Annual accounts released

[Paul Waine]

The accounts make interesting reading - along with comparing them with the accounts (not just the numbers) for the previous season.

Note 24. Events after the reporting date, report players in and players out after each the respective reporting dates.

Key Performance Indicators: - 2019/20 - 2018/19 - 2017/18
League position; 10th; 15th; 7th;
FA Cup; 4th round; 4th round; 3rd round;
Carabao Cup; 2nd round; 3rd round; 3rd round;
Average Home league gate: 20,268; 20,534; 20,688;
Wage:Turnover ratio: 70.20%; 62.86%; 58.72%.
Wages adjusted for comparable 12-months period.

The four home games without fans are not counted in calculating the average home league gates. Would these 4 games - Watford, Sheff Utd, L'pool and Norwich have pushed up the season's average? (I'd forgotten that we'd got 2 relegated sides and the Premier League winners in those 4 games).

Of course, I've added the 2017/18 KPIs - taken from the previous season's accounts.

I've not calculated a wage/turnover figure on the basis that covid-19 and no fans never happened. Of course, that would have reduced the 70.20% ratio as the turnover would have been higher.

[Newcastleclaret93]

Tarks is most likely going to leave.

That's his wages and whatever fee we get for him.
One year left, so circa £20-30 million, maybe.

One would hope our scouting team have targets lined up...

To be fair I’m including that? If my understanding is correct we would technically only get 15m from a 20m sale of Tarks. Then we have the Chinese rebate to pay circa 7-8m.

That leaves us 7-8m to play with not taking into account the wages of the three new owners, I imagine they will all be earning 7 figures as a minimum.

Does not leave a lot of money to sign players with. Possibly the plan is to sell Pope and Tarks

[jojomk1]

Hi CT, are you suggesting that Mike Garlick was making too many footballing decisions, who the club should sign and who the club should let go? Is that's what's behind Sean Dyche referencing, as reported by Sky Sports today, that Alan Pace will leave all the football decisions to SD? Where did Ben Gibson fit in their relationship? Similar question re Joe Hart?

UTC

Same question could be asked of the Vydra signing

But I don't think Garlick signed Crouchy

[GodIsADeeJay81]

To be fair I’m including that? If my understanding is correct we would technically only get 15m from a 20m sale of Tarks. Then we have the Chinese rebate to pay circa 7-8m.

That leaves us 7-8m to play with not taking into account the wages of the three new owners, I imagine they will all be earning 7 figures as a minimum.

Does not leave a lot of money to sign players with. Possibly the plan is to sell Pope and Tarks

That's why it's been so important that the club grows its revenue streams, something many people on here cannot seem to grasp.

Besides, we don't know what % the club would give Dyche, what cut Brentford get etc.

They may not use the Tarks money to pay the TV rebate amount for example.

[Sproggy]

You can see why the manager gets frustrated. Chairman publicly states we'll lose 50 million so there's no money to spend. Manager saying finances are fine and we need to stretch.

Club breaks even.

Hopefully the new chairman has a bit more integrity.

[ClaretTony]

The four home games without fans are not counted in calculating the average home league gates. Would these 4 games - Watford, Sheff Utd, L'pool and Norwich have pushed up the season's average? (I'd forgotten that we'd got 2 relegated sides and the Premier League winners in those 4 games).

The four games with no crowds at home were Watford, Sheffield United, Wolves and Brighton.

[TheFamilyCat]

You can see why the manager gets frustrated. Chairman publicly states we'll lose 50 million so there's no money to spend. Manager saying finances are fine and we need to stretch.

Club breaks even.

Hopefully the new chairman has a bit more integrity.

Didn't the chairman say we could lose £50m if the season didn't finish?

[Chester Perry]

Didn't the chairman say we could lose £50m if the season didn't finish?

he did, more specifically it was IF the season did not finish and there was no indication of when football would return by the end of July - no matter how many times it is pointed out on here there are some who still choose to ignore it

[Newcastleclaret93]

That's why it's been so important that the club grows its revenue streams, something many people on here cannot seem to grasp.

Besides, we don't know what % the club would give Dyche, what cut Brentford get etc.

They may not use the Tarks money to pay the TV rebate amount for example.

Yes I just don’t know where else the money will come from? From what I gather there is next to nothing in the coffers and the club will only operate with the funds the club raises.

Club definitely needs to increase revenue just not sure how they will increase it.

