Official Site: AGM DATE CONFIRMED

[Since452]

£5 million in the bank, no debt and assets of £20 odd million. Has the club ever been in a stronger financial position?

[Peevemor]

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£5 million in the bank, no debt and assets of £20 odd million. Has the club ever been in a stronger financial position?

But can Ron steer a submarine through the Baltic Sea?

[CockneyRebel]

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If you make £500k more and spend it you've increased income (and expenses), not profits. You're still breaking even. So the only thing that changes in your scenario is that you don't spend that income until the next season, instead of projecting it and spending it in current season.

For the avoidance of doubt, I'm absolutely in favour of increasing income in order to be able to spend it on the pitch, and I'm expecting to see some good proposals on that point at the AGM. I just don't see what he's driving at by wanting to be profit making instead of breaking even.

To improve year on year means you usually have to spend more so you have to make a profit to be able to spend more. Spending profit to improve the business is not "breaking even" it's reinvesting. If it's done right then the reinvestment will increase profits.

[Rocky]

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[/B]
This will depend on what the investment is and how it benefits the club - it's not like 500k chucked down a hole. The mortgage is gone now and out of the equation so that 500k is now available every season.

The point I'm making is that in order for it to be profit, by definition we can't have spent it. Suppose we earn £10m a year now, and expenses are £10m, so we break even. We now save £500k a year on mortgage so expenses are down to £9.5m. BUT we aim to make a £500k profit. So we still only have £9.5m of our £10m to spend, but come next July we have an extra £500k in the bank. Therefore in the short term nothing has changed.

[The 90+2]

The accounts look very good reading.

[Hibs4185]

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£5 million in the bank, no debt and assets of £20 odd million. Has the club ever been in a stronger financial position?

Absolutely not! I think us fans deserve a pat on the back! Cheerleaders and free hot dogs will do Ron!

[Caversham Green]

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Forgive my ignorance, but shouldn't the pre-tax profit of £2 million account for everything (lennon, cctv, anything else)?

How do we go from £2 million profit to -£750k purely on tax?

You're looking at it the wrong way round I think.

We made a £750k loss before taking into account the player sales, so profit after player sales id £2m.

[Hibs4185]

The accounts must be good. Sickback has nothing to say about them

[Chorley Hibee]

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You're looking at it the wrong way round I think.

We made a £750k loss before taking into account the player sales, so profit after player sales id £2m.

Thanks Caversham, that makes sense now.

It's been a long day! 🙈

[hibee-boys]

Surely the strength of our liquidity position would be better understood if we knew (not sure if the accounts comment on this) how much of the £5 million was due to be paid out on wages/expenses during the season. It's a bit like us getting paid our annual salary in July as opposed to monthly, it's a false position. Appreciate that we'll generate revenue through the year but i'd be interested to know how much of that £5 million last July was required working capital/cash flow for the season ahead thus what is truly surplus.

[Caversham Green]

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The point I'm making is that in order for it to be profit, by definition we can't have spent it. Suppose we earn £10m a year now, and expenses are £10m, so we break even. We now save £500k a year on mortgage so expenses are down to £9.5m. BUT we aim to make a £500k profit. So we still only have £9.5m of our £10m to spend, but come next July we have an extra £500k in the bank. Therefore in the short term nothing has changed.

Re this and a couple of others, the £500k payments were purely a balance sheet entry and didn't affect profits - if we had exactly the same trading results this year we'd still show a £750k operating loss, but we would have an extra £500k to spend.

I hope Ron's point about making profits is about growth - i.e. making a profit this year gives you more to spend next year, which should produce greater profits and give us more to spend in the year after next and so on. It's really down to good management and spending wisely.

[Keith_M]

No mention of the new stadium?

[DaveF]

I'm sure someone on sickbag has posted 'tick tock'

[Rocky]

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Re this and a couple of others, the £500k payments were purely a balance sheet entry and didn't affect profits - if we had exactly the same trading results this year we'd still show a £750k operating loss, but we would have an extra £500k to spend.

I hope Ron's point about making profits is about growth - i.e. making a profit this year gives you more to spend next year, which should produce greater profits and give us more to spend in the year after next and so on. It's really down to good management and spending wisely.

I'm still of the view that projecting current year income well and spending it within the year is preferable to turning a profit (on which tax is payable) and spending it in a future year. Unless we're saving it for capital projects in the future I guess.

