Grendel
Well-Known Member
The CBS costs and the EFL loan will wipe that out
Coventry City publish Accounts for Year Ended 31st May 2021 (3 Viewers)
- Thread starter oldfiver
- Start date
The CBS costs and the EFL loan will wipe that out
Grendel
Well-Known Member
They have made returns to investors and will continue to do so
Sale of players is a key element of that strategy with larger fees available in this division
I also suspect they will tl reward investors in this period sell Ryton hence all the media around this and Warwick university
Grendel
Well-Known Member
if we get promoted Sisu will clearly be here for a very long time
cc84cov
Well-Known Member
oldskyblue58
CCFC Finance Director
The wording in the report is quite standard, but you also need to read the next bit that such undertakings are not legally binding
since 01/06/20216 to 31/05/2021 SISU have put in less than 50K or put another way during MR's tenure they have put in less than £50k additional funds to help him. They have acted as bank of last resort by putting money in and then taking it out. In 2019 they took out 1.7m in capital & interest only to have put it all back in again the following year when the pandemic started to hit.
since 01/06/20216 to 31/05/2021 SISU have put in less than 50K or put another way during MR's tenure they have put in less than £50k additional funds to help him. They have acted as bank of last resort by putting money in and then taking it out. In 2019 they took out 1.7m in capital & interest only to have put it all back in again the following year when the pandemic started to hit.
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oldskyblue58
CCFC Finance Director
the value of SISU investor investment in CCFC. People look at CCFC figures and make the leap that this is what the value on SISU investment funds is. I am almost certain it is not
The investors have several elements to their investment
ARVO loans to Otium/CCFC. £10m in capital and £11.1m owed in accrued interest. Actual money put in is £10m which is secured on all of the assets of the club past, present & future. The £11.1m at 31/05/2021(now having increased since by another £ 2m) is a paper debt that as it stands is difficult to recover, although SISU will take a fee slice of each years interest as managers (typically 10%). In valuing this part of the investment it is highly likely that the interest element will be written down to reflect irrecoverability. So arguably the value of this part is £10m only
The loans to SBS&L. Firstly the actual cash investment was something around £18m. Secondly this investment in the SISU investor books has been moved around to different funds which probably crystallised paper losses years ago. So very likely in doing so this debt has been written down to pennies in the pound, because the amounts would have to be transferred at market or fair value. The £28m is not secured, is in a company that doesnt generate income, has no income from Otium etc. If the investment value currently is more than £1m i would be surprised. If it were shown as £28m then you would have to write it down to reflect recoverability, which currently is very unlikely. Likely value under £1m
The ordinary shares issued to SBS&L and ARVO. essentially They own shares in a company that owns shares in a loss making football team which has a negative balance sheet at 31/05/2021 of £28m. Yes it has players to sell on but they are charged to ARVO first, then need to pay all the other debts before shareholders get funds. Cant see a big value, and i dont see anyone buying either company and taking on the debts loaded on them (a purchaser would buy the assets less football creditors). In terms of value not a lot then. likely value £1000
The preference shares. These apart from the ones ARVO purchased for 6 or 7m were derived from clever accounting to create losses, from pree SISU, and during SISU tenure. There is no cost to them for the investors. Currently it has an accruing right to dividends of something like 9% but currently no prospect of receiving such dividends. These shares carry no voting rights or rights to a share in the assets. Hard to argue that in an investors hands they are worth anything at all until the company has cleared past losses or the assets are sold. Likely value £1000
SISU specialise in investment losses. They move paper around to create them. That doesnt mean investors stand to lose money. There is no figure that must be paid or below which they cant go. SISU have to provide annual investment reports to its investors that must show current value, including any diminution of value because of the timing or nature of the investment.
What SISU want to go away and sell up is a very different thing to the value of the investment
I still think they will milk the investment before moving on. Forget what the P&L account says about £4.7m losses. the club was £1.3m cash positive and had £2.4m in the bank 31/05/2021. Creates a pot to trade with yes but also such financial management provides investment return opportunities. The club is in the position that to some degree they can pick and choose who to sell and when, and that money will not go all to MR, there will be income extraction
The actual risk to capital invested in the investment reports is less than £17m in my opinion. The interest is paperwork and a revenue risk that is set up in funds specifically designed to avoid or lower taxes. If they have to write off part of the high rate interest then the physical loss is?
