May Rckinnon Posted December 30, 2023 Share Posted December 30, 2023 3 hours ago, FifeSons said: Shaping up to be an interesting battle to avoid the trapdoor. Current results realty drag East Fife and Forfar into it, given you’d expect Clyde to improve. It's an Elgin v Forfar shootout for a trip to wick on a wednesday. 0 Quote Link to comment Share on other sites More sharing options...
FifeSons Posted December 30, 2023 Share Posted December 30, 2023 43 minutes ago, May Rckinnon said: It's an Elgin v Forfar shootout for a trip to wick on a wednesday. I don’t think it’s a foregone conclusion that Clyde will stay up. Stranraer probably not out of it, either. 0 Quote Link to comment Share on other sites More sharing options...
May Rckinnon Posted December 30, 2023 Share Posted December 30, 2023 1 minute ago, FifeSons said: I don’t think it’s a foregone conclusion that Clyde will stay up. Stranraer probably not out of it, either. Don't rob me of the dream of ticking off all the HL grounds. 0 Quote Link to comment Share on other sites More sharing options...
Steakngravys Maw Posted February 20 Share Posted February 20 On 19/12/2023 at 08:25, ScottR96 said: It’s therefore only fair that Elgin take one for the team this season. At least they’ll be dropping into a proper league. Aye? 0 Quote Link to comment Share on other sites More sharing options...
ScottR96 Posted February 21 Share Posted February 21 26 minutes ago, Steakngravys Maw said: Aye? Did you read the post I quoted? If I was suggesting that Clyde would avoid 10th then fair enough, but don’t understand this bump? 1 Quote Link to comment Share on other sites More sharing options...
bullyweehutch Posted February 21 Share Posted February 21 Can re name the thread. Next to go, Clyde FC 2 Quote Link to comment Share on other sites More sharing options...
EdinburghBlue Posted February 28 Author Share Posted February 28 (edited) I’m increasingly wondering whether the “next to go” will be decided by liquidation/administration, rather than on the playing field. We are now in the reporting season for many clubs. Recently published accounts from East Fife and Peterhead make very interesting reading. In both cases auditors have raised concerns about “material uncertainty related to growing concern.” Peterhead lost £297k in the financial year to 31 May 2023. Net liabilities are £329k, meaning that the company is technically insolvent. Net current liabilities – sums that the club might have to find in the next 12 months – are £674k. And in the company’s lifetime it has total losses of £1650k i.e. the amount it has been subsidised by shareholders injecting capital. And there’s an individual note in the accounts that the club owes £275k to a former director, with no agreement in place on possible repayment, and a statement that “it is acknowledged that any request for repayment in demand would create significant cash flow difficulties for the football club and… Suitable repayment terms would have to be agreed… or fresh funding sought.” East Fife only lost £53k in the same financial year, a big improvement on the £189k loss in 2022. In contrast to Peterhead the club isn’t technically insolvent, but that is only because of the value of its land/property. It owes about £270k, with some of that on the basis of a guarantee that it won’t be called in the next 18 months. This is another company that has burned through shareholders’ investments, with total losses of around £500k over the years. In the 2022 financial year the average loss for the 17 SPFL 1/2 clubs whose accounts are available from Companies House was £113k. It rises to £155k if you include the two relegated clubs and the new arrivals from the Lowland League. More updates as more accounts become available. Edited February 29 by EdinburghBlue 6 Quote Link to comment Share on other sites More sharing options...
