Sixfield attendees 2014/2015 Season (2 Viewers)

[stupot07]

I would assume that they gave it that value before the lower rent offers. It stands to reason if you have a lease stating £1.2m a year over the next 40 years you would calculate that it's going to give you more revenue than a 10 year lease at £150K. The point I'm making is the change in revenue projection does not mean ACL are distressed, the very fact that they have offered the lower rent is the clearest indication we have that they are in a financial position to withstand the loss of revenue associated with club moving elsewhere..

So basically Sisu aren't distressing ACL...


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[chiefdave]

It will still affect the value of ACL to any potential buyer, whether that be Sisu or A.N. Other(who has been seen in Varsity having a drink with Elliott and Hoffman).

It may indeed impact on the value, equally it may not, depends on the buyers plans and ACL's revenue projections and how confident the buyer is those revenue projections were correct.

For all we know ACL were turning away businesses greater in value per year than having the club there as the club required so many dates to be reserved for their use. If that were to be the case ACL's value will have increased. It could be the case that the diary for future years (bearing in mind how far in advance a lot of these things are booked) is starting to fill up and ACL can demonstrate to any potential buyer that they have increased revenues as a result of the club walking away.

To merely state the club were due to pay £40m and now won't means the value of ACL has decreased by £40m is far too simplistic.

Of course the sale value of ACL increasing or decreasing is a very different matter to ACL being distressed and needing to be sold.

 

[chiefdave]

So basically Sisu aren't distressing ACL...

I think SISU intended to distress ACL, indeed in one of the court case the judge commented that it was clear that was SISUs intention. However from all the evidence available it appears it isn't working and there is nothing to suggest that situation is going to change.

 

[RoboCCFC90]

Whatever the value was or is , sisu would never pay it . They want it all buckshee with jam on top, sisu out.

I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.

 

[thaiskyblue]

I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.

keep believing robbo, up to you mate....

 

[RoboCCFC90]

keep believing robbo, up to you mate....

I am trying pal. I even sent a letter to CCFC highlighting all this last week, but haven't had a response, not hoping for much though.

 

[stupot07]

I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.

It's not really worth it for the money, formula price for Higgs - £10m buy out CCC £10m+, for a company that only makes a profit of £700k-1m per annum.

Still owing £14m loan, the all the hospitality tied up in IEC.

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[lordsummerisle]

Whatever they paid for the lease has little to do with the value of the business. It could be an asset; but their primary valuation would come from how they were trading and their forward projections.

Let me give you an example. Let's say they'd got it for £20m instead of £40m. That wouldn't make their business suddenly worth less!?! Conversely, if they'd paid over-the-odds and paid £80m - that doesn't then increase the 'value' of the business?!?

What the value of the lease does is to give them a figure they need to cover, month-by-month and year-by-year. A £40m value with a 20 year term gives a different overhead to cover than a £80m value with a 20 year term; insomuch as that the latter would have a larger loan repayment annually - which would depress bottom line. Yes, it might also show as an asset if the auditor believed the value to be true-and-fair, so would help balance sheet but depress P&L.

Whereas you seem to be claiming that the higher value paid, meaning the book value would be higher is the only driver in valuing the business. Do I read that correctly? Surely not

Are you being deliberately obtuse? Respect enough for you to say that you're not stupid.

The value of ACL as a business, separate from the leasehold they have on the Ricoh, would be contigent on contracts that they hold, and current or future income.

The loss of a 40 years to run contract would inevitably impact on the value of the business.

 

[thaiskyblue]

Keep trying mate i've had enough, not interested any more, off down the pub now to have beer with a real sky blue legend, Peter Hill, over 300 games 77 goals, top bloke , he dos'nt go any more real shame. PUSB !

 

[lordsummerisle]

I would assume that they gave it that value before the lower rent offers. .

Think that was the value given at the time of administration.

 

[dongonzalos]

It's not really worth it for the money, formula price for Higgs - £10m buy out CCC £10m+, for a company that only makes a profit of £700k-1m per annum.