Even more important the minimum they require is to cover investment valuation. Anything above 17m looks to be a win. That though is not the same as an investment managers assessment of what they want to maximise as a return
Like i say it is wrong to look at the CCFC financials and think that they are reflected exactly the same way in SISU investor reports
The investors have several elements to their investment
ARVO loans to Otium/CCFC. £10m in capital and £11.1m owed in accrued interest. Actual money put in is £10m which is secured on all of the assets of the club past, present & future. The £11.1m at 31/05/2021(now having increased since by another £ 2m) is a paper debt that as it stands is difficult to recover, although SISU will take a fee slice of each years interest as managers (typically 10%). In valuing this part of the investment it is highly likely that the interest element will be written down to reflect irrecoverability. So arguably the value of this part is £10m only
The loans to SBS&L. Firstly the actual cash investment was something around £18m. Secondly this investment in the SISU investor books has been moved around to different funds which probably crystallised paper losses years ago. So very likely in doing so this debt has been written down to pennies in the pound, because the amounts would have to be transferred at market or fair value. The £28m is not secured, is in a company that doesnt generate income, has no income from Otium etc. If the investment value currently is more than £1m i would be surprised. If it were shown as £28m then you would have to write it down to reflect recoverability, which currently is very unlikely. Likely value under £1m
The ordinary shares issued to SBS&L and ARVO. essentially They own shares in a company that owns shares in a loss making football team which has a negative balance sheet at 31/05/2021 of £28m. Yes it has players to sell on but they are charged to ARVO first, then need to pay all the other debts before shareholders get funds. Cant see a big value, and i dont see anyone buying either company and taking on the debts loaded on them (a purchaser would buy the assets less football creditors). In terms of value not a lot then. likely value £1000
The preference shares. These apart from the ones ARVO purchased for 6 or 7m were derived from clever accounting to create losses, from pree SISU, and during SISU tenure. There is no cost to them for the investors. Currently it has an accruing right to dividends of something like 9% but currently no prospect of receiving such dividends. These shares carry no voting rights or rights to a share in the assets. Hard to argue that in an investors hands they are worth anything at all until the company has cleared past losses or the assets are sold. Likely value £1000
SISU specialise in investment losses. They move paper around to create them. That doesnt mean investors stand to lose money. There is no figure that must be paid or below which they cant go. SISU have to provide annual investment reports to its investors that must show current value, including any diminution of value because of the timing or nature of the investment.
What SISU want to go away and sell up is a very different thing to the value of the investment
I still think they will milk the investment before moving on. Forget what the P&L account says about £4.7m losses. the club was £1.3m cash positive and had £2.4m in the bank 31/05/2021. Creates a pot to trade with yes but also such financial management provides investment return opportunities. The club is in the position that to some degree they can pick and choose who to sell and when, and that money will not go all to MR, there will be income extraction
The actual risk to capital invested in the investment reports is less than £17m in my opinion. The interest is paperwork and a revenue risk that is set up in funds specifically designed to avoid or lower taxes. If they have to write off part of the high rate interest then the physical loss is?
Even more important the minimum they require is to cover investment valuation. Anything above 17m looks to be a win. That though is not the same as an investment managers assessment of what they want to maximise as a return
Like i say it is wrong to look at the CCFC financials and think that they are reflected exactly the same way in SISU investor reports
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Colin Steins Smile
Well-Known Member
I'm not so sure. I would guess that they'll take the PL money to realise a return for their investors, which will include some eye watering interest rate returns and try to sell.
That way they'll realise their profits and sell at the top of the business cycle.
However, would there be a buyer?
higgs
Well-Known Member
skybluepm2
Well-Known Member
NEWS: Coventry City publish accounts for year ended 31st May 2021
Coventry City Football Club has published the latest set of accounts for the year ended 31 May, 2021.
www.ccfc.co.uk
Evo1883
Well-Known Member
Does that mean our wage bill is over 15 million ?NEWS: Coventry City publish accounts for year ended 31st May 2021
Coventry City Football Club has published the latest set of accounts for the year ended 31 May, 2021.
HuckerbyDublinWhelan
Well-Known Member
I mean if they took us back to the premier league I’d be ok with this
NortonSkyBlue
Well-Known Member
They can charge whatever they like.
Sky_Blue_Dreamer
Well-Known Member
They can, but that doesn't mean it's in the best long-term interests of the club that they do.
KenilworthSkyBlue
Well-Known Member
Looking at the accounts of other clubs will be useless and tell us nothing that we don't already know.
The majority of other Championship club owners don't charge interest rates on loans and if they do it's minimal.
Johhny Blue
Well-Known Member
Literally?
SBAndy
Well-Known Member
No, it’s about £13m including admin staff. To put into perspective, Reading’s total staff cost is £32m - although they notoriously overpay.
oldskyblue58
CCFC Finance Director
Looking at other clubs losses is interesting but doesn't really help understand the CCFC ones. Each club will have different set ups, different attitudes from their owners, could be without the increasing interest burden, almost certainly have more assets within the football club or group. So unless you factor all of that sort of stuff then any superficial comparison doesn't mean a lot.
The one thing that it perhaps does make clear is the brilliant job that MR has done in juggling the budget he is given to achieve the results & style of play that he has.
