Topic: Collating headline financial numbers from the club's Annual Accounts

[Witherkay]

Interesting Witherkay. Will add in some detail which may explain the 'whys'....

Liverpool Football Club and Athletic Grounds Ltd and Kop Football (Holdings) Ltd  - 26th February. At this date, refinancing has been secured from RBS until 3rd March.
Kop Football Ltd - 17th March. At this date, RBS have extended refinancing til 19th March.

Thanks Zeb.

I understand the 'practical' issues that could arise, but the Club is the only income generating company in the group isn't it? Directors have a responsiblity to look at least 12 months forward, etc, and the auditors should consider the factors the directors rely on for going concern before they sign off the audit reports. So surely the arrangement of such short term finance would not be compelling enough for the auditors to be satisfied that all the companies in the group were going concerns? (I am aware they did mention fundamental uncertainty, etc, but not an outright qualification or 'no opinion' - which presumably could have lead to a calling in of all loans?).

I also don't understand how auditors can form an opinion on the only income generating company, but not be 100% happy that one of its parent companies was also solvent. Surely the 3 companies are so reliant upon each other - one theoretically provides the future earnings up the group that 'promises' to repay the loans, whilst another the bulk of the loans themselves down through the group, etc. They cannot be that mutually exclusive.

Maybe I am just trying to read too much into it.

[Witherkay]

With my audit hat on, no reason why there should be a delay filing accounts at CosHse once signed by auditors.
Usually the rush is on to get signed by the filing deadline, but once done its couriered over to Cos Hse

Where would we be without the last few days of the month rush!!!  Now even more compressed to the last day with online filing...

Sitting on the signed accounts for over two months seems very strange, especially as they appear to have deliberately planned for them to get to Companies House for the 30th April. I appreciate the late filing penalties are small change in the grand scheme of things with 'our' debts, but why not file on 17th March when all sets where signed? Who were they trying to keep out of the loop for as long as possible?

[redmen77]

Where would we be without the last few days of the month rush!!!  Now even more compressed to the last day with online filing...

Sitting on the signed accounts for over two months seems very strange, especially as they appear to have deliberately planned for them to get to Companies House for the 30th April. I appreciate the late filing penalties are small change in the grand scheme of things with 'our' debts, but why not file on 17th March when all sets where signed? Who were they trying to keep out of the loop for as long as possible?

I would guess that it had something to do with RBS negotiations and the appointment of the new chairman.

[dwesty]

I'm wondering how much we've actually lost (in regeneration grants etc) by not actually putting the spade in the ground / building the stadium?

[Zeb]

I would guess that it had something to do with RBS negotiations and the appointment of the new chairman.

Don't want to take Roy's fact based thread off track so will just say that the Rhone bid was supposedly formally made in the early hours (British time) Saturday, 13th March 2010.

[TSC]

I'm wondering how much we've actually lost (in regeneration grants etc) by not actually putting the spade in the ground / building the stadium?

That's the often overlooked cost of this ownership shambles.  Lost millions in potential regen funds for Anfield.

[Zeb]

That's the often overlooked cost of this ownership shambles.  Lost millions in potential regen funds for Anfield.

At stake is/was around £19.6 million of external funding for regeneration of the area (ERDF - £9 million, NWDA - £8.9 million and council - £1.7 million). Liverpool FC had also committed a further £5 million towards this.

[royhendo]

Zeb - perfect mate - cheers!

[OLDIE]

As to the general issue of delaying sign off pending the outcome of discussions with the banks re new loans, then that makes sense up to a point.  However, why delay sign off only up to 17 March, and only for one set of accounts.   Given the loan expired on 19 March, then why not have sign off in w/c 22 March so as to include the details of the latest loan period (if any).

It is possible that the loan could have included an express condition that this be done. There are likely to be cross guarentee's in place, therefore the lender may require at least 1 set of audited accounts to establish whether or not the accounting policies (conditions) had been adhered to. You may recall that the previous accounts had not received a clean bill of health from the accountants.

Then again I am probably wrong as common sense went out of the window the day these clowns walked into our club

[Tes]

At stake is/was around £19.6 million of external funding for regeneration of the area (ERDF - £9 million, NWDA - £8.9 million and council - £1.7 million). Liverpool FC had also committed a further £5 million towards this.

Is possible that some of the 'missing millions' spent on the stadium has gone to re-pay grants or other forms of penalties for not starting the stadium build by a given deadline?

[Zeb]

Is possible that some of the 'missing millions' spent on the stadium has gone to re-pay grants or other forms of penalties for not starting the stadium build by a given deadline?

It's possible.

eg http://www.liverpoolecho.co.uk/liverpool-news/local-news/2010/03/24/liverpool-fc-and-city-council-face-8-2m-bill-if-stanley-park-stadium-plan-does-not-go-ahead-100252-26097414/

[The Flying Pig]

That's the often overlooked cost of this ownership shambles.  Lost millions in potential regen funds for Anfield.

