Bolton's Finances / Accounts for year ending 30th June 2021 and everything else since.

Sluffy wrote:What the three of us (Bob, Barry and I) have been trying to do is to work out how much FV (and others) have put into the company as equity (how many shares they have bought in the business).

Barry made a provisional calculation of £22.5m

Bob thought nearer £18.5m but I reminded him of a most recent input of £2.4m he had yet to include which brings him up to £20.9m.

I couldn't quite follow the logic of what both Barry and Bob had said and Barry has already spotted something he needs to amend and Bob has patiently explained to me what I had clearly not understood properly (and still really don't - so it is going over my head as well some of this!).

We also now don't know who owns shares in FV.

We know the government does to the tune of £2.5m but apparently a further £4m is owned in some way between a Swiss Consortium who have bought an amount of shares via Luckock's new company AND a mysterious and anonymous investor who is acting through Sharon???

A recent £2.4m shares have just been bought but we don't know by whom.

We also have debts to settle in two weeks time of at least £9m - but we probably don't have £9m spare to pay them!

I suspect they will be rolled over yet again but I'm not sure Bob agrees with me fully on that point.

Bob is really the magician in all of this, I see Barry as being his very best sorcerers apprentice (and only because he admits to not being an accountant) and I'm just the magicians cat that keeps getting under his and Barry's feet at the wrong time!

I guess that you and Bonce are the local kids looking in through the window wondering what the hell is going on!!!

Thanks Sluffy. I'm not claiming to be Paul Daniels but there is a lot that's just not making sense and I don't think its magic

FV have reported that loans (excluding interest) of £12.5m have been converted (with interest) into shares to a value of £15.65m (with £1m unpaid). That would make the interest more than £3m but it cannot be anywhere near that. I'll do some estimates when I have time.

Some shares have been issued at a 20% discount to other shares but the lion's share of these did not go to UKFF nominees (the ones supposedly entitled to shares at a 'discount'). But aren't all the shares vastly overvalued anyway?

Apart from being the slowest of all clubs in Leagues 1 and 2 to file their accounts FV were probably the biggest over spenders in League 2 in 20/21. I should know for certain when I've checked out a few more numbers but I incline to the view that there were quite a number of clubs that were financially better off without spectators during the 20/21 season.

Thanks Bob, I know some people think I blow smoke up your bum by my praising of your skills and knowledge of accountancy but my comments are genuine and simply truthful - you do have unmatched skills and knowledge to anyone else I've stumbled across on social media including Maguire who makes his living at it.

I've also got the utmost  respect for Barry too who clearly is far knowledgeable than anyone else I've seen (you apart) who has commented on the clubs accounts, and I only put him as the 'sorcerer's apprentice' to fit in with my Fantasia analogy (no disrespect intended to him).

Anyway one thing I never did really understand about these discounted shares was from where the money for the loan originally came from?

What I mean is that the way I read it there was a number of 'approved' banks and financial institutions who were the actual lenders with the FF acting guarantee on default.

I wonder therefore if some of the other loans that were rolled into equity at the same time the governments one was, were done so on the same basis?

I mean if I were a bank and loaned FV a sum of money I would want the money back on the due date.  But due to Covid (no crowds etc) maybe that was an impossibility and instead they were obliged to get some security by transferring the money to shares in the company at a discounted price and guaranteed by the FF scheme?

Clearly that didn't happen as such as the banks/approved lenders would have been shown as shareholders on the Conformation Statement in January but I wonder if something along those lines happened due to Luckock's involvement with private equity at HG Capital (maybe Hg was one of the approved lenders?).

I think I'm heading down one of these cul-de-sacs but I mention it anyway because somehow and in someway it does look as though on paper at least (Confirmation Statement) that FV did buy shares at a discount and if so there must be a valid reason for it to have happened.

