Leeds United Full Board Meeting Back

8/9/2019 Leeds United Full Board Meeting Back

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Leeds UnitedMain Club Sponsor Proposal

LUFC Board PackMeeting 18thSeptember 2013


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Financials


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Key Statistics 12/13

Average home league attendance21,572

Full season tickets sold - 11,156

Half season tickets sold345

Average corporate attendance - 839

Total Player Expenditure - 13.2 million

Net revenue player sales - 3.9 million

Exceptional items:

Police refund - 1.2 million

Pension - 401,000

Preference shares redemption - 907,000


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Summary of actual results 2012/13

Loss after tax 15% smaller than budgeted

Revenue 6% lower than budget, but gross margin of 78.9%

better than budget (73.5%)

Wages & salaries 10% more then budget mainly due to first

team salaries & change of control bonus

Administration costs 2% lower than budget


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Profit & loss for the 12 months ending 30th

June 2013 - LUFC

Year to date Prior Year

Actual Budget Variance Actual Variance

000's 000's 000's 000's 000's

Turnover 27,717 29,665 (1,948) 31,081 (3,364)

Cost of sales 5,844 7,858 2,014 5,582 (262)

Gross profit 21,873 21,806 67 25,499 (3,626)

Gross margin 78.9% 73.5% 5.4% 82.0% (3.1%)

Wages and salaries 20,004 18,101 (1,904) 17,828 (2,176)

Administrative expenses 8,647 8,818 171 8,536 (111)

Total expenses 28,652 26,919 (1,733) 26,364 (2,288)

Operating profit/(loss) (6,779) (5,113) (1,666) (865) (5,914)

Profit/(loss) on sale of players 3,907 0 3,907 3,698 209

Profit/(loss) on sale of fixed assets 2 0 2 0 2

Interest received 0 0 0 11 (11)

Financing costs

Depreciation - Fixed Assets 1,431 1,665 234 1,188 (243)

Depreciation - Trademarks 1 1 0 1 0

Amortisation - Players 1,817 1,104 (713) 1,174 (643)

Amortisation - COA 120 120 0 120 0

Interest paid 1,244 62 (1,182) 90 (1,154)

Exceptional items

Non trading expenses 401 0 (401) 0 (401)

Non trading income 1,152 0 1,152 0 1,152

Profit/(loss) before tax (6,731) (8,064) 1,333 272 (7,003)

Deferred tax movement 104 0 (104) (45) (149)

Profit/(loss) after tax (6,836) (8,064) 1,229 317 (7,152)


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Profit & loss for the 12 months ending 30th

June 2013 - LCH

Year to date Prior Year

Actual Actual Variance

000's 000's 000's

Turnover 29,623 33,097 (3,474)

Cost of sales 6,190 6,559 369

Gross profit 23,433 26,538 3,105

Gross margin 79.1% 80.2% (3.1%)

Wages and salaries 20,298 18,741 (1,557)

Administrative expenses 9,254 9,004 (250)

Total expenses 29,552 27,745 1,807)

Operating profit/ loss) 6,119) 1,207) 4,912)

Profit/(loss) on sale of players 3,907 3,699 208

Profit/(loss) on sale of fixed assets 2 0 2

Interest received 0 11 (11)

Financing costs

Depreciation - Fixed Assets 1,431 940 (491)Depreciation - Pavilion 278 604 326

Depreciation - Yorkshire Radio 24 24 0

Depreciation - Trademarks 1 1 0

Amortisation - Players 1,817 1,173 (644)

Amortisation - COA 194 194 0

Amortisation - Carriage Agreement 50 50 0

Interest paid 1,249 98 (1,151)

Profit/ loss) before tax 7,254) 581) 2,427)

Deferred tax movement 104 (45) (149)

Profit/ loss) after tax 7,358) 536) 2,278)


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Key assumptions Budget 13/14

2013 / 14 (budget) 2012/13 (actual)

