RNS Number:5124I
Southampton Leisure Holdings PLC
26 November 2007
Southampton Leisure Holdings Plc
Annual Report and Accounts 2007
Chairman's statement
On behalf of the Board of Southampton Leisure Holdings Plc ("SLH"), I am pleased
to present my second and, I anticipate, my last Annual Report for the period to
30 June 2007.
The anticipated investment post the June 2006 Plc Board changes, sadly, did not
materialise and subsequently your Board have worked tirelessly these past 12
months to secure new investment from alternative sources. We have also
experienced further changes at both Plc and Football Club boards but, despite
these off field distractions, I report an improved financial performance. The
results year-on-year show a modest reduction in turnover from #25.7m to #23.2m
but losses have reduced from #3.3m to #1.0m. The Group was cash positive in the
period with net debt reducing from #21.4m to #19.2m.
Although profit on player trading was reduced from #11.2m to #7.5m, we were able
to reduce losses by substantially reducing operating costs and improving fiscal
control.
However, we are now some five months into the current financial year and we have
still to secure new investment. This presents serious financial challenges which
impact on both our football team and the wider business.
On the playing side, the team performed well by reaching the playoffs but
unfortunately lost on penalties to Derby in a semi final. The close season has
seen Southampton Football Club involved in much transfer activity and our
manager George Burley has developed a playing squad which he believes
is stronger than last year's team, in both depth and quality. We have
experienced a mixed start to this year's campaign, as players get used to each
other but, by general consensus, we are playing attractive, attacking football
and currently lying twelfth in the Championship, just four points adrift of a
playoff position and eight off automatic promotion. We hope to be in a position
where we will be able to provide our manager with funds for player purchases
during the January transfer window but that depends on whether we can secure new
investment. In the absence of significant new investment, the directors would
require to trade players during the January transfer window in order to generate
funds for use as working capital during the remainder of the financial year.
Further cost reduction measures would also be taken. The sale of players in
January would, in the opinion of the directors, be likely to have an adverse
impact on the Company's ability to achieve promotion to the Premier League.
We are in a market where practically all Championship Clubs are either for sale
or seeking major investment from external sources, so competition for
re-financing is intense. The face of football is changing fast, as the rewards
of the Premiership have grown whereby there is now such a wide gulf between
Premier League revenue and the Championship. It is recognised that to gain
promotion and compete at the highest level, SLH will require substantial
funding, especially as this year we do not have the benefit of a parachute
payment, this effectively means that we start the year #6.7m worse off than our
first two years in the Championship.
We have had several expressions of interest from both private high net worth
individuals as well as institutional funds exploring the option of investing in
the football sector. All have been vigorously followed up and hundreds of hours
of executive and my own time spent on exploring every opportunity. As you may
have seen in the press, SLH has received a formal indicative offer from a
London-based institution, which could result in the largest investment ever
being made in SLH since listing on the London Stock Exchange in 1994. The Board
are continuing discussions and the opinions of major shareholders are
being sought.
I can confirm that this is the only formal indicative approach that SLH has
received.
If this investment goes ahead it will greatly enhance our ability to return to
Premiership Football and compete at the highest level.
The Board hopes that the external funding referred to is made available to us
and that we will not need to sell assets or make further cuts to our operating
infrastructure. For this to happen, support for the investment proposal that is
on the table is clearly desirable.
Conclusion
This has been an extremely challenging period and on behalf of all stakeholders
in SLH, I would especially like to thank our dedicated staff, fans and friends
in the community who have continued to play a significant role in helping the
Board operate in the best interests of all associated with our great club. The
highlights of your new Board's first full year, have seen us narrowly miss out
on promotion to the Premiership, positive cash flow, a reduction of debt and the
introduction of a London based financial institution prepared, subject to due
diligence and shareholder approval, to make the largest ever investment that SLH
has yet seen, since listing on the London Stock Exchange in 1994.
