going back a few days ago

[Lord Bracknell]

What does patronise mean? mrs bulldog accused me of doing that a while ago and I denied it, And then we realised that neither of us actualy knew what it meant!

I've asked a few other people and they cant explain it either!

Next time she accuses you of patronising her, just say "How clever of you to notice".

 

[Dave the OAP]

The Club's "version of things" (as expressed in the Annual Accounts) is, of course, true.

But what does it MEAN?

As I read the situation, there are three sorts of debts -

(i) those that seriously need attention (because they cost the club money and they are owed to people who want to see the money repaid);

(ii) those that can sit in the accounts indefinitely (or at least until there is some sort of upheaval in the club's ownership and the creditors can reasonably ask for their money back); and

(iii) "technical" debts that arise from the fact that the annual accounts give a statement of affairs at a particular moment in time.

Obviously this is a very crude analysis, and a more detailed ibreakdown of the accounts would reveal more. But, in broad terms:-

In the first category are:-
Overdraft £335k
Suppliers £506k
Tax £494k
Bank loan £4.4million

In the second category:-
Group company (i.e. the directors) £5.4million
Directors current accounts £530k

And in the third category:-
Season ticket holders payments in advance £1.3m

It looks to me like there is a debt of about £6 million that needs serious servicing and that the Club needs to deploy a fair amount of its income on doing that, if things aren't going to get worse.

Exactomundo.

the Directors "loans" are Technical Debts and everyone who has ever run a business will know the chances of repaying this depends on the goodwill of the owners of the business ( which tend to be the Directors/shareholders anyway)

therefore to bandy about a figure as absolute debt is very misleading.

Perhaps if Yorkie looks that up on the internet, she would also learn something.....oops did I sound patronising there? tsk tsk...naughty dave..bad dave

 

[Brighton Breezy]

I think, as is often the case, Lord B has put things into REAL terms.

A debt of £6m is almost half the £13m being banded around by others on here.

 

[Titanic]

Interesting and very helpful figure there LB, can you just add to which date these are valid ?

 

[Lord Bracknell]

Interesting and very helpful figure there LB, can you just add to which date these are valid ?

Dunno.

The figures came from El Presidente (who has looked at "the latest published accounts").

 

[Simster]

Thanks Ed. I agree with Richie, can we hear no more of this £13million bollocks please? We are in real debt to the tune of £6m and the club is being run by millionaires who will clean up when Falmer is built. I'm not exactly shitting it for the club's future.

 

[Grendel]

As El Pres is a lecturer in Economics and an expert in accountancy I prefer to believe his version thanks Dave.

And of course finance directors have no grounding in economics or accountancy whatsoever

 

[turienzo's lovechild]

surely if we owed £12m we'd be bankrupt?

i can't see us possessing £12m worth of assets

 

[Hiney]

surely if we owed £12m we'd be bankrupt?

i can't see us possessing £12m worth of assets

If you had a house worth £100,000 and debts of £250,000 you would only become insolvent if you were unable to SERVICE those debts.

The key to all this, as Lord B has said, is how much of our TOTAL debt requires servicing on a regular basis.

The £12m figure is probably correct in terms of our ACTUAL TOTAL debt, but the lower figure is also correct in terms of what we need to SERVICE on a regular basis.

Say you bought a house for £100,000 and your Mum & Dad gave you £10,000 deposit. You also have credit card debts of £20,000 and a personal loan of £10,000.

You have to pay regularly for the credit cards and loans but the money to your Mum & Dad is not payable - probably until you move to a bigger house, if at all.

Anyway, BOTH figures are relevant, BOTH figures are probably right but we only need to concern ourselves in the SHORT term with the lower amount.

So can we stop bickering please.

Thank you

 

[Brighton Breezy]

Perhaps when some Superfans stop the SCAREMONGERING.

And I don't mean El Pres as the figures were quite interesting...

 

[El Presidente]

I think there is a fair chance that the directors will waive some/all of the monies owed to them, or convert them into shares. However, if one of the directors falls out with the rest of the board then they could demand their money back. If a new 'investor' came in and wanted 100% control (unlikely given DK's stance on things), then again the existing directors loans would have to be repaid.

We are fortunate that most of the loans are non-interest bearing, we only paid £23k in interest in the last financial year, but I would anticipate that worsening in 2006/7

I will obtain a copy of the holding company's accounts too, and try and work out what is going on in the background.

For those of you who give a shit, total costs of the Falmer appeal were £3.1million at 30 June 2006, BEFORE the latest set of filibustering tactics by LDC and their cohorts. Special thanks for these unnecessary costs must go to a Mr W. Archer and Mr D. Bellendi.

 

[El Presidente]

I have now taken a look at the accounts for the Albion's holding company.

A couple of interesting points come to mind:

1: The club has about £4.3million of non-interest bearing 'other loans'. These are not detailed, but do not charge interest, so I would suggest these come perhaps a relative of one of the directors.

2. The holding company has created an interest free loan note of £15million. This is effectively creating the opportunity to lend the Albion £15million in total, presumably for building Falmer.

3. The 'other loans' are convertible into shares at the rate of 1 share per £1 of debt. I would anticipate this happening once Falmer is completed.

