oldskyblue58
CCFC Finance Director
In no particular order
1)Recent up date at company house. Otium have issued 166,000 more shares.
Share movements
original 1000 issued
increased to 501,000 23/10/13 (to comply with FL insolvency rules for New Co exit from insolvency)
increased 10/01/14 to 1,985,000 by issue of 1,484,000 preference shares to ARVO
increased 30/04/14 to 2,151,000 by issue of more preference shares to ARVO
Interesting that the agreement to resolutions issued 05/05/14 concerning the latest share issue was signed by Fisher for Otium but by Dermott Coleman for ARVO. That now confirms both Coleman & Seppala are both involved in ARVO (as well as SISU Group)
2)Valuations The £1 stated value in the 2013 CCC accounts of their investment in North Coventry Holdings and the £6.5m stated in the AEHC accounts are not market valuations of ACL or 50% of ACL. Both these amounts are not recent adjustments to reflect current worth. Both these amounts were adjusted to those figures in 2003 or 2005.
Asking for the valuations in 2012 is not in my opinion about resolving this dispute, but more about PR - trying to sway public opinion - they will be covered in the JR wont they? . The valuations are out of date and pre any restructuring. I assume the hope is to show that ACL/CCC/AEHC were being unreasonable in their valuations then not selling to SISU and that the valuations prove to be less than the £14m loan so public funds misused. All it would actually do is probably confuse things further. Yes we would all like to see the valuations, but we have at this moment no legal right to. I would think that ML knows much of the contents in any case but can't get the reports out in the public domain without AEHC & CCC approval. Lets be honest with a court case pending in just under a month would you feel the need to release the information. I should image the SISU PR machine is feeling a little frustrated by the lack of response/comment (information) coming out of AEHC & CCC.
The key valuation would be a current one if there was a deal in the air - I do not think there is. But on what basis, who pays the bill, who is the report to be for,etc. CCC do not require a valuation their carrying cost is £1 and there is no requirement to show at market value. The Charity have assessed the value of their investment and concluded it is more than £6.5m they do not need a valuation. Only ones that need a valuation is SISU it looks like to me. What happened in 2012 no longer has a relevance to a current deal in my opinion - and disclosure of the valuations would distract from the real CURRENT problem, the financial viability of CCFC.
I think a concern I have is that from the recent comments from AEHC and CCC plus the carrying values in their accounts that for now they have no interest in a deal on ownership with CCFC. That might be taking a risk on their part, but it might be based on current business and future plans however. We can only wait and see. But it increases the risk to CCFC
3) Arbitration/mediation. Well from a fans point of view it makes sense got to agree with that. Trouble is the reality of the situation seems to imply it wont happen. The only thing ACL can offer is a rent deal. CCC are not inclined to sell the freehold. SISU want outright ownership with all impediments gone. Previously ACL said they would not enter such a process and the first thing ML did in saying yes was to add all sorts of other things in. To work both sides have to buy in to the deal and it has to be about going forward only not what happened before. I am starting to think however that ACL & CCC at this time do not feel the need to propose more deals or enter such process - you have to ask have they something to hide or is it that CCFC are just about out of time for a return as partner or anchor tenant?
4) The Trust doing a deal with ACL then renting to CCFC is an idea but I think unworkable. Why should it be necessary? It could leave the Trust liable for a rent but no sub tenant, it doesn't solve the Clubs problem regarding income
5) What do you get by buying the shares of ACl. Primarily a long term asset on the balance sheet (that would be something for CCFC for a change). A place at the stadium decision making table. I am sure a deal could be structured that gave credit to the club for incomes under FL rules even if under Companies Act rules it doesn't. Owning 50% does not mean under company law you have a right to 50% of the sales. Owning shares gives you rights to income from those shares by way of dividend. The shares give you a share of all assets & liabilities of the company and is reflected in the purchase price of the shares.
6) Deferred income There has been discussion about deferred income in the ACL accounts regarding the Isle of Capri lease termination. Have explained this previously as normal business practice and no great mystery. So normal that SBS&L group has a similar category of income disclosed in all its accounts to date, and a similar category in the CCFC Group accounts previous to SISU. Summary of results since 2002 is on the Trust website
7) Combined figures Got to thinking what if the figures for SBS&L and ACL groups had been one New Group for 2012 and 2013. All this is conjecture and very rudimentary Exclude say £2m rent and intercompany trading, say that the ACL directors costs removed, New Group run by CCFC directors, that a deal to write off all ACL debt done so no interest on that part of the finance.
Figures would have included in round figures
......................... 2012...........................2013
Turnover 16.6m ........................... 19.0m
cost of sales - 2.9m ........................... - 5.6m
staff costs -11.3m............................- 7.9m
other costs -6.9m ......................... -11.2m
operating loss - 4.5m ......................... -5.7m
player sales 2.8m ............................ 1.6m
other sales etc 1.4m .......................... 0.48m
Interest -1.3m ....................... -1.8m
overall loss -1.6m ........................ - 5.4m (disclosed losses SBS&L 2012 4m 2013 7.1m ACL disclosed profits 2012 1.1m and 0.775m 2013)
to me on that basis without cost savings, increased turnover, better margins and player sales then such a group is unviable in normal business terms. It would still require owner or third party funding and greater and greater debt. Promotion brings extra income but greater player cost. Reduction of player costs makes promotion harder to achieve. Catch 22 situation really for the club but just reinforces what the real financial target is in my opinion
Just some thoughts - sure others will see it differently
one final thought - yes I know finance is my pet subject but ........there is currently almost no talk or clarification of any of the clubs finances, why is that?