And the surrounding area,one of the most deprived areas in the country!

[dwesty]

Can't post new threads so sticking this email in here. Sent it seperately to each of the top brass. Will let you know if anyone can be arsed replying.
 -------------------------------------------------
FAO ______

1)   I thought I'd bring it to your attention that thousands of people normally associated with the purchase of official LFC products are buying
a new black 'Standards Corrupted' protest shirt (pictured below) as a visible stance against the colossal debt brought to bear on their
club. Would you care to comment on this?
 
2)   Many Liverpool fans are aware of the Hicks / Texas Rangers saga, the stripping of land assets, and its bankruptcy mess. Naturally this
leads to serious concern that a similar situation could unfold here. Can you please reassure the public to this regard and guarantee that assets
of the club have not and will not be 'stripped' and sold seperately?
 
3)   There appears to be an awfully large amount of money that has been spent, under the current ownership, on the unbuilt stadium. Is
there any way of getting an itemised breakdown of what exactly these huge sums have been spent on, and to whom?
 
4)   MP's here in the UK have been embarassed lately by the publication of frivolous and opportunist expense claims. Would the LFC
ownership / management team be happy to impose upon themselves a much greater public transparency with regard to the claiming of
their own expenses? Due to the grim nature of the current economic climate, and the club's balance sheet, it would be nice to see that
prudence is shown to be exercised when spending club funds. Perhaps an itemised breakdown of expenses claimed could be published on the
liverpoolfc.tv website.
 
I very much look forward to hearing from you.
 
Kind regards,
 
David Westy

[royhendo]

Lads, thanks for your help - just posted an article about the stadium development's history on the main board with your stuff included.

[royhendo]

So lads - can we review these please cos we need to now finalise a version for the various things going on. Would that be possible? Sorry to be a pest. IncredibleLFC4Ever has done a revised version - are his numbers the ones we should use?

OK guys - first I wanted to say thanks for the great efforts on this thread. It's a massive help.

The only gap I'm left with is the comparative profit and loss account numbers for the four years. I have gaps you could drive a bus through.

So... I have as confirmed figures from the accounts...

-	2006	2007	2008	2009
Revenue	121	-	164	185
Cost of sales	(13)	-	(17)	(18)
Staff wages (inc players)	(69)	-	(90)	(103)
Other expenses	(18)	-	(30)	(31)
EBITDA (or whatever you call it)	21	-	27	32
Interest paid	(121)		(164)	(185)
Net transfer spending	(28)	-	(28)	(22)
Money spent on the stadium	0	-	(18)	(22)
Investments (like LFC TV)	0	0	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

If you boys could correct that where it's needed or fill in any gaps, mucharse grarseiarse.

another interesting statistic about where money is going -
Staff levels by year 2009   2008  2007  2006

Players/Coaches    142        137    133    127
Groundstaff              57          60     61       59     
Admin, commercial  275        189    150    149

Hope this helps -

-	2006	2007	2008	2009
Revenue	121	134	164	185
Cost of sales	(13)	(16)	(17)	(18)
Staff wages (inc players)	(69)	(78)	(90)	(103)
Other expenses	(18)	(32)	(30)	(35)
EBITDA (or whatever you call it)	21	8	27	32
Interest paid	(2)	(8 )	(36)	(30)
Net transfer spending	(28)	(46)	(28)	(22)
Money spent on the stadium	0	0	(18)	(23)
Investments (like LFC TV)	0	-8	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

Just to note that this is looking at cash movements rather than the cost for the year, for example in 2009 we paid 30m in interest but there was a further cost of 10m which we did not pay at all yet.  Same for transfer spending - the above is the cash paid and received in the year and not the actual deals done.

[flashman]

I am happy to help, CA, but we need to be careful we are being consistent, the figures above net to the correct amount of movement of debt as per the cash flow but are using numbers taken from the other statements that are prepared on an accruals basis.

[incredibleL4ever]

I am happy to help, CA, but we need to be careful we are being consistent, the figures above net to the correct amount of movement of debt as per the cash flow but are using numbers taken from the other statements that are prepared on an accruals basis.

I know what you are getting at Flamingo, but I think the above figures are a reasonable summary of the situation without getting into too much complication.

The problem here is when you get into the detail of finances most peoples eyes glaze over, so we need to keep it simple and straight forward and consistent, without being incorrect.  e.g. people talk about the debt, but you have net debt, gross debt, internal debt, bank debt etc. which are all different figures. 

I would welcome it if anyone wants to check my calculations.  pm me if you want the details.

I think the best way to educate people on this is to keep it simple and stick to a few headline figures - The increase in debt, the fall in transfer spending, The money spent on the "stadium", the increase in non-footballing staff and such like.  The non-finance people will get these.

