HUFC 2019/2020 Accounts Published

As supporters are likely aware, HUFC recently published their accounts covering the period from August 2019 until 31 July 2020. As per previous years, HUST have produced a summary report which includes reasoned comments on these accounts kindly supported by a HUST member who is a chartered accountant.
 
It is important to highlight that the financial statements are unaudited and they do not need to be. Therefore no conclusion can, or should be, drawn from this point. The financial statements appear to be fully compliant with all relevant Financial Reporting Standards and with applicable Company Law. 
 
HUFC continues to rely on financial support from Clarence 18 Limited (Clarence 18 Limited in turn relies on Prestige Group Investments Limited which is controlled by Mr S Singh). There is a clear indication of this financial support continuing for the foreseeable future where in annual report it states that “…the director has a reasonable expectation that the company has adequate resources to continue in operational existence….” It is also worth noting that this assessment is for 12 months from the date of signing the financial statements which was 16 April 2021 and not just 12 months from 31 July 2020.
 
The statement of financial position as at 31 July 2020 indicates a trading loss for the year then ended of £323k. In 2019 this figure was £860k; 2018 the figure was £1,587k; and 2017 it was £930k.
 
Average staff numbers have decreased from 202 in 2019 to 143 in 2020 which is quite a significant reduction. However, when looked at along with the number for 2018 (128) and 2017 (128) it seems that the 2019 figure was unusually high.
 
At 31 July 2020 there were no amounts owing to HUFC by Group Companies. The £85,610 due at 31 July 2019 from P & R Construction Limited appears to have been paid along with a further £30,180 for tax losses surrendered by HUFC to this company.
 
The annual report shows that Clarence 18 Limited advanced a further £700k to HUFC during the year ended 31 July 2020 bringing the total amount provided to £2,225,000. As it stood at 31 July 2020 the full £2,225,000 was declared as a creditor to be paid back to Clarence 18 Limited.
 
The Filleted Annual Report and Unaudited Financial Statements of Clarence 18 Limited which have now also been filed at Companies House note that “During the period the company advanced loans of £700,000 (2019: £1,525,000) to Hartlepool United Football Club Limited, full provision was made against this balance at the period end.” and “The cost of the investment in Hartlepool United Football Club Limited has been fully impaired at the period end as the company had net liabilities at that date.”
 
This means that as things stand Clarence 18 Limited do not expect to get back any of the money advanced to HUFC. However it is noted as a technical point that it is not to say that were HUFC to become cash rich that this debt could not be re-introduced into Clarence 18 Limited and paid back to it by HUFC.
 
If Clarence 18 (Mr. S. Singh) were ever to sell HUFC it would be part of the sale agreement between Clarence 18 and the potential new owners if or how much of this accumulating debt is to be paid and written off as part of a sale.
The £285,000 listed as ‘Other Creditors Due after one year’ and £45,000 of the £50,895 ‘Other Creditors due in one year’ is assumed to be amounts owed to Sage Investments Limited, however the actual amount to be paid will depend on performances on the pitch within 15 years of the original takeover. But it is possible that all or some of the £45,000 would have to be paid on gaining promotion to the EFL League 2.
 
The amount of financial commitments not included in the statement of financial position is £1,186,143, down from £1,213,275 in 2019. In the 2018 accounts this was £882,000 which was down £18,000 from the 2017 amount.