Obviously, we are much better off than two years ago both on and off the field.
My on-going concern is still whether FV has any real money especially if we do get up to the Champs. The debts are a mere pittance compared with the potential massive costs of promotion. We shall see what happens, but I still think we will have to be sold on sooner or later.

terenceanne wrote:Obviously, we are much better off than two years ago both on and off the field.
My on-going concern is still whether FV has any real money especially if we do get up to the Champs. The debts are a mere pittance compared with the potential massive costs of promotion. We shall see what happens, but I still think we will have to be sold on sooner or later.

Whose the 'we'?

Sharon's about £7.5m worse off, Michael James c.£3m and Nick Luckock c.£1.5m and the club isn't close to paying off the debt FV took on.

Buying a football club is a bit like walking into financial quicksand where the harder you try to get out the deeper you get into it.

Sharon's given it a good go but I do hope someone with deeper pockets throws her a lifeline sooner rather than later.

I can't help wondering if Doctor Holdsworth's an honorary member of the Supporters Trust but the ST are now looking for more daft buggers to keep them in the cloud cuckoo land to which they have become accustomed.

They do say, 'there's one born every minute'.

Sluffy wrote:Thanks Bob, I know some people think I blow smoke up your bum by my praising of your skills and knowledge of accountancy but my comments are genuine and simply truthful - you do have unmatched skills and knowledge to anyone else I've stumbled across on social media including Maguire who makes his living at it.

I've also got the utmost  respect for Barry too who clearly is far knowledgeable than anyone else I've seen (you apart) who has commented on the clubs accounts, and I only put him as the 'sorcerer's apprentice' to fit in with my Fantasia analogy (no disrespect intended to him).

Anyway one thing I never did really understand about these discounted shares was from where the money for the loan originally came from?

What I mean is that the way I read it there was a number of 'approved' banks and financial institutions who were the actual lenders with the FF acting guarantee on default.

I wonder therefore if some of the other loans that were rolled into equity at the same time the governments one was, were done so on the same basis?

I mean if I were a bank and loaned FV a sum of money I would want the money back on the due date.  But due to Covid (no crowds etc) maybe that was an impossibility and instead they were obliged to get some security by transferring the money to shares in the company at a discounted price and guaranteed by the FF scheme?

Clearly that didn't happen as such as the banks/approved lenders would have been shown as shareholders on the Conformation Statement in January but I wonder if something along those lines happened due to Luckock's involvement with private equity at HG Capital (maybe Hg was one of the approved lenders?).

I think I'm heading down one of these cul-de-sacs but I mention it anyway because somehow and in someway it does look as though on paper at least (Confirmation Statement) that FV did buy shares at a discount and if so there must be a valid reason for it to have happened.

Thanks Sluffy. Forgive me if I don’t try to answer all of this until I’ve done more  homework. Figuring it all out is a bit like doing killer sudoku only trickier because you may not have all the clues.

It should be possible to figure out a bit more by following the ‘interest’ clues.

FGR’s owner seems to have wangled the most from COVID loans and I think that money came via HSBC iirc. I’m not sure that narcissist numero uno would want to give up any of his shares though.

The PBP loan is due to be repaid next week. I wonder if anyone will tell us what happens.

Norpig and I await your findings with barely concealed excitement.
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Me again! Here's my own analysis of new money coming into FVWL since the takeover:

 
At the takeover of BWFC by FVWL 27^th August 2019 shareholders injected equity of £2m and a CLN of £4.5m – this is not entirely straightforward as the SH01 shows £1.75m and the accounts £2m.
 