[flashman]

I know what you are getting at Flamingo, but I think the above figures are a reasonable summary of the situation without getting into too much complication.

The problem here is when you get into the detail of finances most peoples eyes glaze over, so we need to keep it simple and straight forward and consistent, without being incorrect.  e.g. people talk about the debt, but you have net debt, gross debt, internal debt, bank debt etc. which are all different figures. 

I would welcome it if anyone wants to check my calculations.  pm me if you want the details.

I think the best way to educate people on this is to keep it simple and stick to a few headline figures - The increase in debt, the fall in transfer spending, The money spent on the "stadium", the increase in non-footballing staff and such like.  The non-finance people will get these.

Fair enough, the earlier post about staff numbers struck me too, compare it to other FTSE companies (BL) say which has net assets around 4.2 bn, but has 164 staff, I know different businesses but strikes me as a large increase in numbers and costs

[royhendo]

The difficulty we have is reconciling it with other figures published elsewhere as they're done using the other methods. It'd maybe be worth clarifying this. I have to say I'm pretty powerless on this front so any help would be massively appreciated.

[incredibleL4ever]

The difficulty we have is reconciling it with other figures published elsewhere as they're done using the other methods. It'd maybe be worth clarifying this. I have to say I'm pretty powerless on this front so any help would be massively appreciated.

The figures commonly quoted are the debt at 351m and the loss at 52.8m.  What other figures are you interested in looking at.

[shredder_red]

Could someone please post a link to the annual report 2009 in pdf format? I can't find it anywhere on the net.

[royhendo]

The figures commonly quoted are the debt at 351m and the loss at 52.8m.  What other figures are you interested in looking at.

I mean the discrepancies between these.

OK guys - first I wanted to say thanks for the great efforts on this thread. It's a massive help.

The only gap I'm left with is the comparative profit and loss account numbers for the four years. I have gaps you could drive a bus through.

So... I have as confirmed figures from the accounts...

-	2006	2007	2008	2009
Revenue	121	-	164	185
Cost of sales	(13)	-	(17)	(18)
Staff wages (inc players)	(69)	-	(90)	(103)
Other expenses	(18)	-	(30)	(31)
EBITDA (or whatever you call it)	21	-	27	32
Interest paid	(121)		(164)	(185)
Net transfer spending	(28)	-	(28)	(22)
Money spent on the stadium	0	-	(18)	(22)
Investments (like LFC TV)	0	0	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

If you boys could correct that where it's needed or fill in any gaps, mucharse grarseiarse.

another interesting statistic about where money is going -
Staff levels by year 2009   2008  2007  2006

Players/Coaches    142        137    133    127
Groundstaff              57          60     61       59     
Admin, commercial  275        189    150    149

Hope this helps -

-	2006	2007	2008	2009
Revenue	121	134	164	185
Cost of sales	(13)	(16)	(17)	(18)
Staff wages (inc players)	(69)	(78)	(90)	(103)
Other expenses	(18)	(32)	(30)	(35)
EBITDA (or whatever you call it)	21	8	27	32
Interest paid	(2)	(8 )	(36)	(30)
Net transfer spending	(28)	(46)	(28)	(22)
Money spent on the stadium	0	0	(18)	(23)
Investments (like LFC TV)	0	-8	0	(5)
Amount left after all that*	(9)	-	(55)	(52)

*AKA how much we had to increase our debt by each year.

Just to note that this is looking at cash movements rather than the cost for the year, for example in 2009 we paid 30m in interest but there was a further cost of 10m which we did not pay at all yet.  Same for transfer spending - the above is the cash paid and received in the year and not the actual deals done.

Also, there are the figures here: http://issuu.com/savelfc/docs/numbers_in_a_nutshell

Is it too ambitious to hope for one correct and unified set of figureS?

[royhendo]

Or are your figures 100% correct and we can go with those - is that a unanimous opinoin?

[royhendo]

or opinion?

[incredibleL4ever]

Ok I will try to explain the different figures.

Net Debt 31/7/09       - 351.4
Total (current) Debt 31/7/09   - 472.6  (this is the 473m used in the ISSUU.com article).
The total current debt here includes trade creditors (mostly owed to other clubs for transfers), accruals and deferred income (prepayment of season tickets).
The Net debt is what is owed to the banks and Kop Cayman less cash on hand.
The Net debt is the one most used in the media.  I would think we should stick to that.
The Issuu.com thing mentions both figures and it might be confusing.

Transfer spending -
The actual transfers completed were
Year ended 31 July      2007          2008           2009           2010*
Purchases                    54.4            70.0          38.8              20.4               
Sales                           21.5             20.7         26.0              33.7
Net                             32.9              49.3         12.8              -13.3

* 31/7/10 has not happened yet so this is up to date.  I added 4m for Benayoun from the previous figures.

