Time to dump the plc

[Guided Missile]

As many of our more vocal posters have suggested for a long time, I think it is time to delist Southampton Leisure plc and admit that the original basis for our listing, first on the main market and now on AIM was an expensive mistake from the outset.

 

Yesterday Sheffield United delisted from AIM, citing economic turmoil and costs. The group was reported in the Times today as saying that the susceptibility of its share price to market conditions was not to the business's benefit and its AIM listing took up too much management time and money, which could be better spent on getting the football side back into the Premier League. Moreover, it said that, like most other listed football clubs, it is unable to raise funds from institutional investors and did not expect this to change in the foreseeable future.

 

Circumstances change and I think it's time to recognise that. The problem is, the main architect of the original listing is running the plc. I wonder if he has the humility to admit that listing hasn't worked, beyond being able to obtain a mortgage at a cost of 6.5% over base for the construction of our new shed.

 

I wonder how many players we could retain with the money saved by delisting?

[Gemmel]

As many of our more vocal posters have suggested for a long time, I think it is time to delist Southampton Leisure plc and admit that the original basis for our listing, first on the main market and now on AIM was an expensive mistake from the outset.

 

Yesterday Sheffield United delisted from AIM, citing economic turmoil and costs. The group was reported in the Times today as saying that the susceptibility of its share price to market conditions was not to the business's benefit and its AIM listing took up too much management time and money, which could be better spent on getting the football side back into the Premier League. Moreover, it said that, like most other listed football clubs, it is unable to raise funds from institutional investors and did not expect this to change in the foreseeable future.

 

Circumstances change and I think it's time to recognise that. The problem is, the main architect of the original listing is running the plc. I wonder if he has the humility to admit that listing hasn't worked, beyond being able to obtain a mortgage at a cost of 6.5% over base for the construction of our new shed.

 

I wonder how many players we could retain with the money saved by delisting?

 

Much as I would like us to delist, is it as simple as the board voting on it? How do the shareholders get paid off?

[Scummer]

Much as I would like us to delist, is it as simple as the board voting on it? How do the shareholders get paid off?

 

Think they'd still be shareholders, we just wouldn't be listed on the AIM any more.

[Guided Missile]

Think they'd still be shareholders, we just wouldn't be listed on the AIM any more.

75% of the shareholders would be required to vote for delisting. It means that if approved, they would no longer be able to publically trade their shares. (and the share price would drop)

[Johnny Bognor]

As many of our more vocal posters have suggested for a long time, I think it is time to delist Southampton Leisure plc and admit that the original basis for our listing, first on the main market and now on AIM was an expensive mistake from the outset.

 

Yesterday Sheffield United delisted from AIM, citing economic turmoil and costs. The group was reported in the Times today as saying that the susceptibility of its share price to market conditions was not to the business's benefit and its AIM listing took up too much management time and money, which could be better spent on getting the football side back into the Premier League. Moreover, it said that, like most other listed football clubs, it is unable to raise funds from institutional investors and did not expect this to change in the foreseeable future.

 

Circumstances change and I think it's time to recognise that. The problem is, the main architect of the original listing is running the plc. I wonder if he has the humility to admit that listing hasn't worked, beyond being able to obtain a mortgage at a cost of 6.5% over base for the construction of our new shed.

 

I wonder how many players we could retain with the money saved by delisting?

 

Totally agree - the extra cost in staying listed completely outweighs any 'benefit' that we might now receive.

[Guided Missile]

For those interested:

 

Unfortunately, the story is very different for most of the companies listed on AIM, which are valued at less than £20 million. All too often shares lack liquidity and it’s not unusual for a company to have a market cap lower than its balance sheet value. For these concerns, AIM has turned into a form of purgatory. A business can neither go forward or backwards but is paying around £250,000 a year in adviser fees for the privilege of being listed.

The credit crisis has compounded market woes. Only 34 companies joined the junior exchange in 2008, raising £537.14 million, compared to 77 companies raising over £2.1 billion for the same period in 2007. Secondary fundraisings are way down too, with £1.5 billion raised between January and May this year, compared to £4.3 billion for the first five months of 2007.

