Commentary Otium Entertainment Group accounts (1 Viewer)

[oldskyblue58]

First off keep in mind the following
- This is a part of the overall picture, the full picture is the SBS&L accounts
- There will be a number of transactions (some very large) that are internal to the group and do not form part of the big picture. In one company a liability in the other an asset put the two together and they cancel out

The strategic report (directors report)
- This is Directors (TF/SW) view of things with selected facts. It is not the full picture necessarily and is their view. nothing wrong with that
- It details the 60.9m in brief which as i said elsewhere is taking the CCFC H debt in to Otium then changing it in to low ranking preference shares that have no vote. That 60.9m is made up of the £33m debts that were discounted when SISU came in plus the 28m that is taken as SISU funds put in since then. In my opinion this does not mean they have put in 28m cash and they certainly have not put in 61m
- How many times can these sums invested be quite legally accounted for, transferred, converted or written off? Administrator traded CCFC Ltd apparently - i thought it was a non trading company?
- Goodwill on taking CCFC Ltd and CCFC H assets and liabilities in to Otium is written off. No real surprise there was no net worth as we know
-paid ACL 471k
- apparently Otium guaranteed the 60.9m to SBS&L and ARVO - i dont think that was a Football League requirement but might be wrong but not the way i read it. So basically guaranteed from the groups left hand to its right hand - sounds good and quite legal but just a way of creating the shares issued in reality.
- no outside finance and no future revenues have been charged. Minimal working capital funding required
- new stadium will be in an associated company - either SBS&L or a new one then
- need for new stadium reiterated
- will rely on academy - better sort out the Alan Higgs Centre then?
- Risks team performance, need for further investment, tenancy at the Ricoh
- Still have option to go back to Sixfields
- no contractual guarantee of future funding only an intention
- signed by TF last Friday 27th

The Figures

- Since balance sheet date 1.02m more shares issued to Arvo - Does that cover outstanding interest? and does it also count towards SMCP. (Indeed does the conversion of 60.9m - not sure that bit does)
- Audit report has emphasis of matter paragraph detailing concerns about going concern. Like last year
- First year of trading for Otium and started to trade August 2013 - anything before that would be included in the full group accounts.
Turnover 3.4m
Direct costs 1.03m
staff costs 4.48m
administration costs (including 2.2m write of goodwill) 5.16m
Profit on player sales 373k
Interest charges 2.098m
Exceptional charge 60.9m

Operating loss 7.7m
trading Loss 9.37m
total loss 70m

Balance sheet shows liabilities of 11.9m and total net liabilities 11.36m

Part 2 follows

 

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[oldskyblue58]

Part 2

-there have been 64m shares issued so far in Otium but only 1000 are voting and they are the ones that denote ownership ie 90.1% to SBS&L 9.9% to ARVO (901:99)

-According to the notes the budgets prepared include the assumption/intention of player sales
- there are land leases total paid 296k in year - SIxfields and Higgs Centre plus other small hires
- there is 2.098m interest payable for the year - now it might all not have been paid out yet but it is contractually due - note in account says that 1.39m remains accrued at the year end so something must have been paid out
Wages were 4.6m on 102 players 28 admin staff and 287 part time stewards. These figures are for total number employed in year it doesnt mean they were all still employed at year end
- Directors were paid £120k - who to it doesnt say but you might assume most to SW ?
- There was 158k paid out on new players - not sure who on? Barton?
- the player profit on sales original cost was 162k and profit was 373k working it back proceeds were 450K
- Goodwill was on the "acquisition" of CCFC Ltd and CCFCH ltd assets and chosen liabilities - no surprise this paper figure was written off as there was no real value to it. But it does inflate the losses
- Ryton is included on the otium accounts at a book value of 352K
- In the year 109k of equipment was purchased
- Total loans to Otium from ARVO/SBS&L total 8.2m with 1.39m still otstanding = 9.6m up from 5.2m in 2013
- £2m of the ARVO loans are convertible loan notes to become shares in certain circumstances
- all assets are charged to ARVO
- ARVO in year has put in 3.29m loans or put in/had converted in to shares 3.3m
- Ultimate parent company is SBS&L but wasnt the ultimate owner disclosed as Sconset previously?
- there is a potential future liability to pay out on players 50k - it might not happen
- there is a potential income re player sales in the future of 420k - it might not happen
- there were land lease commitments in 2015 of 360k and 2016 onwards of £160k - that will be a mix of sixfields, ricoh and Alan Higgs Centre
- there have been transfers since the balance sheet date that gave the club 2.1m net proceeds - I assume this is Wilson but what about Christy?

Lot of tidying up going on and some making it look better

What they have not done is write off any of the "investment" they have actually put in to the group. But the way a group structure works and some clever but entirely legal shifting of amounts does make it look that way if you take otium in isolation - which of course you should not

 

[albatross]

I always look at the auditors Report its a big sign post as to all being well or not and get very nervous if there is any statement regarding a material uncertainty about us being a going concern....

 

[skybluebeduff]

 

[chiefdave]

To sum up OSBs posts

 

[Rusty Trombone]

Matchday receipts were £1.1m including the Arsenal game, I think this confirms why we've moved back.

