Jump to content

New Financial results


stozo

Recommended Posts

I guess he means trading insolvently, whereby directors can become personally laible for debts of the company.

 

I would have thought any personal liability is small due to the club being a limited company.  It's interesting though about trading while insolvent.

Link to post
Share on other sites

I guess he means trading insolvently, whereby directors can become personally laible for debts of the company.

 

I would have thought any personal liability is small due to the club being a limited company.  It's interesting though about trading while insolvent.

 

If a director knowingly trades while insolvent and a creditor is refused payment, he can seek personal recompense from the directors. The 'limited' nature of the company as a seperate legal entity ceases at this point. The Smash Robot will be able to explain it far better than I could.

Link to post
Share on other sites

we want to sue Fred now?

 

just when I thought this campaign couldn't get more comical

 

The only thing comical is the campaign you've just invented, is it a one man thing or is anybody invited?

Link to post
Share on other sites

I guess he means trading insolvently, whereby directors can become personally laible for debts of the company.

 

I would have thought any personal liability is small due to the club being a limited company.  It's interesting though about trading while insolvent.

 

If a director knowingly trades while insolvent and a creditor is refused payment, he can seek personal recompense from the directors. The 'limited' nature of the company as a seperate legal entity ceases at this point. The Smash Robot will be able to explain it far better than I could.

 

I understand that, I'd never really given it any thought until macbeth raised it and you replied.

 

I wonder if that's why the club are looking to restructure the debt?  They could see a problem looming so are trying to reduce debt payments to head that situation off, it's an interesting point.

Link to post
Share on other sites

My spin on this is now at www.nufc-finances.org.uk

 

I've spent this evening trying to work out what the numbers mean. I am now toally and utterly depressed.

 

As NE5 and his family have often said  :smitten: I have often been driven by the club's dividend policy. I really wanted to stop the leeches bleeding all that money out of my club. They've stopped that now. Now they are just incompetetently running the busines into the ground.

 

£9.8m loss in 6 months, which was only that good cos they got £3.3m compensation for Owen. So without that it would have been over £12m loss for 6 months business.

 

£2m per month loss !!! .

 

Wages at a run rate of £60m per year. Try and work that one out  :rant:

 

Income dropping. Interest payments rising.

 

:weep:

 

 

Link to post
Share on other sites

I guess he means trading insolvently, whereby directors can become personally laible for debts of the company.

 

I would have thought any personal liability is small due to the club being a limited company.  It's interesting though about trading while insolvent.

 

If a director knowingly trades while insolvent and a creditor is refused payment, he can seek personal recompense from the directors. The 'limited' nature of the company as a seperate legal entity ceases at this point. The Smash Robot will be able to explain it far better than I could.

 

I understand that, I'd never really given it any thought until macbeth raised it and you replied.

 

I wonder if that's why the club are looking to restructure the debt?  They could see a problem looming so are trying to reduce debt payments to head that situation off, it's an interesting point.

don't they only become insolvent when they can't finance their liabilities ?

 

(i'm thankfully not an accountant)

Link to post
Share on other sites

don't they only become insolvent when they can't finance their liabilities ?

 

(i'm thankfully not an accountant)

 

I've just done a quick google and Wikipedia has this:

 

http://en.wikipedia.org/wiki/Trading_while_insolvent

 

Trading while insolvent

 

 

In many legal systems, once a company becomes insolvent, the directors have to take particular care. Under UK law, trading while insolvent can trigger several provisions under the Insolvency Act 1986 which may have the effect of making directors of a company personally liable to contribute to the assets of a company.

 

The relevant provisions of the Insolvency Act 1986 include:

 

Wrongful trading - Section 214

Transaction at an undervalue - Section 238

Preferences - Section 239

Extortionate credit transactions - Section 244

Under wrongful trading legislation in the UK, if the company continues to trade while it is insolvent the directors of the company may become personally liable to contribute to the company's assets and help meet the deficit to unsecured creditors if the company's financial position is made worse by the directors continuing to trade instead of putting the company immediately into liquidation.

 

In most legal systems, the liability in respect of other transactions only extends for a certain period of time prior to the company going into liquidation. In the UK, directors are exposed in respect of transaction at an undervalue, preferences, and extortionate credit transactions if the transaction occurred: a) while the company was insolvent; and b) within 2 years before the onset of liquidation if the transaction was with a connected person, and 6 months if the transaction was with an unconnected person.

 

Directors who continue to trade while insolvent may face disqualification under the Company Directors Disqualification Act 1986. Under the provision of this act, when a company goes into liquidation, the liquidator must make a report to the Disqualification Unit of the Department of Trade and Industry on the conduct of all directors. If the liquidator has come across conduct which makes the director unfit to be involved in the management of a company in the future (which things would include trading while insolvent) the DTI will apply to the Court for an order disqualifying the director or directors from acting as a company director for a certain period.