Ken Pratt, the managing director of operations and finance for Imagesound, a supplier of in-store music, radio and TV services to shops and hotels, was part of the team who delisted the company from AIM in May. ‘AIM was failing us,’ he says. ‘We floated specifically to raise equity. The company was profitable and we wanted equity to come in and then to match that with bank debt to enable us to go forward with our expansion.’

It wasn’t happening. The defining moment came last summer: ‘We approached our nomad – this was before the banking crisis – and their appetite for raising equity was sort of there but couldn’t be guaranteed. As a result, we went and lost a very good deal – perhaps a life changing deal – because the equity couldn’t be brought in.’

 

Breaking free

 

From start to finish, it took about three months to delist from the market. To delist from the LSE, 75 per cent of shareholders have to approve the proposal (as opposed to 100 per cent when going fully private). Pratt says that 70 per cent of Imagesound’s shares were held by 15 people, so it was straightforward to know what direction the company could take.

‘It’s not a buy-out. All we have done is delist. The shares are still out on the open market; they are now traded on a match bargain basis by Brewin Dolphin over in Manchester. In fact I went and bought 16,000 shares the other day.’

The costs are not as prohibitive as might be imagined, argues Tim Stocks, head of the financial institutions and markets group at law firm Taylor Wessing. He estimates that for a company with a market cap of £50 million, the costs of going totally private would be around ten per cent of that public valuation.

The ‘take private-lite’ option is considerably cheaper than going fully private as fewer advisers are needed. ‘Without any technical bells or whistles, I think you should be able to deliver this all up, including the advisory fees, for in the region of £200,000,’ he says. ‘But you’re dropping between £80,000 to £150,000 straight to the bottom line anyway [in advisers’ fees]. You’ll get payback in the first year.’

[Big Bad Bob]

OK, that saves us £250k a year but then what??

[saintjay77]

To be honest I am interested in what happens on the pitch and think the people on the board should worry about this kind of stuff.

 

maybe im just old fashoned

[Master Bates]

Just had my dump spank you.

[Mole]

GM i've long been against the whole concept of the club being a PLC. I'm just a simple fan and don't know the itrical stuff like a businessman like you would, but i just can't accept the priniple of a PLC whereby the club is run for the shareholders. In my view Saints is a sports club in it's simplest terms - a bit like your locals bowls club. Money raised through player sales and tickets should go back into the club - not some of the money and some of it to shareholders. It's just plain wrong for a comunity institution to be like this.

 

I don't know how feasible it is for us to de-list, but it should be the aim for the club to get back to basics.

[Long Shot]

75% of the shareholders would be required to vote for delisting. It means that if approved, they would no longer be able to publically trade their shares. (and the share price would drop)

 

Turkeys, unfortunately don't vote for Christmas.

[alpine_saint]

As many of our more vocal posters have suggested for a long time, I think it is time to delist Southampton Leisure plc and admit that the original basis for our listing, first on the main market and now on AIM was an expensive mistake from the outset.

 

Yesterday Sheffield United delisted from AIM, citing economic turmoil and costs. The group was reported in the Times today as saying that the susceptibility of its share price to market conditions was not to the business's benefit and its AIM listing took up too much management time and money, which could be better spent on getting the football side back into the Premier League. Moreover, it said that, like most other listed football clubs, it is unable to raise funds from institutional investors and did not expect this to change in the foreseeable future.

 

Circumstances change and I think it's time to recognise that. The problem is, the main architect of the original listing is running the plc. I wonder if he has the humility to admit that listing hasn't worked, beyond being able to obtain a mortgage at a cost of 6.5% over base for the construction of our new shed.

 

I wonder how many players we could retain with the money saved by delisting?

 

Never going to happen. Lowe's credibility would be shot to pieces. Remember, he is now saying he "stepped down for the sake of unity". His image means everything to him.

[Mole]

Remember, he is now saying he "stepped down for the sake of unity".

 

Which is total ******** as he hung on until he had no choice but to step down.

[alpine_saint]

Which is total ******** as he hung on until he had no choice but to step down.

 

Yep, so that the club incurred most of the costs of the aborted EGM. Bastard.

[Guided Missile]

Turkeys, unfortunately don't vote for Christmas.

