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PurpleCanary

2013 ACCOUNTS

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[quote user="lappinitup"][quote user="Waveney Canary"]I remember the day when this forum was here to talk about football rather than detailed and forensic accountancy. Zzzzzzzzzzzzzx[/quote]

You can''t have been here long then. It was only about four years ago when every other post on this site was littered with C.G.F.P.A''s spreadsheets (all in widescreen) which went along the lines of.......

Take a rumour............£....
add a guestimate........£
Deduct say................£
Assume.....................£
Agents fee say...........£
Total.........................£. = FACT!

It was this attention to detail that established important FACTS from our history which posters regularly refer to now. ie......

How much Watling walleted.

Why the hotel would never make money.

How Delia asked Cullum £56m for her shares.

How the Black Hole was discovered.

Why the banks forced Bowkett on the club.

Etc.

Sorry Waveney, you''re much too young to remember how these people gave their all for this club.

C.G.F.P.A''s. Lest we forget. [U]







[/quote]

Just so we can use the very informative information you have supplied, can you remind all readers:-

What your accountancy qualifications are.

How much detailed analysis you have carried out over the last 10 years accounts.

Purple Canary seems to have a grasp of the general accounts, if you are in a similar position why do you need to ask him simple accountancy questions.

 

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[quote user="Matt Hopkins"]Just so we can use the very informative information you have supplied, can you remind all readers:-

What your accountancy qualifications are.

How much detailed analysis you have carried out over the last 10 years accounts.

Purple Canary seems to have a grasp of the general accounts, if you are in a similar position why do you need to ask him simple accountancy questions.[/quote]

Why would I need accountancy qualifications for pointing out things I''ve read on here?

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So in essence Lappinitup, your post was not aimed at adding anything to the thread Headed "2013 ACCOUNTS" but was just a general post.

Aimed to amuse rather than inform.

Many people, like myself, use this forum to gain information on the club and more specifically guage fans opinions.

They need to know which posters opinions are genuine and those that have other aims.

I think you have clarified your position very succinctly.

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[quote user="Matt Hopkins"]So in essence Lappinitup, your post was not aimed at adding anything to the thread Headed "2013 ACCOUNTS" but was just a general post.[/quote]Why haven''t you commented on the post I replied to, namely......[quote user="Waveney Canary"]I remember the day when this forum was here

to talk about football rather than detailed and forensic accountancy.

Zzzzzzzzzzzzzx[/quote]

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[quote user="PurpleCanary"][quote user="Bobzilla"]Apart from the question of the terms of the debt. If a debt is never repayable at the holders request, it is not a debt. It is a permanent loan. The club can choose to repay it, but there is no obligation to repay it. Lawyers might consider this to still be a debt where there is a contingency upon which the debt actually becomes repayable (like liquidation), but for all intents and purposes, including accounting, there is no debt - simply investment.

Now, I don''t know the terms of the Foulger ''debt'' but it is perfectly conceivable that this is not actually a debt.

If there is a plan for a share buyback, does that turn the shares into debt? No planned payments will ever change the nature of the rights upon which payment is made (i.e. equity or debt), until such time as the right to a payment has actually crystallised - there will be a debt if (and only if) the club contractually agrees to repay Foulger.

[quote user="PurpleCanary"][quote user="T"]

Some very nice prose but a few corrections:

Cash flow is lower as a result of player purchases and debt repayment but not the income statement as these expenses are not recorded in the income statement

Bowkett is correct about the amount of internal debt repayable as smith and jones are eligible to be repaid but not Foulger.

Correlatation between premier league wages and points was 91% in 2010/11 and 87% in 2011/12 but then lets not let reality get in the way of the myth that it is all down to CH''s tactics. 

I guess understanding finance is like uderstanding football...

 

[/quote]

 

These "corrections" need correcting. In all my nice prose I didn''t mention cashflow once, so I can''t have got anything wrong on that subject. As for saying that £2.1m figure in the quote from Bowkett for internal debt is right, no it isn''t. The correct figure, as I said, is £3.1m.. I suspect either Bowkett misspoke, as American politicians say, or it is a misprint. In a separate sidebar piece the EDP itself gives £3.1m as the right amount.Whether Foulger is yet eligible to be repaid is entirely irrelevant to the sum outstanding, which is what Bowkett and I are talking about. And it is clear from the fact that the club has already paid Foulger back £323,000 and Bowkett''s comments about the remaining debt ("We would be budgeting to eradicate that in this financial year.") that the plan is to pay it off whether strictly necessary or not.