4. Director's pay totalled £98k in the year, it does not say how many directors this relates to (but my guess is 1)

As for Simster's assertion that the directors will 'clean up once Falmer is built', I can find no evidence that they will ever make any money out of the club, now or in the future, given the club's operational cost base.

 

[Simster]

As for Simster's assertion that the directors will 'clean up once Falmer is built', I can find no evidence that they will ever make any money out of the club, now or in the future, given the club's operational cost base.

Stadium naming rights? A new, large source of revenue? Increase in value of the club which he may choose to sell one day?

I simply don't believe that Dick Knight is in it purely as a charitable gesture.

 

[El Presidente]

The Club's "version of things" (as expressed in the Annual Accounts) is, of course, true.

But what does it MEAN?

As I read the situation, there are three sorts of debts -

(i) those that seriously need attention (because they cost the club money and they are owed to people who want to see the money repaid);

(ii) those that can sit in the accounts indefinitely (or at least until there is some sort of upheaval in the club's ownership and the creditors can reasonably ask for their money back); and

(iii) "technical" debts that arise from the fact that the annual accounts give a statement of affairs at a particular moment in time.

Obviously this is a very crude analysis, and a more detailed ibreakdown of the accounts would reveal more. But, in broad terms:-

In the first category are:-
Overdraft £335k
Suppliers £506k
Tax £494k
Bank loan £4.4million

In the second category:-
Group company (i.e. the directors) £5.4million
Directors current accounts £530k

And in the third category:-
Season ticket holders payments in advance £1.3m

It looks to me like there is a debt of about £6 million that needs serious servicing and that the Club needs to deploy a fair amount of its income on doing that, if things aren't going to get worse.

I would agree with Lord B here, and the interest cost of £23k on bank debt of around £4.7million works out at about 5%. I suspect that with recent rises in interest rates this figure will be far higher in 2006/7, but still serviceable

 

[El Presidente]

Stadium naming rights? A new, large source of revenue? Increase in value of the club which he may choose to sell one day?

I simply don't believe that Dick Knight is in it purely as a charitable gesture.

If you look at the financial statements for the 72 clubs who are not in the Premiership, 60 of them are making losses. There is no evidence that we will be part of the dozen who are making money.

You are ignoring the £40m cost of building the stadium, which will be partly financed by commercial loans.

Swansea are touting around the naming rights for their stadium for about £250k, so I don't think that your conspiracy theory about DK holds much water.

 

[The Auditor]

If you look at the financial statements for the 72 clubs who are not in the Premiership, 60 of them are making losses. There is no evidence that we will be part of the dozen who are making money.

Who are the lucky dozen?

 

[Row Z Creased Shirt]

So we are only 6million in debt, so that's alright then. How much does that mean we have to spend in the transfer kitty?

 

[Bugs Hill]

The Club's "version of things" (as expressed in the Annual Accounts) is, of course, true.

But what does it MEAN?

As I read the situation, there are three sorts of debts -

(i) those that seriously need attention (because they cost the club money and they are owed to people who want to see the money repaid);

(ii) those that can sit in the accounts indefinitely (or at least until there is some sort of upheaval in the club's ownership and the creditors can reasonably ask for their money back); and

(iii) "technical" debts that arise from the fact that the annual accounts give a statement of affairs at a particular moment in time.

Obviously this is a very crude analysis, and a more detailed ibreakdown of the accounts would reveal more. But, in broad terms:-

In the first category are:-
Overdraft £335k
Suppliers £506k
Tax £494k
Bank loan £4.4million

In the second category:-
Group company (i.e. the directors) £5.4million
Directors current accounts £530k

And in the third category:-
Season ticket holders payments in advance £1.3m

It looks to me like there is a debt of about £6 million that needs serious servicing and that the Club needs to deploy a fair amount of its income on doing that, if things aren't going to get worse.

Except the "Bank loan" of £4.4million isn't actually a bank loan - it's an unsecured interest free loan, so probably fits into the second category rather than the first.

 

[El Presidente]

Except the "Bank loan" of £4.4million isn't actually a bank loan - it's an unsecured interest free loan, so probably fits into the second category rather than the first.

Fair comment, apologies for any errors on my side. It looks as if the directors have put in about £10million in total between them as follows:

Owed to group company £5.3million
Other loans £4.4million
Loan accounts £0.5million
Total £10.1million

During the last financial year the Albion paid Adenstar (Director: Derek Chapman) £700k and owed them £100k at the year end. They received hospitality income from Adenstar for the season £NIL

 

[Row Z Creased Shirt]

Except the "Bank loan" of £4.4million isn't actually a bank loan - it's an unsecured interest free loan, so probably fits into the second category rather than the first.

Whether it is or it isn't is kind of beside the point. What the figures clearly point to is that we are in the red so that any monies spent in the transfer/wage market will add to this. We simply do not have bucket loads of cash to spend as freely as we would like, I really cannot see why people have a problem understanding this. This is the lot of a small team in the 3rd division of english football, get used to it. Wishing it were otherwise will not make it so.

Also it is not as if the Albion are steadfastly refusing to look for new additions to the squad, they have been, they just have not been successful with high profile signings. Yet we had a successful transfer window in January with Savage and Bertin contributing to a revival in our fortunes. Some people really need to get a reality check and realign their expectations accordingly.