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Accounts to Year Ended May 31st 2019


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Available to download here if you are interested;

https://www.blackandwhitearmy.com/downloads/accounts-may2019.pdf

 

Summary

  1. Turnover up to £4.1m from £2.8m

    Showing the value of Premiership football over Championship. The extra £1.3m was made up of c£500K in gate receipts, c£600K in prize money and increased advertising and commercial income.
     
  2. Over and above that turnover increase we also got £1m from the sale of John McGinn from Hibs to Villa as our sell on.
     
  3. We've since had another £330k from that deal, which was a third of the £1m kick that Hibs got when Villa got promoted. That money is NOT in these accounts.
     
  4. Our wage bill went up pretty much exactly in line with our increased turnover (point 1). We spent £3m on wages as opposed to £2m in the previous season. That's probably to be expected in the top flight but it does represent a wages to turnover ratio of about 75% which is well above the widely recommended level of 60%. The settlement of Alan Stubbs and Darren Jackson will be in there along with the paying off of all Stubbs duds. Not sure if the Kearney settlement is in there or not. I'd suggest not.
     
  5. The wages of £3m were included in an over all "Admin Expenses" total of £4.5m. That combined with a cost of sales of £500K meant we spent £5.0m last financial year.
     
  6. The income of £1m from John McGinn, plus the turnover of £4.1m meant we brought in £5.1m, spent £5.0m, so thus recorded a £100K profit.
     
  7. We also invested a chunk of money in the new pitch at Ralston and other projects such as the new lighting, the sound system and other bits and pieces.
     
  8. In short we've spent the £1m we got for John McGinn on exiting the Alan Stubbs debacle, repairing and rebuilding the squad, a new pitch and some lights. That £1m offset what would have been a £900K loss.
     
  9. £310K of the operating loss was a depreciation charge
     
  10. Our transfer income last financial year ending May 18 was £728K (Mallan & Morgan), ending last financial year May 19 was £1m and as I said we've actually already banked £300K this financial year. Ralston has delivered.
     
  11. We had £700K in the bank at the end of May (up from £500K previous year)
     
  12. We had 38 players and 36 staff last year (total 74). Previous year was 43 players and 34 staff (total 77)
     
  13. I don't know what prepayments and accrued income is but we had £600K of that this year as opposed to £140K last year.

 

Think that is all the big points. I'll leave everyone to make their own mind up.

For me it's certainly a worry that we have spent £1.8m in transfer income and not really have a whole lot to show for it other than being in, and retaining, a place in the Premiership which is not to be sniffed at.

The real concern is that there's no obvious assets left now. Magennis isn't going to go for big money and Vaclav will walk for nothing so we're going to need to need to stop sacking managers and rebuilding whole squads in January.

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I said this last year and I'll say it again.

We are only able to continue because we've had player transfer money coming in.

Without it we'd be rooked.

That brutal reality is masking the illusion of a nice £100k profit.

We have essentially spunked out inheritance (McGinn money) and unless we find a substantial new source of income or cut costs drastically we'll have nothing to cover the projected £1m operating loss next year. Basically we're playing financial Russian roulette each year, praying for a pay-off to keep the game going.

I haven't changed my view from last year. This is financial mismanagement and at some point we're going to be in deep shit. Relegation for example would certainly do it. Even just surviving might not be enough next year.

Edited by oaksoft
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1 minute ago, oaksoft said:

I said this last year and I'll say it again.

We are only able to continue because we've had player transfer money coming in.

Without it we'd be rooked.

That brutal reality is masking the illusion of a nice £100k profit.

We have essentially spunked out inheritance and unless we find a new source of income or cut costs drastically we'll have nothing to cover the projected £1m operating loss next year. Basically we're playing financial Russian roulette each year, praying for a pay-off to keep the game going.

I haven't changed my view from last year. This is financial mismanagement and at some point we're going to be in deep shit. Relegation for example would certainly do it. Even just surviving might not be enough next year.

Would it not also be fair to say that with the money in the bank from McGinn the board gambled a (big) bit of it to ensure we stayed in the division.

A gamble which ultimately paid off?

The wage bill rose absolutely in line with our turnover which suggests they are setting and sticking to their budget just as we would expect.

Of the £900K operating loss £350K came from depreciation, we paid off two management teams and we laid a new astro pitch.

I'd contend that whilst it is a bit concerning I don't think it's quite as bad as it looks.

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51 minutes ago, div said:

Would it not also be fair to say that with the money in the bank from McGinn the board gambled a (big) bit of it to ensure we stayed in the division.

A gamble which ultimately paid off?

The wage bill rose absolutely in line with our turnover which suggests they are setting and sticking to their budget just as we would expect.

Of the £900K operating loss £350K came from depreciation, we paid off two management teams and we laid a new astro pitch.

I'd contend that whilst it is a bit concerning I don't think it's quite as bad as it looks.

It looks like he's gambled all of it but yes I think that is a fair statement. The problem with gambling the house is when it doesn't pay off. In that sense it's worrying.

The wage bill (and other expenses) and turnover both rose about 50% but remember if both expense and turnover figures increase by 50% then those two figures grow apart because expenses are outstripping turnover - hence the increase in operating loss.

What I will say is that in his favour, it's surely highly unlikely that he'll ever be paying off two management teams and replacing most of the squad in January again so there's scope for cost cutting there.

I also concede the bit about depreciation.

I'n no LPM though. To make me happy, I would like to see some evidence of financial planning beyond the short term and I'm seeing the opposite right now. I hope that changes. That increasing operating loss should not be underestimated.

