West Brom chiefs raise fears for future as accounts revealed
Albion chiefs have revealed they are likely to be reliant on players sales on top of a controversial £20million loan for the club to continue as a going concern.
In financial results lodged at Companies House, Albion directors revealed 'a material uncertainty' over the future of the club if cash cannot be raised.
The new accounts for the club, parent company WBA Group and majority shareholder Guochuan Lai’s WBA Holdings dated to June 2022, revealed WBA Football Club Ltd made a profit of £5.4million before tax in the year to June 30, 2022.
The directors' report section of the results – signed by chief executive Ron Gourlay – lays bare fears for the future of the club.
The report adds: "Should the forecasted player trading not be achieved, the group would need to both maintain existing and find further sources of investment in order to bridge its cashflow position until appropriate player transactions are fulfilled."
However, it starkly states: "Given that such funding player trading is not guaranteed there is a material uncertainty present which may cast significant doubt about the group and company's ability to continue as a going concern."
The report’s contents have been described by minority shareholders to the Express & Star are ‘very worrying’ and at best raise big questions over Albion’s operations moving forward.
While Carlos Corberan’s squad are an outside shot for promotion via a late play-off push, which would go some way to easing financial concerns, the cost of not reaching the Premier League next season could be stark – and affect the head coach’s squad building.
The documents also shed light on the controversial £5m ‘Wisdom Smart loan’, still unpaid by controlling shareholder Lai ,more than two years after it was taken out.
It was revealed WBA Holdings, Lai’s company controlled by Yunyi Guokai (Shanghai) Sports Development – of which Lai is controlling shareholder – has been added as guarantor for if, as expected, Wisdom Smart is unable to repay.
Despite the absentee chairman’s latest assurance the cash would be returned to club coffers, the move was described to the Express & Star as “rearranging the deck chairs on the Titanic” or “kicking the can down Halfords Lane”.
The accounts say “at June 30 2022 and at the date of the approval of the financial statement, the company has yet to receive payment and so the full amount totalling £5,059,000 (including interest) has been impaired (or reduced, in this case) to a carrying value of £Nil.”
Evidence of that can be noted on Page 33 of WBA Group accounts, under section 16 titled ‘debtors’ where the loan was, in the previous accounts dated June 2021, highlighted in the ‘other debtors including related party loan section’. But in the 2022 figures, the £5m is missing and in essence written out of the balance sheet.
