ACL Group 2012 accounts (1 Viewer)

[oldskyblue58]

Just some brief details from the accounts with a little commentary(in italics). Make of it what you will.

- The accounts are not qualified by the auditors, nor do they have an emphasis of matter detailing going concern issues. That implies the auditors had no issues on going concern of ACL as at 27th February 2013 (date they signed off) The directors detail in the notes what they considered to produce on a going concern basis - the auditors concurred

- Principal risk factor to ACL business was identified as CCFC, but aim of ACL is to be independent from the volatility of football industry - no surprise there then

- Directors report includes details that ACL benefited from £1m of Olympic related infra structure im provements (roads and access work i guess). ACL themselves spent £609k on new fixed assets.

- Turnover up from £6.66m to £7.78m (1.3m in both years from ccfc i assume = 16.7% in 2012)...... total costs up from £6.2m to £6.7m

- net assets (the difference between total assets and total liabilities) improved from £1.5m to £6.6m. Profit and loss reserves improved from -£2m to + £2.2m. No new shares issued in ACL - shares are £3516112 split 50:50 between council and charity. No dividend has been paid by ACL to its stakeholders

- *edit Group total liabilities have fallen from 26.4m in 2011 to 23.4m in 2012 a reduction in total debt of £3m which is more than the capital payments on the bank loan (cica 600k)............would be interesting to see the movement on the SBS&L Group for the same period

- New subsidiary IEC Experience limited formed 20/04/12. Owned 77% by ACL and 23% by Compass. Compass paid £4m premium on the shares. IEC bought a licence of hospitality, catering and FM rights at the Ricoh from ACL for next 15 years, ACL is using that money to finance improvements to conferencing and hotel rooms

- staff costs up from £1.01 m to £1.43m. Directors pay 256K (highest paid director £202k) NO payments made to the directors appointed by Council or Charity.

- At 31/05/12 ACL owed Yorkshire bank £15.6m which was repaid with the £14.4m loan via the Council (stakeholder funding borrowings - that is no different to CCFC)

- The rent deposit scheme (escrow) stood at 315218 at 31/05/12 previous year it was 536558. ACL can not draw any of this down until CCFC defaults on the rent clearly CCFC doesnt seem to have paid rent April & May 2012

- ACL have capital commitments at 31/05/12 for improvements to the site of £1.8m

- cash at bank and in hand £3,876,141 at 31/05/12 (was 1,210,382 year before)


Clearly there could be difficult times ahead for ACL if CCFC fold or leave - however none of the above indicates "a failing business" as we have been led to believe

Going forward to 2013 accounts those will include earnings from the Olympics, the remaining draw down on the Rent deposit account 315k, match day cost contributions £300k, savings on the interest payable on the loans say 200K, wages savings due to functions transferred to IEC say £500k and a potential bad debt of £1.3m because of CCFC. just my guess obviously and assuming similar turnover but looks like ACL will be profitable in 2013 also

I am sure everyone will draw their own conclusions in a way that suits them

 

---

[Danceswithhorses]

Oooyyy Fisher...failing business is CCFC and not ACL, ie the one that you are chief executive of !!
Bloody cheek and very hypocritical calling ACL a failing business.

 

[MichaelCCFC]

Thanks OSB. I have said previously that I wondered why ACL had never made a profit net of CCFC rent and questioned whether they could so. But the accounts provide concrete facts rather than opinion so really does look like ACL have improved their performance significantly and there is no reason to doubt your analysis of the coming year. My only query is one director on £256,000. Really? People who do more hours, have special skills, take on greater responsibilities etc deserve to earn more - but £256k for working at ACL???

 

[TheRoyalScam]

Thanks OSB - I'm not surprised really - ACL continue to go from strength to strength.

The Ricoh itself should and could be our 'Jewel In The Crown' for decades, yet some people think the Council should give it to SISU as a gift because it's running* our football club!:facepalm:

*or should that be 'ruining'?

It beggars belief that some people think that ACL won't/can't survive without CCFC - these figures prove just the opposite - their income from CCFC remains below 17% of total turnover - profits are rising, hence the generous offer to reduce the rent - yet SISU are stalling over exact figures for the (small in the general scheme of things) Food and Beverage sales.

I'd love to know Fisher's view on these figures - oh dear me I forgot - he told the CT on February 26th:

“We’re not here to subsidise a failing council-owned business.”

