NUFC 2009 Accounts

[Happy Face]

Thanks Quayside.  Always an interesting read.

 

Just to clarify the bold bits, is it right to say there are now 3 companies....

 

Newcastle united - £20m overdraft

 

Owned by St James Holdiongs - £36m overdraft

 

Owned by MASH Holdings - No figures available

 

Or was the £20m overdraft referenced in the recent club statement a red herring?

 

Yes that's about it although the numbers are a bit different. MASH owns St James which owns Newcastle United Ltd, which owns Newcastle United Football Club Ltd. Overdrafts in the various accounts are:

 

MASH - Unknown

St James - £36m

Newcastle United Ltd - the same £36m as St James

NUFC LTD - £48M

 

I suspect the £20 million figure you quote came from a journalist, and it may be what the bank demanded that the overdraft was reduced to.

 

I am now hoping this thread is not going to head off into the world of how consolidated accounts are prepared....

 

I took the £20m from the statement the club released last week.

 

"Newcastle United also has an overdraft of £20 million that is fully committed. It is clear to the Board that no organisation can be successful, until the financial position is stabilised."

 

Can we assume the £25m investment went in to help reduce the 48m overdraft from last June to £20m currently?

 

or is the £48m including the £36m plus an additional £12m?

[jdckelly]

Thanks Quayside.  Always an interesting read.

 

Just to clarify the bold bits, is it right to say there are now 3 companies....

 

Newcastle united - £20m overdraft

 

Owned by St James Holdiongs - £36m overdraft

 

Owned by MASH Holdings - No figures available

 

Or was the £20m overdraft referenced in the recent club statement a red herring?

 

Yes that's about it although the numbers are a bit different. MASH owns St James which owns Newcastle United Ltd, which owns Newcastle United Football Club Ltd. Overdrafts in the various accounts are:

 

MASH - Unknown

St James - £36m

Newcastle United Ltd - the same £36m as St James

NUFC LTD - £48M

 

I suspect the £20 million figure you quote came from a journalist, and it may be what the bank demanded that the overdraft was reduced to.

 

I am now hoping this thread is not going to head off into the world of how consolidated accounts are prepared....

 

I took the £20m from the statement the club released last week.

 

"Newcastle United also has an overdraft of £20 million that is fully committed. It is clear to the Board that no organisation can be successful, until the financial position is stabilised."

 

Can we assume the £25m investment went in to help reduce the 48m overdraft from last June to £20m currently?

 

or is the £48m including the £36m plus an additional £12m?

could have been some of the cash from transfers out used too

[Colos Short and Curlies]

I'd rather not - but some people may wonder why NUFC had an overdraft of £48m and the Group only had £36m, and I'd rather they didn't.  

 

 

Its as simple as 1+1-1 = whatever you want

[quayside]

Thanks Quayside.  Always an interesting read.

 

Just to clarify the bold bits, is it right to say there are now 3 companies....

 

Newcastle united - £20m overdraft

 

Owned by St James Holdiongs - £36m overdraft

 

Owned by MASH Holdings - No figures available

 

Or was the £20m overdraft referenced in the recent club statement a red herring?

 

Yes that's about it although the numbers are a bit different. MASH owns St James which owns Newcastle United Ltd, which owns Newcastle United Football Club Ltd. Overdrafts in the various accounts are:

 

MASH - Unknown

St James - £36m

Newcastle United Ltd - the same £36m as St James

NUFC LTD - £48M

 

I suspect the £20 million figure you quote came from a journalist, and it may be what the bank demanded that the overdraft was reduced to.

 

I am now hoping this thread is not going to head off into the world of how consolidated accounts are prepared....

 

I took the £20m from the statement the club released last week.

 

"Newcastle United also has an overdraft of £20 million that is fully committed. It is clear to the Board that no organisation can be successful, until the financial position is stabilised."

 

Can we assume the £25m investment went in to help reduce the 48m overdraft from last June to £20m currently?

 

or is the £48m including the £36m plus an additional £12m?