When I was invited to chair the Plc Board, I made it clear that my term would be
for one year only but, when the expected investment did not materialise, the
majority of my Board colleagues requested I continue and assist with the task of
attracting investors. This has been achieved with a substantial indicative offer
on the table for our shareholders to consider and now is the time for me to
consider relinquishing the chair. I therefore propose to stand down as soon as a
suitable replacement can be found and a seamless handover can be achieved.
Accordingly, I do not anticipate that I will be presenting the Chairman's
statement covering the results of SLH's current year on behalf of the Board next
year.
It has been variously a challenging, demanding, disappointing and rewarding
period of my life but never dull. The infrastructure and opportunity
is now available whereby our club can challenge and compete at the highest
level.
Finally, I would like to thank all our employees for their commitment,
flexibility and loyalty, and for carrying out their duties with integrity and
good humour. You are the backbone of our Club and our best ambassadors.
Kenneth Dulieu
Chairman
26 November 2007
Chief Executive's review
Results
Southampton Leisure Holdings Plc ("SLH", the "Company") achieved highly
creditable financial results against a background of unfortunately acrimonious
Board-level disputes concerning the continuing absence of funding that the
Chairman and Executive Directors had been given to believe would be injected
into the Company.
Notwithstanding the above, the business was cash positive over the financial
year and there was a reduction of #2.2m in the year-on-year net debt position,
which stood at #19.2m at the year end.
Turnover of #23.2m was #2.5m down on last year but this reduction was much
smaller than feared. Sales were buoyed-up by imaginative season and matchday
ticket promotions and proved to be substantially more resilient than had been
expected in the second consecutive season following relegation from the Premier
League.
Operating costs and administrative expenses were cut by #5.8m during the course
of the year. Operating losses were very substantially reduced and the Company
recorded a modest pre-tax loss of #1m after player trading, which represented a
substantial improvement upon the #3.3m pre-tax loss reported the previous year.
Operating losses of #4.0m in the year to 30 June 2007 were #3.2m better than in
the 13 month period ended 30 June 2006 and were more than offset by profits of
#7.5m arising from the disposal of players.
Football matters
Given that the performance of the Company as a business is inextricably linked
to the success or otherwise of the Club on the field of play, every practical
endeavour was made to provide the Football Manager, George Burley, with the
players and other resources necessary to enable his first-team squad to compete
as genuine contenders for promotion to the Premier League.
The effect of those endeavours, which included the acquisition of six new
players for cumulative transfer fees in excess of #6m and successfully resisting
the sale of Gareth Bale during the January 2007 player transfer window, was to
assist the team to finish in sixth place in the Coca-Cola Championship. It was
disappointing that, having qualified for the play-off competition by virtue of
its sixth place finish, the team lost out by the narrowest of margins on
reaching the first ever play off final to be staged at the new Wembley Stadium.
The loss of that opportunity was eventually sustained after a penalty shoot-out
and extra time in a highly competitive tie played over two legs against Derby
County, who went on to win the play-off final and promotion to the Premier
League.
Whilst the outcome of Saints' 2006/07 season was disappointing, it was
significantly better than the twelfth place finish the Club achieved in the
Coca-Cola Championship the previous season. There can be little doubt that, by
the end of his first full season as Manager of SFC, George Burley and his
coaching staff had fashioned a team able to compete with the best in the
Championship.
It is very regrettable that for various reasons and, not least, the need to
'balance the books' in the continuing absence of long-promised new investment;
the Club had no recourse but to sell a number of outstanding players, including
Gareth Bale, Chris Baird and Kenwyne Jones, before the new 2007/08 season kicked
off. Players of their quality would undoubtedly have been of immense help in
Saints' ongoing endeavours to win promotion. It is disappointing that the Club
was not in a position to retain these players but it should be made clear that
they were all determined to move elsewhere. Consolation can be taken from the
very substantial fees negotiated for their transfers. These fees totalling #14m
plus contingency payments which could result in further sums up to a total of
#5m being received, represented outstanding value for the Company.