Av Home League

Attendance

26,500 21,572

Season tickets 12,500 11,156

Corporate sales 889 839

Match Categories 6 As

11 Bs

6 Cs

10 As

11 Bs

2 Cs

Player Wages 10m (currently 14m) GBP 13.2m

Exceptional Items Further police refund -400,000

Rates rebate - 250,000

Police refund - 1.2mPension - 401,000

Pref shares - 907,000


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Budget 13/14 - LUFC

2013/14 Prior Year

Budget Actual Variance

000's 000's 000's

Turnover 29,520 28,869 651

Cost of sales 5,862 5,844 18

Gross profit 23,658 23,025 633

Gross margin 80.1% 79.8% 0.4%


Administrative expenses 7,886 9,048 (1,162)

Total expenses 23,460 29,052 5,592)

Operating profit/ loss) 198 6,027) 6,225

Profit/(loss) on sale of players 0 3,907 (3,907)

Profit/(loss) on sale of fixed assets 0 2 (2)

Financing costs

Depreciation - Fixed Assets 1,400 1,431 31

Depreciation - Trademarks 1 1 0



Interest paid 178 1,244 1,066

Profit/ loss) before tax 3,690) 6,731) 3,041

Deferred tax movement 0 104 (104)

Profit/ loss) after tax 3,690) 6,835) 3,145

Needs updating from Fa


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Budget 13/14 - Consolidated

2013/14 Prior Year

Budget Actual Variance

000's 000's 000's

Turnover 30,077 29,623 454

Cost of sales 6,190 6,190 0

Gross profit 23,887 23,433 454

Gross margin 79.4% 79.1% 0.3%


Administrative expenses 8,031 9,254 (1,223)

Total expenses 23,802 29,552 5,750)

Operating profit/ loss) 85 6,119) 6,204

Profit/(loss) on sale of players 0 3,907 (3,907)

Profit/(loss) on sale of fixed assets 0 2 (2)

Financing costs

Depreciation - Fixed Assets 1,400 1,431 31Depreciation - Trademarks 1 1 0

Depreciation - Pavilion 278 278 0

Depreciation - Yorkshire Radio 2 24 22



Amortisation - carriage licence 4 50 46

Interest paid 178 1,249 1,071

Profit/ loss) before tax 4,087) 7,254) 3,167

Deferred tax movement 0 104 (104)

Profit/ loss) after tax 4,087) 7,358) 3,271

Needs updating from Fay


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Variance analysis

Ticket office, Retail and Compass catering have a favourable variance alldue to an increase in attendance to 26,500 from 21,572

Central and First team both have favourable variances due to a decreasein salaries

Cup matches has an adverse variance based on a conservative budgetmore could be achieved depending on performance

Revenue and gross profit are approximately the same from 2012/13actual to 2013/14 budget

Wages & salaries are down by 29% from 2012/13 actual to 2013/14budget

Administration costs have been decreased by 16% for the 2013/14 budget


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2013/14 Projected cash flow requirement

Projected cash flow based on three material

assumption:

Attendance at 26,500 per game Players wages at 14.5 million

No external funding included

Total cumulative cash flow required c4 million

Average attendance will be challenging

Cash requirement may increase to c 5 to 7m


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Cash flow overviewJul13 - Jun14 (000)

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Total

Total inflows 3,213.1 4,559.1 1,965.5 1,599.8 2,593.4 2,880.7 3,163.3 1,877.7 3,578.3 2,871.3 3,462.4 3,702.0 35,466.4

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Total

Total outflows (5,712.6) (3,658.1) (3,639.2) (2,406.0) (3,178.1) (3,245.2) (2,529.3) (2,796.7) (2,879.4) (2,401.1) (4,177.0) (2,836.0) (39,458.6)

Net cash inflow/ (outflow) (2,499.5) 901.0 (1,673.6) (806.3) (584.7) (364.5) 634.0 (919.0) 698.9 470.2 (714.7) 866.0 (3,992.2)

Opening Balance (actual cash) 229.0 (2,270.5) (1,369.5) (3,043.1) (3,849.4) (4,434.1) (4,798.7) (4,164.6) (5,083.6) (4,384.8) (3,914.6) (4,629.2)

Closing Cash Balance (2,270.5) (1,369.5) (3,043.1) (3,849.4) (4,434.1) (4,798.7) (4,164.6) (5,083.6) (4,384.8) (3,914.6) (4,629.2) (3,763.2)

Needs updating from Fay


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Summary of loan monies

To date, the owners have provided GBP 17.5m of loans to LUFC tosupport the clubs cash flow position

The amount of support provided has been in excess of what wasanticipated and reflects the fact that the wage bill was increased andturnover was less than expected.

