Dandyman
In London village.
I got this on the mailing list earlier, today. Would any of you City/Finance types care to comment ?
"It is perhaps more likely, that the new investor has agreed to subscribe for shares in The Community Stadium plc, a completely separate public limited company who will build and hold the new stadium. The new stadium will be financed through a share issue, sale of the name of the stadium and the brewing rights and loan finance. Before placing a share issue, the club will need to be sure that the share placing is adequately underwritten, so if any of the potential funding is lost at this stage, it could seriously impact on the funding model and place the project in jeopardy.
Another possible alternative is that the new investor has already loaned money to the club with the intention of converting this to equity at a later date. Any fall-out could have serious consequences if he demanded repayment. Remember also, that the club will benefit by £3 million repayment of the "Falmer Costs" as soon as the funding for the stadium is in place.
(I believe there is also a separate issue with Skint.)
From the club accounts, at June 2005, the indebtedness was:
Bank Overdraft...............................235,423
Payment received on account........1,599,217
Trade Creditors..............................824,195
Owed to BHA Holdings.................4,483,530
Capital Gains Tax...........................365,418
Tax and Social Security..................810,229
Directors Loan Accounts.................564,083
Other Creditors...............................220,771
Other Loans.................................2,681,898
Accruals..........................................100,622
Total Indebtedness.....................11,885,386
Projecting forward to today's position, it is reasonable to assume that the underlying turnover and expenditure have been similar to last year and that the sale of Virgo and Harding has probably just about balanced the books in terms of cash flow, so it is likely that the above figures will not have changed significantly if projected forward to today.
The major concerns with these figures are:
1. As these figures are as at the end of June, the overdraft at the bank, of £235k, is after having already received most of the season ticket renewals for the coming season. I would assume that most of the "Payment received on account" of £1,599k represented season ticket sales, which means the club would only receive a further ~£800k of gate receipts in the following 12 months and have already spent the season ticket proceeds.
2. Trade Creditors of £824k is very high, considering the comparatively low level of third party suppliers. County Court Judgements highly likely.
3. Capital Gains Tax of £365k. This gain arising from the sale of the Goldstone has been rolled over every year in the expectation of an offset against a new stadium. Given the continuing delays, HM Customs and Revenue could easily call this for payment.
4. Tax and Social Security £810k. Presumably this relates to PAYE and NI deducted from players/staff wages, but not passed to HM Customs and Revenue and the Employer's liability for NI. The level of this is alarming and I would assume an "arrangement to pay" is in place. Failure to make agreed payments on time, could result in full payment being demanded and inevitably severe court action.
5. Other Loans £2,681k - This is perhaps the most concerning given events of the last few days. There is no indication of who has loaned this money and under what terms the loan has been placed. It isn't the directors; those are shown separately, and it isn't a bank loan - that is also shown separately. From the accounts most of this loan is shown as payable within 12 months and very little interest has been paid in the year. It is therefore reasonable to assume that this is a short term, unsecured, interest-free loan from an individual, or individuals. A fall-out with somebody who has already loaned money to the club, and could threaten to demand repayment, is potentially far more damaging than a fall-out with a potential new investor.
For information, the Director's loan of £564,083 comprised:
Dick Knight - £418,333
Derek Chapman - £110,750
Ray Bloom - £35,000
Shareholding of BHA Holdings Ltd (who indirectly own 99.99% of BHA Football Club Ltd)
Dick Knight..................1,367,500.......29.61%
Pig City Incorporated......550,000.......11.91%
Ray Bloom.......................500,000.......10.83%
William Brown.................500,000.......10.83%
Friday-Ad.........................500,000.......10.83%
Kevin Griffiths.................500,000.......10.83%
Derek Chapman...............350,000.........7.58%
Michael Hastilow.............150,000.........3.25%
Robert Pinnock.................120,000.........2.60%
John Vickers.......................50,000.........1.08%
Joseph Hirschel..................15,000.........0.32%
Peter Jackson.....................10,000.........0.22%
John Town...........................5,000.........0.11%
Martin Perry...........................130.........0.00%
.....................................4,617,630......100.00%
The assumption appears to be that the new investor is about to put significant new money into Brighton and Hove Albion Football Club Limited, but this is probably not the case."