Just as former favourites such as Bale, Baird and Jones have moved on, so new
players, including Youssef Safri, Wayne Thomas and Stern John have been signed
and new heroes such as Andrew Surman have begun to emerge. After a difficult
start to the new 2007/08 season, with injuries being sustained
by an inordinately high number of key players, George Burley now sees signs that
his first-team squad once again has many of the qualities necessary to make
a realistic bid for promotion to the Premier League this year, despite very
recent results.
The Company remained as committed as ever to its Youth Academy operations
throughout the financial year and, by comparison with fellow Coca-Cola
Championship clubs was, once again, the biggest and, arguably, most effective
investor in the development of young players.
Investment
When it became apparent that funding that the Board had been given to expect
from certain parties could not be relied upon, the Chairman and I undertook
to pursue substantial new investment in conjunction with the Company's
stockbrokers and nominated advisers, Seymour Pierce.
Resulting from that activity and inaccurate press speculation to the effect that
the Company was engaged in formal discussions that might lead to a takeover bid
for SLH by Paul Allen, the Takeover Panel deemed the Company to be in an "Offer
Period" with effect from 30 April 2007. It has remained in an offer period ever
since.
In the meantime, discussions have been undertaken, both directly and indirectly
and in varying degrees of detail, with numerous potential investors, including
private individuals, consortia, proposed consortia and financial institutions.
The Board announced on 22 October 2007 that it had received and agreed
in principle to proceed with an indicative offer from the UK-based investment
company, SISU Capital Limited ("SISU"). The principal terms of SISU's indicative
offer were subsequently communicated to the Company's principal shareholders and
mentioned in regulatory announcements via the London Stock Exchange. No other
potential investor has pursued their interest to the point of either making or
preparing a formal indicative offer of investment, underpinned by proof of
funds.
The proposed investment by SISU will not proceed unless it is approved in the
first instance by the Company's major shareholders, Rupert Lowe, Michael Wilde
and Leon Crouch representing at least 14.2m ordinary shares in the Company, and,
subsequently, by a resolution to that effect being passed at an Extraordinary
General Meeting of shareholders with not less than 75% of votes being cast in
favour of SISU's proposal.
There are no longer any discussions in progress with any potential investor
other than SISU.
Outlook
The relegation of SFC from the Premier League in 2005 and the subsequent failure
to win back promotion to that level have shaped and continue to exert an
overwhelming influence on the state of the Company's finances, as indicated in
the table below.
12 months 13 months 12 months
to 31 May to 30 June to 30 June
2005 2006 2007
#m #m #m
Turnover 44.8 25.7 23.2
Operating costs (43.0) (32.9) (27.2)
Operating profit/ 1.8 (7.2) (4.0)
(loss)
Net player trading (2.7) 5.9 5.0
Net interest (2.0) (2.0) (2.0)
Exceptional items 3.1 - -
Profit/(loss) before 0.2 (3.3) (1.0)
tax
There has been a #21.6m reduction in annual turnover since the club was
relegated at the end of the 2004/05 football season. The major element of this
reduction has been a #12m per annum decline in broadcasting revenue.
Unfortunately and unavoidably, this very substantial decline is now being
exacerbated by the further loss in the current 2007/08 financial year of the
#6.7m broadcasting revenue "parachute payment" which was paid to the Club by the
Premier League in the first and second seasons following relegation.
It is unrealistic to expect this further reduction in turnover to be compensated
by improvements in other major revenue streams, such as season and match day
ticket and corporate hospitality sales, in Saints' third consecutive season in
the Coca-Cola Championship.
Operating costs have been cut by #15.8m, from #43m to #27.2m per annum since
relegation. However, because of the scale of revenue decline over the same
period, the respective cost cutting was insufficient to enable the Company to
avoid substantial operating losses.
Operating losses of #4.0m in the year to 30 June 2007 and #7.2m the previous
year were largely offset by profits on player trading and, in particular, the
sale of players such as Walcott and Bale.