Still owing £14m loan, the all the hospitality tied up in IEC.

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Offer 20 million ( you will need to come up a bit)

Payable over 100 years. ( far more financially viable than the current proposal)

Get this in place get the club promoted sell the lot for 20 million and bugger off.

 

[RoboCCFC90]

It's not really worth it for the money, formula price for Higgs - £10m buy out CCC £10m+, for a company that only makes a profit of £700k-1m per annum.

Still owing £14m loan, the all the hospitality tied up in IEC.

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It might be worthless to ACL it's in current state, but I don't think it would be useless to CCFC.

This route would also be quicker than building a new Stadium, which may not even appeal to the fans and which may not even reside in Coventry, if you go back to the Ricoh in this manner at least you are getting your monies worth, if CCFC also wanted to be helpful they could take over the repayments of the ACL/CCC loan.

 

[fernandopartridge]

Think that was the value given at the time of administration.

Yes, it was the whole premise of their claim that the administration process wasn't right as they weren't considered the major creditor. They valued the debt CCFC owed as the value of the rent over the entire term of the agreement rather than what hadn't been paid to date. I think they were looking for an administrator sympathetic to that.

 

[stupot07]

Offer 20 million ( you will need to come up a bit)

Payable over 100 years. ( far more financially viable than the current proposal)

Get this in place get the club promoted sell the lot for 20 million and bugger off.

So you pay an innocent Coventry children's charity back over a 100 year period....can't see either of the shareholder seeing that as acceptable, do you?


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[dongonzalos]

I cannot understand that though for the life of me, Tim Fisher said in the summer at the forums, that the financing for a new Stadium would come from Equity converted from the current debt, but why not use that to buy out ACL? Purchase the Higgs Share for the original sale price and CCC's Share for roughly the same price? They wouldn't need the Freehold to the Arena with this all revenues that they would require would easily be accessible, I can't understand why it won't be done, the only thing I can think of is that to some point there pinning their hopes on the JR, but they could be back in the Ricoh tomorrow if they pulled thier finger out.

Exactly makes far far more sense

45 + 25 million
Plus losses over time at Northampton

=

New stadium and sale price of over 70 million

Or

A profit margin that has to overcome approx 3 million of annual Interest charges.

How long would that take to chip away at 70 million in all honesty we all know it would not make a profit anyway so the 70 million would just grow

 

[stupot07]

It might be worthless to ACL it's in current state, but I don't think it would be useless to CCFC.

This route would also be quicker than building a new Stadium, which may not even appeal to the fans and which may not even reside in Coventry, if you go back to the Ricoh in this manner at least you are getting your monies worth, if CCFC also wanted to be helpful they could take over the repayments of the ACL/CCC loan.

Would need to buyout Compass who paid £4m for a 10 year deal worth £125m, how much do you think that will cost?


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[stupot07]

Exactly makes far far more sense

45 + 25 million
Plus losses over time at Northampton

=

New stadium and sale price of over 70 million

Or

A profit margin that has to overcome approx 3 million of annual Interest charges.

How long would that take to chip away at 70 million in all honesty we all know it would not make a profit anyway so the 70 million would just grow

Although they won't own the freehold (not that I'm saying it's essential).


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[dongonzalos]

So you pay an innocent Coventry children's charity back over a 100 year period....can't see either of the shareholder seeing that as acceptable, do you?


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They get a guaranteed yearly income plus a low inflation linked interest rate.

They maybe very happy with that.

Beats someone trying to completely screw you over.

Not that this is relevant but are they a children's charity?

 

[NortonSkyBlue]

Wow, you are all financial experts aren't you? Not a clue between you, just speculating and guessing. As for being back at the Ricoh? not whilst we lay back and have our tummies tickled........

 

[Mary_Mungo_Midge]

Are you being deliberately obtuse? Respect enough for you to say that you're not stupid.

The value of ACL as a business, separate from the leasehold they have on the Ricoh, would be contigent on contracts that they hold, and current or future income.