"It is perhaps more likely, that the new investor has agreed to subscribe for shares in The Community Stadium plc, a completely separate public limited company who will build and hold the new stadium. The new stadium will be financed through a share issue, sale of the name of the stadium and the brewing rights and loan finance. Before placing a share issue, the club will need to be sure that the share placing is adequately underwritten, so if any of the potential funding is lost at this stage, it could seriously impact on the funding model and place the project in jeopardy.
Another possible alternative is that the new investor has already loaned money to the club with the intention of converting this to equity at a later date. Any fall-out could have serious consequences if he demanded repayment. Remember also, that the club will benefit by £3 million repayment of the "Falmer Costs" as soon as the funding for the stadium is in place.
(I believe there is also a separate issue with Skint.)
From the club accounts, at June 2005, the indebtedness was:
Bank Overdraft...............................235,423
Payment received on account........1,599,217
Trade Creditors..............................824,195
Owed to BHA Holdings.................4,483,530
Capital Gains Tax...........................365,418
Tax and Social Security..................810,229
Directors Loan Accounts.................564,083
Other Creditors...............................220,771
Other Loans.................................2,681,898
Accruals..........................................100,622
Total Indebtedness.....................11,885,386
Projecting forward to today's position, it is reasonable to assume that the underlying turnover and expenditure have been similar to last year and that the sale of Virgo and Harding has probably just about balanced the books in terms of cash flow, so it is likely that the above figures will not have changed significantly if projected forward to today.
The major concerns with these figures are:
1. As these figures are as at the end of June, the overdraft at the bank, of £235k, is after having already received most of the season ticket renewals for the coming season. I would assume that most of the "Payment received on account" of £1,599k represented season ticket sales, which means the club would only receive a further ~£800k of gate receipts in the following 12 months and have already spent the season ticket proceeds.
2. Trade Creditors of £824k is very high, considering the comparatively low level of third party suppliers. County Court Judgements highly likely.
3. Capital Gains Tax of £365k. This gain arising from the sale of the Goldstone has been rolled over every year in the expectation of an offset against a new stadium. Given the continuing delays, HM Customs and Revenue could easily call this for payment.
4. Tax and Social Security £810k. Presumably this relates to PAYE and NI deducted from players/staff wages, but not passed to HM Customs and Revenue and the Employer's liability for NI. The level of this is alarming and I would assume an "arrangement to pay" is in place. Failure to make agreed payments on time, could result in full payment being demanded and inevitably severe court action.
5. Other Loans £2,681k - This is perhaps the most concerning given events of the last few days. There is no indication of who has loaned this money and under what terms the loan has been placed. It isn't the directors; those are shown separately, and it isn't a bank loan - that is also shown separately. From the accounts most of this loan is shown as payable within 12 months and very little interest has been paid in the year. It is therefore reasonable to assume that this is a short term, unsecured, interest-free loan from an individual, or individuals. A fall-out with somebody who has already loaned money to the club, and could threaten to demand repayment, is potentially far more damaging than a fall-out with a potential new investor.
For information, the Director's loan of £564,083 comprised:
Dick Knight - £418,333
Derek Chapman - £110,750
Ray Bloom - £35,000
Shareholding of BHA Holdings Ltd (who indirectly own 99.99% of BHA Football Club Ltd)
Dick Knight..................1,367,500.......29.61%
Pig City Incorporated......550,000.......11.91%
Ray Bloom.......................500,000.......10.83%
William Brown.................500,000.......10.83%
Friday-Ad.........................500,000.......10.83%
Kevin Griffiths.................500,000.......10.83%
Derek Chapman...............350,000.........7.58%
Michael Hastilow.............150,000.........3.25%
Robert Pinnock.................120,000.........2.60%
John Vickers.......................50,000.........1.08%
Joseph Hirschel..................15,000.........0.32%
Peter Jackson.....................10,000.........0.22%
John Town...........................5,000.........0.11%
Martin Perry...........................130.........0.00%
.....................................4,617,630......100.00%
The assumption appears to be that the new investor is about to put significant new money into Brighton and Hove Albion Football Club Limited, but this is probably not the case."
