Burnley Football Club - first accounts under ALK

[Paul Waine]

What are people expecting - full or abbreviated accounts ?

Same as last year. They were signed by A Pace Director and dated 1 March 2021.

[Tall Paul]

No such thing as abbreviated accounts these days.

[dsr]

No such thing as abbreviated accounts these days.

Yes there is. They've just got a different name, but you can still file reduced accounts (eg. No profit and loss account) if your company is small enough.

[Tall Paul]

Yes there is. They've just got a different name,

So there isn't then.

[dsr]

So there isn't then.

My apologies. I thought you were trying to be helpful with some advice, inaccurate though it was, about abbreviated accounts.

Had I realised you were being pitifully nitpicky in an attempt to mislead, I would have phrased my answer differently.

[Chester Perry]

and still we wait - The Premier League got them back in December I think

[IanMcL]

Hmmm...

[Down_Rover]

Since lockdown it does take several days for documents to appear on public view post submission. Companies house check the docs first

They should appear shortly

[Paul Waine]

and still we wait - The Premier League got them back in December I think

Hi CP, what makes you think the Premier League rec'd BFC's accounts in December? Wouldn't there be the risk of leaks, not just Burnley, but other clubs if the PL rec'd them so early? Wouldn't it suggest that investigations into breaches of financial rules could be initiated shortly after the PL receiving clubs' accounts? Or, create legal arguments from clubs that if the PL had had the accounts for some time and done nothing that it is too late to do something later on?

Of course, I'm giving the PL the benefit of the doubt, assuming that they'd receive accounts for the purposes of checking if financial regulations were being observed.

[aggi]

Hi CP, what makes you think the Premier League rec'd BFC's accounts in December? Wouldn't there be the risk of leaks, not just Burnley, but other clubs if the PL rec'd them so early? Wouldn't it suggest that investigations into breaches of financial rules could be initiated shortly after the PL receiving clubs' accounts? Or, create legal arguments from clubs that if the PL had had the accounts for some time and done nothing that it is too late to do something later on?

Of course, I'm giving the PL the benefit of the doubt, assuming that they'd receive accounts for the purposes of checking if financial regulations were being observed.

It's the 1 March, not December, that they need to be submitted to the Premier League by.
Each Club shall by 1 March in each Season, submit to the Board a copy of its Annual Accounts in respect of its most recent financial year or if the Club considers it appropriate or the Board so requests the Group Accounts of the Group of which it is a member (in either case such accounts to be prepared and audited in accordance with applicable legal and regulatory requirements) together with a copy of the directors’ report for that year and a copy of the auditors’ report on those accounts.

[Paul Waine]

BURNLEY FC HOLDINGS LIMITED STRATEGIC REPORT FOR THE YEAR ENDED 31 JULY 2021

https://www.burnleyfootballclub.com/mor ... b-accounts

Accounts are now on the club's website.

Just starting reading.

Not on Companies House, yet.

[RVclaret]

A loss of just 2.5m for the year is the first most surprising / positive I've come across, despite a 20m loss in revenue due to Covid/league position.

Wages also reduced played a part.

[Nori1958]

Have I read it right that tens of millions have not been taken out of the club?

[GodIsADeeJay81]

Have I read it right that tens of millions have not been taken out of the club?

I was just wondering that too.

If so, some large slices of humble pie need to be ordered.

[aggi]

So looks like ~ £37m in cash came from the club and another £65m from a loan (MSD presumably) was used to finance the takeover.

A large part of the loan repayments repayable on relegation.

Nothing too unexpected. Not much that looks particularly beneficial to the club.

[Nori1958]

I was just wondering that too.

If so, some large slices of humble pie need to be ordered.

Iam no expert, I was just going off the chairmans article on the website

[RVclaret]

Have I read it right that tens of millions have not been taken out of the club?

There has been a decrease of 30m of the 80m cash in the bank to leave 50m still.

From what I've read/understand, the 67m loan is not due to be repaid until 2025 UNLESS we get relegated, then a larger portion is due immediately. I'd imagine the cash reserves of 50m would be used in this case. The notes also talk a lot about player trading if we go down.

[ClaretTony]

The notes also talk a lot about player trading if we go down.

I would think that's inevitable

[clarethomer]

So how much did ALK pay for the club then? Do we know?

I saw quotes of debts likely to be £200m to fund the purchase?

[Paul Waine]

There has been a decrease of 30m of the 80m cash in the bank to leave 50m still.

From what I've read/understand, the 67m loan is not due to be repaid until 2025 UNLESS we get relegated, then a larger portion is due immediately. I'd imagine the cash reserves of 50m would be used in this case. The notes also talk a lot about player trading if we go down.

