Annual report - £18.7 million loss

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sheffielder said:
Because you only ever tell one side of the story. Answer these questions

Do we still owe McCabe £22 Million?
Do we owe the bank £28 million?
Are we still £50 million in debt?

I think what you mean by debt actually means liability to the rest of us.
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I really cannot believe this.

Answer is no to all your questions. You said the £50m liability was a mystery. It clearly wasn't at June 2009 which is what I clearly mentioned above. we were liable to the tune of £50m to McCabe and the bank. we had assets to back these liabilities. Believe me I understand a balance sheet - albeit not one as complex as SUFCs I admit.

I am chuffed we are now free of the property and can move forward liability free.
 

the facts as i see it are, be it £1 or £50 million ALL external dept are gone, meaning the blades only owe to mcCabe and co, which to anyones mind HAS to be a good thing.
im no financial expert but to me no debt is very much preferable to any debt?
as to the wendy house takeover, steelcity blade mentioned he believes there is a bad smell as to why no takeover, well milan madoric has come out today and stated he doesnt understand why no takeover has happened, he has everything in place to do it at a moments notice but hes being put off, now my question is WHY with things looking, from across the city so bad for our porcine friends have they not taken what seems like an attractive takeover with both trotters?
so i agree with steelcity, summat stinks (other than normal sty type smells) at the wendy house.
anyhoo onwards and upwards Blades.

MunXy
 
MunXy-Blade said:
the facts as i see it are, be it £1 or £50 million ALL external dept are gone, meaning the blades only owe to mcCabe and co, which to anyones mind HAS to be a good thing.
im no financial expert but to me no debt is very much preferable to any debt?
as to the wendy house takeover, steelcity blade mentioned he believes there is a bad smell as to why no takeover, well milan madoric has come out today and stated he doesnt understand why no takeover has happened, he has everything in place to do it at a moments notice but hes being put off, now my question is WHY with things looking, from across the city so bad for our porcine friends have they not taken what seems like an attractive takeover with both trotters?
so i agree with steelcity, summat stinks (other than normal sty type smells) at the wendy house.
anyhoo onwards and upwards Blades.

MunXy
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I'm glad i'm not the only one thinking that munxy, as I am not normally one for conspiracy theories etc. but a lot of the recent happenings seem very peculiar to me and I cant put my finger on why that club hasnt been bought yet. As you say, Mandaric and possibly A N other have the funds to do it but nothing seems to happen. Anyway thats their problem.

After reading the extracts from our report fully now it does paint a better picture than I had first realised. If the only actual debt is now to McCabe then happy days! It seems some sensible steps have been taken to safeguard the football side of things and the chairman/directors should be commended for that because they are looking after our interests in this case.

Makes me happy to be red and white :thumbup:

UTB
 
MunXy-Blade said:
the facts as i see it are, be it £1 or £50 million ALL external dept are gone, meaning the blades only owe to mcCabe and co, which to anyones mind HAS to be a good thing.
im no financial expert but to me no debt is very much preferable to any debt?
as to the wendy house takeover, steelcity blade mentioned he believes there is a bad smell as to why no takeover, well milan madoric has come out today and stated he doesnt understand why no takeover has happened, he has everything in place to do it at a moments notice but hes being put off, now my question is WHY with things looking, from across the city so bad for our porcine friends have they not taken what seems like an attractive takeover with both trotters?
so i agree with steelcity, summat stinks (other than normal sty type smells) at the wendy house.
anyhoo onwards and upwards Blades.

MunXy
Click to expand...

The current board want to keep control to do that they can't have Admin nor Milan. At least that is what I hope for, PLEASE SANTA!!
 
well bob, speaking personaly id rather we owed to mcCabe and co than banks or HMRaC like the porkers, tho having a fan as deputy PM to "smooth the way" with courts, banks and revenue place is kinda handy :)

MunXy
 
Flatulent_Bob said:
The current board want to keep control to do that they can't have Admin nor Milan. At least that is what I hope for, PLEASE SANTA!!
Click to expand...

If thats the case and they wont budge, they're in limbo. Someone has to buy it one way or another so how will they maintain control? The way I see it its either a club owned by someone else or no club at all.......If I'm missing something please enlighten me.
 
A few questions which perhaps will show my ignorance of financial issues….but any answers to which will hopefully put my mind at ease so I can join the ‘despite our obviousl problems this a good day for United overall’ bandwagon.

