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Author Topic: The Long Awaited Accounts....  (Read 111807 times)

Offline PeterWithesShin

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Re: The Long Awaited Accounts....
« Reply #360 on: April 06, 2017, 11:30:59 PM »



We are top of the league, said we are top of the league


Offline peter w

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Re: The Long Awaited Accounts....
« Reply #361 on: April 07, 2017, 06:28:18 AM »
Keith Wyness sat down for an exclusive chat with the Birmingham Mail

Quote
On Accounts

The accounts released on Monday were for the year before we took over the club.

In layman’s, because unless you’re an accountant this gets quite technical because it’s all around this issue called compartment and it is more of an accounting term that’s used.

What is basically means is that once the club was sold at the price Tony bought it for then the value that the club was already at carried over, which was higher than what the club was bought for, meant it had to be adjusted down to a realistic market price.

So, what we actually did was, although we had a notion able value of what the club was worth, with what it was actually sold at it created a real crystallised market value.

Then you have to cut down the money you’re carrying on the books. So, it’s an accounting treatment more than anything else.

Crystal clear, KW.
What was that middle bit again Keith?

I think a bit like if you own a house on a street; and everyone values there house at 200k on thy street (let's assume they are all the same new build types) then it's valued at 200k on paper.

If you sell that house to someonefor 100k; it's hard for the buyer to then start bragging his house is worth 200k given he just paid half of that.

So the actual value of the club and its assets could be higher but of a more illiquid nature, since Lerner wanted out for cash that is very liquid in its nature he accepted less of one for more of the other.

I'm no accountant mind.

Nailed it. You should come to my lodge where we just have a good time and nothing weird happens.

I will preface this by stating that I know nothing of economics...but isn't it the other way round? If a house is valued at £200 000 and you over pay by £100 000 the house is still only worth £200 000 on the open market? if for the same house you pay under pay £100 000 and then sell it it will still be worth £200 000? Given that you look at the market, prices for similar sized and priced goods, and location then just under paying doesn't mean that you bring the whole market down and the commodity 9house, Villa) suddenly loses it's value. There are many reasons for a cheap sale - to get rid being one - so I'm not sure that would affect the long time value.

Offline Ad@m

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Re: The Long Awaited Accounts....
« Reply #362 on: April 07, 2017, 12:48:51 PM »
I will preface this by stating that I know nothing of economics...but isn't it the other way round? If a house is valued at £200 000 and you over pay by £100 000 the house is still only worth £200 000 on the open market? if for the same house you pay under pay £100 000 and then sell it it will still be worth £200 000? Given that you look at the market, prices for similar sized and priced goods, and location then just under paying doesn't mean that you bring the whole market down and the commodity 9house, Villa) suddenly loses it's value. There are many reasons for a cheap sale - to get rid being one - so I'm not sure that would affect the long time value.

What something is worth is an art, not a science.  But accounting tries to put some science to it.

That science involves defining a number of acceptable ways of valuing something, with a recent sales price being one of the best indicators of what something is worth.  After all, in a purely financial sense, what something is worth is essentially what someone else is willing to pay for it.  There are exceptions to this (distressed sales like you say) but none of these apply in Randy's case.  He sold because he wanted to, not because he was forced to.

And to pick up on your final point, the accounts make no attempt to show a "long term value".  The balance sheet is a view of the position of the group at a point in time, and accounting standards demand that for those assets we impaired they must be shown at the lower of cost or net realisable value.  So long term value doesn't really come in to it.

Offline Risso

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Re: The Long Awaited Accounts....
« Reply #363 on: April 07, 2017, 03:55:50 PM »
I will preface this by stating that I know nothing of economics...but isn't it the other way round? If a house is valued at £200 000 and you over pay by £100 000 the house is still only worth £200 000 on the open market? if for the same house you pay under pay £100 000 and then sell it it will still be worth £200 000? Given that you look at the market, prices for similar sized and priced goods, and location then just under paying doesn't mean that you bring the whole market down and the commodity 9house, Villa) suddenly loses it's value. There are many reasons for a cheap sale - to get rid being one - so I'm not sure that would affect the long time value.

What something is worth is an art, not a science.  But accounting tries to put some science to it.

That science involves defining a number of acceptable ways of valuing something, with a recent sales price being one of the best indicators of what something is worth.  After all, in a purely financial sense, what something is worth is essentially what someone else is willing to pay for it.  There are exceptions to this (distressed sales like you say) but none of these apply in Randy's case.  He sold because he wanted to, not because he was forced to.

And to pick up on your final point, the accounts make no attempt to show a "long term value".  The balance sheet is a view of the position of the group at a point in time, and accounting standards demand that for those assets we impaired they must be shown at the lower of cost or net realisable value.  So long term value doesn't really come in to it.

Indeed.  There also isn't really a readily identifiable market price for football clubs, like there is houses.  It would be pretty easy to have an accurate stab at say, a price for a three bed semi in Edbagston, but it would be difficult to value Walsall FC for example, based on the price that other Midlands clubs have gone for.  There are just so many variables.