We need to keep in mind that these accounts are for the y/end 31st July 2021 and that the cash balances reported at the y/end date includes an element of tv money that will be used to pay player wages for the following season.

[Newcastleclaret93]

Tell me if I’m wrong but it basically reads, if we stay up we are ok. If we go down we could be in trouble

[Paul Waine]

So how much did ALK pay for the club then? Do we know?

I saw quotes of debts likely to be £200m to fund the purchase?

There's been a lot of debate about how ClaretPete arrived at his "£200m debt" figure. To be fair to Pete, I don't think he was necessarily speaking of the accounts as at 31st July 2021.

[Nori1958]

There has been a decrease of 30m of the 80m cash in the bank to leave 50m still.

From what I've read/understand, the 67m loan is not due to be repaid until 2025 UNLESS we get relegated, then a larger portion is due immediately. I'd imagine the cash reserves of 50m would be used in this case. The notes also talk a lot about player trading if we go down.

Would some of those cash reserves not have been used due to drops in income during Covid?

[IanMcL]

It doesn't include the debt in the headlines, it seems to me.

Shows assets of over £60m and a creditor, payable in a tear of £65m.

So does that mean the former owner has left the club's money in the bank, for one year, at market interest but wants it in own pocket after a year?

Question not statement

[Paul Waine]

Tell me if I’m wrong but it basically reads, if we stay up we are ok. If we go down we could be in trouble

We've always known that relegation will impact on revenues, and parachute payments aren't as high as Premier League tv money.

Relegation will also be mitigated by relegation clauses cutting player costs - and there will be "player trading."

Yes, a "significant" amount of the £65 million debt from MSD will be repayable - but the accounts don't say what that "significant" amount will be.

Best that we wait and see where we finish the season. I'm sure we will learn how it impacts finances if the club doesn't finish higher than 18th.

UTC

[RVclaret]

Would some of those cash reserves not have been used due to drops in income during Covid?

Doesn't appear that way no. Income statement shows a loss of just 2.5m for the year. Interest paid was 2.7m so without that it was a break even year.

[Newcastleclaret93]

We've always known that relegation will impact on revenues, and parachute payments aren't as high as Premier League tv money.

Relegation will also be mitigated by relegation clauses cutting player costs - and there will be "player trading."

Yes, a "significant" amount of the £65 million debt from MSD will be repayable - but the accounts don't say what that "significant" amount will be.

Best that we wait and see where we finish the season. I'm sure we will learn how it impacts finances if the club doesn't finish higher than 18th.

UTC

Fair enough. I think we stay up now anyway so should be ok.

[RVclaret]

Fair enough. I think we stay up now anyway so should be ok.

You've turned optimistic. Must be a good sign!

[aggi]

Have I read it right that tens of millions have not been taken out of the club?

I think you've read it wrong. £37m was taken out.

[Paul Waine]

So looks like ~ £37m in cash came from the club and another £65m from a loan (MSD presumably) was used to finance the takeover.

A large part of the loan repayments repayable on relegation.

Nothing too unexpected. Not much that looks particularly beneficial to the club.

Hi aggi, we know the loan is from MSD because of the debenture/charges.

Interesting interest rate is Libor + 8%. I might have to read up on how Libor is being replaced...

[aggi]

There has been a decrease of 30m of the 80m cash in the bank to leave 50m still.

From what I've read/understand, the 67m loan is not due to be repaid until 2025 UNLESS we get relegated, then a larger portion is due immediately. I'd imagine the cash reserves of 50m would be used in this case. The notes also talk a lot about player trading if we go down.

Bear in mind that probably £35m of that £50m is premier league money relating to the following season. If we were relegated we wouldn't be recieving that.

We'd get some parachute payments, Chester probably has a better idea than I do of what they'd be. On the other hand wages would probably be much lower without a staying up bonus.

[RVclaret]

Bear in mind that probably £35m of that £50m is premier league money relating to the following season. If we were relegated we wouldn't be recieving that.

We'd get some parachute payments, Chester probably has a better idea than I do of what they'd be. On the other hand wages would probably be much lower without a staying up bonus.

I’m a bit unclear on that - how is 35m PL money?

[OffTheBar]

Hi aggi, we know the loan is from MSD because of the debenture/charges.

Interesting interest rate is Libor + 8%. I might have to read up on how Libor is being replaced...

Good luck reading up on that Of course, they may have hedged the floating rate exposure too.

[RVclaret]

Good luck reading up on that Of course, they may have hedged the floating rate exposure too.

