| £65m - one for the financial experts on PS 22:58 - Jan 14 with 3058 views | Private_Partz |
Apologies for this thread. I am pretty thick when it comes to things financial and my bank manager would agree I am sure if he had heard of me.
I have seen the above figure bandied about a few times tonight. Are we saying that currently the club is £65 million in debt?? [Post edited 14 Jan 2016 22:59]
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| You have mission in life to hold out your hand,
To help the other guy out,
Help your fellow man.
Stan Ridgway
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| £65m - one for the financial experts on PS on 23:08 - Jan 14 with 2965 views | Edmundo |
What?
About £7 profit as far as I can see.
Unless someone's had their hands in the till😂 |  |
| Swansea City-Officially the best football team in Wales-FACT |
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| £65m - one for the financial experts on PS on 23:17 - Jan 14 with 2892 views | raynor94 |
Ask fans_dad, he's your man |  |
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| £65m - one for the financial experts on PS on 23:17 - Jan 14 with 2890 views | A_Fans_Dad |
Did you read the original post that I pointed to?
There may be money owed to us to offset some of the £65M including some outstanding Sky TV cash.
It is also because it has outgoings over 14 months against income of only 12 months. |  | | |
| £65m - one for the financial experts on PS on 23:18 - Jan 14 with 2879 views | awayjack |
It's technically correct as amounts we owe but creditors is just one line in the accounts. To get fair position you'd offset amounts owed to us and money in the bank and probably decent chunks due like instalments from Bony sale. I think the Swiss ramble article mentioned £20m odd in loans or overdrafts in 2015 the accounts, mostly because we'd changed accounting year end from May to July so effectively had two months extra costs (16m or so )in our closed season without income. Sky money was over 80m last year so the timing of these payments will influence our debt at any time. Banks would be fairly relaxed about lending against it short term. Challenge naturally is if it falls due to relegation but then players sales would cover most debt. [Post edited 14 Jan 2016 23:19]
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| £65m - one for the financial experts on PS on 00:43 - Jan 15 with 2640 views | Nookiejack |
I have just copied and pasted what I put on other thread - apologies in advance if seen as duplication.
The £65.8m creditors position is explained to some extent note 15 to the accounts on page 22.
It is all due within one year.
Jackonicko is right to highlight that £30m of it is uncategorised - so quite unhelpful and surprised KPMG did not require the club to give further explanation of what such a material amount comprises.
There are also Creditors falling more than one year equating to £6.8m. (only £0.8m 12 months to 31st May 2015)
I suppose an interesting thing about the move to 31st July accounting period is that £5m amount owing for Eder and £3m for Tabanou would be included in these accounts as we bought them before 31st July 2015. Previously they would not have been included if accounts were made up to 31st May 2015.
So from a comparison perspective with previous accounts (12 months basis) - would make Creditors position £8m worse off but Intangible assets (Player Valuations) £8m better off (less maybe a couple months of amortisation).
Creditors may also include £3m payment due to Southampton for Jack Cork.
Difficult to establish whether the instalments for Cork, Tabanou and Eder are due in less than or over 1 year. I would think most of their combined transfer fees of £11m are reported in Creditors > 1 year (less the first instalments due which would be reported in Creditors <1 year). i.e within the £6.8m highlighted above .
Note 26 is quite interesting - 'Other Financial Commitment' it states signing on fees of £19.4m will become due to certain players if they are still in the service of the 'group' on specific future dates. Hence £19.4m with regards to signing on fees do not appear to have been booked in the accounts yet - only when certain milestones are reached. So not yet in Creditors < 1 year or > 1 year).
We do however have circa £33m of current assets see page 9 (£18m of which is due > 1 year.)
Hence net Creditors position more like £65.8m + £6.8m less £33m = £39.6m.
Then you have to analyse player valuations in the accounts = £49.5m (page 18 note 10) verses true market value. The accounts only reflect what we have paid for the players, less amortisation to date less downward revisions of value only (not upward revisions).
The £12m Shelvey transfer fee (less what we pay to Liverpool) probably means the £49.m is a significantly lower figure than we would achieve if we sold the whole of our playing squad.
So from a Balance Sheet perspective if we monetised (turned everything into cash) all Assets and Liabilities would probably be worth a lot more than the £31.2m of net asset value reported in accounts. Which is what the accounts currently say the club is worth - if turned everything into cash.
The key issue seems to be to manage short term cash flow issues re: Creditors <1 year are £65.m verses Short term Assets of £15m + TV money £85m coming in less wages £80m re: Jackonicko's assessment. Hopefully wages are less due to 14 months accounting period.
