Town make £3.17 million loss

[Riviera]

Town's annual report and accounts reveal that the club made a loss of £3.17 million and took their overall debt to £35.75 million during the year to June 2005. However, chief executive Derek Bowden says the loss was to be expected in the first year without a Premiership parachute payment.

Bowden told TWTD: "I don't think fans should worry about the £3 million loss as it was always forecast that we'd make a loss this year. It's the first year without a parachute payment with one or two players still on Premiership wages.

"It's actually less of a loss than we budgeted and we're looking at a reduction in that loss for 05/06, so I don't think fans have anything to worry about."

The sale of Darren Bent to Charlton prior to the end of June 2005 prevented the loss from reaching £5 million, a figure which Bowden says would still have been within budget: "We've taken all of the Darren Bent fee into last year's accounts.

"However, the money doesn't come in until December this year and June the following year, so we've taken the view that we won't spend the money until we've got it. So, from a profit and loss point of view, the sale is recorded in 04/05, but from a cash available point of view we've got another two instalments as yet.

"The loss would have been nearer £5 million without the sale of Darren Bent but we had a player sale budgeted for July and, as it transpired, Bent was sold in the previous financial year. But our budgeted loss for the year was around £5 million, so it tallies."

Chairman David Sheepshanks also says that the results had been predicted: "Although it is never pleasing in business to report a loss, supporters should not be alarmed by the headline figure reported today. Twelve months ago we alerted shareholders to the fact that the financial year to June 2005 would be a tough one.

"Along with our commitment to the last of the Premiership player contracts and buoyed by extra income from loan note holders and increased gate revenue, the club invested in strengthening Joe Royle's squad as we pushed for promotion. In the end, as we all know, we narrowly missed out."

Despite the overall loss, Sheepshanks says the business is covering its day-to-day costs: "When one looks at cash flow, the most critical measure in a football business, there was an increase in cash of £609,000 in the year. The cash flow from our current activities – ie excluding payments arising from the period of administration, but including paying the required amount of interest on the 25-year, £25 million loan notes [Norwich Union bond] – is broadly break-even.

"We have been able to maintain positive bank current account balances throughout the year, and it is fundamental that we continue to do so."

Town's debt to Norwich Union grew from £25.17 million to £25.9 million in 2004/05. The rest of the overall £35.75 million debt (up from £34.4 million) comprises £4.7 million to Barclays (pre-administration overdraft), £2.07 million in loan notes taken out by ‘high value' investors since administration, £2.43 million in accruals and deferred income, £90,000 to other creditors, £79,000 of obligations under financial leases and hire purchase contracts and £384,000 owed on the CVA (Company Voluntary Arrangement).

Bowden says the club continue to meet with former administrators Deloitte and Touche and their major creditors on a regular basis: "Deloitte and Touche don't have to approve the accounts, but they are the supervisors of the CVA and we meet with them every quarter.

"It's very light touch really, unless we were in trouble, in which case it would be more heavy-handed, but we meet with them every quarter, as we do with Norwich Union and Barclays which is part of the CVA agreement, but is also sensible business.

"Deloitte are involved, they are aware of everything we are doing, but they see absolutely no reason to intervene in the day-to-day running of the club.

"The CVA ends in May 2007. I don't think we will notice a great deal of difference, we will be making slight fewer payments, those to the Crown (£389,000 in 2004/05) will have ceased by then, so there's a slight cash benefit at the end of the CVA. But in the way the club is run there will be no difference, we've run it prudently inside the CVA and we'll run it prudently outside it."

Town's turnover dropped from £24.37 million in 2003/04 to £17.48 million, the difference down to the lack of the £7.3 million parachute payment received in previous years.

The club's wage bill during 2004/05 was £7.1 million, above the budgeted figure of £5 million. Higher than expected crowds and additional investment via loan notes (£1.33 million) allowed the loan signings of David Unsworth and James Scowcroft, the permanent acquisition of Darren Currie and contract extensions for a number of existing players.

Chairman David Sheepshanks took out a new £50,000 loan note but no other directors added further to their investment in the club. The accounts reveal that Sheepshanks's annual salary is £67,000, while Derek Bowden receives £140,000.

The club would have launched a second share issue had they been promoted or reached the play-off final, however, after a second successive loss at the semi-final stage, the proposal was shelved but could still happen at a later stage. The planned offer would have asked existing shareholders to increase their stake in the club.

Bowden says that manager Joe Royle will not be forced to sell during the transfer window: "Unless there's an extraordinarily good football reason for players to leave in January there will be no movement. There's absolutely no financial pressure at all on the manager to sell a player and if anything we'd like to bring more players in between now and January.

