Audited Accounts are now out 12:04 - Mar 13 with 28652 views | Shaky | For club: https://beta.companieshouse.gov.uk/company/00123414/filing-history For holding company: https://beta.companieshouse.gov.uk/company/04305508/filing-history Will try to find time to crunch the numbers later, but quick glimpse shows the huge increase in operating costs is all substantially down to staff costs. As I said previously, it is hard to imagine how even the lions share can be attibutable to the playing staff given the departures. What is certain is the for example Peralman' s salary is lumped in there, and potentally also some kind of remuneration for the US property developer on the board of the parent company. How much is attributable to this remains unclear, however. | |
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Audited Accounts are now out on 11:22 - Mar 14 with 6441 views | Shaky | So have found a little time to look at the accounts and am frankly not entirely sure what to make of it all. One potentially major issue emerges I hadn't previously analysed or considered; there is something clearly not right in the allocation of operating costs, in that there are no costs whatsoever directly attributed to the UK holding company 2002 Ltd, with everything being lumped into the main operating subsidiary Swansea City AFC which legally owns the club. For the holding company, as a minimum there will be some costs related to companies house filings and audit fees, but there should also be something for other corporate costs related to board meetings, expenses, etc. However, the accounts show no operating costs whatsoever recorded against 2002 Ltd. That is simply not correct. That said a quick check on the prior accounts shows the same problem, but with the new ownership structure in place and the explosion in operating costs generally, you have to wonder whether the club is also carrying any costs that should be attributable to the ultimate controlling company registered in Delaware [More to follow] | |
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Audited Accounts are now out on 11:55 - Mar 14 with 6379 views | Shaky | P&L ----- Revenue Overall revenue was up £30.6 million or 31.5% with TV media accounting for practically all of that (£30.2m). As had previously been highlighted in the club press release reported Commercial revenue was up by £2.5 year-on year (y-o-y) to £7m with the club having added 11 new commercial staff during the year. However, other revenue was down by £2 million yoy so it is unclear whether the increase in reported commercial revenue was real or just a shuffling around of revenue allocation. Operating costs Wages, social, etc: costs up £17m or 21% yoy No breakdown is given of playing staff vs others (except for Jenkins' salary being the sole director), but as previously discussed it is hard to imagine the increase was substantially attributable to player wages given the high priced departures. Player ammortisation: costs up £7m or 21% yoy As anticipated in line with gross signings of around £64m vs my prior forecast of £63m (good job again Transfermarket.com) Other costs: costs up £9.3m or 54% yoy No real detail given on this significant increase (except audit related costs up around £150,000) Operating profit -------------------- All this contributed to an increased operating loss of £23m versus £20.4m in the prior year. That's a shocker in the first year of a new TV deal, which has historically been the only year the club has managed to produce a profit, before subsequent inflation in transfer fees and wage demands catch up. There are basically 2 types of costs; variable (eg sell a car and each one costs in terms of components, etc), and fixed that tend to be stable regardless of the level of sales. As far as i can see the variable costs for a football club like Swansea are largely confined to merchandising. in this instance that is minor, so if the balance of costs are largely fixed as I assume the club is in potentially serious of trouble for the remainder of this TV deal. That said there may be some one off costs related to the acquisition, stadium purchase/engineering, Delaware company costs, etc that are not broken out and may be impacting the otherwise decidedly negative picture shown. Profit after Tax . . .then swung to £13m profit from a similar loss the preceding year thanks to a profit on player sales of £37m. i estimate that will rise to around £52million for the current year, based on player sales already announced. [More to follow] | |
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Audited Accounts are now out on 12:09 - Mar 14 with 6341 views | Vetchfielder |
