Latest set of company accounts

[winchester_royal]

Can be found through the following link: https://beta.companieshouse.gov.uk/company/00053703/filing-history

Plenty of concerning news in here. CBA to write it all up though so check it out for yourselves.

[Hound]

that loss of parachute payment has hit very hard there

It doesnt look too special from that it has to be said. I suppose one slight positive is it doesnt include the money from the Norwood and Tish sales

If we don't achieve promotion, it does look like we are reliant on player sales for a while.

[bcubed]

started reading it but too depressing
If anyone gets to the end let me know if it gets any better

[Saaaaaaaammmmmm]

I don't really understand much of it but I can see that Players Wages > Total Turnover which can't be a good thing

Also we received a sell-on clause for a 'Shame Long'

[winchester_royal]

A highlight for me is the emphasis of matter paragraph in the auditor's report that casts doubt over our ability to continue as a going concern.

I doubt that means anything to anyone but accountants like myself, but it sums up that set of accounts quite nicely.

Interesting to see that we can sidestep FFP by converting shareholder loans into capital. That will be useful going forwards.

[muirinho]

that loss of parachute payment has hit very hard there

It doesnt look too special from that it has to be said. I suppose one slight positive is it doesnt include the money from the Norwood and Tish sales

If we don't achieve promotion, it does look like we are reliant on player sales for a while.

Some snippets:

Media and Broadcasting: 14.1 mill
Matchday Income: 5.2 mill
Commercial Income 5.6 mill
Rugby Income: 0.5 mill
Other Income 0.2 mill

Total Income - 25.7 mill

Wages - 30.7 million

So even before the costs of running the stadium etc we are in trouble.

Also worthy of note: apparently Reading Football Club owns 37.5% of RFC Prop Co Ltd - Is that the company doing the Royal Elm Park stuff - or something else?


The auditors note that they can treat Reading FC as a going concern purely because most of the debt is to the shareholders (42 million!), and the shareholders are promising not to recall that debt until it is sustainable from the turnover. Which is going to be never, at this rate!

[Top Flight]

Would it be possible for the government to allow RFC to monetize it's debt? That way we can become debt free.

[JamieY26]

Only £518k from London Irish and £584k from their last season in the premiership...... Hardly seems worth it considering we paid £750k to lay the pitch!

[Greatwesternline]

A highlight for me is the emphasis of matter paragraph in the auditor's report that casts doubt over our ability to continue as a going concern.

I doubt that means anything to anyone but accountants like myself, but it sums up that set of accounts quite nicely.

Interesting to see that we can sidestep FFP by converting shareholder loans into capital. That will be useful going forwards.

Agreed, although i'd suspect that most football teams dont really look like going concerns, other than perhaps Man Utd, who else makes a profit and doesnt rely on owners to finance on going losses, which in most other businesses would be break up basis candidates.

Also a while the majority of our debt is owed to the owners, we more or else exist at their say so, so note 1.2 is pretty much all that is needed.

[warrpp]

Stam claimed after the game last night that we are near the bottom of the table for wages (or words to that effect).

Yet the most recent accounts show our wage bill as approx £30 million.

[winchester_royal]

A highlight for me is the emphasis of matter paragraph in the auditor's report that casts doubt over our ability to continue as a going concern.

I doubt that means anything to anyone but accountants like myself, but it sums up that set of accounts quite nicely.

Interesting to see that we can sidestep FFP by converting shareholder loans into capital. That will be useful going forwards.

Agreed, although i'd suspect that most football teams dont really look like going concerns, other than perhaps Man Utd, who else makes a profit and doesnt rely on owners to finance on going losses, which in most other businesses would be break up basis candidates.

Also a while the majority of our debt is owed to the owners, we more or else exist at their say so, so note 1.2 is pretty much all that is needed.

True, but it's the first time I've seen such an inclusion within RFC's reports.

The fact that the company relies on working capital being pumped in by mercurial Thai businessmen must cast some doubt over the continuing operation as a going concern.

