£1.97 Million Loss For Last Season

[old spot]

Thanks very much for all that info and the time spent posting it Nickj. I haven't got time at the mo to take it all in as it is in such detail, but at first glance it looks very interesting reading and also a bit worrying.

Lets hope things improve on the pitch soon, as this season's losses could well be mounting despite the summer sales. My big worry is that people seem to think that promotion, if it could be achieved which is unlikely this season, would solve all the money worries. But it looks like we would need to get to the premiership to start paying off debt, without significantly increasing the wage bill from what it is now!!

[Brianred]

There trying everything to get us up and out of debt,open the Eastend thats a extra man and a atmosphere back in the ground its a start and a positive thing to do,for players and the club

Ah! English, Fans have already said they will come back if all the Eastend would open, so you might as well put the away fans in the williams stand now! as a trial and lets see what happens both ways, thats if SL and followers opened there eyes, The way the crowds ars dropping, and SL comments on the East, they will be closing parts of the Ateyo until crowds increase.

[the prefect]

Thanks for your comments. As a Financial Adviser rather than an accountant I have to confess to only having a working knowledge of accounts rather than an expert knowledge such as NickJ and a couple of accountants involved with the Supporters Trust, but in simple terms, I understood that a £2M loss would increase your liabilities (or reduce your assets) by £2M. As more or less all our assets are the ground, it inevitably leads to increased liabilities. So while a £2M loss won't necessarily be £2M cash spent, the balance sheet ends up £2M worse off which is broadly backed up by NickJ's subsequent figures.

I agree that we should all be reassured by the directors buying equity rather than loans (which they did in the previous accounting period). It demonstrates commitment as well as saving in interest payments.

As I understand it, the structured debt is in Holdings which owns the Football Club outright. We have looked at the Football Club's accounts in the previous accounting period and felt that Holdings was the company to pay attention to. Have your experiences with Coventry highlighted any particular issues surrounding the relationship between the Football Club's accounts and the Holding company (assuming there is a holding company at Coventry) that we should be watchful for?

Milo - you're right that the loss is posted to the balance sheet which reduces the overall asset of the club by £2m.

Like you, I'm not an accountant however, I am finance qualified and run my own business. Coventry City and Bristol City are similar to many football clubs in that there's a 'holding' company who's prime asset is the football club (usually a separate company). There will be debts that are owed between the two companies that will need your accounting friends to analyse in more detail. Both sets of accounts will be required to distill the debts of the Football Club alone.

During 2003 at Coventry City, three of the directors made loans totalling £2m to the holdings company. As part of a deal on an investment disposal, the £2m loans were repaid by the purchaser. The three directors immediately re-lent the £2m - to Coventry City Football Club Ltd. In itself, this looks fine. The reality is that the directors are attaching their loans the the holding company's only real asset (namely the football club) so in the event of administration (say) of the holdings company, the loans may be better protected if the administrator choses to sell the football club. This is to be expected at Coventry City (who are in financial meltdown) but not yet at Bristol City - but you never know.

From what I see, the board have used up all the clubs assets. If shareholder funds are only £500,000 (as posted previously in this thread) then next year will be significant as the directors may need to do something to support the clubs asset base. That may be to sell good players that aren't on the balance sheet (the academy players such as Lita) or perhaps do a sale and leaseback of the stadium to provide cash. Perhaps the sale of shares. Without doing something along those lines, the only option the board will have will be to put in more loans - unwise on a company with such low turnover and high debts.

There are similarities between Coventry and Bristol City. I must say that the Bristol City board seem to be funding the 'gamble' adequately themselves so there's no cause for alarm just yet as all the indications are that they know what they're doing with regards the financing of the club. What seems to be required is better judgement regarding the on-pitch activities - which has started with the appointment of Gary Johnson. A positive note on which to end!

[NickJ]

Does the figures tell how much the academy is costing the club to run???

No, but I don't think they are as great as you might think.

The costs are going to be:

- Training staff and coaches, but at the younger levels, most are unpaid/paid minimal amounts and/or just minimal expenses.

- Hire of pitches and training courts at Failand

- Travelling expenses

- Some admin cost.

- The St George facility, which I don't know if it is rented or owned. Effectively however the cost is either the rent or a notional rent charge, which would be measured I would think in tens of thousands.

I cant think of much else, and cant see how the above would amount to anywhere near the sum of £1m, which I think is the sort of amount that has been suggested on here in the past.

[Guest ashtonyate]

No, but I don't think they are as great as you might think.

The costs are going to be:

- Training staff and coaches, but at the younger levels, most are unpaid/paid minimal amounts and/or just minimal expenses.

- Hire of pitches and training courts at Failand

- Travelling expenses

- Some admin cost.

