Club accounts

bigmart

bigmart
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Ian Muir
I see the accounts are on companies house, overall loss was £613,000 down from £1.9m loan to pj repaid, this will be for 2018/19.

If anybody is knowledgeable on this type of thing perhaps they could summarise the figures.

From what I can make of it we appear to be in not too bad a position, certainly compared to other clubs but the commercial income reduced.
 
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Jason Koumas / John Morrissey
I think we effectively broke even on the operating side, as the £600k loss includes £300k of depreciation and one-off medical costs of £300k (not sure what these costs are, as I thought our major injury problems were in the following season), plus some further one-off costs in relation to the Indonesian investment.

A major improvement on the position four or five years ago.

The commercial income was down, but footballing income was massively increased, as you would expect after our return to the Football League. It is margin rather than turnover that matters ultimately, and some of the commercial activities in previous years might have been loss making. It is difficult to know without seeing a full breakdown of the income streams.
 

ADD

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Just looking at profits is not strictly relevant though obviously it gives an indication. Losses down from almost £2m to £613k is the headline number but for example depreciation was £250k which is effectively only a book entry especially considering that PP and the other owned land has not been revalued since 1987 so we are depreciating PP by 2% every year even though it will be worth millions more now than it was then....Total value of the assets is only £6.3m which includes £2.4m spent on improvements to the training ground.
Better to look at cashflow....
Cashflow from Operations ie day to day business was £320k positive compared with £753k outflow the prior year so that is a £1.07m improvement in trading cashflow....
There were £1.2m of loans secured on the club's assets - reduced by £500k since the date of the accounts which was June 2019 - that was I believe the final instalment due to Peter Johnson.
Football income more than doubled - reflecting being back in the Football League.
All in all given, the accounts are short form all we can say is that after being decimated during the NL days MP has turned the finances round. The club is now valued at £14m based on the Santini investment and there is little debt.
The trick now will be to mitigate the impacts of relegation - don't forget these accounts are for the year to June 2019 so there is nothing in here in respect of this season just ended when we could expect that trading would have been better still due more EFL money and bigger gates.... There is also no impact of the Santini investment since that did not come until later in 2019.
 
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Jason Koumas / John Morrissey
Just looking at profits is not strictly relevant though obviously it gives an indication. Losses down from almost £2m to £613k is the headline number but for example depreciation was £250k which is effectively only a book entry especially considering that PP and the other owned land has not been revalued since 1987 so we are depreciating PP by 2% every year even though it will be worth millions more now than it was then....Total value of the assets is only £6.3m which includes £2.4m spent on improvements to the training ground.
Better to look at cashflow....
Cashflow from Operations ie day to day business was £320k positive compared with £753k outflow the prior year so that is a £1.07m improvement in trading cashflow....
There were £1.2m of loans secured on the club's assets - reduced by £500k since the date of the accounts which was June 2019 - that was I believe the final instalment due to Peter Johnson.
Football income more than doubled - reflecting being back in the Football League.
All in all given, the accounts are short form all we can say is that after being decimated during the NL days MP has turned the finances round. The club is now valued at £14m based on the Santini investment and there is little debt.
The trick now will be to mitigate the impacts of relegation - don't forget these accounts are for the year to June 2019 so there is nothing in here in respect of this season just ended when we could expect that trading would have been better still due more EFL money and bigger gates.... There is also no impact of the Santini investment since that did not come until later in 2019.
Profit is still the most relevant figure year on year for comparative purposes and you will notice I said above that depreciation should be added back to give a truer indication of operating performance. You must have missed that bit......
 
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Cash flow includes one off major capital and financing transactions, so does not give as reliable an indication of trading performance as profit. Even the operating element of cashflow includes the settlement of debtors and creditors from other periods, so does not give as reliable an indication of performance in the twelve month period in question as the P&L.

Cash flow is most useful in assessing whether a business will go bump in the short or medium term; the P&L gives a better indication of trading performance over a number of years.
 
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Just looking at profits is not strictly relevant though obviously it gives an indication. Losses down from almost £2m to £613k is the headline number but for example depreciation was £250k which is effectively only a book entry especially considering that PP and the other owned land has not been revalued since 1987 so we are depreciating PP by 2% every year even though it will be worth millions more now than it was then....Total value of the assets is only £6.3m which includes £2.4m spent on improvements to the training ground.
Better to look at cashflow....
Cashflow from Operations ie day to day business was £320k positive compared with £753k outflow the prior year so that is a £1.07m improvement in trading cashflow....
There were £1.2m of loans secured on the club's assets - reduced by £500k since the date of the accounts which was June 2019 - that was I believe the final instalment due to Peter Johnson.
Football income more than doubled - reflecting being back in the Football League.
All in all given, the accounts are short form all we can say is that after being decimated during the NL days MP has turned the finances round. The club is now valued at £14m based on the Santini investment and there is little debt.
The trick now will be to mitigate the impacts of relegation - don't forget these accounts are for the year to June 2019 so there is nothing in here in respect of this season just ended when we could expect that trading would have been better still due more EFL money and bigger gates.... There is also no impact of the Santini investment since that did not come until later in 2019.
Thanks, ADD.
 