The worst case for medium term is that we run into short term cash flow problems and then have to embark on a fire-sale of our players - at significant undervalue of their true worth. Especially if we get relegated.
Providing:-
1. cash is well managed; and
2. players have relegation clauses in their contracts equivalent to parachute payments
....we should be in a strong financial position (similar to Norwich) to compete in Championship if we get relegated. Will also then only have to sell players if we want to. | | | |
| £65m - one for the financial experts on PS on 00:49 - Jan 15 with 2632 views | Nookiejack |
I suppose one thing that could potentially hurt us - is the £19.4m of signing on fees that we are committed to - but have as yet not gone through the accounts - if they do not decrease if we get relegated.
This could eat up a fair chunk of cumulative parachute payments. | | | |
| £65m - one for the financial experts on PS on 01:11 - Jan 15 with 2586 views | Nookiejack |
The other thing the Trust needs to keep an eye on is the cumulative related party transactions with Jaxx Ltd.
If you take a look at note 33 on page 29 - the Group purchased good and services of £2.5m in 2015 and £1.7m in 2014. Hence now this totals £4.2m cumulatively and could be greater than this if contract runs into 2016.
Jaxx Ltd appears to be a company owned by Martin Morgan - I recall others on here saying that Jaxx is involved with the building of training facilities/academy?
No issues with this as long as visible tendering process has taken place and Trust is comfortable that best value for money company won the work.
(Apologies if previous Trust minutes have said - Trust reviewed contract won by Jaxx Ltd amounting to £m over certain period and Trust were happy that this offers best value for money with regards to club.) | | | |
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| £65m - one for the financial experts on PS on 07:46 - Jan 15 with 2378 views | Private_Partz |
Thanks all, genuinely I am grateful although my eyes glazed over at a lot if that. Basically I think you are saying it is not as bad as £65m as this can be offset against assets and player sales, hopefully not a fire sale, caused by relegation.
I think I am correct in saying therefore we can still speculate to accumulate and still go down without massive debts if relegation clauses are in place.
In view of this I would suggest we do not shout from the rooftops we are 65m in debt when it is not strictly correct and I am not helping by starting a bloody thread on it! | |
| You have mission in life to hold out your hand,
To help the other guy out,
Help your fellow man.
Stan Ridgway
|
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| £65m - one for the financial experts on PS on 07:54 - Jan 15 with 2347 views | Dewi1jack |
Thanks Nookiejack for doing the legwork on this.  |  |
| If you wake up breathing, thats a good start to your day and you'll make many thousands of people envious. |
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| £65m - one for the financial experts on PS on 08:02 - Jan 15 with 2320 views | Thornburyswan |
Whilst I'd NEVER claim to be a financial expert I don't think the debt (whatever that figure is) is/could become the issue, it's more around cash - i.e. the cash we now need to run our club in regard to wages + crucially the upkeep/running of our brand new training facilities vs the incoming cash IF we were to get relegated, noting that the Sky/TV monies represent circa 90% of our income.
For me as long as we have ALL our players/staff on wage cut clauses if we exit the EPL & when you add in parachute monies + fees in the first year relating to players who want (or we need) to exit AND despite all that mayhem we consolidate in the Championship we will be fine - potentially in a much better place than we were 6 years ago when we were pushing to come up (much better facilities & image to potential new players).
That said you can spin the doomsday cycle of back to back relegations (we have done that before!) & incoming cash dropping much faster than our basic cash needs, at which point any debt becomes an issue. | | | |
| £65m - one for the financial experts on PS on 09:46 - Jan 15 with 2066 views | Uxbridge |
For a start the £65m needs to be offset against the current assets ... you've got to offset the transfer fees/loans to be paid against the income to be received. Plus you'd have things like the season ticket revenue already collected for 2015/16 which would be deferred.
The big thing I took out of the latest set of accounts is that is demonstrated how tight money is at the club. There isn't a pile of cash there that could be just chucked at the playing squad. The Shelvey money will hopefully allow some movement, christ knows we need it, but I'd be surprised if we saw more coming in than we see going out. Not that I'd mind ... there's precious few of the sods I'd want to keep on current form. |  |
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| £65m - one for the financial experts on PS on 09:51 - Jan 15 with 2027 views | Lord_Bony |
Don't be too worried about profit.
It is the job of the accounts team to make sure we show as shabby a profit as possible...this is how all businesses operate worldwide.
To show unnecessary profits means we get hammered with all kinds of taxes.
