Rams announce financial results

[ramblur]

Having now finished my analysis of 12/13,I usually like to try and explain something for the benefit of those who look at the accounts.Following a stadium revaluation,some might wonder what "Valuation prepared on a depreciated replacement cost basis" means.Basically,you work out the replacement cost and then imagine this was the construction cost when the stadium was first built.You then depreciate this figure from construction date to valuation date.I'll give an example using convenient dates and figures,but bearing no relationship to DCFC.

 

Stadium built at a cost of £25m in 2003,with an estimated life of 50 years for depreciation purposes.Hence historical cost depreciation would be £0.5m per year.

 

Replacement cost calculated at £75m in 2013,therefore assume this was cost in 2003. Annual depreciation charge will now be £1.5m,so 10 years of this would be £15m. Hence depreciated replacement cost in 2013 would be £75m-£15m = £60m.

 

Going back to the DCFC accounts,there's a note that adjusts the loss to take account of the difference between valuation depreciation and historical cost depreciation,the wording being "Difference between historical cost depreciation charge and actual depreciation charge for the year calculated on revalued amount". The difference is £994k,and would effectively bring the loss down to c£6m. No cash was ever expended as part of this £994k,another big reason why those who maintain our owners have to fund the actual loss have got it completely wrong. They fund the cash loss,net interest,net capital expenditure and any loan repayment.

[Martyn]

Having now finished my analysis of 12/13,I usually like to try and explain something for the benefit of those who look at the accounts.Following a stadium revaluation,some might wonder what "Valuation prepared on a depreciated replacement cost basis" means.Basically,you work out the replacement cost and then imagine this was the construction cost when the stadium was first built.You then depreciate this figure from construction date to valuation date.I'll give an example using convenient dates and figures,but bearing no relationship to DCFC.

 

Stadium built at a cost of £25m in 2003,with an estimated life of 50 years for depreciation purposes.Hence historical cost depreciation would be £0.5m per year.

 

Replacement cost calculated at £75m in 2013,therefore assume this was cost in 2003. Annual depreciation charge will now be £1.5m,so 10 years of this would be £15m. Hence depreciated replacement cost in 2013 would be £75m-£15m = £60m.

 

Going back to the DCFC accounts,there's a note that adjusts the loss to take account of the difference between valuation depreciation and historical cost depreciation,the wording being "Difference between historical cost depreciation charge and actual depreciation charge for the year calculated on revalued amount". The difference is £994k,and would effectively bring the loss down to c£6m. No cash was ever expended as part of this £994k,another big reason why those who maintain our owners have to fund the actual loss have got it completely wrong. They fund the cash loss,net interest,net capital expenditure and any loan repayment.

 

Thanks ramblur, appreciating the accountancy schooling!

 

[ramblur]

Just realised I forgot Steve Davies was sold that year and so formed part of the £1.597m,along with Shackell.It seems one ,or both,were sold for less than variously reported.Looking back at PBSE for 11/12,it gives net proceeds of sales in the following year at 1.305,250.Davies will have been completely paid for by then,so it seems we must have owed £292k on Shackell.

 

I've noticed that Balance Sheet items relating to amounts owed to other clubs at year end are always classed as being payable within 12 months.This must mean that we pay for players within 2 years,but doesn't mean we'll pay in 2 equal instalments (though we may on occasions).

[ramblur]

Having looked through my posts,I can see a couple of things that might need clarification.Now I know Daveo gets a bit nervous at this time of year and likes to see this thread disappear off the first page a.s.a.p.,so I'll make this my last post (unless being called on to answer something).

 

When SR/SP talked of the £28.5m of loan capital being swapped for equity,they weren't talking (totally) of pre existing loan capital.I wouldn't criticise them for this,as it might have been difficult for them to (quickly) explain it all.In 12/13 the amount outstanding to Gellaw was £18.5m at the start of the year and remained at that level at the year end.What did happen was that a further £5.969m was loaned during the year,and this was subsequently converted to equity.

 

The £3.95m signalled in the Gellaw directors' report as being injected this year will also no doubt appear as loan capital initially, then to be converted (along with the pre existing £18.5m) into £22.5m of equity. I've no doubt that the injections come as and when cash flow requires and it wouldn't be practical to convert to equity in dribs and drabs,so they probably wait towards the end of the year and deal with it in the one transaction.Thus the £28.5m can probably be broken down as £18.5m pre existing +£10m subsequent.