[/quote][/quote]

 

It is definitely a debt. There is an oddity in that there is a difference in the terms as laid out in the 2012 accounts and the 2013 accounts, so the question of when repayment is due can be read two ways (a polite way of saying one is wrong).In 2012 the accounts said that, subject to us not owing BoS anything, the debt could be called in "on the earlier of  August 31, 2012 OR"...upon Smith and Jones ceasing to own at least 30 per cent of the ordinary shares. Since we are past August 31 2012 and we have paid off BoS, clearly accordng to that wording Foulger can demand his money back. The 30 per cent bit is not a dealbreaker - it is an either/or with the date of August 31, 2012, depending on which comes first.But for some reason the terms in the 2013 accounts have changed, so that the 30 per cent stipulation IS a dealbreaker. Until Smith and Jones slash their shareholding (in effect no longer control the club) Foulger cannot claim his money.Either way, either now or in the future, Foulger can claim back the dosh, so it is a debt, and, as pointed out earlier, the question is rather moot because Bowkett has said they aim to repay it this financial year.

[/quote]

Fair enough on the terms - on that basis the contingency has materialised and the club can be obliged to repay.

However, I still fundamentally disagree that an intention to do something has any impact on the underlying matter on which it is to be done. If it were not a debt (from your description of the terms, I''m not disputing that it is a debt, this is purely a hypothetical), and intention to repay it would not mean that you accounted for it as a debt. I would qualify the accounts if they tried to account for it as a debt when there was never any obligation to repay, simply because they wanted to repay it.

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Purple Canary...

Message a bit clearer.

Fair enough on the terms - on that basis the contingency has materialised and the club can be obliged to repay.

However, I still fundamentally disagree that an intention to do something has any impact on the underlying matter on which it is to be done. If it were not a debt (from your description of the terms, I''m not disputing that it is a debt, this is purely a hypothetical), and intention to repay it would not mean that you accounted for it as a debt. I would qualify the accounts if they tried to account for it as a debt when there was never any obligation to repay, simply because they wanted to repay it.

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I think it''s great that Delia, MWJ and Foulger will see their money returned to them. We should all be grateful for what they have done for the club. 
I just hope that when the time comes for them to sell the club, presumably in the not too distant future considering their age, they find the right person to take the club forward. 
Hopefully not somebody like Tony Fernandes. 

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PC you misread my correction. You did not talk about cash flow but you did say "an understandably sharply lower profit figure than last year, because of player purchases and debt repayment". Clearly it is not understandable to you because player purchases and debt repayment are not part of the profit and loss account and therefore could not result in a lower profit figure. That is just such a basic howler that you may as well have started your piece by saying you have no understanding of finance or accounts. The main reason for the lower profits is increased wages. This is the most important figure in the accounts from a football perspective as it is the key driver of the team''s performance. I''m afraid you have exposed yourself as the smooth talking charlatan that you are.

Bowkett is also effectively correct about the internal debt repayments as 2m to S&J is eligible for repayment but the 1m to Foulger is not.

The accounts may be boring but as up to 90 % of a teams performance is down to finance they are important to understand properly as they are the main driver of our league position, not CH''s team selection or tactics.

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[quote user="T"]

PC you misread my correction. You did not talk about cash flow but you did say "an understandably sharply lower profit figure than last year, because of player purchases and debt repayment". Clearly it is not understandable to you because player purchases and debt repayment are not part of the profit and loss account and therefore could not result in a lower profit figure. That is just such a basic howler that you may as well have started your piece by saying you have no understanding of finance or accounts. The main reason for the lower profits is increased wages. This is the most important figure in the accounts from a football perspective as it is the key driver of the team''s performance. I''m afraid you have exposed yourself as the smooth talking charlatan that you are.

Bowkett is also effectively correct about the internal debt repayments as 2m to S&J is eligible for repayment but the 1m to Foulger is not.

The accounts may be boring but as up to 90 % of a teams performance is down to finance they are important to understand properly as they are the main driver of our league position, not CH''s team selection or tactics.

