ADO announce financial details of 2014/15

Explanation of the annual figures of NV ADO Den Haag for the 2014/2015 season

On 1 December NV ADO Den Haag submitted its annual figures for the 2014/2015 season and a forecast for the current season to the KNVB (Royal Dutch Football Association). The annual figures have also been submitted to the Chamber of Commerce.

NV ADO Den Haag finished last season with a loss of 0.7 million Euros. However, thanks to a share premium from major shareholder United Vansen (hereinafter: “UVS”) of 1.5 million Euros during the previous season, for the first time since June 2006 ADO Den Haag was able to record positive equity. As at 30 June 2015 the equity amounted to € 654,000.00 (positive). This is good news.

Not such good news is the fact that on 1 December NV ADO Den Haag was not able to submit a definitive cashflow forecast for the 2015-2016 season to the KNVB. The reason for this is the continued failure by major shareholder UVS to make payments promised in writing. In his audit report approving the annual accounts for 2014-2015, the auditor expressed his concerns about this.

NV ADO Den Haag shares the auditor’s concerns. On Friday 18 December there will be a shareholders’ annual general meeting. Then we will find out whether or not major shareholder UVS is still going to meet its obligations (or has already done so in the meantime).

More detailed explanation:

The annual accounts show that NV ADO Den Haag made an operating loss of 0.7 million Euros for the 2014/2015 season. This was in line with expectations. So in mid-season two investments were made so as to contribute to better sports results. These investments were made possible by a share premium payment of 1.5 million Euros by major shareholder UVS. Thanks in part to this premium, for the first time since 30 June 2006 ADO Den Haag was able to record positive equity in the annual accounts.

The annual accounts for the 2014/2015 season were approved by the auditor. However, the auditor expressed his concerns about the near future. These concerns relate to the continued failure of major shareholder UVS to make payments. In the event of total failure to make all the promised payments, there is the threat of a planned liquidity shortfall of up to € 1.3 million.

The auditor’s concerns are of course shared by NV ADO Den Haag. The current situation is, in chronological order, as follows:

– NV ADO Den Haag submitted a budget for the current season to the KNVB’s Licensing Committee and the Committee accepted it.

– Agreement was reached with major shareholder UVS about additional investments totalling 3.7 million with the aim of raising NV ADO Den Haag to a higher level. These agreements were made in the Supervisory Board meeting. The major shareholder confirmed the agreements in writing. The three dates on which the promised investment amounts would be transferred were also set down in writing by both parties.

– NV ADO Den Haag anticipated with confidence that UVS would keep its promises because of:

a) the plans set down in writing by UVS upon take up of the shares. In these, UVS revealed that it intended to invest in the club so as to raise the club to a higher level in sports terms in line with UVS’s ambitions expressed at that point.

b) the 1.5 million Euro share premium that UVS had actually made in the 2014/2015 season.

c) the written confirmation, including the three specified payment dates, for the 3.7 million Euro share premium for the 2015/2016 season.

– Now the two dates have passed (30 September and 30 November 2015) and neither the payment of 0.7 million Euros for the first date nor the payment of the 1.2 million Euros for the second have been made. Despite urgent requests by the management, members of the Supervisory Board and the priority shareholder, the Municipality of The Hague, UVS is to date still in default.

– As a result of all this, in his report on the 2014/2015 annual accounts, the auditor expressed his concerns about the continuity of the company. In addition, NV ADO Den Haag then had to submit an interim cashflow forecast to the KNVB. This could have consequences for the classification of ADO Den Haag to a category by the KNVB’s Licensing Committee. This classification is usually published at the start of March.

– The shareholders’ annual general meeting will be held on Friday 18 December. Then we will find out whether or not major shareholder UVS is still going to meet its obligations (or has already done so in the meantime). If not, then in any event the club’s ambitions will have to be adjusted downwards.

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So things are certainly not looking as bright as all the promises made by Mr Wang. Auditors are concerned about future investment. There have been comments made from within the club that have reached media sources about the worries etc. I think this is a story that will be growing very quickly.

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