Brera Holdings PLC — Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2023. The filing is an annual Form 20-F, not a quarterly filing; the source text does not provide separate Q4 2023 financial statements. Financial statements are audited and prepared under IFRS as issued by the IASB, with the euro as the presentation currency.
Business context
Brera Holdings is an Irish holding company focused on multi-club ownership and sports-related services, including sponsorships, advertising, ticketing, player transfers, youth leagues, consulting and tournament activities. During 2023, the Company shifted from its legacy consulting model toward acquiring and managing international sports clubs.
- Acquired 90% of North Macedonian football club FKAP, rebranded Brera Strumica FC.
- Acquired 51% of Italian Serie A1 women’s volleyball club UYBA Volley.
- Entered sponsorship and management arrangements involving Brera Tchumene FC in Mozambique and Brera Ilch FC in Mongolia.
- Brera FC remained an amateur club and was on hiatus during the 2023-24 season.
- Class B ordinary shares began trading on Nasdaq under “BREA” in January 2023.
Financial performance and key metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | €1,147,492 | €162,407 | Up 607% |
| Cost of revenue | €100,877 | €90,270 | Down 12% |
| Gross profit | Approximately €1,046,615 | Approximately €72,137 | Substantially higher |
| General and administrative expenses | €6,417,782 | €1,298,873 | Up 394% |
| Operating loss | €5,371,167 | €1,226,736 | Loss increased 338% |
| Net loss | €4,911,665 | €1,226,855 | Loss increased 300% |
| Net loss attributable to parent | €4,438,440 | €1,226,855 | Not comparable due to 2023 non-controlling interests |
| Cash and cash equivalents | €2,293,518 | €347,229 | Up €1,946,289 |
| Net cash used in operating activities | €2,418,524 | €917,436 | Use increased |
| Net cash used in investing activities | €2,009,785 | €26,209 | Higher acquisition and investment spending |
| Net cash provided by financing activities | €6,364,969 | €1,237,144 | Primarily IPO proceeds |
Approximate 2023 margins were a 91% gross margin, a negative 468% operating margin and a negative 428% net margin. Revenue consisted principally of sponsorships and advertising (€745,452), ticketing (€174,247), player transfers (€122,159), youth league activities (€54,690), store sales (€9,848) and other revenue (€41,096).
Liquidity, debt and financial position
- Total assets were €8,490,276 at December 31, 2023, compared with €1,125,099 in 2022.
- Total shareholders’ surplus was €2,944,490, versus a shareholders’ deficit of €131,213 in 2022, primarily reflecting IPO-related equity financing and acquisitions.
- Loan payable totaled €423,741, including €197,664 current and €226,077 non-current.
- Lease liabilities totaled €708,922, including €107,922 current and €601,000 non-current.
- Contingent consideration related to FKAP was recorded at €181,000 and may be settled through future Class B share issuances based on qualifying transfer fees and UEFA prize income.
- Current liabilities were €4,495,916, including €3,485,774 of trade and other payables and €481,912 of deferred revenue.
- Management stated that a written commitment from Executive Chairman Daniel Joseph McClory indicates an intention to fund the Company as needed if operating revenue and alternative funding are insufficient.
- The auditor identified recurring losses and liquidity conditions that raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include additional equity, debt, public or private financing and other funding sources.
Material changes versus the prior comparable period
- The Company’s revenue model changed from primarily consulting revenue in 2022 to sports sponsorship, advertising, ticketing and player-transfer revenue in 2023.
- Revenue increased sharply, but expenses grew faster; general and administrative expenses increased by €5.1 million, resulting in a significantly larger operating and net loss.
- FKAP and UYBA were consolidated during 2023. FKAP contributed €157,365 of revenue and a €225,718 net loss from acquisition through year-end; UYBA contributed €836,786 of revenue and a €908,697 net loss.
- Non-current intangible assets increased to €4,053,378, primarily from acquisition-related brands, player contracts, broadcasting rights, customer relationships and goodwill.
- Cash increased primarily because the January 2023 IPO generated approximately $6.9 million of net proceeds. The proceeds were intended for club acquisitions or management rights, social-impact football, marketing, working capital and general corporate purposes.
- Shares issued and outstanding at December 31, 2023 were 7,700,000 Class A shares and 3,960,000 Class B shares. Class A shares carry ten votes per share; Class B shares carry one vote per share.
Guidance, outlook, commentary and unusual items
The filing does not provide formal quantitative revenue, earnings or cash-flow guidance. Management expects future revenue to depend on expanding sponsorship and consulting activities, operating and acquiring clubs, tournament participation, player transfers and competition prizes. Management also expects seasonality, with revenue and expenses generally concentrated in the third and fourth quarters.
- Brera Tchumene FC was promoted to Mozambique’s first division for 2024. A January 2024 agreement provides for shared revenues and costs with Transportes Lalgy Lda and a minimum annual management budget of €250,000 while in the first division.
- The Company’s investment in Manchester United securities generated a 74% realized gain when a portion was sold in February 2024; the filing does not state the amount of the gain.
- Nasdaq issued a minimum-bid-price deficiency notice in December 2023. The Company regained compliance in February 2024 after the Class B share price exceeded $1.00 for 20 consecutive business days.
- Cash and cash equivalents declined to €442,436 as of June 30, 2024, from €2,293,518 at December 31, 2023, according to the subsequent-events disclosure.
- Management reported a material weakness in internal control over financial reporting as of December 31, 2023, involving ineffective review and approval of journal entries and financial statement preparation, insufficient accounting personnel, inadequate segregation of duties and improperly maintained records.
- Key risks include continued operating losses, dependence on additional financing, club popularity and competitive performance, sponsorship renewals, player and staff availability, acquisition execution, seasonality, foreign exchange, customer and supplier concentration, regulatory restrictions on multi-club ownership, potential PFIC status for U.S. investors and possible share dilution.
Most important facts for investors to verify
- Whether the Company can reduce its recurring operating cash burn and reach profitable operations without substantial additional equity or debt financing.
- The status and enforceability of the Chairman’s funding commitment, including whether it is legally binding and sufficient to address projected liquidity needs.
- The composition and collectability of the €553,750 of outside-party trade receivables and the basis for the reported bad-debt expense of €582,467.
- The valuation and impairment risk of the €4.05 million of acquired intangible assets and the €181,000 FKAP contingent consideration.
- Whether the 2024 operating performance of FKAP, UYBA, Brera Tchumene FC and Brera Ilch FC supports management’s projected sponsorship, transfer and competition-related revenue opportunities.
- The remediation of the disclosed material weakness and whether future filings will contain corrected, timely and adequately supported accounting records.
- The Company’s cash balance after June 30, 2024, upcoming debt, lease and sponsorship obligations, and any further share issuances under equity plans or acquisition agreements.
- The impact of the dual-class structure, controlled-company status and related-party transactions on minority shareholder protections and dilution.