strichener Posted February 28 Share Posted February 28 (edited) On 28/02/2024 at 12:15, EdinburghBlue said: I’m increasingly wondering whether the “next to go” will be decided by liquidation/administration, rather than on the playing field. We are now in the reporting season for many clubs. Recently published accounts from East Fife and Peterhead make very interesting reading. In both cases auditors have raised concerns about “material uncertainty related to growing concern.” Peterhead lost £297k in the financial year to 31 May 2023. Net liabilities are £329k, meaning that the company is technically insolvent. Net current liabilities – sums that the club might have to find in the next 12 months – are £674k. And in the company’s lifetime it has total losses of £1650k i.e. the amount it has been subsidised by shareholders injecting capital. And there’s an individual note in the accounts that the club owes £275k to a former director, with no agreement in place on possible repayment, and a statement that “it is acknowledged that any request for repayment in demand would create significant cash flow difficulties for the football club and… Suitable repayment terms would have to be agreed… or fresh funding sought.” East Fife only lost £53k in the same financial year, a big improvement on the £189k loss in 2022. In contrast to Peterhead the club isn’t insolvent, but that is only because of the value of its land/property. It owes about £270k, with some of that on the basis of a guarantee that it won’t be called in the next 18 months. This is another company that has burned through shareholders’ investments, with total losses of around £500k over the years. In the 2022 financial year the average loss for the 17 SPFL 1/2 clubs whose accounts are available from Companies House was £113k. It rises to £155k if you include the two relegated clubs and the new arrivals from the Lowland League. More updates as more accounts become available. We'll just have to form a supporter organisation and get the Scottish Government to throw a few 100k to buy shares and take ownership. On the £275k in particular, this has been a longstanding loan rather than something that has just appeared this year and whilst it may be a former director, he is still the majority shareholder so there is little incentive for this loan to be called in. You also use the term technically insolvent in the second paragraph and then use the term insolvent in the following. Just to be clear, Peterhead are not insolvent and pay their debts as the fall due. Don't mistake this correction as an endorsement of how the club has been funded to date but it does need pointed out. Edited February 29 by strichener 3 Quote Link to comment Share on other sites More sharing options...
Pedro Cabeza Posted February 29 Share Posted February 29 I knew we shouldn't have let the Trump organisation do our books. Last season was a total disaster with our performance on the pitch affecting the attendances at Balmoor. We were also paying over the odds in wages for some of Robertson's signings. This season, attendances are amongst the highest in the division, corporate hospitality has increased greatly and many new sponsors have come on board. I wouldn't think that we would have such a deficit for next year'. 2 Quote Link to comment Share on other sites More sharing options...
Frank Quitely Posted February 29 Share Posted February 29 I know @EdinburghBlue has already had a poke around, but if anyone is doing a Masters in Forensic Accountancy they could do worse than try to unravel Dumbarton's financial situation. 0 Quote Link to comment Share on other sites More sharing options...
EdinburghBlue Posted February 29 Author Share Posted February 29 (edited) On 28/02/2024 at 18:07, strichener said: We'll just have to form a supporter organisation and get the Scottish Government to thrive a few 100k to buy shares and take ownership. On the £275k in particular, this has been a longstanding loan rather than something that has just appeared this year and whilst it may be a former director, he is still the majority shareholder so there is little incentive for this loan to be called in. You also use the term technically insolvent in the second paragraph and then use the term insolvent in the following. Just to be clear, Peterhead are not insolvent and pay their debts as the fall due. Don't mistake this correction as an endorsement of how the club has been funded to date but it does need pointed out. Good spot. I have amended my original post to refer to "technical insolvency" rather than "solvency". (For the uninitiated, insolvency is when a company can't meet its debts and either goes into administration or is liquidated. Technical insolvency is when the shareholder funds go negative, but the directors may decide that they can continue to trade their way out of the problem without the company going insolvent.) But even with this correction I don't think Peterhead's accounts look good. The club's cash balances have fallen from £86k to £13k. I think it starts to become uncomfortable for a business if they have less than three months cash on hand. And creditors (potentially) due within 12 months have risen from £587k to £766k. I think these are flashing red signs. But I'm not trying to get at individual clubs. The general point I'm trying to make is that running a team in SPFL 1/2 is unaffordable for most clubs with the cost base imposed on them by SPFL rules/government regulation and the income they get from gates and SPFL prize money. The problems would go away if the SPFL directed enough of its sponsorship income to supporting teams' basic costs rather than distributing it as prize money, prize money which is hugely skewed towards the top league and the top two. I think the challenges are particularly hard for member-owned clubs, whether there are a members' club or a company. The approaches of dealing with financial pressures by issuing new shares or selling a stake/majority stake to a new owner who is willing to put money in (sometimes several times) isn't available to them. I wouldn't be surprised if over the next few years we see some clubs starting to offer some players amateur terms. Edited March 10 by EdinburghBlue 4 Quote Link to comment Share on other sites More sharing options...