[ClaretTony]

Yes I just don’t know where else the money will come from? From what I gather there is next to nothing in the coffers and the club will only operate with the funds the club raises.

Club definitely needs to increase revenue just not sure how they will increase it.

I think you might have gathered wrong with the money in the coffers

[ClaretTony]

Yes I just don’t know where else the money will come from? From what I gather there is next to nothing in the coffers and the club will only operate with the funds the club raises.

Club definitely needs to increase revenue just not sure how they will increase it.

I think you might have gathered wrong with the money in the coffers

[Newcastleclaret93]

I think you might have gathered wrong with the money in the coffers

What’s changed Tony? Thought the big news break was that 50m was given to the ex owners as part of the deal?

[Chester Perry]

I think you might have gathered wrong with the money in the coffers

Tony it looks like the money at July 31 2020 in the accounts included both the final season monies of 2019/20 and the first TV payment of the current season

[Chester Perry]

What’s changed Tony? Thought the big news break was that 50m was given to the ex owners as part of the deal?

The story was circa £30m of the £50m - £55m that the club had in the bank at the time

[Paul Waine]

The four games with no crowds at home were Watford, Sheffield United, Wolves and Brighton.

Hi CT, and thanks. Whoops, yes, I rushed those 4 names. It's funny how memories are distorted when we can't go on games. I remember last season we were the only team to take a point at Liverpool - though this record has changed a little following our victory at Anfield this season. And, I had plans to go to Norwich, the last away game of the original (normal) season.

Given these 4 fixtures, I'm more confident in concluding that if these games had been open to fans, our full 19 home game average would have fallen below the previous season.

UTC

[claretgilly]

https://twitter.com/kieranmaguire/statu ... 32960?s=21

Thread here is decent

[Chester Perry]

https://twitter.com/kieranmaguire/statu ... 32960?s=21

Thread here is decent

This was on the thread already

We will probably have to wait a until Wednesday or Thursday for Swiss Ramble at the earliest as both Sheffield United and West Brom released their accounts before us this weekend

[aggi]

Tony it looks like the money at July 31 2020 in the accounts included both the final season monies of 2019/20 and the first TV payment of the current season

That would tie in with Accruals and deferred income increasing by £30m.

[Paul Waine]

Tony it looks like the money at July 31 2020 in the accounts included both the final season monies of 2019/20 and the first TV payment of the current season

Hi CP, do you have other sources that indicate that the first instalment of 2020/21 season tv money was received on or before 31st July by the club? Do you have an estimate of this figure? Is it mentioned somewhere in the MMT thread?

I notice that Note 16 Creditors Amounts falling due within one year, on page 26 includes "accruals and deferred income" of £56 million, compared with £24 million in the previous accounts - an increase of £32 million.

Also, Note 27 Cash Generated from Group Operations, page 29, shows £41 million contribution to cash generation from increase in creditors.

For those who aren't familiar with accounting terms "accruals" are costs/expenses/liabilities that have been incurred, but have not yet been invoiced by the supplier, thus recognised as an accrual rather than in the trade creditors ledger. And, "deferred income" can refer to money that has been received before it is due. Both these terms - and prepayments on the debtors side - are included in accounts so that income and expenses are always matched to the correct accounting period.

Conclusion: given that creditors have increased by £32 million, it means that at least £32 million of the £80 million cash figure includes money that is not due to any "success" in 2019/20. We would be wrong to think that "we had £80 million cash in the bank... where were the Premier League starters that we could have signed with all the cash?"

UTC

[Devils_Advocate]

We did have £80m in the bank though and at the next accounts we will see what income we have received since and what costs we have incurred.

I assume this time next year we should be able to see what impact (if any) the takeover had with respect to the cash in the bank figure.

[Chester Perry]

Hi CP, do you have other sources that indicate that the first instalment of 2020/21 season tv money was received on or before 31st July by the club? Do you have an estimate of this figure? Is it mentioned somewhere in the MMT thread?

I notice that Note 16 Creditors Amounts falling due within one year, on page 26 includes "accruals and deferred income" of £56 million, compared with £24 million in the previous accounts - an increase of £32 million.

Also, Note 27 Cash Generated from Group Operations, page 29, shows £41 million contribution to cash generation from increase in creditors.