Offline Gareth

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Re: The Long Awaited Accounts....
« Reply #364 on: February 15, 2018, 11:27:52 AM »
Seems this years Recon Group ones are out.

Not got a clue if they are good, bad or indifferent but I’m sure the good folk that understand accounts will tell us

Offline Woofles The Wonder Dog

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Re: The Long Awaited Accounts....
« Reply #365 on: February 15, 2018, 11:58:05 AM »
A quick glance, and we’ve made a profit of £1.7m, which is pretty decent, though it says we lost £197m last year, which is a bit of a shock as I thought it was “only” £80m ish. No wonder they’re shitting themselves over FFP.

Offline Ad@m

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Re: The Long Awaited Accounts....
« Reply #366 on: February 15, 2018, 12:00:42 PM »
Just had a quick 5 min peek before a meeting - there's been a group reorg so Recon Group UK Limited are the accounts you want to go look at if you're so inclined.

Highlights:
  • Revenue down £35m to £74m - mainly down to Broadcasting revenue reduction but also big drops in sponsorship and commercial revenue
  • Operating loss before player disposals of £41m, increased from a loss of £36m last year
  • Balance sheet position improved though due to a £57m capital contribution by the parent company

I'll do a more detailed review later when I've got more time.

Offline Ad@m

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Re: The Long Awaited Accounts....
« Reply #367 on: February 15, 2018, 12:01:11 PM »
A quick glance, and we’ve made a profit of £1.7m, which is pretty decent, though it says we lost £197m last year, which is a bit of a shock as I thought it was “only” £80m ish. No wonder they’re shitting themselves over FFP.

You're looking at the wrong company Woofles - see my post above.

Online Dave

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Re: The Long Awaited Accounts....
« Reply #368 on: February 15, 2018, 12:15:07 PM »
Balance sheet position improved though due to a £57m capital contribution by the parent company[/li][/list]

Presumably that's a pretty positive thing isn't it? Suggests that fears that everything is being funded by loading up liabilities on the club aren't the case.

Or not?

Offline Risso

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Re: The Long Awaited Accounts....
« Reply #369 on: February 15, 2018, 03:12:23 PM »
    Balance sheet position improved though due to a £57m capital contribution by the parent company[/li][/list]

    Presumably that's a pretty positive thing isn't it? Suggests that fears that everything is being funded by loading up liabilities on the club aren't the case.

    Or not?

    Correct, there's no bank debt to speak of.  The loan with the charge over the statement is to the parent company for £49m.  No different really to what Lerner was doing.

    Online London Villan

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    Re: The Long Awaited Accounts....
    « Reply #370 on: February 15, 2018, 04:10:57 PM »
    In laymans terms have they put £49m into the business as a cash injection?

    Offline Risso

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    Re: The Long Awaited Accounts....
    « Reply #371 on: February 15, 2018, 04:26:49 PM »
    Here's the link: Recon Group accounts


    Turnover £74m, costs £115m, profit on player sales of £27m, so overall loss of £14m.


    Cash injection of £49m from a loan from the parent company in China.


    Since the balance sheet date, further player sales of £22m and purchases of £3m.

    Offline Ad@m

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    Re: The Long Awaited Accounts....
    « Reply #372 on: February 15, 2018, 04:56:45 PM »
    Bit more colour on the accounts:
    • Revenue down to £74m from £109m last year - decreases in broadcasting (£17m), sponsorship (£9m), and commercial (£7m).  Sponsorship has gone from £12m last year to £3m this year - shows what a difference a Premier League profile makes!
    • Operating expenses before player transactions of £91m this year vs £129m last year.  Almost all of the reduction is in wages, which have gone from £93m last year to £61m this year.  FTE staffing has reduced to 1,064 from 1,623 last year.  Most of the reduction is in part time staff on matchdays, etc but back-office full time staff were cut from c.350 in the Prem to c.230 in the Championship.
    • Net spend on players was £14m vs £12m the year before.
    • Net loss of £14m this year vs £81m last year but last year included £80m of exceptional (paper) write offs so in effect, the loss has increased year-on-year by £13m
    • As well as having a capital contributinon of £57m in to the club loan notes of £15m have been issued.  Both of these have come from Recon.  Loan notes are debt, capital contribution is equity (ie there's no obligation to pay back equity, unlike debt).
    • Dr Tone took a salary of £357,795 out of the club.
    • The Strategic Report describes FFP as presenting 'a significant challenge' and the Directors Report confirms that we're getting 'a reduced level of broadcasting revenue for the 2017/18 season'.  It then goes on to say that the cash flow forecasts for this season showed we needed further investments of cash from the parent co (ie 2017/18 will show a loss too) but that the parent company has confirmed it'll be provided.

    Offline Risso

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    Re: The Long Awaited Accounts....
    « Reply #373 on: February 15, 2018, 05:08:56 PM »
    The loan notes are £49m. I think it was accruals that are £15m.

    Offline Ad@m

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    Re: The Long Awaited Accounts....
    « Reply #374 on: February 15, 2018, 05:16:18 PM »
    The loan notes are £49m. I think it was accruals that are £15m.

    And they were £34m last year, so an increase of £15m.

     


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