Edited by oaksoft
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38 minutes ago, oaksoft said:

It looks like he's gambled all of it but yes I think that is a fair statement. The problem with gambling the house is when it doesn't pay off. In that sense it's worrying.

The wage bill (and other expenses) and turnover both rose about 50% but remember if both expense and turnover figures increase by 50% then those two figures grow apart because expenses are outstripping turnover - hence the increase in operating loss.

What I will say is that in his favour, it's surely highly unlikely that he'll ever be paying off two management teams and replacing most of the squad in January again so there's scope for cost cutting there.

I also concede the bit about depreciation.

I'n no LPM though. To make me happy, I would like to see some evidence of financial planning beyond the short term and I'm seeing the opposite right now. I hope that changes. That increasing operating loss should not be underestimated.

All fair comment.

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My god those accounts are a real laundry list of shit figures!
Turnover up by only a third despite promotion
But expenses up by fifty percent!!!

Wages up Again by an eye watering fifty percent!

Carrying financial assets down 70%
But liabilities up 30%!
And debtors up 160k

If it wasn't for cough, cough.. Youth income going up (guessing that's the council's payment to run street stuff?)
Then the REAL drop in profit would have been even larger...

Add to that as Oaky highlights the shocking operating loss and you are in real Sevco territory.

Going forward it will deteriorate as Oran & co payoffs are not included (after 31/5/19) theres no big transfer fee coming in, and whatever they spaffed on McAllister hits the balance sheet.
And if our fortunes on the pitch don't improve the clamour to blame and bag the manager as gates fall will just accelerate that negative trend.

The laughable chairman statement where he tries to say how well he has done by producing an 11k profit out of a 30% turnover increase and extra 300k player sales is a bit like the tories insisting there will be 50k more nurses if we don't detract the 19k already employed!

Still the directors got a bit more so its "kushty" as Del Boy would say.

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18 minutes ago, Lord Pityme said:

My god those accounts are a real laundry list of shit figures!
Turnover up by only a third despite promotion
But expenses up by fifty percent!!!

Wages up Again by an eye watering fifty percent!

Carrying financial assets down 70%
But liabilities up 30%!
And debtors up 160k

If it wasn't for cough, cough.. Youth income going up (guessing that's the council's payment to run street stuff?)
Then the REAL drop in profit would have been even larger...

Add to that as Oaky highlights the shocking operating loss and you are in real Sevco territory.

Going forward it will deteriorate as Oran & co payoffs are not included (after 31/5/19) theres no big transfer fee coming in, and whatever they spaffed on McAllister hits the balance sheet.
And if our fortunes on the pitch don't improve the clamour to blame and bag the manager as gates fall will just accelerate that negative trend.

The laughable chairman statement where he tries to say how well he has done by producing an 11k profit out of a 30% turnover increase and extra 300k player sales is a bit like the tories insisting there will be 50k more nurses if we don't detract the 19k already employed!

Still the directors got a bit more so its "kushty" as Del Boy would say.

Love how your rant about the accounts then just descends into your own wee fantasy land where you've got Goody getting sacked and the gates collapsing 🤣

On the last point, I don't personally expect Tony Fitzpatrick to work full time for nothing, do you?

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Love how your rant about the accounts then just descends into your own wee fantasy land where you've got Goody getting sacked and the gates collapsing [emoji1787]
On the last point, I don't personally expect Tony Fitzpatrick to work full time for nothing, do you?
Why would a club employee's wages be listed as Director Expenses? That may constitute an element of false accounting?
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1 hour ago, Lord Pityme said:
2 hours ago, div said:
Love how your rant about the accounts then just descends into your own wee fantasy land where you've got Goody getting sacked and the gates collapsing emoji1787.png
On the last point, I don't personally expect Tony Fitzpatrick to work full time for nothing, do you?

Why would a club employee's wages be listed as Director Expenses? That may constitute an element of false accounting?

As he’s listed on the front pages as a Director.

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4 minutes ago, Lord Pityme said:
16 minutes ago, aldo_j said:
As he’s listed on the front pages as a Director.

Aye we can all see that, but he is a paid employee. Directors don't get a salary for being Directors

He’s chief exec, so will be classed as an executive director. They then call out his entire salary. 

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I am not sure why you think this. The financial statements show the books were balanced last year.
Although expenses were high a fair chunk of it is non recurring. I would expect the player recruitment budget for the current year will have been set taking account of anticipated income and known ongoing costs. The fact that JG is talking about bringing in new players in January indicates that there is more cash to spend rather than a need for cutbacks.


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2 minutes ago, La Roche Derriere said:

I am not sure why you think this. The financial statements show the books were balanced last year.
Although expenses were high a fair chunk of it is non recurring. I would expect the player recruitment budget for the current year will have been set taking account of anticipated income and known ongoing costs. The fact that JG is talking about bringing in new players in January indicates that there is more cash to spend rather than a need for cutbacks.

 

Are you scoop1987?

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10 minutes ago, La Roche Derriere said:

If that is another forum poster then no.

Scoop1987 was an alias our current Chairman used on this forum a few years ago to criticize the then BoD whilst he was estranged..

You seem to have inside knowledge and you only started posting a couple of hours ago on the day after the financial Accounts were released, I guess I'm asking if you're GLS or if not then another Board member?

Edited by Bud the Baker
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17 hours ago, D.F.Riley said:

 

Didn't expect to see my tweet in here :lol: 

I don't think the accounts look that bad - just could be better based on the amount we've brought in

I really like the work we've done on the stadium, especially the lights - looks so much better

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