Evo Posted 1 July, 2009 Share Posted 1 July, 2009 So, what is the business case for SFC + SMS? Over the last week or so, I've been trying to get my head round the respective accounts of the SLH group constituents. I've detailed the salient points below. This is from the last available set of accounts - for the year ending 2007. Bear in mind that a lot has happened since then... ST MARYS SPV LIMITED 03998175 N/A ST MARYS STADIUM LIMITED 03798424 Turnover £9,625,344 Direct Costs £5,548,220 Admin Costs £1,168,932 Profit £2,908,192 Interest payments £2,462,209 Net profit £445,983 -- League ticket income £4.7m, cup ticket income £0.3m -- Assets: Stadium Stadium building freehold £17.9m Stadium land freehold £8.3m Fixtures & Fittings £10.9m Accrued finance Costs, depreciation etc. (£7.2m) Net Value £29.9m Investments £2.5m Cash in hand £1.5m Debtors (£10.4m of which from SFC...) £10.5m Total £14.5m Total Assets £44.4m Liabilities: Current Liabilities Trade Creditors £0.04m Amounts due to parent company undertakings £9.5m Amounts due to other group companies £2.2m Taxes, accruals & deferred income £3.8m Total £15.5m Long term liabilities Loans due to other group companies within 1-2 years £0.6m Loans due to other group companies within 2-5 years £2.1m Loans due to other group companies within 5+ years £19.5m Accruals & deferred income £4m Total £26.2m Total Liabilities £41.7m Book Value Total Assets £44.4m Total Liabilities £41.7m Provisions £1.4m Share Capital £2 Net Book Value £1.4m ST. MARY'S TRAINING CENTRE LIMITED 02892833 Dormant ST. MICHAEL'S STREET HOMES (NO.1) LIMITED 02342581 N/A SOUTHAMPTON FOOTBALL CLUB LIMITED 00053301 Turnover £19,048,280 Direct costs £21,778,590 Loss on disposal of players £2,565,614 Net Loss £5,295,924 Assets: Fixed assets: Player registrations £5.4m Equipment & Vehicles £0.9m Total £6.3m Current assets: Stock £0.4m Debtors £6.8m Cash in hand £0.7m Total £7.9m Total assets £14.2m Liabilities: Current Liabilities: Bank Loan £0.1m Football League Loan £0.1m Trade Creditors £1.7m Amounts due to Group undertaking £10.4m Tax & S/S £1.7m Accruals £1m Finance Lease £0.1m Total £15.1m Long term Liabilities Bank Loan £0.4m Football League Loan £0.1m Trade Creditors £0.2m Finance Lease £0.2m Total £1m Total Liabilities £16.1m The bank loan relates to a loan taken out in 2003 for £1m, secured against group freehold properties, with quarterly repayments. Interest fixed at 2% over base. At the end of f/y 2007, SFC was liabile to pay other clubs up to £1.6m in respect of players under contract - dependent on appearances and international appearances. Between the end of f/y 2007 and the time the accounts were submitted ( April 2008 ) £9.6m had been raised in player sales. Players & Staff Costs were £14.1m, excluding SLH director remuneration, which is in the SLH group accounts (I don't have those to hand). Lawrie was paid £75k p/a by SFC though. Book Value: Total Assets £14.2m Total Liabilities £16.1m Provisions £0.5m Share Capital £52,270 Net Book Value (£2.5m) SFC made a loss of £6m before player sales in 2007. The SFC accounts truly are a horror show. It's easy to see how we ended up in this mess... Clearly the business case for any purchaser is going to be contingent on promotion to a degree. With the infrastructure we have in place they will need to subsidise the operation of the club until we reach the big time again. Much will depend on the deal they can strike with Aviva over the stadium loan - this is by far the biggest millstone hanging around our collective necks. This raises a difficult question - which is better for a prospective owner, disband as much of the Saints infrastructure as possible to get the running costs down, but accept that this is likely to leave us unprepared should we gain promotion - or - potentially have to subsidise the running of the club for a long time in the hope that promotion is obtained? Link to comment Share on other sites More sharing options...
buctootim Posted 1 July, 2009 Share Posted 1 July, 2009 IMO buying Saints only makes sense for two groups of people Very wealthy Saints / football fans who see a real medium term prospect of competing in the Prem and are prepared to take a punt. They will know they could potentially lose a lot of money. Property people who are preapred to give the club a reasonable chance to turn itself around, but wont hesitate to sell off assets - incl SMS, Jacksons Farm and Staplewood to recoup losses if they dont look like getting promoted and increasing the clubs value quickly. Link to comment Share on other sites More sharing options...
Whitey Grandad Posted 1 July, 2009 Share Posted 1 July, 2009 What's this 'amounts due to parent company undertakings'? Link to comment Share on other sites More sharing options...
benjii Posted 1 July, 2009 Share Posted 1 July, 2009 It is the loan that St Mary's Stadium provided to SLH PLC - see the £10.6m "Debtors" entry on SMS Ltd's sheet. Link to comment Share on other sites More sharing options...