The loss of a 40 years to run contract would inevitably impact on the value of the business.

Yes. Yes it would. That's clear.

However, and to come back to the point I've made throughout, ACL's activity in other areas is beginning to compensate for this loss; and their value right now will be more determined by their current business model.

The c.£40m paid gives them a right to trade for a defined period under a leasehold arrangement. I don't know what reliance they placed on the football club within their projections over that period; but let's guess 60% of turnover. For no other reason than it's a figure.

In practice, now that SISU have done what they have, they have a 0% reliance on the football club, as opposed to the hypothetical 60%. They have changed - and are changing - their business mix so that they can trade within this new landscape.

The c.£40m they paid for the 'right to trade' still has a value, it's just that the composition of the trade isn't as predicted without CCFC. As such, SISU's actions could potentially depress the trading with of the leasehold, but ACL are currently withstanding that storm.

Their value, right now, will be based on current trading, forward projections, and - of course to an extent - the shortening length of the lease they still have to harvest that income. But it'll be the business case that will be the primary factor in determining ACL's value; not whatever the book value of the lease sits at. And again, perhaps more importantly, the less reliant on CCFC it is, the more diverse it's appeal is; the more likely others may be interested. That gives SISU competition for any potential purchase (even of a long leasehold), and that won't depress the price - in fact quite the contrary may prevail.

And to go back to what I've said in recent days; SISU appear less liable to be able to 'afford' any share in the Ricoh right now than they ever have. As I discussed with Rob the other day, they should have agreed the deal with Higgs when it was alleged to have been on the table

 

[dongonzalos]

Although they won't own the freehold (not that I'm saying it's essential).


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I have no understanding of that argument to be honest.

 

[ahccfc]

That's not really distressed though is it, that's a loss of future revenues which may or may not be replaced by other revenues (doesn't necessarily have to be a replacement anchor tenant). It will still affect the value of ACL to any potential buyer, whether that be Sisu or A.N. Other(who has been seen in Varsity having a drink with Elliott and Hoffman).

But this assumes ACL are interested in selling up! ACL's hit of £40 million is on the assumption that they cannot get another tenant is it not? If they get another tenant, or alternate owners of CCFC, then there will be a new lease in existence. This argument only holds true if the Ricoh has a finite lifespan. If it were to be knocked down right at the end of the lease, then yes, however the intention I assume for at least some structure to remain at the site for long after the lease expires! Yes it has lost what was expected in income, but expected incomes change all the time! Ultimately you this is a contrary argument. And frankly not a well thought out one at that!

 

[lordsummerisle]

Yes. Yes it would. That's clear.

However, and to come back to the point I've made throughout, ACL's activity in other areas is beginning to compensate for this loss; and their value right now will be more determined by their current business model.

The c.£40m paid gives them a right to trade for a defined period under a leasehold arrangement. I don't know what reliance they placed on the football club within their projections over that period; but let's guess 60% of turnover. For no other reason than it's a figure.

In practice, now that SISU have done what they have, they have a 0% reliance on the football club, as opposed to the hypothetical 60%. They have changed - and are changing - their business mix so that they can trade within this new landscape.

The c.£40m they paid for the 'right to trade' still has a value, it's just that the composition of the trade isn't as predicted without CCFC. As such, SISU's actions could potentially depress the trading with of the leasehold, but ACL are currently withstanding that storm.

Their value, right now, will be based on current trading, forward projections, and - of course to an extent - the shortening length of the lease they still have to harvest that income. But it'll be the business case that will be the primary factor in determining ACL's value; not whatever the book value of the lease sits at. And again, perhaps more importantly, the less reliant on CCFC it is, the more diverse it's appeal is; the more likely others may be interested. That gives SISU competition for any potential purchase (even of a long leasehold), and that won't depress the price - in fact quite the contrary may prevail.

And to go back to what I've said in recent days; SISU appear less liable to be able to 'afford' any share in the Ricoh right now than they ever have. As I discussed with Rob the other day, they should have agreed the deal with Higgs when it was alleged to have been on the table

That £40million is the value that ACL put on the contract between themselves and the club at the time of administration.

