ricoh grows in value......according to wasps (14 Viewers)
- Thread starter singers_pore
- Start date
oldskyblue58
CCFC Finance Director
I think people lose sight of the fact that the short lease was included in the accounts 31/05/2014 at 18m
Somehow it often gets portrayed that the uplift is 48m it isn't. It is significant yes and it relates to the lease not ACL shares. Similarly the value of a lease in one business ownership isn't necessarily the same value in another business ownership
As the original lease was included in the accounts and formed a part of total assets acquired then CCC must have got the benefit of the value of the shorter lease in the share price. The lease extension did not exist at that point as anything other than an intention dependent on other events. Share value being the agreed value of all assets less all liabilities acquired. The effect that Wasps ownership might have was irrelevant to the value to CCC in 2014
The value of the lease in total increased because of different factors under new ownership, some of which were Wasps business plans, long term tenants (Wasps, G Casino etc), investment in the infra structure, length of lease etc
Would be very surprised if a valuation of ACL was not done prior to disposal of the shares, the fact that a different valuer might have a different opinion is not really material its just a difference of opinion. CCC can point to having taken time to get professional advice on the share values and to have been guided by that, ie proper process followed in that respect. It would be difficult to see how SISU could have access to all the information required to provide an alternative opinion, but it would only be an opinion in any case and wouldn't make the process wrong necessarily.
The loan from CCC was £14m and that was secured on all of the assets (tangible or otherwise) of ACL. So it was charged amongst other things against the value of the short lease £18m and ACL total assets were significantly more than the loan, based on the accounts figures. (around £25m according to the 2014 accounts - so was security really an issue?)
The latest valuation if correct at £60m could put the Wasps Group balance sheet in to a positive, depending on what else has gone on.
Somehow it often gets portrayed that the uplift is 48m it isn't. It is significant yes and it relates to the lease not ACL shares. Similarly the value of a lease in one business ownership isn't necessarily the same value in another business ownership
As the original lease was included in the accounts and formed a part of total assets acquired then CCC must have got the benefit of the value of the shorter lease in the share price. The lease extension did not exist at that point as anything other than an intention dependent on other events. Share value being the agreed value of all assets less all liabilities acquired. The effect that Wasps ownership might have was irrelevant to the value to CCC in 2014
The value of the lease in total increased because of different factors under new ownership, some of which were Wasps business plans, long term tenants (Wasps, G Casino etc), investment in the infra structure, length of lease etc
Would be very surprised if a valuation of ACL was not done prior to disposal of the shares, the fact that a different valuer might have a different opinion is not really material its just a difference of opinion. CCC can point to having taken time to get professional advice on the share values and to have been guided by that, ie proper process followed in that respect. It would be difficult to see how SISU could have access to all the information required to provide an alternative opinion, but it would only be an opinion in any case and wouldn't make the process wrong necessarily.
The loan from CCC was £14m and that was secured on all of the assets (tangible or otherwise) of ACL. So it was charged amongst other things against the value of the short lease £18m and ACL total assets were significantly more than the loan, based on the accounts figures. (around £25m according to the 2014 accounts - so was security really an issue?)
The latest valuation if correct at £60m could put the Wasps Group balance sheet in to a positive, depending on what else has gone on.
jimmyhillsfanclub
Well-Known Member
Ricoh Arena soars in value under Wasps
Meanwhile.....in other equally valid financial news, My 63 plate van has also increased in value by approx 30% in the last 12 months....cos I say so.
I'm considering writing myself a 3 page report to convince myself its true.......and also to reassure the greedy morally bankrupt franchise supporting bond buying cunts that their cash is safe.....
Meanwhile.....in other equally valid financial news, My 63 plate van has also increased in value by approx 30% in the last 12 months....cos I say so.
I'm considering writing myself a 3 page report to convince myself its true.......and also to reassure the greedy morally bankrupt franchise supporting bond buying cunts that their cash is safe.....
Liquid Gold
Well-Known Member
Doesn't this just help SISU's case in JR2
oldskyblue58
CCFC Finance Director
no not really. The only value that matters is the value of the shares on the day that the shares were sold. What the value of ACL or the lease is now has no real relevance to a decision in October 2014
Captain Dart
Well-Known Member
Tell you in 3 years.
