Global Derby News

[Gritstone Ram]

Who owns the one worth  £28m?

[ramblur]

Thanks - so it could be either

You can see why I'm asking?

Same as in my company - I can BUY shares with my own mony if I want to invest in the company, so if Sam has done that it shows that he is committed to the club's success

Equally when I get given shares as a reward, they are also effectively trying to incentivise me to stay...

​Yep,I do see your point. There's always the possibility that he was allowed to buy shares (that otherwise might have cost £5.32,or another amount much greater than £1) at the par value of £1. I couldn't see him buying at £5.32,and if they were actually free shares,then the issue price obviously wouldn't be £5.32.

It's worth noting that Glick had also been a shareholder,which adds credence to an incentive scheme of some sort. 

[twinkletoes]

An annual return (AR01) has landed at CH,giving details of shares issued as at 30/11/14 (so bear in mind these totals will have increased in the meantime).The issued shares are in sterling and other currencies,and include both ordinary and preference shares.The preference shares have no voting rights,but have preference over any dividends available.Both classes of shares have a nominal (par) value of £1,but as you will see,some were issued at a premium.To get to the value of the investment you have to multiply shares issued by issue price.I'll start with the sterling issues:-

Ordinary:- 1@ £28,452,203,  799,664 @£5.32,  11,189,284 @£1 (par)

Preference:- 12,000,000 @£1 (par) 

Total issued:- 23,988,949

Other currencies (all ordinary) :- 1@£5886,983,.26,  1@ £1.853,088.60,  1@ £3,720,060.00, 1@ £6,623,586.82

The currencies aren't given,and I've assumed they've been converted to sterling.

 

Each ordinary share gives entitlement to one vote.

 

Now onto the shareholdings (numbers of shares only given) :-

Ordinary:-   North American Partners LP 11,087,667,  Mel Morris 799,664,  Samuel J Rush 101,622

Preference:- North American Partners LP 9,532,888,  Mel Morris 2,467,112

Total:-23,988,953 (including 4 in other currencies).

For those so inclined,a couple of bits of deduction can throw up more details of holdings.For my part,I'm just content to give a huge thanks to all concerned for their magnificent commitment to our great club.

 

​Right so you lent me a tenner?

[ramblur]

Ramblur I for one don't understand your posts in full but appreciate the effort and have learned from them (open minds not made of stone during daylight hours help)

 

keep posting

​Thanks davenport.You and a few others have definitely shown signs of a better understanding of the finances over the years,so I must have been doing something right ! Unfortunately,after doing this for a number of years now,and with declining health,I'm just sick of it all  and it's becoming too much.I'd already decided late last year,when I started to experience more new health reversals,that 13/14 would be the last set of accounts I'd cover,but that I'd stay  posting on finance till 14/15 arrived. However,it's not to be and I'm already starting to feel a great sense of relief that the finish line is in sight.Diag Ram knows his stuff !

[ramblur]

Its all good stuff because its Rams related even if most of us dont understand the ins and outs of all this share business. What we want to know mr ramblur is if it is good news for Derby or something to be concerned about.

​Nothing at all to be concerned about,hiltonram.Just shows that there is a high level of equity based investment,and it also shows to me that Mel Morris (for instance) must have confidence in us.

[Guest]

​Nothing at all to be concerned about,hiltonram.Just shows that there is a high level of equity based investment,and it also shows to me that Mel Morris (for instance) must have confidence in us.

I assume Mel paid over £6m into club ? ( 799k shares at £5.32 ? And 2,400k pref at £1 )

that is a large investment into club, and as you say shows much more confidence than it being a loan.

[jagerbob]

Ahhhh so this is why the American invvestors welcomed mel morris with open arms.

Its because he's loaded and prepared to invest in us. (Meaning we can pay Ince and Bent the mega money they demand)

[AndyB]

Excellent insight as always Ramblur. I wish you all the best with your health and I hope you're comfortable and not suffering too much.

[ramblur]

Who owns the one worth  £28m?

​The ultimate parent company,North American Partners LLP, on behalf of its constituent members,gritters. Now this is where I concede it might get difficult to understand,and even more difficult to explain.The share issued at over £28m has the same value in terms of voting rights and share of eventual pie as those issued at £5.32,and as those issued at £1.In this case the issue of just one share at a massive premium was just for sheer convenience.

North American Partners already owned 11,087,666 ordinary shares out of a total of 11.988.952 prior to issue of this share and it's this prior holding that effectively dictates their percentage holding ,which is over 90% - the issue of one share made a minute difference to this.

If more shares had been issued at a lesser value,then I guarantee that Mel Morris would have been buying a lot more shares at a lesser price to compensate,and the whole business would have been eating into the authorised shares total.

[ramblur]

I assume Mel paid over £6m into club ? ( 799k shares at £5.32 ? And 2,400k pref at £1 )

that is a large investment into club, and as you say shows much more confidence than it being a loan.

​At least you said it's an assumption,igor ! Whilst the 799k shares at £5.32 looks fairly likely,it's far from a cast iron certainty (though it would be a massive coincidence,I'll grant,if it turned out otherwise). We have to remember that the Gellaw accounts indicated that a further £9.4m of funding had been transferred to DCFC after the financial year end (if that were purely to fund operations deficit,interest and net player instalments,I think FFP would be up the Swanee,but I suspect some might relate to land purchase),so these figures will have risen.However,part of this £9.4m is likely to feature in this return,because of its November date.