They have never paid "£40million as a right to trade", they paid £25million for the 50 year lease.

You are getting the two confused.

 

[RoboCCFC90]

Exactly makes far far more sense

45 + 25 million
Plus losses over time at Northampton

=

New stadium and sale price of over 70 million

Or

A profit margin that has to overcome approx 3 million of annual Interest charges.

How long would that take to chip away at 70 million in all honesty we all know it would not make a profit anyway so the 70 million would just grow

I think the £70m is an irrelevant figure Dong, if they converted £25m of debt to Equity they wouldn't count this as debt going forward, or that's what I am making of it from what I have been told.

 

[Mary_Mungo_Midge]

That £40million is the value that ACL put on the contract between themselves and the club at the time of administration.

They have never paid "£40million as a right to trade", they paid £25million for the 50 year lease.

You are getting the two confused.

No, sorry - you are right. In all the excitement; and trying to run through a contract this morning, I mixed my figures. Notwithstanding that faux pas, the balance of what I typed stands good.

Do you see how much more credible you can look when you freely admit a mistake, as opposed to charging on or changing tack

 

[stupot07]

That £40million is the value that ACL put on the contract between themselves and the club at the time of administration.

They have never paid "£40million as a right to trade", they paid £25million for the 50 year lease.

You are getting the two confused.

£21m. .


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[RoboCCFC90]

Would need to buyout Compass who paid £4m for a 10 year deal worth £125m, how much do you think that will cost?


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How far are we in to the 10 year deal Stupot?

 

[stupot07]

How far are we in to the 10 year deal Stupot?

Halfway.

http://m.catererandhotelkeeper.co.uk/Article.aspx?cat=news&id=326945


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[covcity4life]

compass are the enemy?!

 

[RoboCCFC90]

Halfway.

http://m.catererandhotelkeeper.co.uk/Article.aspx?cat=news&id=326945


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Hmm...

There are two options, you don't buy Compass out and let the deal run down and then go from there.

Buy them out the ten year deal, can't imgaine that would be cheap though.

 

[RoboCCFC90]

compass are the enemy?!

Compass have their fingers dipped in all sorts of pies, I am not sure they're the enemy as such.

 

[Astute]

Is it not working though?

Surely the value of ACL has been distressed by around the £40million that was remaining on the clubs lease?

Do you think that the value of ACL has gone up or not since the club left?

Twisting it around a little I see.

SISU are not trying to make ACL worth less. They are trying to make ACL worthless by sending them to the wall. And they look to have failed so far. Is that why you seem to be a bit upset about it?

 

[stupot07]

They get a guaranteed yearly income plus a low inflation linked interest rate.

They maybe very happy with that.

Beats someone trying to completely screw you over.

Not that this is relevant but are they a children's charity?

So not £20m over 100 years then?

Yeah, I think Higgs charity is mainly aimed at helping disadvantaged young people in Coventry and Warwickshire, although I don't know what that looks like in practice.


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[Astute]

The classic way of valuing a business is that it is the sum of it's discounted expected future cash flows.

So it depends what those expectations are.

If the cash flows are expected to be lower without the lease, the value will be lower.

If it is expected that other larger revenue streams will replace the lease, the value will be higher.

It's probably too soon to say, but the clean audit report certainly suggests that ACL's future is not as awful as some have predicted.

....or not as awful as some had hoped.

 

[NortonSkyBlue]

This is a catering and operating contract not a fixed financial contract. If there are no customers there is no income. It is a projection based upon best case scenario. Unfortunately for all parties it has not come to pass that it is a best case scenario. Therefore 125 million is a red herring.
There will be fixed charges attached that both parties are liable to pay. Another point is that Compass no longer run the hotel, that is De Vere, which could be a sub contractor or on a management contract as Compass is not a Hotel operator as such but a caterer and De Vere is a Hotel operator.
Anyhow all this was superceded by the joint venture between ACL and Compass. Not story here.....