Whilst the reduction of #2.2m in net indebtedness in the year to 30 June 2007
was encouraging, the Group's gross debt of #24m remained excessive in relation
to its net asset value of #8.1m at that date.
Against this background, the business has very restricted borrowing capacity.
Accordingly, in the absence of new investment, further cost cutting and player
sales will be essential to ensure the Company can continue to function within
its overdraft facilities, meet its payment obligations in relation to the
stadium bond and thereby maintain the support of its major creditors.
These creditors are currently supporting the operations of the business but
Barclays have intimated they will not passively sit by and watch the liquidity
position of the Company deteriorate over the coming year.
The Company continues to trade in the current financial year, ending 30 June
2008, broadly in line with the directors' expectations. However, unless and
until there is significant new investment, the directors will have no recourse
but to continue cutting costs and trading players in order to generate funds for
use as working capital and to offset operational losses before player trading.
Ongoing cost cutting and player sales will undoubtedly diminish SFC's prospects
of achieving promotion to the Premier League. Moreover, maintaining the Company
as a going concern by such means is an inherently time-limited strategy. New
investment is therefore required as a matter of considerable urgency.
Jim Hone
Chief Executive
26 November 2007
Financial review
Financial highlights
2007 2006
#m #m
Turnover 23.2 25.7
Operating loss before
player trading (4.0) (7.2)
Player trading 5.0 5.9
Loss before taxation (1.0) (3.3)
Turnover
2007 2006
#m #m
Broadcasting 8.1 8.1
Matchday 10.5 11.5
Commercial 4.5 6.0
Property 0.1 0.1
23.2 25.7
Operating costs
2007 2006
#m #m
Cost of sales 21.5 26.0
Depreciation 1.9 2.3
Goodwill amortisation 0.8 0.1
Property revaluation (0.3) -
Administrative expenses 3.3 4.5
27.2 32.9
Player trading
2007 2006
#m #m
Amortisation (2.5) (5.3)
Profit on disposal of players 7.5 11.2
5.0 5.9
Balance sheet
2007 2006
#m #m
Fixed assets 40.3 39.6
Net debt (19.2) (21.4)
Net assets 8.1 8.8
Summary
The financial statements have been prepared for the 12 months ended 30 June
2007, and the comparative figures are for a 13 month period ended 30 June 2006.
The comparative figures include the additional month of June 2005; the impact of
this is not significant as no football was played in that month. The previous
period's consolidated results also include the results of Saints in the
Community, a charitable trust with a separate board of trustees; however,
following agreement with the Charity Commission the results this year have not
been consolidated into the Group's accounts. For the 13 months ended 30 June
2006 Saints in the Community had a turnover of #686,000 and a retained loss of
#4,000.
The financial results for 2006/07 are based on Southampton Football Club playing
its football in the Coca-Cola Championship for the second year running. The Club
benefited from receiving a parachute payment of #6.7m from the Premier League in
2007; however, turnover remains considerably lower than when the Club was in the
Premier League and achieved turnover of #44m in the 2004/05 season and #49m in
the 2003/04 season.
The results show a modest reduction in turnover from #25.7m to #23.2m and a
reduced loss before taxation from #3.3m to #1.0m. The Group was cash positive in
the period with net debt reducing from #21.4m to #19.2m.
The Club finished the 2006/07 season in sixth place in the Championship, and
lost in a penalty shoot out to Derby County in the play off semi-final. This
compares with twelfth place in the 2005/06 season.
The Club loses its parachute payment for the 2007/08 season and accordingly
turnover is expected to further reduce. The turnover reduction has necessitated
the sale of a number of players since the year end in order to generate
sufficient cash to ensure the Group can live within its working capital
facilities and at the same time field a playing squad capable of challenging for
promotion to the Premier League.
Broadcasting income
* Broadcasting income of #8.1m remains at a level comparable with the previous
year. The majority of this relates to the parachute payment from the Premier
League. The parachute payment lasts for two seasons only, so no parachute
payment will be received in the financial year to 30 June 2008.