- The St George facility, which I don't know if it is rented or owned. Effectively however the cost is either the rent or a notional rent charge, which would be measured I would think in tens of thousands.

I cant think of much else, and cant see how the above would amount to anywhere near the sum of £1m, which I think is the sort of amount that has been suggested on here in the past.

The last thing that is have seen reguarding cost was 645k for 2004 in a Lansdown post?

[rednotblue]

Milo, thanks for the compliment.

There are other liabilities, the group balance sheet looks like this:

£'000

Fixed assets

Intangible (players contracts) 460

Tangible (mainly the ground) 7,868

8,328

Current assets

Stocks 65

Debtors 223

Bank 3

291

Creditors repayable within one year

Bank 2,865

Loan stock 2006 586

Transfer fees 52

Players contracts 89

Trade creditors 196

VAT, PAYE 337

Accruals and deferred income 2,338

6,283

**NET CURRENT LIABILITIE######* 5,992

Creditors repayable after one year

Loan stock 2006 886

Loan stock 2006/07 950

1,836

Reserves 500

Capital & reserves

Share capital 3,568

Share premium 4,012

Revaluation reserve 6,174

P&L accumulated losses (13,253)

Shareholders funds 500

- So the only reason we are not insolvent is due to the revaluation of the ground, carried out in 1995. I suspect that a further loss this year will see, in addition to some equity/loan injection, a further revlaution. The ground is the only thing that keeps us afloat in terms of lending from the bank.

- I don't know what the deferred income of £2,338,000 relates to, but its such a significant figure I would like to find out.

Here's the Group P&L:

Turnover - main activities 3,367

Turnover - other 1,950

5,317

Staff costs 4,201

Amortisation of player contracts 305

Depreciation 221

Other costs 2,414

7,141

Operating loss (1,824)

Profit on disposal of players contracts 158

Loss before interest (1,666)

Net interest payable (302)

Loss for the year (1,968)

I agree with your comments re the wage bill. Four years ago, it was almost £5m, and there were 38/40 players, so its come down, but still too much. What worries me is that with a squad of 30 plus some promising youngsters, GJ, and some on this forum, are actually advocating bringing in more on loan.

And thats where we start to get to the nub of the matter. We don't need 30 players, just 18 or so decent ones, with a reserve team containing some decent players coming through and/or as back up.

But to have a smaller squad, you need a manager capable of identifying the wheat from the chaff. And its a long time since we had that. If I were Lansdown, that would be my strategy. He's sort of on that road, but I think he has at times been deviated from it.

We are on bit of downward spiral here. The time will come, at the present rate, when we will be unable to service the debt. When that time comes, which will be when the loan providers can see that the liabilities are dangerously close to the value of the main asset, the ground, I do not like to think of the consequences.

EDIT: Sorry, its difficult to get the formatting right, so some of the figures look a bit jumbled, hope you can make sense of it.

does anyone have a copy of the accounts that they could send me please.

Also when was the last time the stadium revalued??? As with property increasing if Ashton Gate has not been revalued in the last 5-10 years I would think that the ground is worth significantly more than it is in the Balance Sheet for.

[NickJ]

does anyone have a copy of the accounts that they could send me please.

Also when was the last time the stadium revalued??? As with property increasing if Ashton Gate has not been revalued in the last 5-10 years I would think that the ground is worth significantly more than it is in the Balance Sheet for.

If you want to receive accounts every year, just buy a couple of shares. Or you could obtain copies from the Companies House website for just £1, though I don't think they are available quite yet.

The ground was last revalued in in 1995, as stated in my post (although you should remember that the figures in the accounts include all land and buildings, not just the ground - I think some other buildings are owned). Agreed, that 10 years on, the market value will be considerably more - as I said, I suspect it will not be too long before we see a revaluation in the accounts.

[redrocks]

Woop woop! Bean counter alert!!

[RedUn]

The last thing that is have seen reguarding cost was 645k for 2004 in a Lansdown post?

Before grants.

[Guest ashtonyate]

Before grants.

No he said we would get the grants if we had an academy or not

No he said we would get the grants if we had an academy or not

Joined: 24-October 03

Member No.: 5

The academy costs for the last 2 years were:-

2003 £672k

2004 £654k

We do receive some grants which we would get even if we did not have an academy and we do look to generate income from elsewhere towards it,which again we could possibly get without the academy, so I have not netted those off against the above.

Steve.

PS I do not have previous figures to hand.

So one of you are wrong

[NickJ]

Woop woop! Bean counter alert!!

Yes, apologies for highlighting the fact that if the serious financial mess continues, it will be light years before we can even contemplate the Championship, let alone Premiership.

