Peter Parker
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Richard Walker
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Post by Peter Parker on Feb 12, 2015 9:34:04 GMT
AN unexpected windfall following the surprise sale of Rickie Lambert from Southampton to Liverpool has helped Bristol Rovers avoid posting a yearly loss of close to £1 million.
Financial results for the year ending June 30, 2014, which are set to be approved at Rovers' annual general meeting on Tuesday, March 3, will show that the club reduced their yearly losses by 27.5 per cent from £781,911 to £566,408. The club, however, would have posted a much more significant loss had it not been for the bonus they received as a result of a sell-on clause when Lambert was snapped up by Liverpool for about £4.5 million prior to the start of the World Cup over the summer.
Lambert's move is believed to account for the majority of the £470,000 the club received in player sales, while a deal that saw goalkeeper Matt Macey join Arsenal is also believed to have made up the most of the £150,000 collected for sale of youth players.
Total debt, meanwhile, was slightly reduced year-on-year (3.7 per cent) – but current liabilities still exceed assets by almost £5.5 million and chairman Nick Higgs writes that the "club's ability to continue trading is still heavily dependent on funding from directors."
This is a situation that is described as "untenable" in the long term and brings into sharp focus the importance of getting the problem-laden UWE Stadium project moving again in the summer.
The report confirms that close to £1 million has been spent on pursuing a High Court action against Sainsbury's over the sale of the Memorial Stadium to fund the project.
A trial is scheduled to take place in May and should a ruling going against Rovers, the report states that the club would have to "return to the drawing board", a position that would be "hard to contemplate".
The club confirmed in the report that it had needed to take out a relatively high-interest, short-term loan with a company called MSP Capital Limited in December.
When asked about the reason for taking out that loan, which is believed to be in the region of £2 million, finance director Toni Watola said: "The High Court action is costing the club extra money and we were unable to obtain further funds from Barclays, who we had the mortgage with. To ensure we had sufficient funds to continue the action we had to seek alternative funding."
The loan, part of which was used to repay former director Geoff Dunford £200,000 of what he is owed, is accumulating interest of 1.2 per cent per month and has to be paid back later this year.
Elsewhere, turnover was up to £4,328,341 from £3,819,633, but the wage bill across the company as a whole was up from about £3.2 million to £3.5 million as the board invested in a number of loan players to try to improve a season of struggle that eventually ended in relegation.
"The real impact will come in the next set of figures as a result of the club getting relegated last season," said Watola.
"We have lost central funds of just short of £500,000 as a result of the relegation and we probably won't have the benefit of the profit from player transfers we have had this time around.
"The big positive we have had this season is that we are staying within the parameters of our budget this season.
"The great support of our fans has also helped because crowds have held up pretty well and the directors are generally pretty happy with the financial performance of the club this year.
"There will still be another loss at the end of this year and that is why we are continuing to pursue the stadium project through the high court as that is the real future of the club."
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Peter Parker
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Richard Walker
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Post by Peter Parker on Feb 12, 2015 9:36:35 GMT
As good as confiems from the club. the court decision is sh*t or bust
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Deleted
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Post by Deleted on Feb 12, 2015 9:38:34 GMT
Deep, deep, poo if Sainsbury's are able to walk away.
s**t or bust it is.
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Deleted
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Post by Deleted on Feb 12, 2015 9:40:49 GMT
That wage bill for any league 2 club is scandalous let alone for a squad which got the club relegated.
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Post by bluebeard on Feb 12, 2015 10:47:54 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model.
We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year".
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Deleted
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Post by Deleted on Feb 12, 2015 11:01:28 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model. We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year". I would suspect that most League 2 clubs would make a profit if they had our level of income. |
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Post by bluebeard on Feb 12, 2015 11:14:58 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model. We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year". I would suspect that most League 2 clubs would make a profit if they had our level of income. But how many of them actually do make a profit? I think there is a tendency to live beyond your means in football with speculate to accumulate being the strategy and luck and chemistry being the missing ingredients in most cases. Of course it is possible to build a break even operating model but you will always be overtaken by your more ambitious or reckless peers. People don't protest that loudly at BRFC over the level of losses, they protest if the board won't fund a signing or if we miss out on a player to another club. Thats not an excuse for the mess we're in, its a fact. As the chairman says in his report, not getting any Sainsburys money will be hard to contemplate. |
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Cheshiregas
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Post by Cheshiregas on Feb 12, 2015 11:16:36 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model. We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year". Points from this: ~ the directors either haven't got the cash or don't want to fund the club further - if we are that desperate to be honest I would rather they lent the club the money and charged interest. ~ MSP is the type of company that will not take prisoners. They will want their money repaid on the dot. If not refinancing will come at an extortionate cost. ~ the final decision on the Sainsbury contract needs to come quickly and hopefully it will be in our favour because if not..... |
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Post by bluebeard on Feb 12, 2015 11:21:15 GMT
Your home may be at risk if you fail to meet these repayments.