"It could be a combination of both loanees or permanent signings. We'll take a view at the end of December based on attendances, and we may even have a good cup draw by then. If there's more money in the club, then more money will be made available to Joe."

The club's AGM will be held at Suffolk College on Thursday, December 1st when shareholders will vote on the appointment to the board of financial director Anna Hughes and sales and marketing director Andrew Goulborn, as well as the re-elections of existing board members Derek Bowden, Kevin Beeston and Holly Bellingham.

[hallamblue]

everything's all in order then ..and better than "planned " !!

[Riviera]

everything's all in order then ..and better than "planned " !!

going on past quotes and news coming out of the club hallam, if take most of that with a huge pinch of salt lol

[crazee]

just a pinch of salt? im buying a salt mine! but it is reassuring that the loss is smaller than expected

[Dubai Blue]

This all makes interesting reading and is broadly speaking good news.

I would say there are a couple of points worth making;

a. Whilst we are in debt, the huge majority of our debt is well managed. I would love to know, however, why our debt to NU increased and also what arrangement we have with Barclays for repayment of the converted overdraft, (term, interest rate). As I understand it the NU money was to develop the ground in order to increase capacity and the cost is projected to at least be repaid against increased capacity. So if our crowds went up why did our NU debt go up also ? Is this good management ?
b. Only 384k remains under the CVA and with most of the Darren Bent income deferred from cash flow this should disappear within schedule. That means that we should soon be able to look more of the local businesses to whom we owe money in the eye. This is important.
c. Excluding parachute payments we increased our turnover by around 400k last year which is pretty good without any significant cup run. This amount again is more than the remaining 'unconverted' CVA debts. Would be good to know how much of this increase is down to Mr. Bowden's improved marketing of products and peripherals (concerts &c) and how much down to attendances.
d. This shown how closely our chances of increasing our playing staff are tied to attendances and cup runs. 2 comments on this;
1. Why don't we take cups more seriously then ?
2. Our standing in the championship is vital to keeping the supporters coming who will drift away if we don't look like being very successful. If we don't get into the play-off zone (top eight) fairly soon it could be than plans for increasing the playing staff will have to be shelved.
e. I think these figures show that we can really believe them when they say that we are under no pressure to sell. It doesn't mean we won't sell but it means we don't have to.

Does anybody go to the open evenings and know the answers to some of these questions ?

[Mork]

I don't quite see how anyone can read that and take many positives from it.

Essentially, the club isn't a viable concern yet, and is losing money - its debt is extremely large compared to it's income, and its going to take many, many years to deal with it - the only way of even making headway, is going to be by cutting costs, which in football terms, will translate to lower quality players, which in turn, almost guarantees a prolongued existence in the Championship or worse - meaning attendances will almost certainly go down, fickle bastards quickly giving up on the team, and confining town to second-tier football for the forseeable future.

Depressed now?

[phily bon bon]

This all makes interesting reading and is broadly speaking good news.

I would say there are a couple of points worth making;

a. Whilst we are in debt, the huge majority of our debt is well managed. I would love to know, however, why our debt to NU increased and also what arrangement we have with Barclays for repayment of the converted overdraft, (term, interest rate). As I understand it the NU money was to develop the ground in order to increase capacity and the cost is projected to at least be repaid against increased capacity. So if our crowds went up why did our NU debt go up also ? Is this good management ?
b. Only 384k remains under the CVA and with most of the Darren Bent income deferred from cash flow this should disappear within schedule. That means that we should soon be able to look more of the local businesses to whom we owe money in the eye. This is important.
c. Excluding parachute payments we increased our turnover by around 400k last year which is pretty good without any significant cup run. This amount again is more than the remaining 'unconverted' CVA debts. Would be good to know how much of this increase is down to Mr. Bowden's improved marketing of products and peripherals (concerts &c) and how much down to attendances.
d. This shown how closely our chances of increasing our playing staff are tied to attendances and cup runs. 2 comments on this;
1. Why don't we take cups more seriously then ?
2. Our standing in the championship is vital to keeping the supporters coming who will drift away if we don't look like being very successful. If we don't get into the play-off zone (top eight) fairly soon it could be than plans for increasing the playing staff will have to be shelved.
e. I think these figures show that we can really believe them when they say that we are under no pressure to sell. It doesn't mean we won't sell but it means we don't have to.

Does anybody go to the open evenings and know the answers to some of these questions ?