 

Many other countries have similar laws, often referred to as 'insolvent trading' or wrongful trading.

 

 

Link to post
Share on other sites

Guest Invicta_Toon

My spin on this is now at www.nufc-finances.org.uk

 

I've spent this evening trying to work out what the numbers mean. I am now toally and utterly depressed.

 

As NE5 and his family have often said  :smitten: I have often been driven by the club's dividend policy. I really wanted to stop the leeches bleeding all that money out of my club. They've stopped that now. Now they are just incompetetently running the busines into the ground.

 

£9.8m loss in 6 months, which was only that good cos they got £3.3m compensation for Owen. So without that it would have been over £12m loss for 6 months business.

 

£2m per month loss !!! .

 

Wages at a run rate of £60m per year. Try and work that one out  :rant:

 

Income dropping. Interest payments rising.

 

:weep:

 

 

 

 

you should finally put the boot in and stop going, that'll learn em

 

'my club' :lol:

Link to post
Share on other sites

but do they only become insolvent when they can't finance their liabilities ?

 

ie and a learning exercise for myself here....club A is £100mill in debt,NAV of £25MILL but are financing all loans etc,due to the unique(well it might be) nature of footballs accounting re amortisation have players in the live market would be worth say £150mill,is this club in danger of insolvency ?

Link to post
Share on other sites

but do they only become insolvent when they can't finance their liabilities ?

 

ie and a learning exercise for myself here....club A is £100mill in debt,NAV of £25MILL but are financing all loans etc,due to the unique(well it might be) nature of footballs accounting re amortisation have players in the live market would be worth say £150mill,is this club in danger of insolvency ?

 

No.

 

Even on a very basic level our club can re-finance against future season ticket sales.

Link to post
Share on other sites

but do they only become insolvent when they can't finance their liabilities ?

 

ie and a learning exercise for myself here....club A is £100mill in debt,NAV of £25MILL but are financing all loans etc,due to the unique(well it might be) nature of footballs accounting re amortisation have players in the live market would be worth say £150mill,is this club in danger of insolvency ?

 

I think they're OK as long as they keep paying off the debt.  The players could be sold off at some stage if things got too bad, I'm not saying for one minute that this will happen to us, I doubt that it could.

 

I've worked for a company that went into voluntary liquidation before things got too bad, the directors got away without any penalties because they acted in a responsible manner and didn't trade on for too long and they didn't do anything like removing assets from the company.

 

I would think that they could have carried on trading if they knew that they were about to get some kind of financial windfall, I suppose it’s all about acting responsibly.

 

Link to post
Share on other sites

but do they only become insolvent when they can't finance their liabilities ?

 

ie and a learning exercise for myself here....club A is £100mill in debt,NAV of £25MILL but are financing all loans etc,due to the unique(well it might be) nature of footballs accounting re amortisation have players in the live market would be worth say £150mill,is this club in danger of insolvency ?

 

No.

 

Even on a very basic level our club can re-finance against future season ticket sales.

 

I would have thought that they could do this but only up to a reasonable limit because season ticket sales are not guaranteed.

Link to post
Share on other sites

There is no short of even medium term exposure and there are various fianancial instruments that bear up vis a vie TV money, re-fianancing the loan agains season ticket sales and other furture income by performing better on the pitch.

What we must do immediately is look at a sensible wage structure and maximise the business. Basically we need to hire some professionals.

I would seriously look at developing our corporate and leisure business. With such a loyal catchment of support and regional identity this area has a lot of potential revenue streams.

I personally wouldn't be too aggreived we sponsored the stadium name is things started to get financially tighter.

I think Arsenal get £9.6m a year from the Emirates for the stadium brand, That is a lot of free money.

Our turnover targets should in reality be around £110m and not this hanging around the low £80's lark.

Link to post
Share on other sites

There is no short of even medium term exposure and there are various fianancial instruments that bear up vis a vie TV money, re-fianancing the loan agains season ticket sales and other furture income by performing better on the pitch.

What we must do immediately is look at a sensible wage structure and maximise the business. Basically we need to hire some professionals.

I would seriously look at developing our corporate and leisure business. With such a loyal catchment of support and regional identity this area has a lot of potential revenue streams.

I personally wouldn't be too aggreived we sponsored the stadium name is things started to get financially tighter.

I think Arsenal get £9.6m a year from the Emirates for the stadium brand, That is a lot of free money.

Our turnover targets should in reality be around £110m and not this hanging around the low £80's lark.

 

Is re-financing not going to bring it's own problems?

 

I would guess that they'll try to bring any debt together into one loan which they'll pay off over a longer period, a longer period will probably cost more as they'll end up paying a higher interest rate, also, interest rates have been increased since the original stadium expansion was carried out, I'm guessing.

