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

Companies House has now been updated.  Bob and Sluffy I want a full report on my desk by 10AM.

Norpig wrote:Dodgy music collection? Most of you on here haven't listened to anything new since the 80's 

10/10 Monsieur Pignor. A hit for the McGuire Sisters in 1958

You might just become a model pupil in the exciting and creative world of accountancy and finance.

When the 2021 accounts are published I'll be looking to see, amongst other things, what value has been placed on the ten million quid of 'intellectual property' FV created last time around on their balance sheet.

You won't remember 1958 so here's summat a bit more contemporary for you. Don't take it personally, mind you!

Read the full conversation for more analysis from Kieran

BoltonTillIDie wrote:Read the full conversation for more analysis from Kieran

The first thing I noticed was that the £5.3m described as 'Other operating income ' isn't explained.

I'd be most surprised if there hadn't been some lengthy debate on how these numbers were to be presented. Is it really 'operating income'?


The best I can offer is Investopedia's definition of 'creative accounting':

Creative accounting consists of accounting practices that follow required laws and regulations, but deviate from what those standards intend to accomplish. Creative accounting capitalizes on loopholes in the accounting standards to falsely portray a better image of the company. Although creative accounting practices are legal, the loopholes they exploit are often reformed to prevent such behaviors.

BoltonTillIDie wrote:Companies House has now been updated.  Bob and Sluffy I want a full report on my desk by 10AM.

Ok!

The headline as was predicted by Bob and I (but not Wanderlust who seems to have had some sort of meltdown in his post above!!!) is a £6m loss as expected which has been mitigated by a £2.75m write off by EDT (Eddie Davies Trust) as correctly identified by Bob at the time the 'charge' was settled as per Companies House records and furlough monies from the government bringing the reported loss for the year to £1.4m

FV paid something like £28m iirc for the club and hotel out of Administration, which included something like £8m(?) for 'good will' (intangible assets), which in simple terms means a payment in excess of what the actual physical assets of the business are worth.  The accounts are showing that we now have creditors of £31m (although some of that was later converted to equity - meaning the loans were converted to shares in the club).  So in simple terms two years previously from these accounts FV bought 'tangible' assets (the stadium, the hotel, land, etc) for something like £22m but now two years on, they owe £31m - meaning that if everybody wanted their money back the club would go bust to the tune of something like £11m as you can't 'sell' intangibles like 'goodwill'.

To highlight how the club is running for every £100 they got in, they were paying out £112 in wages.  

On top of that they had to fund every other running cost of the business!!!

As stated constantly through out by Bob and myself (and contrary to the inane and frankly mentalist rantings of Wanderlust above) the business is being sustained from the pockets of the owners of FV and the continued goodwill of creditors not seeking repayments of their loans which are long outstanding!

Tbh most of what I've said is cribbed from Maguire as I've not yet read through the accounts myself.  I'll post below Maguires tweets so people can see for themselves how things stand.

Club has cash in the bank but total creditors of £31 million, some of which have been converted to shares post year end [You must be registered and logged in to see this link.]

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

Nearly all revenue sources down due to Covid impact on first half of year. Furlough covered £905k of wages, slightly down on previous year. [You must be registered and logged in to see this link.]

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

Wages down slightly but still £112 for every £100 of income. [You must be registered and logged in to see this link.]

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

Bolton bought players for £179k in 2020/21 [You must be registered and logged in to see this link.]

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

Since 30 June 2021 Bolton have issued shares for £4m and £12.5m of loans plus have been converted into shares. [You must be registered and logged in to see this link.]

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

How much did Bellway Homes pay for the land to build on at the Academy?

Ten Bobsworth wrote:
You might just become a model pupil in the exciting and creative world of accountancy and finance.

...and boy can it be creative! ....which in conjunction with the complete absence of half the information required to make a complete assessment is why being a professional tea leaf reader has considerable limitations.

That said, most tasseographers like Bob will swear they know the whole picture

[You must be registered and logged in to see this image.]

Looking at the tea leaves, there seems to have been some fancy dancing going on behind the scenes with some decent deals being struck to stabilise the ship - remember this is the 2020/21 period and if rumours are anything to go by Sharon et al have stepped up a gear since then. Perhaps we'll get a meaningful insight into what is really happening in a couple of year's time?

I'm sorry but I don't think Lusty has been having a meltdown at all, Sluffy. I think he's just one of natures bullshitters and I expect he has been for most his adult life.

Btw if you look at the previous times there have been loan write offs in the accounts (Burnden Leisure), the amounts concerned were shown as separate items and not counted as 'operating income'. So why should it be different this time? It's the same auditors.

There will undoubtedly have been loan write offs in other clubs' accounts. I don't have a Twitter account but has McGuire K picked up on this?