Good points I wish I had answers to ,but I dont think its as bad as you fear mork.The future is bleak but manageable and as long as the fans dont desert the teamm and joe can get the lads to put a decent run together who knows.
Im most disappointed with the attitudes towards cup games....I really cant tell you all how P#"¤%ed off I am with the attitude towards them they would CLEARLY bring in despiratley needed cash and raise morale amongst the team.




Im trying to be positive in these difficult times

Oh well onwards and upwards

[toby]

One question concerns me, what are we doing to ensure that Lazio keep their side of the bargain with regard to the transfer of Matteo Sereni?

Surely David Sheepshanks, with his connections at high levels in the game, could do something to ensure that if the friendlies scheduled (for what, two years ago now?) don't go ahead then we at least recieve some financial remuneration.

Why are we letting Lazio weasel out of their debt when we need every pound we can get?

[Mork]

One question concerns me, what are we doing to ensure that Lazio keep their side of the bargain with regard to the transfer of Matteo Sereni?

Surely David Sheepshanks, with his connections at high levels in the game, could do something to ensure that if the friendlies scheduled (for what, two years ago now?) don't go ahead then we at least recieve some financial remuneration.

Why are we letting Lazio weasel out of their debt when we need every pound we can get?

I guess he doesn't want to burn any bridges, and has some kind of committment from Lazio and a timeline.

They must be on their last chance however.

[Dubai Blue]

Yes Toby I was concerned about this too. I suspect that our board is using strong methods but is not able to get very far. However it would do no harm, I believe, to show us clearly that strong methods are being used and maybe even strong words. Otherwise we will be inclined not to believe it.

Sadly Lazio are far more bankrupt than we are so any hope of getting some payment as part of a deal are fantasy land. We are going to have to buy tickets to the friendlies to get this money in the club's bank account. Effectively we are paying, not Lazio.

[Aluren]

Yes Toby I was concerned about this too. I suspect that our board is using strong methods but is not able to get very far. However it would do no harm, I believe, to show us clearly that strong methods are being used and maybe even strong words. Otherwise we will be inclined not to believe it.

Sadly Lazio are far more bankrupt than we are so any hope of getting some payment as part of a deal are fantasy land. We are going to have to buy tickets to the friendlies to get this money in the club's bank account. Effectively we are paying, not Lazio.

Correct, Lazio's debts are projected at £180m

[sirbobby]

The accounts reveal that Sheepshanks's annual salary is £67,000, while Derek Bowden receives £140,000

Bowden is on £2692 a week.

[Dubai Blue]

Seems to be appropriate for an organisation turning over around 20 million a year. Who do you want doing it, Noddy ?

[phily bon bon]

Seems to be appropriate for an organisation turning over around 20 million a year. Who do you want doing it, Noddy ?

Is he available

[the-mole]

Seems to be appropriate for an organisation turning over around 20 million a year. Who do you want doing it, Noddy ?

Well big ears is earning £67,000 for the priviledge of working 2 days per week!!! One of those days being match days where all he is doing is wining and dining - sign me up and I will do it for only 20,000 - saving the club £47,000 in the process!!!!

So in essence we are paying sheepshanks £520/day for what he works!!! Nice easy money me thinks!!

[Dubai Blue]

Would be interesting if Sheepy, (or any other club chairman for that matter), allowed a nominated supporter to shadow him for a week to see what he actually does.

As it stands none of us (including, perhaps surprisingly, those with strong opinions) really has a clue what he/she gets up to. I think it would be useful for football supporters up and down the land to know this.

Why not suggest this at the next club open evening ?

[Mork]

Seems to be appropriate for an organisation turning over around 20 million a year. Who do you want doing it, Noddy ?

Well big ears is earning £67,000 for the priviledge of working 2 days per week!!! One of those days being match days where all he is doing is wining and dining - sign me up and I will do it for only 20,000 - saving the club £47,000 in the process!!!!

So in essence we are paying sheepshanks £520/day for what he works!!! Nice easy money me thinks!!

Personally dunno how he survives on such a meagre salary.

[the-mole]

Seems to be appropriate for an organisation turning over around 20 million a year. Who do you want doing it, Noddy ?

Well big ears is earning £67,000 for the priviledge of working 2 days per week!!! One of those days being match days where all he is doing is wining and dining - sign me up and I will do it for only 20,000 - saving the club £47,000 in the process!!!!

So in essence we are paying sheepshanks £520/day for what he works!!! Nice easy money me thinks!!

Personally dunno how he survives on such a meagre salary.

