Rams announce financial results

[Guest]

Assuming all loan capital has now been converted to equity ,I make the overall investment to be as follows:-

 

£16m total acquisition +£14.4m equity previously injected + £28.5m converted to equity = £58.9m

 

Always a pleasure to read your posts Ramblur.

 

Given the loans have been converted to equity, I wonder if our "investors" are now split on the direction they are taking.

 

Not being in the same league as you financial whizz kids Im probably wrong, but it would look on the outside to me, one or some of the investors are happy putting  more money into the Rams in return for more equity, whereas maybe some of the investors have decided that they arent puting any more cash into it.

 

Maybe the ones who are investing that little bit extra, can see the only way for a ROI is to get us into the promised land, as I cant see the club being worth c60m as a championship team ?

[ramblur]

Always a pleasure to read your posts Ramblur.

 

Given the loans have been converted to equity, I wonder if our "investors" are now split on the direction they are taking.

 

Not being in the same league as you financial whizz kids Im probably wrong, but it would look on the outside to me, one or some of the investors are happy putting  more money into the Rams in return for more equity, whereas maybe some of the investors have decided that they arent puting any more cash into it.

 

Maybe the ones who are investing that little bit extra, can see the only way for a ROI is to get us into the promised land, as I cant see the club being worth c60m as a championship team ?

Thanks Leeds Ram.I've always thought you to be one of the forum's better posters (irrespective of any compliments that come my way). You make interesting points,and the question of who may or may not be investing has often occupied my mind.Because we can't see the transactions within the ultimate parent company,the stock holdings may have changed several times therein for all we know.When the loan capital first arose,I wondered if all investors might not have been contributing and that this route would have been far easier than the more complicated (in the circumstances) equity one.The one thing about FFP is that,in certain situations, it requires the injection of equity,thus if we were trying to avoid the equity route,FFP could become problematical.Now,assuming that there were some loan non contributors I could see them having been bought out by the rest to overcome the problem and facilitate an easier transition from loan capital to equity (and allow for future equity injections,if required). All complete and utter speculation however, as there's no concrete evidence to get stuck into,and it may well all be utterly and completely wrong.

 

I'm sure you'd be dead right in assuming the club isn't worth anything approaching £60m whilst in the current division.

[ramblur]

The best accounting and financial management academics in the world will argue the differences that capital structure have on a business with no end result haha its how you choose to look at it. 

Debt capital - cheaper than equity capital as there is much less uncertainty regarding payment...there is a legal obligation to pay interest on loans. (therefore interest rates are lower than return required by equity holders)

Equity capital - usually more expensive than debt capital as there is a risk of not being paid due to companies only paying a dividends when making a profit. 

 

But back on this topic.... it is probably seen as being beneficial in the long run if they plan on selling the club for profit (I'm not convinced all of the shareholders will sell but I do believe some will want to if we were to get to the promised land). It is much easier to command an inflated price for a club if it is a clean slate ie debt free than a club where the owners are then asked to take on previous debt. 

 

So they can either keep the loans and get the new ownership to pay off the loans (to them) OR they can change the debt into equity and receive a higher capital gain when selling the club to new owners. I doubt very much that these astute business men will lose out in the long run but it is another sign of a risk they are taking for the benefit of the club as we would much rather reduce debt as debt capital is only really useful for an organisation making a profit. 

All very interesting,but I'd just like to point out that I hadn't intended to discuss the relative merits and demerits of loan capital,merely to point out the different ways the same administration viewed the same loan capital at injection v withdrawal.

[Martyn]

So are the accounts now publicly available?

 

(By which I mean, will someone PM me and email them to me pwetty pwease )

[ramblur]

So are the accounts now publicly available?

 

(By which I mean, will someone PM me and email them to me pwetty pwease )

Not yet arrived at CH,Martyn,and now showing as overdue.Even if they landed tmw,it usually takes a few days before they're released to the public.I'll sort you out when they're available,assuming I don't get detained in hospital this week.

[Martyn]

Not yet arrived at CH,Martyn,and now showing as overdue.Even if they landed tmw,it usually takes a few days before they're released to the public.I'll sort you out when they're available,assuming I don't get detained in hospital this week.

 

Thanks again ramblur, best of health to you.

[CornwallRam]

Hi Ramblur.

 

I hope that your health is baring up.

 

If it becomes relevant once the accounts land and you fancy working out who owns what - Brett Wilson said at the Sign up Sunday event that he'd personally put in £15m (stressed pounds not dollars).

[ramblur]

Hi Ramblur.

 

I hope that your health is baring up.

 

If it becomes relevant once the accounts land and you fancy working out who owns what - Brett Wilson said at the Sign up Sunday event that he'd personally put in £15m (stressed pounds not dollars).

Sorry CornwallRam -mission impossible.Without access to records of the ultimate parent company,it simply can't be done.

[observer]

Sorry CornwallRam -mission impossible.Without access to records of the ultimate parent company,it simply can't be done.

 

is there not an american equivalent of companies house, or a way to check it.

 

if he has put in £15m then its safe to assume he owns 25%

 

 

also dont gse themselves retain a shareholding along with the investors

[ramblur]

is there not an american equivalent of companies house, or a way to check it.

 

if he has put in £15m then its safe to assume he owns 25%

 

 

also dont gse themselves retain a shareholding along with the investors

Yes,the SEC.Unfortunately,following an initial filing,the company has reporting exemptions. Appleby has a stake.

[RamNut]

I blame the mods.

[Abu Derby]

Does anyone know when the £15m stadium mortgage will finally be paid?

Could do with fixing it for ten years at a preferential rate.

[davenportram]

Does anyone know when the £15m stadium mortgage will finally be paid?

Could do with fixing it for ten years at a preferential rate.

its terms up in 2016 I think from memory.

[Abu Derby]

its terms up in 2016 I think from memory.

Not long to wait then. Could pay it off early if we reach the land of milk and honey.

[LanguedocFox]

I haven't read the whole of this thread, but your owners have done what City's owners did and converted debt into equity. Mind you, our numbers are eye-wateringly big - £103 million for us plays £25 mill for Derby, although that includes buying our stadium. Also our loss was £30 million against nearly £8 million. It beggars belief.

 

Of course it looks almost certain that we will have at least one season in the promised land for which, so I am told by those who know about such things, the club will get £60 mill for being there, and roughly the same again if we get relegated after a year. Presumably the owners will then be able to get some money back, although I doubt it will be as much as people think: being up there is not cheap, as Southampton are finding.

 

I guess the Rams' owners are banking on getting into the Prem sooner or later so that they can get a share: this could be the year, although after last night I really do think Wigan look like play-off winners. Mind you, what do I know.

[ramblur]

Hi Ramblur.

 

I hope that your health is baring up.

 

If it becomes relevant once the accounts land and you fancy working out who owns what - Brett Wilson said at the Sign up Sunday event that he'd personally put in £15m (stressed pounds not dollars).

The one thing I didn't mention is that it's quite obvious that Brett has put extra cash in far in excess of the proportion of his original investment.From memory only,I think he originally invested via Prairie Merchant Bank (or Corporation) ,and whilst it was a decent investment,it didn't particularly stand out from the rest. I like Brett,and the way he engages with fans,both through Twitter and his preference for sitting amongst fans.He deserves success and I'm very happy that he's a major player (not that the others don't-it's just that Brett has been more visible and we know more about him).

 

Going back to the equity to debt conversion,there's another thing that's occurred to me now that FFP has become fully active.I mentioned that the loan capital interest amounted to £626k in 11/12,an amount that contributed to our headline loss in that year.Now let's imagine the loans were still in place,and a similar amount were charged to P/L this year.The FFP allowable deviation loss for this year is £3m,with a further £5m available if matched by an equity injection.

 

Leaving the £626k to one side for the moment,let's imagine we recorded a £3m FFP loss this year (no equity injection required).If you were then to introduce the £626k, you'd have the rather silly situation whereby they'd have to inject £626k of equity as a result of expenditure which is accrued,yet not paid.

 

As an aside,the accounts have now landed at CH,but aren't yet available to the public.

[EssendonRam]

I'm confused now, does this mean we will win on Saturday or not?

I'm an accountant...But, for you, I'll say it means we win 7.1m to nil. Which just marginally shades the win over NF!

[EssendonRam]

I haven't read the whole of this thread, but your owners have done what City's owners did and converted debt into equity. Mind you, our numbers are eye-wateringly big - £103 million for us plays £25 mill for Derby, although that includes buying our stadium. Also our loss was £30 million against nearly £8 million. It beggars belief.

 

Of course it looks almost certain that we will have at least one season in the promised land for which, so I am told by those who know about such things, the club will get £60 mill for being there, and roughly the same again if we get relegated after a year. Presumably the owners will then be able to get some money back, although I doubt it will be as much as people think: being up there is not cheap, as Southampton are finding.

 

I guess the Rams' owners are banking on getting into the Prem sooner or later so that they can get a share: this could be the year, although after last night I really do think Wigan look like play-off winners. Mind you, what do I know.

You've got to remember that signings demand relegation protection - hence the parachute payments always disappear- which does reduce significantly any net gain from one year in the Premiership.

This is why the Academy is so critical; it gives us another source of earnings....

[ramblur]

The accounts are now available and I'd very quickly like to correct something I said earlier.It turns out that the total wages figure given of £10.5m wasn't the overall total (£12.059m),as it excluded Employers' NIC.Therefore the reduction on the previous year was just £1m,rather than the £2.5m I suggested,and I obviously apologise for this and withdraw any comments made earlier.

 

It turns out I have a hip infection,and to my immense relief I wasn't detained, but have been given 2 fairly brutal oral antibiotics for at least 6 weeks.I'm feeling pretty rough,so won't be launching into any accounts analysis today (at least)-however a quick glance shows nothing particularly untoward.

 

As I realise that these are 2 areas that interest folks,I've calculated the value of outgoing transfer fees to be £1.597m,and incomings (including agents' fees/league levy) at £4.728m (both figures verified by coming from 2 different directions).I'll show how worked out at a later date,and that's definitely it for the day.

[archram]

As always, Ramblur, thank you , and good wishes for your health. I occasionally require heavy duty antibiotics and it's no barrel of fun!