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JPrinty
09-09-2010, 09:18 AM
Not too bad, I think!

http://www.hibernianfc.co.uk/news/20100909/financial-results-200910_2262950_2147801


EDIT - See the accounts in full here.......

http://www.hibs.net/showthread.php?192245-****Hibs-Accounts-To-31st-July-2010-See-Them-Here****

Mikey
09-09-2010, 09:22 AM
Excellent considering we didn't sell any players in the last financial year.

As I've said on the PM board though, they need to start getting it right on the park now. We've waited long enough.

Peevemor
09-09-2010, 09:23 AM
The Board of Hibernian Football Club today announced the Club's financial results for the year ended 31 July 2010. Despite the ongoing challenging financial climate, the Club managed to deliver a bottom line profit for the sixth consecutive year.

In recognising this feat, Chairman Rod Petrie said, "To have achieved a profit for six consecutive years is a truly outstanding achievement within football, let alone football within Scotland.

Being in 'profit' means that the Club is self sufficient and in control of its own destiny - it also means any surplus income is retained within the Club and re-invested for the future. The Club's financial position is the envy of many other clubs."

The Chairman did however recognise that the year had been a challenging one: "A combination of the difficult economic conditions for supporters and commercial partners, the reduction in season ticket prices, and the closure of the old East Terrace in February resulted in turnover dropping 8% year-on-year.

Additionally, at a time when many football clubs were reducing playing budgets, the Board sought to support our new Manager John Hughes and sanctioned a further increase in staff costs from £4.7m to £4.8m in the year. This increase, together with the significant reduction in turnover, led to a rise in the Wages to Turnover Ratio to 68%. There is work to be done to bring this important ratio back below 60%."

Key points from the Financial Statements include:
• Net Profit for the year of £0.1m - a sixth consecutive year of profit
• Staff Costs increased to £4.8m - representing a ratio of 68% to Turnover
• Turnover decreased by 8% to £7.1m
• Operating Costs reduced by £0.2m to £3.3m
• Net Asset position strengthened for the seventh year in succession to over £15m
• Net Debt of £4.1m, positive Cash Balance of £2.2m

Looking to the future, and the means of addressing the challenges the Club faces, Chief Executive Scott Lindsay stressed the opportunities for future revenue generation with the completion of Easter Road Stadium and the construction of the new East Stand:

"The opportunity to construct the new East Stand at a cost of around £500 per seat was one that could not be overlooked. The completion of the stadium provides the scope for additional revenue from home matches in the future as well as allowing Easter Road to be utilised for other matches; such as Cup Semi-Finals and Scotland U21 internationals.

We will now turn our efforts towards widening the Hibernian Family, working the completed Stadium hard and increasing both attendances and turnover, to allow us to continue to maximise our investment into the product on the pitch. Our commitment to the Manager and the team, and our ambition to compete at the very top of Scottish football is unwavering. Ultimately our focus remains on sporting performance, the single most important factor in generating revenue.

The commitment of our supporters over the past season, and in renewing seasonal memberships for the current season has been tremendous. Their support is the cornerstone upon which future success will be built, and we thank them for their support and confidence, especially given the ongoing financial circumstances that we all face."

Shareholders should receive their copy of the Annual Report and Accounts from Thursday 9 September onwards. The Annual General Meeting to approve the accounts takes place on Monday 4 October 2010.

Financial Statements for the Year ended 31 July 2010 - Key Facts
• Profit for the Financial Year was £0.1m (2008-09: £0.7m)
• Bottom line Profit for the 6th consecutive year
• Turnover for the year was £7.1m (2008-09: £7.7m) a reduction of £0.6m (-8%)
• Staff costs were £4.8m (2008-09: £4.7m) an increase of £0.1m (+2%)
• The Ratio of Staff Costs to Turnover was 68% (2008-09: 61%)
• Operating Charges were £3.3m (2008-09: £3.5m) a reduction of £0.2m (-6%)
• The gain on disposal of intangible assets was £2.3m (2008-09: £2.4m)
• Net Assets at 31 July 2010 were £15.0m (2009: £15.0m)
• Cash balances at 31 July 2010 were £2.2m (2009: £2.9m)



Better than I'd expected!

Peevemor
09-09-2010, 09:25 AM
Excellent considering we didn't sell any players in the last financial year.

As I've said on the PM board though, they need to start getting it right on the park now. We've waited long enough.


The gain on disposal of intangible assets was £2.3m (2008-09: £2.4m)

Add-ons?

HFC 0-7
09-09-2010, 09:25 AM
Not too bad, I think!

http://www.hibernianfc.co.uk/news/20100909/financial-results-200910_2262950_2147801

Staff costs are getting to high though at 68% of turnover.

HFC 0-7
09-09-2010, 09:26 AM
Add-ons?

Yep, think the Fletcher sale to wolves will be in there.

Gatecrasher
09-09-2010, 09:27 AM
Good news, i will need to see the full report when i get home :thumbsup:

Mikey
09-09-2010, 09:32 AM
Yep, think the Fletcher sale to wolves will be in there.

It will. And possibly Thomson's sale to Boro.

Andy74
09-09-2010, 09:32 AM
So, can anyone talk me through how the Board can do more to back the manager and improve the quality on the pitch? I keep hearing how they can.

HFC 0-7
09-09-2010, 09:33 AM
It will. And possibly Thomson's sale to Boro.

Did we get money for Thomson? How much?

WellingtonHibby
09-09-2010, 09:35 AM
This increase, together with the significant reduction in turnover, led to a rise in the Wages to Turnover Ratio to 68%. There is work to be done to bring this important ratio back below 60%."


There's the fly in the ointment if ayones looking for it.......:rolleyes:

HFC 0-7
09-09-2010, 09:38 AM
So, can anyone talk me through how the Board can do more to back the manager and improve the quality on the pitch? I keep hearing how they can.

Its easy, make a loss for a couple of years, if it doesnt improve income then go back to what we normally do in selling players to fill the debt. We are happy to sell players to fund debts that will have been accumulated through building stands and training centres. If Hibs were to operate at a loss of 1 million per year for 3 years and the incomce never increased then sell a player or 2 as we do now to cover the debt.

interestingly it says we have about 2.4 million cash, how much was the new stand?

Peevemor
09-09-2010, 09:43 AM
This increase, together with the significant reduction in turnover, led to a rise in the Wages to Turnover Ratio to 68%. There is work to be done to bring this important ratio back below 60%."


There's the fly in the ointment if ayones looking for it.......:rolleyes:

Not really, given that the turnover should (could?) increase this year, thus reducing the ration without cutting the wages budget.

HibeeDave
09-09-2010, 09:51 AM
interestingly it says we have about 2.4 million cash, how much was the new stand?

around £500 per seat

Andy74
09-09-2010, 09:51 AM
Its easy, make a loss for a couple of years, if it doesnt improve income then go back to what we normally do in selling players to fill the debt. We are happy to sell players to fund debts that will have been accumulated through building stands and training centres. If Hibs were to operate at a loss of 1 million per year for 3 years and the incomce never increased then sell a player or 2 as we do now to cover the debt.

interestingly it says we have about 2.4 million cash, how much was the new stand?

We are essentially extending player costs beyond what is comfortable. The receipts from sales were used to fund things that will help but thay are one offs. A policy of having to fund costs through players sales is pointless.

We've added players like Riordan, Miller, Stokes (for a bit!) and the crowds haven't really been increasing so it's always a very risky policy.

big-mo
09-09-2010, 09:52 AM
Its easy, make a loss for a couple of years, if it doesnt improve income then go back to what we normally do in selling players to fill the debt. We are happy to sell players to fund debts that will have been accumulated through building stands and training centres. If Hibs were to operate at a loss of 1 million per year for 3 years and the incomce never increased then sell a player or 2 as we do now to cover the debt.

interestingly it says we have about 2.4 million cash, how much was the new stand?

If the the new East has 6500 seat at a cost of £500 each that means the stand cost £3.25m.

Andy74
09-09-2010, 09:56 AM
Its easy, make a loss for a couple of years, if it doesnt improve income then go back to what we normally do in selling players to fill the debt. We are happy to sell players to fund debts that will have been accumulated through building stands and training centres. If Hibs were to operate at a loss of 1 million per year for 3 years and the incomce never increased then sell a player or 2 as we do now to cover the debt.

interestingly it says we have about 2.4 million cash, how much was the new stand?

The cash figure is also a bit misleading, we'd probably taken a fair bit of season ticket money by then which gets us through the rest of the year's payments.

RyeSloan
09-09-2010, 09:58 AM
Its easy, make a loss for a couple of years, if it doesnt improve income then go back to what we normally do in selling players to fill the debt. We are happy to sell players to fund debts that will have been accumulated through building stands and training centres. If Hibs were to operate at a loss of 1 million per year for 3 years and the incomce never increased then sell a player or 2 as we do now to cover the debt.

interestingly it says we have about 2.4 million cash, how much was the new stand?

Easy?

Aye to mire the club in debt again....it's quite clear we are ALREADY using you cunning plan to cover the on field expenditure and it's also clear that despite paying more than the motherwells of this world that it is HOW it is spent not how much that is spent is the critical thing for Hibs just now.

I seriously despair at the thought of people being happy to throw a million here and a million there at the team that we simply don't have in some vague hope that it will magic Hibs into league winning side with multi million pound players.

Can I ask what happens if your grand plan doesn't work (we have tried it before you know!) and we have thrown £3m down the drain for nothing and have no players worth selling to cover the loss...do we sit back and go ah well that was worth it, let's pay for that over the next 10 years by cutting back?

Seems clear to me that the Board have clearly identified that the turnover has to start to rise again and that now the capital expenditure is completed that these have to start generating the extra revenue. Allied to a VERY clear commitment and understanding that improved sporting performance is the main driver behind everything then I am more than comfortable that the Board understand what the fans want and will go about it in a sustainable way.

To start chasing 'glory' by over spending now would be sheer folly and a total waste of all the hard work that has been put in to get us to this stage.

iwasthere1972
09-09-2010, 10:01 AM
Staff costs are getting to high though at 68% of turnover.

Stokes must have been on decent earnings so with him off the payroll that surely should make a significant reduction when the figures for next year are published.

Antifa Hibs
09-09-2010, 10:02 AM
Anyone know our total debt now?

GloryGlory
09-09-2010, 10:07 AM
This increase, together with the significant reduction in turnover, led to a rise in the Wages to Turnover Ratio to 68%. There is work to be done to bring this important ratio back below 60%."


There's the fly in the ointment if ayones looking for it.......:rolleyes:

The preferred option would be to increase turnover, sustainably - hence the comment about working the stadium as an asset. That way, salary budgets could be maintained (and hopefully improved).

GloryGlory
09-09-2010, 10:08 AM
Anyone know our total debt now?

Net debt = £4.1M, cash = £2.2M, so total debt = £6.3M.

Keith_M
09-09-2010, 10:10 AM
This increase, together with the significant reduction in turnover, led to a rise in the Wages to Turnover Ratio to 68%. There is work to be done to bring this important ratio back below 60%."


There's the fly in the ointment if ayones looking for it.......:rolleyes:

The turnover was down, though, so the ratio could have gone up even if the wages didn't. FWIW, I think turnover will be higher this year purely through our average attendance increasing from last year, as we spent half a season last year with no East Stand. Maybe I'm being overly optimistic though :wink:

Antifa Hibs
09-09-2010, 10:15 AM
Net debt = £4.1M, cash = £2.2M, so total debt = £6.3M.

Cheers m8.



Does anyone know Hearts, Aberdeen and Dundee Utd's turnover for their previous finicial year and see how it compares to us?

Sergio sledge
09-09-2010, 10:15 AM
We are essentially extending player costs beyond what is comfortable. The receipts from sales were used to fund things that will help but thay are one offs. A policy of having to fund costs through players sales is pointless.

We've added players like Riordan, Miller, Stokes (for a bit!) and the crowds haven't really been increasing so it's always a very risky policy.

No we aren't. Wages to turnover ratio was up this year because there was a slight increase in wage bill, but a larger drop in turnover. This drop was due to the reduced season ticket prices, perhaps reduced season ticket sales, and reduced crowds due to the east being re-built. This year should see turnover back up again (provided the team do the business on the park) with the new east, and higher season ticket prices.

The 60% figure is guidance, and I'd like to think we'd be pretty flexible around that figure, an especially good season this year with a good cup run and 3rd place, would probably see us dropping under 60% again. Our margins are that tight that a few hundred thousand either way can make a huge difference to the look of our wages to turnover ratio, so I don't think this can be taken as a hard and fast figure.

I agree with you about the policy of funding things through player sales being risky, but these last couple of years have been exceptional with the turnover of players and managers adding to costs, and the board have obviously taken the view that they can afford to make this risk these last couple of years as they know that they need to get a successful team on the pitch.

Andy74
09-09-2010, 10:29 AM
No we aren't. Wages to turnover ratio was up this year because there was a slight increase in wage bill, but a larger drop in turnover. This drop was due to the reduced season ticket prices, perhaps reduced season ticket sales, and reduced crowds due to the east being re-built. This year should see turnover back up again (provided the team do the business on the park) with the new east, and higher season ticket prices.

The 60% figure is guidance, and I'd like to think we'd be pretty flexible around that figure, an especially good season this year with a good cup run and 3rd place, would probably see us dropping under 60% again. Our margins are that tight that a few hundred thousand either way can make a huge difference to the look of our wages to turnover ratio, so I don't think this can be taken as a hard and fast figure.

I agree with you about the policy of funding things through player sales being risky, but these last couple of years have been exceptional with the turnover of players and managers adding to costs, and the board have obviously taken the view that they can afford to make this risk these last couple of years as they know that they need to get a successful team on the pitch.

Yes we are, turnover being down was a fact and so the ratio was above what was confortable. Any increase in turnover at this stage is hopefull to say the least.

You'll find most clubs that drop turnover have to cut the wage bill, we haven't, we've gone beyond what is comfortable in still trying to back the manager.

MacBean
09-09-2010, 10:33 AM
Net debt = £4.1M, cash = £2.2M, so total debt = £6.3M.


Thats positive cash though, not debt. so our Total debt is £4.1M

We have a Cash balance of £2.2M but should not be even linked with Debt - EVERY business needs debt and Cash to survive.

HFC 0-7
09-09-2010, 10:40 AM
Easy?

Aye to mire the club in debt again....it's quite clear we are ALREADY using you cunning plan to cover the on field expenditure and it's also clear that despite paying more than the motherwells of this world that it is HOW it is spent not how much that is spent is the critical thing for Hibs just now.

I seriously despair at the thought of people being happy to throw a million here and a million there at the team that we simply don't have in some vague hope that it will magic Hibs into league winning side with multi million pound players.

Can I ask what happens if your grand plan doesn't work (we have tried it before you know!) and we have thrown £3m down the drain for nothing and have no players worth selling to cover the loss...do we sit back and go ah well that was worth it, let's pay for that over the next 10 years by cutting back?

Seems clear to me that the Board have clearly identified that the turnover has to start to rise again and that now the capital expenditure is completed that these have to start generating the extra revenue. Allied to a VERY clear commitment and understanding that improved sporting performance is the main driver behind everything then I am more than comfortable that the Board understand what the fans want and will go about it in a sustainable way.

To start chasing 'glory' by over spending now would be sheer folly and a total waste of all the hard work that has been put in to get us to this stage.

Mire the club in debt again? I am talking about 3 million over 3 years, which for hibs is a very easy amount to get back through player sales. My point is that we sell players to pay for things like stands and training centres. Why not speculate A LITTLE? We are happy to throw money at stands, which is also a dangerous thing when you think that in terms of re sale value are worthless. We spent 3.25 million on a stand which will take years to pay for itself as the the extra capacity will hardly be used, especially if the product on the pitch is not good enough. spend 3.25 million on a stand and you have no re sale value, struggle to get it to pay for itself or spend 3.25 million on players which do have re sale value, could generate a lot more income and could better the product on the pitch.

Yes the stadium is brilliant and the price they got is great, however, would you not prefer that the 3.25 million was spent on players that could really improve the product on the pitch and get more people coming to games, sitting in a full 3500 old east stand?

i dont understand how people are so against spending money on players but were so in favour of spending money on the stand etc when the stand is not going to benefit the play any time soon.

The board vision seems that make more capacity = increase revenue, but they are missing the fact that to increase capacity people need to want to come to the matches and the only way that will happen is to better the product which will only happen IMO if we speculate or at least stop selling our best players!

robinp
09-09-2010, 10:41 AM
Thats positive cash though, not debt. so our Total debt is £4.1M

We have a Cash balance of £2.2M but should not be even linked with Debt - EVERY business needs debt and Cash to survive.

I think the key point is the £4.1m is NET debt.

What Does Net Debt Mean?
A metric that shows a company's overall debt situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets. :cool2:

GloryGlory
09-09-2010, 10:42 AM
Thats positive cash though, not debt. so our Total debt is £4.1M

We have a Cash balance of £2.2M but should not be even linked with Debt - EVERY business needs debt and Cash to survive.

Without seeing the accounts and the accounting policies, I am assuming that net debt is total debt less cash in hand. This is a common definition - e.g. from Investopaedia:-


What Does Net Debt Mean?
A metric that shows a company's overall debt situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets.

Andy74
09-09-2010, 10:44 AM
We should also note that we only escaped a loss of about £2m by sell on clauses and other things to do with player sales!

GloryGlory
09-09-2010, 10:46 AM
I think the key point is the £4.1m is NET debt.

What Does Net Debt Mean?
A metric that shows a company's overall debt situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets. :cool2:

You beat me to it! :thumbsup:

MacBean
09-09-2010, 10:54 AM
Without seeing the accounts and the accounting policies, I am assuming that net debt is total debt less cash in hand. This is a common definition - e.g. from Investopaedia:-


What Does Net Debt Mean?
A metric that shows a company's overall debt situation by netting the value of a company's liabilities and debts with its cash and other similar liquid assets.


my mistake. you are correct - jumping the gun:wink:

big-mo
09-09-2010, 11:00 AM
Thats positive cash though, not debt. so our Total debt is £4.1M

We have a Cash balance of £2.2M but should not be even linked with Debt - EVERY business needs debt and Cash to survive.


The board took the decision last year not to operate on an overdraft basis and that is why they currently (July 2009) have £2.2m in cash in the bank for operating expenditure. If you are doing a true debt analysis the club has a debt of £1.9m. Until we see the detailed figures, I would assume that the cost of the East Stand has not been incorporated into EOY accounts, so the club should have a current debt of £5.15m. Having said that, it is more than likely that the stand would be set-off as a mortgage and would not be accounted for in the current working debt. Mortgages would be offset against assists.

As for EVERY business needs debt and Cash to survive, not quite true, I think that every business would like to operate debt free.