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Post by frenchgashead on Feb 12, 2015 11:30:44 GMT
This certainly confirms just how bad the situation is. We're running at a yearly loss of about £1m (apart from the Lambert windfall), debts of almost £6m, a BoD refusing to put in more money and a loan from MSP (secured on the Mem) at 14% a year partly used to pay off Dunford and the rest for the case against Sainsbury's. So as everybody says it's s..t or bust with bust looking the best bet at the moment. Can we really say that the BoD have acted responsibly? We are in hoc to a firm that would surely take the Mem cheap at £2m and sell from under us and charge a high rental while they do it. May be Sainsbury's pay us enough to write off about £7.5/8m of debts (probably £9m now) or some unknown benefactor buys the club - but would they do it knowing they could sell the Mem and then clear off? All this has happened to other clubs. Administration in the Conference means a loss of 10 points (either this season with the play-offs much more difficult) or next. Insolvency means automatic relegation to Conference South but as Hereford found out that isn't automatic - it could be worse.
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Post by upminstergas on Feb 12, 2015 11:59:38 GMT
This certainly confirms just how bad the situation is. We're running at a yearly loss of about £1m (apart from the Lambert windfall), debts of almost £6m, a BoD refusing to put in more money and a loan from MSP (secured on the Mem) at 14% a year partly used to pay off Dunford and the rest for the case against Sainsbury's. So as everybody says it's s..t or bust with bust looking the best bet at the moment. Can we really say that the BoD have acted responsibly? We are in hoc to a firm that would surely take the Mem cheap at £2m and sell from under us and charge a high rental while they do it. May be Sainsbury's pay us enough to write off about £7.5/8m of debts (probably £9m now) or some unknown benefactor buys the club - but would they do it knowing they could sell the Mem and then clear off? All this has happened to other clubs. Administration in the Conference means a loss of 10 points (either this season with the play-offs much more difficult) or next. Insolvency means automatic relegation to Conference South but as Hereford found out that isn't automatic - it could be worse. I was in a pretty good mood this morning before i read that.  What makes you think bust is looking the best bet?? |
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strung out
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Post by strung out on Feb 12, 2015 12:04:04 GMT
If things go tits up, don't buy the club narrative that it'll be anyone else's fault but theirs.
Sainsburys haven't caused million pound a year losses, TRASH haven't forced the club to waste money on long contracts and poor financial management. Smaller clubs than ours, in higher leagues, with worse stadiums have posted profits.
I will be absolutely ecstatic if the club manage to pull off the UWE stadium, but don't let the appearance (or non appearance) of it mask the fact that this club is atrociously run.
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Post by Bristol Rovers on Feb 12, 2015 12:36:54 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model. We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year". I would suspect that most League 2 clubs would make a profit if they had our level of income. How do you know that? How would you know what & how much they would spend. How do you know they wouldn't piss it all away? Also, how many league 2 clubs run at a profit? Not many I bet. |
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faggotygas
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Post by faggotygas on Feb 12, 2015 12:52:21 GMT
This certainly confirms just how bad the situation is. We're running at a yearly loss of about £1m (apart from the Lambert windfall), debts of almost £6m, a BoD refusing to put in more money and a loan from MSP (secured on the Mem) at 14% a year partly used to pay off Dunford and the rest for the case against Sainsbury's. So as everybody says it's s..t or bust with bust looking the best bet at the moment. Can we really say that the BoD have acted responsibly? We are in hoc to a firm that would surely take the Mem cheap at £2m and sell from under us and charge a high rental while they do it. May be Sainsbury's pay us enough to write off about £7.5/8m of debts (probably £9m now) or some unknown benefactor buys the club - but would they do it knowing they could sell the Mem and then clear off? All this has happened to other clubs. Administration in the Conference means a loss of 10 points (either this season with the play-offs much more difficult) or next. Insolvency means automatic relegation to Conference South but as Hereford found out that isn't automatic - it could be worse. Might be me not understanding business loans, but MSP couldn't just take the Mem if Rovers were unable to repay, could they? I mean, its worth way more than 2 million, so although they could repossess, the Mem would have to be sold and any profit after fees over the £2m returned to Rovers, wouldn't it? That's what happens with residential mortgage. |
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Post by Topper Gas on Feb 12, 2015 13:05:54 GMT
But as a "fire" sale what is the Mem actually worth w/o pp for houses etc? If we lose come may debts by then will be £6m+ we'll have our own & Sainsbury's costs to pay so overall debts could be £7.5m, would we recover that sum form selling the mem, even if we did where would we play our hame games?