For those who aren't familiar with accounting terms "accruals" are costs/expenses/liabilities that have been incurred, but have not yet been invoiced by the supplier, thus recognised as an accrual rather than in the trade creditors ledger. And, "deferred income" can refer to money that has been received before it is due. Both these terms - and prepayments on the debtors side - are included in accounts so that income and expenses are always matched to the correct accounting period.

Conclusion: given that creditors have increased by £32 million, it means that at least £32 million of the £80 million cash figure includes money that is not due to any "success" in 2019/20. We would be wrong to think that "we had £80 million cash in the bank... where were the Premier League starters that we could have signed with all the cash?"

UTC

Paul - I know roughly when the payments are due and that the first payment is the biggest (though it is based on the equal share income not merit/tv appearance income) - it was actually Kieran Maguire who said our cash holding it was around £30m up as a result of the first payment this season.

Of course if we had not had the pandemic the July 31 cash position would have been £91m - as it include the £10.5m of revenue the club said it had lost.

What these numbers also show is that the club maintained it's policy if budgeting for 17t/16th place finish in the league in relation to turnover.

[Chester Perry]

We did have £80m in the bank though and at the next accounts we will see what income we have received since and what costs we have incurred.

I assume this time next year we should be able to see what impact (if any) the takeover had with respect to the cash in the bank figure.

The cash in the bank is a different accounting approach to the trading deferral of income into the next season. It is standard practice to treat the two differently in this way.

The next set of accounts will definitely show the impacts of the takeover including
- the value of the inter-company loan
- the value of the MSD loan and the rate of interest - this loan may also double as as a kind of overdraft facility (in the way West Ham are using theirs) i.e. there is a maximum facility the club can use but they may not necessarily be using it all at any given time. That may account for the different valuation reports we heard in Dec/Jan about the MSD loan. All that would have to be revealed if it was what the agreement entailed.

[Paul Waine]

Paul - I know roughly when the payments are due and that the first payment is the biggest (though it is based on the equal share income not merit/tv appearance income) - it was actually Kieran Maguire who said our cash holding it was around £30m up as a result of the first payment this season.

Of course if we had not had the pandemic the July 31 cash position would have been £91m - as it include the £10.5m of revenue the club said it had lost.

Thanks, CP. so Kieran Maguire has indicated BFC has rec'd £30 million tv money on or before 31st July as the first instalment of tv money for 2020/2021. That sounds like a good source and ties back nicely to the £32 million estimate of "deferred income" in the accounts to 31st July 2020.

You say "if we had not had the pandemic" - we'd have had an extra £10.5 million of revenue. But, also, if we'd not had the pandemic the season would have been completed before 30th June and we wouldn't be seeing accounts that include figures that relate to both the 2019/20 season and the 2020/21 season. Instead, we'd have seen accounts to 30th June 2020 and, all other things being equal, we'd have had a cash balance of £50 to £60 million.

I wonder, btw, if we will see the year end switched back to 30th June at some time?

UTC

[Chester Perry]

Thanks, CP. so Kieran Maguire has indicated BFC has rec'd £30 million tv money on or before 31st July as the first instalment of tv money for 2020/2021. That sounds like a good source and ties back nicely to the £32 million estimate of "deferred income" in the accounts to 31st July 2020.

You say "if we had not had the pandemic" - we'd have had an extra £10.5 million of revenue. But, also, if we'd not had the pandemic the season would have been completed before 30th June and we wouldn't be seeing accounts that include figures that relate to both the 2019/20 season and the 2020/21 season. Instead, we'd have seen accounts to 30th June 2020 and, all other things being equal, we'd have had a cash balance of £50 to £60 million.

I wonder, btw, if we will see the year end switched back to 30th June at some time?

UTC

If you wind back to the 31st of June in a normal season we would not have had the £6m - £7m of July costs either.

I suspect we will stay at 31st July going forward - that is what Sheffield United and West Brom have indicated, having made the accounting date change for the same reasons as us for last season

[dsr]

I wonder, btw, if we will see the year end switched back to 30th June at some time?

UTC

I think we will have to. we don't want to be playing the early rounds of the Europa League in the wrong financial year, do we.