I think he is struggling hehe - hence the red face!!

[McDonna29]

The accounts reveal that Sheepshanks's annual salary is £67,000, while Derek Bowden receives £140,000

Bowden is on £2692 a week.

Apparently the Championship average salary for their chairman is £200k a year for a 5 day week.

So Sheepshanks £67k for 2 days work is well in line with everyone else based on a daily rate.

Add Bowdens £120k a year to Sheepy's £67k and you have a total of £187k per year on the people who effectively run the club.

But Sheepy works 2 days, Bowden 5 days, so for less than the Championship average wage we are getting 7 man days per week rather than other clubs 5 man days.

My argueing is quite likely flawed and I'm sure will tear it shreds, but to me it seems like we actually get quite a good deal

[Dubai Blue]

I don't think your conclusion is wrong McDonna. Especially if some of those champ clubs have an equivalent to Bowden as well.

I am sure we would all like to be on the money these boys are on, (maybe some of us are), but we shouldn't let this blind us to the fact that thay are certainly not being overpaid for their positions.

Whether they perform as well as we would like ...... well we can debate that as much as we want. But the issue of overpaid/underpaid you have effectively closed. Unless we regard ourselves as way below the status of an average champ club of course

[the-mole]

I don't think your conclusion is wrong McDonna. Especially if some of those champ clubs have an equivalent to Bowden as well.

I am sure we would all like to be on the money these boys are on, (maybe some of us are), but we shouldn't let this blind us to the fact that thay are certainly not being overpaid for their positions.

Whether they perform as well as we would like ...... well we can debate that as much as we want. But the issue of overpaid/underpaid you have effectively closed. Unless we regard ourselves as way below the status of an average champ club of course

I think you have hit the nail on the head there. Whilst bigger richer clubs in this division can afford to pay big money for their chairmen who may actually be doing the work of 3 guys we cannot. We talk about wanting to be a big club but the truth is we are working very similarly to a club like crewe. Whose chairman I am pretty sure might not be earning £200,000 per year!!

[the-mole]

I don't think your conclusion is wrong McDonna. Especially if some of those champ clubs have an equivalent to Bowden as well.

I am sure we would all like to be on the money these boys are on, (maybe some of us are), but we shouldn't let this blind us to the fact that thay are certainly not being overpaid for their positions.

Whether they perform as well as we would like ...... well we can debate that as much as we want. But the issue of overpaid/underpaid you have effectively closed. Unless we regard ourselves as way below the status of an average champ club of course

I think you have hit the nail on the head there. Whilst bigger richer clubs in this division can afford to pay big money for their chairmen who may actually be doing the work of 3 guys we cannot. We talk about wanting to be a big club but the truth is we are working very similarly to a club like crewe. Whose chairman I am pretty sure might not be earning £200,000 per year!!

I think the point I am trying to highlight here is there is no such thing as an average wage - or paid in line with other clubs etc. All people should be paid in accordance with the results they achieve regardless of the competition. IMO sheepshanks is overpaid for what he seems to be doing. I think perhaps Bowden is paid about right. Just because we may be paying slightly under average for 2 guys I seriously doubt this is something to be happy about. It just means we are paying for an area of the club which pulls more resource away from the team.

[Dubai Blue]

Some interesting points there Mr. Mole. I suspect that this season may well serve as an indication of whether we are able to consider ourselves big so I suppose the jury is out there.

As I understand it Derek Bowden was recruited, on the initiative of Mr. Sheepy in order to beef up the performance of the club in terms of non-match revenue earning. As usual we don't know the details of where it came from but turnover alone was up by 400k last year. This alone is twice what the guys got paid during the same period and this ignores the fact that they are responsible for ensuring that the organisation receives the other 17+ million and that this revenue figure doesn't drift.

The two of them presided over redundancies last year. We don't know how much this saved but they planned it, implemented it and ensured that the club still ran fine despite of it.

I own and run a group of businesses myself and am very much a numbers man. Whenever cashflows get tight or it looks like I might not be making any money I always instinctively look at the big numbers and think about how i can get rid of them.

I learnt a long time ago that often when I 'lose' expensive people to save costs it doesn't take long to find out just why they were so expensive. And fixing the problem usually costs a lot more than not shooting yourself in the foot in the first place

I suspect they are being paid the going rate for what they do. but I can't really be sure. Maybe even below. Or the other major shareholders wouldn't tolerate it. As always the question really is, 'could they be doing more to justify it'. And unfortunately to answer that question one would have to be a lot closer to the club and its workings than we are.