[/quote]

 

T, thanks for the cheery post. You are right that I should not have included the debt repayment in that sentence about profit and loss. It was a carelessly written intro done at the last moment after some hours of researching figures (in my blunderingly amateurish way!) and then bashing out more than 1,500 words, but that is not much of an excuse. I short-circuited things a bit too much. I should have referred to debt and player trading separately and said, as does Alan Bowkett, that paying down the debt was a question of throwing off "all the remaining difficulties [ie the debt] of the old balance sheet".But as to your assertion that "player purchases...are not part of the profit and loss account", I think we still have a difference of opinion. Or we are looking at different accounts. In the profit and loss account in mine there is a figure of £14.289m for the group operating profit, followed immediately by a minus of £13.406m for "player trading", giving then a figure of £883,000. And there is a plus of £801,000 for the disposal of players'' registrations.And if you look at the introduction to the accounts, signed on behalf of the directors by Sam Gordon, the finance director, you will see (in contrast to your other assertion that"the main reason for the lower profits is increased wages") the following:"Operating profit of £2.4m is less than the previous year''s operating profit of £18m due to investment in the playing squad."Unless "investment in the playing squad" doesn''t mean buying players then if there is a howler that betrays a total lack of knowledge of finance it has been made either by me, and Sam Gordon, and Alan Bowkett and David McNally, and the rest of the directors, and the auditors. Or by someone else.As the the minor but apparently pesky matter of the size of the internal debt, good try but no. I love your obfuscatory use of "effectively" in "effectively correct" and the way you swear by the letter of the accounts when it suits you and ignore it when it doesn''t. The internal debt is (or was at the time of producing the accounts) £3.1m. As Bobzilla has agreed, a debt is a debt is a debt. It doesn''t matter whether Foulger can yet claim it back. As I patiently explained in an earlier post that is unclear, because according to last  year''s accounts he now can and according to this year''s he still cannot. But either way it is still a debt that will need to be repaid.And since, as also mentioned earlier, Bowkett has said they plan to pay back all the money owing to Foulger and Smith and Jones this year, whether due or not, then the "effective" debt is all of it. And that "all of it" is £3.1m.

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PC you are half way there. I can see you wriggling but you are not off the hook. I''ve seen the accounts as a shareholder but I don''t even need to see the accounts to know it is not a difference of opininon but a difference of fact. Look closer and you will see the players purchases are actually recorded in the intangible assets in the balance sheet. What you are seeing in the P&L is an amortisation charge. Two very different things. The first is a cash cost. The second is a notional non-cash charge which is why it is shown in a separate column of the accounts. No matter how many words you write no-one who actually understood the accounts would ever write that that the profit is lower because of debt repayments and player purchases. Reading the accounts and actually understanding  and interpreting them are 2 different things. If you understood the accounts it is very unlikely that you would have written what you have written in the first place and if you had subsequently understoood  the accounts you would not prevaricate but instantly correct yourself. By your own words you are clearly indicating that you don''t kow what you are talking about. The same applies to critics of CH. You can watch a game but does not mean that you actually really understand what is going on but hey at least I now know how CH feels when he is crititised by people who obviously don''t know what they are talking about.If you are actually now capable of correcting the reasons for the profit being lower in one of your opening sentences then you may redeem some of the little credibility that you have left.

As for you valuation comment it also demonstrates a scary but laughable ignorance of finance. 100 pounds nmay be the price paid for shares but it has absolutely nothing to do with the value of the club. If you really believe that a business that makes no money for its shareholders is worth what you say it is then you can buy my shares for a 100 quid each!

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[quote user="T"]

PC you are half way there. I can see you wriggling but you are not off the hook. I''ve seen the accounts as a shareholder but I don''t even need to see the accounts to know it is not a difference of opininon but a difference of fact. Look closer and you will see the players purchases are actually recorded in the intangible assets in the balance sheet. What you are seeing in the P&L is an amortisation charge. Two very different things. The first is a cash cost. The second is a notional non-cash charge which is why it is shown in a separate column of the accounts. No matter how many words you write no-one who actually understood the accounts would ever write that that the profit is lower because of debt repayments and player purchases. Reading the accounts and actually understanding  and interpreting them are 2 different things. If you understood the accounts it is very unlikely that you would have written what you have written in the first place and if you had subsequently understoood  the accounts you would not prevaricate but instantly correct yourself. By your own words you are clearly indicating that you don''t kow what you are talking about. The same applies to critics of CH. You can watch a game but does not mean that you actually really understand what is going on but hey at least I now know how CH feels when he is crititised by people who obviously don''t know what they are talking about.If you are actually now capable of correcting the reasons for the profit being lower in one of your opening sentences then you may redeem some of the little credibility that you have left.