Running total £6.5m
 
A UKFF loan was arranged in the form of a CLN on 28^th August 2020 for £5m of which 50% came from UKFF and 50% from shareholders
 
Running total £11.5m
 
A CLN funded by shareholders was arranged in February 2021 for £3m
 
Running total £14.5m
 
Possibly, new shares for around £2m were issued at the same time as the three CLNs (£4.5m + £5m + £3m) were converted to equity on 29^th October 2021 - but see the note below*
 
Running total £16.5m
 
New shares were issued on 21^st January 2022 for £4m
 
Running total £20.5m
 
New shares were issued on 28^th June 2022 for £2.4m
 
Running total £22.9m
 
*IMHO, the only questionable point is whether or not the approx. £2m issued alongside the conversion of the CLNs in October 2021 was new money.  The SH01 dated 11^th November 2021 shows 117,857 of unpaid shares issued alongside the paid shares.  The paid shares at the lower price of £6.7878 amount to almost exactly to £9.5m, which is the sum of the original £4.5m CLN and UKFF/Shareholder CLN for £5m.  The paid shares at the higher price of £8.48476 amount to £5.1555m.
 
It’s possible that the interest on the original CLN and the UKFF/Shareholder CLN were issued as unpaid shares as this was not new money, but money owed. 
 
So, under that calculation UKFF would own 368,308 shares from conversion of the £2.5m and a further 25,573 shares granted in lieu of interest.  My interest calculation based on the period from 28^th August 2020 to 29^th October 2021 comes to £233,425 which would equate to 27,551 shares at the price of £8.48476, but it could be that the loan agreement was 28^th August and date of actual transfer of cash was a little later.  That is reasonably consistent with UKFF owning a total of 393,881 shares in total.
 
I estimate the interest on the £3m CLN was around £165k.  If that is deducted from the £5.1555m it leaves 1.99m. Might as well call that £2m!  It does mean there’s some inconsistency between the treatment of the interest on the first two CLNs and the, later, £3m CLN, whereas the first two CLNs were granted unpaid shares and the later CLN effectively paid shares.
 
There is also the question of why the original £4.5m CLN was allowed to convert at the same discounted price as the UKFF/shareholder CLN of £5m.  I don’t have an answer to that.  However, I believe the UKFF rules say that their CLN must convert to equity at a discount of 20% of any future round, so there must have been some new money in the 29^th October 2021 round and not just conversion of the £3m CLN or it wouldn’t have been a qualifying event.

Thanks for the replies Bob and Barry (and even you too Bonce! )

Barry if you are right and FF received 368,308 discounted shares for £2.5m and a total of 1,399,566 discounted shares were issued on the 29th October, 2021 then someone else bought 1,031,258 of them.

My maths is not the best but if we divide 2.5m in to 1,399,566 368,308 then I make it that £1m buys 147,323 (and a bit) shares - yes?

If we then divide 1,031,258 by 147,323 then that comes to bang on £7m.

So add back the £2.5m of FF then it would seem that £9.5m were paid in order to get these discounted shares.

We know (or at least we think we do!) that £5m was the joint funding between FF and FV, which leaves the £4.5m Conversion to loan notes plus accrued interest the obvious suspect as to what attracted the remaining discount at that time.

So if I've done my sums right it seems to back up what you have said on this above.

Well done - you are very clever (Bob too as he said above to follow the interest) on this and you both clearly do know your onions as Keith would say!

Have to commend you guys for your perseverance.
Al Capone ruled an empire of crime in Chicago. Prostitution, bootlegging, bribery, narcotics trafficking, protection rackets, and murder, and was seemingly impervious to the law.
It was the figure chasers that finally brought him down. 
Taken down by accountants, with pencils and paper.
Dull, maybe. No machine guns. But chillingly effective.
All hail the men with pencils.

A bit of a dumb follow up question from me though, what's the benefit to FV and FF of future share issues?

If say the Swiss Consortium put in say £4m but wanted to buy the shares at £6.50 (see July Statement of Capital share value price) presumably that would effect FV if they wanted to put more equity in because the market price is now lower than the discounted price!