We still have Stokes £800,000 to be accounted for and for his wages to come off the total wage cost however there will be tax on this amount and we have brought in some new players since July, we have also released others.
With wage to income running at 68% does not mean we are paying more, only that income has declined.

basehibby
09-09-2010, 11:03 AM
Excellent considering we didn't sell any players in the last financial year.

As I've said on the PM board though, they need to start getting it right on the park now. We've waited long enough.

Eh?!? What about Fletcher and jones?!?

basehibby
09-09-2010, 11:07 AM
Yep, think the Fletcher sale to wolves will be in there.

Surely as it's results for financial year 09-10 (ending 1st April) these results will include Fletcher's original departure from Hibs and NOT his subsequent move to Wolves.

bob12345
09-09-2010, 11:10 AM
500 a seat? We've been conned. I know a shop which does an excellent seat for a tenner.

HFC 0-7
09-09-2010, 11:12 AM
Surely as it's results for financial year 09-10 (ending 1st April) these results will include Fletcher's original departure from Hibs and NOT his subsequent move to Wolves.

Nope, the results are for the year up to 31st july.

MB62
09-09-2010, 11:31 AM
Thats positive cash though, not debt. so our Total debt is £4.1M

We have a Cash balance of £2.2M but should not be even linked with Debt - EVERY business needs debt and Cash to survive.

If we have a debt of £4.1m and cash of £2.2m, does that not mean that presently our overall debt is £1.9m?

Whilst this may rise as the cash disappears during the season, I would have thought it will again be replenished next year by annual season ticket sales.

HenryMonk
09-09-2010, 11:38 AM
If we have a debt of £4.1m and cash of £2.2m, does that not mean that presently our overall debt is £1.9m?

Whilst this may rise as the cash disappears during the season, I would have thought it will again be replenished next year by annual season ticket sales.

it will have already been boosted with £1.2 mill for stokes, yeah?
but we will have payments for the new east. or has that been pay'd with so called "ring-fenced monies"?

bawheid
09-09-2010, 11:39 AM
If we have a debt of £4.1m and cash of £2.2m, does that not mean that presently our overall debt is £1.9m?

Whilst this may rise as the cash disappears during the season, I would have thought it will again be replenished next year by annual season ticket sales.

Think the net debt is £4.1m, which includes the positive cash balance.

Peevemor
09-09-2010, 11:40 AM
It'll be interesting to see how much of the £2M operating loss are payments for the new stand.

GloryGlory
09-09-2010, 11:42 AM
If we have a debt of £4.1m and cash of £2.2m, does that not mean that presently our overall debt is £1.9m?

Whilst this may rise as the cash disappears during the season, I would have thought it will again be replenished next year by annual season ticket sales.

We have NET debt of £4.1M. This is the debt after the cash in hand balance has been offset. Total debt is net debt £4.1M plus cash in hand £2.2M = £6.3M. IIRC, this is the outstanding mortgage on the West stand, on which we are paying interest. The capital is not due for repayment until the end of the mortgage term.

hibees_green
09-09-2010, 11:43 AM
We've added players like Riordan, Miller, Stokes (for a bit!)...

We've also lost as many players of similar quality? Fletcher? Jones? Stokes?


..the crowds haven't really been increasing so it's always a very risky policy.

This is probably partly due to us not having won at ER for 6 months. But that's measuring performance through results. Who'd want to do anything as daft as that:greengrin

GloryGlory
09-09-2010, 11:46 AM
It'll be interesting to see how much of the £2M operating loss are payments for the new stand.

The payments for the new stand would have been classed as capital, and will appear in the balance sheet under fixed assets. The depreciation charge on fixed assets is what goes to the profit and loss account, spread over the lifetime of the asset. As the new stand was still under construction at the financial year end, there would not have been any depreciation charge to profit and loss this financial year. In short, none of the operating loss is a result of spending on the new stand. (Some may be accelerated depreciation on any net book value on the old East terrace).

Peevemor
09-09-2010, 11:46 AM
We have NET debt of £4.1M. This is the debt after the cash in hand balance has been offset. Total debt is net debt £4.1M plus cash in hand £2.2M = £6.3M. IIRC, this is the outstanding mortgage on the West stand, on which we are paying interest. The capital is not due for repayment until the end of the mortgage term.


But surely the new East has to come into the equation somewhere?

On one side they may or may not have increased the value of the stadium as an asset, but there will also have been the liability of the amount outstanding to the contractors.

I wonder if the figures have been manipulated to show the small net profit. :hmmm:

IWasThere2016
09-09-2010, 11:51 AM
But surely the new East has to come into the equation somewhere?

On one side they may or may not have increased the value of the stadium as an asset, but there will also have been the liability of the amount outstanding to the contractors.

I wonder if the figures have been manipulated to show the small net profit. :hmmm:

What were cash and net debt figs at 31 July 2009?

GloryGlory
09-09-2010, 11:55 AM
But surely the new East has to come into the equation somewhere?

On one side they may or may not have increased the value of the stadium as an asset, but there will also have been the liability of the amount outstanding to the contractors.

I wonder if the figures have been manipulated to show the small net profit. :hmmm:

Yes, these figures will be reflected in the balance sheet in 2009-10. To an extent, as AFAIK we haven't borrowed any more to pay for the new stand, but used ring-fenced funding, one asset (i.e. cash) will have been replaced by another asset (i.e. fixed assets - stadium). Any outstanding liability to the contractors at the balance sheet date will be reflected in either long or short term liabilities in the balance sheet.

The total cost of the new stand will eventually be amortised through the profit and loss account, over the lifetime of the stand. If the estimated lefetime of the stand is 30 years, and the total cost is, say, £3M, then each year for the next 30 years the profit and loss account will be charged £100,000 to write off the cost of the stand. It is this £100,000 cost (plus all other costs in the year) which is deducted from income to determine profit or loss in the year. As the new stand was not finished and in operation at the financial year end 2009-10, there will be no depreciation charge for the new stand in the 2009-10 profit and loss account.

scoopyboy
09-09-2010, 11:55 AM
When do you pay for a building project?

On completion? If so then the cost of the east stand won't have appeared in this years accounts.

On the other hand if it was nearly all paid for prior to July 31st then the accounts would be even better.

IWasThere2016
09-09-2010, 11:56 AM
So, can anyone talk me through how the Board can do more to back the manager and improve the quality on the pitch? I keep hearing how they can.

They should have taken a longer term view on financing the tangible assets and any associated debt, IMHO. The stands, EM etc are bricks and mortar after all and mortgage type debt - releasing cash for the squad and building the fan base - would have been my approach. Financial strategy ain't an exact science though ..


We should also note that we only escaped a loss of about £2m by sell on clauses and other things to do with player sales!

Which is why we will always sell players ..

IWasThere2016
09-09-2010, 12:00 PM
When do you pay for a building project?

On completion? If so then the cost of the east stand won't have appeared in this years accounts.

On the other hand if it was nearly all paid for prior to July 31st then the accounts would be even better.

You tend to pay as you go - with the contractor issuing a certificate and invoice of work done. The client's agent will approve and payment will be made.

Traditional accounting convention is the asset starts to depreciate in the year of completion. This will be 2010/11 for the East. So other than cash out, the East should not affect the bottom line profit in 2009/10.

scoopyboy
09-09-2010, 12:00 PM
Surely as it's results for financial year 09-10 (ending 1st April) these results will include Fletcher's original departure from Hibs and NOT his subsequent move to Wolves.

My understanding is we received half from Burnley right away, ie in last years accounts.

We were to receive the balance during 2009-2010, ie in this years accounts.

The sell on to Wolves would also be in this years accounts.

3 different payments.

Peevemor
09-09-2010, 12:01 PM
When do you pay for a building project?

On completion? If so then the cost of the east stand won't have appeared in this years accounts.

On the other hand if it was nearly all paid for prior to July 31st then the accounts would be even better.

When you pay the contractor depends on the type of contract used. A 'normal' contract would see the contractor getting monthly interim payments based on the work carried out, or there may have been a system of stage payments based on completion of the various phases of construction (substructure, steelwork, roof, cladding, etc....).

In any case, the construction cost of the new stand should appear in the accounts as either payments made or as a liability.

GloryGlory
09-09-2010, 12:02 PM
When do you pay for a building project?

On completion? If so then the cost of the east stand won't have appeared in this years accounts.

On the other hand if it was nearly all paid for prior to July 31st then the accounts would be even better.

Generally, you pay proportionately over the period of construction. The amount of work completed will be certified by an architect/surveyor as X% of the total - the contractor will submit an invoice, plus the interim certificate,for this amount, usually less an agreed retention, to his customer. This goes on until the final certificate is issued on completion of the project. the retention is held back for an agreed period, usually one year, so that any flaws, etc, in the building work that become apparent can be corrected. Once the customer is satisfied, the retention money is then paid out.

GloryGlory
09-09-2010, 12:05 PM
You tend to pay as you go - with the contractor issuing a certificate and invoice of work done. The client's agent will approve and payment will be made.

Traditional accounting convention is the asset starts to depreciate in the year of completion. This will be 2010/11 for the East. So other than cash out, the East should not affect the bottom line profit in 2009/10.

The cash out would only affect the balance sheet, surely? All of the cost of the new stand is capital expenditure, therefore the balancing entry for the cash going out is the increase in the value of fixed assets under construction.

BSEJVT
09-09-2010, 12:07 PM
Which is why we will always sell players ..

Got it in 1

The figure that matters is the profit minus player sales, that gap has got to close to zero

We are not exactly awash with saleable assets now with Riordan, Zouma & Bamba in last year of contracts and of minimal value.

Simply put the answer to spending more on the team must be no until that gap is bridged.

The manager of the day has got to get more out of the resource at his disposal.

Part/Time Supporter
09-09-2010, 12:08 PM
Mire the club in debt again? I am talking about 3 million over 3 years, which for hibs is a very easy amount to get back through player sales. My point is that we sell players to pay for things like stands and training centres. Why not speculate A LITTLE? We are happy to throw money at stands, which is also a dangerous thing when you think that in terms of re sale value are worthless. We spent 3.25 million on a stand which will take years to pay for itself as the the extra capacity will hardly be used, especially if the product on the pitch is not good enough. spend 3.25 million on a stand and you have no re sale value, struggle to get it to pay for itself or spend 3.25 million on players which do have re sale value, could generate a lot more income and could better the product on the pitch.

<snip>

Presumably that £3M worth of players will be willing to play for free.

The only reason they broke even this year is receving £2M for players (part Fletcher and Jones). If they hadn't been sold, Hibs would have lost just over £2M last season.

They'll expect income this year to go back to where it was in 08/09 (ie because they won't have to restrict the OF and Yams away support to half the south stand), but that would still have left a £1M gap in budget. Hence selling a player to fill it (Stokes).

banarc7062
09-09-2010, 12:27 PM
Eat yer hearts out Weegies and our Big Team over the road. How a well run organisation performs. GGTTH

BSEJVT
09-09-2010, 12:34 PM
The only reason they broke even this year is receving £2M for players (part Fletcher and Jones). If they hadn't been sold, Hibs would have lost just over £2M last season.

Not surprised by £2m trading loss last year, it could have been worse

Whilst I accept that having the new East Stand and full South Stand available should help, I wonder if it will?

Last year the team were flying till after Christmas, this would have attracted many "floating" supporters who may not keep coming back if that's not the case this year.

Also IMO the ordinary man in the street is feeling the effects of the recession more now than last year and with the austerity measures still to bite, I would personally bite your hand off for a £2m loss next year if offered now.

I think there will be numerous clubs up and down the UK at seriously increased levels of risk in 12 months time.

HFC 0-7
09-09-2010, 12:37 PM
Presumably that £3M worth of players will be willing to play for free.

The only reason they broke even this year is receving £2M for players (part Fletcher and Jones). If they hadn't been sold, Hibs would have lost just over £2M last season.

They'll expect income this year to go back to where it was in 08/09 (ie because they won't have to restrict the OF and Yams away support to half the south stand), but that would still have left a £1M gap in budget. Hence selling a player to fill it (Stokes).

You dont know that for sure though as you dont know if the ring fenced funds were part of the jones and fletcher sales. Hibs would have paid out a lot of money in the last financial year on the stand probably over 1million. Hibs are making profits year on year or close to it through player sales, but still affording to build multi million pound stands and training centres. My point is, if we can still break even when spending millions on structures, why cant we now spend on players, or at least stop selling players and building the squad instead?

IMO the board have messed up with the way in which they have been paying for the stands and training centre. These types of things should be mortgaged and should be paid up over time allowing money to be spent on the playing staff instead the board saw fit to sell players to fund these multi million pound structures which have no re sale value unlike players. the board now must be in a position to stop selling players as we have nothing to pay for or save for. Over the last few years we have spent around 5 million on structures and still made profits. This was through player sales, why cant we just hold onto players or speculate a little and bring other in. If we dont succeed with the speculating we can go back to selling players like we have done in the past to fund 5 million worth of stands and training centres.

Stevie Reid
09-09-2010, 12:44 PM
Not surprised by £2m trading loss last year, it could have been worse

Whilst I accept that having the new East Stand and full South Stand available should help, I wonder if it will?

Last year the team were flying till after Christmas, this would have attracted many "floating" supporters who may not keep coming back if that's not the case this year.

Also IMO the ordinary man in the street is feeling the effects of the recession more now than last year and with the austerity measures still to bite, I would personally bite your hand off for a £2m loss next year if offered now.

I think there will be numerous clubs up and down the UK at seriously increased levels of risk in 12 months time.

No one gave Wolves a hope in hell of staying up in the EPL last year, yet in the end, they did it quite comfortably. During the summer they spent well, including signing Fletch, their record signing. Just this week they announced that ST sales were down on last year.

BSEJVT
09-09-2010, 12:46 PM
You dont know that for sure though as you dont know if the ring fenced funds were part of the jones and fletcher sales. Hibs would have paid out a lot of money in the last financial year on the stand probably over 1million. Hibs are making profits year on year or close to it through player sales, but still affording to build multi million pound stands and training centres. My point is, if we can still break even when spending millions on structures, why cant we now spend on players, or at least stop selling players and building the squad instead?

IMO the board have messed up with the way in which they have been paying for the stands and training centre. These types of things should be mortgaged and should be paid up over time allowing money to be spent on the playing staff instead the board saw fit to sell players to fund these multi million pound structures which have no re sale value unlike players. the board now must be in a position to stop selling players as we have nothing to pay for or save for. Over the last few years we have spent around 5 million on structures and still made profits. This was through player sales, why cant we just hold onto players or speculate a little and bring other in. If we dont succeed with the speculating we can go back to selling players like we have done in the past to fund 5 million worth of stands and training centres.

I think the point at issue is that buying these things has marginal effect on P & L as its only the depreciation on these assets such as the stand & the training centre that effects the P & L.

The ring fenced monies have no effect on P & L other than to keep borrowing costs down or zero.

What you can see is a change in the balance sheet from cash at Bank to fixed assets. If any borrowing results it will be shown as either current or long term liabilities and will simply reduce the amount of the increase in value caused by the creation of the asset.

It helps me to think of it that the Balance Sheet is simply a summary of your assets & laibilities.

The P & L a/c from where profits and losses are determined is simply like looking at your bank statement and saying I got paid £2000 and spent £2500 therefore I made a loss of £500

Sas_The_Hibby
09-09-2010, 12:48 PM
500 a seat? We've been conned. I know a shop which does an excellent seat for a tenner.

Yeah, but does it come with a complementary slab of concrete underneath it? :greengrin

Ray_
09-09-2010, 12:51 PM
Eat yer hearts out Weegies and our Big Team over the road. How a well run organisation performs. GGTTH##

When was the last time we had a home win?

hibees_green
09-09-2010, 12:58 PM
They should have taken a longer term view on financing the tangible assets and any associated debt, IMHO. The stands, EM etc are bricks and mortar after all and mortgage type debt - releasing cash for the squad and building the fan base - would have been my approach. Financial strategy ain't an exact science though ..

:top marks

flash
09-09-2010, 12:58 PM
When was the last positive post you made?

BSEJVT
09-09-2010, 01:02 PM
They should have taken a longer term view on financing the tangible assets and any associated debt, IMHO. The stands, EM etc are bricks and mortar after all and mortgage type debt - releasing cash for the squad and building the fan base - would have been my approach. Financial strategy ain't an exact science though ..

Taken in isolation I might have agreed with you to a point.

I have long thought this to be an STF vanity/legacy project and as such am not surprised at the view being taken by the board.

Its also served us well in the recent past and maybe with the improvements we are seeing on the sales and marketing side they plan to do both?

Mikey
09-09-2010, 01:02 PM
Eh?!? What about Fletcher and jones?!?

They weren't sold in the last financial year.

HFC 0-7
09-09-2010, 01:05 PM
I think the point at issue is that buying these things has marginal effect on P & L as its only the depreciation on these assets such as the stand & the training centre that effects the P & L.

The ring fenced monies have no effect on P & L other than to keep borrowing costs down or zero.

What you can see is a change in the balance sheet from cash at Bank to fixed assets. If any borrowing results it will be shown as either current or long term liabilities and will simply reduce the amount of the increase in value caused by the creation of the asset.

It helps me to think of it that the Balance Sheet is simply a summary of your assets & laibilities.

The P & L a/c from where profits and losses are determined is simply like looking at your bank statement and saying I got paid £2000 and spent £2500 therefore I made a loss of £500

How does building a stand make it an assett? Surely the assett existed before in the land, not the structure itself. ER is an assett in the land not the structures in place. If we spent 100 million on stands for ER, we would not have an assett of 100 million, we would only really have an assett of the land.

In regards to building the stand I think it was a mistake. Increasing the capacity was not really required as we were never filling the ground. The new stand holds around 3000 more people than the old stand. It would only be benefitting the club financially after we filled that stand for 55 games based on £22 a ticket and if no one moved from the other stands to the east. Basically the stand wouldnt even make hibs money for around 3 seasons even if it was filled every week.

The reality is, is that we spent 3.25 million on a stand that wont make money unless the crowds increase, which wont happen unless the product on the pitch improves a lot! We are now in a position where we have a money maker in the form of a stand but no way to use it as the board has no way to improve the standard on the pitch without speculating.

Mikey
09-09-2010, 01:07 PM
This increase, together with the significant reduction in turnover, led to a rise in the Wages to Turnover Ratio to 68%. There is work to be done to bring this important ratio back below 60%."


There's the fly in the ointment if ayones looking for it.......:rolleyes:

They do that by increasing turnover, not cutting wages.

It would help if fans would get off their arse at the weekend and go along and watch the team instead of sitting on hibs.net all day looking for things to complain about.

EDIT - That wasn't directed at you btw ;)

GloryGlory
09-09-2010, 01:11 PM
They weren't sold in the last financial year.

:agree: Jones left about 9 July 2009 and Fletcher left about 30 June 2009. Both their transfers would have been reported in the last financial accounts 2008-09. Fletcher's sell-on to Wolves would be in the current accounts 2009-10.