Ten Bobsworth wrote:I'm sorry but I don't think Lusty has been having a meltdown at all, Sluffy. I think he's just one of natures bullshitters and I expect he has been for most his adult life.

Btw if you look at the previous times there have been loan write offs in the accounts (Burnden Leisure), the amounts concerned were shown as separate items and not counted as 'operating income'. So why should it be different this time? It's the same auditors.

There will undoubtedly have been loan write offs in other clubs' accounts. I don't have a Twitter account but has McGuire K picked up on this?

Wanderlust doesn't exhibit normal behaviour even for on the internet, so I think his issues extend well beyond just bullshitting.

Probably best that I leave it there but one thing I will add, it is now noticeable that no one listens and responds to him anymore as can be evidenced in the continuing shite he's posted in this thread.  

People are finally seeing him for what he is.

As for Maguire, if his twitter behaviour follows the pattern he normally does for other clubs accounts, then I think that will be the end of his musings on BWFC.

I will however post a couple of replies he's made to questions asked of him today.

Whilst owners are willing to find rhe losses it’s okay, but as saw with Eddie Davies, that may not last forever. Championship TV income worth about an extra £6m but average wage £14k a week compared to £2.5k

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

It’s the total creditors at 30,June 2021, but the good news is that a lot has been converted into shares since then

— Kieran Maguire (@KieranMaguire) [You must be registered and logged in to see this link.]

I also think you will appreciate this tweet that was more of a statement than a question to him.

The same Eddie Davies who many blame for their recent problems. [You must be registered and logged in to see this link.]

— Stuarty Mc (@stuchastosh) [You must be registered and logged in to see this link.]

Bolton misery started with Eddie Davies, claims trust chairman
17th April 2019

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

Accounts 2020/21 Published

Bolton Wanderers considerably reduced their losses in the financial year ending June 2021 as the club continues to move forward on a firm footing on and off the pitch.

Despite the impact of the COVID-19 pandemic – when Wanderers were forced to play out their League Two promotion-winning campaign behind closed doors  – the Whites (through parent company Football Ventures (Whites) Limited) saw operating losses fall from £3.5m in the previous 12 months to £0.5m.

The annual accounts show turnover fell from £9.3m  to £6.2m as fans were unable to attend matches.

“The form of the team in the latter stages of last season, additional activity in the transfer market and the stabilised financial position means we now look forward with confidence to challenging the top teams in League One next season,” said Chairman Sharon Brittan in her report to accompany the 2020/21 accounts.

Sharon also thanks fans and the Bolton business community for their continued support and confirms that ‘progress continues with the shareholders committing further investment during 2021/2022 and support is committed in 2022/23 and beyond.’

A link to the 2020/21 Accounts including the full Chairman’s report can be found HERE.

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


It is worth pointing out that the accounts cover FV as a whole and that both the club (FVWL Football Ltd) and the hotel (FVWL Hotel Limited) compile their own accounts separately - hence why the trading loss of FV is different from the stated trading loss at the club (FVWL) Football Ltd.

I'm slowly going through the accounts but this stands out already from the Strategic report and I'm only on page 2 (5 of 41).

Despite the loss during the year to 30 June 2021, the Group has a sound financial base from which to further improve the business. The Group is reliant on funding from its shareholders and such funding has been and continues to be made available from the shareholders when required.


What this means is the business is running at a loss and Sharon, Luckock and James have had to keep putting their hands in their pockets to bail it out...

...and have had to put in millions more in the following year which will only be reported when these accounts are published next year!

The accounts show we paid just short of £1m (from turnover of just over £6m) on Interest payable and similar expenses.

Or to put it another way for every £6 we got in we had to pay £1 of it just on debt management.

Page 28 (31 of 41) shows we paid £275k on bank overdraughts and loans, £385k on 'other' interest on financial liabilities  (could this be something to do with the £20m's that Sharon and Luckock put up?  - although Bob didn't believe I was on the right track with this), and under the heading 'other finance costs' a further £300k is shown as 'other interest'.  

I've yet to figure out who or what we are paying most of this interest to, and also how much capital we owe to the bank/s.

Goodwill £4.85m and Other Intangible Assets £9.75m = total £14.6m amount to more than actual tangible assets £12.1m in respect of fixed assets!!! (p12 or 15 of 41)

Total equity shown at the bottom of the page shows a deficit of £2.56m

What that means in simple terms if FV was to be liquidated at that point and sold everything off for the full value shown, even stuff like goodwill - they would still owe to others £2.56m.

We were theoretically then technically insolvent at the time of the accounts!

Page 30 (33 of 41) states that we have NO Intangible fixed assets - which indicates that although a value of £14.6m is shown earlier as being on the accounts, that there is no realisation value to them.