As for you valuation comment it also demonstrates a scary but laughable ignorance of finance. 100 pounds nmay be the price paid for shares but it has absolutely nothing to do with the value of the club. If you really believe that a business that makes no money for its shareholders is worth what you say it is then you can buy my shares for a 100 quid each!

[/quote]

T/PC as you are both in such good form perhaps one of you might try your hand at analysing the accruals......seems a large amount.

Is there still some bank interest/Axa in there OR 

No doubt bonus amounts etc.

Over to the experts please.

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[quote user="T"]

1) No matter how many words you write no-one who actually understood the accounts would ever write that that the profit is lower because of...player purchases.2) As for you valuation comment it also demonstrates a scary but laughable ignorance of finance. 100 pounds nmay be the price paid for shares but it has absolutely nothing to do with the value of the club. If you really believe that a business that makes no money for its shareholders is worth what you say it is then you can buy my shares for a 100 quid each!

[/quote]

 

1) I do admire your blindness, T, I really do. It is not just me saying buying players hit profits. It is the club''s official view:"Operating profit of £2.4m is less than the previous year''s operating profit of £18m due to investment in the playing squad."2) I less admire your brazen ability to misrepresent what I say. I never claimed the current share price gave a valid valuation of the company''s worth. Indeed I specifically cautioned against believing that:"Whether a price of £100 would be adhered to in a takeover is a question."The thing is I am always happy to own up to any mistakes I make, and appreciate constructive criticism. I want to know more. But that kind of blatant duplicity, that scary ignorance of morality, doesn''t really do it for me.

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[quote user="The Butler"]

T/PC as you are both in such good form perhaps one of you might try your hand at analysing the accruals......seems a large amount.

Is there still some bank interest/Axa in there OR 

No doubt bonus amounts etc.

Over to the experts please.

[/quote]

 

I''m going to pass on that, TB. I might understand it and get it right, and that would never do.

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[quote user="City1st"]" Not for

nothing did Bowkett say a couple of years ago that without a major investor we

would need a 35,000-seat stadium to stay afloat financially in the PL."

which has become even more redundant nowa 35.000 seater stadium would give 25% more income - all things being equal - which is about £3m morehowever that presumes the same ''100%'' occupancy ratesthe same high level of ticket pricesand the killer that the new stand can be built for nothing, the old stand taken down for nothing and there would be no loss of income whilst we have 4000 less seatsthe reality is that at best the club will be losing around £1.5m for at least a decade after the constructionand that subsidy wil merrly climb higher every time the attendance is less that 100% and when the lower ticket prices are factored in so we will have to continue with the idea of developing young players, be they at the level of Redmond, the level of the young keeper from Luton or the emerging FA youth Cup winning team

[/quote]

Thanks Purple. Excellent read as always. Thank you for putting in the effort to explain all this to people like me who cannot :) It would seem that funding redevelopment through conventional means would certainly saddle the club with a worrying and long term debt.

Tho only caviat I would mention would be that maybe we are now in a position (after not having been for almost 10 years) to acquire a sudden cash injection on the basis of a forced player sale.

Not for an instant would I advocate a return to the days under Chase where we were a selling club. But there could now conceivably be a point at which we make a substantial profit on a player. With the recent thread about Pilkington, and the concern (later debunked) that his contract was up, but that we rejected an 8 figure bid from Liverpool on deadline day, it highlights, that we could actually make some serious profit on some players. In the Pilkington scenario, this would be an ''Im not signing a new contract so you need to sell me or Im off for free in 6 months'' situation, and so a ''forced signing'' in effect. Similar scenarios might be Ruddy wanting to progress at a bigger club like Chelsea for instance, to enhance England opportunities, same scenario for RvW if he has a prolific season, or Fer. Periods where we may in all reality be forced to sell, but make quite a lot of profit. Whilst it is important to invest in the playing side, we are doing that already are we not? Something being debt-free has allowed us to do. If Pilkington or Ruddy left, we could arguably get by with promoting a Murphy or a Rudd (arguably).

