Hull warned over finances
Wednesday 28 October 2009
Hull's accountants have raised concerns over the club's "ability to continue as a going concern" should they be relegated from the Barclays Premier League.
The Tigers managed to retain their top-flight status on the final day of last season, and are currently third from bottom.
The accounts have now been filed, five months late, to Companies House.
The period covers the year ending 31 July 2008, when Hull made a loss of nearly £10m as they won promotion to the Premier League via the play-offs.
This does not include any figures from the club's first season in the top tier of English football, and the directors remain confident the next set of results will be much more positive.
However, auditors Deloitte nevertheless warn a surplus of some £23million would need to be raised just to meet current liabilities.
Should Hull stay up, they would still, according to the report which is now a matter of public record, need to produce an additional £16million, with another £7million needed should they go down.
The report read: "These forecasts demonstrate that in order to operate within the company's finance facilities Hull City AFC will need to generate a surplus £23million during the next 12 months through player trading, match day and commercial income and/or through additional finance raising.
"In the event that the club retain Premier League status for the 2010-11 season, the additional funding required for the 12 month period will be in the region of £16million. This is reduced as a result of the guaranteed level of Premier League distributions that will be received.
"As is common with all football clubs, Hull City AFC will make player purchases and sales during the course of the season to manage the company's cash flow as and when required.
"The directors acknowledge that player purchases and sales are uncertain in terms of timing and quantum and some uncertainty exists over the availability and quantum of additional facilities should such be required.
"These conditions indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern."
Hull, though, remain confident once the additional revenue from their first Premier League campaign is factored in - worth an estimated minimum of some £40million - then the results for 2008-09 will be more positive.
The directors' statement concluded: "The financial benefits arising from the Premier League's broadcasting rights are not recognised until the following financial year, where the losses incurred this year are forecast to be made good.
"The club are currently in advanced discussions with finance providers for the acceleration of known Premier League distributions for amounts of £7million. These discussions are expected to be concluded in the near future and would reduce the surplus finds required by £7million.
"The directors have a reasonable expectation that the company have adequate resources to continue in operational existence for the foreseeable future."
Latest in Sport
My one and only game for Neil Baldwin FC
Laura Trott and Jason Kenny announce engagement
Jose Mourinho says Chelsea deserve to be setting pace going into Christmas fixtures
Manchester United vs Newcastle United preview: Alan Pardew targets rare Old Trafford win to halt Newcastle slump
Arsenal vs QPR: Leroy Fer seeks perfect present for Boxing Day
- 1 Christmas comes early to Hong Kong, as millions of bank notes spill out onto busy street
- 2 The 'Black Museum': After 150 years, public can visit police’s grisly crime museum
- 3 British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
- 4 Vagina canoe artist facing two years in jail defends herself over ‘obscenity’ charges
- 5 The Queen’s speech 2014: Recap and Twitter reaction to Game of Thrones reference
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader