Rams announce financial results

[Martyn]

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.

 

Thank ramblur, look after yourself.

[ramblur]

As I've perked up a bit,I'll try and get rid of a bit more.The £4.728m for new players' regs breaks down as follows:- 

Transfer fees £3.9m +Agents' fees/levy £828k.  I forgot to mention that JR is included in this figure. The outgoing transfer fees of £1.597m is a gross figure and will not reflect any instalments which were owed to former club.Even taking JR out,there is still significant net spending,although cash paid of £2.620m isn't a great deal more than that rec'd of £1.961m.However,at the year end we owed other clubs £2.997m against amounts owed to us of £459k.

 

Post Balance Sheet Events (Bearing in mind that the accounts were again signed off in late November) states that player sales gave rise to NET proceeds of £963,162,the net book value having been £107,681-presumably Brayford as I can't remember anyone else we flogged (Jacobs came after the end of November).The all in figure for purchases is indicated at £467,500,but again Dawkins can hardly feature.Going back to the main body of the accounts,we made a book profit on sales of £808k for the year.

 

Interest payable dropped from £1.398m to £500k.I was a little surprised to find that zilch interest was charged on the loan capital in 12/13,which contributes to the reduction, along with a big reduction in revolving loan interest (the final £112,255 loan principal of which was repaid during the year).There's still a figure of accrued loan capital interest amounting to just over £1m at year end,but I suspect this too may have been swapped for equity in 13/14.

 

Although the lack of LC interest is a good thing,as I was expecting to have seen something significant in 12/13 it does mean that there'll be no saving for this year.If you take this in conjunction with the fact that I'd forgotten to take into account the £808k profit from 12/13 when talking about a large book profit on the Brayford sale (the impact on 13/14 v 12/13 will be the difference between the 2),then there's unlikely to be as big a reduction in losses this year as I first thought.

 

GSE management fees again came in at a modest £60k.

 

Debt was little changed over the year,and there's little point looking at it as we all know what has happened this year.I can confirm that the c£6m equity/loan capital switch is visible in the accounts.

[StaffsRam]

Beyond my own accounts, I think DCFC is just about the only context that I could ever find reading about accounts 'interesting' - top job Ramblur, many thanks, and hope you're not pushing yourself too much old fella. 

[davenportram]

As I've perked up a bit,I'll try and get rid of a bit more.The £4.728m for new players' regs breaks down as follows:-

Transfer fees £3.9m +Agents' fees/levy £828k. I forgot to mention that JR is included in this figure. The outgoing transfer fees of £1.597m is a gross figure and will not reflect any instalments which were owed to former club.Even taking JR out,there is still significant net spending,although cash paid of £2.620m isn't a great deal more than that rec'd of £1.961m.However,at the year end we owed other clubs £2.997m against amounts owed to us of £459k.

Post Balance Sheet Events (Bearing in mind that the accounts were again signed off in late November) states that player sales gave rise to NET proceeds of £963,162,the net book value having been £107,681-presumably Brayford as I can't remember anyone else we flogged (Jacobs came after the end of November).The all in figure for purchases is indicated at £467,500,but again Dawkins can hardly feature.Going back to the main body of the accounts,we made a book profit on sales of £808k for the year.

Interest payable dropped from £1.398m to £500k.I was a little surprised to find that zilch interest was charged on the loan capital in 12/13,which contributes to the reduction, along with a big reduction in revolving loan interest (the final £112,255 loan principal of which was repaid during the year).There's still a figure of accrued loan capital interest amounting to just over £1m at year end,but I suspect this too may have been swapped for equity in 13/14.

Although the lack of LC interest is a good thing,as I was expecting to have seen something significant in 12/13 it does mean that there'll be no saving for this year.If you take this in conjunction with the fact that I'd forgotten to take into account the £808k profit from 12/13 when talking about a large book profit on the Brayford sale (the impact on 13/14 v 12/13 will be the difference between the 2),then there's unlikely to be as big a reduction in losses this year as I first thought.

GSE management fees again came in at a modest £60k.

Debt was little changed over the year,and there's little point looking at it as we all know what has happened this year.I can confirm that the c£6m equity/loan capital switch is visible in the accounts.

Aren't losses reduced by combining increased revenue and removing costs?

Reduction in losses will be from increased revenue - naming rights.

And the screens were paid for duryng this accounting period just reported on - £1m that won't be paid out in the 13-14 accounts.

So that would reduce losses by £1.7m (taking the naming rights to be an even split of 700k per annum)

I have noticed a significant increase in the amount of different adverts on the pitchside hoardings and scoreboard so we may well see increased revenue from them too.

Oh and Sam Rush has a sponsor for his programme notes too.

[ramblur]

Beyond my own accounts, I think DCFC is just about the only context that I could ever find reading about accounts 'interesting' - top job Ramblur, many thanks, and hope you're not pushing yourself too much old fella. 

Thanks Staffie- I was very pleased when you rejoined the fray after your long absence.Believe me,without DCFC I'd never again have gone anywhere near accountancy.I learnt a very hard lesson last year,so you can be sure I'm going to take my time this year.

[ramblur]

Aren't losses reduced by combining increased revenue and removing costs?

Reduction in losses will be from increased revenue - naming rights.

And the screens were paid for duryng this accounting period just reported on - £1m that won't be paid out in the 13-14 accounts.

So that would reduce losses by £1.7m (taking the naming rights to be an even split of 700k per annum)

I have noticed a significant increase in the amount of different adverts on the pitchside hoardings and scoreboard so we may well see increased revenue from them too.

Oh and Sam Rush has a sponsor for his programme notes too.

As far as the screens go,you really must learn to distinguish between capital and revenue expenditure.A loose definition of revenue expenditure would be items that give value only to the accounting period in question.Anything that gives value in year/s beyond is capital expenditure and is subject to depreciation/amortisation over the expected useful life.The former is charged straight to P/L,whilst the latter appears as the oft called "paper transaction". Fixed asset depreciation increased to £2.123m from £1.996m. In short,your £1m is down to your own misconception.

 

I think you've forgotten about the £2m wages hike.The thinking was that this would roughly balance out with the increased turnover,hence why I was looking to interest reductions/Brayford profit for any meaningful reduction in losses this year.It's a bit pointless trying to estimate turnover increases when the people in the know (Rush/Pearce) have already given us their informed assessment.

 

Whilst I'm active again,directors' total emoluments reduced from £274k to £210k -I won't bother citing the highest paid one because only a part year is involved.

 

The value (as opposed to what was actually paid in the year) of fixed asset additions was as follows:-

F&F 387k , Computer equipment £354k.  £36k of F&F were disposed of during the year.The amount actually paid during the year in respect of new fixed assets amounted to £614k.

 

There's been a lot of commendable tidying up on the loans front and it should be mentioned and appreciated.

[Gritstone Ram]

All sounds good to me. Apart from JR who else have we signed to make up the other 3 mill odd?

[ramblur]

All sounds good to me. Apart from JR who else have we signed to make up the other 3 mill odd?

I'd first explain that JR was signed in June,which is why he crept into the 12/13 accounts.Forsyth,I believe,landed on July 1st and therefore probably features in the PBSE figure I gave earlier.From memory only,we signed Keogh,Sammon and Jacobs as major players.Because agents' fees are capitalised,it's almost certain that even free transfers are brought into the accounts at the value of any agents' fees involved

 

PS I've found out why the accounts have come out later this year.Whilst the DCFC accounts were signed off in late November to hit the Dec 1st FFP deadline,the Gellaw accounts weren't signed off until late March.(these accounts not being needed for FFP).

[Gritstone Ram]

I'd first explain that JR was signed in June,which is why he crept into the 12/13 accounts.Forsyth,I believe,landed on July 1st and therefore probably features in the PBSE figure I gave earlier.From memory only,we signed Keogh,Sammon and Jacobs as major players.Because agents' fees are capitalised,it's almost certain that even free transfers are brought into the accounts at the value of any agents' fees involved

cheers. I thought JR would have been more recent and not with the likes of Keogh, Sammon etc... Nice to hear from you Ramblur. Were having a good season did you watch the forest match??

[ramblur]

cheers. I thought JR would have been more recent and not with the likes of Keogh, Sammon etc... Nice to hear from you Ramblur. Were having a good season did you watch the forest match??

You bet gritters,though as I mentioned before my broadband speed is so chronic I could only catch a few seconds at a time.Believe me it's nerve wracking when the screen freezes with the gumps on the attack-you've got time to notice all the unmarked players and hope they're not found.Mind you,I don't know why I worried

[ramblur]

All sounds good to me. Apart from JR who else have we signed to make up the other 3 mill odd?

Forgot about Coutts,and wasn't that the year we picked up the 3 lads for the development squad?

[ramblur]

Breakdown of turnover (comparative 11/12 figures second):-

 

Match Receipts £5.285m/£5.626m , Sponsorship & Advertising £1.799m  / £2m , TV Receipts £4.451m / £4.963m

 

Commercial Activities £2.529m / £2.653m  , Programme Sales & Related activities £172k / £212k

 

Merchandising £314k / £1.217m , Other Receipts £885k /£605k  ,  TOTAL TURNOVER  £15.435m / £17.276m

 

The 11/12 merchandising figure represents traditional turnover,whereas the 12/13 one would appear to be our profit cut under the new arrangement.To get 11/12 in line with 12/13 you'd have to deduct cost of goods sold and total overheads(incl wages),neither of which figure we know.All we know is that the end result must have been less than £314k.

[ramblur]

Calculation of underlying cash loss on operations,after adjusting for paper transactions:-

 

Operating (as opposed to overall) loss  £7.387m.  Deduct amortisation of players' regs £2.083m and fixed asset depreciation £2.123m and add amortisation of deferred grant income £78k, giving a cash loss of £3.259m (which from memory isn't much different to 11/12).For those with accounts,the latter figures may be found in note 21,towards the end of the accounts.

 

This figure represents what would have happened in cash terms if everything had been received and paid in full during the year.However,in the real world this never happens,so note 21 also adjusts for movements in debtors/creditors/stock over the year to finally arrive at the final cash figure.This is shown as a deficit of £3.689m,compared to £4.857m in 11/12,and this figure becomes the opening figure of the cash flow statement.

[CornwallRam]

Andy Appleby claimed that we got £2m for Brayford - does this ring true from the accounts?

[ramblur]

Andy Appleby claimed that we got £2m for Brayford - does this ring true from the accounts?

Brayford was a transaction from the current year,however PBSE talks of net proceeds of £963,162.Unfortunately we don't know what was owed to Crewe,but whatever it was could hardly push the total to £2m. If the £2m figure were correct it must obviously include some hefty incentivised elements which may or may not be met (and the may not appears likely).

 

If Jacobs hadn't been sold,I'd have been able to nail it when the 13/14 accounts are published,but his fee being undisclosed makes things tricky.However,if the 2 combined come to less than £2m.......................

[davenportram]

Wouldn't the net proceeds also take into account the fee for Forsyty (joined July 1st) and loan fees for Smith, Whitbread, Dawkins and Wisdom?

[ramblur]

Wouldn't the net proceeds also take into account the fee for Forsyty (joined July 1st) and loan fees for Smith, Whitbread, Dawkins and Wisdom?

Net proceeds doesn't mean sales less purchases,but sales figures after deducting amounts owing to other clubs and any other expenses relating to the sale.As I stated in an earlier post,purchases were given as £467,500.

[ramblur]

I promised to show those with access to the accounts how to work out the values of incoming and outgoing transfers for the year.The ingredients can be found as follows:-

 

P/L Account for profit on sale of players' regs.

Balance Sheet:- Current assets/players' reg fees receivable + Creditors/players' reg fees payable. Note that the figure in the R/H column,being the closing figure for 11/12 also becomes the opening figure for 12/13.

Cash flow statement:- Capital expenditure/payments and proceeds re purchases and sales.

Note 8 "Intangible Fixed Assets":- Cost/Additions and disposals (R/H figures).   Amortisation/disposals (R/H figure).

 

Let's start with the easy one- simply go to note 8 and read off additions at £4.728.You can also get it as follows:-

The cash payment made during the year+what we owed at the end of the year must represent the value of the year's incoming transfers+anything owing from previous year,so payment+closing balance-opening balance = value of transfers.

Thus £2.62m +£2.997m -£889k = £4.728m.

 

Now onto outgoing transfers-the same principle as above, so £1.961m+£459k -£823k = £1.597m

 

Alternatively,go to note 8 to work out the net book value of disposals by subtracting the amortisation figure from the cost figure,hence £2.092m -£1.303m =£789k. Now transfer fee/s - net book value =book profit/loss,hence transfer fee/s =net book value +profit/loss = £789k+£808k = £1.597m.

 

You might say that Shackell never cost £2.092m and you'd be right.However disposals includes anyone who left the club and had an original cost value.If a contract has run out,the amortisation figure would equal the original cost figure,so the cost figure is Shackell +£x,and the amortisation figure is Shackell +£x.

 

Don't forget the Panadol.

[ramblur]

I've long thought that the lay person looking at the accounts would be far better off looking at the cash flow statement rather than try to understand the complexities of an income and expenditure driven (with paper transactions) profit and loss account,where the headline figure isn't a cash loss. The opening figure of the cash flow statement is effectively the P/L figure converted to a receipts and payments basis that most would understand,hence the cash outflow from operations was £3.689m.Given that cash going out is given in brackets,it can be fairly easy to see what else had to be financed.

 

Thus,starting with the £3.689m,there was net interest paid of £801k/payments to acquire fixed assets of £614k/payments for players' regs,net of outgoing proceeds £659k/capital element of HP repayments £91k,loan repayments (excluding the £5.969m exchanged for equity) £130k (probably finally clearing the revolving loan+some HP interest).The total of this lot comes to £5.984m -deduct the small corporation tax repayment of £31k and you're left with £5.953m to fund.

 

Funding of £5.969m came in,which funded the aforementioned and increased cash by £16k,as witnessed by the last line of the cash flow statement.

[ramblur]

PBSE states that a further £3m of funding was received from Gellaw after the year end (i.e in the current year).However,the Gellaw directors' report (signed off 3 months later than the DCFC accounts) gives the figure as £3.95m.If you were to add this to the £18.5m shown as owing to Gellaw by DCFC at the year end,it would appear that the 2 added together will form the £22.5m equity exchange.It therefore seems unlikely that the £1m+ accrued loan capital interest has been exchanged.