If we have no prospect of raising investment due to our AIM listing and the market for the shares is moribund, then the prospect of an extra £250K on our bottom line and some hope of dividends in the future should convince the Saints fans that hold shares to vote for delisting. Those institutional investors that want to get out can sell their shares to the Saints fans, to whom a capital gain on their shareholding is not important, but a healthier club, not paying £250K plus per annum to Seymour Pierce, is...

[IronCitySaint]

For once I am in total agreement with you. This AIM listing is costing way more than any value we get from it and, IMO, the plc has been a total failure and hindered any progress that should have been made since its inception. Glad to see that a club like Sheffield Utd., who have many similarities to ourselves, are leading the way on this and hopefully this lead will be followed by our illustrious board. Fat chance, though.

[Big Bad Bob]

Right, we delist, the same people hold the same amount of shares, just now (for some reason) they are worth less!

 

Now there's no transparency, no accounts need to be published, no-one telling us how much wages people earnt etc. etc. etc.

 

Who would that please the most? Fans? I think not!

[bridge too far]

Bob I think ALL PLCs have to publish their accounts annually. I know my (little) company does.

[Guided Missile]

Now there's no transparency, no accounts need to be published, no-one telling us how much wages people earnt etc. etc. etc.

 

Who would that please the most? Fans? I think not!

 

I would be quite pleased if the club saves itself £250K a year, for another player. I can also wait until the accounts are published on the Companies House website like any other plc. Your contention is totally wrong, assuming that an unlisted company has a lack of transparency. I seem to remember that Northern Rock was listed until it was taken into private ownership (ie the taxpayer bought it). Listing has never guaranteed "transparency" and anyway, what right do the fans have to know the wages that are paid, etc. Just another reason to moan, IMHO...

Edited 5 December, 2008 by Guided Missile

[um pahars]

I would at least like to see an open and honest debate about why we maintain our AIM listing, the cost of listing and compliance etc, set off aginst the benefits (tangible or not).

 

My personal opinion is that I can no longer see the point in maintaining such a listing, but would be only too happy for people to explain why we should.

 

I would be quite pleased if the club saves itself £250K a year, for another player. I can also wait until the accounts are published on the Companies House website like any other plc. Listing has never guaranteed "transparency"

 

With regards transparency, there is nothing to stop the Club/company providing more information to fans (remember the three year or so cashflow they put on the OS a few years back).

 

Of course we should never compromise our competitive position, but I see nothing wrong with providing more detailed information to both shareholders and supporters.

 

As you yourself said the other week, this Club has a special role in the community, so why not talk in an open and honest way with the community?

 

Those institutional investors that want to get out can sell their shares to the Saints fans,

 

As far as I am aware we have no major institutional investors (at least above 3% anyway), so I can't really see any obstacles out there (apart from Lowe and his cabal of course).

[John B]

What were happen to our loans if we were not a PLC?

[um pahars]

Time to dump the plc

 

BTW, you might want to rephrase your question as although we all know what you really mean, i.e. time to dump the listing on AIM, dear old Jonah might have a heart attack if he sees this title.

[Toadhall Saint]

GM i've long been against the whole concept of the club being a PLC. I'm just a simple fan and don't know the itrical stuff like a businessman like you would, but i just can't accept the priniple of a PLC whereby the club is run for the shareholders. In my view Saints is a sports club in it's simplest terms - a bit like your locals bowls club. Money raised through player sales and tickets should go back into the club - not some of the money and some of it to shareholders. It's just plain wrong for a comunity institution to be like this.

 

I don't know how feasible it is for us to de-list, but it should be the aim for the club to get back to basics.

 

Great post and totally agree!! But how else can lowe feather his own nest.

[Gorgiesaint]

Great post and totally agree!! But how else can lowe feather his own nest.

 

De-listing the club in itself won't solve the 'problem' of the owners taking a dividend. Even if the club was in private hands, you would expect the owner to want some return for the £50m or so they would need to stump up. And no-one has yet found a Saints mad fan with that kind of money kicking around who doesn't want any return.

 

However if de-listing would save the club money then it should be looked at. Can someone who owns some shares get this question tabled at the AGM? At least then we can get a debate started amongst the shareholders over who would be in favour. The only other question mark would be if barclays would be happy with us de-listing, but I cannot think why given the potential savings.