 

I was a bit lazy in my post on cash flow statement.I said that a loan repayment of £130k probably represented the last vestiges of the revolving loan and some HP.The HP was dealt with separately in the cash flow statement (and I even quoted it !) -the £130k actually represented £112k of revolving loan +£18k of long term debt (an element of c£15.5m of long term debt,comprising the £15m stadium loan,£434k of preference shares and another small element that I never tried to identify because of its relative insignificance).

 

I wouldn't want to split hairs over it (again,they'd find it hard to quickly explain),but when the equity swap has gone through we'll be left with a bit more than £15m of debt.The redemption date of the preference shares (which go back years) is more than 5 years away (and that's all I can say).At 30/6/13 there was also £331k of HP debt (£384k of new debt in the year,with a part repayment of this and a small amount of pre existing).

[Martyn]

I wouldn't want to split hairs over it (again,they'd find it hard to quickly explain),but when the equity swap has gone through we'll be left with a bit more than £15m of debt.The redemption date of the preference shares (which go back years) is more than 5 years away (and that's all I can say).At 30/6/13 there was also £331k of HP debt (£384k of new debt in the year,with a part repayment of this and a small amount of pre existing).

 

Hi ramblur.  Can you give a little explanation of preferential shares?  I don't really know anything about them.

[ramblur]

Hi ramblur.  Can you give a little explanation of preferential shares?  I don't really know anything about them.

There are several different possible classes of preferred stock,Martyn,but as I don't want to end up writing an essay I'll stick to what I know of the DCFC variety.Unlike ordinary shares,our preference shares are redeemable-I don't know the redemption date,but it's over 5 years away.Also,unlike ordinary shares,the preferred carry a coupon (fixed dividend),in this case 2.5% -the same as the stadium loan whilst base rate remains at 0.5%.

 

They're called preference shares because the payment of their dividend takes precedence over the payment of any ordinary share dividend declared.They will also often have prior call on any available assets (after creditors) upon liquidation,though I notice the DCFC ones rank equally with ordinary shares in this eventuality.I don't know who holds the stock,but it was around in 04/05,which is as far back as I go accounts wise.

 

You might wonder why something with 'shares' in its name isn't classed as equity.Well,when you think about it,they have a repayment date and the dividend is little different to interest (and it's classed as this in the accounts),so much more in common with loans than ordinary equity.

[davenportram]

04/05 was when the three amigos were in charge. Hope it's nothing shady.

[Martyn]

Unlike ordinary shares,our preference shares are redeemable-I don't know the redemption date,but it's over 5 years away.Also,unlike ordinary shares,the preferred carry a coupon (fixed dividend),in this case 2.5% -the same as the stadium loan whilst base rate remains at 0.5%.

 

They're called preference shares because the payment of their dividend takes precedence over the payment of any ordinary share dividend declared.They will also often have prior call on any available assets (after creditors) upon liquidation,though I notice the DCFC ones rank equally with ordinary shares in this eventuality.I don't know who holds the stock,but it was around in 04/05,which is as far back as I go accounts wise.

 

Thanks I get that.

 

I to am intrigued by who owns them - I wonder how far back they go?

[ramblur]

04/05 was when the three amigos were in charge. Hope it's nothing shady.

Nah,I'm sure they're above board and probably originated years before 04/05.Every limited company has levels of authorised share capital up to which limits they can issue without further application to raise the authorised levels.920,000 of these preference shares (par value £1) are authorised,and only 433,568 were ever issued,and they are non-voting.In 04/05 they were treated as equity,but in 06/07 they were treated as a liability (debt).Unfortunately I don't have the 05/06 accounts.

 

UK accountants would mainly work to the guidelines set by a body called the Accounting Standards Board that issues standards called Financial Reporting Standards,the idea being that accounts are prepared to a certain uniform standard in certain areas.My guess is that this body decided that preference shares would be better classed as a liability round about that time-the particular standard that applies is FRS 25 (as stated in the accounts).

 

In response to Martyn,I was always mildly interested in their ownership,but never to the extent that I felt like delving,mainly because the value is fairly insignificant,and the annual dividend wouldn't be much more than £10k.

[ramblur]

Just seen an interesting post on another forum giving the 12/13 overall wages table.We're shown in 7th from bottom position,however the 4 teams immediately below us (Millwall,Charlton,Wednesday,Blackpool) all seem to be around the same c£12m mark.The bottom 2,Peterborough and Barnsley,are somewhat adrift.

 

I'd wager that our non player wages were greater than the 4 mentioned,which implies our player wages would be smaller,effectively putting us 3rd bottom on this score (apologies to davenport for being a little sceptical on that score last year).Even under the new merchandising arrangements,we still employed 54 Admin&Marketing staff and our academy wages spend would be relatively high.

