Following the publication of the accounts of Birmingham City FC plc for the year ending 30 June 2011, the Blues Supporters’ Trust has sought professional advice to gain a better understanding of the club’s current financial position.
The advice has identified four topics in the accounts that the Trust would like clarity on.
The first relates to the auditor’s ‘disclaimer of opinion’ and the auditor’s unwillingness to positively approve the accounts. This appears to relate to information not disclosed, comments made by an unnamed director concerning the integrity of certain transactions, and to certain payments that were not disclosed and provided in a “redacted” form.
The second regards the £21.5m worth of BCFC debts repayable to both Carson Yeung and BIHL. Whilst the accounts state that assurances are in place that repayment of the loans will not be required for 12 months, our independent examiners have advised the Trust that there is a risk that repayment of the loans could be required and that any forecasts should factor in this risk.
Thirdly, whilst BCFC directors have prepared a detailed profit and cash flow forecast through to June 2013, the accounts state that additional funding to “continue its operations” may be required. No further details on this additional funding are provided. However, comments in the accounts regarding future cash flow requirements appear to indicate that further sales of players will be required through to June 2013.
Finally, the accounts disclose that kit sponsorship revenue was transferred from BCFC to another BIHL company for no payment. This was specifically cited as a reason for the delays in publishing the accounts, as the auditors felt they needed to seek clarification from Directors.
A Trust spokesperson said, “The professional advice we have received has highlighted a number of issues that the Blues Trust and our members would welcome clarity on. Trust members are naturally concerned over the departure of Chris Hughton, the current transfer embargo and ongoing delay in the publication of BIHL’s accounts, and the club’s accounts appear to raise further areas of concern.
The Trust will be contacting BCFC board members in Hong Kong imminently to seek clarification on these issues.