme are held separately from those of the company,
being invested with insurance companies. Sufficient information is not available for full FRS 17 disclosure.
Following a review of the Minimum Funding Requirement ("MFR") of the FLLPLAS, accrual of benefits of the final salary
section of the scheme was suspended as at 31 August 1999. In light of the exceptional circumstances affecting the
scheme, the trustees of the scheme commissioned an independent actuary's report on the MFR position and a
substantial deficit was identified. Under the Pensions Act 1985, participating employers will be required to contribute to
the deficiency. The latest actuarial valuation of the scheme was carried out as at 31 August 2014 and resulted in a
charge to the profit and loss account of 172,946 The allocation of the deficit under this valuation is repayable at 6,465
per month effective from 1 September 2015.
17.
^\Vonp M^'
18.
35,090
1 ,994,798
2,029,888
Other Items
84,410
4,614
89,024
2014
Land and
buildings
Other Items
35,000
1,943.000
56,000
4,000
4,000
1,978,000
64,000
CONTINGENCIES
In the event of the club becoming a member of the FA Premier League before the 2017/18 Season a liability of
4,750,000 (2014: 4,750,000) will become payable to the liquidator of Leeds United Association Football Club Limited
under the provision of the sale agreement entered into on 4 May 2007.
Under the terms of the financial provisions relating to transfer of player registrations, future payments of up to 1,197,620
(2014: 1,062,000) may be payable dependent on the club's promotion to the FA Premier League and/or players
appearances for the club. Promotion to the FA Premier League may also incur bonuses payable of 8,321,284 (2014:
6,170,000) conditional on the performance of both players and football management throughout the 2015/16 season.
At the year end there were a number of legal claims and various claims from H M Revenue and Customs outstanding
against the company. These claims are being challenged by the directors and so there is significant uncertainty over their
outcome. For this reason no provision has been included in the balance sheet.
20.
SHARE CAPITAL
Allotted, called up and fully paid:
2015
No
19,000,000
19,000,000
2014
No
4,500,000
4,500,000
On 27 May 2015 a debt of 6,500,000 was converted to share capital by the issue of 6,500,000 1 Ordinary Shares at 1
per share. A further 3.000,000 1 Ordinary Shares were also issued on 27 May 2015 at 1.67 per share for cash
consideration. On 12 June 2015 a further 5,000,000 1 Ordinary Shares were issued at 1 per share for cash
consideration.
ZSA
-17-
cx
22.
23.
Share capital
500,000
Share premium
account
908,681
1,408,681
(22,886,464)
(22,886,464)
4,000,000
4,000,000
4,500,000
-
4,000,000
(21,977,783)
(2,012,342)
8,000,000
14,500,000
2,000,000
16,500,000
19.000,000
6,000,000
(23,990,125)
1,009,875
(13,477,783)
(2,012,342)
Operating loss
Amortisation and impairment
Depreciation
Loss/(Profit) on disposal of fixed assets
(lncrease)/decrease in stocks
Increase in debtors
Increase in creditors
2015
(12,640,676)
3,514,380
1,346,723
786
(208,033)
(3,722,427)
1,632,490
2014
(17,841,564)
3,720,006
1,391,878
(5,549)
804,070
(2,650,860)
7,043,675
(10,076,757)
(7,538,344)
2015
(1,175,375)
2014
11,854,158
4,274,581
(10,967,560)
98,595
(3,802,581)
3,564,378
7,637,353
(2,892,825)
(16,814,369)
11,201,731
(21,555,686)
(19,707,194)
(1,848,492)
(10,353,955)
(21,555,686)
-18-
(75,437)
325,446
139,726
Cash flows
Net cash:
Cash in hand and at bank
12,113,047
(1,175,375)
Debt:
Debt due with 1 year
Debt due after 1 year
Finance lease agreements
(222,984)
(33,156,510)
(289,239)
4,600,027
139,726
(33,668,733)
(21,555,686)
Net debt
Other changes
At
30 Jun2015
10,937,672
(777,016)
8,414,369
(1,000,000)
(20,142,114)
(149,513)
4,739,753
7,637,353
(21,291,627)
3,564,378
7,637,353
(10,353,955)
Other changes in net debt relate to the conversion of 6,500,000 debt into share capital (see note 20) and the reversal of
914,369 loan interest previously accrued (see note 19).
25.
^fl- \o f^c.
26.
off