1) McCabe has bought the hotel at a ‘market value’ which must be the trough of all troughs in the hotel market. Assuming he can hold onto it for a few years he’s going to make a tidy profit out of this deal? Would other companies have been able to bid for it?
2) Realistically isn’t there very little prospect that United are going to be able to afford or be willing to buy the hotel back in a few years when it is worth substantially more – especially after what has happened. Anyway – who will make that decision? Isn’t McCabe effectively ‘United’ anyway so won’t he decide if he buys it back off himself?
3) How much have United lost/put into building and running the hotel before handing it over to McCabe?
4) The property that United have written off in Blades Realty…has that effectively gone to McCabe as well? The worst time to sell? And potentially a nice little earner in a few years for whoever has acquired it as compared to previous years you can be pretty sure that prices can only be higher in a few years?
5) How much have we lost overall on Chengdu and the other international links.

I accept McCabe has the good of United in his heart as well as the good of his own businesses. Who could argue with that?

It may well be that everything revealed by today’s financial statement is absolutely the best thing that could have happened for United and McCabe is acting charitably towards the club he loves - I really don’t know - how can we know when the deals seem effectively to be between McCabe and himself?

I think there is now no escaping the fact that during his tenure his international branding strategy through China, Hungary etc has failed, his property strategy has failed, his international football links strategy has failed and let’s not forget – the small matter of our first team has ultimately failed. I'm not clear who is picking up the bill for these failures and who is likely to do ok out of them. Any answers?

Btw - I actually think he was right to try most of these strategies!
 
Tuns said:
A few questions which perhaps will show my ignorance of financial issues….but any answers to which will hopefully put my mind at ease so I can join the ‘despite our obviousl problems this a good day for United overall’ bandwagon.

1) McCabe has bought the hotel at a ‘market value’ which must be the trough of all troughs in the hotel market. Assuming he can hold onto it for a few years he’s going to make a tidy profit out of this deal? Would other companies have been able to bid for it?
2) Realistically isn’t there very little prospect that United are going to be able to afford or be willing to buy the hotel back in a few years when it is worth substantially more – especially after what has happened. Anyway – who will make that decision? Isn’t McCabe effectively ‘United’ anyway so won’t he decide if he buys it back off himself?
3) How much have United lost/put into building and running the hotel before handing it over to McCabe?
4) The property that United have written off in Blades Realty…has that effectively gone to McCabe as well? The worst time to sell? And potentially a nice little earner in a few years for whoever has acquired it as compared to previous years you can be pretty sure that prices can only be higher in a few years?
5) How much have we lost overall on Chengdu and the other international links.

I accept McCabe has the good of United in his heart as well as the good of his own businesses. Who could argue with that?

It may well be that everything revealed by today’s financial statement is absolutely the best thing that could have happened for United and McCabe is acting charitably towards the club he loves - I really don’t know - how can we know when the deals seem effectively to be between McCabe and himself?

I think there is now no escaping the fact that during his tenure his international branding strategy through China, Hungary etc has failed, his property strategy has failed, his international football links strategy has failed and let’s not forget – the small matter of our first team has ultimately failed. I'm not clear who is picking up the bill for these failures and who is likely to do ok out of them. Any answers?

Btw - I actually think he was right to try most of these strategies!
Click to expand...

Top stuff - apart from the last sentence! The only answer I can give you is that the properties/overseas have cost the football club millions, McCabe will get his wedge back and as you say he has got some properties at the very bottom.

Can anyone answer me how much profit Santander will be making out of the Tevez deal?

Namely - they lend us £8m to no doubt pay off some liability. West Ham owe us £8m more but we will see somat like £7m? exactly same principle as a securitising their season ticket sales.

When the Santander arrangement runs out we had better be in a position where wages and costs are covered by turnover - or maybe Trevor will have produced by then?

Did Trevor get a performance bonus?

In cash flow terms I reckon the accounts are not as bad as a £18m loss would suggest.
 
Tuns said:
A few questions which perhaps will show my ignorance of financial issues….but any answers to which will hopefully put my mind at ease so I can join the ‘despite our obviousl problems this a good day for United overall’ bandwagon.