If we made some Joe Allen type profits on some players, suddenly investing in the stadium wouldnt seem so unfeasible. Dangerous I know, to not re-invest in the playing squad. But remember where Ruddy and Pilkington came from. If the club felt confident in a youngster stepping up or on unearthing a lower league gem, it might be an option - and thats what the scouting team/management team are paid to do - to make those assessments.

We havent had any saleable profit-making assets really since Ashton. We have a whole squad littered with them now. I can see some forced sale scenarios rearing their heads over the coming seasons. If that happened, we could look at investing the sudden capital into the stadium, rather than borrowing, if it was felt to be an acceptable risk.

Of course, Wolverhampton Wanderers should be a stark reminder to everyone when considering this option

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" I think it''s great that Delia, MWJ and Foulger will see their money returned to them. We should all be grateful for what they have done for the club. 
I just hope that when the time comes for them to sell the club, presumably in the not too distant future considering their age, they find the right person to take the club forward. 
Hopefully not somebody like Tony Fernandes. "

Here here - When we were languishing in League One and the Delia hate stuff was coming out, it looked very unlikely she would get any on her money back. People forget she saved the club by investing what is a very large amount of money for anyone (but of course because she is not a Sheikh or a Russian oligarch, she is vilified for not being a bit richer). She saved the club, kept the faith, and it is only right that she should, after sticking with the club through thick ( a lot of thick when it comes to some supporters attitudes) and thin, she should be repaid for her faith.

I found the Delia hate stuff thoroughly distateful, just because she wasnt rich enough. Pure rich benefactor snobbery! I owuld have liked to see some of her detractors invest their life savings into a sinking ship before they started throwing stones

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PC more weasily words I''m afraid. A parrot can repeat words but that does not mean that he is cognisant of what they actually mean. Once again player purchases are a cash item that are recorded in the balance sheet, the amortisation of the investment in players is a non cash item that is recorded in the p&l. You can say it is just words but the income statement and balance sheet and cash and non- cash are also words but the P&L and balance sheet, and cash and non-cash items are also 2 connected but fundamentally different things and clearly based on your words you do not understand these basic concepts and therefore don''t understand the accounts which is the point otherwise you would have corrected yourself rather than just merely repeating words that you obviously don''t understand.

 

On your valuation point it is simply not good enough to caveat what you say. The price that individual shares are currently sold for has nothing to do with the valuation of the business. If you understand the concepts you would not caveat the statement you made. You simply would not have made such a ridiculous statement in the first place.

 

On the internal debt, effective are the key words. Clearly, Bowkett lives in the real commerical world and has a fundamental understanding of finance and you don''t.

 

It was a very well written piece and has some good observations but it is obvious to anyone who has say advised on the acquisition of a premier league football club that you lack a fundamental understanding of finance. Your comments are entertaining but you are simply not credible to anyone who has a basic understanding of finance. I''ll give you an A-plus for your prose and a C for understanding. Man up and and simply admit you don''t actually know what you are talking about rather than continuing to squirm.

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[quote user="T"]That is just such a basic howler that you may as well have started your piece by saying you have no understanding of finance or accounts.[/quote][quote user="T"]I''m afraid you have exposed

yourself as the smooth talking charlatan that you are.
[/quote]I and many others are always grateful to Purple for simplifying the accounts for us. You portray yourself as a qualified accountant and yet resort to insults to make your case, something the profession would always distance itself from. If you truly believe the quotes above, why not start your own thread with your own breakdown and conclusions rather than nitpick over someone elses?[quote user="T"]The

accounts may be boring but as up to 90 % of a teams performance is down

to finance they are important to understand properly as they are the

main driver of our league position, not CH''s team selection or tactics.
[/quote]If that was the case we would never have got beyond the Championship considering our financial status compared to teams with parachute payments. Our promotion had EVERYTHING to do with our managers team selections and tactics.