 

You can take it that the overdraft was £36m at 30th June as that was the Group's net exposure, the NUFC figure of £48m isn't relevant. So if the statement said that the overdraft was £20m then I would think you are correct and some of the £25.5 Ashley put in went towards reducing the Group overdraft.

[Liam Liam Liam O]

I'd rather not - but some people may wonder why NUFC had an overdraft of £48m and the Group only had £36m, and I'd rather they didn't.  

 

 

Its as simple as 1+1-1 = whatever you want

 

Don't say that man.

 

You'll have the conspiracy theorists going mental!

[Dokko]

Why have several companies owning each other and only the one each?

 

Is it just so they can get separate overdrafts so banks don't try to call them in?

 

The whole thing just seems a tad far fetched, is this normal practise?

 

 

[quayside]

I'd rather not - but some people may wonder why NUFC had an overdraft of £48m and the Group only had £36m, and I'd rather they didn't.  

 

 

Its as simple as 1+1-1 = whatever you want

 

Don't say that man.

 

You'll have the conspiracy theorists going mental!

 

Ashley's got £12 million hidden away where no one can see it etc etc

[quayside]

Why have several companies owning each other and only the one each?

 

Is it just so they can get separate overdrafts so banks don't try to call them in?

 

The whole thing just seems a tad far fetched, is this normal practise?

 

 

 

The creation of St James was necessary because Ashley needed to create a vehicle to do the Newcastle transaction in the first place. That is normal. Why MASH is being created is anybody's guess, maybe Ashley wants to build an empire of investments of this type and lump them all under one umbrella, only he (or his advisors) would know. The Newcastle United companies were in existence in that structure when Ashley bought the club as far as I can see.

 

 

Edit: can't see it having any impact on overdrafts as the bank would look at its overall exposure to the Group.

[Parky]

He's always upto something. Get the forensic accountant in now!111

[Matt]

MASH holds his shares in both NUFC and Sports Direct. Offset-tastic.

[quayside]

MASH holds his shares in both NUFC and Sports Direct. Offset-tastic.

 

You know this or are you speculating?

[Fenham Mag]

The bastards who owe us £17 million better pay up 

[quayside]

The bastards who owe us £17 million better pay up 

 

Villa (Milner, Beye), Spurs (Bassong), Man City (Given), Fulham (Duff) should be ok.

Wigan (N'zogbia) - could see Whelan spinning that one out to piss Ashley off    

[Dokko]

Why have several companies owning each other and only the one each?

 

Is it just so they can get separate overdrafts so banks don't try to call them in?

 

The whole thing just seems a tad far fetched, is this normal practise?

 

 

 

The creation of St James was necessary because Ashley needed to create a vehicle to do the Newcastle transaction in the first place. That is normal. Why MASH is being created is anybody's guess, maybe Ashley wants to build an empire of investments of this type and lump them all under one umbrella, only he (or his advisors) would know. The Newcastle United companies were in existence in that structure when Ashley bought the club as far as I can see.

 

 

Edit: can't see it having any impact on overdrafts as the bank would look at its overall exposure to the Group.

 

Cheers.

 

Could Ashley in essence make Sports Direct buy NUFC and lumber half of the problem on the shareholders?

 

 

[OzzieMandias]

Abramovich seems to have a similar company-owning-company-owning-club structure for Chelsea (and similarly is keeping his investment classed as a repayable loan). Reading the article which explains this (link below) it seemed to me this was maybe done so that the club could carry that debt while also complying with UEFA rules re borrowing.

 

http://www.guardian.co.uk/football/2010/may/19/roman-abramovich-chelsea-loan-debt

[Broadsword]

If anyone is interested the St James Holdings accounts have now been filed for year ended 30th June 2009, this is the parent company of NUFC. There are a few points that come out, some of these are already known and some clarify certain rumours that have been doing the rounds.

 

- As at 30th June Ashley's total investment (ie purchase cost plus loan) was £242.9 million. Since the year end the accounts report that he loaned a further £25.5 million making his investment up to £268.4 million.