1) McCabe has bought the hotel at a ‘market value’ which must be the trough of all troughs in the hotel market. Assuming he can hold onto it for a few years he’s going to make a tidy profit out of this deal? Would other companies have been able to bid for it?
2) Realistically isn’t there very little prospect that United are going to be able to afford or be willing to buy the hotel back in a few years when it is worth substantially more – especially after what has happened. Anyway – who will make that decision? Isn’t McCabe effectively ‘United’ anyway so won’t he decide if he buys it back off himself?
3) How much have United lost/put into building and running the hotel before handing it over to McCabe?
4) The property that United have written off in Blades Realty…has that effectively gone to McCabe as well? The worst time to sell? And potentially a nice little earner in a few years for whoever has acquired it as compared to previous years you can be pretty sure that prices can only be higher in a few years?
5) How much have we lost overall on Chengdu and the other international links.

I accept McCabe has the good of United in his heart as well as the good of his own businesses. Who could argue with that?

It may well be that everything revealed by today’s financial statement is absolutely the best thing that could have happened for United and McCabe is acting charitably towards the club he loves - I really don’t know - how can we know when the deals seem effectively to be between McCabe and himself?

I think there is now no escaping the fact that during his tenure his international branding strategy through China, Hungary etc has failed, his property strategy has failed, his international football links strategy has failed and let’s not forget – the small matter of our first team has ultimately failed. I'm not clear who is picking up the bill for these failures and who is likely to do ok out of them. Any answers?

Btw - I actually think he was right to try most of these strategies!
Click to expand...

Good post.

"Isn’t McCabe effectively ‘United’ anyway". This is the constant factor in the myriad of financial arrangements. He has said he wants the club to be self sustaining, and he's no longer going to be the misty-eyed benefactor.

The report itself says the team needs to be built from the academy and astute management. Given we can't expect any big spending, my only question is, do we have to sell players by necessity, or can we actually attempt to build a team now?
 
JohnDenver said:
Given we can't expect any big spending, my only question is, do we have to sell players by necessity, or can we actually attempt to build a team now?
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My guess would be that we still need to offload a couple of big earners to pull the wage budget down another couple of million. Then they'll look to inject new and younger players into the squad. Reading between the lines I think that's what they're looking at.

I would expect that perhaps some of the older high earners such as Morgs, Hendo and Cressy will depart at some points. Thats all fine as long as they're replaced with academy prospects and players bought in that we can add value to. Here's hoping.
 
SteelCity Blade said:
My guess would be that we still need to offload a couple of big earners to pull the wage budget down another couple of million. Then they'll look to inject new and younger players into the squad. Reading between the lines I think that's what they're looking at.

I would expect that perhaps some of the older high earners such as Morgs, Hendo and Cressy will depart at some points. Thats all fine as long as they're replaced with academy prospects and players bought in that we can add value to. Here's hoping.
Click to expand...

I agree with your hopes 100%, but I'm deeply vexed if we need to offload those self same players we gave new contracts to in the summer.

I don't mind us being frugal, but I desperately need to believe in us building something here, however slowly. Running the team on yet more short term loans and flogging someone like Matt Lowton to pay for it is not acceptable.
 
Tuns said:
I think there is now no escaping the fact that during his tenure his international branding strategy through China, Hungary etc has failed, his property strategy has failed, his international football links strategy has failed and let’s not forget – the small matter of our first team has ultimately failed. I'm not clear who is picking up the bill for these failures and who is likely to do ok out of them. Any answers?
Click to expand...

I have to agree with this. When he took us over we were a debt laden mid table second tier club. Ten years later, well, you know the rest.
 
JohnDenver said:
I agree with your hopes 100%, but I'm deeply vexed if we need to offload those self same players we gave new contracts to in the summer.

I don't mind us being frugal, but I desperately need to believe in us building something here, however slowly. Running the team on yet more short term loans and flogging someone like Matt Lowton to pay for it is not acceptable.
Click to expand...

I think those new contracts were more out of necessity than anything. They had already cut other big earners in Sharp, Naysmith, Harper, Camara and Kenny. To avoid completely clearing out the squad they had to retain what was left in order to try and be competitive.

I could be wrong but Morgs wasnt given a massive extension to his contract was he? Wasnt it like a year or two? I cant see Hendo being around longer than the end of the season. If we are to believe he's one of our top earners then he'll be the next one for sale. He'll be one of the few Saleable assets we have left on the playing side because clubs in this division will want him.

Ched is the real quandry for United because if his wages are as high as I'm led to believe he would be an obvious one to offload. Problem with that is his lack of goals hence he's not worth a fraction of what we paid for him now. He'll either maintain his current form and drain our income or start finding the net and get sold just to cut our losses.

