I posted this ages ago on the facebook banter page in response to a pox fan who didn't know what he was really talking about it turned out someone who did know what they were talking about was analysing stuff on their forum and the chump on facebook was taking all the worst 'headline' observations in order to wind up Swindon fans. What a cretin. It's more of an analysis that we're not going to pot and that we shouldn't suddenly have to find millions to pay back our backers and the holding co. That could all happen later down the line, but that's true of the majority of football clubs, especially the larger and more successful ones.
Cash at bank in hand exceeded £590k at the year end, a similar amount to the previous year. Clearly there isn't a cashflow problem, at least short term. Obviously I'm mindful that a lot of season ticket money comes in around this time, but the point is planning how and when that cash is utilised. My next observations highlight that this appears to be sufficiently managed.
The company has no bank borrowings or fixed rate borrowings at the balance sheet date.
Loan interest expense was a third of that in the previous year, due to not utilising borrowing arrangements.
Trade and other creditors due within 1 year did not increase.
Short-term liquidity seems ok, a massive improvement from a few years ago.
Sir Martin Arbib and Andrew Black are worth millions. They are not nobodies who want a get rich quick scheme. At present the club does not have any notable assets to make that happen anyway.
The only way to recover the money would be through player sales which could happen if they're not happy with their current fortunes. Chances are the terms of these loans have been carefully drawn up as the football club had various legal battles which resulted in a lot of expense and High Court litigation from when Bill Power advanced money to the club N.B. This was all due to the previous shambles of a board which was running the club.
The loans from Sir Martyn and Andrew Black are secured against a leasehold which runs out on 31st March 2013. Should the lease pass to them it would be practically worthless.Of course, you could reasonably assume the terms of these loans will renew when the lease does.
Shareholder funds have increased overall since the current owners and board took over. Of course, there have been quite a few exceptional items and company restructuring in order to make that happen.
When they took over we were posting far greater losses each year.
Bottom line is STFC is being run by people who know what they are doing. Looking at this one isolated year of accounts will not tell you that history. Indeed, with the disaster of last season I may have thought the position to be even worse. It also highlights why there is a need for a re-developed stadium and facilities.
The fact that the company discloses more than the legal requirements in the accounts at companies house tells me we are being run by an honest, transparent group of people with the interests of the business AND the club at heart.
The focus for me is not really on the Profit and Loss account. It is a good indication of financial results in the year but we all know the danger to a football club is cashflow and being unable to meet debts and more specifically short term debts such as VAT and PAYE. If you look at the prior year we made a profit which Fitton stated was extraordinary and was down to one-off events which didn't really benefit the club (and thus emphasises this point). Profit is desirable as it allows investors to extract money out of a business through dividends, but it will never help a business or a football club run stably.
What you can gain from the P&L is that an awful season hit the turnover (sales) very hard and the drop in turnover is largely attributable to the accounts showing a massive loss. Had we had a similar season as the one prior (play offs) I think we'd be talking about a £350-400k loss at the very worst. I know there's a whole argument that 'if we didn't sell Austin or Morrison' but at the time Fitton stated the club business plan included the sale of players to fund the club. I think it's unfair to look on those player sales and state 'if they never happened then we'd be up shit creek' as those player sales were successful, in a financial sense.
The main focus should really be on the fact that the investors have loaned the club more money, to the tune of £1.2m in that year. They are propping the club up short term and it's clear to the majority of fans that they've sunk a lot into the club and are continuing to do so.
We should be immensely thankful about the fact another £2m is being pumped into the club and that we are getting in talented players. Hopefully it all pays off if and when the club gets other ways to support itself i.e. a redeveloped stadium and facilities.
