Blues Saga: Receivers hand club lifeline despite latest losses
RECEIVERS acting for Birmingham City FC parent, Birmingham International Holdings have said they will continue to fund the business despite its perilous financial position suggesting doubts about it being able to continue as a going concern.
The stark statement is outlined in the BIH interim results for the six months ended December 31, 2014, which receivers have authorised be released.
The results show that for the period end, the Birmingham City Group (which is the BIH operation and the club’s subsidiaries) reported a consolidated loss of £0.9m (HK$10,635,000), and had consolidated net current liabilities of approximately £9,025m (HK$105,917,000).
“These conditions indicate the existence of a material uncertainty which may cast significant doubt on the group’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business,” said the receivers in the interims statement.
“Nevertheless, the receivers of the company are of the opinion that the group will have sufficient working capital to meet its financial obligations as and when they fall due for the next 12 months given that the receivers will consider to raise funds by way of loans, if necessary, in order to meet the group’s funding requirements.
“Accordingly, the receivers of the company are of the opinion that it is appropriate to prepare the condensed consolidated interim financial statements on the going concern basis. Should the group be unable to continue to operate as a going concern, adjustments would have to be made to the condensed consolidated interim financial statements, to write down the value of assets to their recoverable amounts, to provide for further liabilities which might arise and to reclassify non-current assets and non-current liabilities as current assets and current liabilities respectively.”
The receivers said the challenges faced by the group were considerable after four years in the Championship, but it had responded with “prudent expenses control, downsizing and cost reductions across the board” to ensure the situation remained manageable.
The group recorded a loss of approximately £0.82m (HK$9.6m) for the six months ended December 31, 2014, compared to a loss of approximately £5.3m (HK$62.2m) for the corresponding period in 2013.
“Such reduction in loss was mainly driven by better performance of football players during the reporting period in comparison to the same period in last year,” said the receivers.