 

- Obviously, since St James (like NUFC) is in an insolvent position it was necessary for him to personally guarantee to fund it for the next 12 months. Also, as with NUFC, he has shunted all his investment into current creditors instead of creditors due in more than 1 year.

 

- The rumour that Ashley has set up another company to act as the parent to St James Holdings is true.  the company is called MASH Holdings Limited. It is a new company and has not filed any accounts and is not due to do so until late December. If there is any significance to the setting up of this company it is not apparent from the St James accounts.

 

- At one point in the year Ashley's investment had risen to £248.8 million, indicating that between that point and the year end about £6 million of his loan was repaid. This may be where the rumour about Ashley taking money out of the club came from. Although as I said above he put £25.5 million back in some time after he had received this repayment. Ashley has taken no money out by way of interest, salary or dividends.

 

- St James Holdings has a bank overdraft of £36 million, secured on the Group's fixed assets. This is a sharp increase from the previous year end where the overdraft stood at £1 million.

 

- As at the year end the Group was owed £17 million in transfer fees, of which £4 million was due in more than 1 year. The accounts repeat the club's philosophy of paying up front for players purchased even though this is not the case when players are sold, as is apparent from the £17 million still owing.

 

There may be some other points in the accounts which I've missed,  but I've just had a quick look and those are the things that stood out for me.

 

 

 

 

 

Don't forget that those accounts are consolidated in the NUFC accounts, which means the holding company is insolvent in itself, but NUFC Ltd is not.  There is no guarantee from Ashley in the NUFC accounts and the auditors are perfectly happy to sign them off without anything to say.

 

Ive not seen the holdings accounts so take your word that is not the case in those and that a guarantee is in place.

 

You've lost me there - can you explain?

 

The NUFC balance sheet shows an insolvent position of £58 million as at 30th June 2009, and Ashley's commitment is specifically referred to on page 11 (under the heading Fundamental Accounting concept). Because of that commitment the NUFC accounts were prepared on a going concern basis and the auditors signed off on that.

 

That note on page 11 is just an explanation of how the directors have come to the conclusion that it is a going concern, it is not a guarantee.  The auditors are not concerned either otherwise they would have highlighted it in the audit report.

[quayside]

Why have several companies owning each other and only the one each?

 

Is it just so they can get separate overdrafts so banks don't try to call them in?

 

The whole thing just seems a tad far fetched, is this normal practise?

 

 

 

The creation of St James was necessary because Ashley needed to create a vehicle to do the Newcastle transaction in the first place. That is normal. Why MASH is being created is anybody's guess, maybe Ashley wants to build an empire of investments of this type and lump them all under one umbrella, only he (or his advisors) would know. The Newcastle United companies were in existence in that structure when Ashley bought the club as far as I can see.

 

 

Edit: can't see it having any impact on overdrafts as the bank would look at its overall exposure to the Group.

 

Cheers.

 

Could Ashley in essence make Sports Direct buy NUFC and lumber half of the problem on the shareholders?

 

 

Matt is absolutely right in his post above. MASH do own Ashley's shares in Sports Direct as well as being the ultimate owner of Newcastle United.

 

Ashley has been buying up Sports Direct shares since the value fell post flotation (the subscribing investors and the other shareholders just love him). He owned about 75% the last info I had. So he could pretty much get Sports Direct to do whatever he likes..... 

[quayside]

If anyone is interested the St James Holdings accounts have now been filed for year ended 30th June 2009, this is the parent company of NUFC. There are a few points that come out, some of these are already known and some clarify certain rumours that have been doing the rounds.

 

- As at 30th June Ashley's total investment (ie purchase cost plus loan) was £242.9 million. Since the year end the accounts report that he loaned a further £25.5 million making his investment up to £268.4 million.

 

- Obviously, since St James (like NUFC) is in an insolvent position it was necessary for him to personally guarantee to fund it for the next 12 months. Also, as with NUFC, he has shunted all his investment into current creditors instead of creditors due in more than 1 year.