1)Recent up date at company house. Otium have issued 166,000 more shares.
Share movements
original 1000 issued
increased to 501,000 23/10/13 (to comply with FL insolvency rules for New Co exit from insolvency)
increased 10/01/14 to 1,985,000 by issue of 1,484,000 preference shares to ARVO
increased 30/04/14 to 2,151,000 by issue of more preference shares to ARVO
Interesting that the agreement to resolutions issued 05/05/14 concerning the latest share issue was signed by Fisher for Otium but by Dermott Coleman for ARVO. That now confirms both Coleman & Seppala are both involved in ARVO (as well as SISU Group)
2)Valuations The £1 stated value in the 2013 CCC accounts of their investment in North Coventry Holdings and the £6.5m stated in the AEHC accounts are not market valuations of ACL or 50% of ACL. Both these amounts are not recent adjustments to reflect current worth. Both these amounts were adjusted to those figures in 2003 or 2005.
Asking for the valuations in 2012 is not in my opinion about resolving this dispute, but more about PR - trying to sway public opinion - they will be covered in the JR wont they? . The valuations are out of date and pre any restructuring. I assume the hope is to show that ACL/CCC/AEHC were being unreasonable in their valuations then not selling to SISU and that the valuations prove to be less than the £14m loan so public funds misused. All it would actually do is probably confuse things further. Yes we would all like to see the valuations, but we have at this moment no legal right to. I would think that ML knows much of the contents in any case but can't get the reports out in the public domain without AEHC & CCC approval. Lets be honest with a court case pending in just under a month would you feel the need to release the information. I should image the SISU PR machine is feeling a little frustrated by the lack of response/comment (information) coming out of AEHC & CCC.
The key valuation would be a current one if there was a deal in the air - I do not think there is. But on what basis, who pays the bill, who is the report to be for,etc. CCC do not require a valuation their carrying cost is £1 and there is no requirement to show at market value. The Charity have assessed the value of their investment and concluded it is more than £6.5m they do not need a valuation. Only ones that need a valuation is SISU it looks like to me. What happened in 2012 no longer has a relevance to a current deal in my opinion - and disclosure of the valuations would distract from the real CURRENT problem, the financial viability of CCFC.
I think a concern I have is that from the recent comments from AEHC and CCC plus the carrying values in their accounts that for now they have no interest in a deal on ownership with CCFC. That might be taking a risk on their part, but it might be based on current business and future plans however. We can only wait and see. But it increases the risk to CCFC
3) Arbitration/mediation. Well from a fans point of view it makes sense got to agree with that. Trouble is the reality of the situation seems to imply it wont happen. The only thing ACL can offer is a rent deal. CCC are not inclined to sell the freehold. SISU want outright ownership with all impediments gone. Previously ACL said they would not enter such a process and the first thing ML did in saying yes was to add all sorts of other things in. To work both sides have to buy in to the deal and it has to be about going forward only not what happened before. I am starting to think however that ACL & CCC at this time do not feel the need to propose more deals or enter such process - you have to ask have they something to hide or is it that CCFC are just about out of time for a return as partner or anchor tenant?
4) The Trust doing a deal with ACL then renting to CCFC is an idea but I think unworkable. Why should it be necessary? It could leave the Trust liable for a rent but no sub tenant, it doesn't solve the Clubs problem regarding income
5) What do you get by buying the shares of ACl. Primarily a long term asset on the balance sheet (that would be something for CCFC for a change). A place at the stadium decision making table. I am sure a deal could be structured that gave credit to the club for incomes under FL rules even if under Companies Act rules it doesn't. Owning 50% does not mean under company law you have a right to 50% of the sales. Owning shares gives you rights to income from those shares by way of dividend. The shares give you a share of all assets & liabilities of the company and is reflected in the purchase price of the shares.
6) Deferred income There has been discussion about deferred income in the ACL accounts regarding the Isle of Capri lease termination. Have explained this previously as normal business practice and no great mystery. So normal that SBS&L group has a similar category of income disclosed in all its accounts to date, and a similar category in the CCFC Group accounts previous to SISU. Summary of results since 2002 is on the Trust website
7) Combined figures Got to thinking what if the figures for SBS&L and ACL groups had been one New Group for 2012 and 2013. All this is conjecture and very rudimentary Exclude say £2m rent and intercompany trading, say that the ACL directors costs removed, New Group run by CCFC directors, that a deal to write off all ACL debt done so no interest on that part of the finance.
Figures would have included in round figures
......................... 2012...........................2013
Turnover 16.6m ........................... 19.0m
cost of sales - 2.9m ........................... - 5.6m
staff costs -11.3m............................- 7.9m
other costs -6.9m ......................... -11.2m
operating loss - 4.5m ......................... -5.7m
player sales 2.8m ............................ 1.6m
other sales etc 1.4m .......................... 0.48m
Interest -1.3m ....................... -1.8m
overall loss -1.6m ........................ - 5.4m (disclosed losses SBS&L 2012 4m 2013 7.1m ACL disclosed profits 2012 1.1m and 0.775m 2013)
to me on that basis without cost savings, increased turnover, better margins and player sales then such a group is unviable in normal business terms. It would still require owner or third party funding and greater and greater debt. Promotion brings extra income but greater player cost. Reduction of player costs makes promotion harder to achieve. Catch 22 situation really for the club but just reinforces what the real financial target is in my opinion
Just some thoughts - sure others will see it differently
one final thought - yes I know finance is my pet subject but ........there is currently almost no talk or clarification of any of the clubs finances, why is that?
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