[-JW-]

I think Mel Morris will buy the yanks out before the end of next season.

[ramblur]

Excellent insight as always Ramblur. I wish you all the best with your health and I hope you're comfortable and not suffering too much.

​Thanks Andy - not too bad at moment or wouldn't be posting ! One of the worst things is that,because of a relatively high steroid dose, I've difficulty sleeping.Often I'll go to bed early,only to get up at about 1am and come on here to try to get myself tired. I can remember that the day I eventually posted the Global Derby stuff I'd had a long,medical related day,come on here to do a load of stuff and went to bed dog tired,yet still couldn't sleep.Eventually got up again to find GD had landed at CH and got stuck into it.I slept when I eventually got back to bed!

[ramblur]

I was just thinking again about the one share at the massive premium and trying to find a way to tell people how tricky it is sometimes to strike an issue price that is fair to all parties.This would be a good one for a davenport/albert type to have a go at.The ordinary shareholdings at the end of the report enable you to work out the %age holdings for each party (I'd earlier worked out Rush at 0.85%). Now assume that instead of 1 share at £28m+, 2,845,220 shares had been issued @£10 each.How many shares,and at what issue value (it could be at a discount,ie below £1) would Rush and Morris have had to buy to preserve their %age holdings at current levels,and end up with the same amounts invested (obviously if they maintained their %age levels,then so would NA Partners). Assume that Morris originally bought all shares at £5.32,and Rush £1.

Best of British to anyone who takes this on.

[AndyB]

Well I for one hope you'll continue posting Ramblur, not just on this subject but all things DCFC.

[eustonstation]

I think Mel Morris will buy the yanks out before the end of next season.

​Hope not. Rather have a billionaire plus some millionaires than just one millionaire.

[davenportram]

I was just thinking again about the one share at the massive premium and trying to find a way to tell people how tricky it is sometimes to strike an issue price that is fair to all parties.This would be a good one for a davenport/albert type to have a go at.The ordinary shareholdings at the end of the report enable you to work out the %age holdings for each party (I'd earlier worked out Rush at 0.85%). Now assume that instead of 1 share at £28m+, 2,845,220 shares had been issued @£10 each.How many shares,and at what issue value (it could be at a discount,ie below £1) would Rush and Morris have had to buy to preserve their %age holdings at current levels,and end up with the same amounts invested (obviously if they maintained their %age levels,then so would NA Partners). Assume that Morris originally bought all shares at £5.32,and Rush £1.

Best of British to anyone who takes this on.

its a difficult concept to get your head round ay first but once your into it its just time consuming. If I were to do it it would be on a spreadsheet so I could quickly compare issue prices.

[We'll be back in 81]

Ramblur, we seem to be in debt by around 7m pounds every season recently. How many more years can we do this before it becomes a big problem?

Surely someone will want this money paying back at some stage. To me we cannot sustain this level of spend, bring the wage bill down.

 

[ramblur]

its a difficult concept to get your head round ay first but once your into it its just time consuming. If I were to do it it would be on a spreadsheet so I could quickly compare issue prices.

​I'd hate you to spend time on this,dav.I've just done it myself,and it's a lot simpler than I thought,but you have to see the opening gambit.Concentrate on the numbers of shares and retaining the original percentages - you can then work out the issue prices.I can tell you that if you work out that Mel and Sam,between them, would need an extra 231,280 shares,you'll be on the right lines.

What it shows is that if 2.845,220 shares had been issued,instead of the 1 that was actually issued,then 2.845,219+231,280 extra shares would have been issued (or,in other words,the issue of just 1 share was the most efficient outcome).

[RamNut]

It gets worse.....

[ramblur]

Ramblur, we seem to be in debt by around 7m pounds every season recently. How many more years can we do this before it becomes a big problem?

Surely someone will want this money paying back at some stage. To me we cannot sustain this level of spend, bring the wage bill down.

 

​I have a constant battle over getting a point accross here,hilton.The headline loss isn't a cash loss because (amongst other things) it includes the so called 'paper' transactions of depreciation and amortisation.To give just one example,roughly £1.5m is charged to P/L each year for stadium depreciation,but there's no cash outlay involved.

In 13/14,the owners put in c£3.7m,and this covered the cash deficit on operations,interest payments and net instalments on player purchases (net of sales).

However,you're right,it can't go on indefinitely and the spending will have increased this year.This is my one fear,because it doesn't matter how much you spend (as the late ND found out),there are no guarantees.

We tried the heavy spend approach in 08/09.When that failed we tightened the belt for a few years,and we now seem to have decided to retry the heavy spend,no doubt aided by Mel's involvement. As to how long it can go on,I just don't know.I've quickly worked out that the value of all the shares (as at 30/11/14) ,based on issue prices, is just short of £74m (the acquisition,including subsequent AP buyout) representing c£16m of this,so £58m working capital. Now this is a bit more than I thought when I did my piece on the accounts.The problem is over these shares in other currencies.It didn't give the currencies,just a string of figures with no currency symbol in front.Because decimal points appeared,I assumed it was converted to sterling (and it actually gave the nominal value of the shares at £1,with the pound sign there).A bit annoying,that.

I don't think there's any chance of getting this back (let alone make a profit) whilst in the Championship and the trouble is,the longer we stay there,the bigger the hole gets.There will be tremendous pressure on any manager we have next year to get us promoted,should we fail this year. 

Actually,I've made a mistake- there was no pound sign in front of the nominal value.These shares could have been denominated in US$, which would bring the sterling value down.