This alone certainly helps them with one of the bond covenants, which is something to do with total debt not being something like 1.6 ratio of the combined ACL valuation + League share. They still need to achieve the profit (before tax and interest etc) of a ratio above finance costs (at least 2.3m). That we will see in October when the accounts are published.
I suppose they have less close season in this half of the results plus season ticket sales? so as OSB has said, it could contribute to something that looks good for them...
But Imo, meh... I just want to know where we will be playing after next season and into the long term where the academy will be based and the first team train...
I suppose they have less close season in this half of the results plus season ticket sales? so as OSB has said, it could contribute to something that looks good for them...
But Imo, meh... I just want to know where we will be playing after next season and into the long term where the academy will be based and the first team train...
SkyblueBazza
Well-Known Member
It's hardly unusual for authorities to value things lowly to offload them. Trains, energy...need I go on?
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SkyblueBazza
Well-Known Member
Personally I think people lose sight of the fact that it's about entertainment from kicking a ball about.
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singers_pore
Well-Known Member
Yet another CT exclusive story that was stolen from Sky Blue Talk. This time it was my post. Mr Simon Gilbert - have you no shame?
Nick
Administrator
You posted the document not meYet another CT exclusive story that was stolen from Sky Blue Talk. This time it was my post. Mr Simon Gilbert - have you no shame?You should be paying Nick and me a commission.
oldskyblue58
CCFC Finance Director
under the covenants.................
the value of the arena plus league share must be 1.4 x the debt ................. with the new valuation it is 1.97
Consolidated senior debt (excluding owner loans) must be less than the greater of £40m or 4 times Earnings before interest, tax, depreciation, amortisation (EBITDA)................ Senior debt is 34m
from 2017 accounts year onwards EBITDA must be 1.5 times the interest paid. Interest paid annually is 2.278m so the target is 3.417m for EBITDA.................. At 31/12/2016 it looked like the ratio was 1.3 so room for improvement there but the 2nd half of year should have been busier at the stadium.
the value of the arena plus league share must be 1.4 x the debt ................. with the new valuation it is 1.97
Consolidated senior debt (excluding owner loans) must be less than the greater of £40m or 4 times Earnings before interest, tax, depreciation, amortisation (EBITDA)................ Senior debt is 34m
from 2017 accounts year onwards EBITDA must be 1.5 times the interest paid. Interest paid annually is 2.278m so the target is 3.417m for EBITDA.................. At 31/12/2016 it looked like the ratio was 1.3 so room for improvement there but the 2nd half of year should have been busier at the stadium.
chiefdave
Well-Known Member
What would the Ricoh valuation have had to drop to for them to be under the 1.4?
oldskyblue58
CCFC Finance Director
Assuming that the P share remains at a value of 9m then stadium value would be 40m or less to be under 1.4
35m x 1.4 = 49m
35m x 1.4 = 49m
jimmyhillsfanclub
Well-Known Member
Yet another CT exclusive story that was stolen from Sky Blue Talk. This time it was my post. Mr Simon Gilbert - have you no shame?You should be paying Nick and me a commission.
Yep.....I noticed it come up on the newsbot, so I laughingly assumed it may be new news.......ha ha ha....should have known better.
Good work Singers-pore........
Pull your socks up Canley Gilbert !!
chiefdave
Well-Known Member
While I doubt the court case will lead to much the whole area of the value of ACL doesn't sit well with me. If you look back over it things are all over the place.
You've got a £115m stadium build of which the council takes 100% freehold ownership despite only putting £10m up themselves
CCC and CCFC both get 50% of ACL who have to pay £21m for a 50 year lease
CCFC then sell their 50% of ACL to Higgs for £6.5m
It is generally accepted that CCFC could buy back that 50% for a figure in the region of £10m
Matchday revenues offered to CCFC for the remainder of the lease for £24m
CCC bail out ACL with a £14m loan - at this point you would expect the value to be at least £14m or CCC have issued a loan without sufficient security in place
CCC sell their 50% of ACL to Wasps for £2.77m. At the time of the sale a 200 year lease extension in return for a one off payment of £1m has already been agreed
Higgs sell their 50% of ACL to Wasps for £2.77m.