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Profit is still the most relevant figure year on year for comparative purposes and you will notice I said above that depreciation should be added back to give a truer indication of operating performance. You must have missed that bit......
No I didn't miss that - I referred to it and pointed out we were depreciating an asset which is valued on a historical basis.
 
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No I didn't miss that - I referred to it and pointed out we were depreciating an asset which is valued on a historical basis.
I was referring to your comment that I had not mentioned adding back depreciation.

I had, in the first line of my initial post.
 

ADD

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Cash flow includes one off major capital and financing transactions, so does not give as reliable an indication of trading performance as profit. Even the operating element of cashflow includes the settlement of debtors and creditors from other periods, so does not give as reliable an indication of performance in the twelve month period in question as the P&L.

Cash flow is most useful in assessing whether a business will go bump in the short or medium term; the P&L gives a better indication of trading performance over a number of years.
I specifically referenced cash from operations and the numbers I quoted were those numbers. Cash from Operations DOES NOT INCLUDE capex or financing so it reflects true trading performance. Debtors and creditor adjustments do yes impact but if you have a look at our accounts you can see that there is no significant relative movement in those.

Companies do not go bust due to a lack of profits - we have after all £5.5m of retained losses. Companies go bust due to a lack of cash when they can't pay their bills and when other companies stop supplying them.
 

ADD

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I was referring to your comment that I had not mentioned adding back depreciation.

I had, in the first line of my initial post.
You need to re- read my post - I didn't reference you at all so I have no idea what you are talking about now! I was referring to Bigmart's post when he referred only to p&L and asked for some summary from knowledgeable people.
 
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Jason Koumas / John Morrissey
I specifically referenced cash from operations and the numbers I quoted were those numbers. Cash from Operations DOES NOT INCLUDE capex or financing so it reflects true trading performance. Debtors and creditor adjustments do yes impact but if you have a look at our accounts you can see that there is no significant relative movement in those.

Companies do not go bust due to a lack of profits - we have after all £5.5m of retained losses. Companies go bust due to a lack of cash when they can't pay their bills and when other companies stop supplying them.
I have already stated that cash flow is most relevant when assessing if, or when, a business is likely to go bust.

However, I think it is clear that at the last year end we were not in imminent danger of going bust. The real interest in the accounts for most readers on here is in assessing our trading performance relative to prior years. That is best done by looking at the P&L.

I was not performing a detailed analytical review of the entire financial statements. I was making a couple of brief comments on profitability and operating performance.
 
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Jason Koumas / John Morrissey
You need to re- read my post - I didn't reference you at all so I have no idea what you are talking about now! I was referring to Bigmart's post when he referred only to p&L and asked for some summary from knowledgeable people.
You implied that my comments on profit took no account of non-cash items like depreciation, when they did.
 
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Ian

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There are championship clubs (and quite a few of them) on the brink of collapse because of their overspending so I think in times like these we have to be mindful of that. Like RLC mentions above and is an excellent point, the club were not prepared to take those risks.

Supporters want instant success but it’s a steady mountain we climb. We are in a significantly better position and a more attractive club then we were years ago. A lot of people forget that.
 

bigmart

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Thanks.for the summary guys, so all.in all decent figures, a good turnaround and we appear to be in a comfortable position especially compared to a number of other lower league clubs.
 
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I specifically referenced cash from operations and the numbers I quoted were those numbers. Cash from Operations DOES NOT INCLUDE capex or financing so it reflects true trading performance. Debtors and creditor adjustments do yes impact but if you have a look at our accounts you can see that there is no significant relative movement in those.

Companies do not go bust due to a lack of profits - we have after all £5.5m of retained losses. Companies go bust due to a lack of cash when they can't pay their bills and when other companies stop supplying them.
Just to pick you up on a couple of things I did not mention: from looking at the accounts in more detail, there are massive movements on prepayments, trade debtors and accruals, all of which mean the operating cash flow figure is completely distorted and does not truly reflect current year trading activity.

And on a point of basic principle, a cash flow statement can never accurately reflect current year trading activity as it is not prepared using the accruals or 'matching' concept, one of the key accounting principles (all income must be directly matched to the expenditure to which it relates).
 
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Charlton1975

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Just to pick you up on a couple of things I did not mention: from looking at the accounts in more detail, there are massive movements on prepayments, trade debtors and accruals, all of which mean the operating cash flow figure is completely distorted and does not truly reflect current year trading activity.

And on a point of basic principle, a cash flow statement can never accurately reflect current year trading activity as it is not prepared using the accruals or 'matching' concept, one of the key accounting principles (all income must be directly matched to the expenditure to which it relates).
Jesus have a day off will you :rolleyes:
 
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