Seeking Board approval to meet future cash flow shortfall on pro-ratabasis

Distribution of existing debt % stake Debt

GFH Capital 53.50% 9.38

IIB 10.00% 1.75

Envest 36.00% 6.31

Al Khal 0.50% 0.09100.00% 17.54

Distribution of future requirement % stake Debt

GFH Capital 53.50% 2.14

IIB 10.00% 0.4

Envest 36.00% 1.44

Al Khal 0.50% 0.02

100.00% 4


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Operational Issues


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Update on Management Structure

Shaun Harvey

SH resigned.

Placed on Garden Leave

Outstanding financial and employment issues with SH

Ken BatesKB resigned as chairman on 30th June and become president

Termination of KB as president due to breach of his services contract

Retrospective Board ratification requested

Gwyn Williams

GW was made redundant from this position as Academy head and technical

director

On review of his conduct GW was then dismissed on notice for gross misconduct (

pornography and breach of confidentiality)

Seek board ratification on changes


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Update on Management Structure

David Haigh

Following placing of SH on garden leave DH allocated as interim MD

DH has good relationships with staff and SH to smooth transition

Following appointment of acting CEO DH to focus on litigation and investment

DH focusing on Flowers deal

Salah NooruddinInitially Salah Nooruddin made Vice Chairman of LUFC

Following 30thJune 2013 made Chairman

Paul Hunt

Paul hunt, former deputy CEO of Blackburn rovers appointed as acting CEO

Temporary contract to move permanent on basis of success

To focus on operational matters

Has been known to GFH since summer 2012

Has been advising as a consultant since 1st

July

Seek board ratification on changes


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Aim is to reduce staff cost by 40% which will be broadly

achieved once settlement costs are paid

Senior management staff have been let goGW, NP, YA, SH

Junior staffRedundancy program complete Re-training for Safety Officer position to replace incumbent

Staff Optimisation


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Increase match day sales

Outbound sales

Positive PR

Group Sales

Dynamic pricing

Enhance commercial revenue

Outbound sales

Increase marketing

Improve match day experience

Increase retail revenues

Partnership with JD Sports

Pop up shop in Trinity

Increase product range

New Revenue Generation Strategy


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Cost Cutting Strategy

Closure of Yorkshire radioto save up to 350k per

annum in cash

Squeeze Suppliersobtain better terms from key

suppliers

Cost Committee

Individual departmental meetings

Biggest cost is player wage bill

Key is to ensure club is meeting FFP requirements


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Football


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Brian Mcdermott appointed in April and steered club away from relegation

Well-liked by the fans, media and peers

Presents a positive image

Engages well with staff

Thorp Arch appears to be a positive environment

New Manager


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Football Squad

Since the end of last season, 7 players have not had their contracts renewed

as they were not in the plans of the new manager.

Furthermore, Steve Morison was allowed to go on loan and 60% of his

wages are being recovered.

Four new players have arrived (Matt Smith, Noel Hunts, Luke Murphy andScott Wootton)

The arrivals have increased the wage bill to over GP 14.5m (budget is 10m)

The manager believes the squad is unbalanced and requires further

changes:

Too many left backs

Too many midfielders

No pace or width up front


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Shareholders


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New Shareholding Structure

LUFC Holding

Leeds City Holdings

Limited

100%

Leeds UnitedFinancial

Services Limited

Leeds UnitedMedia Limited

Leeds UnitedFootball Club

Limited

Leeds UnitedCentenary

Pavilion Limited

Shareholder Structure

GFH 49.8

IIB 10

Envest 39.7

Other 0.5

Total 100


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AOB

Documents

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