Don't you worry your little head about it, leave it to the big boys, just have a go at this one:

http://www.otib.co.uk/index.php?showtopic=47313

[RedUn]

No he said we would get the grants if we had an academy or not

Joined: 24-October 03

Member No.: 5

The academy costs for the last 2 years were:-

2003 £672k

2004 £654k

We do receive some grants which we would get even if we did not have an academy and we do look to generate income from elsewhere towards it,which again we could possibly get without the academy, so I have not netted those off against the above.

Steve.

Once again thank you for your assistance in making my point, in this case, that the figure of £645k is not the cost of the academy net of grants (or indeed "other income" which reduces the net cost still further).

[redrocks]

Yes, apologies for highlighting the fact that if the serious financial mess continues, it will be light years before we can even contemplate the Championship, let alone Premiership.

Don't you worry your little head about it, leave it to the big boys, just have a go at this one:

http://www.otib.co.uk/index.php?showtopic=47313

So is "Condescension" part of the curriculum at Accounting school these days then? Here's a nice site for you big boys to drool over too:

Phwoar!!!

[NickJ]

So is "Condescension" part of the curriculum at Accounting school these days then? If it needs to be.

Here's a nice site for you big boys to drool over too:

Phwoar!!!

Can't match that. Your superior wit and intellect has no equal.

[Gerry Gows' Tash]

Yes, apologies for highlighting the fact that if the serious financial mess continues, it will be light years before we can even contemplate the Championship, let alone Premiership.

Don't you worry your little head about it, leave it to the big boys, just have a go at this one:

http://www.otib.co.uk/index.php?showtopic=47313

That's not quite true - IF the team do the business on the pitch and get us promoted or at least go on a cup run

then income increaseses dramatically (tv rights, bigger gates, bigger sponsorship deals etc) while overheads only increase slightly - this is especially true in our case as I suspect we already pay the same as some champs club. Plus there is always the possibility of transfer income. Operating loss can then become operating profit literally overnight. Agree it would take a while to reverse the accumulated debt but that's not unusual in football and people need to keep it in perspective - I mean like most people with a mortage I'm technically insolvent and only become otherwise if I pop my clogs !

Does the figures tell how much the academy is costing the club to run???

Hmm, I bet there's a smilie on here that conveys laughter but I'm too lazy to look for it. Now why wasn't I surprised that that question came from ashtonyate ?

[NickJ]

That's not quite true - IF the team do the business on the pitch and get us promoted or at least go on a cup run

then income increaseses dramatically (tv rights, bigger gates, bigger sponsorship deals etc) while overheads only increase slightly - this is especially true in our case as I suspect we already pay the same as some champs club. Plus there is always the possibility of transfer income. Operating loss can then become operating profit literally overnight. Agree it would take a while to reverse the accumulated debt but that's not unusual in football and people need to keep it in perspective - I mean like most people with a mortage I'm technically insolvent and only become otherwise if I pop my clogs !

Cant disagree with the first bit - if we do the business and get pomoted, preferably via the play offs, and have a cup run, then we will do better financially.

However my point is that IF we do not, then dire consequences are not inconceivable. You might say that is obvious - but it is not. Our cost structure is such that lack of the above will hit us harder than any other club in this division.

[Gerry Gows' Tash]

Cant disagree with the first bit - if we do the business and get pomoted, preferably via the play offs, and have a cup run, then we will do better financially.

However my point is that IF we do not, then dire consequences are not inconceivable. You might say that is obvious - but it is not. Our cost structure is such that lack of the above will hit us harder than any other club in this division.

Yep - we're potentially buggered - it's the old "big club" in a small division syndrome

[Milo]

That's not quite true - IF the team do the business on the pitch and get us promoted or at least go on a cup run

then income increaseses dramatically (tv rights, bigger gates, bigger sponsorship deals etc) while overheads only increase slightly - this is especially true in our case as I suspect we already pay the same as some champs club. Plus there is always the possibility of transfer income. Operating loss can then become operating profit literally overnight. Agree it would take a while to reverse the accumulated debt but that's not unusual in football and people need to keep it in perspective - I mean like most people with a mortage I'm technically insolvent and only become otherwise if I pop my clogs !

Hmm, I bet there's a smilie on here that conveys laughter but I'm too lazy to look for it. Now why wasn't I surprised that that question came from ashtonyate ?

You're only technically insolvent with your mortgage if the value of your mortgage is higher than the value of your house. If it's not, you can sell your house, pay off your mortgage, start renting and have a few quid in your pocket.

Using this analogy, our ground is the house and the debts we've accumulated are the mortgage. We now have a mortgage worth almost as much as the house. Many of us find this level of debt uncomfortable because if the mortgage lender wants his money repaid, we either need to find an alternative lender or we sell the ground. We're in a position where we're uncomfortably reliant on the directors which isn't a problem today but who knows what tomorrow brings?

I agree that promotion and sustained championship football would help ... but have you seen the league table lately?