[Chester Perry]

In response to the little short lived disagreement which has been removed - my expectations for the next accounts is that we will still have a positive cash holding at the end of this season just reduced substantially, primarily as a result of the inter-company loan

[claretandy]

I agree

if you take away the PAYE and pension costs the increase is about 50% of the expected place money which seems an incentivised approach (perhaps overly so) - There were some notable new deals that season for Wood and Dwight - was Pope done as well? - plus you would expect Jay to be on a decent wack

In Leeds latest accounts, it states that 35m in bonus payments for stopping up, they paid 20m promotion bonus, 18.5m in add-ons for stopping up and player appearances.

[Paul Waine]

If you wind back to the 31st of June in a normal season we would not have had the £6m - £7m of July costs either.

I suspect we will stay at 31st July going forward - that is what Sheffield United and West Brom have indicated, having made the accounting date change for the same reasons as us for last season

Hi CP, "30 days has September, April, June and November...." thus "30th of June," please.

What are the July costs, I assume these include players' wages, so it's only a case of putting these wages into the correct period. July is, more usually, pre-season, so players' wages fit into the same accounting period as the tv money received for the new season.

I still can't get my head around the situation with the out of contract players. It appears as though their contracts ended on 30th June and so they were not obliged to play in the 9 end of season games - in June and July. Yet, there were reports the club had to pay them for both the months of June and July.

I hope the club goes back to 30th June year end.

Looking forward to today's game in a little over 2 hours time.

UTC

[claretandy]

Hi CP, "30 days has September, April, June and November...." thus "30th of June," please.

What are the July costs, I assume these include players' wages, so it's only a case of putting these wages into the correct period. July is, more usually, pre-season, so players' wages fit into the same accounting period as the tv money received for the new season.

I still can't get my head around the situation with the out of contract players. It appears as though their contracts ended on 30th June and so they were not obliged to play in the 9 end of season games - in June and July. Yet, there were reports the club had to pay them for both the months of June and July.

I hope the club goes back to 30th June year end.

Looking forward to today's game in a little over 2 hours time.

UTC

Isn't it the situation that even though contracts expire at June 30, wages are still paid in July ? I'm sure I've seen that somewhere before.

[aggi]

In Leeds latest accounts, it states that 35m in bonus payments for stopping up, they paid 20m promotion bonus, 18.5m in add-ons for stopping up and player appearances.

That's an interesting disclosure. I wonder why Leeds' auditors deemed it necessary but others don't.

[aggi]

The cash in the bank is a different accounting approach to the trading deferral of income into the next season. It is standard practice to treat the two differently in this way.

The next set of accounts will definitely show the impacts of the takeover including
- the value of the inter-company loan
- the value of the MSD loan and the rate of interest - this loan may also double as as a kind of overdraft facility (in the way West Ham are using theirs) i.e. there is a maximum facility the club can use but they may not necessarily be using it all at any given time. That may account for the different valuation reports we heard in Dec/Jan about the MSD loan. All that would have to be revealed if it was what the agreement entailed.

There's also a hefty amount of season ticket money for the upcoming season in that cash balance. It also needs to be viewed in the context of our debtors dropping by £15m. I wonder if a lot of the transfer debts become payable in July?

[NewClaret]

he did, more specifically it was IF the season did not finish and there was no indication of when football would return by the end of July - no matter how many times it is pointed out on here there are some who still choose to ignore it

Does make you wonder why he chose to say it though, given the season did restart and we didn’t lose £50m???

[GodIsADeeJay81]

Does make you wonder why he chose to say it though, given the season did restart and we didn’t lose £50m???

He said it before the season restarted though.
We will still be losing money this season, no Matchday revenue, TV rebates and anything we need for Covid related things to allow fan reentry.
Season ticket money for this season is being used for next season so that's going to be a good couple of million lost.

[NewClaret]

Thanks, CP. so Kieran Maguire has indicated BFC has rec'd £30 million tv money on or before 31st July as the first instalment of tv money for 2020/2021. That sounds like a good source and ties back nicely to the £32 million estimate of "deferred income" in the accounts to 31st July 2020.

You say "if we had not had the pandemic" - we'd have had an extra £10.5 million of revenue. But, also, if we'd not had the pandemic the season would have been completed before 30th June and we wouldn't be seeing accounts that include figures that relate to both the 2019/20 season and the 2020/21 season. Instead, we'd have seen accounts to 30th June 2020 and, all other things being equal, we'd have had a cash balance of £50 to £60 million.

I wonder, btw, if we will see the year end switched back to 30th June at some time?