Peevemor
09-09-2010, 01:12 PM
they do that by increasing turnover, not cutting wages.

It would help if fans would get off their arse at the weekend and go along and watch the team instead of sitting on hibs.net all day looking for things to complain about.

Edit - that wasn't directed at you btw ;)

f***in' booooooooooooo!

GloryGlory
09-09-2010, 01:13 PM
How does building a stand make it an assett? Surely the assett existed before in the land, not the structure itself. ER is an assett in the land not the structures in place. If we spent 100 million on stands for ER, we would not have an assett of 100 million, we would only really have an assett of the land.

In regards to building the stand I think it was a mistake. Increasing the capacity was not really required as we were never filling the ground. The new stand holds around 3000 more people than the old stand. It would only be benefitting the club financially after we filled that stand for 55 games based on £22 a ticket and if no one moved from the other stands to the east. Basically the stand wouldnt even make hibs money for around 3 seasons even if it was filled every week.

The reality is, is that we spent 3.25 million on a stand that wont make money unless the crowds increase, which wont happen unless the product on the pitch improves a lot! We are now in a position where we have a money maker in the form of a stand but no way to use it as the board has no way to improve the standard on the pitch without speculating.

Land and buildings are different assets. The land at ER will be shown at a "current use" value, separately from the buildings and infrastructure that occupy the land.

BSEJVT
09-09-2010, 01:13 PM
They do that by increasing turnover, not cutting wages.

It would help if fans would get off their arse at the weekend and go along and watch the team instead of sitting on hibs.net all day looking for things to complain about.

EDIT - That wasn't directed at you btw ;)

Got it in one

Thats why I may be reluctant to follow the course advocated by TQM

You could burn your dosh quickly with no upturn see Harts & the SMG money for an example.

Football is a transient business with nothing guaranteed.

IMO the only sustainable option is th build the infrastructure to tease out those that would attend but wont because of eg the privations of the old East Satnd.

That way you can hopefully get incremental growth.

IMO the average Hibs supporter thinks that beacuse we are doing well financially we should be doing better than others on the park.

The two are as often mutually exclusive as they are related.

Its all about getting more bums on seats / more revenue to the club

Mikey
09-09-2010, 01:14 PM
Did we get money for Thomson? How much?

Don't know and don't know :greengrin

As mentioned on the PM board, there might also be money from Celtic if we were due more if Scott Brown reached a certain number of appearances for them.

Either way, it looks as though deals done in previous years have resulted in the club avoiding having to sell a player in the last financial year.

Antifa Hibs
09-09-2010, 01:17 PM
They do that by increasing turnover, not cutting wages.

It would help if fans would get off their arse at the weekend and go along and watch the team instead of sitting on hibs.net all day looking for things to complain about.

EDIT - That wasn't directed at you btw ;)

Would also help if the board made any incentives for punters to go. They always remind us how they are a business etc etc. When we've lost the last 8 home games on the trot, I can't blame anyone punter not wanting to pay £22 for 90 minutes of so-called fitba. £22 is four hours work for me (it's also half my tele, broadband and phone bill etc etc). I'll still be there, but I know folk who will hit it the fitba on the head just now. It's not just a Hibs thing I should add, everyone is the same, even Man U still had 5000 ST's for sale, 10 years ago there was a 10,000 name waiting list for Old Trafford!

BSEJVT
09-09-2010, 01:23 PM
How does building a stand make it an assett? Surely the assett existed before in the land, not the structure itself. ER is an assett in the land not the structures in place. If we spent 100 million on stands for ER, we would not have an assett of 100 million, we would only really have an assett of the land.

In regards to building the stand I think it was a mistake. Increasing the capacity was not really required as we were never filling the ground. The new stand holds around 3000 more people than the old stand. It would only be benefitting the club financially after we filled that stand for 55 games based on £22 a ticket and if no one moved from the other stands to the east. Basically the stand wouldnt even make hibs money for around 3 seasons even if it was filled every week.

The reality is, is that we spent 3.25 million on a stand that wont make money unless the crowds increase, which wont happen unless the product on the pitch improves a lot! We are now in a position where we have a money maker in the form of a stand but no way to use it as the board has no way to improve the standard on the pitch without speculating.

Suppose I own a field but want to make widgets, then I need to build a factory to make widgits.

This may not increase the value of the field, but hopefully I will make a profit selling widgets and then have field + profit

If I dont build the factory, I have the field

On a different scale thats what Hibs have been doing the last 20 years.

Developing the land to make the overall experience better, the fact that results /performances havent been as we hoped for isnt peculiar to Hibs but is suffered by probably every club in Scotland and beyond, regardless of whether they have spent or not.

Take a look around ER next time you are there, see how many women and girls and kids go to the game.

Do you think they would be there in such numbers in the old pre modernisation stadium?

They board have done IMO pretty well all they can, the simple fact IMO is that they are being let down by people who call themselves Hibs Supporters, but cant be arsed going' s failure to SUABC.

I will conceed that they have made some questionable choices of manager, but who hasnt?

They are ultra professional in everything else they do, so my supposition is they are likely to be the same in managerial selection.

At the end of the day though they have got to role the dice and see what transpires.

MacBean
09-09-2010, 01:26 PM
f***in' booooooooooooo!


for when boo is just not enough :agree:

Caversham Green
09-09-2010, 01:32 PM
A few observations on what has been said so far...

Net debt - Gross debt is £6.3m less cash in hand £2.2m = £4.1m. The gross debt is exactly what was expected and probably includes a £250k parent company loan. This suggests that no additional debt capital has been raised to pay for the East Stand.

East Stand - this was not completed at 31 July, so will probably be shown as 'Assets in the Course of Construction' at cost to that date (although given that it was close to completion it may have been incorporated into the stadium). The stadium is revalued at rebuild cost each year, and the difference is dealt with through the 'Statement of Total Recognised Gains and Losses' so will have no effect on the Profit and Loss account now or in the future.

Player sales - This is much higher than I was expecting. Fletcher and Jones were both sold before 31 July 2009, so the total 'fixed' prices for them were recognised in the P&L to 31 July 2009. No other players were sold before 31 July this year, so the £2.3m is all add-ons.

Trading results - I think these are very disappointing. We played more income-generating games than the previous year - because of cup runs - but turnover has fallen by 8%. Even allowing for the reduction in capacity, that's not good. The club has to all intents and purposes broken even after player sales, which means that transfer fees are already being used to subsidise excess wages and there is no scope for increased future spending based on these figures. Indeed, because of the requirement to pay off debt at £240k pa, the club actually needs to make a profit of that amount each year just to stand still financially. In truth, we have gone backwards this year despite better footballing results and I reckon the net asset value will only have increased as a result of the stadium revaluation mentioned above.

Quite a worrying set of accounts IMO.

hibees_green
09-09-2010, 01:47 PM
.........the privations...........

Had to look that one up. :top marks

BSEJVT
09-09-2010, 01:54 PM
A few observations on what has been said so far...

Net debt - Gross debt is £6.3m less cash in hand £2.2m = £4.1m. The gross debt is exactly what was expected and probably includes a £250k parent company loan. This suggests that no additional debt capital has been raised to pay for the East Stand.

East Stand - this was not completed at 31 July, so will probably be shown as 'Assets in the Course of Construction' at cost to that date (although given that it was close to completion it may have been incorporated into the stadium). The stadium is revalued at rebuild cost each year, and the difference is dealt with through the 'Statement of Total Recognised Gains and Losses' so will have no effect on the Profit and Loss account now or in the future.

Player sales - This is much higher than I was expecting. Fletcher and Jones were both sold before 31 July 2009, so the total 'fixed' prices for them were recognised in the P&L to 31 July 2009. No other players were sold before 31 July this year, so the £2.3m is all add-ons.

Trading results - I think these are very disappointing. We played more income-generating games than the previous year - because of cup runs - but turnover has fallen by 8%. Even allowing for the reduction in capacity, that's not good. The club has to all intents and purposes broken even after player sales, which means that transfer fees are already being used to subsidise excess wages and there is no scope for increased future spending based on these figures. Indeed, because of the requirement to pay off debt at £240k pa, the club actually needs to make a profit of that amount each year just to stand still financially. In truth, we have gone backwards this year despite better footballing results and I reckon the net asset value will only have increased as a result of the stadium revaluation mentioned above.

Quite a worrying set of accounts IMO.

I agree Caversham they are worrying and are pretty much as I had predicted in previous threads on similar subjects, I think short of elongated runs in both cups next years results will be far worse for reasons I have previoulsy stated on this thread.

With to date only the Stokes transfer to offset them, we will see debt increasing.

IMO there is a total disconnect between the normal fan in the streets understanding of these things and the actual situation.

This then leads to the fan feeling short changed that the board wont splash the cash and thinks stuff them and the situation worsens.

IMO the boards "smugness" over our results intensifies that feeling and misleads the support.

The Board really need to get out there and tell fans in nut & bolt detail the realities under which they operate.

IMO they could do themselves a massive favour in this regard by pushing forward the annual account date to the end of the season and showing where we are when the season ticket money is spent.

It was useful in the past to "hide" the real debt but is IMO now totally counterproductive.

HFC 0-7
09-09-2010, 01:58 PM
Suppose I own a field but want to make widgets, then I need to build a factory to make widgits.

This may not increase the value of the field, but hopefully I will make a profit selling widgets and then have field + profit

If I dont build the factory, I have the field

On a different scale thats what Hibs have been doing the last 20 years.

Developing the land to make the overall experience better, the fact that results /performances havent been as we hoped for isnt peculiar to Hibs but is suffered by probably every club in Scotland and beyond, regardless of whether they have spent or not.

Take a look around ER next time you are there, see how many women and girls and kids go to the game.

Do you think they would be there in such numbers in the old pre modernisation stadium?

They board have done IMO pretty well all they can, the simple fact IMO is that they are being let down by people who call themselves Hibs Supporters, but cant be arsed going' s failure to SUABC.

I will conceed that they have made some questionable choices of manager, but who hasnt?

They are ultra professional in everything else they do, so my supposition is they are likely to be the same in managerial selection.

At the end of the day though they have got to role the dice and see what transpires.

Thats my point though! The club will not be making any more out of the new stand than the old stand unless we fill it! Right now the money we spent on the new stand will never make a return unless the product is better. Like your widgets, if you spent money on a factory to make them but they were rubbish you wouldnt be making a profit.

Yes I have looked around the stand and it is more attractive than before but people dont go to a football match to sit and admire the stand they go for the football.

In regards to so called supporters, I think the problem is what hibs are doing. I know a good few Hibs fans that dont go, because the product is rubbish. You may argue that if they go the club will get more money and the product will get better, but IMO the board have shown no signs of this instead they have ploughed money into a stand that wasnt really needed. there is a lot of hibs fans out there that would sit in a terrible stand and watch a good hibs team. Unfortunately it will take a lot to convince these fans that the product is good. Even at the start of last season when things were good the hibs fans that dont go were all waiting for the slump, and unfortunately last season it came and stayed.

If you look at football in most countries they build new stands or stadiums out of necessity, ie the capacity is too small for the current interest. Hibs previous stand never got filled so what was their reasoning for using money which could otherwise be spent on playing staff to fund a stand that will hardly be filled?

So called fans have been sickened by the business side of the club IMO. Some fans that now dont go were happy sitting in open terraces, pillars blocking views standing or sitting on a wooden bench if the team was good enough. The fact is, is that we have spent money on a stadium fit for an excellent footballing team that challenges and wins honours. Perhaps we should have built the latter first before striving to get the stadium to fit it.

HenryMonk
09-09-2010, 02:10 PM
Building new stand was done because having a crap east stand was holding us back in terms of growing a bigger fan base!
ask real madrids fans if spending hundreds if millions the last four years gets them success?
Yeah spending the 3.25 mill on players instead of the stand would have won us the league last year! Not!!

HFC 0-7
09-09-2010, 02:17 PM
Building new stand was done because having a crap east stand was holding us back in terms of growing a bigger fan base!
ask real madrids fans if spending hundreds if millions the last four years gets them success?
Yeah spending the 3.25 mill on players instead of the stand would have won us the league last year! Not!!

Yeah having a crap east stopped people using the FF and West. The east was usually the fullest stand and many of the peopl ethere were happy to stay there. Building a new stand doesnt mean that people will start going, expecially if the team is still crap. Ask Chelsea fans if spending a lot got them the league! Ask Man City fans if spending a lot means they are now competing!

Andy74
09-09-2010, 02:28 PM
Another interesting point is that reducing ST prices cost us money - another illustration that making football a wee bit more affordable doesn't seem to work. Just about the same people go but they pay a wee bit less than they would have.

BSEJVT
09-09-2010, 02:28 PM
Thats my point though! The club will not be making any more out of the new stand than the old stand unless we fill it! Right now the money we spent on the new stand will never make a return unless the product is better. Like your widgets, if you spent money on a factory to make them but they were rubbish you wouldnt be making a profit.

Yes I have looked around the stand and it is more attractive than before but people dont go to a football match to sit and admire the stand they go for the football.

In regards to so called supporters, I think the problem is what hibs are doing. I know a good few Hibs fans that dont go, because the product is rubbish. You may argue that if they go the club will get more money and the product will get better, but IMO the board have shown no signs of this instead they have ploughed money into a stand that wasnt really needed. there is a lot of hibs fans out there that would sit in a terrible stand and watch a good hibs team. Unfortunately it will take a lot to convince these fans that the product is good. Even at the start of last season when things were good the hibs fans that dont go were all waiting for the slump, and unfortunately last season it came and stayed.

If you look at football in most countries they build new stands or stadiums out of necessity, ie the capacity is too small for the current interest. Hibs previous stand never got filled so what was their reasoning for using money which could otherwise be spent on playing staff to fund a stand that will hardly be filled?

So called fans have been sickened by the business side of the club IMO. Some fans that now dont go were happy sitting in open terraces, pillars blocking views standing or sitting on a wooden bench if the team was good enough. The fact is, is that we have spent money on a stadium fit for an excellent footballing team that challenges and wins honours. Perhaps we should have built the latter first before striving to get the stadium to fit it.

Thanks for you points which are well put and reasonable.

What you and I represent IMO are opposite sides of a philosophy.

If it were only old guys like me who went to the football, then safety issues apart I would agree there was no business need to improve facilities.

But its not just old guys like me.

The age profile and gender profile of crowds is changing all over Britain.

As the father of a daughter who took her and 5 of her pals to ER I can categorically say that I wouldnt have done so if all that was on offer was the old stadium.

I dont think it can be unrelated that many "older" and by that I mean 30 plus women are going either or that there are more kids than ever going.

For them its to do more with the overall experience than the tribal 90 minutes as it was in the old days. If I am going to be miserable, I will do so in comfort.

Having been spoiled by a diet of Sky football, supporters have unrealistic expectations of what their own clubs can do, me included!

Are we worse than we were in the 80, 90's and 00's?

I wouldnt say so but we have seen the "promised land" are for sure it aint ER just now.

I would have to disagree with your point re rebuilding stadiums though, The Boltons, Middlesboroughs etc of this world have suffered by moving.

The unpalatable truth is that football is dying on its backside, other than marquee leagues like the EPL, which is beginning to show signs of saturation.

Folk have more leisure options than I had and are taking them.

Hibs need to appeal to a wider spectrum as the "day out with the boys guys are fading away"

I support them in their endeavours.

Re your last point. You and I may not like it, but it is a business. The days of wealthy benefactors shoring up loss making clubs are going fast as its not loose change we are talking about to do so.

Look around the Scotland, the Championship, clubs are in all sorts because they weren't treated like businesses and are now paying the price.

IMO its no good pretending you are King Canute and hoping to turn the tide back by the power of your thoughts /wishes.

Supporters need to accept the changing times and go with them or walk away. Inceasingly many are walking away which is why the club need to do what they are to attract new fans.

If your local pub cant pay its way it shuts, why should Hibs be any different?

steviecarnie
09-09-2010, 02:34 PM
where would one get the full detailed accounts/report? im not gonna lie im ***** at maths and have no interest in it tbh, but my mates a financial advisor, would be interested to see his take on a full report.

HenryMonk
09-09-2010, 02:46 PM
Do you honestly think hibs spending 3.25 mill on players would have win us the league last year?
And how do you think hibs could fund the wages that goes with?
Chelsea bought there success at a low time in spendin by other clubs, fair dos.
Man c! What success have they had yet for there 500 mill ish outlay?
We now have a stadium that will generate us more money! ie hopefully bigger average, cup semi's, scots games and u21's.

HFC 0-7
09-09-2010, 02:51 PM
Thanks for you points which are well put and reasonable.

What you and I represent IMO are opposite sides of a philosophy.

If it were only old guys like me who went to the football, then safety issues apart I would agree there was no business need to improve facilities.

But its not just old guys like me.

The age profile and gender profile of crowds is changing all over Britain.

As the father of a daughter who took her and 5 of her pals to ER I can categorically say that I wouldnt have done so if all that was on offer was the old stadium.

I dont think it can be unrelated that many "older" and by that I mean 30 plus women are going either or that there are more kids than ever going.

For them its to do more with the overall experience than the tribal 90 minutes as it was in the old days. If I am going to be miserable, I will do so in comfort.

Having been spoiled by a diet of Sky football, supporters have unrealistic expectations of what their own clubs can do, me included!

Are we worse than we were in the 80, 90's and 00's?

I wouldnt say so but we have seen the "promised land" are for sure it aint ER just now.

I would have to disagree with your point re rebuilding stadiums though, The Boltons, Middlesboroughs etc of this world have suffered by moving.

The unpalatable truth is that football is dying on its backside, other than marquee leagues like the EPL, which is beginning to show signs of saturation.

Folk have more leisure options than I had and are taking them.

Hibs need to appeal to a wider spectrum as the "day out with the boys guys are fading away"

I support them in their endeavours.

Re your last point. You and I may not like it, but it is a business. The days of wealthy benefactors shoring up loss making clubs are going fast as its not loose change we are talking about to do so.

Look around the Scotland, the Championship, clubs are in all sorts because they weren't treated like businesses and are now paying the price.

IMO its no good pretending you are King Canute and hoping to turn the tide back by the power of your thoughts /wishes.

Supporters need to accept the changing times and go with them or walk away. Inceasingly many are walking away which is why the club need to do what they are to attract new fans.

If your local pub cant pay its way it shuts, why should Hibs be any different?

You talk about dwindling support and the fact that the people going to the matches have now changed. If thats the case why did we choose to increase the stadium capacity as it would appear, from your understanding, that there is little chance of getting larger crowds. Hibs had the FF and West where people could sit in 'luxury' compared to the old east. there was no need whatsoever to build the east as it wasnt stopping anyone going because we had everything. the east represented the old way that football games were watched the west and FF represented the new way.