If we need cash I'm sure there's millions tied up in assets we could liquidate if need be.
All in all my opinion is we are a well run club and financially healthy. |  |
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| £65m - one for the financial experts on PS on 10:24 - Jan 15 with 1918 views | Nookiejack |
| £65m - one for the financial experts on PS on 08:02 - Jan 15 by Thornburyswan |
Whilst I'd NEVER claim to be a financial expert I don't think the debt (whatever that figure is) is/could become the issue, it's more around cash - i.e. the cash we now need to run our club in regard to wages + crucially the upkeep/running of our brand new training facilities vs the incoming cash IF we were to get relegated, noting that the Sky/TV monies represent circa 90% of our income.
For me as long as we have ALL our players/staff on wage cut clauses if we exit the EPL & when you add in parachute monies + fees in the first year relating to players who want (or we need) to exit AND despite all that mayhem we consolidate in the Championship we will be fine - potentially in a much better place than we were 6 years ago when we were pushing to come up (much better facilities & image to potential new players).
That said you can spin the doomsday cycle of back to back relegations (we have done that before!) & incoming cash dropping much faster than our basic cash needs, at which point any debt becomes an issue. |
I think this is a very good summary.
The £19.4m commitment for outstanding signing on fees - not yet booked through our accounts - could be a drain.
Most likely to apply to:-
1. Gomis
2. Cork
3. Ayew
If a buying club pays market value for these players - they will not move unless they are compensated for the outstanding signing on fees - otherwise will be taking a £19.4m hit. Of course buying club could increase their current wages to compensate them for this.
This is probably reason why Gomis did not go to Middle East club last Summer. We would have wanted c. £7m market value but could then have been £6-7m signing on fees outstanding which Gomis would have wanted settled plus wages of £60k to £80k a week.
So Arab club would have been asked to pay £14m plus £80k wages a week. Probably why they pulled out.
Given the quantum of the £19.4m and say £6m outstanding for Gomis plus say £4m for Cork (I assume we paid him a substantial one as only paid Southampton £3m transfer fee). The signing on fee for Ayew could have been between £7m to £9m. No wonder we were able to attract him.
If we get relegated - there will be definite be strong interest for Ayew but we might have to accept netting off signing on fee - as part of any deal.
I can't see that the outstanding signing on fees would be reduced - if we get relegated.
I would definitely want to keep Cork if we did. | | | |
| £65m - one for the financial experts on PS on 10:42 - Jan 15 with 1871 views | Nookiejack |
| £65m - one for the financial experts on PS on 07:46 - Jan 15 by Private_Partz |
Thanks all, genuinely I am grateful although my eyes glazed over at a lot if that. Basically I think you are saying it is not as bad as £65m as this can be offset against assets and player sales, hopefully not a fire sale, caused by relegation.
I think I am correct in saying therefore we can still speculate to accumulate and still go down without massive debts if relegation clauses are in place.
In view of this I would suggest we do not shout from the rooftops we are 65m in debt when it is not strictly correct and I am not helping by starting a bloody thread on it! |
With regards to speculating to accumulate - if relegation clauses are in place.
This is probably the reason why we are finding it so hard to attract players at the moment.
We have a very high chance of going down - so if you were a Naismith type player - why would you take the chance of moving from Everton - if a relegation clause was in place. Much better to sit on bench at Everton.
That is why others on here are saying can only see Loan deals being done - with then view to permanent signings if we stay up. | | | |
| £65m - one for the financial experts on PS on 11:50 - Jan 15 with 1763 views | A_Fans_Dad |
Nookiejack, excellent analysis thanks.
I am amazed that the £30M uncategorised amount has not been questioned, surely the Trust Rep had to sign off these accounts and should know who the cash is owed to?
That amount is roughly equal to what we would be left with (ie your £39.6M)
Also, we have "assets", but do we have any debtors owing us money, I couldn't see any noted? | | | |
| £65m - one for the financial experts on PS on 11:52 - Jan 15 with 1745 views | A_Fans_Dad |
Should the Mods remove this & the other threads where I have mentioned the cash situation to prevent any "embarressment" of any kind?
Phil_S? | | | |
| £65m - one for the financial experts on PS on 12:07 - Jan 15 with 1691 views | Nookiejack |
| £65m - one for the financial experts on PS on 11:50 - Jan 15 by A_Fans_Dad |
Nookiejack, excellent analysis thanks.
I am amazed that the £30M uncategorised amount has not been questioned, surely the Trust Rep had to sign off these accounts and should know who the cash is owed to?