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[quote user="T"]

PC more weasily words I''m afraid. A parrot can repeat words but that does not mean that he is cognisant of what they actually mean. Once again player purchases are a cash item that are recorded in the balance sheet, the amortisation of the investment in players is a non cash item that is recorded in the p&l. You can say it is just words but the income statement and balance sheet and cash and non- cash are also words but the P&L and balance sheet, and cash and non-cash items are also 2 connected but fundamentally different things and clearly based on your words you do not understand these basic concepts and therefore don''t understand the accounts which is the point otherwise you would have corrected yourself rather than just merely repeating words that you obviously don''t understand.

 

On your valuation point it is simply not good enough to caveat what you say. The price that individual shares are currently sold for has nothing to do with the valuation of the business. If you understand the concepts you would not caveat the statement you made. You simply would not have made such a ridiculous statement in the first place.

 

On the internal debt, effective are the key words. Clearly, Bowkett lives in the real commerical world and has a fundamental understanding of finance and you don''t.

 

It was a very well written piece and has some good observations but it is obvious to anyone who has say advised on the acquisition of a premier league football club that you lack a fundamental understanding of finance. Your comments are entertaining but you are simply not credible to anyone who has a basic understanding of finance. I''ll give you an A-plus for your prose and a C for understanding. Man up and and simply admit you don''t actually know what you are talking about rather than continuing to squirm.

[/quote]T, PC. I''m disapointed that you both feel the need to bicker. Both of your comments are grounded in truth and you certainly do not need to be so hostile to one another. l would certainly expect player purchases to have a significant impact on profit, through an increased amortisation charge. PC would have done better to have explained this in his post but we must recall that the aim is to give a brief and simple overview for non-finance readers.Again likewise with the share price issue. We should consider that this £100 figure has been bandied about quite a bit so its relevance should be noted (as to its irrelevance which again I would say PC could have explained better). T is of course correct that the £100 figure is somewhat meaninglessness. It would require a detailed and  comprehensive analysis beyond the scope of the information of the financial statements to reach a more likely figure.I have yet to recieve my copy of the accounts so I would just like to thank you both for your commentary thus far.(apologies for any typos, I am on my tablet)

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[quote user="Buncey"][quote user="T"]

PC more weasily words I''m afraid. A parrot can repeat words but that does not mean that he is cognisant of what they actually mean. Once again player purchases are a cash item that are recorded in the balance sheet, the amortisation of the investment in players is a non cash item that is recorded in the p&l. You can say it is just words but the income statement and balance sheet and cash and non- cash are also words but the P&L and balance sheet, and cash and non-cash items are also 2 connected but fundamentally different things and clearly based on your words you do not understand these basic concepts and therefore don''t understand the accounts which is the point otherwise you would have corrected yourself rather than just merely repeating words that you obviously don''t understand.

 

On your valuation point it is simply not good enough to caveat what you say. The price that individual shares are currently sold for has nothing to do with the valuation of the business. If you understand the concepts you would not caveat the statement you made. You simply would not have made such a ridiculous statement in the first place.

 

On the internal debt, effective are the key words. Clearly, Bowkett lives in the real commerical world and has a fundamental understanding of finance and you don''t.

 

It was a very well written piece and has some good observations but it is obvious to anyone who has say advised on the acquisition of a premier league football club that you lack a fundamental understanding of finance. Your comments are entertaining but you are simply not credible to anyone who has a basic understanding of finance. I''ll give you an A-plus for your prose and a C for understanding. Man up and and simply admit you don''t actually know what you are talking about rather than continuing to squirm.

[/quote]

T, PC. I''m disapointed that you both feel the need to bicker. Both of your comments are grounded in truth and you certainly do not need to be so hostile to one another. l would certainly expect player purchases to have a significant impact on profit, through an increased amortisation charge.

PC would have done better to have explained this in his post but we must recall that the aim is to give a brief and simple overview for non-finance readers.

Again likewise with the share price issue. We should consider that this £100 figure has been bandied about quite a bit so its relevance should be noted (as to its irrelevance which again I would say PC could have explained better). T is of course correct that the £100 figure is somewhat meaninglessness. It would require a detailed and  comprehensive analysis beyond the scope of the information of the financial statements to reach a more likely figure.

I have yet to recieve my copy of the accounts so I would just like to thank you both for your commentary thus far.