Yes times have changed with no wealthy people shoring up the accounts but its the same for everyone. The differnece is, is that our financials are better than most and we have had the benefit of being able to spend money, the problem is that it was on structures not te playing staff. Yes you are correct about middlesboro and bolton and supports my point. Building new stadium and stands when not required are the wrong thing to do.

We are now in the position where we have spent around 8 million in the last 3 years on a stand and a training centre and the standard on the pitch has remained the same and IMO quite poor. Hibs have proved then that they can raise 8 million in 3 years through player sales. Can Hibs not start speculating and spend more on the squad and if it does not work out then we can sell to fill the deficit.

PaulSmith
09-09-2010, 03:01 PM
Thats my point though! The club will not be making any more out of the new stand than the old stand unless we fill it! .

What if we get bigger attendances for the home games against Hearts, Rangers and Celtic than last season, get a league cup semi final and get the the upcoming u21 Scottish game with a full house will that not increase the income?

HFC 0-7
09-09-2010, 03:04 PM
Do you honestly think hibs spending 3.25 mill on players would have win us the league last year?
And how do you think hibs could fund the wages that goes with?
Chelsea bought there success at a low time in spendin by other clubs, fair dos.
Man c! What success have they had yet for there 500 mill ish outlay?
We now have a stadium that will generate us more money! ie hopefully bigger average, cup semi's, scots games and u21's.

I am not saying winning the league. I am talking about putting a better product on the pitch will help increase crowds, how else will this happen without spending on the playing staff? Re the bit an bold, why do you think that we will get bigger average? Just because we have a bigger stadium? Having a bigger stadium when demand is low can have a negative effect on crowds because there will always be the chance to get a ticket. Cup semi's and scottish games will only be played at ER every now and again and will not make us that much more money.

How to you propose that the crowds will get bigger if the product remains the same, or, how do you feel that the product can improve without spending money?

Also, I am not talking about buying all the time I am talking about not selling our best players and trying to build rather than this constant assett stripping.

HFC 0-7
09-09-2010, 03:11 PM
What if we get bigger attendances for the home games against Hearts, Rangers and Celtic than last season, get a league cup semi final and get the the upcoming u21 Scottish game with a full house will that not increase the income?

Ok, say that the stadium capacity is now 4000 higher than before. At £22 a ticket it would take around 40 games at full capacity just to recoup the 3.25 million. Also, how many tickets would be less than £22 for kids, concessions etc.

Rangers and Celtic will not attract 4000 more supporters than normal, Hearts will. It will probably be about 10 seasons, maybe more, before the east stand has made the 3.25 million it cost to build.

PaulSmith
09-09-2010, 03:12 PM
We are now in the position where we have spent around 8 million in the last 3 years on a stand and a training centre and the standard on the pitch has remained the same and IMO quite poor. Hibs have proved then that they can raise 8 million in 3 years through player sales. Can Hibs not start speculating and spend more on the squad and if it does not work out then we can sell to fill the deficit.

So we rake up a huge debt on the hope that we're able to sell players in the future? I'm sure that Hearts thought that they were sitting on a £6m goal mine with Wallace and Driver, one now has hardly played in a year and the other will be out for about a year.

How about we continue exactly as we are and only re-invest any incoming capital back into the playing squad once we have recieved the money from a player sale, borrowing huge amounts of money to spend on players is short sigted and will only lead to at some point to hitting a level of debt which is ubsubstainable.

Delighted that we now have a stadium and East Mains as a foundation to build the club on.

Just in case no one did notice but we are actually spending more than we get it and if it weren't for layer sales we'd be looking at a £2m loss.

PaulSmith
09-09-2010, 03:15 PM
Ok, say that the stadium capacity is now 4000 higher than before. At £22 a ticket it would take around 40 games at full capacity just to recoup the 3.25 million. Also, how many tickets would be less than £22 for kids, concessions etc.

Rangers and Celtic will not attract 4000 more supporters than normal, Hearts will. It will probably be about 10 seasons, maybe more, before the east stand has made the 3.25 million it cost to build.

Well we've got off to a good start with 4500 more at a home game against Rangers compared to similar fixture against Celtic last season with the great old East Stand.

Perhaps we shouldn't have built the West or the FF/Sout either eh?

HFC 0-7
09-09-2010, 03:26 PM
So we rake up a huge debt on the hope that we're able to sell players in the future? I'm sure that Hearts thought that they were sitting on a £6m goal mine with Wallace and Driver, one now has hardly played in a year and the other will be out for about a year.

How about we continue exactly as we are and only re-invest any incoming capital back into the playing squad once we have recieved the money from a player sale, borrowing huge amounts of money to spend on players is short sigted and will only lead to at some point to hitting a level of debt which is ubsubstainable.

Delighted that we now have a stadium and East Mains as a foundation to build the club on.

Just in case no one did notice but we are actually spending more than we get it and if it weren't for layer sales we'd be looking at a £2m loss.

All teams are in debt, there assetts cover it. Just look at every successful team in the world, even the ones with wealthy benifactors. At the moment we are stagnating, unable to move forward on the pitch because the income will not support it. To increase income we need larger crowds, better cup runs better league finishes and better sponsorship deals. Will we get this because we have a big stadium and good training complex?

We need to bring in players to increase revenue which would involve debt. If you look at any business in any sector they borrow to grow, football is no different. We need to borrow at acceptable level to grow. The stands and training centre should have been mortgaged allowing Hibs to keep players instead of selling which would have improved the product and increased crowds and revenue. I am not talking silly levels of debt but a total debt of 10 million, most of which would be in mortgages is servicable for a club like hibs with their assetts.

If you look at hibs now with a 20K capacity stadium and an average attendance of about 12.5K how do you A) justify 3.25 million increasing the capacity and B) look to fill the stadium and use its 20K capacity income power?

HFC 0-7
09-09-2010, 03:33 PM
Well we've got off to a good start with 4500 more at a home game against Rangers compared to similar fixture against Celtic last season with the great old East Stand.

Perhaps we shouldn't have built the West or the FF/Sout either eh?

The first Hibs Rangers home game of last season attracted 16,894, The Hibs Rangers game this season attracted 17,145. Bearing in mind that people would have went because it was the first home league game in the new east stand and the 'big' incentive of the direct debit scheme its not much different!

PaulSmith
09-09-2010, 04:02 PM
The first Hibs Rangers home game of last season attracted 16,894, The Hibs Rangers game this season attracted 17,145. Bearing in mind that people would have went because it was the first home league game in the new east stand and the 'big' incentive of the direct debit scheme its not much different!

A bit creative there hibs13681 as we all know that the first Rangers game was on a public holiday and Hibs were flying high at the time (Dec 27th)

BEEJ
09-09-2010, 04:03 PM
You talk about dwindling support and the fact that the people going to the matches have now changed. If thats the case why did we choose to increase the stadium capacity as it would appear, from your understanding, that there is little chance of getting larger crowds. Hibs had the FF and West where people could sit in 'luxury' compared to the old east. there was no need whatsoever to build the east as it wasnt stopping anyone going because we had everything. the east represented the old way that football games were watched the west and FF represented the new way.

Reasons:
1. The pitch as well as the stadium was upgraded, making it now a hugely attractive neutral venue for cup finals and internationals.
2. There was a window of opportunity to build the new East stand with planning permission not lasting for ever.
3. Another window of opportunity was to make this investment when the construction industry was desperate for work and raw material prices had fallen significantly from the highs of recent years. We got a real bargain!
4. Some years ago the Hibs support gave an emphatic 'no' to the prospect of a new stadium at Straiton. Since then the Board have worked away at the strategy to rebuild and develop Easter Road. That's it just about done.

The new stand is there now. It's time you moved on and just accepted that. :wink:


We are now in the position where we have spent around 8 million in the last 3 years on a stand and a training centre and the standard on the pitch has remained the same and IMO quite poor. Hibs have proved then that they can raise 8 million in 3 years through player sales. Can Hibs not start speculating and spend more on the squad and if it does not work out then we can sell to fill the deficit.
Success on the pitch is down to the manager in charge. That's where we need to make changes if there is no distinct improvement in the next few months.

And every Manager from TM onwards has gone on about how a dedicated training facility is now an essential asset for a football club. So now, whoever the incumbent is in the Hibs job, he has no excuse. :greengrin

PaulSmith
09-09-2010, 04:19 PM
All teams are in debt, there assetts cover it. Just look at every successful team in the world, even the ones with wealthy benifactors. At the moment we are stagnating, unable to move forward on the pitch because the income will not support it. To increase income we need larger crowds, better cup runs better league finishes and better sponsorship deals. Will we get this because we have a big stadium and good training complex?

We need to bring in players to increase revenue which would involve debt. If you look at any business in any sector they borrow to grow, football is no different. We need to borrow at acceptable level to grow. The stands and training centre should have been mortgaged allowing Hibs to keep players instead of selling which would have improved the product and increased crowds and revenue. I am not talking silly levels of debt but a total debt of 10 million, most of which would be in mortgages is servicable for a club like hibs with their assetts.

If you look at hibs now with a 20K capacity stadium and an average attendance of about 12.5K how do you A) justify 3.25 million increasing the capacity and B) look to fill the stadium and use its 20K capacity income power?

OK, so we bring in players and increase the debt. We now need to pay a bank a figure of c£250k pa to service that debt, on top of the existing c£250k pa for the existing mortgages. So we're now paying out nearly 7% of our turnover.

Secondly how do we keep a Scott Brown who is being offered £25k a week at Celtic, do we match what Celtic are offering, meet him half way and pay him £500k a year...we're now up to 14% of turnover.

Now Whittaker wants a wage to match what he is offered at Rangers...another £300k a year.

If you follow your policy then we're looking at wages above what turnover we get, before any other operating costs. We now MUST service a mortgage debt, pay interest on the borrowings that we used to keep the players at the club plus pray that we get into finals of both cups, finish 3rd otherwise and magically hope to find another 3/4000 fans per home game just to keep the yearly losses below a starting figure of around £1m per year.

How long do we continue with this policy, one bad year on the playing side could see the club easily lose £3m.

It's pure football fantasy and whether other clubs do it or not doesn't really cut it for me, you cannot compare the SPL to the mega money in the EPL or Spain.

Finally and just to try and nail this one Hibs did not replace the East Stand to increase capacity, indeed with the space between the rows they could've easily got more fans in. They done it cause the old one was an embarresment and it was falling to bits, increasing the capacity was a by product of getting a completed modern football stadium which gives is the platform to grow.

HFC 0-7
09-09-2010, 04:38 PM
A bit creative there hibs13681 as we all know that the first Rangers game was on a public holiday and Hibs were flying high at the time (Dec 27th)

Creative? Dont think so! December 27th Was a Sunday, therefore the public holiday was actually the 28th! Plus, just after christmas which is a tough time for people to find money? You were the one being creative picking Celtic as we normally get lower crowds against them than we do against rangers.

Compare it to the 08/09season 15,292 were present on the 28th September against rangers, only 2K more. The stand apart from the opening league game for the stand will not make more people come. People didnt want to part with their money to sit in an old stand and watch below par performances on the pitch, they still wont part with their money to watch below par performances in the new stand.

The proof will be mid season attendances against standard opposition.

ancienthibby
09-09-2010, 04:42 PM
OK, so we bring in players and increase the debt. We now need to pay a bank a figure of c£250k pa to service that debt, on top of the existing c£250k pa for the existing mortgages. So we're now paying out nearly 7% of our turnover.

Secondly how do we keep a Scott Brown who is being offered £25k a week at Celtic, do we match what Celtic are offering, meet him half way and pay him £500k a year...we're now up to 14% of turnove


Whitts is re-signing??? Que?? Que??
If you follow your policy then we're looking at wages above what turnover we get, before any other operating costs. We now MUST service a mortgage debt, pay interest on the borrowings that we used to keep the players at the club plus pray that we get into finals of both cups, finish 3rd otherwise and magically hope to find another 3/4000 fans per home game just to keep the yearly losses below a starting figure of around £1m per year.

How long do we continue with this policy, one bad year on the playing side could see the club easily lose £3m.

It's pure football fantasy and whether other clubs do it or not doesn't really cut it for me, you cannot compare the SPL to the mega money in the EPL or Spain.

Finally and just to try and nail this one Hibs did not replace the East Stand to increase capacity, indeed with the space between the rows they could've easily got more fans in. They done it cause the old one was an embarresment and it was falling to bits, increasing the capacity was a by product of getting a completed modern football stadium which gives is the platform to grow.

What's going on?? Whitts is re-signing??

PaulSmith
09-09-2010, 04:44 PM
Creative? Dont think so! December 27th Was a Sunday, therefore the public holiday was actually the 28th! Plus, just after christmas which is a tough time for people to find money? You were the one being creative picking Celtic as we normally get lower crowds against them than we do against rangers.

Compare it to the 08/09season 15,292 were present on the 28th September against rangers, only 2K more. The stand apart from the opening league game for the stand will not make more people come. People didnt want to part with their money to sit in an old stand and watch below par performances on the pitch, they still wont part with their money to watch below par performances in the new stand.

The proof will be mid season attendances against standard opposition.

Nope, the proof will be if we're able to attract more punters into the 'sell out' games. I know a large number of fans who refused to attend the Hearts/Rangers/Celtic games as they would've have to sit (stand) in the East Stand. The other stands were sold out pretty quickly with ST's and trying to get 3, 4 or even 5 seats together was nigh on impossible for them and we missed the opportunity to get them to Easter Road.

Looks like we're never going to agree on this though.

HFC 0-7
09-09-2010, 04:45 PM
OK, so we bring in players and increase the debt. We now need to pay a bank a figure of c£250k pa to service that debt, on top of the existing c£250k pa for the existing mortgages. So we're now paying out nearly 7% of our turnover.

Secondly how do we keep a Scott Brown who is being offered £25k a week at Celtic, do we match what Celtic are offering, meet him half way and pay him £500k a year...we're now up to 14% of turnover.

Now Whittaker wants a wage to match what he is offered at Rangers...another £300k a year.

If you follow your policy then we're looking at wages above what turnover we get, before any other operating costs. We now MUST service a mortgage debt, pay interest on the borrowings that we used to keep the players at the club plus pray that we get into finals of both cups, finish 3rd otherwise and magically hope to find another 3/4000 fans per home game just to keep the yearly losses below a starting figure of around £1m per year.

How long do we continue with this policy, one bad year on the playing side could see the club easily lose £3m.

It's pure football fantasy and whether other clubs do it or not doesn't really cut it for me, you cannot compare the SPL to the mega money in the EPL or Spain.

Finally and just to try and nail this one Hibs did not replace the East Stand to increase capacity, indeed with the space between the rows they could've easily got more fans in. They done it cause the old one was an embarresment and it was falling to bits, increasing the capacity was a by product of getting a completed modern football stadium which gives is the platform to grow.

250K per annum on 3 million of debt? Dont think so! maybe at Wonga.com!

Some players will have to be sold like Scott Brown, i accept that, but when they still have a long time on their contract you are best getting as much time out of them before you sell. Stokes had a long time on his contract and we could have sold him next season allowing us to know how much in wages we were freeing up, how much of a trasnfer fee we would roughly get and having plenty time to get in a replacement. I know we wont be able to challenge the old firm all the time but we should be aiming to be the best of the rest. We should look to buy the best players from th other clubs outwith the old firm, they wont be on higher wages and they arent being offered silly money from anywhere else.

HFC 0-7
09-09-2010, 04:48 PM
Nope, the proof will be if we're able to attract more punters into the 'sell out' games. I know a large number of fans who refused to attend the Hearts/Rangers/Celtic games as they would've have to sit (stand) in the East Stand. The other stands were sold out pretty quickly with ST's and trying to get 3, 4 or even 5 seats together was nigh on impossible for them and we missed the opportunity to get them to Easter Road.

Looks like we're never going to agree on this though.

So you would pay 3.25 million on a stand to get 4000 extra people through the gates for 6 games per season? If you think along those lines that stand will only start making money after 7 seasons IF we get capacity crowds for those games! Of which the rangers game has gone past 3000 under capacity.

So the proof has already shown itself, we never got a capacity crowd against rangers we got about 300 more than the previous rangers game at home!

Mikey
09-09-2010, 04:49 PM
250K per annum on 3 million of debt? Dont think so! maybe at Wonga.com!



Why don't you go and get your facts straight before ripping into the board and just making yourself look silly.

HibbyDave
09-09-2010, 04:52 PM
Its easy, make a loss for a couple of years, if it doesnt improve income then go back to what we normally do in selling players to fill the debt. We are happy to sell players to fund debts that will have been accumulated through building stands and training centres. If Hibs were to operate at a loss of 1 million per year for 3 years and the incomce never increased then sell a player or 2 as we do now to cover the debt.

interestingly it says we have about 2.4 million cash, how much was the new stand?


£500 Per seat according to the financial statements. How many seats? 4000 seats? x £500 = £2,000,000

Noticed that net assets remanined identical at £15million between 09/09 and 09/10.
Finally, the comment that turnover was down due to reduced attendances with the closure of the east is a little hard to believe. I don't think many fans refused to attend just cause the east was no longer an option.

Think the answer was to be found by simply reviewing results on the park towards the end of last season-- winning teams get bigger crowds Seemples!

Otherwise good accounts (that the suits behind the scenes will be delighted with).:greengrin

ancienthibby
09-09-2010, 04:57 PM
A few observations on what has been said so far...

Net debt - Gross debt is £6.3m less cash in hand £2.2m = £4.1m. The gross debt is exactly what was expected and probably includes a £250k parent company loan. This suggests that no additional debt capital has been raised to pay for the East Stand.

East Stand - this was not completed at 31 July, so will probably be shown as 'Assets in the Course of Construction' at cost to that date (although given that it was close to completion it may have been incorporated into the stadium). The stadium is revalued at rebuild cost each year, and the difference is dealt with through the 'Statement of Total Recognised Gains and Losses' so will have no effect on the Profit and Loss account now or in the future.

Player sales - This is much higher than I was expecting. Fletcher and Jones were both sold before 31 July 2009, so the total 'fixed' prices for them were recognised in the P&L to 31 July 2009. No other players were sold before 31 July this year, so the £2.3m is all add-ons.

Trading results - I think these are very disappointing. We played more income-generating games than the previous year - because of cup runs - but turnover has fallen by 8%. Even allowing for the reduction in capacity, that's not good. The club has to all intents and purposes broken even after player sales, which means that transfer fees are already being used to subsidise excess wages and there is no scope for increased future spending based on these figures. Indeed, because of the requirement to pay off debt at £240k pa, the club actually needs to make a profit of that amount each year just to stand still financially. In truth, we have gone backwards this year despite better footballing results and I reckon the net asset value will only have increased as a result of the stadium revaluation mentioned above.

Quite a worrying set of accounts IMO.

