This is what they said in March....
“As we have always said since launching the retail bond in May 2015, one of our options would be to re-finance the bond, which we are entitled to do any time between May 2019 and May 2022.
“Anyone working in business in general or in the financial industry will understand re-financing is a very common step in many financial situations and particularly for long-term asset backed bond finance.
“We would like to underline that selling the Ricoh Arena has never been part of our plan. We have said from the outset that Wasps’ long-term future is at the Ricoh Arena and this remains true.”
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What else is in the accounts?
Following the publication of the group’s half year accounts, which run up to December 2016, we asked a qualified accountant to analyse what the numbers meant for the Wasps group.
The group includes Premiership Rugby club Wasps, Ricoh Arena business ACL and events company IEC and Paul Carvell has given us his view on what the numbers mean.
Among his observations are that Wasps owner Derek Richardson has poured more money into the business, but that the financial performance of the group appears to be “moving in the right direction”.
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On the general performance
“Turnover increased to almost £17m, that’s up by £1.8m - a 12 per cent increase.
“Wasps brought in £8.6m, ACL £2m and IEC £6m.
“Their gross margins have gone up, so for every pound they’ve earned, they’ve generated more income from it. That’s gone from £29.6m to £36.3m.
“Operating profit has gone from a £0.2m loss to a £1.5m profit.”
He added: “There’s a figure called EBITDA - which is earnings before interest, taxes, depreciation, and amortisation which I would describe as non-cash items, but it’s slightly more complicated than that.
“This is a figure which tends to show the underlying profitability of a business. That has gone up to £1.4m as opposed to a loss of £192,000 (during the same period in 2015) and a loss for the year (2016) of £2.1m. So that is absolutely brilliant.”
“Food and beverage spend for the rugby has gone up to an average £6.32 from £5.84 - I don’t know why that is but they are getting more out of people attending.”
Ricoh Arena
How important is the Ricoh Arena to Wasps?
“The stadium is really important to them as a business.
“Income is principally from rugby matches, hospitality, sponsorship, central revenues, hotels, conferences and exhibitions.
“Sports income has shot up to £8.3m from £5.8m. For the year to date it was £12.3m.
“We don’t know what the trend is to the second half of the year, but if you doubled that, it would mean they would be doing £16.6m.
“That’s pretty good - but I’d imagine there would be variations.”
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On income
“Revenues are just short of £17m, and for the same time next year they were just over £15m. It’s a really good increase this year to last year.
“Gross profit has also gone up by £6.1m as opposed to £4.5m this time last year.
“Margins have gone up by about six per cent, which is quite good.
“Administrative expenses have gone down from last year. It was £5.5m in this period and £5.6m the year before.
“Operating profit before exceptional items is £680,000, that’s up from a loss of £1m in the previous year and a £3.7m loss for the whole year - so that’s a massive swing.”
He added: “They have an operating loss of £41,000. If you compare that to the operating loss in the previous year that was £1.8m. That’s a great turnaround.
“Looking at the accounts, they actually made a profit in the last six months of last year. If they do the same this year, it could be they claw quite a lot of that back in the second half of the year.”
Jimmy Gopperth of Wasps passes the ball during the Aviva Premiership match against Bath.(Image: David Rogers/Getty Images)
What are the most interesting figures from the six months?
“The figure that should be drawn is operating profit (before exceptional items) at £680,000. It’s probably as meaningful as anything.
“In the olden days we would have taken from that the finance costs. They were £1.1m.
“It would have meant that the loss in old fashioned money would have been £459,000.”
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On Ricoh Arena lease valuation
“It is £48.5m and the next valuation is due in April 2017.
“There’s nothing in the accounts to suggest that value will change dramatically, but there wouldn’t be.
“It’s done professionally by a RICS approved valuer. It’s done completely properly, it is an independent valuer.”
Kyle Eastmond of Wasps celebrates his side's try during the Aviva Premiership match between Exeter Chiefs and Wasps at Sandy Park (Image: Photo by Harry Trump/Getty Images)
Other loans
“They have £600,000 to HSBC. That’s being repaid over six months.
“Mr Richardson also provided a loan. He has put his money where his mouth is - it’s £11.7m.
“He’s put in £1.7m since June 2015. Every six months he’s put more money into the club. He is funding it and credit to him.
“They have asset finance of £100,000 and £300,000 from Close Leasing - the company can afford that. The trend of the business is good.”
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On the future
“The underlying business looks like it’s moving in the right direction.
“You can’t take away that there’s a loss, but it is moving in the right direction.”
He added: “If I was them, I’d be relatively proud of it.”
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