EdinburghBlue Posted March 1 Author Share Posted March 1 On 28/02/2024 at 12:15, EdinburghBlue said: More updates as more accounts become available. The two Edinburgh clubs have now lodged their accounts at Companies House. Spartans lost £101k to May 2023, a slight improvement on the previous year. They have burned through £209k of shareholders' funds in the last two years, and their accounts state that "the directors anticipate another funding round from the shareholders which has already been notified to the shareholders." On the face of it, Edinburgh City appear to have had a good year, with shareholders funds improving by £122k, actually moving £19k into the black and hence the company is no longer technically insolvent. But it's impossible to tell from the accounts they publish whether this is because of running a profit or more money being pumped in. Based on everything that happened to them in the last 12 months the latter seems much more likely. 1 Quote Link to comment Share on other sites More sharing options...
sirscottyoung Posted March 3 Share Posted March 3 On 28/02/2024 at 12:15, EdinburghBlue said: I’m increasingly wondering whether the “next to go” will be decided by liquidation/administration, rather than on the playing field. We are now in the reporting season for many clubs. Recently published accounts from East Fife and Peterhead make very interesting reading. In both cases auditors have raised concerns about “material uncertainty related to growing concern.” Peterhead lost £297k in the financial year to 31 May 2023. Net liabilities are £329k, meaning that the company is technically insolvent. Net current liabilities – sums that the club might have to find in the next 12 months – are £674k. And in the company’s lifetime it has total losses of £1650k i.e. the amount it has been subsidised by shareholders injecting capital. And there’s an individual note in the accounts that the club owes £275k to a former director, with no agreement in place on possible repayment, and a statement that “it is acknowledged that any request for repayment in demand would create significant cash flow difficulties for the football club and… Suitable repayment terms would have to be agreed… or fresh funding sought.” East Fife only lost £53k in the same financial year, a big improvement on the £189k loss in 2022. In contrast to Peterhead the club isn’t technically insolvent, but that is only because of the value of its land/property. It owes about £270k, with some of that on the basis of a guarantee that it won’t be called in the next 18 months. This is another company that has burned through shareholders’ investments, with total losses of around £500k over the years. In the 2022 financial year the average loss for the 17 SPFL 1/2 clubs whose accounts are available from Companies House was £113k. It rises to £155k if you include the two relegated clubs and the new arrivals from the Lowland League. More updates as more accounts become available. Just a wee FYI on east fife. The shareholders don't put money into the club especially not to the tune of £500k as per post. The money owed is for the clubs share in fixing the local sea walls/ docks around the stadium. As far as I can read into it, it's owed to a group of local businessmen and is unlikely to be recalled if at all from them. Others will know alot more than me on this case but it's not that we have had a pot of money that's been burned through at the club. 0 Quote Link to comment Share on other sites More sharing options...
McBrian Posted March 3 Share Posted March 3 1 hour ago, sirscottyoung said: Just a wee FYI on east fife. The shareholders don't put money into the club especially not to the tune of £500k as per post. The money owed is for the clubs share in fixing the local sea walls/ docks around the stadium. As far as I can read into it, it's owed to a group of local businessmen and is unlikely to be recalled if at all from them. Others will know a lot more than me on this case but it's not that we have had a pot of money that's been burned through at the club. IIRC Danskin agreed to a yearly sum of £50K from EFFC to upkeep the sea wall as part of the deal with Forth Ports for the land that to build the stadium on. 0 Quote Link to comment Share on other sites More sharing options...
strichener Posted March 4 Share Posted March 4 (edited) 23 hours ago, sirscottyoung said: Just a wee FYI on east fife. The shareholders don't put money into the club especially not to the tune of £500k as per post. That isn't what it means. The club has accumulated losses of 500k over many years, this has to be financed somehow and it East Fife's case it is from people buying shares over their par value (share premium account) in your case £615k. Edited March 4 by strichener 2 Quote Link to comment Share on other sites More sharing options...
