7.9m loss to June 2012

[G STAR RAM]

One thing I've probably missed is cost price of merchandise,which could be quite significant.In 10/11 merchandising turnover was £1.461m,and I'd have no idea of mark up.I suspect that purchases,adjusted for opening and closing stock,must surely feature in the £7m+,thus effectively creating the trading account.Still wouldn't affect my 14x £500k massively though.

Are you looking purely at cash expenditure?

[ramblur]

Are you looking purely at cash expenditure?

Yes,I said at the outset that paper transactions and total wages were stripped out.

[CornwallRam]

One thing I've probably missed is cost price of merchandise,which could be quite significant.In 10/11 merchandising turnover was £1.461m,and I'd have no idea of mark up.I suspect that purchases,adjusted for opening and closing stock,must surely feature in the £7m+,thus effectively creating the trading account.Still wouldn't affect my 14x £500k massively though.

At the Forum Sam Rush was asked why Derby County merchandise was only available in the ground - which he was advised was a Kappa decision (although things we're later contradicted by complaints of being cheaper through an on libne retailer and a available at a shop in the Westfield). This suggests to me that the Kappa deal is not as simple as we but the stuff dfrom them and sell it through our shop. I wonder whether we have sold off the shop rights, in the same way as the catering and seemingly the ticket sales?

[Martyn]

That's the difficulty with football clubs - trying to think of all the things they have as business expenses. They don't have many of the things you think of with a "normal" business. Club Shop stock never even occurred to me.

[Stive Pesley]

Here's another random thought - these accounts should also include the first year's rent from Gregg's. That opened in 2011 I think.

[CornwallRam]

Here's another random thought - these accounts should also include the first year's rent from Gregg's. That opened in 2011 I think.

I wonder if it's possible that things like that don't go through the club, but to a company higher up in the ownership chain? In fact, is it possible that catering monies etc go to one of LLC companies - thus making DCFC look like they're making a loss, but actually making a profit for the ownership group?

Only speculation obviously, but I'm still trying to fathom why rich and successful investors would be happy to plod on making losses every year - especially as they refused a bid a couple of years ago that offered them the chance to get out in a relatively painless manner.

[ramblur]

That's the difficulty with football clubs - trying to think of all the things they have as business expenses. They don't have many of the things you think of with a "normal" business. Club Shop stock never even occurred to me.

I know,Martyn,but my 14x £500k also converts to 28x £250k- not much less than £5k/week.You could get several GSE management fees into one of these portions.Legal and audit expenses come to mind.Agents' fees are capitalised,so they don't figure.

[Stive Pesley]

It is a bit odd isn't it? I dont recall the club making a song and dance out of the opening of Gregg's even though it was a brand new unit within the ground (as opposed to the Starbucks which merely took over the BBG Grill) so whatever money they get as Landlord's would be "new" money.

Compared to the advertising screens which they have repeatedly trumpeted

[ramblur]

I wonder if it's possible that things like that don't go through the club, but to a company higher up in the ownership chain? In fact, is it possible that catering monies etc go to one of LLC companies - thus making DCFC look like they're making a loss, but actually making a profit for the ownership group?

Only speculation obviously, but I'm still trying to fathom why rich and successful investors would be happy to plod on making losses every year - especially as they refused a bid a couple of years ago that offered them the chance to get out in a relatively painless manner.

No,I think you could rule that out.I'm convinced it's the expenditure side that's causing the problems.I wouldn't rule out the possibility of the Plaza being spun out into a separate company though,especially if it's a partnership-but not suggesting any income share would go anywhere other than DCFC.Don't forget that any DCFC losses are their losses.

[ramblur]

It is a bit odd isn't it? I dont recall the club making a song and dance out of the opening of Gregg's even though it was a brand new unit within the ground (as opposed to the Starbucks which merely took over the BBG Grill) so whatever money they get as Landlord's would be "new" money.

Compared to the advertising screens which they have repeatedly trumpeted

If it only opened in 2011,then the maximum possible rent for 10/11 would be 50%,and that assumes Jan 1st opening.Small beer,I'm afraid.

[Schteve]

That's the difficulty with football clubs - trying to think of all the things they have as business expenses. They don't have many of the things you think of with a "normal" business. Club Shop stock never even occurred to me.

Stock is part of operating costs not expenses.

[ramblur]

Stock is part of operating costs not expenses.