Audited Accounts are now out on 11:55 - Mar 14 by Shaky | P&L ----- Revenue Overall revenue was up £30.6 million or 31.5% with TV media accounting for practically all of that (£30.2m). As had previously been highlighted in the club press release reported Commercial revenue was up by £2.5 year-on year (y-o-y) to £7m with the club having added 11 new commercial staff during the year. However, other revenue was down by £2 million yoy so it is unclear whether the increase in reported commercial revenue was real or just a shuffling around of revenue allocation. Operating costs Wages, social, etc: costs up £17m or 21% yoy No breakdown is given of playing staff vs others (except for Jenkins' salary being the sole director), but as previously discussed it is hard to imagine the increase was substantially attributable to player wages given the high priced departures. Player ammortisation: costs up £7m or 21% yoy As anticipated in line with gross signings of around £64m vs my prior forecast of £63m (good job again Transfermarket.com) Other costs: costs up £9.3m or 54% yoy No real detail given on this significant increase (except audit related costs up around £150,000) Operating profit -------------------- All this contributed to an increased operating loss of £23m versus £20.4m in the prior year. That's a shocker in the first year of a new TV deal, which has historically been the only year the club has managed to produce a profit, before subsequent inflation in transfer fees and wage demands catch up. There are basically 2 types of costs; variable (eg sell a car and each one costs in terms of components, etc), and fixed that tend to be stable regardless of the level of sales. As far as i can see the variable costs for a football club like Swansea are largely confined to merchandising. in this instance that is minor, so if the balance of costs are largely fixed as I assume the club is in potentially serious of trouble for the remainder of this TV deal. That said there may be some one off costs related to the acquisition, stadium purchase/engineering, Delaware company costs, etc that are not broken out and may be impacting the otherwise decidedly negative picture shown. Profit after Tax . . .then swung to £13m profit from a similar loss the preceding year thanks to a profit on player sales of £37m. i estimate that will rise to around £52million for the current year, based on player sales already announced. [More to follow] |
Thanks very much for taking the time to analyse this for us | |
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Audited Accounts are now out on 12:29 - Mar 14 with 6278 views | Shaky | Cash-flow On the - unrealistic - assumption that all player sales and purchases were settled in cash during the year, operating cash-flow would have been negative £22million. Financing Cash in hand declined 63% to £7.5m. In addition the club as taken on new non-bank (/non-factoring) borrowings of just over £9m. Finally the club continues its standard practice of using working capital to finance the business, in 2017 generating cash of just under £3m taking the accumulated negative net working capital to £66m. This is a giant hole in the balance sheet If you take out changes in net working capital from operating cash-flow, cumulatively this would amount to negative £61.3m since Swansea got into the prem. And the only year in which cash-flow was positive, was the first year generating a measly £300,000. That means on on a cash-flow valuation basis the club is worthless. At a time when the the outlook for TV revenues appears to have turned negative. | |
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Audited Accounts are now out on 12:45 - Mar 14 with 6207 views | Vetchfielder |
Audited Accounts are now out on 12:29 - Mar 14 by Shaky | Cash-flow On the - unrealistic - assumption that all player sales and purchases were settled in cash during the year, operating cash-flow would have been negative £22million. Financing Cash in hand declined 63% to £7.5m. In addition the club as taken on new non-bank (/non-factoring) borrowings of just over £9m. Finally the club continues its standard practice of using working capital to finance the business, in 2017 generating cash of just under £3m taking the accumulated negative net working capital to £66m. This is a giant hole in the balance sheet If you take out changes in net working capital from operating cash-flow, cumulatively this would amount to negative £61.3m since Swansea got into the prem. And the only year in which cash-flow was positive, was the first year generating a measly £300,000. That means on on a cash-flow valuation basis the club is worthless. At a time when the the outlook for TV revenues appears to have turned negative. |
Thanks Shaky There's a lot of accounting stuff in there that I don't understand so how would you summarise the club's financial well-being in one paragraph maybe? | |
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Audited Accounts are now out on 13:01 - Mar 14 with 6169 views | Shaky |
Audited Accounts are now out on 12:45 - Mar 14 by Vetchfielder | Thanks Shaky There's a lot of accounting stuff in there that I don't understand so how would you summarise the club's financial well-being in one paragraph maybe? |
Good question. Let me try to quickly explain the technical terms and do a quick back of the envelope. The negative working capital of £66m means that over the next 12 months or so the club have to pay out more than £66 million punds more than they have coming in. This is money that has to be found. In addition they have the borrowings of £9m that more than cancels out any cash on hand. There is then a profit on player sales of perhaps £52m that is partially offset by signings of around £36m by my estimate for a net of positive £16m on player ins and outs (less costs of converting that to cash). And that is all before before anything can be invested in the stadium. In summary the club remains in urgent need of new fianancing and is seriously strapped for cash. | |
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Audited Accounts are now out on 13:08 - Mar 14 with 6136 views | Tom1912 |