 

Link to post
Share on other sites

I would guess that they'll try to bring any debt together into one loan which they'll pay off over a longer period, a longer period will probably cost more as they'll end up paying a higher interest rate, also, interest rates have been increased since the original stadium expansion was carried out, I'm guessing.

 

 

From the accounts in 2003 ...

 

"....Under the terms of the securitisation, funds  have to be held ina designated account to meet the annual capital and interets repayment due on 30 September each year. An additional amount, equivalent to 50% of forthcoming repayment has to be held in a separate desinated account on a permanent basis. These funads are not therefore available to the Group as part of working capital. At 31 July 2003 the balace held in these accounts was £9.4m (2002 £9.4m)"

 

followed by

 

"The Group has in issue £52.9m of senior loan notes with a fixed interest rate of 7.43%"

 

They could probably get a lot better rate than the 7.43%, even in their precarious position, as they can prove previous abilityto pay.

 

If the club had not paid any dividends, and had not bought back shares from the Halls, and had used that £35m on paying of the stadium, then they would now have no repayments left to make. (Get EXcel going, do a mortgage calcualtion with 17 years at 7.43% on 52m, then add £4m to the payments, and voila nothing left)

Link to post
Share on other sites

Guest Invicta_Toon

I would guess that they'll try to bring any debt together into one loan which they'll pay off over a longer period, a longer period will probably cost more as they'll end up paying a higher interest rate, also, interest rates have been increased since the original stadium expansion was carried out, I'm guessing.

 

 

From the accounts in 2003 ...

 

"....Under the terms of the securitisation, funds  have to be held ina designated account to meet the annual capital and interets repayment due on 30 September each year. An additional amount, equivalent to 50% of forthcoming repayment has to be held in a separate desinated account on a permanent basis. These funads are not therefore available to the Group as part of working capital. At 31 July 2003 the balace held in these accounts was £9.4m (2002 £9.4m)"

 

followed by

 

"The Group has in issue £52.9m of senior loan notes with a fixed interest rate of 7.43%"

 

They could probably get a lot better rate than the 7.43%, even in their precarious position, as they can prove previous abilityto pay.

 

If the club had not paid any dividends, and had not bought back shares from the Halls, and had used that £35m on paying of the stadium, then they would now have no repayments left to make. (Get EXcel going, do a mortgage calcualtion with 17 years at 7.43% on 52m, then add £4m to the payments, and voila nothing left)

 

nothing to do with it

 

 

so tell me btw, why would any shareholder keep their shares in a devaluing company if no dividend was issued for 10 years?

 

you do know what happens to our ability to borrow / pay off loans when shareholders start to sell up don't you? or is that not in the Excel help files?

Link to post
Share on other sites

I would guess that they'll try to bring any debt together into one loan which they'll pay off over a longer period, a longer period will probably cost more as they'll end up paying a higher interest rate, also, interest rates have been increased since the original stadium expansion was carried out, I'm guessing.

 

 

From the accounts in 2003 ...

 

"....Under the terms of the securitisation, funds  have to be held ina designated account to meet the annual capital and interets repayment due on 30 September each year. An additional amount, equivalent to 50% of forthcoming repayment has to be held in a separate desinated account on a permanent basis. These funads are not therefore available to the Group as part of working capital. At 31 July 2003 the balace held in these accounts was £9.4m (2002 £9.4m)"

 

followed by

 

"The Group has in issue £52.9m of senior loan notes with a fixed interest rate of 7.43%"

 

They could probably get a lot better rate than the 7.43%, even in their precarious position, as they can prove previous abilityto pay.

 

If the club had not paid any dividends, and had not bought back shares from the Halls, and had used that £35m on paying of the stadium, then they would now have no repayments left to make. (Get EXcel going, do a mortgage calcualtion with 17 years at 7.43% on 52m, then add £4m to the payments, and voila nothing left)

 

nothing to do with it

 

 

so tell me btw, why would any shareholder keep their shares in a devaluing company if no dividend was issued for 10 years?

 

you do know what happens to our ability to borrow / pay off loans when shareholders start to sell up don't you? or is that not in the Excel help files?

 

Some interesting points there Vic, why not elaborate on exactly what you mean?  What would happen to our ability to borrow/pay off loans if the shareholders started to sell up & why?

Link to post
Share on other sites

so tell me btw, why would any shareholder keep their shares in a devaluing company if no dividend was issued for 10 years?

 

you do know what happens to our ability to borrow / pay off loans when shareholders start to sell up don't you? or is that not in the Excel help files?

 

Me too :)

 

Or turn it the other way around...

 

What happens to our ability to borrow/pay off loans when all the cash in the company has been given away?

