I think fernandopartridge was wondering could wasp buy them at the lower rate and then not have to repay themselves back ?
Maybe Sisu have been buying them up cheap.
I think fernandopartridge was wondering could wasp buy them at the lower rate and then not have to repay themselves back ?
Maybe Sisu have been buying them up cheap.
It's probably implausible though as you're getting to a robbing Peter to pay Paul situation
The situation as I see it is SISU could buy up the bonds, refuse to roll them over meaning Wasps either have to pay back the £35m or forego the stadium. If the price drops into the 60s that represents a very good discount. In practice I don’t know whether it’s permitted but just a thought I had (which I think I’ve run through before).
Yes the Prospectus says 2016. However you would have to expect that the directors had permission from the bond trustees not to do a formal valuation in 2016, that the permission was documented as were the reasons, the assumptions, calculations and criteria for the directors decision, that the auditors examined all that and confirmed directly in writing with the bond trustees that the trustees were in agreement not to have a formal valuation in 2016 and that the auditors, bond trustees and regulators were happy with the conclusion. That is how, as an auditor, i would have expected the process to have gone. It would not be just on the directors say so, especially with something so public and high profile. It is also clear that the auditors were, in their work, challenging whether wasps holdings and wasps finance had met the requirements of the bond issue document. But frankly its old news isn't it.
The reference to falsified information is contained in the 2017 financials and audit report not 2016. My guess is that the falsified transaction took place around June 2017 in an effort to meet the EBITDA provision. Whether it had an impact on any lease valuation done 31 March 2017 i am not sure, as a single transaction in a single year ? when the valuation is based over a number of years. We just do not know. After increasing their audit fee by a factor of 7 the auditors found nothing other than the one falsification. You would think if they did their job properly they would have traced its impact back to the valuation assumptions. The new auditors in 2018 would have also had to check all of the above as it relates to lease value. Again it is stuff that is done and dusted, i havent seen any evidence of any regulatory action being taken by the FCA it must be over a year since Reid made his complaint.
The 2019 valuation. More comment by who? I would suggest that a reportable event would be if the security total drops below the required minimum - it hasnt. There is no requirement for wasps to give detailed narrative that i can see. I accept it is a matter of opinion as to what makes sufficient disclosure but generally companies disclose as little as possible and only in the detail demanded of them by regulation. There may of course be more detail in the financials to be published later this month for wasps holdings & wasps finance. Whether the CT picks up on it or should have i cant answer you would think they might.
The valuation has been disclosed. The disclosure first and foremost is to the bond trustees, but we dont know when any of the valuations were disclosed to them. We dont actually even know when it appeared on the website either. Was it prompt disclosure or not? at the moment i cant answer that.
The charge on the P Shares is a charge over the possible sale proceeds not the share itself. Which means in any insolvency or sale of those shares the bond holders have first call on the cash generated. because is convertible to cash that is why it was included i would think
The drop seems bigger than for bonds registered. Is there something else going on in the background
Lots of assumptions here that should not be so
You should look at the postion from WASPS FINANCE Plc and the Bond Holders and you should get a different angle
If I was a Bond Holder and read your article I would wonder what was going on
Strange that something you see as a fundamental breach of terms doesn't get a mention in the 2016 Financials or the 2016 independent auditors report of any group company, but most importantly Wasps Finance PLC then (which were signed off 30 September 2016). That is the auditors who had access to all the information (including the bond document), parties involved etc where as we do not. Nor following more extensive work for 2017 was it mentioned in the Wasps Finance PLC audit report, by the same auditors who were clearly (as is their duty) and quite rightly prepared to bring any breach of the bond terms to light. We have little choice but to assume for both years that the auditors did their job properly, professionally and to the standards set technically & ethically. I am not aware of any actions being taken by the trustees or bondholders on the matter of no valuation in 2016 either. Its a dead issue. Will leave it at that
The bond holders may be more concerned when they see the 2019 financials of course. It will be interesting to see what wasps plan to do going forward. They need to deal with their mess at some point between now and May 2022
Valuation of the Arena and investment properties The Group assesses the value of Arena on an annual basis in accordance with the accounting policy stated in note 2. This valuation follows the principles of IFRS 13 and is based on an income approach. This approach requires estimation of the future income streams, length of the leasehold and a number of other market-based assumptions. Any changes in these assumptions will impact the carrying value of the Arena. The Arena was revalued as at 31March 2019 by an independent valuer, Gerald Eve LLP, at £51m (including £6.8m relating to the leasehold of the casino). This valuation was at a point in time and does not reflect changes in the business since that date. Management have prepared forecasts for future years which support the carrying value of the Arena. The projections show a continued improvement in the underlying trade, which if not achieved could result in a further downward revaluation. The next formal valuation is due in 2021.
Yes ACL and IEC income up (CCFC will contribute) but Wasps Rugby income down.Quick glance at figures tell me they made a £12.1 loss ignoring exceptional items (one off money form CVC and revaluing their share in premier rugby.
Can’t see us getting a mention.
That’s £12.1million!!
True, but their move was sold to stop this being necessary.Group still relies on Richardson. Not unusual for many sports teams to rely on their owners
Key Points on wasps 2019 financials. Will try to keep opinions out of it
- Turnover up overall by 1.6m to 34.5m. In that wasps (sports side) turnover dropped 700k but ACL and IEC (the venue side) up 2.3m
- Operating loss increased by 3m to minus 5.162m. that has to improve it is unsustainable
- Wages were up 900k, f&B costs up by 850K, utilies up 350k, match day & event cost up 1mother costs (?) up 1.4m
- Exceptional item was a positive 16.7m Profit on CVC shares 12.5m (assume proceeds lest value already held) revaluation of the shares still held after the CVC sale 4.1m JR costs recovered 85k
- Finance costs are up 370k interest payable 3.8m in total
- Tax provision of 1m but it is deferred tax (based on a calculation of tax that could be paid in the future) so is not actually paid out
- Overall net profit 3.6m ( but after excluding exceptional items that’s a net loss 13.2m) Not good because wont get exceptional item every year.