* The Premier League has recently agreed to make a 'solidarity' payment to the
Football League for the next three seasons. The Club's share of this will be
#1.3m for the 2007/08 season.
* The Club also receives broadcasting income as a result of its participation in
the Coca-Cola Championship. This amounted to #1.0m in the period.
* Other broadcasting income is received from TV facility fees for matches played
in the Coca-Cola Championship and the FA Cup, and for income generated from
the Company's radio station 'The Saint.'
Matchday income
* Matchday attendances remained at a level consistent with the previous year:
averaging 23,849 compared to 23,701 in the 2005/06 season. Season ticket sales
were down on the previous year at 11,800 compared to 13,500. It is pleasing to
note that season ticket sales for the 2007/08 season have exceeded 13,000.
* Ticket income from league matches reduced from #9.1m to #8.8m - largely due to
reduced price ticket offers for schools and clubs associated with the Club.
* Cup receipts reduced from #0.7m to #0.3m. Cup income was disappointing with
early exits in both the FA Cup and the Carling Cup.
Commercial income
* Commercial income reduced by #1.5m to #4.5m. The main areas impacted were
central commercial League revenue and a reduction in Club sponsorship income.
Club merchandising income increased from #1.9m to #2.0m, largely attributable
to the launch of a new home kit in the 2006/07 season.
* The comparative figures include #0.7m from Saints in the Community which is
now excluded from the Group accounts.
* The Club continued to expand its non-matchday activities, and St Mary's
Stadium has now established itself as a leading venue for conferences and
exhibitions in the South of England.
Operating costs
* The very substantial drop in revenue since the Club's participation in the
Premier League has meant the Club has continued to make reductions in its cost
base. Total operating costs have been reduced by 17% from #32.9m to #27.2m,
and this in turn has led to a reduction in the operating loss before player
trading from #7.2m to #4.0m.
* The primary reduction was in player and coaches' wages. Player and coaches'
wages reduced from #13.6m (53% of turnover) to #10.5m (45% of turnover). The
reduction in the level of wages was possible following a reduction in the
overall size of the playing squad and the transfer of high wage earners.
* Operating costs this year include a charge for goodwill amortisation of #0.8m
which compares with a charge of #0.1m in the preceding period. The extra
charge this year results from the sale of the radio station post year end.
* The surplus on revaluation of the Group's investment property, Jackson's Farm,
of #0.3m has been credited against administrative expenses.
Player trading
* The net income generated from player trading amounted to #5.0m and compares
with net income of #5.9m in the prior period.
* The profit on disposal of players #7.5m during the period arises primarily
from the sale of Bale to Spurs for an initial fee of #5.0m, as well as the
sales of Cranie, Higginbotham, Blackstock and Van Damme. A further #1.0m was
received from Arsenal following Walcott completing ten starts. The Club can
potentially receive a further amount of up to #11m on the sale of Walcott and
Bale, this amount due is contingent on club appearances, league position and
international appearances.
* Six new players were added to the squad during the period at a cost of #6.1m.
These were Wright-Phillips, Pele, Davis, Skacel, Viafara and Idiakez.
* Following the sale of a number of players and a reduction in the squad playing
size, player amortisation has reduced from #5.3m to #2.5m.
Dividend
The Directors are not proposing a dividend (2006: nil).
Balance sheet
* Fixed assets have increased marginally from #39.6m to #40.3m. The value of
player registrations increasing from #3.0m to #5.4m and tangible fixed assets
reducing from #35.9m to #34.9m.
* The Group's investment property Jackson's Farm was revalued in October 2007 at
#1.1m. This is #0.3m higher than the previous valuation in August 2004.
* It is pleasing to report that despite the lower turnover level and the
operating loss incurred, the Group was able to generate cash of #2.0m during
the period and subsequently reduce the level of debt to #19.2m at the year
end.
