New beginnings - 25% Truth, 80% Bollocks

[Nemo]

Using the information from the accounts document, you can see the other income of £2.3m from the Eady Trust.

The other side of it (the donation to the Trust) would have to appear in admin expenses, which would account for £1.15m of the £1.4m.

I can't see the donation anywhere else.

Yes, I think that is the most likely scenario (as I mentioned in the post). Seems a bit strange that they wouldn't have put a note in to that effect when they do put a few other notes in.

Take that 1.15m out of the admin expenses and they would have gone up roughly in line with the cost of sales, which would make the entire accounts rather unremarkable - everything is about 10-15% up cost wise in line with inflation, turnover is down 10% on not having Man City/playoffs.

[STFC_Manc]

Presumably the revenue therefore includes the injections of funding from our benevolent owner? Otherwise, that would contradict the various statements we have had about losing £ hand over fist.

No that would be put into the club as a loan, we would have lost c£1.2m without the Eady money in other income.

[Nemo]

Presumably the revenue therefore includes the injections of funding from our benevolent owner? Otherwise, that would contradict the various statements we have had about losing £ hand over fist.

Without the Eady money, there's a c. £1m gap between money in and money out - that's the gap Clem would be filling.

Remember this is for last season when they weren't saying that we were losing £1m a year though - I think they were saying more like £500k then...

[singingiiiffy]

Didn't clem refer to current expenditure levels of £8m? Assuming that this will be in the next set of accounts and that this is the better version and the next ones will be fucking awful?

[ThreeDrawsMentality]

I look forward to the helpful guide the club promised to produce alongside the accounts.

Something I hadn't noticed before: Has that £25mn operating lease due later than 5 years time always been there? What on earth does it mean and what could it be? It was in the 2022 accounts too

[Nemo]

Didn't clem refer to current expenditure levels of £8m? Assuming that this will be in the next set of accounts and that this is the better version and the next ones will be fucking awful?

I think it's fair to assume that things are likely to have got worse in the current season yes - no Eady money, and inflation has continued to be high.

[RobertT]

Remember everyone, Profit/Loss <> Cash

You can bank a gain without seeing money in the hand, same for a loss, it doesn't have to mean money going out of the bank.

I'll have a peruse and be back in a bit, got fuck all else to do

[RobertT]

OK, so a quick glance.

The addition of the Eady money as income is odd to me - as people have questioned, I'd believe the 1.15m outgoing to the Trust's portion of the purchase is banked in the Admin expenses.  The oddity is why that appears in the P&L at all - it's an asset transaction, and as such it would usually stay out of the P&L until realised, with depreciation charges hitting the P&L over a number of years.

I can only presume it has something to do with the way the deal was structured which has caused an in year profit and loss being banked.

What is missing here, to add more detail and context, would be the JV accounts.  I would expect to see an asset valued much higher than the investment and purchase itself.  Not least because of that Lease - which someone asked about.  The football club signed up to a very long lease, as such there would be a number of years before any break can occur I assume, without penalty.  The club must state that as a liability on the books - the fact it has ongoing payment commitments that cannot be removed from the business.  To counter that, you'd usually have an asset valuation to the leasehold, as well as the investment vehicle for the freehold.  See Gillingham as a club that recently revalued it's assets.

I'd still expect the JV and Club to revalue the CG at some point.

Overall it shows nothing that we would otherwise expect.  They only other real material difference is the Axis liability - it looks like Clem moved some Director loans to Axis.

The bigger question to me is how has the Debenture been accounted for.  It was in the 2022 accounts but not this years, but long term liabilities increased.  That suggests the funds for the debenture were banked as loans, but it does not state who.  To counter my previous point, it could be the increase on the Axis side accounts for Clem's share on this.  No notes to explain anything beyond that.

Oh, and the accounts offer nothing new vs. last years in terms of transparency/detail.  Assume we are getting some sort of summary documents/presentation to be published alongside this......

[RobertT]

edit:  Thinking about the Eady money.

I think they have banked the 2.3m as income, then took a hit for 1.15m going to the Trust.  They entire 2.3m left as cash to the Council, but the club ended up with a 1.15m asset on the books.  That asset would now be depreciated over time, so next year expect a small hit to the P&L.

I would still think they revalue this, between them and the JV.  The lease has value, the freehold has value beyond the purchase price.  The club has already depreciated the value of the stands.

[RobertT]

One final point, it shows Hall has fuck all idea how to run a business.  Manc pointed out that the total operating expenses adds up to the number he quoted, which is right.  BUT, he used that as his knowledge of what it costs to run this business, which it is NOT.  It's almost bang on 7m, because it's carrying that 1.15m paper movement of money for the CG purchase.  Someone will argue with me, but he, in my mind, very clearly confused the 8.2m with actually cash needed to run the football club from year to year.

[4D]

Looks like 2.3m in re Eady
1.15m admin (re Trust)
1.15m tangible asset (STFC share of ground).

[Batch]

so er, we would have lost money had the Eadie money not come into the accounts .

But is that basically a nuteral event, or did the ground purchase 2m not show?

not had chance to look yet.

in other words, does it show we genuinely lost 1m?

Edit: sorry, my app doesn't load big threads and I missed robs last comment.

If I understood that right, those accounts show we were breakevenish  had we not purchased the ground? If so, how the fuck are we still losing 1m now (allegedly)

[Nemo]

so er, we would have lost money had the Eadie money not come into the accounts .

But is that basically a nuteral event, or did the ground purchase 2m not show?

not had chance to look yet.

in other words, does it show we genuinely lost 1m?

Edit: sorry, my app doesn't load big threads and I missed robs last comment.

If I understood that right, those accounts show we were breakevenish  had we not purchased the ground? If so, how the fuck are we still losing 1m now (allegedly)

So all the Eady money in is accounted for in our accounts (the club 'half' and the Trust 'half') but only one half (fuck knows which) shows as going out (we think, under Administrative Expenses), so the profitability of the club is overstated by the other half - if there was no ground purchase activity at all, we're roughly - £1.2m on the year.

I'm not accounting-y enough to know why they'd gave done it this way, but I think it's meant we had to pay a bit of corporation tax that we otherwise wouldn't have done (if we'd shown an operating loss). Does Si Pie still post?

[RobertT]

Yep, we basically were trading at a 1m loss - increased costs and reduced income, outside the one off event.

Bringing in roughly 6m and spending 7m.

The other 1.15m is not a "cost" because we get an asset of that value.  We will now depreciate that asset over 10-25 years, depending on method they choose.  That depreciation will appear as a cost every year and reduce profitability, and tax exposure, over a number of years.

[Batch]

Ah thanks