Auditors raise doubts over Sky Blue accounts
The auditors of Coventry City Football Club, BDO, have raised doubts over the club's accounts. They said there was a 'fundamental uncertainty' over a series of key issues. Auditor Julian Rye stated in his report, 'These conditions ... indicate the existence of a fundamental uncertainty which may cast significant doubt over the company's ability to continue as a going concern.'
The club actually increased turnover across the year to 31 May, depite a fall in matchday income, but failed to cut staff costs and saw pre-tax losses increase to £6.7m. Turnover increased from £9.3m to £10.3m, but the profit on transfers fell from £4.7m to £72,209. This reflected the fact that most of the best players had already been sold.
Nevertheless, the number of players and management staff actually increased from 94 to 108 and total staff costs rose from £10.3m to £10.4m. The auditors say uncertainty exists over the directors' ability to make cuts to payroll costs.
Income from match receipts fell from £4.4m to £3.9m as disgruntled fans stayed away, but revenue from commercial activities rose from £4.9m to £6.3m.
What is particularly worrying is that net liabilities have increased from £46.2m to £54.9m. Coventry City FC has practically no assets and have defaulted on the rent at Ricoh Arena.
The company has received written confirmation from a group of shareholders and other significant funders on their intention to support the company, but auditors said there was no 'contractual certainty' over this.