I agree with you CG, but we have to wait for the full Accounts to arrive.

I am very concerned about our current liquidity given that substantial (East Stand re-building) costs must be in Accrued Liabilities, yet we have at the moment no known mechanism for paying these when they fall due. Of cousre, there are some funds to come in from the Stokes sale, but will they be enough to cover the £3.25 mln cost?? Doubt it very much!!

I take with a large pinch of salt anything that suggests that these building costs are somehow ring-fenced and so will not affect current operations!!

There is nothing in these accounts to suggest that (subject to review of the actual Accounts) or even the accounts for the last couple of years!"

There has been no mention of a 'sinking fund' to make provision for the costs, so there remain very substantial questions to be answered about our actual financial position!

(But the better news is that the Company has now actually added a line about positive cash position, so that the true Debt position of about £6.4 mln (pre East Stand) is now more clear!):greengrin

PaulSmith
09-09-2010, 05:27 PM
So you would pay 3.25 million on a stand to get 4000 extra people through the gates for 6 games per season? If you think along those lines that stand will only start making money after 7 seasons IF we get capacity crowds for those games! Of which the rangers game has gone past 3000 under capacity.

So the proof has already shown itself, we never got a capacity crowd against rangers we got about 300 more than the previous rangers game at home!

I'll try again mate, we paid £3.25m to improve Easter Road and replace the crumbling pathetic 'stand' that was in place.

Increasing the capacity was a by-product of building the stand but it does give the club the opportunity to have larger attendances and thus increase income for the bigger games, semi finals and Scotland games. I don't think that Hibs or any single supporter would somehow be silly enough to think that we're re-coup the £3.25m in 4/5 years.

hibsdaft
09-09-2010, 05:45 PM
I agree Caversham they are worrying and are pretty much as I had predicted in previous threads on similar subjects, I think short of elongated runs in both cups next years results will be far worse for reasons I have previoulsy stated on this thread.

With to date only the Stokes transfer to offset them, we will see debt increasing.

IMO there is a total disconnect between the normal fan in the streets understanding of these things and the actual situation.

This then leads to the fan feeling short changed that the board wont splash the cash and thinks stuff them and the situation worsens.

IMO the boards "smugness" over our results intensifies that feeling and misleads the support.

The Board really need to get out there and tell fans in nut & bolt detail the realities under which they operate.

IMO they could do themselves a massive favour in this regard by pushing forward the annual account date to the end of the season and showing where we are when the season ticket money is spent.

It was useful in the past to "hide" the real debt but is IMO now totally counterproductive.

excellent post.

in a similarly realistic spirit, i've not seen it mentioned before but if we want to acrue additional revenue from the new East, games against the Old Firm and Hearts are our only likely source - and i'm talking about away fans here. the home end of ER has barely sold out on a dozen occasions this century, and even then only just.

moving towards opening sections of the West up to away support (like we did with the old West) on big games (ie once s/t holders have been moved elsewhere) is going to come very soon i would suggest. (the East will then accomodate West refugees).

HFC 0-7
09-09-2010, 05:56 PM
Why don't you go and get your facts straight before ripping into the board and just making yourself look silly.


How is it silly? I know that banks are offering business overdrafts at 4% above the base rate. 4.5% of 3million is about 140K per annum.

HFC 0-7
09-09-2010, 05:58 PM
excellent post.

in a similarly realistic spirit, i've not seen it mentioned before but if we want to acrue additional revenue from the new East, games against the Old Firm and Hearts are our only likely source - and i'm talking about away fans here. the home end of ER has barely sold out on a dozen occasions this century, and even then only just.

moving towards opening sections of the West up to away support (like we did with the old West) on big games (ie once s/t holders have been moved elsewhere) is going to come very soon i would suggest. (the East will then accomodate West refugees).

I had thought about the stand being opened to away support as well if we were not filling it but the recent rangers game had empty seats on the south, is that because we sold tickets to them late in case the east wasnt finished and they were only going to get half the south?

PaulSmith
09-09-2010, 06:01 PM
How is it silly? I know that banks are offering business overdrafts at 4% above the base rate. 4.5% of 3million is about 140K per annum.

Are we not paying back any of the capital then?

HFC 0-7
09-09-2010, 06:01 PM
I'll try again mate, we paid £3.25m to improve Easter Road and replace the crumbling pathetic 'stand' that was in place.

Increasing the capacity was a by-product of building the stand but it does give the club the opportunity to have larger attendances and thus increase income for the bigger games, semi finals and Scotland games. I don't think that Hibs or any single supporter would somehow be silly enough to think that we're re-coup the £3.25m in 4/5 years.

i know what you are saying but to me the figures just dont add up. We have paid out a lot of money for a new stand when there was no real demand for it. yes the east was crumbling etc but there wasnt a massive amount of support boycotting ER because of it. IMO I think they should have been focussing all efforts on the playing side before improving the stand. i think that the price of steel and labour forced their hand a bit early and now they are going to have a very hard time trying to fill the stand never mind stop dwindling support.

marinello59
09-09-2010, 06:03 PM
excellent post.

in a similarly realistic spirit, i've not seen it mentioned before but if we want to acrue additional revenue from the new East, games against the Old Firm and Hearts are our only likely source - and i'm talking about away fans here. the home end of ER has barely sold out on a dozen occasions this century, and even then only just.

moving towards opening sections of the West up to away support (like we did with the old West) on big games (ie once s/t holders have been moved elsewhere) is going to come very soon i would suggest. (the East will then accomodate West refugees).

I doubt it. Even Rantic struggle to sell out their allocation now.
Incidentally the West isn't set up for proper crowd segragation. The East is. (Maybe they could use it to stop fights breaking out between the real proper genuine fans and the prawn sandwich brigade.:greengrin)

1875 NO 1
09-09-2010, 06:04 PM
Excellent considering we didn't sell any players in the last financial year.

As I've said on the PM board though, they need to start getting it right on the park now. We've waited long enough.

Excellent. Not in my opinion.

Highly paid exec directors made an Operating Loss of £2.2m.That ain't a well run company. I think 3rd year in a row. Also, it was player sales for the year ending 31 July 2010which covered these losses eg Jones and Fletch.

One day there will be no transfer income and we will be goosed.

1875 NO 1
09-09-2010, 06:08 PM
Nope, the proof will be if we're able to attract more punters into the 'sell out' games. I know a large number of fans who refused to attend the Hearts/Rangers/Celtic games as they would've have to sit (stand) in the East Stand. The other stands were sold out pretty quickly with ST's and trying to get 3, 4 or even 5 seats together was nigh on impossible for them and we missed the opportunity to get them to Easter Road.

Looks like we're never going to agree on this though.

So where were these fans against the huns a few weeks ago?

HFC 0-7
09-09-2010, 06:08 PM
Are we not paying back any of the capital then?

Not if its an overdraft. Thats what my point has been. We spend 3 million using the likes of an overdraft over the course of say 3 seasons. If this generates more income through improved performances, crowd increases, league positions and cup runs then we will be in a position to keep the players and start paying the overdraft, if it doesnt then we will look at paying the capital back through player sales. The result is either it works and we move onward and upward, or, it fails and we are in the same position as we are now having to sell players. The key is to speculate with a small amount of debt making sure not to get carried away and most importantly if it is a success build on that slowly not throwing even more money. IMO 3 million spent on a squad over 3 seasons would make us best of the rest and that is where we would remain, the problem would be if then the board felt we could make a charge at the old firm by speculating further which IMO wouldnt work because it would put us into too much debt trying to compete with them as even with improved attendances and league positions we would never generate the income to compete.

ancienthibby
09-09-2010, 06:08 PM
Excellent. Not in my opinion.

Highly paid exec directors made an Operating Loss of £2.2m.That ain't a well run company. I think 3rd year in a row. Also, it was player sales for the year ending 31 July 2010which covered these losses eg Jones and Fletch.

One day there will be no transfer income and we will be goosed.

Naive beyond belief!!:grr::grr::grr:

marinello59
09-09-2010, 06:09 PM
Excellent. Not in my opinion.

Highly paid exec directors made an Operating Loss of £2.2m.That ain't a well run company. I think 3rd year in a row. Also, it was player sales for the year ending 31 July 2010which covered these losses eg Jones and Fletch.

One day there will be no transfer income and we will be goosed.


I am willing to bet that the fans of most other football clubs in Scotland would like to see their club run as badly as Hibs. Which club in Scotland do you think is better run?

PaulSmith
09-09-2010, 06:10 PM
So where were these fans against the huns a few weeks ago?

At Easter Road probably considering there were 3000 more at this game than the comparative game v Celtic almost 12 months previous.

CropleyWasGod
09-09-2010, 06:10 PM
Excellent. Not in my opinion.

Highly paid exec directors made an Operating Loss of £2.2m.That ain't a well run company. I think 3rd year in a row. Also, it was player sales for the year ending 31 July 2010which covered these losses eg Jones and Fletch.

One day there will be no transfer income and we will be goosed.

When will that be? That's the whole point of the policy we adopted a few years ago when we went with the youth policy. It's one of the main reasons for East Mains. The Board recognise the reality that we have to sell to survive... which has always been the case... and have put in place things to ensure that we are better placed than most to do just that.

PaulSmith
09-09-2010, 06:17 PM
Not if its an overdraft. Thats what my point has been. We spend 3 million using the likes of an overdraft over the course of say 3 seasons. If this generates more income through improved performances, crowd increases, league positions and cup runs then we will be in a position to keep the players and start paying the overdraft, if it doesnt then we will look at paying the capital back through player sales. The result is either it works and we move onward and upward, or, it fails and we are in the same position as we are now having to sell players. The key is to speculate with a small amount of debt making sure not to get carried away and most importantly if it is a success build on that slowly not throwing even more money. IMO 3 million spent on a squad over 3 seasons would make us best of the rest and that is where we would remain, the problem would be if then the board felt we could make a charge at the old firm by speculating further which IMO wouldnt work because it would put us into too much debt trying to compete with them as even with improved attendances and league positions we would never generate the income to compete.

Why don't we just use any player sales from now and re-invest this into the squad rather than a more risky strategy of borrowing on an expensive overdraft and then hope that we either earn enough through footballing or future player sale income.

I just don't know how we can borrow heavily against nothing but a hope that we're able to sell players at a later date to bail us out.

1875 NO 1
09-09-2010, 06:17 PM
A few observations on what has been said so far...

Net debt - Gross debt is £6.3m less cash in hand £2.2m = £4.1m. The gross debt is exactly what was expected and probably includes a £250k parent company loan. This suggests that no additional debt capital has been raised to pay for the East Stand.

East Stand - this was not completed at 31 July, so will probably be shown as 'Assets in the Course of Construction' at cost to that date (although given that it was close to completion it may have been incorporated into the stadium). The stadium is revalued at rebuild cost each year, and the difference is dealt with through the 'Statement of Total Recognised Gains and Losses' so will have no effect on the Profit and Loss account now or in the future.

Player sales - This is much higher than I was expecting. Fletcher and Jones were both sold before 31 July 2009, so the total 'fixed' prices for them were recognised in the P&L to 31 July 2009. No other players were sold before 31 July this year, so the £2.3m is all add-ons.

Trading results - I think these are very disappointing. We played more income-generating games than the previous year - because of cup runs - but turnover has fallen by 8%. Even allowing for the reduction in capacity, that's not good. The club has to all intents and purposes broken even after player sales, which means that transfer fees are already being used to subsidise excess wages and there is no scope for increased future spending based on these figures. Indeed, because of the requirement to pay off debt at £240k pa, the club actually needs to make a profit of that amount each year just to stand still financially. In truth, we have gone backwards this year despite better footballing results and I reckon the net asset value will only have increased as a result of the stadium revaluation mentioned above.

Quite a worrying set of accounts IMO.

I agree.

My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.

ancienthibby
09-09-2010, 06:20 PM
6]Why don't we just use any player sales from now and re-invesis into the squad[/B] rather than a more risky strategy of borrowing on an expensive overdraft and then hope that we either earn enough through footballing or future player sale income.

I just don't know how we can borrow heavily against nothing but a hope that we're able to sell players at a later date to bail us out.

So exactly how is the new stand paid for then??:devil:

1875 NO 1
09-09-2010, 06:22 PM
Naive beyond belief!!:grr::grr::grr:
yes

Peevemor
09-09-2010, 06:22 PM
I agree.

My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.

What would you suggest?

Maybe if you stopped moaning long enough to think, you would maybe realise that now that spending on the infrastructure is completed, whilst leaving us with a manageable level of debt, we're actually in a superb position to move onward and upward.

PaulSmith
09-09-2010, 06:22 PM
I agree.

My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.

Perhaps they knew what the income was at the beginning of the financial year and were quite happy to run at a 'loss'.

I find it quite funny that on one hand we have posters raging at operating losses and other telling us that they should speculate more! :greengrin

PaulSmith
09-09-2010, 06:25 PM
So exactly how is the new stand paid for then??:devil:

Tell you after I read the accounts and the AGM! :greengrin

HFC 0-7
09-09-2010, 06:27 PM
Why don't we just use any player sales from now and re-invest this into the squad rather than a more risky strategy of borrowing on an expensive overdraft and then hope that we either earn enough through footballing or future player sale income.

I just don't know how we can borrow heavily against nothing but a hope that we're able to sell players at a later date to bail us out.

Possibly, I think there is probably a balance in there somewhere, sell players for a lot and invest half, something lke that. Maybe the board will continue to sell for a few seasons to get a lot of cash in the bank then have a go at making 3rd best ours. the problem with that is that it may see crowds drop more.

hibsdaft
09-09-2010, 06:28 PM
Incidentally the West isn't set up for proper crowd segragation.

isn't it? from my memory you'd just need a barrier outside - corporate provides a segregation of sorts, and all they use these days is a few lines of empty seats in the seating area. you'd be talking about the whole southern half of it going to the away fans tho because of ground floor concourse area .

agreed that away demand probably wouldn't justify it just now, but that may change in the future or depending on the context (e.g. title deciders).

ancienthibby
09-09-2010, 06:29 PM
Tell you after I read the accounts and the AGM! :greengrin


I won't be holding my breath!!:greengrin

PaulSmith
09-09-2010, 06:30 PM
Possibly, I think there is probably a balance in there somewhere, sell players for a lot and invest half, something lke that. Maybe the board will continue to sell for a few seasons to get a lot of cash in the bank then have a go at making 3rd best ours. the problem with that is that it may see crowds drop more.

We done that last season and crowds didn't increase though

WindyMiller
09-09-2010, 06:44 PM
I am willing to bet that the fans of most other football clubs in Scotland would like to see their club run as badly as Hibs. Which club do in Scotland do you think is better run?


That's a loaded question.:greengrin

Caversham Green
09-09-2010, 06:46 PM
I agree.

My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.

You need to bear in mind that the club is not a profit-driven business. That's why results are so sensitive to top-line fluctuations, and also why player sales have been and will continue to be used to subsidise running costs. This is the first season in many that the club has apparently gone backwards (and even then it's very marginal) and good results from previous seasons mean that it can be absorbed comfortably.

My worry is that a relatively successful season on the field was not matched by an increase in turnover, and that 'windfall' income has gone against last season's costs rather than providing a base for this season. They need to turn that around quickly.

HFC 0-7
09-09-2010, 06:54 PM
You need to bear in mind that the club is not a profit-driven business. That's why results are so sensitive to top-line fluctuations, and also why player sales have been and will continue to be used to subsidise running costs. This is the first season in many that the club has apparently gone backwards (and even then it's very marginal) and good results from previous seasons mean that it can be absorbed comfortably.

My worry is that a relatively successful season on the field was not matched by an increase in turnover, and that 'windfall' income has gone against last season's costs rather than providing a base for this season. They need to turn that around quickly.

Could the drop in turnover be because of the new TV deal with SKY? I cant remember what the figures were that Setanta were giving and what Sky is currently giving. Anyone?

marinello59
09-09-2010, 06:55 PM
isn't it? from my memory you'd just need a barrier outside - corporate provides a segregation of sorts, and all they use these days is a few lines of empty seats in the seating area. you'd be talking about the whole southern half of it going to the away fans tho because of ground floor concourse area .

agreed that away demand probably wouldn't justify it just now, but that may change in the future or depending on the context (e.g. title deciders).

Yes, it would have to be the whole half due to the small concourse area. Demand would never justify that. Segregating a smaller portion of the East Stand concourse could perhaps be justified though. Not that I would ever like to see it happen.

Part/Time Supporter
09-09-2010, 06:59 PM
You need to bear in mind that the club is not a profit-driven business. That's why results are so sensitive to top-line fluctuations, and also why player sales have been and will continue to be used to subsidise running costs. This is the first season in many that the club has apparently gone backwards (and even then it's very marginal) and good results from previous seasons mean that it can be absorbed comfortably.

My worry is that a relatively successful season on the field was not matched by an increase in turnover, and that 'windfall' income has gone against last season's costs rather than providing a base for this season. They need to turn that around quickly.

1. They cut the tickets prices by ~10% last summer - attendance barely increased before they rebuilt the east despite that and the very good start on the park.

2. Rebuilding the east cost at least £150K in revenue. 2000+ away fans @ £27 for three games. United and Ross Co might also have shifted more tickets but for the different segregation rules.

I think they will close the operating loss gap unless things (continue to) nosedive on the park.

Part/Time Supporter
09-09-2010, 07:00 PM
Could the drop in turnover be because of the new TV deal with SKY? I cant remember what the figures were that Setanta were giving and what Sky is currently giving. Anyone?

They're much the same (£12M / £13M a season for all the clubs). The clubs were moaning because Setanta and Sky were offering about double the money when the rights went out to tender. After Setanta went bust, Sky/ESPN reduced their offer to about what Setanta had been paying before.

hibs0666
09-09-2010, 07:01 PM
I agree.

My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.

Exactly how much would you like to see lopped off the players wage bill in order to return to an operating profit?

sahib
09-09-2010, 07:14 PM
I bought a Morrison's budget toaster a while back and after a couple of weeks of burnt toast it mercifully packed in. We have a squad with a number of budget players who nobody wants to pay to watch. Petrie is a cheapskate like me.

Speedway
09-09-2010, 08:50 PM
Exactly how much would you like to see lopped off the players wage bill in order to return to an operating profit?

That saves me a post.

The biggest cuts we can make to get back to 60% WTTR in lieue of rising revenues, is to cut the squad or the quality of it.

Hibby Bairn
09-09-2010, 09:16 PM
Apologies for not having read whole thread but what was net cash flow during the year?

jgl07
09-09-2010, 09:20 PM
When do you pay for a building project?

On completion? If so then the cost of the east stand won't have appeared in this years accounts.

On the other hand if it was nearly all paid for prior to July 31st then the accounts would be even better.
Construction projects are normally paid in monthly installments. This will be in arrears. The work completed each month will be valued and paid some two to three weeks later.