That's as much a lie as your claim to have paid £800k rent, when £500k came from the ESCROW account.

So what are you here for, Tim? To run a successful football club? By getting us relegated?

 

[oldskyblue58]

Just a thought on the turnover figures...... gone up 18% from £6.6m to £7.8m in round terms. Strangely by an amount similar to the current CCFC rent. So it is possible to make up that level of turnover...... of course couple that with cost savings (interest & wages) and the business seems a viable proposition

That turnover is before the Olympics but it also at a time when their share of the profit from match F&B was falling because our crowds were falling. They had to be making that turnover increase from somewhere and with crowds in decline it would not seem logical to think it to have been from CCFC.

 

[Stevec189]

So does the formation of IEC make it difficult for ACL to sell back the F&B to CCFC? It looks like CCFC would never own 100%of the revenue unless they bought out Compass which would surely cost them a minimum of £4M?

 

[Bennets Afro]

Does this mean we will never own 100% of ACL if they are trying to distance themselves from the club?

- Principal risk factor to ACL business was identified as CCFC, but aim of ACL is to be independent from the volatility of football industry - no surprise there then

 

[oldskyblue58]

Does this mean we will never own 100% of ACL if they are trying to distance themselves from the club?

- Principal risk factor to ACL business was identified as CCFC, but aim of ACL is to be independent from the volatility of football industry - no surprise there then

not necessarily, but to be honest i do not believe ccfc will ever own acl.

- wont happen under current ccfc owners
- any other owners need to gain a track record
- any other owners would own it as part of a group but it makes no sense to put it all in one company when football is so volatile (that doesn't mean the club cant have the income stream rights though)
- Dont think it is trying to distance from the club more it is from the financial risk. If CCFC became viable and less of a risk then the two sides would work more closely

 

[oldskyblue58]

So does the formation of IEC make it difficult for ACL to sell back the F&B to CCFC? It looks like CCFC would never own 100%of the revenue unless they bought out Compass which would surely cost them a minimum of £4M?

certainly looks like that has happened. Think people forget that the first duty of ACL directors is to what is best for ACL. They have to minimise that financial risk, but it looks like most turnover etc has nothing to do with CCFC in the first place

The deal that the club was offered gave them rights to turnover but not rights to the profit so there are as they say many ways to skin a cat

£4m got compass 23% of IEC so it would cost a lot more to get 100%

 

[Jack Griffin]

The continued seperation of Arena & Football Club is to my mind for the best.

It is not just this football club but most football clubs that have consistently shown themselves to pursue wreckless spending policies, thats why they're always going into administration, its not bad luck, its cavalier management.

That being so, it is in the interests of the Arena business to help the football club obtain a stable business model from which it can again climb the leagues, but I don't think there are any quick fixes.

 

[Sky Blues]

So CCFC, if it was paying the rent, would be contributing about 17% of turnover. But, by my quick calculations of these figures, that money would also only cover 19.4% of the costs of running the stadium. While I am glad ACL is healthy enough to be able to offer a two-thirds reduction in that rent to CCFC while it is in League 1, do these figures not call in to question suggestions that a £1.3m rent is a "rip-off"?

 

[oldskyblue58]

I think what we are looking at is a changing world

When CCFC first went in to the stadium the set up was 85% for the club with the possibility of other income being available for the site. In that circumstance you could argue that the club should contribute the lions share to costs & financing, even so they were being asked to contribute to the cost of the lease not the cost of the build. Pretty soon afterwards CCFC said they could not afford it ...... that must have set alarm bells ringing at ACL etc, they reacted and started the process of developing non football income streams and investing in the site to do it. They had to because the alternative was the whole site went bust. Got to remember at that time CCFC were saying couldnt afford the rent but could afford to regularly pay out 110% of turnover as wages, anyone looking at that is going to say thats unsustainable deal with it then we can talk.