UTC

Totally agree. I think the £55m cash pile from one of the ALK reports (Guardian) looks about right. Cash has grown £15-20m each season for the last three so that would be ballpark right area.

[scouseclaret]

Probably being thick here, but the cash statement refers to purchase of intangible assets of c£46m. We bought Brownhill, Jrod (only half paid up-front), BPF and Pieters during the period, which would account for less than half of that number.

What have I missed?

[fidelcastro]

Exciting times.

[Chester Perry]

That's an interesting disclosure. I wonder why Leeds' auditors deemed it necessary but others don't.

That one is down to a specific legal case that is on going - a player they had on loan last season and were obliged to buy on promotion - the players registration was up end of May their season finished in July and they did not want him, Was in the MMT thread over the summer

[Chester Perry]

There's also a hefty amount of season ticket money for the upcoming season in that cash balance. It also needs to be viewed in the context of our debtors dropping by £15m. I wonder if a lot of the transfer debts become payable in July?

That is when you expect them to be paid - The numbers where supposed to be relatively even in and out, though as I commented yesterday, it appears that someone has managed to negotiate an extension in paying to us. Out outgoing payments appear to include around £1m of conditional payments

[Chester Perry]

Isn't it the situation that even though contracts expire at June 30, wages are still paid in July ? I'm sure I've seen that somewhere before.

It is, I have posted about that a few times, specifically last summer and those OoC players

[Chester Perry]

Probably being thick here, but the cash statement refers to purchase of intangible assets of c£46m. We bought Brownhill, Jrod (only half paid up-front), BPF and Pieters during the period, which would account for less than half of that number.

What have I missed?

I raised that yesterday - £29m plus change on players what is the rest for?

[aggi]

Probably being thick here, but the cash statement refers to purchase of intangible assets of c£46m. We bought Brownhill, Jrod (only half paid up-front), BPF and Pieters during the period, which would account for less than half of that number.

What have I missed?

I've not looked at this specifically but generally agents' fees and signing on fees (including contact renewals) will be in here too.

[aggi]

Also, having had a quick look that's the cash outgoings. At the end of the previous season we owed £14m on transfers, this season we owed £2m. That £12m will account for a large amount of your difference.

[NewClaret]

He said it before the season restarted though.
We will still be losing money this season, no Matchday revenue, TV rebates and anything we need for Covid related things to allow fan reentry.
Season ticket money for this season is being used for next season so that's going to be a good couple of million lost.

I know. My point was more why make the statement at all, when so much was up in the air? It was a strange one to say the least.

[IanMcL]

Odd if a chairman foists a player on a manager.
He'll be taking training next!

[HahaYeah]

Odd if a chairman foists a player on a manager.
He'll be taking training next!

Can't get my head round it at all.

[GodIsADeeJay81]

I know. My point was more why make the statement at all, when so much was up in the air? It was a strange one to say the least.

Fans - we demand more noise from the owner.

Chairman/Co owner - ok

Fans - no, not like that, shush.

[Paul Waine]

Probably being thick here, but the cash statement refers to purchase of intangible assets of c£46m. We bought Brownhill, Jrod (only half paid up-front), BPF and Pieters during the period, which would account for less than half of that number.

What have I missed?

Hi scouse, the £46 million is a cash movement item. It doesn't represent the transfer values of the incoming players that you name, but all the cash paid out in the period in respect of those players and other players that were signed in previous periods, where some money was paid out in the 13 months of 2019/20. Plus, I expect it includes agent fees paid out for players transferred into the club and any agent fees paid out on the re-negotiation/extension of player contracts that took place in the period (I'm assuming that agents don't have to wait a long time to receive their fees).

UTC

[claretandy]

It would be a lot more simpler if they accounts showed, who we've bought, what we've paid, and what's still to pay.

[NewClaret]

Fans - we demand more noise from the owner.

Chairman/Co owner - ok

Fans - no, not like that, shush.

Thing is, in Garlicks case, he was otherwise pretty silent but then issued a statement out-of-the-blue prophesising doom.

It was all just very strange that a few weeks after lockdown he was predicting the financial implications. Perhaps made more strange by these results showing the cash pile sat at £80m a few months later.

[Chester Perry]

It would be a lot more simpler if they accounts showed, who we've bought, what we've paid, and what's still to pay.

you mean like they do in Italy

surprisingly, given the who owns them. Juventus is the most open in this of all big clubs - In this country only Chesterfield give this information I believe