Have I understood the correctly?

boltonbonce wrote:Have to commend you guys for your perseverance.
Al Capone ruled an empire of crime in Chicago. Prostitution, bootlegging, bribery, narcotics trafficking, protection rackets, and murder, and was seemingly impervious to the law.
It was the figure chasers that finally brought him down. 
Taken down by accountants, with pencils and paper.
Dull, maybe. No machine guns. But chillingly effective.
All hail the men with pencils.

On behalf of Bob, Barry and myself thank you for your kind words.

I assume things like this led to the saying of 'always follow the money' as this really does lead to the truth of the matter I guess.

Sluffy wrote:

On behalf of Bob, Barry and myself thank you for your kind words.

I assume things like this led to the saying of 'always follow the money' as this really does lead to the truth of the matter I guess.

I remember boasting to an accountant friend of mine about a new suit I'd bought, and was raving over my 'bargain'.
He then went through it with me, step by step, material, sourcing of material, quality of material, manufacturing costs, overheads, advertising etc.
When he'd finished, I could see it was no bargain at all.
We were both looking at the same picture, and seeing different things.
I saw the box and said 'wrap it'. He saw the box and said 'open it'.
We live and learn.

Two quick points, if I may Barry.

The cash flow statement (Page 16) shows £6.5m received in Year 1 alright  but it does not show £8m received in Year 2.

The creditors note on Page 33 show the balance of the £3m facility to be £2,065,739 at the balance sheet date. I expect that will most likely be £2m  plus accrued interest for the time the money's been in.

Unpaid shares issued to 'a value' of £1m in October 2021 suggests to me that this is probably the same £1m of the £3m facility and that it hadn't been paid over by October 2021.

P.S. Note to Boncey. We don't use pencils much these days but I do use one to mark out  where to saw wood. I was using one only this morning.

boltonbonce wrote:

Sluffy wrote:

On behalf of Bob, Barry and myself thank you for your kind words.

I assume things like this led to the saying of 'always follow the money' as this really does lead to the truth of the matter I guess.

I remember boasting to an accountant friend of mine about a new suit I'd bought, and was raving over my 'bargain'.
He then went through it with me, step by step, material, sourcing of material, quality of material, manufacturing costs, overheads, advertising etc.
When he'd finished, I could see it was no bargain at all.
We were both looking at the same picture, and seeing different things.
I saw the box and said 'wrap it'. He saw the box and said 'open it'.
We live and learn.

It would not do for us all to look at life the same way.

If folk are happy in the way they look at the world then good for them, the trouble is when it comes to effect us (or others).

Take your suit, if you were happy with it should your mate not have popped your bubble?

But then again maybe he was trying to do you a kindness that might make you think the next time?

I'm just one of life's people who likes to have knowledge about things that interest me, I've never found it to be a task to research and find out stuff - I think most do.

I guess I'm kind of like your friend in a way, simply trying to do folks on here a kindness by trying to better inform them on things I know something about.

Clearly it hasn't gone down well with one or two in the past but hopefully we might have got over that hump recently.

I bet you looked a dandy in your suit though eh!

It was a nice suit, Sluffy, but not the bargain I thought.

And I didn't feel he'd popped my bubble, but simply showed me that maybe a delve under the surface could be to my advantage.

Helps to know what you're looking for though.

Some points from (incomplete so far) examination of interest costs in the accounts:

1. The total interest costs are shown in the 2020/21 accounts to be £959,351 (Pages 10 & 28).
The amount actually paid is shown as only £51,236 (Page 16)

2. The annual interest on the £4.5m loan notes amounted to £180K, the same as the amount shown on Page 16 as 'Proceeds from issue of loan notes'. I'm not sure these are 'proceeds' at all. They seem more likely to be the capitalisation of the interest due. In other words, not new investment.

3. Brett Warburton's £2.5m loan was supposed to pay interest at bank base rate plus 5%. I've found no evidence of interest paid on this. The loan is secured on land at Lostock. There seems to be some doubt whether the sale of the land will provide enough to clear the debt.