[Caversham Green]

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Surely the strength of our liquidity position would be better understood if we knew (not sure if the accounts comment on this) how much of the £5 million was due to be paid out on wages/expenses during the season. It's a bit like us getting paid our annual salary in July as opposed to monthly, it's a false position. Appreciate that we'll generate revenue through the year but i'd be interested to know how much of that £5 million last July was required working capital/cash flow for the season ahead thus what is truly surplus.

It's really all for the next season's (i.e. now the current season) expenses and it will be topped up by monthly revenue. It will include a fair chunk of season ticket sales - which will be reflected in the deferred income figure in creditors. That's the same for every club every season, which is why Hearts accounts look dire at first glance - they had less than £600k left in the bank out of £5.2m ST sales.

[Keith_M]

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I'm sure someone on sickbag has posted 'tick tock'

Do clocks even make that noise any more?

[Caversham Green]

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I'm still of the view that projecting current year income well and spending it within the year is preferable to turning a profit (on which tax is payable) and spending it in a future year. Unless we're saving it for capital projects in the future I guess.

It's very difficult to plan for break even in football and can lead to the boom and bust pattern we've seen in the past - it could also be seen by some as 'unambitious'. The problem in Scottish football is that there is a very definite glass(gow) ceiling and despite their current league performances Hibs, Hearts and Aberdeen are very close to it. I hope Ron isn't going to be too ambitious.

[hibby6270]

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The accounts must be good. Sickback has nothing to say about them

That’s because they’re not privy to the actual information we’ve had drop though our letterboxes this morning.
Once it’s announced in the press and on tv/radio, all Sickback will pick up on is £750K loss and try to spin that as a terrible position to be in without actually looking at the underlying financial strength of our club. It’s what they do. Clutch at straws!!

[Onceinawhile]

Just a point, Although there was a cash balance of 5m, that was at 2nd July. It'll have been massively depleted by now.

[Hibeesmad]

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That’s because they’re not privy to the actual information we’ve had drop though our letterboxes this morning.
Once it’s announced in the press and on tv/radio, all Sickback will pick up on is £750K loss and try to spin that as a terrible position to be in without actually looking at the underlying financial strength of our club. It’s what they do. Clutch at straws!!

They will lose a lot more than £750k playing in the Championship next season.

[Peevemor]

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Just a point, Although there was a cash balance of 5m, that was at 2nd July. It'll have been massively depleted by now.

Which is normal, though ordinarily it won't all be gone.

It will also have been added to by ticket sales (some STs, home walk-ups & all away fans) cup run money including our LC semi share, merchandising including strip sales & league/tv money instalments.

I'd guess about half of the £5m will be gone (though I could be wildly wrong).

[Brightside]

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If you make £500k more and spend it you've increased income (and expenses), not profits. You're still breaking even. So the only thing that changes in your scenario is that you don't spend that income until the next season, instead of projecting it and spending it in current season.

For the avoidance of doubt, I'm absolutely in favour of increasing income in order to be able to spend it on the pitch, and I'm expecting to see some good proposals on that point at the AGM. I just don't see what he's driving at by wanting to be profit making instead of breaking even.

He is talking about wanting to make profit. like Celtic.

[hibbydad]

We will also have had payouts from the league. If my memory serves me right all premiership clubs receive a payment of approximately 600k in august a small payment in december then the remainder is divied up at the end of the seaon depending on your league position

[007]

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A £700k+ trading loss can't really be described as healthy - we won't make millions from player trading every year.

If we don't make the millions from player sales then we cut our cloth accordingly and don't spend so much.

If we'd tightened the purse strings and spent £700k less to achieve break even on an operating basis we'd have had a further £700k sitting in the bank and people would be complaining the player sales income wasn't being reinvested in the squad.

[Speedway]

Is the break even comment also a dig at RP who said that the club should always spend 1p less than it earned?

[Hibbyradge]

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£5 million in the bank, no debt and assets of £20 odd million. Has the club ever been in a stronger financial position?

That was then ...

[Hibbyradge]

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Do clocks even make that noise any more?

They do and it's one of the most relaxing, soporific noises in the world.

[Hibbyradge]

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Is the break even comment also a dig at RP who said that the club should always spend 1p less than it earned?

I very much doubt it's a dig at anyone.

A change of approach, maybe, but nothing malicious.

[Lago]

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I'd settle for CWG coming back myself and explaining this gobbledygook.....

Me to I miss his input, made it easier for the layman to understand.

[Lago]

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They do and it's one of the most relaxing, soporific noises in the world.

Beat me too it, I'm sitting under one on my wall & it's a lovely peaceful sound as it ticks away my life. 🙂