Lease valued at £48.5m. While I appreciate the lease and ACL are separate entities to go from purchasing ACL with the longer lease (at a point at which CCFC are playing there and the buyer and seller clearly know Wasps will also be playing there) for £6.5m to a lease valuation of £48.5m in a matter of 2 months doesn't stack up for me.
The lease is now valued at £60m with no explanation given for the increase. This despite no naming rights deal and nothing to indicate ACL is performing any better than when the previous valuation was carried out.
Somewhere along the line something isn't right as far as I'm concerned. Either CCC have sold the lease to Wasps at a massively discounted price or there is an issue with the valuations. Not questioning the companies carrying out the valuations but they do give the caveat that the valuations are reliant on information supplied to them by Wasps and if that information is incorrect so is the valuation.
You've got a £115m stadium build of which the council takes 100% freehold ownership despite only putting £10m up themselves
CCC and CCFC both get 50% of ACL who have to pay £21m for a 50 year lease
CCFC then sell their 50% of ACL to Higgs for £6.5m
It is generally accepted that CCFC could buy back that 50% for a figure in the region of £10m
Matchday revenues offered to CCFC for the remainder of the lease for £24m
CCC bail out ACL with a £14m loan - at this point you would expect the value to be at least £14m or CCC have issued a loan without sufficient security in place
CCC sell their 50% of ACL to Wasps for £2.77m. At the time of the sale a 200 year lease extension in return for a one off payment of £1m has already been agreed
Higgs sell their 50% of ACL to Wasps for £2.77m.
Lease valued at £48.5m. While I appreciate the lease and ACL are separate entities to go from purchasing ACL with the longer lease (at a point at which CCFC are playing there and the buyer and seller clearly know Wasps will also be playing there) for £6.5m to a lease valuation of £48.5m in a matter of 2 months doesn't stack up for me.
The lease is now valued at £60m with no explanation given for the increase. This despite no naming rights deal and nothing to indicate ACL is performing any better than when the previous valuation was carried out.
Somewhere along the line something isn't right as far as I'm concerned. Either CCC have sold the lease to Wasps at a massively discounted price or there is an issue with the valuations. Not questioning the companies carrying out the valuations but they do give the caveat that the valuations are reliant on information supplied to them by Wasps and if that information is incorrect so is the valuation.
Captain Dart
Well-Known Member
It gives Wasps the leeway to start another bond before the first one matures in 2022.
I believe this valuation enables them to issue a second £8M bond in 2021 for working capital, I expect they will do something like that sort of like a bridging loan.
There will be an even bigger bond if Wasps sell naming rights and secure CCFC tenancy, but I'm sure SISU will only sign up a year or 2 at a time.
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oldskyblue58
CCFC Finance Director
This doesnt make good reading as a CCFC supporter
Wasps optimistic for English rugby
average league gates up to 19530, ST's for 2017/18 up 27%. Total all games around 300,000 2016/17
If average ticket per head was £15 that is £4.5m plus F&B at £6.30 per head (from 2016 accounts) £1.89m plus central distribution 6m + plus other rugby add ons sponsorship etc thats going to give a Rugby turnover alone of £14m+
(EXCLUSIVE: RFU agree £220m deal for their Premiership clubs | The Rugby Paper)
Then there is the other stadium incomes to add in (around £20m judging by last accounts)
Have they hit the EBITDA target? have they over stretched on the wages? Will they have to cut back on the wages and marquee signings? (Rugby Digger – transfer news and rumours: 'Wasps target Jaco Kriel to form back-row dream team')
to answer Ian 1779's earlier comment, sorry but i dont see them leaving any time soon, if at all. Sorry
Depressing
Wasps optimistic for English rugby
average league gates up to 19530, ST's for 2017/18 up 27%. Total all games around 300,000 2016/17
If average ticket per head was £15 that is £4.5m plus F&B at £6.30 per head (from 2016 accounts) £1.89m plus central distribution 6m + plus other rugby add ons sponsorship etc thats going to give a Rugby turnover alone of £14m+
(EXCLUSIVE: RFU agree £220m deal for their Premiership clubs | The Rugby Paper)
Then there is the other stadium incomes to add in (around £20m judging by last accounts)
Have they hit the EBITDA target? have they over stretched on the wages? Will they have to cut back on the wages and marquee signings? (Rugby Digger – transfer news and rumours: 'Wasps target Jaco Kriel to form back-row dream team')