Transfer cashflow (actual cash movements)

Year ended 31 July      2007          2008       2009         
Payments                   31.8           52.1         66.5
Receipts                      9.1           23.9          42.6                           
             
Net                             22.7          28.2           23.9
     
No information for 2010.
As the transfer cashflow depends on the timing of payments rather than the deals done I would suggest the transfer spending is more easily understood and this is what to go with.

I dont know where the statement "Suddenly the club borrows 298m" comes from in the issuu.com article.  Maybe that should be left out.  The simple facts are -
The bought the club for 220m, H&G put in 0 equity and now value it at 600m - 800m

On the secnd page of issuu.com/wellred the 110k per day is correct.
The stadium spend is 45.5m, not 50.3m (Liverpool accounts 2009 note 11)
The 51.5m additional debt is net debt increase in Kop Holdings for the year to 31/7/09 and is correct.
Read above about the 473m.  While this is a correct figure for debts repayable within one year, it is a bit confusing if you run with the 351.4m net debt figure elsewhere.  Either explain it fully or leave it out.

The 1bn is fine except the phrase "add in debts and the cost of a new ground" should (imo) just say "add in the cost of a new ground".  The debts are included in Hicks 600m - 800m we assume.  A 500m figure is mentioned here also.  I think 600m should be used to be consistent.

The 85m is interest charged up to 31/7/09.  We dont know categorically the interest charge for the current year but it will be at least 26.6m (144m Cayman at 10% plus 244m RBS at 5%+).  I would have no problem with changing that figure to 112m.  The interest paid in my earlier post on cashflow is a smaller figure because they are not paying the interest on the Kop Cayman loan, it is being added on to the loan balance.

The 144.4m is factually correct, the amount owed to Kop Cayman.  I am not sure what Joe Public will make of that figure though. Again I would think we need to keep it simple and consistent and focus on the 351m figure.

You need to understand that the cashflow figures I did were to try to explain to a RAWK member where the profits and borrowings have gone.  There is a small bit of rounding but in general I am happy to stand over my June 23 post.

I would appreciate it if anyone wants to double check my figures.

Other items that need highlighting include -
Net Profit/Loss graph
2005      2006       2007      2008        2009
7m        -4m           -21m        -43m      -52m
Didn't Hicks say something life "Liverpool is in much better shape than when we took over"  Use that quote and the graph of increasing losses.

The 85% increase in admin/commercial staff.

The parallels with Corinthians and the Texas Rangers - Hicks buys the club, initially buys some players, promises more investment, loads debt on to the club, leaves it in financial ruin.  Maybe use the three club badges under the heading Tom Hicks sporting investments and across Corinthians write "Financial Mess", Rangers "Bankrupt" and Liverpool "Heading there".

What we could have done if the money was spent on players instead of interest and the ghost stadium - Thats 157m over three years. Maybe pics of players that cost this amount would make make it more graphic e.g. Villa, Alves, Silva, Barry, and a few others.  Maybe using a tag line - "Look at what £157m can buy you"

[Zeb]

On the transfers, could you add 1.5m received for Mihaylov for y/e 10 (depending on how you're estimating the deal is structured)?

Also recorded as post balance sheet events is £1, 069, 328 of liabilities and £1, 615, 824 of assets under contingent liabilities and assets (ie add-ons which have been triggered). Would they be paid in 09/10 as I'm assuming?

[redmen77]

On the transfers, could you add 1.5m received for Mihaylov for y/e 10 (depending on how you're estimating the deal is structured)?

Also recorded as post balance sheet events is £1, 069, 328 of liabilities and £1, 615, 824 of assets under contingent liabilities and assets (ie add-ons which have been triggered). Would they be paid in 09/10 as I'm assuming?

Haven't we also sold San Jose to Bilbao for over £2m?

[flashman]

Also recorded as post balance sheet events is £1, 069, 328 of liabilities and £1, 615, 824 of assets under contingent liabilities and assets (ie add-ons which have been triggered). Would they be paid in 09/10 as I'm assuming?

would be guesswork as the liability crystallising is contingent on something else happening, so disclosed only

[incredibleL4ever]

I would leave the contingency things out because we dont know whether they were triggered or not.  These usually related to players making a certain number of appearances, the club reaching certain targets etc.

No problem if a couple of million is added for San Jose and Mikhilov.  I took in the actual figures revealed as post balance sheet events in the accounts plus 4m for Benayoun.  I think the trend is there and proven and nobody should argue about a couple of million one way of the other.

[Zeb]

Fair enough. I'm presuming that one can't use the transfer spending listed as being due post y/e 09 pre-post-balance sheet events (if you know what I mean ) for the reason that there's no way to tell when exactly it becomes due?