 

- The rumour that Ashley has set up another company to act as the parent to St James Holdings is true.  the company is called MASH Holdings Limited. It is a new company and has not filed any accounts and is not due to do so until late December. If there is any significance to the setting up of this company it is not apparent from the St James accounts.

 

- At one point in the year Ashley's investment had risen to £248.8 million, indicating that between that point and the year end about £6 million of his loan was repaid. This may be where the rumour about Ashley taking money out of the club came from. Although as I said above he put £25.5 million back in some time after he had received this repayment. Ashley has taken no money out by way of interest, salary or dividends.

 

- St James Holdings has a bank overdraft of £36 million, secured on the Group's fixed assets. This is a sharp increase from the previous year end where the overdraft stood at £1 million.

 

- As at the year end the Group was owed £17 million in transfer fees, of which £4 million was due in more than 1 year. The accounts repeat the club's philosophy of paying up front for players purchased even though this is not the case when players are sold, as is apparent from the £17 million still owing.

 

There may be some other points in the accounts which I've missed,  but I've just had a quick look and those are the things that stood out for me.

 

 

 

 

 

Don't forget that those accounts are consolidated in the NUFC accounts, which means the holding company is insolvent in itself, but NUFC Ltd is not.  There is no guarantee from Ashley in the NUFC accounts and the auditors are perfectly happy to sign them off without anything to say.

 

Ive not seen the holdings accounts so take your word that is not the case in those and that a guarantee is in place.

 

You've lost me there - can you explain?

 

The NUFC balance sheet shows an insolvent position of £58 million as at 30th June 2009, and Ashley's commitment is specifically referred to on page 11 (under the heading Fundamental Accounting concept). Because of that commitment the NUFC accounts were prepared on a going concern basis and the auditors signed off on that.

 

That note on page 11 is just an explanation of how the directors have come to the conclusion that it is a going concern, it is not a guarantee.  The auditors are not concerned either otherwise they would have highlighted it in the audit report.

 

 

Ok try this - imagine you were the auditor. The balance sheet shows a heavily insolvent position, and the company's survival relies on the owner not pulling the plug and continuing to support it. Plus a commitment from Ashley to support the club for the next 12 months is NOT forthcoming. The directors have prepared the accounts on a going concern basis. You need to audit those accounts.

 

Question - would you have given a clean audit report with no qualification or emphasis of matter?

[Liam Liam Liam O]

MASH holds his shares in both NUFC and Sports Direct. Offset-tastic.

 

He's stealing our losses.

[BottledDog]

MASH holds his shares in both NUFC and Sports Direct. Offset-tastic.

 

He's stealing our losses.

 

[Parky]

Abramovich seems to have a similar company-owning-company-owning-club structure for Chelsea (and similarly is keeping his investment classed as a repayable loan). Reading the article which explains this (link below) it seemed to me this was maybe done so that the club could carry that debt while also complying with UEFA rules re borrowing.

 

http://www.guardian.co.uk/football/2010/may/19/roman-abramovich-chelsea-loan-debt

 

That's the strength of it.

[BottledDog]

http://www.guardian.co.uk/football/2010/jun/02/newcastle-debt-banks

 

Newcastle United will this year recoup up to and above £10m from the past sales of some of its big-name players, but it has all been pledged to the bank.

 

On 30 June last year, Newcastle's balance sheet showed their overdraft at Barclays Bank had leapt from less than £13m in 2008 to a whopping £47.87m by the end of their 2008-09 relegation season. Few lenders would be prepared to sustain this level of unsecured exposure to a Championship club and it appears Barclays took steps to reduce it.

 

The following day, 1 July, a mortgage was registered assigning St James' Park, the club's training ground and academy centre to the bank, as well as all their intellectual property such as brand names and even Newcastle's "trade secrets", whatever they may be.