The key thing with the finances isn't to compare with other teams but to compare with previous years of Otium and to factor in additional information from the SBS&L group situation. The things that i think are not being highlighted is that yet again (and in a pandemic year) SISU have not provided any new funds and that by the end of the 2021 financial year the money in the bank had increased by £1.4m to £2.4m. Happy to accept increasing bank balance is good financial control but claiming investment by the owners is for me a bit of a stretch
In fact SISU Master Fund took out £140k in the 2021 financial year, a year of pandemic restrictions. So to amend my earlier assertion in the period of MR's tenure SISU have, far from providing net funds to the manager, now withdrawn a net £100k
The one thing that it perhaps does make clear is the brilliant job that MR has done in juggling the budget he is given to achieve the results & style of play that he has.
The key thing with the finances isn't to compare with other teams but to compare with previous years of Otium and to factor in additional information from the SBS&L group situation. The things that i think are not being highlighted is that yet again (and in a pandemic year) SISU have not provided any new funds and that by the end of the 2021 financial year the money in the bank had increased by £1.4m to £2.4m. Happy to accept increasing bank balance is good financial control but claiming investment by the owners is for me a bit of a stretch
In fact SISU Master Fund took out £140k in the 2021 financial year, a year of pandemic restrictions. So to amend my earlier assertion in the period of MR's tenure SISU have, far from providing net funds to the manager, now withdrawn a net £100k
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NortonSkyBlue
Well-Known Member
Of course you are correct.
duffer
Well-Known Member
I suppose I could flog my old banger and offer them three grand on a 'take or leave it' basis; but I'm only interested in the deal if you'll join the board, OSB.
shmmeee
Well-Known Member
£13m for a wage bill isn’t bad in terms of competitiveness TBF. Around £15m or so seems to be the normal mark If you ignore the ridiculous overspenders. Do wonder where it’s going though if £10k ish is our ceiling. That’s 25 players on £10k/wk which we certainly don’t have.
Covkid1968#
Well-Known Member
MR is like the black knight off Monty Python….no investment…. No ground….shite pitch to play on due to Wasps.
Tis but a scratch for our saviour
Brighton Sky Blue
Well-Known Member
Well it includes everyone, so the actual playing wage bill is going to be lower
Grendel
Well-Known Member
it won’t include the likes of waghorn though will it?
shmmeee
Well-Known Member
We haven’t even got half that on £10k and we pay everyone minimum wage from the looks of the job adverts.
still think another £2m would make a huge difference if we can move the right players on. That’s 4/5 decent players.
Grendel
Well-Known Member
i assume all summer signings and contract extensions are in addition to the £13m
shmmeee
Well-Known Member
How much of that is likely to be playing budget? Seems high for what we have in terms of squad.
Grendel
Well-Known Member
I assume it doesn’t include any signings made after May 2021 so the wages this year will be a lot higher I’d assume a lot of contracts had a big increase built in for promotion
NorthernWisdom
Well-Known Member
Promotion bonuses?
Grendel
Well-Known Member
Yes league 2 to 1 was something like 30%
Wage bill now will be much higher than £13 million I would assume
waghorn
Moore
Sheaf
Bidwell
Kane
also improved deals for players
the ones we lost that season would be on lower wages by a margin I’d guess
oldskyblue58
CCFC Finance Director
They will have loan agreements so not quite anything they like but certainly 4 sets of loans at varying rates between 9% and 15%. The lower rate perhaps reflecting the security on that particular loan.
So long as the interest is not actually paid not a problem to MR budget............ but any repayment will restrict that budget. At some point logically they must start drawing the interest & capital down otherwise why charge it. Yes a paper charge keeps investors happy for a while but at some point they may want to spend some of it...............
oldskyblue58
CCFC Finance Director
the 13.17m includes 1.1m for national insurance and 210k for pension. In 2020 the total was 6.5m national insurance 579k and pension 39k
There were 160 full time employees (2020 145) of which 13 were administrative (2020 12). So the amount paid to employees who were administrative is not going to be a big figure, major one would be Boddy followed probably by Scope. Directors were not paid anything
the amount due to team and team management i would guess at 12.5m up from approx £6m in 2020
in addition there were 225 other temporary employees (ie stewards etc) at a cost of 310k (included in the £13.17m total wage cost). Majority of stewards not used in 2021 but the cost increased from £189k to £310k . Accounting rules require any one on the payroll must be disclosed whether paid in the year or not
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The interest charged was 7.5% or thereabouts. Yes it could be zero but where can you get a £20 odd million unsecured loan over an undefined period of time at 7.5%. You can’t.
Irrespective of what SISU would do with those two if Hamer doesn’t sign an extension before the end of the season he will be sold. His value to the club is depreciating by the day beyond the final day of the season and by December this year will be zero.