Gemmel Posted 1 July, 2009 Share Posted 1 July, 2009 Much will depend on the deal they can strike with Aviva over the stadium loan - this is by far the biggest millstone hanging around our collective necks. From a commercial perspective, any take over will be pretty much dependant on the above. If the Pinnacle figure of 14 million was correct (And I assume now reduced by the value of player sales) that would suggest that Aviva are looking for anywhere between 6 - 9 million, which is obviously a huge hit for them, but not without precedent. Given the revenue streams that even in league 1 we could achieve it becomes far more attractive to buy out right now at low cost, rather than re-negociate the loan / mortgage and still be saddled with 24 milion pounds worth of debt. Everything written suggests Aviva are playing ball and are prepared to accept a massive reduction. Someone with the availble cash could make a significant return within a comparatively short time frame and even more if the club ever gain promotion Link to comment Share on other sites More sharing options...
Whitey Grandad Posted 1 July, 2009 Share Posted 1 July, 2009 It is the loan that St Mary's Stadium provided to SLH PLC - see the £10.6m "Debtors" entry on SMS Ltd's sheet. If it's between SMS and SLH then why does it appear on SFC as a current liability? Link to comment Share on other sites More sharing options...
benjii Posted 1 July, 2009 Share Posted 1 July, 2009 If it's between SMS and SLH then why does it appear on SFC as a current liability? Sorry - my mistake. "SLH PLC" in my post should have read "SFC Ltd". Link to comment Share on other sites More sharing options...
CB Fry Posted 1 July, 2009 Share Posted 1 July, 2009 From a commercial perspective, any take over will be pretty much dependant on the above. If the Pinnacle figure of 14 million was correct (And I assume now reduced by the value of player sales) that would suggest that Aviva are looking for anywhere between 6 - 9 million, which is obviously a huge hit for them, but not without precedent. Given the revenue streams that even in league 1 we could achieve it becomes far more attractive to buy out right now at low cost, rather than re-negociate the loan / mortgage and still be saddled with 24 milion pounds worth of debt. Everything written suggests Aviva are playing ball and are prepared to accept a massive reduction. Someone with the availble cash could make a significant return within a comparatively short time frame and even more if the club ever gain promotion Correct. So the big win is to get a multimillion stadium with decades of life in it for a knock down price. By the way, this (a knock down stadium and potentially debt free when other clubs are spending millions on new stadiums) is the sporting advantage we are getting the sporting sanctions over (10 points). Writing off huge debts is the advantage you get from going into admin. But no one ever listens when I post that. Link to comment Share on other sites More sharing options...
Whitey Grandad Posted 1 July, 2009 Share Posted 1 July, 2009 Sorry - my mistake. "SLH PLC" in my post should have read "SFC Ltd". Ta for that. So SMS loaned 10m+ to SFC and SFC has to pay interest on this as well as 'rent' for using the stadium? Direct costs of over £21m would seem to have been the problem. Link to comment Share on other sites More sharing options...
buctootim Posted 1 July, 2009 Share Posted 1 July, 2009 Correct. So the big win is to get a multimillion stadium with decades of life in it for a knock down price. By the way, this (a knock down stadium and potentially debt free when other clubs are spending millions on new stadiums) is the sporting advantage we are getting the sporting sanctions over (10 points). Writing off huge debts is the advantage you get from going into admin. But no one ever listens when I post that. All thats true - but with big assets come big maintenance charges. You need deep pockets to be able to fund the losses until you can get back to the position where the assets start to work for you again instead of against you - ie in the Prem and filling the ground. Link to comment Share on other sites More sharing options...
Whitey Grandad Posted 1 July, 2009 Share Posted 1 July, 2009 Correct. So the big win is to get a multimillion stadium with decades of life in it for a knock down price. By the way, this (a knock down stadium and potentially debt free when other clubs are spending millions on new stadiums) is the sporting advantage we are getting the sporting sanctions over (10 points). Writing off huge debts is the advantage you get from going into admin. But no one ever listens when I post that. I hear you. The sanctions are not so much for what has happened but for what will happen. Link to comment Share on other sites More sharing options...
Gemmel Posted 1 July, 2009 Share Posted 1 July, 2009 All thats true - but with big assets come big maintenance charges. You need deep pockets to be able to fund the losses until you can get back to the position where the assets start to work for you again instead of against you - ie in the Prem and filling the ground. Fag Packet maths; Average attenance fo this coming season 14,000 (I think it will be higher, but for arguments sake) 70% at £19 (Also think this might be higher) 30%at concessions £9 £190,000 + £40,000 tickets + (pure guess) £30k profit from matchday revenue = £260k per match which without concerts, corporate functions and cup matches is over 5 million a year, I think with the extras above that would hit 6 milion. Link to comment Share on other sites More sharing options...
bigdavewatson Posted 1 July, 2009 Share Posted 1 July, 2009 Great post, clarifies a couple of grey areas I had. Cheers Link to comment Share on other sites More sharing options...
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