 

[steveecov]

Do I take it The elusive "golden share" is now securely tied into OTIUM. Was this, and is this not the real valuable part for Sisu, Sconset or whoever?

 

[steveecov]

Anyway as long as we can cope with Marshalll and Pope; City win by 2 on Saturday.

 

[Godiva]

- there is 2.098m interest payable for the year - now it might all not have been paid out yet but it is contractually due - note in account says that 1.39m remains accrued at the year end so something must have been paid out

Looking at SBS&L cash flow statement - Net Cash Inflow From Capital Expenditure and Financial Investment ... (£738t)
Is that the difference you're looking for?

 

[Rusty Trombone]

Looking at SBS&L cash flow statement - Net Cash Inflow From Capital Expenditure and Financial Investment ... (£738t)
Is that the difference you're looking for?

No, that's the sub total of the buying and selling of assets, and the goodwill.

 

[Godiva]

No, that's the sub total of the buying and selling of assets, and the goodwill.

Of course!
But as there is 0 (NIL) in Loan Repayment (under Financing), then the difference in Interest Payable and Interest Accrued must have been converted to equity?
I know I am looking in SBS&L consolidated cash flow statement - there is no such statement in the Otium accounts.

 

[Rusty Trombone]

So, £2.1m received for selling Wilson and Christie. How much was the Christie transfer thought to bring in?

 

[speedie87]

OSB - is the post balance sheet event disclosure on a receipts and payments basis or an accruals basis?

The 2.1m post date for player sales seems very low if on a accruals basis? However is probably about right if on a payment basis, as clubs normally pay transfer fees in installments.

 

[Godiva]

So, £2.1m received for selling Wilson and Christie.

The accounts says:

The company has also signed transfer agreements under which net proceeds of £2.1m were received.
Two key words there: 'net' and 'received'. The amount relates to all transfer activities in the year and only states the net amount received - so there could potentially be add-ons that is not yet received or paid.

 

[Jack Griffin]

The accounts says:

The company has also signed transfer agreements under which net proceeds of £2.1m were received.
Two key words there: 'net' and 'received'. The amount relates to all transfer activities in the year and only states the net amount received - so there could potentially be add-ons that is not yet received or paid.

There are always add-ons, do you think Gael B. will get an England cap nw, he might have to settle for being a Burundian legend.

 

[shmmeee]

The accounts says:

The company has also signed transfer agreements under which net proceeds of £2.1m were received.
Two key words there: 'net' and 'received'. The amount relates to all transfer activities in the year and only states the net amount received - so there could potentially be add-ons that is not yet received or paid.

Would paying off player contracts be transfer activity or staff wages? I'm sure we had a few "mutual consent" deals last season, plus loan fees I'd imagine.

 

[stupot07]

Part 2

-there have been 64m shares issued so far in Otium but only 1000 are voting and they are the ones that denote ownership ie 90.1% to SBS&L 9.9% to ARVO (901:99)

-According to the notes the budgets prepared include the assumption/intention of player sales
- there are land leases total paid 296k in year - SIxfields and Higgs Centre plus other small hires
- there is 2.098m interest payable for the year - now it might all not have been paid out yet but it is contractually due - note in account says that 1.39m remains accrued at the year end so something must have been paid out
Wages were 4.6m on 102 players 28 admin staff and 287 part time stewards. These figures are for total number employed in year it doesnt mean they were all still employed at year end
- Directors were paid £120k - who to it doesnt say but you might assume most to SW ?
- There was 158k paid out on new players - not sure who on? Barton?
- the player profit on sales original cost was 162k and profit was 373k working it back proceeds were 450K
- Goodwill was on the "acquisition" of CCFC Ltd and CCFCH ltd assets and chosen liabilities - no surprise this paper figure was written off as there was no real value to it. But it does inflate the losses
- Ryton is included on the otium accounts at a book value of 352K
- In the year 109k of equipment was purchased
- Total loans to Otium from ARVO/SBS&L total 8.2m with 1.39m still otstanding = 9.6m up from 5.2m in 2013
- £2m of the ARVO loans are convertible loan notes to become shares in certain circumstances
- all assets are charged to ARVO
- ARVO in year has put in 3.29m loans or put in/had converted in to shares 3.3m
- Ultimate parent company is SBS&L but wasnt the ultimate owner disclosed as Sconset previously?
- there is a potential future liability to pay out on players 50k - it might not happen
- there is a potential income re player sales in the future of 420k - it might not happen
- there were land lease commitments in 2015 of 360k and 2016 onwards of £160k - that will be a mix of sixfields, ricoh and Alan Higgs Centre
- there have been transfers since the balance sheet date that gave the club 2.1m net proceeds - I assume this is Wilson but what about Christy?

Lot of tidying up going on and some making it look better

What they have not done is write off any of the "investment" they have actually put in to the group. But the way a group structure works and some clever but entirely legal shifting of amounts does make it look that way if you take otium in isolation - which of course you should not

OSB - could you answer Italia questions. Please he's clogging up the wrong thread.


http://www.skybluestalk.co.uk/threads/60970-Back-to-being-the-biggest-club-in-Coventry


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