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SALFORD RED DEVILS AUDITOR ‘CASTS DOUBT’ ABOUT ‘COMPANY’S ABILITY TO CONTINUE’
 

Star date: 19th February 2018

SALFORD REDS ACCOUNTS SHOW ALMOST £9MILLION LIABILITIES

New accounts published for the Salford Red Devils show that the company made losses of over £700,000 last year and that it has net liabilities of almost £9million, including the £1million loan from Salford City Council.

Despite the directors insisting that restructures and changes within the club forecast a 'modest profit', its auditor states that the conditions "indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern".

Full details here...


After months of delays, Salford City Reds (2013) Ltd, the parent company of Salford Red Devils, has published its accounts for the year ending January 2017, with updates on its current status.

The accounts show that the company made losses of £727,176 during the year, and has net liabilities of £8,945,677, with £1.045million due to be paid out within one year.

Long term creditors (due after one year) are owed £7.899million, which breaks down as £5.111million owed to former owner Marwan Koukash, and £2.788million to companies that are part of the historic Creditors Voluntary Agreement (CVA) which includes the Salford City Council debt, specified in the Council's accounts as £1.038million.

The Reds accounts show that over the year Marwan Koukash gave the club a further loan of £911,864 (making the £5.111million total) but that he "has provided certain other assurances to the club in respect of historical liabilities and has additionally confirmed that he will not request repayment of his loan account until the company has sufficient funds to do so".

Meanwhile, the £2.788million CVA has a 'temporary holiday' (for further details see previous Salford Star article – click here). With these conditions in place, and with Koukash relinquishing ownership to Salford RD Holdings Ltd - a 'not for profit holding company governed by a consortium of fans' - the directors produced a statement arguing that the company is a 'going concern'...

They state that Koukash has injected a further £70,000; that the cost base of the club has reduced considerably as a result of restructuring decisions that will be "fully recognised in the next 12 months"; that key functions at the club, including legal, HR and finance, "will be offset partially or in full by contra deals"; and that projections assume "increased revenues based on key commercial appointments and third party consultancy at no cost to the club". The directors conclude that "forecasts prepared show a modest profit".

At the end of the published accounts, the Reds auditor states that having considered the adequacy of the directors' 'going concern' statement, the conditions "indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern...".

The Salford Star contacted the new holding company for the club last week for a comment but, as yet, has received no response.
 

Update: 9:05am 19th February

The club's directors have now responded...

"The Jan 2017 Accounts are before the ownership change as are the Accounts for the period ending January 2018. Whilst January 2018 Accounts are yet to be prepared the management accounts reveal further substantial reductions in losses and historical creditors.

"The delays encountered in getting RFL approval to the new ownership structure have impacted on the budget for the current financial year as there has been insufficient time to roll out many of the planned pre season initiatives. However, these are now gathering pace and investment has been made in generating more Corporate Sponsorship income and non match day revenues. We are also working very closely with the fans including the newly reformed Supporters Trust to improve the match day experience, entice new fans to the ground and to recruit volunteers to help the Club
 
"It will always be a challenge to balance the books whilst maintaining a competitive side on the pitch but we will be trying everything we can to engage further with the people of Salford and the Business Community to support the Club. We are always interested in listening to new ideas and welcome anyone with a genuine desire to help the Club to make contact."
 

wrote
at 05:42:41 on 22 February 2018
I see Felsey is at it again. Does he pay the Salford Star for all the publicity he gets on the website? If not, get him to cough up for an advert on here. Be a nice regular income!
 