On that basis maybe two thirds of the project costs will have been paid by the end of July.

son of haggart
09-09-2010, 09:29 PM
Construction projects are normally paid in monthly installments. This will be in arrears. The work completed each month will be valued and paid some two to three weeks later.

On that basis maybe two thirds of the project costs will have been paid by the end of July.

There would usually be a contingency held back too, though how that would appear t in the accounts i would not be sure

grunt
09-09-2010, 09:52 PM
My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.
FFS. Hibs wage costs for 2009/2010 were £4.8m, up slightly from the previous year's £4.7m. Compare and contrast with that hugely successful club across the city, whose wage bill for their last published accounts 2008/09 was £10.5m, which was down from the previous year's £11.3m.

grunt
09-09-2010, 10:00 PM
They should have taken a longer term view on financing the tangible assets and any associated debt, IMHO. The stands, EM etc are bricks and mortar after all and mortgage type debt ...


IMO the board have messed up with the way in which they have been paying for the stands and training centre. These types of things should be mortgaged and should be paid up over time allowing money to be spent on the playing staff
I'm no expert, but I would be very surprised if any bank would extend loan or mortgage finance to a football club in the current climate. Banks just now are not lending except to relatively risk free industries. Look at Rangers for an indication of how banks are viewing the football business.

Antifa Hibs
09-09-2010, 10:02 PM
excellent post.

in a similarly realistic spirit, i've not seen it mentioned before but if we want to acrue additional revenue from the new East, games against the Old Firm and Hearts are our only likely source - and i'm talking about away fans here. the home end of ER has barely sold out on a dozen occasions this century, and even then only just.

moving towards opening sections of the West up to away support (like we did with the old West) on big games (ie once s/t holders have been moved elsewhere) is going to come very soon i would suggest. (the East will then accomodate West refugees).

Rangers didn't sell out their end of 3900 a few weeks go. Celtic just manage to sell out these days against us, and Hertz sell out their allocation once in a blue moon. Aberdeens support has dipped massively and other away supports generally consist of one man and his dug. So whats this mythical 1000 extra seats going to do other piss the home fans off?

grunt
09-09-2010, 10:09 PM
IMO the boards "smugness" over our results intensifies that feeling and misleads the support.
I didn't read their report as coming over as smug. In the first para he refers to the challenging financial climate, and later on he mentions "difficult economic conditions for supporters and commercial partners". Both of these comments set the scene for a difficult year, where we just scraped a profit.


IMO they could do themselves a massive favour in this regard by pushing forward the annual account date to the end of the season and showing where we are when the season ticket money is spent.Interesting point. Isn't it a convention that all football clubs do their accounts to end July, so that they each contain a full season? I admit I don't know when other clubs have their year ends - certainly Hearts are also a July year end.

GloryGlory
10-09-2010, 06:41 AM
I agree.

My questions to the much praised Mr Petre is, once again you and your highly paid exec team have turned in a massive operating loss. When and how are you going to address this situation.

They could have a massive wage cutting round and we could get cheaper players. :wink:

HFC 0-7
10-09-2010, 07:32 AM
I'm no expert, but I would be very surprised if any bank would extend loan or mortgage finance to a football club in the current climate. Banks just now are not lending except to relatively risk free industries. Look at Rangers for an indication of how banks are viewing the football business.

Banks would lend no problem to Hibs because of their assetts, ie, the land they own. As long as it was secured banks wouldnt have a problem with it. If it was unsecured it would need to be guaranteed by someone like Tom farmer but as our assetts would cover any debts I dont think their would be any problem.

GloryGlory
10-09-2010, 07:56 AM
Banks would lend no problem to Hibs because of their assetts, ie, the land they own. As long as it was secured banks wouldnt have a problem with it. If it was unsecured it would need to be guaranteed by someone like Tom farmer but as our assetts would cover any debts I dont think their would be any problem.

Given the volatility of land values over the last few years and the recession in the construction industry, I doubt it would be seen as gilt-edged security. Plus the land at East Mains was purcahsed at agricultural value, which is very low.

Caversham Green
10-09-2010, 08:42 AM
So you would pay 3.25 million on a stand to get 4000 extra people through the gates for 6 games per season? If you think along those lines that stand will only start making money after 7 seasons IF we get capacity crowds for those games! Of which the rangers game has gone past 3000 under capacity.

So the proof has already shown itself, we never got a capacity crowd against rangers we got about 300 more than the previous rangers game at home!

The stand is a long-term asset and it is already paid for so the concept of a payback period is not particularly relevant - it probably has up to 50 years to pay for itself. Players on the other hand are short-term, and you are proposing to finance them through interest-bearing debt, therefore the payback period is critical.

For £3m expenditure to pay for itself within 4 years (the longest likely term of a player's contract) we would need an average of around 2,000 extra fans for our home games. The derby and OF games are the ones where we would be most likely to achieve that, but we didn't have the capacity for an extra 2000 fans for those games before the new stand was built.

Alternatively we would have to rely on the unreliable and hope we had extended cup runs against high-ranking opposition to make up the shortfall. Should we rely on (a) drawing Celtc/Rangers/Hearts in the cups and (b) beating them if we did draw them?

Caversham Green
10-09-2010, 08:59 AM
Interesting point. Isn't it a convention that all football clubs do their accounts to end July, so that they each contain a full season? I admit I don't know when other clubs have their year ends - certainly Hearts are also a July year end.

Clubs year ends are always in the close season, but not always 31 July - Aberdeen and Dundee United are 30 June for example. A 31 May year end might make the position re season ticket money a bit clearer but clarity in other areas might suffer - eg player sales/purchases, distribution of league money etc.

I don't really think there's much of a case for changing the accounting date TBH.

BSEJVT
10-09-2010, 11:17 AM
Possibly, I think there is probably a balance in there somewhere, sell players for a lot and invest half, something lke that. Maybe the board will continue to sell for a few seasons to get a lot of cash in the bank then have a go at making 3rd best ours. the problem with that is that it may see crowds drop more.

The board IMO are correct in principle not to spend transfer income on playing costs.

You could however argue that that is exactly what we are doing albeit seliing the players after the costs have been incurred.

The problem with this approach is that if the music stops and you have no one to sell, then you have players on 2, 3, & 4 year contracts needing paid and increasing the debt.

Some might argue that its not the player costs that are the problem but falling turnover from £8.7 m 2006 rising to £9.8m 2007 and falling to 7.1 now at a time when staff costs keep increasing.

The simple truth is that the board are backing the manager but the fans arent backing the club.

There are one of two options 1) more folk turn up or 2) the wage bill goes down.

The board have said they are going for 1) I think they can have 2 seasons max at that and then will have to face reality if it doesnt work. By that time the debt could be north of £10m.

Anyone who doesnt get that the board are already "rolling the dice" in a speculate to accumulate policy is IMO deluding themselves.

cockneymike
10-09-2010, 11:29 AM
The board IMO are correct in principle not to spend transfer income on playing costs.

You could however argue that that is exactly what we are doing albeit seliing the players after the costs have been incurred.

The problem with this approach is that if the music stops and you have no one to sell, then you have players on 2, 3, & 4 year contracts needing paid and increasing the debt.

Some might argue that its not the player costs that are the problem but falling turnover from £8.7 m 2006 rising to £9.8m 2007 and falling to 7.1 now at a time when staff costs keep increasing.

The simple truth is that the board are backing the manager but the fans arent backing the club.

There are one of two options 1) more folk turn up or 2) the wage bill goes down.

The board have said they are going for 1) I think they can have 2 seasons max at that and then will have to face reality if it doesnt work. By that time the debt could be north of £10m.

Anyone who doesnt get that the board are already "rolling the dice" in a speculate to accumulate policy is IMO deluding themselves.

Of the £9.8m in 2007 do we know how much of that was attributable to the cup win, and how much to the goodwill built up of 2 good years of Mowbray, going into a successful transition to JC? (initially obviously, it went pete tong pretty fast). Or is it impossible to distinguish between the two?

Mikey
10-09-2010, 12:02 PM
You can see the accounts here...........

http://www.hibs.net/showthread.php?192245-****Hibs-Accounts-To-31st-July-2010-See-Them-Here****

And the AGM is on Monday 4th October at 7pm.

ancienthibby
10-09-2010, 01:22 PM
You can see the accounts here...........

http://www.hibs.net/showthread.php?192245-****Hibs-Accounts-To-31st-July-2010-See-Them-Here****

And the AGM is on Monday 4th October at 7pm.

First of all many, many thanks for Mikey to making the considerable effort to post the full set of Accounts on this forum!!:thumbsup::thumbsup:

Second, as I alluded to yesterday (in a response to CavGreen) I am quite concerned about the change in the Company's liquidity position and, so far as I could see, there being no mention in the Accounts of exactly how and when the so-called 'ring-fencing' of funding for the East Stand is going to show its face.

For the record the increase in the current illiquidity position is quite severe going from negative £691k to negative £3,321K!!

On top of that any protection from Current Assets has dimished from £5.1 million to £3.3 million. Remember that Current Assets (including Cash) will be dominated by Season Ticket advance sales which are normally used to fund ongoing monthly expenses of £750k each and every month. The Accounts also note that there are contingent liabilities of some £300k at the year end, presumably relating to the East Stand.

So its quite clear that a pressure point is looming with respect to short-term liquidity!!

The Board needs to come clean wrt to the exact funding arrangements for the new stand.:grr::grr::grr:

Phil D. Rolls
10-09-2010, 01:24 PM
1) For the record the increase in the current illiquidity position is quite severe going from negative £691k to negative £3,321K!!


2) The Board needs to come clean wrt to the exact funding arrangements for the new stand.:grr::grr::grr:

1) Is that the same as £3 billion?
2) Says who?

GloryGlory
10-09-2010, 01:28 PM
First of all many, many thanks for Mikey to making the considerable effort to post the full set of Accounts on this forum!!:thumbsup::thumbsup:

Second, as I alluded to yesterday (in a response to CavGreen) I am quite concerned about the change in the Company's liquidity position and, so far as I could see, there being no mention in the Accounts of exactly how and when the so-called 'ring-fencing' of funding for the East Stand is going to show its face.

For the record the increase in the current illiquidity position is quite severe going from negative £691k to negative £3,321K!!

On top of that any protection from Current Assets has dimished from £5.1 million to £3.3 million. Remember that Current Assets (including Cash) will be dominated by Season Ticket advance sales which are normally used to fund ongoing monthly expenses of £750k each and every month. The Accounts also note that there are contingent liabilities of some £300k at the year end, presumably relating to the East Stand.

So its quite clear that a pressure point is looming with respect to short-term liquidity!!

The Board needs to come clean wrt to the exact funding arrangements for the new stand.:grr::grr::grr:

Or maybe they're still hoping to sell Bamba for £1M+ and that's Dunfermline's share. :wink:

ancienthibby
10-09-2010, 02:06 PM
Or maybe they're still hoping to sell Bamba for £1M+ and that's Dunfermline's share. :wink:

The Notes to the Accounts say that it's for capital expenditure.:agree:

ancienthibby
10-09-2010, 02:08 PM
1) Is that the same as £3 billion?

Only in your heid :wink:


2) Says who?

A shareholder!:agree:

Idlewild
10-09-2010, 02:18 PM
Banks would lend no problem to Hibs because of their assetts, ie, the land they own. As long as it was secured banks wouldnt have a problem with it. If it was unsecured it would need to be guaranteed by someone like Tom farmer but as our assetts would cover any debts I dont think their would be any problem.

Banks lend on viability I.e how will a business repay its debt. A football team is non profit making therefore what bank would give a football club £3 million to buy players?

Phil D. Rolls
10-09-2010, 02:24 PM
A shareholder!:agree:

Fair enough. :agree:

Verdict: no case to answer, prisoner admonished and free to go.

ancienthibby
10-09-2010, 02:32 PM
Fair enough. :agree:

Verdict: no case to answer, prisoner admonished and free to go.

Thank you, kind sir!:greengrin

HFC 0-7
10-09-2010, 02:35 PM
Banks lend on viability I.e how will a business repay its debt. A football team is non profit making therefore what bank would give a football club £3 million to buy players?

Banks will lend as long as its debts are not higher than their assetts, ie, secured lending. The £3 million would be in the form of an overdraft which would incur around 4% servicing fee per annum. Banks are still lending as long as the securties are in place its unsecured lending that banks are clamping down on.

Nearly every business, including banks, borrow money to move forward. the borrowing is secured against assetts whether it be financial assetts or land assetts. In every business around the world, the borrow to grow. businesses do not wait until they have saved enough to expand.

Any business has a product which they are pushing, if they want to improve that product they invest in that product. When investing they dont normally use their own cash they use others, either investors or banks. They invest an amount based on a model which shows how much they are likely to make, the problem with football is the demand for the product is difficult to understand and the investment into the product is somewhat unknown. At some point there needs to be either a cash injection from a business person or a small risk taken by the club.

At present we cannot move forward as we are unwilling to do this and we have now peaked at where we can be with the product and the income. To move forward the product needs to improve to improve crowds which improves income. To improve the product you need to spend money or hold onto players losing some money in the short term.

Its a hard position for the club at the moment as everything is in place for us to start moving forward on the pitch but in order to do that players need to be kept unless silly money is offered, or, money needs to be spent on bringing players in.

PaulSmith
10-09-2010, 03:14 PM
Banks will lend as long as its debts are not higher than their assetts, ie, secured lending. The £3 million would be in the form of an overdraft which would incur around 4% servicing fee per annum. Banks are still lending as long as the securties are in place its unsecured lending that banks are clamping down on.

Nearly every business, including banks, borrow money to move forward. the borrowing is secured against assetts whether it be financial assetts or land assetts. In every business around the world, the borrow to grow. businesses do not wait until they have saved enough to expand.

Any business has a product which they are pushing, if they want to improve that product they invest in that product. When investing they dont normally use their own cash they use others, either investors or banks. They invest an amount based on a model which shows how much they are likely to make, the problem with football is the demand for the product is difficult to understand and the investment into the product is somewhat unknown. At some point there needs to be either a cash injection from a business person or a small risk taken by the club.

At present we cannot move forward as we are unwilling to do this and we have now peaked at where we can be with the product and the income. To move forward the product needs to improve to improve crowds which improves income. To improve the product you need to spend money or hold onto players losing some money in the short term.

Its a hard position for the club at the moment as everything is in place for us to start moving forward on the pitch but in order to do that players need to be kept unless silly money is offered, or, money needs to be spent on bringing players in.

Honestly mate I'd read the accounts before even contemplating getting into further debt right now.

Quick question for you though, where do we find £5m cash in the next 9 years to pay off the existing mortgages and cost of the East Stand from our operating trading figure.

HFC 0-7
10-09-2010, 03:26 PM
Honestly mate I'd read the accounts before even contemplating getting into further debt right now.

Quick question for you though, where do we find £5m cash in the next 9 years to pay off the existing mortgages and cost of the East Stand from our operating trading figure.

We either sell players are we doing now or we try and get the income up so that we are bringing in more cash. Every club has debt, its their ability to be able to manage that debt that matters.


lets look at the facts right now.

We are struggling on the pitch.

We are struggling to break even.

We have spent over 8 million on a new stand and training centre in the last 3 or 4 years.

We have had a few managers in with around the same budgets who have struggled to cement our position in scottish football.

We wont get attendances apart from 2 games a season that will be above what our old east+stadium could handle.

People are saying how can we spend 3 million on players as we cant afford it. We managed to spend millions on training centres and stands so how can we not afford to spend money on players?

My point is that we see fit to spend millions on stands etc but not on playing staff.

Why build a 20,250 capacity stadium by selling the best players, weakening the team if there is no chance of filling it, it just doesnt make sense.

How do you suggest we move forward and fill the stadium?

PaulSmith
10-09-2010, 03:37 PM
We either sell players are we doing now or we try and get the income up so that we are bringing in more cash. Every club has debt, its their ability to be able to manage that debt that matters.

We cannot guarantee that we'll sell £5m worth of players in the next 9 years.

We'll get turnover/income up if the team perform on the park or supporters get their fingers out and come to Easter Road.

We've spent what we've spend on EM and a new Stadium, we cannot spend it again so no point in arguing the toss about what has already happened.

A business plan to borrow another £3m for players and add it to the £5m due within 9 years and then hope that we earn enough money each year to A) cover our current operating losses and B) also save enough to pay for the new debt figure of £8m due back within 9 years. Sorry but that's a non-starter for me.

ancienthibby
10-09-2010, 03:42 PM
We cannot guarantee that we'll sell £5m worth of players in the next 9 years.

We'll get turnover/income up if the team perform on the park or supporters get their fingers out and come to Easter Road.

We've spent what we've spend on EM and a new Stadium, we cannot spend it again so no point in arguing the toss about what has already happened.

A business plan to borrow another £3m for players and add it to the £5m due within 9 years and then hope that we earn enough money each year to A) cover our current operating losses and B) also save enough to pay for the new debt figure of £8m due back within 9 years. Sorry but that's a non-starter for me.


That's the only thing that matters at this point. How it is achieved is not really important.

It will come from more punters in seats or more progress in Cups and, therefore, more punters in seats and/or more TV income.

It's not rocket science.:devil:

HFC 0-7
10-09-2010, 03:46 PM
The stand is a long-term asset and it is already paid for so the concept of a payback period is not particularly relevant - it probably has up to 50 years to pay for itself. Players on the other hand are short-term, and you are proposing to finance them through interest-bearing debt, therefore the payback period is critical.

For £3m expenditure to pay for itself within 4 years (the longest likely term of a player's contract) we would need an average of around 2,000 extra fans for our home games. The derby and OF games are the ones where we would be most likely to achieve that, but we didn't have the capacity for an extra 2000 fans for those games before the new stand was built.

Alternatively we would have to rely on the unreliable and hope we had extended cup runs against high-ranking opposition to make up the shortfall. Should we rely on (a) drawing Celtc/Rangers/Hearts in the cups and (b) beating them if we did draw them?

Check the attendancies, we were always a few thousand short against the old firm, the only times we filled ER was against Hearts, which is my point really, the club see fit to spend 3.25 million on a stand that wont get filled unless the performances improve.

Can you explain the clubs decision on spending 3.25 million on a stand when the previous one coped with the demand. Can you explain how the club will plan to fill the stadium without further money being put into the team? I dont think its ideal borrowing money to try and better the playing staff but as it stands it looks like there is no other way to achieve this. As it stands we will have, maybe, 1 season in 5 that we make Europe which has to be the goal every season for a club like hibs.

sahib
10-09-2010, 03:53 PM
We either sell players are we doing now or we try and get the income up so that we are bringing in more cash. Every club has debt, its their ability to be able to manage that debt that matters.


lets look at the facts right now.

We are struggling on the pitch.

We are struggling to break even.

We have spent over 8 million on a new stand and training centre in the last 3 or 4 years.