That amount is roughly equal to what we would be left with (ie your £39.6M)
Also, we have "assets", but do we have any debtors owing us money, I couldn't see any noted? |
A_Fans_Dad,
If you take a look at the Balance Sheet on page 9 - you will see that Debtors are £28.9m (also noted there is that £11.6m are due after more than 1 year - hence why Jackonicko assumed Bony money owed by Man City is staggered over a few years.)
There is a further breakdown then of the £28.9m if you take a look at Note 13 on page 21.
(For this analysis ignore the Holding Company Balance Sheet on page 10. This doesn't contain debtors - just the Investment that the Holding Company has made in the Trading Company. It is the Balance Sheet of the Trading Company on page 9 that matters for this discussion).
Totally agree with you that the £30m of uncategorised Creditors should be explained - as is a material element of the Balance Sheet and as I have said above - don't understand why KPMG haven't required further disclosure of this. | | | |
| £65m - one for the financial experts on PS on 12:14 - Jan 15 with 1671 views | A_Fans_Dad |
| £65m - one for the financial experts on PS on 12:07 - Jan 15 by Nookiejack |
A_Fans_Dad,
If you take a look at the Balance Sheet on page 9 - you will see that Debtors are £28.9m (also noted there is that £11.6m are due after more than 1 year - hence why Jackonicko assumed Bony money owed by Man City is staggered over a few years.)
There is a further breakdown then of the £28.9m if you take a look at Note 13 on page 21.
(For this analysis ignore the Holding Company Balance Sheet on page 10. This doesn't contain debtors - just the Investment that the Holding Company has made in the Trading Company. It is the Balance Sheet of the Trading Company on page 9 that matters for this discussion).
Totally agree with you that the £30m of uncategorised Creditors should be explained - as is a material element of the Balance Sheet and as I have said above - don't understand why KPMG haven't required further disclosure of this. |
Thanks!  | | | |
| £65m - one for the financial experts on PS on 12:43 - Jan 15 with 1607 views | Nookiejack |
When you take a look again at Jackonicko's excellent analysis and in particular his point about how worrying the the Cashlow statement is.
He points out that we only made £6m cash from Operating Activities (see page 11 and then explained in detail notes 29 and 30 on pages 27-28).
The Cashflow statement and notes then explain where the cash has gone:-
+ £6m Operating Activities
- £41.6m on Player Acquisitions
+£18m on Player Sales
- £3.3.m on Fixed Assets (I assume this on on building the training facilities and Academy)
- £0.9m Dividend
= -£22m
+ Loan Taken Out £7.5m
= Net Cash Outflow = -£14.5m.
Amazing to think that with a Turnover of £103.9m (Match Income £7.7m, Media £85.2m, Commercial Income £9.2m and £1.8m other)
..............we had net cashflow of -£14.5m, including taking out a loan of £7.5m (so would have been -£22m without it).
The £3.3m on Fixed Assets suggests that not that much cash has been spent on the Training Ground / Academy - unless other large elements of this have been booked under Operating Expenses and hence not capitalised? | | | |
| £65m - one for the financial experts on PS on 12:50 - Jan 15 with 1583 views | A_Fans_Dad |
| £65m - one for the financial experts on PS on 12:43 - Jan 15 by Nookiejack |
When you take a look again at Jackonicko's excellent analysis and in particular his point about how worrying the the Cashlow statement is.
He points out that we only made £6m cash from Operating Activities (see page 11 and then explained in detail notes 29 and 30 on pages 27-28).
The Cashflow statement and notes then explain where the cash has gone:-
+ £6m Operating Activities
- £41.6m on Player Acquisitions
+£18m on Player Sales
- £3.3.m on Fixed Assets (I assume this on on building the training facilities and Academy)
- £0.9m Dividend
= -£22m
+ Loan Taken Out £7.5m
= Net Cash Outflow = -£14.5m.
Amazing to think that with a Turnover of £103.9m (Match Income £7.7m, Media £85.2m, Commercial Income £9.2m and £1.8m other)
..............we had net cashflow of -£14.5m, including taking out a loan of £7.5m (so would have been -£22m without it).
The £3.3m on Fixed Assets suggests that not that much cash has been spent on the Training Ground / Academy - unless other large elements of this have been booked under Operating Expenses and hence not capitalised? |
It strongly suggests that we need the new Media money for next year, plus we need to get back to being more savy with the Player Buying & Wages departments.