Audited Accounts are now out on 12:45 - Mar 14 by Vetchfielder | Thanks Shaky There's a lot of accounting stuff in there that I don't understand so how would you summarise the club's financial well-being in one paragraph maybe? |
In one line: The club has to sell players at a profit regularly to balance the books. | | | |
Audited Accounts are now out on 13:11 - Mar 14 with 6124 views | Vetchfielder |
Audited Accounts are now out on 13:01 - Mar 14 by Shaky | Good question. Let me try to quickly explain the technical terms and do a quick back of the envelope. The negative working capital of £66m means that over the next 12 months or so the club have to pay out more than £66 million punds more than they have coming in. This is money that has to be found. In addition they have the borrowings of £9m that more than cancels out any cash on hand. There is then a profit on player sales of perhaps £52m that is partially offset by signings of around £36m by my estimate for a net of positive £16m on player ins and outs (less costs of converting that to cash). And that is all before before anything can be invested in the stadium. In summary the club remains in urgent need of new fianancing and is seriously strapped for cash. |
Ok, thanks Shaky | |
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Audited Accounts are now out on 13:11 - Mar 14 with 6121 views | nantywatcher |
Audited Accounts are now out on 13:08 - Mar 14 by Tom1912 | In one line: The club has to sell players at a profit regularly to balance the books. |
The club has to sell players at a (VERY BIG) profit regularly to balance the books. | | | |
Audited Accounts are now out on 13:13 - Mar 14 with 6112 views | Tom1912 |
Audited Accounts are now out on 13:11 - Mar 14 by nantywatcher | The club has to sell players at a (VERY BIG) profit regularly to balance the books. |
Indeed. I expect we're already trying to drum up interest in Mawson for this summer. | | | |
Audited Accounts are now out on 13:14 - Mar 14 with 6106 views | 34dfgdf54 |
Audited Accounts are now out on 13:11 - Mar 14 by nantywatcher | The club has to sell players at a (VERY BIG) profit regularly to balance the books. |
Exactly, Mawson in the summer, but that cash would be needed to keep us competive on the pitch. Vicious cycle. | | | |
Audited Accounts are now out on 13:22 - Mar 14 with 6065 views | Darran |
Audited Accounts are now out on 13:01 - Mar 14 by Shaky | Good question. Let me try to quickly explain the technical terms and do a quick back of the envelope. The negative working capital of £66m means that over the next 12 months or so the club have to pay out more than £66 million punds more than they have coming in. This is money that has to be found. In addition they have the borrowings of £9m that more than cancels out any cash on hand. There is then a profit on player sales of perhaps £52m that is partially offset by signings of around £36m by my estimate for a net of positive £16m on player ins and outs (less costs of converting that to cash). And that is all before before anything can be invested in the stadium. In summary the club remains in urgent need of new fianancing and is seriously strapped for cash. |
Don’t worry Shakes we now own the lease on the stadium so by the time we take out a loan against it we can pay off any debt like. Securing that lease was a fantastic bit of business,FSS even The Box Office said so. | |
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Audited Accounts are now out on 13:45 - Mar 14 with 6028 views | awayjack | Thanks for good analyis. Yup creditors and cash outflow is pretty worrying, with our conmercial guru deciding to sell our assets to balance the books rather than increasing commercial income and cutting costs. Not clear on timing of some of the Sky installed payments but £60m - even after offsetting Sales of Siggy, Cork and Llornete post YE. Close to going concern risk and God forbid what happens if we're relegated. Firesale! As you point out the real mystery is why the cost base has increased so much. It's much higher than many lower half Premier League clubs that also have higher match day and commercial income. Getting shot of very high earners like Gomis, Ayew and Ash in that year should've balanced out new wages for likes of Llorente. I don't expect we'll get much more details of these costs from Club - espadrilles if they are hiding big fees to Yanks. Trust will say nothing, so perhaps get 'Swiss Ramble' to do some analysis V other clubs, as it's usually more useful. | | | |
Audited Accounts are now out on 13:50 - Mar 14 with 6006 views | QJumpingJack | Oprah is worth $2.8 bn. Surely she can help out. | | | |
Audited Accounts are now out on 13:54 - Mar 14 with 5980 views | wobbly | The millions of pounds in ‘related party transactions’ look pretty opaque as well. | | | |
Audited Accounts are now out on 13:54 - Mar 14 with 5978 views | Highjack | We have a bigger overdraft now though so the next level is still within sight. | |
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Audited Accounts are now out on 14:22 - Mar 14 with 5900 views | Shaky |
Audited Accounts are now out on 13:22 - Mar 14 by Darran | Don’t worry Shakes we now own the lease on the stadium so by the time we take out a loan against it we can pay off any debt like. Securing that lease was a fantastic bit of business,FSS even The Box Office said so. |
Good news; in terms of financial expertise you are roughly at the same level as the boy wonder. | |