Looking at Wycombe as an example their wage bill was £1.6m on their last declared accounts, barnet's this season is £0.75m, Macclesfield's just £0.2m!!
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Post by frenchgashead on Feb 12, 2015 13:15:07 GMT
But as far as we can see the MSP money is NOT a mortgage. It is a loan with the Mem used as security. Later this year they will ask for their money back. If we can't pay then we've defaulted on the loan terms and the security passes to MSP who then own the Mem. Maybe we could negotiate a new deal either with MSP or some other Wonga style company but I assume the terms would be a lot worse than 14%.
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Deleted
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Post by Deleted on Feb 12, 2015 13:18:59 GMT
I'm not sure how it compares to other clubs at L2 level but that wage bill illustrates why, outside of the premiership, it is very difficult to find a sustainable business model. We knew the MSP money would probably be expensive but, at 14.4% annualised, let's hope that a financial settlement is reached in May. We don't want to be in the uncomfortable position of having to ask for an extension when the loan falls due for repayment "later this year". I would suspect that most League 2 clubs would make a profit if they had our level of income. I suspect they'd spend it. |
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Cheshiregas
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Post by Cheshiregas on Feb 12, 2015 13:19:15 GMT
This certainly confirms just how bad the situation is. We're running at a yearly loss of about £1m (apart from the Lambert windfall), debts of almost £6m, a BoD refusing to put in more money and a loan from MSP (secured on the Mem) at 14% a year partly used to pay off Dunford and the rest for the case against Sainsbury's. So as everybody says it's s..t or bust with bust looking the best bet at the moment. Can we really say that the BoD have acted responsibly? We are in hoc to a firm that would surely take the Mem cheap at £2m and sell from under us and charge a high rental while they do it. May be Sainsbury's pay us enough to write off about £7.5/8m of debts (probably £9m now) or some unknown benefactor buys the club - but would they do it knowing they could sell the Mem and then clear off? All this has happened to other clubs. Administration in the Conference means a loss of 10 points (either this season with the play-offs much more difficult) or next. Insolvency means automatic relegation to Conference South but as Hereford found out that isn't automatic - it could be worse. Might be me not understanding business loans, but MSP couldn't just take the Mem if Rovers were unable to repay, could they? I mean, its worth way more than 2 million, so although they could repossess, the Mem would have to be sold and any profit after fees over the £2m returned to Rovers, wouldn't it? That's what happens with residential mortgage. The loans are secured on the Mem and day to day business cashflow. if Rovers default MSP can take possession, flog the Mem for whatever they can get ~ they won't worry as long as their debt/interest/fees are paid ~ and any balance left over (if any) is handed back to the club. Whether we can continue to play there while this happens would be up to MSP ~ they may want to sell with vacant possession.... MSP are a business and not a charity. They won't worry about the adverse publicity of putting Rovers out of business. Therefore it is vitally important that we win the case or get substantial compensation and quick. |
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Deleted
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Post by Deleted on Feb 12, 2015 13:20:17 GMT
So, Rovers are confident that Sainsburies will at least pay court fees / out of court settlement to cover the loan cost... Jesus, I hope this Judge makes an example of them.
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faggotygas
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Post by faggotygas on Feb 12, 2015 13:29:24 GMT
But as a "fire" sale what is the Mem actually worth w/o pp for houses etc? If we lose come may debts by then will be £6m+ we'll have our own & Sainsbury's costs to pay so overall debts could be £7.5m, would we recover that sum form selling the mem, even if we did where would we play our hame games? Looking at Wycombe as an example their wage bill was £1.6m on their last declared accounts, barnet's this season is £0.75m, Macclesfield's just £0.2m!! Who knows, but surely more than £2m for that piece of land in a popular area. Anyhow, perhaps we would be able to arrange a sale and lease-back with the council a la Plymouth Argyle, again who knows - we would be through the looking glass.
Agreed the wage bill seems out of control, but I'm not sure there's enough information in the report to compare properly. For example, it says 'wage bill over the company as a whole', so including stewards, bar persons etc. Is that the same with the amounts you quoted from the other clubs?
Turnover of £4.3m and wages of £3.5m could be good or bad, depends on what the rest of the club's non-exceptional expenses are, e.g. rates and upkeep of the stadium. Presumably those losses include exceptional items, so how much of them is down to fighting Sainsbury's? Is the club's ongoing loss, without exceptionals? What's the cashflow situation? Impossible to know the true ongoing financial viability of the club without this information.
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