No mention of any hedging in the accounts. But yeah, possibly, given rates are seemingly only heading upwards from record lows.

[bfcjg]

Is the shares purchase on next years accounts as some item of other, now I'm not a shareholder I cannot be bothered going through them.

[aggi]

I’m a bit unclear on that - how is 35m PL money?

It's the first installment of the money for the next season. It's matched by a creditor in the accounts. It wasn't there when we had a June year end.

[RVclaret]

It's the first installment of the money for the next season. It's matched by a creditor in the accounts. It wasn't there when we had a June year end.

Got it. So cash balance is ‘actually’ much less at around 15m.

So it seems to me, then, that relegation means player sales + cash balance to pay off a big chunk of the 65m loan. Is that your understanding?

[NewClaret]

A loss of just 2.5m for the year is the first most surprising / positive I've come across, despite a 20m loss in revenue due to Covid/league position.

Wages also reduced played a part.

Seem to recall CP suggested that losses would be £10-£20m during the COVID period (May have been revenue reductions vs profit). So, yes, very surprising.

[NewClaret]

Got it. So cash balance is ‘actually’ much less at around 15m.

So it seems to me, then, that relegation means player sales + cash balance to pay off a big chunk of the 65m loan. Is that your understanding?

Hang on. What date are the accounts to? Presumably the cash balance is the cash in the bank on that date?

I cannot believe accounts ending June 2021 include cash received for a 2022/23 season?

[Paul Waine]

Is the shares purchase on next years accounts as some item of other, now I'm not a shareholder I cannot be bothered going through them.

Note 25, Events after the reporting date, mentions £10 million "advanced to a fellow group company."

My speculation is this may be the funding for the purchase of the small shareholders shares.

Nothing in the accounts with regard to the instalments due to the previous directors/major shareholders.

[RVclaret]

Hang on. What date are the accounts to? Presumably the cash balance is the cash in the bank on that date?

I cannot believe accounts ending June 2021 include cash received for a 2022/23 season?

Ending July 2021 which I think is the key difference

[Paul Waine]

Hang on. What date are the accounts to? Presumably the cash balance is the cash in the bank on that date?

I cannot believe accounts ending June 2021 include cash received for a 2022/23 season?

Cash in bank is as at 31st July 2021. The first instalment of the 2021/22 season tv money is paid to the clubs in July.

There's nothing in the accounts about the 2022/23 season.

[NewClaret]

Cash in bank is as at 31st July 2021. The first instalment of the 2021/22 season tv money is paid to the clubs in July.

There's nothing in the accounts about the 2022/23 season.

Almost certain that CP said the last thing about the £80m last year - it included some PL TV money & obviously some of that will be committed on future expenditure, as is normal for any business that receives all or part of its revenue up front. On a like for like basis, sounds like cash balances have reduced by £30m?

[NewClaret]

I think you've read it wrong. £37m was taken out.

I need to read these myself but how do you get to the £37m “taken out” figure? Cash balances reduced by £30m so was there £7m positive cash flow in year?

[RVclaret]

I need to read these myself but how do you get to the £37m “taken out” figure? Cash balances reduced by £30m so was there £7m positive cash flow in year?

Yes, that is stated on the cash flow statement. 37m used for ‘financing’.

[elwaclaret]

Annual accounts are always ‘last years’ trading figures (usually to April year end).

[mybloodisclaret]

Looking forward to Chester Perry's take on the accounts, and what they mean.

[Chester Perry]

Note 25, Events after the reporting date, mentions £10 million "advanced to a fellow group company."

My speculation is this may be the funding for the purchase of the small shareholders shares.

Nothing in the accounts with regard to the instalments due to the previous directors/major shareholders.

I will speculate differently Paul

- my view is that was primarily used for staged payments to the Sellers possibly the small shareholders
- I will also suggest that the £37m related company loan is made up of the original sum borrowed for the initial payment and a subsequent borrowing for a staged payment

note that VSL have now confirmed they have borrowed £47m from the club and placed the £65m MSD loan on the club with its interest payments being met by the club

elsewhere I note:
- we have only paid around £3m of the £12m for Collins
- cost of football (wages + amortisation/revenue) is over 93%

I am a little surprised at just how much I have been in the ball park in terms of the financial performance, and the takeover costs including size of MSD loan and the associated interest rate

[Paul Waine]

Note 6: Employees. "None of the directors received remuneration from the group during the current or previous year."

So, all the work that Alan Pace is doing he's not taken a wage from Burnley - at least not for his first 7 months work.

UTC

[BurnleyFC]

I’m far from an expert, but those accounts make frightening reading to me.