Post balance sheet events
* During July 2007 the Group sold two of its subsidiary companies, Southampton
Insurance Services and Saints Radio Ltd. The sale of the subsidiaries allows
the Group to focus on its core activities. The insurance services subsidiary
in the year ended 30 June 2007 recorded a profit of #19,000 on a turnover of
#145,000.
The business was sold to its management for a consideration of #150,000. The
radio station continued to be loss making and in the year ended 30 June 2007
recorded a loss of #218,000 on a turnover of #265,000. The station was sold in
July 2007 for a nominal consideration.
* Since the period end and during the August 2007 transfer window, the Club has
purchased and sold a number of players, giving rise to net transfer income of
#7.0m.
International Financial Reporting Standards
The Directors are aware that the December 2007 interims and June 2008 financial
statements will need to be prepared under International Financial Reporting
Standards (IFRS) as adopted for use in the European Union. The conversion
process to IFRS is currently under consideration.
David Jones
Finance Director
26 November 2007
Consolidated profit and loss account
Year ended 30 June 2007
Operations 12 months 13 months
excluding Player ended ended
player trading trading* 30 June 30 June
2007 2007 2007 2006
Note #'000 #'000 #'000 #'000
Turnover 1 23,269 - 23,269 25,696
Cost of sales 2 (21,535) (2,566) (24,101) (31,363)
Gross profit/ 2 1,734 (2,566) (832) (5,667)
(loss)
Administrative expenses (5,658) - (5,658) (6,861)
Operating loss 3 (3,924) (2,566) (6,490) (12,528)
Profit on disposal of - 7,524 7,524 11,241
players
(Loss)/profit before interest and (3,924) 4,958 1,034 (1,287)
taxation
Net interest payable 4 (2,004) (2,008)
Loss on ordinary activities before (970) (3,295)
taxation
Tax on loss on ordinary activities 7 284 953
Loss on ordinary activities after (686) (2,342)
taxation
Basic loss per share 9 (2.44)p (8.34)p
Diluted loss per share 9 (2.44)p (8.34)p
* Player trading represents the amortisation of registrations and the profit or
loss on disposal of registrations.
All amounts derive from continuing activities.
There are no recognised gains or losses for the current financial year and
preceding financial year other than as stated in the profit and loss account.
Accordingly, a statement of total recognised gains and losses has not been
presented.
There is no material difference between the results reported above and the
results on an unmodified historical cost basis. Accordingly, a note of
historical cost profits and losses has not been presented.
Consolidated and company balance sheet
At 30 June 2007
Group Company
30 June 30 June 30 June 30 June
2007 2006 2007 2006
Note #'000 #'000 #'000 #'000
Fixed assets
Intangible assets 10 5,402 3,757 - -
Tangible assets 11 34,945 35,866 4,116 4,065
Investments 12 - - 8,440 10,191
40,347 39,623 12,556 14,256
Current assets
Stocks 13 383 404 - -
Debtors 14 2,936 6,466 9,520 9,257
Investments 15 2,500 2,480 - -
Cash at bank and in hand 2,296 2,220 26 437
8,115 11,570 9,546 9,694
Creditors: amounts falling due 16 (10,972) (11,294) (5,269) (6,439)
within one year
Net current (liabilities)/ (2,857) 276 4,277 3,255
assets
Total assets less current 37,490 39,899 16,833 17,511
liabilities
Creditors: amounts falling due
after more than one year 17 (27,449) (28,555) - -
Provisions for liabilities 19 (1,973) (2,590) (54) -
Net assets 8,068 8,754 16,779 17,511
Capital and reserves
Share capital 20 1,405 1,405 1,405 1,405
Share premium account 21 3,340 3,340 3,340 3,340
Other reserves 21 1,050 1,050 7,370 7,560
Profit and loss account 21 2,273 2,959 4,664 5,206
Shareholders' funds 22 8,068 8,754 16,779 17,511
These financial statements were approved by the Board of Directors and
authorised for issue on 26 November 2007.