Loans should have been completely avoided this year. I would venture that whatever we're paying Noz and Reidy could have been spent on signing 4 or 5 younger players with potential from the lower divisions. I am of course speculating on that but its seems a fairly safe assumption.
 

I haven't read the accounts in detail but I assume that the asset writedowns are included in the 18 million loss and the accounts take a hit this year and is separate from the day to day accounts where all our current liabilities e.g HMRC can be met without recourse to borrowing more money and thus increasing debt a la the Piggies?
 
Does the full £18m loss relate to the one year? Given that we had turnover of £20m does this mean we spent £38m - and if so, what the xxxx on?

It would be good to see a breakdown of how the £18m loss was arrived at.

Good crowds, £10m surplus on player sales yet still an £18m loss. Doesn't make sense.
 
From reading the article and watching the Birch interview on Blades Player, i think this is what happened.

McCabe's group, not linked to United has bought our share of the Hotel off of us, and we've ceased all financial links with Chengdu. Also surrendering our 50% share in Blades Realty. This has left us with a debt equal to that of the money owed from the 'Tevez Saga', of which the final payment is due in 2013, when we will be debt free.

As for how we lost £18m, it's far beyond may analysis to figure that one out. I'm guessing a lot of it is down to loss of parachute payments, and maybe back dated orders of Pie's for Turry! ;-)
 
Ive been saying it for ages, Wages have been well beyond what we could afford.
 
Deano said:
Does the full £18m loss relate to the one year? Given that we had turnover of £20m does this mean we spent £38m - and if so, what the xxxx on?

It would be good to see a breakdown of how the £18m loss was arrived at.

Good crowds, £10m surplus on player sales yet still an £18m loss. Doesn't make sense.
Click to expand...

Take the 10 million player sales you've highlighted, add the £4M + gate receipts and then deduct the £14M wage budget. You're already at break even with just those factors, before taking any other expenditure into account.
 
The £10m write off re property is included in the £18m loss I believe and doesn't represent cash spent in the year.
 
I for one find it hard to believe how gleeful some people on here are with the released figures. Maybe I am naive or optimistic but I don't read the statement and figures as all doom and gloom. There appear to be a number of positives to be taken, mainly that the football side is debt free to external sources and that we are going to be run in a professional manner. We might be alone in our desire to balance the books, expenditure will be covered by income, I imagine that this will mean ;

More Academy players, who are normally local and will have a sense of feeling for the club
Younger up and coming players bought from the lower leages rather than journeymen looking for their last big paycheck
A couple of season long loans from Premier clubs, where they contribute to the salary
A couple of shorter term loans to cover the holes in the squad as I imagine that would be at a minimum.
A lot of wheeling and dealing in the free transfer/Bosman market (Britton being a fine example)

For me this would be fine. Reality is starting to hit this division hard as we saw by how few transfers there were in the summer and I doubt that there will be many in the winter. There is no extra cash flying around and unless a premier club pays a big fee for a Championship player starting a wave effect I can't see much happening. Warnock might buy a couple of strikers as well !

I think McCabe is doing what he can to prop the club up without directly putting any more cash in and why should he? This club is a business and should be able to support itself.
 
Take the 10 million player sales you've highlighted, add the £4M + gate receipts and then deduct the £14M wage budget. You're already at break even with just those factors, before taking any other expenditure into account.
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Thats true but you are also missing off other sources of income such as sponsorship, advertising, tv income, prize money, merchandising etc. Our income is not merely 4 million gate receipts.
 
Prize money????
 

As I'm sitting an accounts exam tomorrow...

The £18.7m is mainly the £10m property write-down. It will also have been affected by whatever loss we took on Chengdu - if that was valued in the books at £10m and we sold it for £1m - which is quite likely - then that's a loss of £9m for the year. None of this affects the cash balance at all.

The rest is an unsustainable wage bill, loan fees, expenses relating to the property side for the last year, payment of interest on loans. If Chengdu cost £2.5m in 2009-10 as I think it did, it'll have cost considerably more in 2010-11 after their relegation. Not much of this will affect the accounts for 2010-11.

The factoring of the receivable (the money West Ham owe us) is nothing unusual either but Santander won't be doing it out of the goodness of their hearts. It's very, very different to borrowing against future season ticket sales which are not quantifiable. West Ham owe us that money so it's an asset.

Clearing the external debt has involved divesting almost all external assets but given the albatross they've been the past few years (Chengdu!) that is well worthwhile.
 
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