- Take off the fall in leasehold valuation after tax provision there is negative of 3.5m although it is a movement through revaluation reserve rather than the P&L
- Total assets have dropped 3.5m to 82.9m
- Total liabilities are 89.9m up by 3.4m
- Balance sheet is negative by 7m but that does include a charge of 4.7m to settle out Compass. Compass has a charge on the group because it wont get all its money back till July 2024
- The group is cash flow positive by 3.1m for the year
- The group spent 1.9m on plant & equipment in the year, including 595k on “other leasehold property”?
- Drew down 1.5m in borrowing but repaid 5.8m other borrowing and had 3.1m in the bank at the year end
- There is a detailed note on going concern which the auditors refer to. Group still relies on Richardson. Not unusual for many sports teams to rely on their owners
- No qualification of the audit report but audit fees have increased by 70k to 150k
- Lot more mentions of the refinancing of the bond
- Details of valuation imply that all tenants at 31/03/2019 were included so that would mean CCFC too. Find that odd because even in March they knew there were problems and nothing had been agreed. Was expecting a greater value on the P share.
- They have restructured things since balance sheet date at a cost of £130k, we knew that staff at ACL were leaving for example. That said total non playing staff increased by 12 in year
- Highest paid director £170k
- Amount owed to Richardson 18.3m but that’s 290k down
- Total borrowings down 3m (loans & bank)
Very detailed accounts, but cant hide the fact that exceptional items aside there is a big loss in there. That said the feeling I get is that there is a lot of very careful tidying up of the balance sheet going on, crossing “t’s” and dotting “I’s”. Is there something else going on, say to do with the bond finance? i dont believe they are about to up sticks and move away. Will also be interesting how the new deal with CVC unwinds through future accounts
The situation as I see it is SISU could buy up the bonds, refuse to roll them over meaning Wasps either have to pay back the £35m or forego the stadium. If the price drops into the 60s that represents a very good discount. In practice I don’t know whether it’s permitted but just a thought I had (which I think I’ve run through before).
Key Points on wasps 2019 financials. Will try to keep opinions out of it
- Turnover up overall by 1.6m to 34.5m. In that wasps (sports side) turnover dropped 700k but ACL and IEC (the venue side) up 2.3m
- Operating loss increased by 3m to minus 5.162m. that has to improve it is unsustainable
- Wages were up 900k, f&B costs up by 850K, utilies up 350k, match day & event cost up 1mother costs (?) up 1.4m
- Exceptional item was a positive 16.7m Profit on CVC shares 12.5m (assume proceeds lest value already held) revaluation of the shares still held after the CVC sale 4.1m JR costs recovered 85k
- Finance costs are up 370k interest payable 3.8m in total
- Tax provision of 1m but it is deferred tax (based on a calculation of tax that could be paid in the future) so is not actually paid out
- Overall net profit 3.6m ( but after excluding exceptional items that’s a net loss 13.2m) Not good because wont get exceptional item every year.
- Take off the fall in leasehold valuation after tax provision there is negative of 3.5m although it is a movement through revaluation reserve rather than the P&L
- Total assets have dropped 3.5m to 82.9m
- Total liabilities are 89.9m up by 3.4m
- Balance sheet is negative by 7m but that does include a charge of 4.7m to settle out Compass. Compass has a charge on the group because it wont get all its money back till July 2024
- The group is cash flow positive by 3.1m for the year
- The group spent 1.9m on plant & equipment in the year, including 595k on “other leasehold property”?
- Drew down 1.5m in borrowing but repaid 5.8m other borrowing and had 3.1m in the bank at the year end
- There is a detailed note on going concern which the auditors refer to. Group still relies on Richardson. Not unusual for many sports teams to rely on their owners
- No qualification of the audit report but material uncertainty regarding going concern detailed. Audit fees have increased by 70k to 150k
- Lot more mentions of the refinancing of the bond
- Details of valuation imply that all tenants at 31/03/2019 were included so that would mean CCFC too. Find that odd because even in March they knew there were problems and nothing had been agreed. Was expecting a greater value on the P share.
- They have restructured things since balance sheet date at a cost of £130k, we knew that staff at ACL were leaving for example. That said total non playing staff increased by 12 in year
- Highest paid director £170k
- Amount owed to Richardson 18.3m but that’s 290k down
- Total borrowings down 3m (loans & bank)
Very detailed accounts, but cant hide the fact that exceptional items aside there is a big loss in there. That said the feeling I get is that there is a lot of very careful tidying up of the balance sheet going on, crossing “t’s” and dotting “I’s”. Is there something else going on, say to do with the bond finance? i dont believe they are about to up sticks and move away. Will also be interesting how the new deal with CVC unwinds through future accounts
Thanks, as ever, for the measured analysis OSB. It certainly doesn't sound like they're in a great financial position.
I'm still not convinced regarding valuations or bond repayments, and the CVC deal could come back to bite them too perhaps. Maybe the biggest risk is their debt to Richardson though, if he tires of it or runs out of finance, then I think it's going to be a bad place for them...
It's going to have to be one hell of a turnaround to not be making a significant loss again for FY 19/20, not sure how to address losses that are such a high % of total turnover.Bloody hell if oldskyblue is giving wasps a pretty average/poor appraisal of there accounts then they are in the shit! (Joke)
Correct me if I’m wrong but the indications are wasps accounts will be even worse this FY with decrease in attendances, no European rugby, poor results, no CCFC etc etc....
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