That process of sourcing new income has continued to where we are at 31/05/12 rent from CCFC accounting for under 17% of income it is highly unlikely that 24 or 25 days football will increase the ACL share of net income to take that percentage for ccfc past 33% let alone make it the majority of ACL turnover. ACL are working to reduce that "reliance" on CCFC even further

What the SISU challenge surrounding the rent and Yorkshire bank has done is to focus ACL on its structure, costs and finance burdens. They have refinanced, the fact it is through the Council is frankly a red herring..... take away the name and it is a stakeholder financing its company to safeguard it and no different to what CCFC/SISU are doing. The net effect of that financing is I believe a cash flow saving of around £800K per year which they have more than passed on to CCFC by offering to reduce the rent from £1.3m to £400k and by giving up £100k in F&B profits (£1m benefit for CCFC). ACL could and should have looked at finance costs before probably but there may be valid reasons why it couldnt be. You can argue that passing on the savings is the right thing to do for CCFC, it may be the right thing to do for both companies but ACL has no duty to pass on cost savings it makes or the benefit of better income.

Going forward the costs will reduce and there will be an effect on the percentage of CCFC rent to ACL turnover. Take out the £1.3m and replace with £400k rent that would be 400k out of a total turnover of £6.9m or 5.8% (or as a percentage contribution to costs less than 8%). Profitability may well be very similar because of the restructuring and cost savings being made despite lower rent from CCFC. Would seem even under the proposed new deal the CCFC rent is not so important even now ........... but that doesnt mean CCFC should not pay a fair value for the facilities they get........... or that ACL want to be rid of CCFC

CCFC could have chosen to be part of this, but they sold the rights and were paid for them........ SISU could have looked at this and said we can be a partner in this with a long term goal of ownership, deal with our own costs, buy lease earn the rights to various incomes, increase the viability and worth of CCFC, have something to sell on......... they (CCFC/SISU) chose a different path............. got to take responsibility for your own actions in business

 

[oldskyblue58]

There have been discussions regarding future income from sponsorship and naming rights at the stadium as far as ACL is concerned. Important part of their income and it is right to highlight potential problems etc. So did some quick google research and came up with these. There seems to be evidence of continued support and new sponsorship

Lloyds Pharmacy extend sponsorship to 2015

http://bdaily.co.uk/hospitality/01-03-2013/lloydspharmacys-sponsorship-extension-at-the-ricoh-arena/

how Ricoh seem to see the Arena .......... a soccer stadium complex that is now a landmark building in the Uk...... kind of implies it has gone beyond a reputation based on football. Not sure that the stadium name sponsors are as reliant on the so called anchor tenant as some think...... deal runs to at least 2015

http://www.ricoh.com/about/company/ataglance/media_etc/index.html

Then there is the view of the Ricoh commercial director -
And Mr Moloney admitted the football team's form on the pitch would have a bearing on whether the Japanese firm extended that deal again.
"Our contract is with the arena, the football club are a tenant. But it would be fantastic if they got out of trouble," he said.
"Their future performance would play a small part in whether we renewed our contract but the key benefits are from concerts and other events.
"It's been a bit of a surprise as to how well people have taken to the name but we're delighted people have adopted the term 'The Ricoh'."


Read more: No gripes with Olympic name snub, insist Ricoh | Coventry Observer

http://www.coventryobserver.co.uk/2...th-Olympic-name-snub,-insist-Ricoh-36478.html

examples of other income streams ACL are looking at

http://www.getmemedia.com/DB/idea-of-the-week-archive/sponsorship-of-the-ricoh-arena-car-parks.html
http://www.marketingbirmingham.com/...leads_to_new_sponsorship_deal_at_ricoh_arena/

E-on deal on sponsorship runs to 2017

no comments from me

 

[MichaelCCFC]

I clicked on the http://www.ricoh.com/about/company/a...etc/index.html link and the section on the Ricoh is headed 'Ricoh Arena (Birmingham, UK). It would appear that any link with Coventry (never mind ccfc) is, in marketing terms, irrelevant. The quote from Ricoh that CCFC's "future performance would play a small part in whether we renewed our contract but the key benefits are from concerts and other events" is hugely telling.

 

[Sick Boy]

If it wasn't for the football club, do you think the Ricoh would really be as well known as it is?

Let's hope the club are gone soon though so we can make some real money from having concerts every Saturday!

 

[oldskyblue58]

If it wasn't for the football club, do you think the Ricoh would really be as well known as it is?