4.The interest on the PBP loan seems to have been rolling up year-on-year since the original loan in 2016. I'm not sure that PBP gave any ground during the takeover negotiations but were subsequently willing to write off all the interest if the £5.5m is paid by 1 August 2022. I'd say they want their money back but will FV be able to find the money to repay it?

5. Previous SHO1 returns have shown amounts unpaid on shares. The latest shows all shares as fully paid.

6. And Boncey, its the same with accounts. 'It helps to know what you're looking for'

Ten Bobsworth wrote:Two quick points, if I may Barry.

The cash flow statement (Page 16) shows £6.5m received in Year 1 alright  but it does not show £8m received in Year 2.

The creditors note on Page 33 show the balance of the £3m facility to be £2,065,739 at the balance sheet date. I expect that will most likely be £2m  plus accrued interest for the time the money's been in.

Unpaid shares issued to 'a value' of £1m in October 2021 suggests to me that this is probably the same £1m of the £3m facility and that it hadn't been paid over by October 2021.

P.S. Note to Boncey. We don't use pencils much these days but I do use one to mark out  where to saw wood. I was using one only this morning.

Yes, Bob, I had noticed the note about the £3m and that it’s described as a ‘facility’ rather than a loan note, so maybe it was only drawn-down as funds were required. 

Also, I did notice that the ‘unpaid’ shares issued at the same time as the CLNs were converted was close to £1m, but I’m not convinced that means the two are connected. 

As for funds received in 20/21, the important number seems to be £7.368m (proceeds from new borrowings). I suggest this is the £5m CLN from UKFF/shareholders plus the £2.065m of the £3m facility drawn-down plus the balance, possibly from some unspecified short term loan. 

However, note 24 in the 20/21 accounts is quite categoric in saying the £3m loan was converted - not part of it and there was clearly around £5.155m realised from shares sales alongside the CLN conversions of £9.5m. Of course, I absolutely acknowledge I could be wrong, but that feels like conversion of the £3m loan plus interest and £2m new money. 

Obviously, some of that is reading between the lines, so sorry if it’s all a bit inconclusive.

BarrygoestoBolton wrote:Yes, Bob, I had noticed the note about the £3m and that it’s described as a ‘facility’ rather than a loan note, so maybe it was only drawn-down as funds were required. 

Also, I did notice that the ‘unpaid’ shares issued at the same time as the CLNs were converted was close to £1m, but I’m not convinced that means the two are connected. 

As for funds received in 20/21, the important number seems to be £7.368m (proceeds from new borrowings). I suggest this is the £5m CLN from UKFF/shareholders plus the £2.065m of the £3m facility drawn-down plus the balance, possibly from some unspecified short term loan. 

However, note 24 in the 20/21 accounts is quite categoric in saying the £3m loan was converted - not part of it and there was clearly around £5.155m realised from shares sales alongside the CLN conversions of £9.5m. Of course, I absolutely acknowledge I could be wrong, but that feels like conversion of the £3m loan plus interest and £2m new money. 

Obviously, some of that is reading between the lines, so sorry if it’s all a bit inconclusive.

I don't know if it may help at all but the way I read this is that the accounts do indeed say that Barry BUT they don't say when.

The October 2021 Statement of Capital clearly shows £1m worth of shares not allocated but we do know they were allocated by the following January's Confirmation Statement - meaning to me at least, that the £1m was paid in sometime AFTER the 29th October 2021 and before the 10th January 2022.

Which to me means Bob's opinion of the £3m 'facility' being a £1m short on the 29th October 2021 (and shares to that value 'held back' until it is 'put in' - which they later were) is valid.

Bob, I thought you might like to see an up to date picture of the esteemed, 'go to' football financial expert!

Heja Sverige damer [You must be registered and logged in to see this link.]

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At Leigh's ground last night.

Thanks Sluffy.

Prince Charming of the Beeno, eh? What next?


Smiley Dick's pleased with him, mind you.