[Greatwesternline]

We paid a Thai company £1.5 million in management consultancy fees. Some of our Thai owners are directors of that company.

The club owns a company called RFC Prop Co Ltd. This is probably the holding company for Royal Elm Park.

The club sold some shares (different to issuing new ones) to the same Thai company above, for £5.6 million. This is the money which the club got for Royal Elm Park.

The company still owns 37.5% of this company. So what this means is the football club used to own 75% of the holding company owning the land. It sold half its stake to the Thais for £5.6 million.

Now it owns 37.5%. But as the owners own RFC, it makes little difference. Its just moving money around.

[Hound]

I would like to see how it compares with other clubs in the division. Grayson at Preston was at pains to point out that he thought PNE were the only profitable club in the division or words to that effect.

Noticed Chelsea (obviously a slightly different case) lost 70mill last year

Also in a world where Scott Hogan will prob end up costing West Ham 15 mill - then the priority must surely be trying to find young good players and sell them on to tackle that loss.

[Greatwesternline]

I would like to see how it compares with other clubs in the division. Grayson at Preston was at pains to point out that he thought PNE were the only profitable club in the division or words to that effect.

Noticed Chelsea (obviously a slightly different case) lost 70mill last year

Also in a world where Scott Hogan will prob end up costing West Ham 15 mill - then the priority must surely be trying to find young good players and sell them on to tackle that loss.

I've often thought that there must be a viable business in simply purchasing the most aspiring players from League 1, giving them a shop window to prove themselves in the Championship, and then selling on at a fairly quick rate, 18 months or less.

[paultheroyal]

Only £518k from London Irish and £584k from their last season in the premiership...... Hardly seems worth it considering we paid £750k to lay the pitch!

Didn't you know? Rugby has no impact on the quality of the playing surface and basically them being tenants is like free money to us!

[OLLIE KEARNS]

I would like to see how it compares with other clubs in the division. Grayson at Preston was at pains to point out that he thought PNE were the only profitable club in the division or words to that effect.

Noticed Chelsea (obviously a slightly different case) lost 70mill last year

Also in a world where Scott Hogan will prob end up costing West Ham 15 mill - then the priority must surely be trying to find young good players and sell them on to tackle that loss.

I've often thought that there must be a viable business in simply purchasing the most aspiring players from League 1, giving them a shop window to prove themselves in the Championship, and then selling on at a fairly quick rate, 18 months or less.

I've been trying to explain this one to my two lads but including young players at Prem clubs as well as League 1 players. The activity this summer reflects this approach I believe. Young free transfers probably coming here on the back of very good wage offers with the view to something like a 20% success rate each year (Swift and Moore maybe) effectively covering the investment via selling on and also financing the next wave of players coming in. These young players are then integrated with a core of experienced players.
If we get a 0% success rate in any given year then we're in a financial mess. If we get a 60% success rate at any point in time then it might just get us promoted.

[Esteban]

These accounts are concerning, but we need some context. If the vast majority of clubs in the Championship are in the same boat, then it's a slightly easier pill to swallow.

[PieEater]

Stam claimed after the game last night that we are near the bottom of the table for wages (or words to that effect).

Yet the most recent accounts show our wage bill as approx £30 million.

Historically we've always been near the top payers, as results on the pitch are generally better for teams that pay more. In our case we wasted it on a team of well paid under performers last season including Vydra, Piazon, Sa, Fernadez, HRK and John

It's probable our refreshed squad has reduced the wage bill a lot, but I doubt we are anywhere close to Rotherham, Burton, Preston, Wigan or Barnsley.

Does any know why we might of paid £888k on legal fees?

[tmesis]

Stam claimed after the game last night that we are near the bottom of the table for wages (or words to that effect).

Yet the most recent accounts show our wage bill as approx £30 million.

It's last season's wage bill, not this year's.

[3points]

Does any know why we might of paid £888k on legal fees?

Same reason we paid 1.5m in financing costs (probably)