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Audited Accounts are now out on 14:26 - Mar 14 with 5889 views | Shaky |
Audited Accounts are now out on 13:54 - Mar 14 by wobbly | The millions of pounds in ‘related party transactions’ look pretty opaque as well. |
I am +95% certain that substantially relates to Stadco stuff, which qualifies as an associate via Swansea City AFC's 33% stake. Nothing to see there, I believe. [Post edited 14 Mar 2018 14:28]
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Audited Accounts are now out on 15:30 - Mar 14 with 5713 views | wobbly |
Audited Accounts are now out on 14:26 - Mar 14 by Shaky | I am +95% certain that substantially relates to Stadco stuff, which qualifies as an associate via Swansea City AFC's 33% stake. Nothing to see there, I believe. [Post edited 14 Mar 2018 14:28]
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Top line of the disclosure maybe. What about the £1.8m to other related parties under control of key management personnel? That doesn’t sounds like Stadco? | | | |
Audited Accounts are now out on 15:32 - Mar 14 with 5701 views | WarwickHunt |
Audited Accounts are now out on 13:01 - Mar 14 by Shaky | Good question. Let me try to quickly explain the technical terms and do a quick back of the envelope. The negative working capital of £66m means that over the next 12 months or so the club have to pay out more than £66 million punds more than they have coming in. This is money that has to be found. In addition they have the borrowings of £9m that more than cancels out any cash on hand. There is then a profit on player sales of perhaps £52m that is partially offset by signings of around £36m by my estimate for a net of positive £16m on player ins and outs (less costs of converting that to cash). And that is all before before anything can be invested in the stadium. In summary the club remains in urgent need of new fianancing and is seriously strapped for cash. |
Thank fück for those American investors! | | | |
Audited Accounts are now out on 15:41 - Mar 14 with 5668 views | LeonWasGod |
Audited Accounts are now out on 13:54 - Mar 14 by wobbly | The millions of pounds in ‘related party transactions’ look pretty opaque as well. |
Prosecco and balloons aren't cheap mun! Grim reading really given the larger TV deal.. | | | |
Audited Accounts are now out on 16:11 - Mar 14 with 5600 views | Shaky |
Audited Accounts are now out on 15:30 - Mar 14 by wobbly | Top line of the disclosure maybe. What about the £1.8m to other related parties under control of key management personnel? That doesn’t sounds like Stadco? |
I didn't see that. Which note are you looking at, and in which set of accounts? | |
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Audited Accounts are now out on 16:54 - Mar 14 with 5509 views | swanforthemoney |
Audited Accounts are now out on 13:22 - Mar 14 by Darran | Don’t worry Shakes we now own the lease on the stadium so by the time we take out a loan against it we can pay off any debt like. Securing that lease was a fantastic bit of business,FSS even The Box Office said so. |
I understand youre not being entirely serious here, but I'd like it explained to me in reasonably detailed terms how borrowings against the lease might work and how detrimental it could be. I really dont understand. What is the value of the lease? How much might be borrowed against it ? Exactly how do the mechanics work which makes this detrimental to the finances of the football club? Why would securing a loan against the lease be any different to securing a loan against, say, future ticket sales or any other fixed asset such as Landore? | |
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Audited Accounts are now out on 16:59 - Mar 14 with 5492 views | swanforthemoney |
Audited Accounts are now out on 13:01 - Mar 14 by Shaky | Good question. Let me try to quickly explain the technical terms and do a quick back of the envelope. The negative working capital of £66m means that over the next 12 months or so the club have to pay out more than £66 million punds more than they have coming in. This is money that has to be found. In addition they have the borrowings of £9m that more than cancels out any cash on hand. There is then a profit on player sales of perhaps £52m that is partially offset by signings of around £36m by my estimate for a net of positive £16m on player ins and outs (less costs of converting that to cash). And that is all before before anything can be invested in the stadium. In summary the club remains in urgent need of new fianancing and is seriously strapped for cash. |
"The negative working capital of £66m means that over the next 12 months or so the club have to pay out more than £66 million punds more than they have coming in. This is money that has to be found. " Might that explain, partially, why weve gone back for old players like Wilf and Ayew, so we dont have to find any real money ? That Mindy Kaling needs to be out shaking a bucket outside the Liberty on Saturday. Ill look down the back of the sofa in readiness. PS thanks for the analysis Shaky. [Post edited 14 Mar 2018 17:03]
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Audited Accounts are now out on 17:06 - Mar 14 with 5467 views | longlostjack | Just a question Shaky. Pearlman and Chaudhari - would they be included in the intangible assets or current liabilities? | |
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