 

In October Newcastle went further, with a secured loan that charged a number of deferred transfer-fee receipts, and this is what will really affect the club's cashflow. Among the items hocked is a £3,983,333 payment due from Aston Villa for James Milner on 29 August this year and two €1.68m (£1.4m) instalments from Wolfsburg for Obafemi Martins, the first on 31 August this year and the other a year later.

 

Newcastle would already have received £3.25m from Wigan Athletic for Charles N'Zogbia in January this year and another €950,000 (£796,500) for David Rozehnal from Lazio. It means Newcastle have borrowed against a total of £10.8m in transfer fees between this January and next August, ensuring the pain of relegation endures even after promotion back to the Premier League.

 

Hoping this insight doesn't mean that we're more fucked than we might have believed?

 

[Zero]

well it "just" means that we have nearly pledged every bits of assets last year.

 

If we got 5m transfer budget this summer I would be happy then...

[jdckelly]

http://www.guardian.co.uk/football/2010/jun/02/newcastle-debt-banks

 

Newcastle United will this year recoup up to and above £10m from the past sales of some of its big-name players, but it has all been pledged to the bank.

 

On 30 June last year, Newcastle's balance sheet showed their overdraft at Barclays Bank had leapt from less than £13m in 2008 to a whopping £47.87m by the end of their 2008-09 relegation season. Few lenders would be prepared to sustain this level of unsecured exposure to a Championship club and it appears Barclays took steps to reduce it.

 

The following day, 1 July, a mortgage was registered assigning St James' Park, the club's training ground and academy centre to the bank, as well as all their intellectual property such as brand names and even Newcastle's "trade secrets", whatever they may be.

 

In October Newcastle went further, with a secured loan that charged a number of deferred transfer-fee receipts, and this is what will really affect the club's cashflow. Among the items hocked is a £3,983,333 payment due from Aston Villa for James Milner on 29 August this year and two €1.68m (£1.4m) instalments from Wolfsburg for Obafemi Martins, the first on 31 August this year and the other a year later.

 

Newcastle would already have received £3.25m from Wigan Athletic for Charles N'Zogbia in January this year and another €950,000 (£796,500) for David Rozehnal from Lazio. It means Newcastle have borrowed against a total of £10.8m in transfer fees between this January and next August, ensuring the pain of relegation endures even after promotion back to the Premier League.

 

Hoping this insight doesn't mean that we're more fucked than we might have believed?

 

not really we just put transfer cash from last year to cover loses

[Zero]

http://www.guardian.co.uk/football/2010/jun/02/newcastle-debt-banks

 

Newcastle United will this year recoup up to and above £10m from the past sales of some of its big-name players, but it has all been pledged to the bank.

 

On 30 June last year, Newcastle's balance sheet showed their overdraft at Barclays Bank had leapt from less than £13m in 2008 to a whopping £47.87m by the end of their 2008-09 relegation season. Few lenders would be prepared to sustain this level of unsecured exposure to a Championship club and it appears Barclays took steps to reduce it.

 

The following day, 1 July, a mortgage was registered assigning St James' Park, the club's training ground and academy centre to the bank, as well as all their intellectual property such as brand names and even Newcastle's "trade secrets", whatever they may be.

 

In October Newcastle went further, with a secured loan that charged a number of deferred transfer-fee receipts, and this is what will really affect the club's cashflow. Among the items hocked is a £3,983,333 payment due from Aston Villa for James Milner on 29 August this year and two €1.68m (£1.4m) instalments from Wolfsburg for Obafemi Martins, the first on 31 August this year and the other a year later.

 

Newcastle would already have received £3.25m from Wigan Athletic for Charles N'Zogbia in January this year and another €950,000 (£796,500) for David Rozehnal from Lazio. It means Newcastle have borrowed against a total of £10.8m in transfer fees between this January and next August, ensuring the pain of relegation endures even after promotion back to the Premier League.

 

Hoping this insight doesn't mean that we're more f***ed than we might have believed?

 

not really we just put transfer cash from last year to cover loses

 

The key point is we have mortgaged ALL the assets we have, including debt receivable.