Let's hope the club are gone soon though so we can make some real money from having concerts every Saturday!

it isnt what the main sponsor thinks though is it

""Their future performance would play a small part in whether we renewed our contract but the key benefits are from concerts and other events." and in terms of revenue that is the only opinion that counts ..... doesnt matter if we think it is because of the club, it isnt how the Global brand of Ricoh see it

 

[Sick Boy]

it isnt what the main sponsor thinks though is it

""Their future performance would play a small part in whether we renewed our contract but the key benefits are from concerts and other events." and in terms of revenue that is the only opinion that counts ..... doesnt matter if we think it is because of the club, it isnt how the Global brand of Ricoh see it

I stand by my point that the coverage the Ricoh Arena has got is due to the football club. Millions of people in the country have heard of it due to the football club, they will associate it with the football club, as our stadium. I doubt that if we mention 'the Ricoh Arena' to them they are going to think of a major music venue in the UK.

 

[MichaelCCFC]

If it wasn't for the football club, do you think the Ricoh would really be as well known as it is?

Let's hope the club are gone soon though so we can make some real money from having concerts every Saturday!

I always believed the stadium was dependent on ccfc both for direct income (rent) and wider 'brand recognition'. But the evidence seems to be stacking up that ACL have got their act together, can survive without ccfc and what took me aback looking at the Ricoh company website is they refer to the stadium as being in Brum not Cov. ccfc being at the ricoh no doubt helped get the stadium name established but the facts now suggest the stadium has moved on and no longer needs ccfc in order to survive. Having said all that, a successful ccfc would benefit the stadium and associated businesses eg the casino but it seems like the sisu-acl/council conflict means there is never going to be a positive working relationship between them. But who knows what the future holds?

 

[Sick Boy]

I always believed the stadium was dependent on ccfc both for direct income (rent) and wider 'brand recognition'. But the evidence seems to be stacking up that ACL have got their act together, can survive without ccfc and what took me aback looking at the Ricoh company website is they refer to the stadium as being in Brum not Cov. ccfc being at the ricoh no doubt helped get the stadium name established but the facts now suggest the stadium has moved on and no longer needs ccfc in order to survive. Having said all that, a successful ccfc would benefit the stadium and associated businesses eg the casino but it seems like the sisu-acl/council conflict means there is never going to be a positive working relationship between them. But who knows what the future holds?

Without CCFC the stadium would be a massive white elephant.

 

[Grendel]

Without CCFC the stadium would be a massive white elephant.

Yes it would and the public statement from Ricoh may or may not be telling.

 

[Wrenstreetcarpark]

Yes it would and the public statement from Ricoh may or may not be telling.

Now how do you get to that from the evidence? Your opinion, okay, not based on the evidence is it? It is just the same as Fisher running an insolvent company and shouting that the profitable one he can see ahead of him is going bust. Just where does that put his company? Evo-Stik Northern Premier perhaps. But Grendel has already said his loyalty only stays with CCFC while it is in the League. Skin deep fan.

 

[Grendel]

Now how do you get to that from the evidence? Your opinion, okay, not based on the evidence is it? It is just the same as Fisher running an insolvent company and shouting that the profitable one he can see ahead of him is going bust. Just where does that put his company? Evo-Stik Northern Premier perhaps. But Grendel has already said his loyalty only stays with CCFC while it is in the League. Skin deep fan.

Whilst your only posts are ever when ACL are questioned. People will draw their own conclusion.

 

[Jack Griffin]

Whilst your only posts are ever when ACL are questioned. People will draw their own conclusion.

Whilst your only posts are ever when SISU are questioned. People will draw their own conclusion.

 

[oldskyblue58]

one of the links posted says there is a footfall of 1.1m on the site - currently CCFC with an average attendance of 11063 that equates to approx 25% of total footfall. Significant certainly but .................

It may turn out to be a "white elephant" without ccfc (dont think so in my opinion) .......... or just break even ............ but equally it may turn out to be a success - we do not actually know. Personally I try to keep an open mind..............however i do think the assertion of failure is over stated

You cant state it will be a white elephant as fact as seems to happen repeatedly .......... it is just an opinion nothing more

 

[Grendel]

one of the links posted says there is a footfall of 1.1m on the site - currently CCFC with an average attendance of 11063 that equates to approx 25% of total footfall. Significant certainly but .................

It may turn out to be a "white elephant" without ccfc (dont think so in my opinion) .......... or just break even ............ but equally it may turn out to be a success - we do not actually know. Personally I try to keep an open mind..............however i do think the assertion of failure is over stated

You cant state it will be a white elephant as fact as seems to happen repeatedly .......... it is just an opinion nothing more

Of course it is only an opinion.