We have had a few managers in with around the same budgets who have struggled to cement our position in scottish football.

We wont get attendances apart from 2 games a season that will be above what our old east+stadium could handle.

People are saying how can we spend 3 million on players as we cant afford it. We managed to spend millions on training centres and stands so how can we not afford to spend money on players?

My point is that we see fit to spend millions on stands etc but not on playing staff.

Why build a 20,250 capacity stadium by selling the best players, weakening the team if there is no chance of filling it, it just doesnt make sense.

How do you suggest we move forward and fill the stadium?

The old east needed replacing, so dry your eyes. The thing is done now we should move forward. I don't think we should get into debt by buying players as you can waste a lot of money on crap. Transfer fees should, as much as possible, be reinvested in the playing squad now. This allows a decent manager to trade up to a better team.

Wee Scottie Dug
10-09-2010, 03:56 PM
We either sell players are we doing now or we try and get the income up so that we are bringing in more cash. Every club has debt, its their ability to be able to manage that debt that matters.


lets look at the facts right now.

We are struggling on the pitch.

We are struggling to break even.

We have spent over 8 million on a new stand and training centre in the last 3 or 4 years.

We have had a few managers in with around the same budgets who have struggled to cement our position in scottish football.

We wont get attendances apart from 2 games a season that will be above what our old east+stadium could handle.

People are saying how can we spend 3 million on players as we cant afford it. We managed to spend millions on training centres and stands so how can we not afford to spend money on players?

My point is that we see fit to spend millions on stands etc but not on playing staff.

Why build a 20,250 capacity stadium by selling the best players, weakening the team if there is no chance of filling it, it just doesnt make sense.

How do you suggest we move forward and fill the stadium?

Really ?? How do you work that one out - creative accounting at best.

If you have to make assumptions you should really consider puting IMHO in front of these bold statements.

IMHO - the truth is nobody knows how many more bums on seats the new stadium will attract as compared to the old stand. No-one can say with certainty that the crowd tomorrow would have been less/more/equal if the old stand was still in place.

What we do know is that the stand can take 6400 or so 'bouncing' Hibees and I for one am delighted that this is a possibilty.

I think you have made your point very clear that you were not in favour of the new stand being built before the performance was improved on the park and thats your opinion ..... its not shared by everyone though :greengrin

Lets all unite together behind the team and lets see if we can get that improvement on the park we all richly deserve and then lets see if we can fill the stadium on a more regular basis .....

GGTTH

HFC 0-7
10-09-2010, 03:57 PM
We cannot guarantee that we'll sell £5m worth of players in the next 9 years.

We'll get turnover/income up if the team perform on the park or supporters get their fingers out and come to Easter Road.

We've spent what we've spend on EM and a new Stadium, we cannot spend it again so no point in arguing the toss about what has already happened.

A business plan to borrow another £3m for players and add it to the £5m due within 9 years and then hope that we earn enough money each year to A) cover our current operating losses and B) also save enough to pay for the new debt figure of £8m due back within 9 years. Sorry but that's a non-starter for me.

I understand what you are saying and see your points, but, if the budgets remain the same for players and managers perfromances will not improve and no one can give a good answer how to achieve a better performance on the budget just now. From what the financials say is that if we keep going with the turnover we have just now we will go into debt. To increase turnover crowds need to increase and cup runs and league positions need to be better and consistent.

the key here is performances, good performances bring in the crowds and no matter how much people say that supporters should get their fingers out and support their team, it just isnt going to happen unless they see that there money is well spent.

If someone can come up with an idea to improve performances, consistently, without spending more money, spending less in fact then I am sure every supporter will back it.

HFC 0-7
10-09-2010, 04:01 PM
Really ?? How do you work that one out - creative accounting at best.

If you have to make assumptions you should really consider puting IMHO in front of these bold statements.

IMHO - the truth is nobody knows how many more bums on seats the new stadium will attract as compared to the old stand. No-one can say with certainty that the crowd tomorrow would have been less/more/equal if the old stand was still in place.

What we do know is that the stand can take 6400 or so 'bouncing' Hibees and I for one am delighted that this is a possibilty.

I think you have made your point very clear that you were not in favour of the new stand being built before the performance was improved on the park and thats your opinion ..... its not shared by everyone though :greengrin

Lets all unite together behind the team and lets see if we can get that improvement on the park we all richly deserve and then lets see if we can fill the stadium on a more regular basis .....

GGTTH

Well, the opening of the stand which should have attracted a few more bums on seats just for the occasion only drew in about 300 more fans than when we played Rangers at home last season, so I would say thats good proof. As far as I know, even with the DD scheme season tickets are about on par with the previous season. IMO, building a new stand isnt enough to attract more supporters.

Caversham Green
10-09-2010, 04:02 PM
First of all many, many thanks for Mikey to making the considerable effort to post the full set of Accounts on this forum!!:thumbsup::thumbsup:

Second, as I alluded to yesterday (in a response to CavGreen) I am quite concerned about the change in the Company's liquidity position and, so far as I could see, there being no mention in the Accounts of exactly how and when the so-called 'ring-fencing' of funding for the East Stand is going to show its face.

For the record the increase in the current illiquidity position is quite severe going from negative £691k to negative £3,321K!!

On top of that any protection from Current Assets has dimished from £5.1 million to £3.3 million. Remember that Current Assets (including Cash) will be dominated by Season Ticket advance sales which are normally used to fund ongoing monthly expenses of £750k each and every month. The Accounts also note that there are contingent liabilities of some £300k at the year end, presumably relating to the East Stand.

So its quite clear that a pressure point is looming with respect to short-term liquidity!!

The Board needs to come clean wrt to the exact funding arrangements for the new stand.:grr::grr::grr:

A few points in response to this:

East Stand - The cost to 31 July was £2.87m and is in the accounts under 'Assets in the Course of Construction'. There's no obvious figure on the other side apart from an increased trade creditors figure - £1.2m against £400k in 2009. This would suggest that the stand was paid for apart from that creditor and the balance to complete. It looks like the ring-fenced cash has already been used.

Liquidity - This is a bit misleading because a large part of creditors (£4.7m) is under accruals and deferred income. A large part of that relates to ST money and is effectively next years turnover, so doesn't directly constitute future cash outflow. Also 2009 was artifically high because of the sale of Fletcher right at the year end, with some cash in and a large debtor. Not as bad as it first appears, but not great is my verdict.

Contingent liability - This is actually a capital commitment (should've gone to Spec-Savers, Auld Yin :wink:). It will almost certainly be the balance of the East Stand to the extent that it was contracted. No doubt there will have been some further costs that were not obligations at 31 July.

Other observations - We paid £316k in transfer fees (Stokes:dunno:) and £25k compensation for Yogi. We disposed of players for whom we had paid £381k, with an unexpired contract value of £40k. Long-term debt is as expected, with no additional debt for the East Stand. We were due a £10k Corporation Tax refund during the year, which is surprising, because there has not been any tax charged in recent accounts.

Overall, I think the Stokes money will ease the immediate cash flow problems, but another season like 2009/10 could see us with problems this time next year.

Oh aye, and thanks to Mikey for all that slaving over a hot scanner.

PaulSmith
10-09-2010, 04:06 PM
Check the attendancies, we were always a few thousand short against the old firm, the only times we filled ER was against Hearts, which is my point really, the club see fit to spend 3.25 million on a stand that wont get filled unless the performances improve.

Can you explain the clubs decision on spending 3.25 million on a stand when the previous one coped with the demand. Can you explain how the club will plan to fill the stadium without further money being put into the team? I dont think its ideal borrowing money to try and better the playing staff but as it stands it looks like there is no other way to achieve this. As it stands we will have, maybe, 1 season in 5 that we make Europe which has to be the goal every season for a club like hibs.

My take, again, is that the East Stand was well past its sell by date, made the stadium look crap and had to be replaced with a modern structure. The increase in attendance of c3000 is neither here nor there IMO but it may help generate extra income to the club in the future.

If they club had built a 3500 stand keeping the capacity the same would that have made you more happy and stopped this almost Jamboskickback view that we've built some white elephant monster stand.

HFC 0-7
10-09-2010, 04:08 PM
My take, again, is that the East Stand was well past its sell by date, made the stadium look crap and had to be replaced with a modern structure. The increase in attendance of c3000 is neither here nor there IMO but it may help generate extra income to the club in the future.

If they club had built a 3500 stand keeping the capacity the same would that have made you more happy and stopped this almost Jamboskickback view that we've built some white elephant monster stand.

Fair do's we will agree to disagree, I just cant see how we will be able to move forward with the same budget, unless its been the last 3 managers fault that we seem to be standing still.

PaulSmith
10-09-2010, 04:10 PM
If someone can come up with an idea to improve performances, consistently, without spending more money, spending less in fact then I am sure every supporter will back it.

Here's a radical one, we allow a manager 3 or 4 years to build a squad using the resources that we have plus keep promoting and selling on the younger higher value players.

HFC 0-7
10-09-2010, 04:15 PM
Here's a radical one, we allow a manager 3 or 4 years to build a squad using the resources that we have plus keep promoting and selling on the younger higher value players.

Which manager though? IMO The only way the fans would accept a 3 or 4 year plan where we may be pretty mince for 2 seasons is if it was a failry seasoned and respected manager. I have no idea who that would be. If yogi can get us playing a bit more solid I think that would settle a few fans. IMo Yogi's biggest problem was the way we started last season which set the benchmark.

ancienthibby
10-09-2010, 04:19 PM
A few points in response to this:

East Stand - The cost to 31 July was £2.87m and is in the accounts under 'Assets in the Course of Construction'. There's no obvious figure on the other side apart from an increased trade creditors figure - £1.2m against £400k in 2009. This would suggest that the stand was paid for apart from that creditor and the balance to complete. It looks like the ring-fenced cash has already been used.

Liquidity - This is a bit misleading because a large part of creditors (£4.7m) is under accruals and deferred income. A large part of that relates to ST money and is effectively next years turnover, so doesn't directly constitute future cash outflow. Also 2009 was artifically high because of the sale of Fletcher right at the year end, with some cash in and a large debtor. Not as bad as it first appears, but not great is my verdict.

Contingent liability -[B] This is actually a capital commitment (should've gone to Spec-Savers, Auld Yin :wink:). It will almost certainly be the balance of the East Stand to the extent that it was contracted. No doubt there will have been some further costs that were not obligations at 31 July.

Other observations - We paid £316k in transfer fees (Stokes:dunno:) and £25k compensation for Yogi. We disposed of players for whom we had paid £381k, with an unexpired contract value of £40k. Long-term debt is as expected, with no additional debt for the East Stand. We were due a £10k Corporation Tax refund during the year, which is surprising, because there has not been any tax charged in recent accounts.

Overall, I think the Stokes money will ease the immediate cash flow problems, but another season like 2009/10 could see us with problems this time next year.

Oh aye, and thanks to Mikey for all that slaving over a hot scanner.

Good to have your response CG, but here are a couple of responses:

Re your point B, this was acknowledged in another post!!:devil:

But re the major substantive point, just where has this so-called ring-fenced cash come from?? It was not identified in last tears's accounts. It is not identified in this year's accounts, so far as I can tell!

My own view, is that the Hibs board have a commitment from a lender to provide loan/mortgage facilities for the new stand and that the Board will only make this public once the first drawdown is made!!

Otherwise the cash flow is in queer street!!:grr::grr::grr:

Wee Scottie Dug
10-09-2010, 04:29 PM
Well, the opening of the stand which should have attracted a few more bums on seats just for the occasion only drew in about 300 more fans than when we played Rangers at home last season, so I would say thats good proof. As far as I know, even with the DD scheme season tickets are about on par with the previous season. IMO, building a new stand isnt enough to attract more supporters.

I'm not trying to be smart but just curious as to why you compared the 17,145 crowd (bigger than any crowd last season) to the one played on 27/12/2009 - att 16,894 and not the most recent game on 25/4/2010 - att 10,593?

seems to me there were quite a few factors resulting in a decent crowd to the earlier game ....... Xmas time (visiting relations and all that jazz) / better KO time / we were very close to 2nd in the league and playing well etc.

Statistics and all that eh!! the happy clapper could say its a roaring success as it attracted 6,500 more than showed up for the previous encounter. I personally suspect its somewhere in the middle - I think without the new stand we might have struggled to get 14000 based on the performances since January, but lets move on eh ..... its here to stay and it will outlive both of us and I'm sure we will see it full(ish) more often than its empty(ish) .....

:thumbsup:

Caversham Green
10-09-2010, 04:30 PM
Check the attendancies, we were always a few thousand short against the old firm, the only times we filled ER was against Hearts, which is my point really, the club see fit to spend 3.25 million on a stand that wont get filled unless the performances improve.

Can you explain the clubs decision on spending 3.25 million on a stand when the previous one coped with the demand. Can you explain how the club will plan to fill the stadium without further money being put into the team? I dont think its ideal borrowing money to try and better the playing staff but as it stands it looks like there is no other way to achieve this. As it stands we will have, maybe, 1 season in 5 that we make Europe which has to be the goal every season for a club like hibs.

We were short of filling the ground against the OF, but the additional 2000 needed to finance your proposed overdraft would have taken the crowd above the old capacity. In reality, we would also have needed more than the additional 2000 to compensate for the St Mirrens and Hamiltons who would not attract as much.

As for explaining the club's decision to build, PaulSmith and others have already done that several times - the stand HAD to be built because of the state of the old one. Building a stand of the same size or refurbishing the old one might have cost a fraction less, but would have been a false economy IMO. It is perfectly conceivable that in the next 50 years we will have a team that's capable of attracting 20k crowds, but under your scheme, we'd have nowhere to put them.

What makes you think a bank would grant a £3m overdraft to a company that is losing £2m per year?

What makes you think we will only have one season in five where we achieve qualification for Europe?

HFC 0-7
10-09-2010, 04:40 PM
I'm not trying to be smart but just curious as to why you compared the 17,145 crowd (bigger than any crowd last season) to the one played on 27/12/2009 - att 16,894 and not the most recent game on 25/4/2010 - att 10,593?

seems to me there were quite a few factors resulting in a decent crowd to the earlier game ....... Xmas time (visiting relations and all that jazz) / better KO time / we were very close to 2nd in the league and playing well etc.

Statistics and all that eh!! the happy clapper could say its a roaring success as it attracted 6,500 more than showed up for the previous encounter. I personally suspect its somewhere in the middle - I think without the new stand we might have struggled to get 14000 based on the performances since January, but lets move on eh ..... its here to stay and it will outlive both of us and I'm sure we will see it full(ish) more often than its empty(ish) .....

:thumbsup:

I compared it to that because it was the only time we played rangers with the old easter road, in april the east wasnt there! Both games were on a sunday one kicked off at 12 the other 12.15. Ok, so because its xmas it attracted more fans, well the opening of the new stand would attract more fans too.

I think that these 2 fixtures were about the best 2 fixtures to compare.

Caversham Green
10-09-2010, 04:40 PM
Good to have your response CG, but here are a couple of responses:

Re your point B, this was acknowledged in another post!!:devil:

But re the major substantive point, just where has this so-called ring-fenced cash come from?? It was not identified in last tears's accounts. It is not identified in this year's accounts, so far as I can tell!

My own view, is that the Hibs board have a commitment from a lender to provide loan/mortgage facilities for the new stand and that the Board will only make this public once the first drawdown is made!!

Otherwise the cash flow is in queer street!!:grr::grr::grr:

The ring-fenced cash was just cash in hand - we had £2.9m in the bank with £1.8m to come at the start of the year. At the end of the year we only had £2.2m in hand and £200k to come. That's £2.3m down, which must have gone to pay for the stand. The cost recognised in the accounts is £2.8m and creditors is up by £800k. It all fits quite neatly really.

HFC 0-7
10-09-2010, 04:48 PM
We were short of filling the ground against the OF, but the additional 2000 needed to finance your proposed overdraft would have taken the crowd above the old capacity. In reality, we would also have needed more than the additional 2000 to compensate for the St Mirrens and Hamiltons who would not attract as much.

As for explaining the club's decision to build, PaulSmith and others have already done that several times - the stand HAD to be built because of the state of the old one. Building a stand of the same size or refurbishing the old one might have cost a fraction less, but would have been a false economy IMO. It is perfectly conceivable that in the next 50 years we will have a team that's capable of attracting 20k crowds, but under your scheme, we'd have nowhere to put them.

What makes you think a bank would grant a £3m overdraft to a company that is losing £2m per year?

What makes you think we will only have one season in five where we achieve qualification for Europe?

I am only saying that the way in which you fill a stand is to better performances. the only way I can see this happening is to spend money.

My whole point is that i think it was a silly idea to build a 3.25 million stand to increase the capacity by 2,750 when we werent filling the old one. i know the old east was a bit of an eye sore but there was plenty of people that would have been happy sitting in that stand this season and seeing the money spent on the new stand being spent on the playing staff instead. If capacity was to become a problem for a few games a season it would perhaps make more people buy a season ticket to guarantee they get to the game meaning that when the smaller teams visit the crowds would be larger. I should really just get on with the fact that its been built but it annoys me that we spent 3.25 million to make it look good and to cater for another 2,750 fans that probably wont show anyway.

Maybe I am just of a different era where I dont mind sitting in a dump watching football if the performances are good.

yekimevol
10-09-2010, 05:20 PM
did the results include the stokes transfer ?

BEEJ
10-09-2010, 05:24 PM
did the results include the stokes transfer ?
No - that transaction will be in the accounts for this year - to be published in September 2011.

grunt
10-09-2010, 05:30 PM
My whole point is that i think it was a silly idea to build a 3.25 million stand to increase the capacity by 2,750 when we werent filling the old one. ... I should really just get on with the fact that its been built but it annoys me that we spent 3.25 million to make it look good and to cater for another 2,750 fans that probably wont show anyway.
Jeezo. I see your last comment about accepting it and moving on, but this thread is becoming hard work. The Board have already explained that there were other reasons for building the new stand, and increasing the size of the pitch. Firstly there's the need to bring the stadium up to 21st century standards; secondly the expansion of the pitch to cater for internationals and cup matches and possibly concerts, in order to garner more cash through the door. Its called investing in the future of the club. Then there's the effect of the recession on building costs - it has possibly been £2m (a guess, in case anyone jumps) cheaper to build now rather than last year or next year. Who knows? Regardless, it looks like a good business decision to build now while costs are low, and while the cash was available.

Now that the stadium and the training centre are in place, all future profits can be spent on the team. Seems like a good strategy to me.

matty_f
10-09-2010, 05:37 PM
Banks would lend no problem to Hibs because of their assetts, ie, the land they own. As long as it was secured banks wouldnt have a problem with it. If it was unsecured it would need to be guaranteed by someone like Tom farmer but as our assetts would cover any debts I dont think their would be any problem.