Also a bit worrying is the number of people who work for the club, but at least we have got rid of 4 of them, but unfortunately their jobs were pretty essential. | | | |
| £65m - one for the financial experts on PS on 13:44 - Jan 15 with 1487 views | Nookiejack |
There are perhaps some lesser points in the Accounts which would be interesting to understand:-
1. on page 19 there is a transfer of £3.15m assets under construction into short leasehold.
Does this mean costs of Training ground / Academy have been incurred and then incorporated into a Fixed Asset - with a short leasehold?
Do these Assets revert back to someone at end of lease? If yes who do they revert back to?
Do we own the Training Ground and Academy - or are they under short term lease?
2. Auditors services (page 15) for taxation equated to £33.2k (£11k in 2014) compared to the full costs of the audit of £18.5k. i.e. Nearly twice the costs of the full audit.
Interesting what taxation advice the club asked KPMG to perform? Why in particular have they trebled in 2015 compared to 2014. | | | |
| £65m - one for the financial experts on PS on 13:53 - Jan 15 with 1454 views | A_Fans_Dad |
| £65m - one for the financial experts on PS on 13:44 - Jan 15 by Nookiejack |
There are perhaps some lesser points in the Accounts which would be interesting to understand:-
1. on page 19 there is a transfer of £3.15m assets under construction into short leasehold.
Does this mean costs of Training ground / Academy have been incurred and then incorporated into a Fixed Asset - with a short leasehold?
Do these Assets revert back to someone at end of lease? If yes who do they revert back to?
Do we own the Training Ground and Academy - or are they under short term lease?
2. Auditors services (page 15) for taxation equated to £33.2k (£11k in 2014) compared to the full costs of the audit of £18.5k. i.e. Nearly twice the costs of the full audit.
Interesting what taxation advice the club asked KPMG to perform? Why in particular have they trebled in 2015 compared to 2014. |
Isn't the Academy facility a joint venture with the Uni? | | | |
| £65m - one for the financial experts on PS on 14:26 - Jan 15 with 1414 views | Nookiejack |
| £65m - one for the financial experts on PS on 12:50 - Jan 15 by A_Fans_Dad |
It strongly suggests that we need the new Media money for next year, plus we need to get back to being more savy with the Player Buying & Wages departments.
Also a bit worrying is the number of people who work for the club, but at least we have got rid of 4 of them, but unfortunately their jobs were pretty essential. |
Yes agree again with you about Employee Numbers - considering £85.1m of our £103.9m turnover was media and you don't need many employees in this department (9 noted in the accounts - page 15)
307 employees = 2015 (Turnover £103.9m including £85.1m Media income, 9 employees in Media department)
246 employees = 2014 (Turnover £98.7m including £80.7m Media income, 10 employees in Media department).
This implies our Turnover has increased by circa £5m because our Media income has increased.
Yet Employee numbers in Media department have fallen by 1.
.......hence Employee numbers have increased by 62 (307- 246 - 1) in non Media departments - without on face of it any increase in non Media income.
Hopefully the Trust sees Management Accounts along the lines of the following:-
The Profit and Loss Account (P&L) of the Club divided into following P&L Sub-divisions:-
1. Media department: (Media income £85.1m in 2015 less costs of 9 Employees in Media Department).
2. Match Day: (Match day Revenue £7.7m in 2015 less costs of Employees specifically with regards to Match days).
3. Commercial Revenue: (£9.2m Revenue in 2015 (£7.9m in 2014) less costs of the 59 Employees (55 in 2014) in the Commercial Department.
4. Administration Costs: (17 Employees in 2015 verses 14 in 2014).
5. Player, Manager and Coaches Costs (excluding Academy): Including Player Wages, Player Amortisation, Profit/Loss from Player Trading plus Revenue received from players loaned out.
6. Academy Costs: Including Players and Coaches of the Academy. Can then see over time - the cumulative costs of the Academy compared to how many then make first team or are sold to other clubs. Probably need to look at this cumulatively over a few years as it will take academy players a few years to develop - as opposed to shutting the Academy down after 1 year if no Academy players make the first team.
Hopefully can then see which divisions are making the club profit or loss and you would assume we would only be increasing employee numbers in divisions where we are increasing the revenue. | | | |
| £65m - one for the financial experts on PS on 14:29 - Jan 15 with 1403 views | Nookiejack |
| £65m - one for the financial experts on PS on 13:53 - Jan 15 by A_Fans_Dad |
Isn't the Academy facility a joint venture with the Uni? |
Would you then report it as a short lease?
Doesn't it suggest we are leasing it off the University? | | | |
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