EdinburghBlue Posted March 7 Author Share Posted March 7 (edited) On 03/03/2024 at 19:34, sirscottyoung said: Just a wee FYI on east fife. The shareholders don't put money into the club especially not to the tune of £500k as per post. The money owed is for the clubs share in fixing the local sea walls/ docks around the stadium. As far as I can read into it, it's owed to a group of local businessmen and is unlikely to be recalled if at all from them. Others will know alot more than me on this case but it's not that we have had a pot of money that's been burned through at the club. Strichener is basically spot-on. Over the years shareholders have put £665k into the club, but it's now worth only £161k. So the club has "burned through" £504k of shareholders funds. To put this another way it looks as if on average shareholders have paid about £4.15 per share and these are now worth £0.81 – assuming that the company could sell the ground for the amount shown in the accounts. Auditors don't refer to "material uncertainty… significant doubt about the company's ability to continue as a going concern" without reason. Although shareholders' funds are positive, the company's net current assets are very low indicating potential liquidity problems. On the issue of loans being from local businessmen who are unlikely to call them in, if these are personal loans they would likely be called in by the individual's estate on death, and if they have been made by a company if that were to fold the administrators/liquidators would almost certainly seek the money back. Of course it would be possible for the creditors to convert the amounts owed into equity in the company, but I would expect this would be at the low current value per share, so significantly diluting current ownership. Since one shareholder owns 52% of the company not sure that they would be happy with this. As I've said before, I'm not trying to get at one club in particular – although I really don't like the model of additional funds being pumped in by rich individuals every time a club is in financial difficulties – but rather the fact that there is a systemic financial problem for lower league clubs in Scotland. Edited March 10 by EdinburghBlue 0 Quote Link to comment Share on other sites More sharing options...
EdinburghBlue Posted March 7 Author Share Posted March 7 Some more updates: Clyde lost £98k in the last financial year. Net assets are down to £69k, so unless their financial position improves this year – which seems unlikely given their relegation undercurrent position – there's the potential for net assets to go negative in the next accounts. Share capital is £1608k, so the club has gone through £1548k of this. And while there has been a lot of talk on here about additional investments in the club, nothing has been reported to Companies House. Montrose lost £114k in the last financial year. They report shareholder funds of only £28k, but this would have been negative (i.e. technically insolvent) without an additional £44.2k of investment in the club. Net current liabilities are £131k, suggesting potential liquidity problems, and the club also has longer-term debt of £240k. The stadium is essentially mortgaged. Another year of losses at this level would lead to technical insolvency unless there were further investments in the club. Stirling Albion lost £181k. They reported £260k cash, so no immediate liquidity problems, but the club has essentially no assets. They have gone through £880k shareholders funds over the years. 0 Quote Link to comment Share on other sites More sharing options...
Glorious Purpose Posted March 7 Share Posted March 7 Our additional income (from a benefactor) will be in the accounts for this season. The figures you are addressing are from the season ending 2022-23 which was before this "investment" was secured. 0 Quote Link to comment Share on other sites More sharing options...
EdinburghBlue Posted March 7 Author Share Posted March 7 (edited) Alloa's accounts are a bit difficult to understand. The bottom line was a loss of £190k, and this appears to make the company technically insolvent with net current assets of (£153k). However, these include a loan from the owner of £240k, which was converted into shares after the date of the balance sheet, along with another £160k investment. So the owner has shoved in £400k to prop the company up. In the face of it the company appears wealthy, with shareholders' funds of £1060k, but much of this is the revaluation reserve, leaving net shareholder funds of about £120k. The company values the ground at £1.4M, but I doubt it would be worthless unless it came with planning permission for redevelopment. But this sort of analysis is probably meaningless for a club owned by one individual who has the wherewithal to put in whatever is necessary to cover ongoing losses. Edited March 10 by EdinburghBlue 0 Quote Link to comment Share on other sites More sharing options...
Stag Nation Posted March 7 Share Posted March 7 24 minutes ago, EdinburghBlue said: Alloa's accounts are a bit difficult to understand. The bottom line was a loss of £190k, and this appears to make the company technically insolvent with net current assets of (£153k). The profit and loss account has no direct bearing on (in)solvency: the £190k loss is irrelevant as it is not a liability. What matters is the balance sheet. In particular, whether enough assets are realisable to meet current liabilities by their due dates. 0 Quote Link to comment Share on other sites More sharing options...
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