to answer Ian 1779's earlier comment, sorry but i dont see them leaving any time soon, if at all. Sorry
Depressing
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oldskyblue58
CCFC Finance Director
What the new lease valuation provides is the possibility of more traditional forms of lending because of the equity the value provides, whilst retaining the possibility of utilising new bonds, AIM, or flotation. If bank loan taken out it could stretch repayment years and even lower interest rates as it would be secured on the equivalent of freehold, reducing annual payments. It could well remove the kind of covenants on the bond issue also
Get a deal done on stadium sponsorship and a new deal with CCFC and things would look fairly healthy. In terms of stadium naming rights would it be a big annual figure though? Would it be under £1m per year (of course that is mainly profit)
singers_pore
Well-Known Member
That only works if the providers of the external finance actually believe the new lease valuation. I know that investors are often stupid but are they really that stupid?? To me this looks like a game of poker and Wasps have gone all in with a Jack high. Their next set of accounts will be very interesting. It could be the end of their dream if they don't show a substantial profit given the very successful season that they have had.
chiefdave
Well-Known Member
Been digging around for some other valuations on ground leases, can only find a few but they give a lot more detail than we've had on this one and would seem to indicate that the Ricoh lease has been massively overvalued.
oldskyblue58
CCFC Finance Director
Don't read any of these posts as defending Wasps, it isn't. Just trying to cut through opinion & conjecture
It isn't really about the bottom line for the next Wasps accounts, the key things to consider are
1) the EBITDA figure
2) the profit after interest - important because going forward the business has to have profit to be able to pay it
3) the cash flow surplus or deficit for the year
4) the other bond covenants
As far as I know the surplus on revaluation ( £11.5m ) will be shown as a credit to the P&L account which means the P&L account bottom line will almost certainly be substantially positive, but it would be wrong to focus on it
So far there have been two different professionally qualified valuers who using RICS principles, (that the valuers can be investigated on by RICS) show lease values at £48.5m or more. By the time the Bonds need to be repaid there will have been two further lease valuations. Against that, is unqualified opinion that it doesn't look right. There is no evidence specific to the Ricoh to counter the valuations that I am aware of but I am not a RICS valuer, I don't have access to the data. As an investor I could be persuaded by the valuations provided or simply think its not for me you take your choice. As a lender you would seek your own valuation for security purposes. The way I look at it is that I have to warily accept the valuations until there is evidence they are incorrect - I can question, I can be surprised but I am not in a position to say they are wrong or indeed right or in error or unreliable or over/under stated. They are however professional informed opinion of said value by qualified experienced valuers
So why specifically are the valuations wrong or in error?
In any case its Wasps problem not CCFC's so isn't that important to me
What has been the value to CCC of the lease? 21m for the first lease then £1m for the extension = £22m that's what they have sold the lease interest for isn't it. There is no extension to be had unless you own ACL so there is no open market value to the lease extension because it couldn't be offered to any other party for 40 years
The £1m would imply there is not much being earnt from the lease extension. Certainly for the next 40years there are no further earnings because CCC received it all up front.
I think in CCC reports at the opening of the stadium it was stated that the Freehold had very little value, what changes that 7 years into a 50 year lease? If the long lease is economically the same value as freehold to CCC what would make the extension, at that point of share sale, more valuable than the freehold value to CCC?
If there is no real evidence of great lease value on other sites doesn't that support the notion that what the CCC could have sold it for wasn't a large figure either? CCC have received capital (not revenue) sums of £22m on the lease and its extension haven't they?
and low value goes against what SISU are trying to argue doesn't it both in terms of lease value but also in terms of share value ? What Wasps value it at is unimportant in terms of the JR2 and becomes their problem only when looking to finance repayment of the bonds (Currently trading at around 107 - a 7% premium) or meeting the bond covenants.