Signed on behalf of the Board of Directors.
D A Jones
Director
Group cash flow statement
Year ended 30 June 2007
12 months ended 13 months ended
30 June 2007 30 June 2006
Note #'000 #'000 #'000 #'000
Net cash inflow/(outflow) from 26(a) 466 (7,037)
operating activities
Returns on investments and
servicing of finance
Interest paid (2,135) (2,116)
Interest element of finance lease (19) -
rental
Interest received 150 251
Net cash outflow from returns on
investments and servicing of (2,004) (1,865)
finance
Capital expenditure and financial
investment
Payments to acquire tangible fixed (184) (1,986)
assets
Proceeds on disposal of players' 11,167 15,902
registrations
Payments to acquire players' (6,672) (4,883)
registrations
Net cash inflow from capital
expenditure
and financial investment 4,311 9,033
Tax paid - (303)
Dividends paid - (140)
Cash inflow/(outflow) before use
of liquid resources and financing 2,773 (312)
Management of liquid resources
Purchase of current asset (2,500) -
investments
Sale of current asset investments 2,480 -
Net cash outflow from management of (20) -
liquid resources
Financing
New loan - 265
Repayment of capital element of (78) -
finance lease
Repayment of loans (687) (560)
Net cash outflow from financing (765) (295)
Increase/(decrease) in cash in the 26(b) 1,988 (607)
year
Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash in the 1,988 (607)
year
Cash outflow from decrease in debt
and lease financing 26(b) 765 295
Cash outflow from increase in 26(b) 20 -
liquid resources
Change in net debt resulting from
cash flows in the year 2,773 (312)
New finance leases (468) -
Amortisation of finance costs (33) (37)
Movement in net debt in the year 2,272 (349)
Net debt at 1 July (21,464) (21,115)
Net debt at 30 June 2007 26(b) (19,192) (21,464)
1. Basis of preparation
The financial information on the Group set out above does not constitute
'statutory accounts' within the meaning of Section 240 of the Companies Act
1985. The financial information for the period ended 30 June 2006 has been
extracted from the Group's audited consolidated statutory accounts for the
period ended 30 June 2006, Statutory accounts for 2006 have been delivered to
the Registrar of Companies for England & Wales. The auditors have reported on
these accounts. Their report was unqualified and did not contain statements
under Section 287(2) or (3) of the Companies Act 1985. The financial information
for the year ended 30 June 2007 has been extracted from the Group's audited
consolidated statutory accounts for the year ended 30 June 2007. Statutory
accounts for 2007 will be delivered to the Registrar of Companies for England &
Wales in due course. The statutory accounts included, in the Statement of
Accounting Policies, a paragraph on Going Concern which is set out below.
Going concern
The Group currently manages its working capital requirement through a bank
overdraft facility which is repayable on demand. The current facility is due to
be reviewed in June 2008.
The Directors have prepared cash flow forecasts for the 12 months to November
2008, which include the sale of various assets and rely upon the continued
support of the bank. On this basis the Directors consider it appropriate to
prepare the accounts on the going concern basis, although inherently there can
be no certainty with these matters.
In the event that the Group's bankers do not renew the facility, alternative
financing would need to be found for the Group to continue as a going concern,
and the Directors continue to explore opportunities for finance from both
external and internal sources.
The accounts do not include any adjustments that would result if the Group is
unable to continue as a going concern.
The auditors have reported on those accounts; their report was unqualified and
did not contain statements under Section 237 (2) or (3) of the Companies Act
1985. However, it did contain an emphasis of matter paragraph which drew
attention to the material uncertainties surrounding the going concern
assumptions as set out above.
Enquiries:
Southampton Leisure Holdings 0845 688 9448
Jim Hone, CEO
Seymour Pierce Limited 020 7107 8000
Roger Clement/Sarah Jacobs
Square 1 Consulting 020 7929 5599
David Bick
This information is provided by RNS
The company news service from the London Stock Exchange
END
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