Cov City owner makes £150,500 loss, latest accounts show

COVENTRY City owner Sisu has filed its latest accounts and they show the firm made a £150,500 loss - while directors received £241,000.

Sisu Capital’s 2016/17 accounts have been lodged with Companies House - seven months after the business filed the 2015/16 accounts.

They show a fall in profit, after tax, of more than £400,000 with the London hedge fund posting a profit of £263,000 in the previous financial year.

There’s also a drop in the total amount Sisu’s two directors, Joy Seppala and Dermot Coleman, received. That figure was £431,000 in the previous 12 months.

The report at the top of the accounts outlines the business activity of Sisu as “the provision of fund management services”.

It also mentions restructuring of the Sisu Capital Fund and adds: “Alongside this transition, the Group’s focus will remain on extracting value from the portfolios of the Arvo Fund and the Private Equity Funds.”

Although there is no direct mention of Coventry City FC in the accounts, Cayman Islands-based Arvo has been used as an investment vehicle to put money into CCFC in the form of loans. It also has a charge, essentially loan security, on the club’s Ryton training ground.

The report also outlines risks to the business including “the ability of the Group to maintain its performance record and to continue to meet the investment objectives of the underlying funds under management.”

Independent auditors BDO have signed off the accounts and said that all the necessary information had been provided.

The auditors said: “In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified any material misstatements in the directors’ report.”

The accounts show a turnover of £804,854 compared to £1.36million in the previous year.

After tax, the company made a loss of £150,503 - down from a £263,612 profit in the previous year.

Administrative expenses have fallen from £1.09m to £961,995 between 2015/16 and 2016/17.

Sisu has £3.47m in an “employee benefit trust”, compared to £2.65m in the previous year.

Trusts like this allow employers to deposit money into the trust, which in many cases is paid out to the beneficiaries in the form of loans.

Employee benefit trust payments should not be made on a contractual basis - as that would essentially mean they are salary and subject to tax and national insurance.

Sisu now employs eight people, including the two directors Joy Seppala and Dermot Coleman.

That compares to 13 staff two years ago and nine last year.

Despite the workforce being reduced, the group’s total staff costs increased for 2016/17 to £479,103 compared to £455,171 in the previous financial year.

In 2014/15 staff costs were £674,313. The amounts received from the company by chief executive Joy Seppala and business partner Dermot Coleman have reduced from 2015/16.

The accounts read: “Emoluments paid to or due to both directors in respect of the year totalled £241,478 (2016: £431,505). The aggregate emoluments paid to the highest paid director were £216,793 (2016: £301,089).

“Directors received allocation of profits as Member of Sisu Capital Partners LLP amounting to £100,000 (2016: £366,399), and received drawings of £100,000 (2016: £338,766).

“Directors received profit allocations of £57,500 (2015: £9,410) from Sisu Capital Limited Partnership, in which they are partners, and drawings amounting to £65,000 (2016: £11,000).”

Emoluments are not necessarily cash payments and could be benefits, like cars, the business has signed off for those directors.