I cannot see another example of such a complex surviving without a football club.

Out of interest when exhibitions and indoor concerts are held who would you view as the main named sponsor for those?

 

[SkyBlueCharlie]

OSB58, firstly thanks for taking the time out to do this.

You said at the end of your original post that anyone looking at these figures would draw their own conclusions. Well, when you see turnover increasing faster than overheads, Nett assets increasing, P&L reserves up by over £4m, cash up by over £2m then it's not hard to see that this is a business that is well managed and well structured.
In my opinion it would be reasonable to expect that the current year's figures would continue to reflect this even with the lack of rent payments and the boost from the Olympic events, so all in all a business set fair for the future. They would also appear to demonstrate that whether we like it or not, ACL could survive without CCFC and they are distancing themselves from CCFC and the impact they could have on ACL in the future.
Would you agree?

 

[oldskyblue58]

Of course it is only an opinion.

I cannot see another example of such a complex surviving without a football club.

Out of interest when exhibitions and indoor concerts are held who would you view as the main named sponsor for those?

1) then with respect Grendel couch it in those terms rather than making a statement of opinion a statement of fact
2) doesnt mean it cant.......... we do not actually know do we. Clearly ACL are making moves in their structure, cost base and target market to get away from any reliance on CCFC. Whether it works or not only time or CCFC leaving(including going bust) will tell
3) You know as well as i do there is cross overs on many aspects at the Ricoh Arena. Sponsorship is one of those cross overs. It is not an unusual situation when it comes to marketing as you must know. The overall complex sponsor is Ricoh others sponsor individual rooms and halls. The value and benefit of that is matched by the amount each pays.

 

[oldskyblue58]

OSB58, firstly thanks for taking the time out to do this.

You said at the end of your original post that anyone looking at these figures would draw their own conclusions. Well, when you see turnover increasing faster than overheads, Nett assets increasing, P&L reserves up by over £4m, cash up by over £2m then it's not hard to see that this is a business that is well managed and well structured.
In my opinion it would be reasonable to expect that the current year's figures would continue to reflect this even with the lack of rent payments and the boost from the Olympic events, so all in all a business set fair for the future. They would also appear to demonstrate that whether we like it or not, ACL could survive without CCFC and they are distancing themselves from CCFC and the impact they could have on ACL in the future.
Would you agree?

Whether ACL survive without CCFC remains to be seen but it would appear they are setting out their stall to do so. Looking from purely a ACL point of view then it is only right that they try to insulate their business from the financial risk posed by CCFC. Nothing wrong in those actions, it is the duty of the directors to do so, it is not about trying to knife CCFC in the back. Equally there is nothing wrong in the principle of SISU protecting their company either (how each do it is a different discussion).

There is a statement on the last ACL directors report that they are seeking to protect themselves from the volatility of the football industry............ everything in the accounts and details released by ACL points to this

 

[Stevec189]

Of course it is only an opinion.

I cannot see another example of such a complex surviving without a football club.

Can you name one that has failed? Plenty of exhibition and conference facilities are sponsored and have no football club attached!

 

[fernandopartridge]

Can you name one that has failed? Plenty of exhibition and conference facilities are sponsored and have no football club attached!

Yes but the majority of the property can only be used for football or rugby which is very unlike most other exhibition venues. There is also no room for expansion aside from demolishing the stadium.

 

[Jack Griffin]

Yes but the majority of the property can only be used for football or rugby which is very unlike most other exhibition venues. There is also no room for expansion aside from demolishing the stadium.

The indoor hall has 7000 seated capacity, making it about the 15th largest indoor event space in the UK and the hotel has 121 rooms.

www.ricoharena.com/business/business-facilities/1000-delegates-plus/jaguar-exhibition-hall/

http://www.devereatthericoharena.com/default-en.html

I think CCFC turnover in league one is less than that of ACL. In the championship I reckon it would be similar.

 

[sky blue john]

With the latest threat from Sisu !!!
The accounts have not been filed yet so I should imagine they will have two sets of accounts ready for if they push the liquidation button or not.
I wouldn't be surprised to see an extra 10million on top of the 45million debt could easily be put down to legal fees !!!
My worry is that they will get more for a tax rebate than someone is prepared to pay for the registration.