 

For anyone who's seen the post in question,the author queried how we made an £800k profit on the sales of Shackell and Maguire.The answer is he's got the wrong 2- I looked at Maguire,but he left at the back end of 11/12,and Steve Davies is his missing man,his sale probably representing nearly all book profit.

[dwhrams]

ramblur, many thanks for your enlightenment over the years; good to have someone on here that understands these things and can explain them to us.

[ramblur]

ramblur, many thanks for your enlightenment over the years; good to have someone on here that understands these things and can explain them to us.

Thanks dwhrams,and my pleasure.I've always tried to present facts accurately,and referenced wherever possible.If I give opinions I always try to give full supporting reasoning.I don't expect to be liked (and I suspect I'm not particularly),but I do hope I'm respected.

 

When I first started on the DET all those years ago I was given a pretty torrid time for a long period,going against a massive flow.In order to survive in those circumstances you have to develop a bit of a street fighter mentality,and I suspect I've never quite shaken that off.

[davenportram]

Just seen an interesting post on another forum giving the 12/13 overall wages table.We're shown in 7th from bottom position,however the 4 teams immediately below us (Millwall,Charlton,Wednesday,Blackpool) all seem to be around the same c£12m mark.The bottom 2,Peterborough and Barnsley,are somewhat adrift.

I'd wager that our non player wages were greater than the 4 mentioned,which implies our player wages would be smaller,effectively putting us 3rd bottom on this score (apologies to davenport for being a little sceptical on that score last year).Even under the new merchandising arrangements,we still employed 54 Admin&Marketing staff and our academy wages spend would be relatively high.

For anyone who's seen the post in question,the author queried how we made an £800k profit on the sales of Shackell and Maguire.The answer is he's got the wrong 2- I looked at Maguire,but he left at the back end of 11/12,and Steve Davies is his missing man,his sale probably representing nearly all book profit.

No worries rambur

The graph comes from Swiss Ramble - on his twitter feed he put loads of graphs comparing loads of stats

@SwissRamble I think is his twitter name. Don't know if they are on his website I haven't googled to check.

[needles]

Thanks dwhrams,and my pleasure.I've always tried to present facts accurately,and referenced wherever possible.If I give opinions I always try to give full supporting reasoning.I don't expect to be liked (and I suspect I'm not particularly),but I do hope I'm respected.

 

When I first started on the DET all those years ago I was given a pretty torrid time for a long period,going against a massive flow.In order to survive in those circumstances you have to develop a bit of a street fighter mentality,and I suspect I've never quite shaken that off.

 

 

We love you baby.

 

It's great to have someone who understands explaining the accounts because I for one wouldn't have a clue past the headline in the DET. 

So thanks very much for your efforts, it is massively appreciated.

[ramblur]

No worries rambur

The graph comes from Swiss Ramble - on his twitter feed he put loads of graphs comparing loads of stats

@SwissRamble I think is his twitter name. Don't know if they are on his website I haven't googled to check.

Know the site well.Of course what I probably failed to appreciate last year was that you were probably talking in the present tense,whilst I was examining the historical 11/12.If I'd had the current graphic to hand then,it'd have been a no brainer to concur.I won't ask your source,but I did notice you seemed to have struck up a wee friendship with a certain guy.

[ramblur]

We love you baby.

 

It's great to have someone who understands explaining the accounts because I for one wouldn't have a clue past the headline in the DET. 

So thanks very much for your efforts, it is massively appreciated.

Thanks needles-I'm going to go all weepy soon.

[davenportram]

Know the site well.Of course what I probably failed to appreciate last year was that you were probably talking in the present tense,whilst I was examining the historical 11/12.If I'd had the current graphic to hand then,it'd have been a no brainer to concur.I won't ask your source,but I did notice you seemed to have struck up a wee friendship with a certain guy.

Not sure who you mean? Can't remember who my source was either.

Swiss Ramble does a great job, and it makes sense too. I notice that last year we were third or fourth bottom in wages to turnover % too.

[ramblur]

Not sure who you mean? Can't remember who my source was either.

Swiss Ramble does a great job, and it makes sense too. I notice that last year we were third or fourth bottom in wages to turnover % too.

The man who pushed the bounds of infinity infinitely further back.

[uttoxram75]

ramblur, many thanks for your enlightenment over the years; good to have someone on here that understands these things and can explain them to us.

Oh for god's sake don't encourage him.

 

 

 

 

 

 

 

 

 

 

 

Top stuff as always Ramb!

[davenportram]

The man who pushed the bounds of infinity infinitely further back.

Lol - him yeah. Most of what he told me has panned out to be true.

Thanks for your hard work on the accounts.