In other words FV are saying we believe we have something good about us that we can't 'touch' as such that we believe is worth £14.6m to us, the accounts are saying there is no actual hard evidence to back this value to record against if FV wanted to sell them.

So maybe someone would pay a further £14.6 extra to the tangible assets of the business if they wanted to acquire the company badly enough - but then again they might not, or anything like it!

Page 13 (or 16 of 41) The Company Balance Sheet shows that the total fixed and current assets for the year amounted to just £626k but there are £12m owed to creditors after one year leaving the company to be scarily short of equity by £11.5m.

Clearly that resulted in FV changing debts to equity and the significant share issues that happened around October time last year and since.

In other words in order for any company to survive it either has to trade at a profit or be supported by the owners (shareholders) pumping money into it to keep it going. The business has clearly been running at a loss (despite what Wanderlust may think!) has been unable to generate a profit and therefore the owners have had to transfer their loans in the club to shares - and have had to put in extra money themselves to buy even more, to support the club being able to survive through last season up to 30th June 2022.

p16 and 17 (19 and 20 of 41) shows that £7.368m entered the club as 'new' and 'other' borrowing.

EDT (Eddie Davies Trust) settled their charge against FV on 5th October 2020 (during the accounting period) - unless Bob corrects me I believe this is EDT waiving the amount left owing to them (although I think there is still an agreement to pay EDT promotion bonuses still?).

Further to Intangible Fixed Assets -Post 56 above.

Page 19 (22 of 41) gives the definition of 'Goodwill' -

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets
acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less
accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite
useful life and is amortised on a systematic basis over its expected life, which is 10 years.

In simple terms it means what someone has paid above the assets of the company and is written down over 10 years to zero.  Or in other words it is not an asset at all as such but an additional cost paid to buy the company which is written off gradually over 10 years.

On the next page Intangible fixed assets other than goodwill is defined -

Basically it seems to be in two 'chunks', iirc in the previous accounts these assets under this heading seemed to be about some sort of 'technological innovations - or something like that - which is written down over 50 years.  This years accounts talks more about players transfer fees and contract lengths and are written down to zero according to each other.

It looks to me as though the club is lumbered with the vast bulk of the £9.75m for years to come until FV sells the business.

Below is the actual definition -

Intangible assets acquired separately from a business are recognised at cost and are subsequently
measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the
acquisition date where it is probable that the expected future economic benefits that are attributable to the
asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset
arises from contractual or other legal rights; and the intangible asset is separable from the entity.
In accordance with FRS102 "Goodwill and Intangible Assets", fees payable on the transfer of players'
registrations are capitalised at cost and written off over the length of the players' contracts. Profit or loss on
the sale of players' registrations is based on transfer fees receivable and amortised cost of the players and
is recognised in the period in which the transfers are made. Players' registrations are written down for
impairment when the carrying amount exceeds the amount recoverable through use or sale. Future
payments for the acquisition of a player's registration, which may become due dependent on the
performance of the team and/or the individual player, are recognised within the original cost of acquisition
if, in the opinion of the Directors, it is probable that these payments will eventually be made. Similar terms
may exist in contracts for the sale of players' registrations but such payments are not recognised as part of
the proceeds of disposal until the event upon which the payment is dependent is known to have occurred.
Provision is made for any impairment.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over
their useful lives on the following bases:
Intellectual property 50 years
Player transfer and agent fees Over the term of the respective contract

Page 25 (28 of 41) shows a government grant received of £905k and one of £1m the previous year which was included in the previous years accounts. Both were for furlough payments.

As expected turnover dropped due to Covid and no crowds Food and Beverage by £1.4m, Corporate Sales by 300k but Communications increased by £770k - which I assume to mean iplayer income(?).

Under Exceptional items - income a loan of £2,75m was written off,

And under expenditure £370k  Gain or loss on revaluation of acquisition liabilities, £250k performance related and £150k restructuring costs, which to me normally means payment to staff leaving.

The other three items being defined here -

An agreement was made in September 2020 between the Football Club and the Eddie Davies Trust Fund,
a previous shareholder in the company. The agreement was for the immediate repayment of £2.75m of the
outstanding £5.5m owed to the Trust, with the remaining £2.75m to be subsequently written-off. The
£2.75m was repaid during the reporting period, with the remaining £2.75m being released to the profit and
loss account.

During the year there had been constant dialogue with unsecured creditors as a result of the administration
period. The loss on revaluation of acquisition liabilities relates to movements as a result of the dialogue with
the unsecured creditors during the reporting period and therefore has been expensed to the profit and loss
account.

Due to the Football Club gaining promotion from EFL League Two to EFL League One during the
2020/2021 season, the Group was required to pay £250,000 to the Eddie Davies Trust Fund as a condition
of the £2.75m loan being written off, as detailed above. Further details relating to this transaction are
detailed within note 24 of these financial statements.