Not so, there has to be a good reason to lend, and there has to be a repayment vehicle as well. Telling the bank that you'd just sell a couple of players if you had to wouldn't cut it.

ancienthibby
10-09-2010, 05:42 PM
The ring-fenced cash was just cash in hand - we had £2.9m in the bank with £1.8m to come at the start of the year. At the end of the year we only had £2.2m in hand and £200k to come. That's £2.3m down, which must have gone to pay for the stand. The cost recognised in the accounts is £2.8m and creditors is up by £800k. It all fits quite neatly really.

Disagree CG,

The Cash flow from the last two years dispute your assertion, in that they were negative, plus the operating profit is just not there to sustain the liabilities outstanding at this past year's end!

I have no difficulty in accepting that the cash from the Stokes sale will help to some extent (but not to equate with the liabilities!) but I am still left with a yawning gap between these;
Current Assets;
Current Liabilities;
and forward Income which is NIL apart from walk-up sales and very much reduced TV income.

We need £750k a month to cover running costs - the Cash in the Bank will last for three months, with no payments to Current Creditors!!

These latter have to be paid - where is the cash to do that???

PaulSmith
10-09-2010, 05:42 PM
Jeezo. I see your last comment about accepting it and moving on, but this thread is becoming hard work. The Board have already explained that there were other reasons for building the new stand, and increasing the size of the pitch. Firstly there's the need to bring the stadium up to 21st century standards; secondly the expansion of the pitch to cater for internationals and cup matches and possibly concerts, in order to garner more cash through the door. Its called investing in the future of the club. Then there's the effect of the recession on building costs - it has possibly been £2m (a guess, in case anyone jumps) cheaper to build now rather than last year or next year. Who knows? Regardless, it looks like a good business decision to build now while costs are low, and while the cash was available.

Now that the stadium and the training centre are in place, all future profits can be spent on the team. Seems like a good strategy to me.

That's where I made the mistake as well but I'm afraid we need to find another c£5m in the next 9 years to be in that position unless we really start to turn it around and vastly increase our income through increased attendances or performance on the park.

Scary I know.

Caversham Green
10-09-2010, 06:26 PM
Disagree CG,

The Cash flow from the last two years dispute your assertion, in that they were negative, plus the operating profit is just not there to sustain the liabilities outstanding at this past year's end!

I have no difficulty in accepting that the cash from the Stokes sale will help to some extent (but not to equate with the liabilities!) but I am still left with a yawning gap between these;
Current Assets;
Current Liabilities;
and forward Income which is NIL apart from walk-up sales and very much reduced TV income.

We need £750k a month to cover running costs - the Cash in the Bank will last for three months, with no payments to Current Creditors!!

These latter have to be paid - where is the cash to do that???

You're not really disagreeing though, you're looking forward whereas I'm just looking back at what has actually happened. The accounts have a cost of £2.8m which was financed by a decrease in cash/debtors (effectively £4.7m less £2.4m = £2.3m) and an increase in creditors. Everything else - including ST money - is fairly comparable and results were close to breakeven. We've been carrying a rump of ring-fenced money for a few seasons now and it's the variable bit on top of that that influences the cashflow fluctuations.

Your concern seems to be that the money we have now will not be enough to meet this season's costs, but it was ever thus and £2.2m strikes me as about right for the season tickets that had been sold at 31 July. We will have income from the Maribor game, walk-ups, merchandising etc to supplement that. Remember too that we have the payment plans on the STs this season. There's no doubt that cash will be tight and I wouldn't be surprised if an overdraft facility has been negotiated, but we've started seasons with less and finished up ok. As I've said before though, we need a better season than last time.

BEEJ
10-09-2010, 06:47 PM
Disagree CG,

The Cash flow from the last two years dispute your assertion, in that they were negative, plus the operating profit is just not there to sustain the liabilities outstanding at this past year's end!

I have no difficulty in accepting that the cash from the Stokes sale will help to some extent (but not to equate with the liabilities!) but I am still left with a yawning gap between these;
Current Assets;
Current Liabilities;
and forward Income which is NIL apart from walk-up sales and very much reduced TV income.

We need £750k a month to cover running costs - the Cash in the Bank will last for three months, with no payments to Current Creditors!!

These latter have to be paid - where is the cash to do that???
It is slightly unnerving.

But like some of us have been saying on here for a while, a loan facility will have been set up to meet the balance of the costs for the East Stand.

(1) Payments for Fixed assets during the year - £1,816,410 (Cash flow statement)

(2) Fixed asset additions in the year total £3.24m (note 10) of which £2.87m (certainly) and £3.03m (probably) relate to the construction of the East Stand.

(3) "All payments made to contractors during the year in respect of the new East Stand were funded from the Club's internal resources." (Directors' Report)

(4) Trade Creditors increased by £786k.

(5) "A substantial part of the increase in Trade Creditors at the year end relates to construction creditors." (Directors' Report)

The sale of Stokes (net sum of circa £800k to Hibs?) will offset some of the cash yet to be paid out. The remainder will have to be met through a loan facility.

The other point about our Net Current Liabilities is that the 2009 figure had an unusually high Trade Debtors position, created presumably by the sums outstanding from the transfer of Fletcher in 2009 to Burnley FC.

Ray_
10-09-2010, 06:50 PM
You're not really disagreeing though, you're looking forward whereas I'm just looking back at what has actually happened. The accounts have a cost of £2.8m which was financed by a decrease in cash/debtors (effectively £4.7m less £2.4m = £2.3m) and an increase in creditors. Everything else - including ST money - is fairly comparable and results were close to breakeven. We've been carrying a rump of ring-fenced money for a few seasons now and it's the variable bit on top of that that influences the cashflow fluctuations.

Your concern seems to be that the money we have now will not be enough to meet this season's costs, but it was ever thus and £2.2m strikes me as about right for the season tickets that had been sold at 31 July. We will have income from the Maribor game, walk-ups, merchandising etc to supplement that. Remember too that we have the payment plans on the STs this season. There's no doubt that cash will be tight and I wouldn't be surprised if an overdraft facility has been negotiated, but we've started seasons with less and finished up ok. As I've said before though, we need a better season than last time.

As well as the money you mentioned, won't we also have money from the Stokes transfer to also fund this season, if need be?

PaulSmith
10-09-2010, 06:53 PM
It is slightly unnerving.

But like some of us have been saying on here for a while, a loan facility will have been set up to meet the balance of the costs for the East Stand.

(1) Payments for Fixed assets during the year - £1,816,410 (Cash flow statement)

(2) Fixed asset additions in the year total £3.24m (note 10) of which £2.87m (certainly) and £3.03m (probably) relate to the construction of the East Stand.

(3) "All payments made to contractors during the year in respect of the new East Stand were funded from the Club's internal resources." (Directors' Report)

(4) Trade Creditors increased by £786k.

(5) "A substantial part of the increase in Trade Creditors at the year end relates to construction creditors." (Directors' Report)

The sale of Stokes (net sum of circa £800k to Hibs?) will offset some of the cash yet to be paid out. The remainder will have to be met through a loan facility.

The other point about our Net Current Liabilities is that the 2009 figure had an unusually high Trade Debtors position, created presumably by the sums outstanding from the transfer of Fletcher in 2009 to Burnley FC.

BEEJ, there is a note in the directors report that they judged an increase in net borrowings to fund the new East Stand as being justified. I cannot see though where is this ties into the accounts.

BEEJ
10-09-2010, 07:09 PM
BEEJ, there is a note in the directors report that they judged an increase in net borrowings to fund the new East Stand as being justified. I cannot see though where is this ties into the accounts.
Net Debt has increased by £0.5m as at 31 July 2010 (table on first page of Directors' Report).

And any borrowings they require from 1 August on as payments to the contractor fall due will add further to the debt position.

BSEJVT
10-09-2010, 07:13 PM
What makes you think a bank would grant a £3m overdraft to a company that is losing £2m per year?

Great Point

2 things to put to bed right now

1) Banks are not interested in lending anymore if their only recourse is to sell the security if it goes tits up (or call in a potential guarantee from STF)

Applications need to be viable and repayable from increased cash flow, not in the faint hope throwing money at something might improve. Hearts / SMG anyone?

2) The £2m per annum loss we are currently suffering is partly because the playing budget is too high for the turnover. Just how much more money do some folk suggest we throw at it?

The directors have a legal responsibility to return the company to profitability or break even at worse.

BSEJVT
10-09-2010, 07:26 PM
Net Debt has increased by £0.5m as at 31 July 2010 (table on first page of Directors' Report).

And any borrowings they require from 1 August on as payments to the contractor fall due will add further to the debt position.

Thats exactly my view as well and what some of us have been saying for a long time.

I have never saw how sufficient actual cash was available to "ring fence" the cost of the East Stand, they may have had a funding line "ring fenced".

Also ask yourselves this:

Is one potential reason we got less than expected from the Stokes sale beacuse we went from the reluctant seller at our price or not at all, position of the past few years to oh christ we really need to sell someone or there is a massive hole in the finances?

I bet the board are gutted that Bamba and Zouma will likely walk for nothing at the end of the season.

I have no problem at all with them financing fixed asset purchases will player sales, there is no other reasonable way for us.

The problem I see now is that we will be financing operating losses with player sales and that is potentially a severe downward spiral, always assuming we can find someone else who will acquire some resale value.

You could see this situation coming 2 or 3 years back and to some extent it was inevitable, the board have played the hand they had well and there is no question that a) as a club we have made tremendous steps b) as a team we are much much poorer.

It was IMO a one time opportunity they took advantage of to move the club substantially forward.

The trick for them will be to prove they can still win without holding any of the aces.

The obligation for the support is to keep the faith and keep supporting the team financially until some sort of financial normality returns to the club.

It concerns me that a large chunk of the support think we are minted and run by skinflints who would rather hoard cash then spend it on the club.

The back biting about whether we should have rebuilt the East Stand or not has got to stop, its done like it or not.

The debate needs to move forward to how the hell are the club gong to firstly break even and beyond that increase the playing budget to improve the product on the park?

Unless there is major major talent coming through from the U 19's or Hughes can get the gold dust machine working overtime its going to be a long haul.

matty_f
10-09-2010, 07:27 PM
Great Point

2 things to put to bed right now

1) Banks are not interested in lending anymore if their only recourse is to sell the security if it goes tits up (or call in a potential guarantee from STF)

Applications need to be viable and repayable from increased cash flow, not in the faint hope throwing money at something might improve. Hearts / SMG anyone?

2) The £2m per annum loss we are currently suffering is partly because the playing budget is too high for the turnover. Just how much more money do some folk suggest we throw at it?

The directors have a legal responsibility to return the company to profitability or break even at worse.

Point 1 is absolutely spot on.:agree: Banks have had their fingers burnt big style with lending and will be being very cautious to make sure any lending is lent responsibly and with a clear repayment plan in place.

Part/Time Supporter
10-09-2010, 07:44 PM
Net Debt has increased by £0.5m as at 31 July 2010 (table on first page of Directors' Report).

And any borrowings they require from 1 August on as payments to the contractor fall due will add further to the debt position.

That will be minimal. £2.8M of the cost of the stand is already in the accounts (FA under construction) with ~£800K unpaid at 31 July (the increase in trade creditors). The stand won't have cost much more than £3M as the report talks about it costing £500 per seat.

They were needing another £1M cash in to avoid having to take out another loan or to restart an overdraft facility. Which if you're a cynic coincides with the Stokes sale price. Roughly speaking, the second lot of money they were due from Burnley from Fletcher (£1.5M) + his sell-on to Wolves (£0.5M) + Stokes to Celtc (£1M) has paid for the east.

If you work on that basis, the real reason for the increase in net debt (cash on hand v loans) is the club now selling some STs on the tick. That's why accrued income has gone up by about the same amount as the cash has gone down. If the club had continued to insist on payment up front they would have had roughly the same cash resource as last year.

BEEJ
10-09-2010, 08:22 PM
It concerns me that a large chunk of the support think we are minted and run by skinflints who would rather hoard cash then spend it on the club.

The back biting about whether we should have rebuilt the East Stand or not has got to stop, its done like it or not.

The debate needs to move forward to how the hell are the club gong to firstly break even and beyond that increase the playing budget to improve the product on the park?

Unless there is major major talent coming through from the U 19's or Hughes can get the gold dust machine working overtime its going to be a long haul.
:agree: :top marks Let's keep our fingers crossed for the 'gold dust'.


That will be minimal. £2.8M of the cost of the stand is already in the accounts (FA under construction) with ~£800K unpaid at 31 July (the increase in trade creditors). The stand won't have cost much more than £3M as the report talks about it costing £500 per seat.

They were needing another £1M cash in to avoid having to take out another loan or to restart an overdraft facility. Which if you're a cynic coincides with the Stokes sale price. Roughly speaking, the second lot of money they were due from Burnley from Fletcher (£1.5M) + his sell-on to Wolves (£0.5M) + Stokes to Celtc (£1M) has paid for the east.

If you work on that basis, the real reason for the increase in net debt (cash on hand v loans) is the club now selling some STs on the tick. That's why accrued income has gone up by about the same amount as the cash has gone down. If the club had continued to insist on payment up front they would have had roughly the same cash resource as last year.
I refer you to post #195 on this thread in which Paul quotes from the Directors' Report.

Part/Time Supporter
10-09-2010, 08:31 PM
I refer you to post #195 on this thread in which Paul quotes from the Directors' Report.

http://www.hibs.net/attachment.php?attachmentid=6766&d=1284119531

para 2: HFC net debt has gone up by £0.5M.

para 5: 3000 fans have bought STs on payment plans. HFC cash resources at 31/7/10 are £0.5M lower than if they had paid up front.

What they mean by the bit Paul has quoted is that they could have sat on the cash that came in for Fletcher. If they hadn't rebuilt the east, the accounts now would show £3M less fixed assets, £1M less creditors and about £2M more cash on hand. In which case the net debt at 31/7/10 would have been about £2M rather than £4M.

The justification for rebuilding the east in their view is the value for money they got in doing it now. It would definitely have cost more 2-3 years ago when the housing bubble was at its peak. They might not have had the resources to do it in (say) 10 years when the East would have indisputably needed replacing.

BEEJ
10-09-2010, 08:40 PM
http://www.hibs.net/attachment.php?attachmentid=6766&d=1284119531

para 2: HFC net debt has gone up by £0.5M.

para 5: 3000 fans have bought STs on payment plans. HFC cash resources at 31/7/10 are £0.5M lower than if they had paid up front.

What they mean by the bit Paul has quoted is that they could have sat on the cash that came in for Fletcher. If they hadn't rebuilt the east, the accounts now would show £3M less fixed assets, £1M less creditors and about £2M more cash on hand. In which case the net debt at 31/7/10 would have been about £2M rather than £4M. The justification for rebuilding the east in their view is the value for money they got in doing it now.
I completely understand their justification for building the East when they did.

The point remains that Net Current Liabilities as at 31 July look a tad strained relative to recent years. It would be great, of course, if they could manage their way through that short-term cash issue without recourse to further debt finance.

But I doubt it.

Caversham Green
11-09-2010, 08:32 AM
BEEJ, there is a note in the directors report that they judged an increase in net borrowings to fund the new East Stand as being justified. I cannot see though where is this ties into the accounts.


Net Debt has increased by £0.5m as at 31 July 2010 (table on first page of Directors' Report).

And any borrowings they require from 1 August on as payments to the contractor fall due will add further to the debt position.

This is the reason I dislike net debt as a headline figure. The increase in net debt is entirely down to the drop in cash - cash fell by £708,850, gross debt fell by £230,749 (which is the scheduled £240k mortgage repayment less an increase in lease creditors) and the difference is the £478,101 increase in net debt. They haven't taken out any additional finance, and I can't see anything in the accounts to suggest they will. I'm almost sure that the cash that has been used is the stuff that was ring-fenced for so long.

I agree with BEEJ and others that the cash flow looks tight, but I'm sure the three accountants on the board will have done copious cashflow projections (it's what accountants do) and are confident that they have it covered, possibly through an overdraft facility.

BEEJ
11-09-2010, 08:59 AM
This is the reason I dislike net debt as a headline figure. The increase in net debt is entirely down to the drop in cash - cash fell by £708,850, gross debt fell by £230,749 (which is the scheduled £240k mortgage repayment less an increase in lease creditors) and the difference is the £478,101 increase in net debt. They haven't taken out any additional finance, and I can't see anything in the accounts to suggest they will. I'm almost sure that the cash that has been used is the stuff that was ring-fenced for so long.

CG, the relevant quote from the Directors' Report is:

"The Board of Directors judged that the increase in net borrowings to fund the new East Stand was justified ...."

It seems entirely appropriate to link this with the increase in Net Debt. By 31 July they had not had to take out additional loan finance but in using cash / "internal resources" the net borrowings have inevitably increased.

Other factors, of course, contribute to this position, such as the new payment terms for season tickets. But the Board themselves have highlighted the construction project as being the main factor.

The position from 1 August onwards is a challenging one for them and possibly sets in context the sale of Stokes and the late arrival of three new signings during the summer window.

I think we are actually all in vehement agreement over this but the terminology is causing the confusion. :greengrin

Caversham Green
11-09-2010, 09:21 AM
CG, the relevant quote from the Directors' Report is:

"The Board of Directors judged that the increase in net borrowings to fund the new East Stand was justified ...."

It seems entirely appropriate to link this with the increase in Net Debt. By 31 July they had not had to take out additional loan finance but in using cash / "internal resources" the net borrowings have inevitably increased.

Other factors, of course, contribute to this position, such as the new payment terms for season tickets. But the Board themselves have highlighted the construction project as being the main factor.

The position from 1 August onwards is a challenging one for them and possibly sets in context the sale of Stokes and the late arrival of three new signings during the summer window.

I think we are actually all in vehement agreement over this but the terminology is causing the confusion. :greengrin

I agree we're in agreement generally - I may have misinterpreted your second para. I took this to mean that in your opinion they were likely to take on loan finance rather than just increasing net debt by reducing cash in hand. I think the statement was made because the reduction of net debt has been presented (misleadingly IMHO) as an unmitigated positive in the past and they now had to justify the increase this year.

My view is that net debt is an almost irrelevant figure in the accounts of football clubs who sell season tickets in significant numbers before the end of their financial year.

sesoim
11-09-2010, 04:50 PM
We are essentially extending player costs beyond what is comfortable. The receipts from sales were used to fund things that will help but thay are one offs. A policy of having to fund costs through players sales is pointless.

We've added players like Riordan, Miller, Stokes (for a bit!) and the crowds haven't really been increasing so it's always a very risky policy.



I don't really agree. We can't expect to hold onto our best players when they could expect to earn £15k+ elsewhere. In football, we will always have players who want to move on, so naturally most of the fees we receive will go on squad wages over and above our operating turnover.

At least we aren't using transfer fees to finance our owner's debts, unlike certain American chairmen down south.