Wasps drop the ball with ‘improper accounting’
Wasps has been forced to ask bondholders to waive some conditions on its £35m bond after its auditors found it had overstated earnings.
“Improper accounting” at the Coventry-based Premiership rugby union club and Ricoh Arena owner had seen £1.1m from its ultimate shareholder Derek Richardson counted as income. The timing of the payment was also problematic, with auditors from PwC ruling the payment should be accounted for as a capital contribution made in the 2018 financial year.
It resulted in Wasps’ consolidated EBITDA for its 2017 financial year being stated as £3.5m, rather than £2.4m – which put it in breach of its agreement with bondholders that sets a ratio of earnings to costs.
Chief executive Nick Eastwood said Wasps “welcome the continued support from our Bondholders throughout this time”.
He added: “We take the events and circumstances surrounding the accounting of the cash contribution extremely seriously and have implemented various steps to strengthen the robustness of the Group’s reporting and accounting procedures.”
The errors overshadowed a successful year for the business. Turnover was up 9% to £33.6m and its operating loss shrank from £6.2m to £0.8m.
Wasps came top of the Premiership table, only to be beaten by Exeter in a dramatic final, with average attendances up by nearly 2,500 to 19.338.
Eastwood said: “The business has evolved significantly since we moved to the Ricoh Arena in 2015. We have continued to grow the business, reported record revenues and reduced operating losses as part of our strategy to build a stable foundation for our long-term future.”
The Ricoh Arena held 895 events in the year, with the highlights including international rugby league, Robbie Williams and Peter Kay.
The on-site hotel was converted from a De Vere to a DoubleTree by Hilton, a change which has been described as “very successful” with revenue per available room jumping from £42 to £49.