(apologies for any typos, I am on my tablet)
[/quote]

 

Don''t apologise for that, Buncey. It sounds like T has taken several pills. [:D]

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T,You and I have had our differences in the past regarding the whole land business, but you are absolutely correct in all of your comments in response to PC re both debt repayment and player amortisation. This is not a matter of taking sides but simple accountancy fundamentals which would be apparent to any qualified accountant.The issue of valuation can only ever be crystallised when a transaction takes place (i.e. it is simply whatever someone proposes to pay on the day). Like you, I feel that the £30 notional valuation per share is meaningless in an unquoted and illiquid stock such as NCFC. This is simply the price that punters areasked to pay if they want some shares, but this price massively overvalues the club on any tradational valuation methodology given that there is nil proespect of any dividends and that voting control is in the hand of two individuals.

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[quote user="Buncey"]

Again likewise with the share price issue. We should consider that this £100 figure has been bandied about quite a bit so its relevance should be noted (as to its irrelevance which again I would say PC could have explained better). T is of course correct that the £100 figure is somewhat meaninglessness. It would require a detailed and  comprehensive analysis beyond the scope of the information of the financial statements to reach a more likely figure.[/quote]

 

Buncey, I''m happy to expand on that. Firstly I have no idea how to value a football club. But I am not sure anyone else does. A while ago someone called Tom Markham produced a paper detailing his new way of doing it. He listed three other methods, rubbished them as flawed, and said his system solved all the problems. I didn''t bother reading his argument because it may be no better than the others, and if it really is the one true way then it will start to get quoted, and I''ll take more interest, I will, though, come back to it later on.There are two obvious problems. One is that Norwich City is an unlisted plc, so you can''t see how the stock market values it. Of course you can still look at factors such as debt (or lack of it), profitability (or otherwise), assets etc. But we are not talking about a ball-bearing company, where a potential purchaser really only cares about making a profit. Some people buy into football for that sole reason, but with most there are also less easily quantifiable, more emotional factors. Some are fans, some are just mad about football in general. Some are just mad...And this cuts both ways. Not only might someone be willing to pay more than the financially correct price. Some might sell for less. Remember that Smith and Jones said (admittedly a while ago now) that they would give the club away for nothing to the right buyer.As to NCFC, I have to go back into a bit of Cullumgate history, becase it explains and validates the short section in my OP. Cullum made it known (he may even have said it publicly) he regarded the shares (then priced at £30 and valuing the club at £16m) as worthless, and indeed his plan was not to buy out Smith and Jones but to be gifted new shares. I was not so much a minority as solitary voice then, saying the shares, far from being worthless, were underpriced. It was a long-term view, given what has become our natural position in the top 30 or so of English football and the strong basics.And it seems the directors agreed, since the price has more than trebled. But, and I think this may not have been understood, so I have to stress it, that I said the price should be higher than £30 does not remotely mean I think £100, valuing the club at £61m, is fair or realistic in the real world. I have never expressed an opinion on that, and didn''t in the OP. Frankly I don''t know whether it''s justified, or still too low, or too high. I was, faux de mieux, simply stating  the valuation, not expressing a judgment on it. That there is not a valuation method out there that everyone accepts is pretty much proved by the fact that Markham has produced a FOURTH system.And, to emphasise just how purely theoretically I was regarding that £100/£61m price I was careful to add that in the event of a takeover this valuation might not stand up. Although, funnily enough, Markham''s assessment of NCFC''s worth is a cool £91m...

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OK, player trading. Can it impact P&L?

Yes it can.

First impact has already been identified, being the amortisation charge on player contract fees. More player costs, bigger intangible, bigger amortisation, especially if shorter contracts,

Second impact hasn''t been ref''d from what I can see. What happens when you sell a player? In terms of double entry, you get cash in (Dr Cash on balance sheet) and you remove the intangible relating to the player contract (Cr intangible asset). Thing is, the cash and the intangible very rarely match, difference going to P&L. So it is very correct to say that player TRADING has an impact on P&L.

As I understand it, we had a good year the year before last on player trading, and sold players for more than they were accounted for. This year, we''ve let quite a lot of quite expensive players (which Lambert over-paid for, arguably) go for bugger all, so you would expect losses on player trading.

Hopefully this settles things on player trading and P&L impact. If you want to discuss my accounting qualifications and experience, please feel free to PM me.

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