Felsey wrote
at 18:02:12 on 21 February 2018
Thank you Toldusso. I agree my political views are as unfathomable as the deepest ocean. Certainly my dress sense could never be called fashionable. That aside, I know my extensive education, training and lead body knowledge is second to none. I've advised Ministers and Skills Lead Bodies on qualifications. On community cohesion I've shown how to put hearts into communities. I know the Tory Government today struggles with the new Apprenticeship Levy roll out. A Community Sports Academy can show them how to roll out Apprenticeships in the short term while leading into Sports Degree status within a few years. With the right partnership of Salford College, University and Council the £1million as owed to Salford Council (us) can just become converted into Customer Service Apprenticeships for Council workers, wiping out the debt while infusing into Salford Red Devils an equal amount. Offset from Salford Council's Apprenticeship statutory Levy it costs Council Tax payers nothing but it shores up Salford Red Devils' balance sheet through reducing its debt. Sounds too simply, it is, but requires vision to be worthy of a podium finish.
 
julian caine wrote
at 10:44:15 on 21 February 2018
In reality koukash is still in control, he could call in his debt at any time.
 
toldusso wrote
at 15:36:00 on 20 February 2018
Cllr's Merry, Lancaster & Hinds decided that this was a great idea several years ago, try getting a quote now from them? They retreat to the shadows and have let Ian Stewart and now Paul Dennett defend the indefensible position of making Salford Council squander public money. Mike Felse, as unfathomable and unfashionable as he is, is onto something with his idea though!
 
The end wrote
at 08:20:10 on 20 February 2018
Simon, I looked at attending a game now MK has gone, it’s one of the most expensive grounds in super league to attend as two adults. Won’t be bothering
 
The end wrote
at 08:20:04 on 20 February 2018
Ref . Wrote- did you actually read the article before commenting?
 
Felsey wrote
at 14:19:38 on 19 February 2018
Well done on those accounts, praise to The Club. I would suggest a leap forward can be to create the Salford Red Devils Sports Academy along with the University. I see a major shift into sport degrees from across the World happening. With degrees at £9k a year, taking into the Academy 1000 students would brings in £9million per year. Opens up youth player options. Attract £280million sports village new development funding. Plus add sports & leisure management degrees of 225 places (£2million) then Salford Council gets it cash back to keep open the nursery jobs. Win - Win
 
wrote
at 12:06:31 on 19 February 2018
Piss Taker Koucash it was your club but you didn’t want to loose your money so you walked away, now finding out when the club can afford it he’s claiming it back, what MASSIVE prick he is.
 
Gareth L wrote
at 10:22:53 on 19 February 2018
Wow strike me down with a feather - I am staggered that Dr. Koucash put that much money into the club. I can't see the club ever being in a position for him to get his money back.
 
Simon Williams wrote
at 10:22:49 on 19 February 2018
Speaking as a fan and not a reporter, If we continue increasing the gates which we have shown can be done after one game 6500 attended at the Wigan game of which at least 2000 were away fans this shows an increase of 1600 home fans since last season and it's a start. If we can continue to capture new fans and have the Community's backing, then our future will look a lot healthier. The New Board along with the Supporters Trust are being run by Salfordians, and we all know how the Community views the Club, "more money to the White Elephant", well to me and many others it is our home, the place where the team I love, as only a fan would play. But the New Board are trying to change the views, that the people of Salford have of the team and rebuild the bridges which have been burnt over the last 20 years with the people of Salford. The New Board have every intention of making repayment to the Council of the loan provided to the Club when we was back at the Willows, but to achieve this need the backing of the people of Salford to ensure that this is a success. The Club has launched the Community Initiative this is for the City's Clubs, Organisations, Charities to get behind as it's financially beneficial to them too as they keep 50% of the ticket sales. Earning them much needed funds along with increasing attendances. The Club have even put on special family tickets (2 adults 2 children) £40 to make it affordable to everyone to attend and to encourage new fans along with lapsed fans back to the game, this together with the Community Initiative is to try and show the people of Salford it needs their help and backing. Our Club, Salford RLFC has been a part of "Our Community" for 110 years, it is so important for that this continues, everyone in the City can play their part in making the Club a success, you can join the Supporters Trust, or sell tickets to raise funds for your own charity, together us Salfordians can make this team great again, it is Our City, Our Club but One Salford.
 
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