Understand what you're saying,I'm guessing that you're pointing out that stock forms part of the trading profit calculation.However,it's all about presentation.They could have run a trading account and inserted "trading profit on merchandise" within the P/L statement.However,merchandising is listed as part of the overall turnover figure that comes at the start of the P/L statement, and because of this the stock purchase/stock movements must appear on the expenses side (otherwise the turnover would become 100% trading profit).

[PistoldPete]

Just been thinking about that £7.34m for 10/11 expenditure minus total wages (including paid directors) and come to the conclusion it's a frightening figure (as is the 06/07 one in relative terms -only chose 10/11 because it's nearer to the present day.)

I started thinking about the usual candidates:- Heat and Light,Phone,Printing postage &stationery,Policing,Normal R&M and servicing of office equipment,plant&machinery etc,Various insurances (which could be quite high),Maintenance of grounds (excluding labour element),any contract cleaning and other contract work etc.

It just seems so unbelievably high.Additions to office equipment etc would be capital costs,so wouldn't figure.

Doesnt the £7m expenditure include transfer fees for Schackell Maguire Bryson Ward Robinson Fielding and Lezgdins etc.?

Cant think it could possibly be that high otherwise. Mind you even with that it looks very high

[ramblur]

Doesnt the £7m expenditure include transfer fees for Schackell Maguire Bryson Ward Robinson Fielding and Lezgdins etc.?

Cant think it could possibly be that high otherwise. Mind you even with that it looks very high

No,that's all capital,as opposed to revenue (operations) expenditure and appears on the capital side of the divide.It filters through as amortisation (known as a 'paper' transaction) into the P/L statement,but I've already taken this and fixed asset depreciation out of the equation to end up with the figure given.

[Igorwasking]

It does give rise to the question though, that if the club cannot trade at break even, even with the significant squad trimming we have been through, how long will the board live with making significant annual losses? If I was Nigel Clough, I'd be saying, "give me ten million, and I'll get us to the promised land and untold riches. If I fail for any reason, you can cover your investment with the sale of young Will." Must be quite a compelling proposition for the board - surely?

Otherwise, what is the alternative?

[davenportram]

I actually don't think that we are spending any more on the academy than in the past. As part of the EPPP categorisation, one of the stiplulations is that achieve Cat. 2 (which we are) status clubs have to spend over £1.25m on their acamemy. To achieve Cat. 1 you need to spend over £2.5m pa.

I read an article from a few years ago recently, which I'm going to look for again and will post a link if I can find it, where it was stated that DCFC were spending over £1.2m on the academy.

Credit must go to Clough, Wassal and Short as they seem to be getting a better return, but I think this is due to better staff, rather than a greater investment.

there's 1.25m between the requirements for Cat 1 and Cat 2 so plenty of room for increased investment on the Academy without being able to jump to Cat 1.

if we were spending 1.5m on it a few years ago we could have put in an extra 900,000 and still not be at a level for Cat 1 -

[Pudding Jack]

I've not seen anything from the club where they admit they're going to be selling the youngsters on.

Quite the opposite, they have said we don't need to sell anybody.

i didnt mean immediatly.

[Pudding Jack]

I've not seen anything from the club where they admit they're going to be selling the youngsters on.

Quite the opposite, they have said we don't need to sell anybody.

i didnt mean immediatly.

[ramblur]

there's 1.25m between the requirements for Cat 1 and Cat 2 so plenty of room for increased investment on the Academy without being able to jump to Cat 1.

if we were spending 1.5m on it a few years ago we could have put in an extra 900,000 and still not be at a level for Cat 1 -

Wouldn't help much with my exercise,as most of any increase would be wage based,which I've stripped out.

On the other hand though,did I read some time ago that we didn't own the land there? If so,there's ground rent to add to the list.

[CornwallRam]

there's 1.25m between the requirements for Cat 1 and Cat 2 so plenty of room for increased investment on the Academy without being able to jump to Cat 1.

if we were spending 1.5m on it a few years ago we could have put in an extra 900,000 and still not be at a level for Cat 1 -

Of course that's true, but with so much emphasis on the academy being such a large part of the plans, I reckon that if we we're anywhere close to Cat 1 than we'd go the extra bit and get it. Although their are plenty of other critera for Cat 1, such as number of and qualification of coaches etc, so maybe there is a greater hurdle than a mere £1m (tongue in cheek)