 

I am seriously interested in what happens when shareholders sell up. My site is there to try and explain the clu's finances. I totally accept I'm no more than a keen amateur in these things, and I need to know more. If you have a good concise explanation of what difference it would make if the share price went down, or up, then I will happily include it. (It has to have no jargon in it :) )

 

As far as not paying dividends having a negative effect on share-price, surely it doesn't make any difference ?

Pay dividends and business has less assets and is worth less, so share price drops, investors see some short term gain so buy. So share price nets out as unchanged.

Don't pay dividends and business is worth more so share price rises, but has less short term enticement to an investor so the price nets out as unchanged.

Roughly

Link to post
Share on other sites

We get £30m extra per season from next season. We may have to spend this on sorting ourselves out, which may bring us financially behind others, but at least we wont go bankrupt thanks to that.

 

Shepherd needs to go though.

Link to post
Share on other sites

Guest Invicta_Toon

so tell me btw, why would any shareholder keep their shares in a devaluing company if no dividend was issued for 10 years?

 

you do know what happens to our ability to borrow / pay off loans when shareholders start to sell up don't you? or is that not in the Excel help files?

 

Me too :)

 

Or turn it the other way around...

 

What happens to our ability to borrow/pay off loans when all the cash in the company has been given away?

 

I am seriously interested in what happens when shareholders sell up. My site is there to try and explain the clu's finances. I totally accept I'm no more than a keen amateur in these things, and I need to know more. If you have a good concise explanation of what difference it would make if the share price went down, or up, then I will happily include it. (It has to have no jargon in it :) )

 

As far as not paying dividends having a negative effect on share-price, surely it doesn't make any difference ?

Pay dividends and business has less assets and is worth less, so share price drops, investors see some short term gain so buy. So share price nets out as unchanged.

Don't pay dividends and business is worth more so share price rises, but has less short term enticement to an investor so the price nets out as unchanged.

Roughly

 

you really don't get this shares lark do you?

 

shreholders make money in two ways, price increases and divis. If the share price is falling and there are no divis, there is no point in owning shares

 

share price is purely refelcted by share buyer confidence, and has absolutely nothing to do with whether the company has money in the bank or as you put it 'the company's worth' (unless you honestly believe that someone would buy shares in a shit football club just because they have some cash). The company's worth is the share price.

 

Share price dictates a companies market capitalisation (hope that's not too jargony for you, but it's a standard term). MC is a key measure for plc's and dictates credit limits and repayment rates.

Link to post
Share on other sites

so tell me btw, why would any shareholder keep their shares in a devaluing company if no dividend was issued for 10 years?

 

you do know what happens to our ability to borrow / pay off loans when shareholders start to sell up don't you? or is that not in the Excel help files?

 

Me too :)

 

Or turn it the other way around...

 

What happens to our ability to borrow/pay off loans when all the cash in the company has been given away?

 

I am seriously interested in what happens when shareholders sell up. My site is there to try and explain the clu's finances. I totally accept I'm no more than a keen amateur in these things, and I need to know more. If you have a good concise explanation of what difference it would make if the share price went down, or up, then I will happily include it. (It has to have no jargon in it :) )

 

As far as not paying dividends having a negative effect on share-price, surely it doesn't make any difference ?

Pay dividends and business has less assets and is worth less, so share price drops, investors see some short term gain so buy. So share price nets out as unchanged.

Don't pay dividends and business is worth more so share price rises, but has less short term enticement to an investor so the price nets out as unchanged.

Roughly

 

you really don't get this shares lark do you?

 

shreholders make money in two ways, price increases and divis. If the share price is falling and there are no divis, there is no point in owning shares

 

share price is purely refelcted by share buyer confidence, and has absolutely nothing to do with whether the company has money in the bank or as you put it 'the company's worth' (unless you honestly believe that someone would buy shares in a shit football club just because they have some cash). The company's worth is the share price.

 

Share price dictates a companies market capitalisation (hope that's not too jargony for you, but it's a standard term). MC is a key measure for plc's and dictates credit limits and repayment rates.

 

:lol:

Link to post
Share on other sites

In all reality in football terms Newcastle United is a prime business oppurtunity. It is just being run badly. If I had the money (say £130m :lol:) it would be a no brainer. We are being run incredibly badly and we have had some bad luck.

Link to post
Share on other sites

Guest Invicta_Toon

In all reality in football terms Newcastle United is a prime business oppurtunity. It is just being run badly. If I had the money (say £130m :lol:) it would be a no brainer. We are being run incredibly badly and we have had some bad luck.

 

have a guess where the last lottery winner who invested in football ended up

Link to post
Share on other sites

In all reality in football terms Newcastle United is a prime business oppurtunity. It is just being run badly. If I had the money (say £130m :lol:) it would be a no brainer. We are being run incredibly badly and we have had some bad luck.

 

have a guess where the last lottery winner who invested in football ended up

 

Poor house? mackems.gif

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...