It isn't really about the bottom line for the next Wasps accounts, the key things to consider are
1) the EBITDA figure
2) the profit after interest - important because going forward the business has to have profit to be able to pay it
3) the cash flow surplus or deficit for the year
4) the other bond covenants
As far as I know the surplus on revaluation ( £11.5m ) will be shown as a credit to the P&L account which means the P&L account bottom line will almost certainly be substantially positive, but it would be wrong to focus on it
So far there have been two different professionally qualified valuers who using RICS principles, (that the valuers can be investigated on by RICS) show lease values at £48.5m or more. By the time the Bonds need to be repaid there will have been two further lease valuations. Against that, is unqualified opinion that it doesn't look right. There is no evidence specific to the Ricoh to counter the valuations that I am aware of but I am not a RICS valuer, I don't have access to the data. As an investor I could be persuaded by the valuations provided or simply think its not for me you take your choice. As a lender you would seek your own valuation for security purposes. The way I look at it is that I have to warily accept the valuations until there is evidence they are incorrect - I can question, I can be surprised but I am not in a position to say they are wrong or indeed right or in error or unreliable or over/under stated. They are however professional informed opinion of said value by qualified experienced valuers
So why specifically are the valuations wrong or in error?
In any case its Wasps problem not CCFC's so isn't that important to me
What has been the value to CCC of the lease? 21m for the first lease then £1m for the extension = £22m that's what they have sold the lease interest for isn't it. There is no extension to be had unless you own ACL so there is no open market value to the lease extension because it couldn't be offered to any other party for 40 years
The £1m would imply there is not much being earnt from the lease extension. Certainly for the next 40years there are no further earnings because CCC received it all up front.
I think in CCC reports at the opening of the stadium it was stated that the Freehold had very little value, what changes that 7 years into a 50 year lease? If the long lease is economically the same value as freehold to CCC what would make the extension, at that point of share sale, more valuable than the freehold value to CCC?
If there is no real evidence of great lease value on other sites doesn't that support the notion that what the CCC could have sold it for wasn't a large figure either? CCC have received capital (not revenue) sums of £22m on the lease and its extension haven't they?
and low value goes against what SISU are trying to argue doesn't it both in terms of lease value but also in terms of share value ? What Wasps value it at is unimportant in terms of the JR2 and becomes their problem only when looking to finance repayment of the bonds (Currently trading at around 107 - a 7% premium) or meeting the bond covenants.
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Captain Dart
Well-Known Member
I think Wasps have to pay £1M next week for the next instalment of bond interest.
Yeah Eleventh isn't it?
fernandopartridge
Well-Known Member
Interest payment is due today. Bond price has risen slightly presumably in anticipation?
Wasps Finance PLC has asked for the latest trade publication be delayed, not sure if it has any significance....
Wasps Finance PLC has asked for the latest trade publication be delayed, not sure if it has any significance....
Terry Gibson's perm
Well-Known Member
According to giblet tonight the cracks are growing at the Ricoh but unfortunately only in the walls
fernandopartridge
Well-Known Member
What did he say?
Terry Gibson's perm
Well-Known Member
Cracks appeared in brickwork repair work being undertaken, stadium bosses have said nothing unusual. But have sent italia to check things out.
There's been some settlement !!
Terry Gibson's perm
Well-Known Member
There's been some settlement !!
Maybe there will be a bigger settlement soon
.I have said since it was built that place will be a money pit as it was thrown together and I still look an wonder when they will come back and finish it off
italiahorse
Well-Known Member
.... and I can report that the stadium will be monitored for Wasps crowds above 30,000. CCFC fans need not worry.
Nick
Administrator
Best make sure the leicester fans are safe when they come over.... and I can report that the stadium will be monitored for Wasps crowds above 30,000. CCFC fans need not worry.
fernandopartridge
Well-Known Member
Wanker.... and I can report that the stadium will be monitored for Wasps crowds above 30,000. CCFC fans need not worry.