Latest Accounts

[EverBlue86]

Think becoming debt free will only increase our chances of convincing a bank to let us borrow a large sum to go towards the new stadium, think naming rights and 3rd party investment will only take us so far

 

[Deleted member 24970]

If Lionel Messi isnt signed by the end of the January transfer window i will be furious ! Getting Ronaldo in as panic buy simply isnt good enough Bill....

 

[royalblue66]

There is something on BBC gossip column about quite a few Americans who want to buy premiership clubs. Anyone seen it ?

 

[davek]

Mull the statistics over, muse about where it leaves the club, speculate about the possibilities now open with debt reduction and increasing revenue...I'll guarantee you that, regardless of all that, in 5 years time we'll still be owned by the same people, still penny pinching in the transfer market, and still dreaming up stadium schemes that never come to fruition.

Christmas Eve 1999. The blackest day in Everton's history when Kenwright and his fellow carpet baggers seized ownership of the club.

 

[Dymak]

Hate to piss on everyone's chips but you need to take a closer look at the actual accounts, particularly at Borrowings and Net Debt. Borrowings is what you owe people you lend money from whilst net debt is borrowings minus cash held.

These are the figures from the report - rounded off for simplicity

Borrowings 2014 £49m
Cash held 2014 £21m
Net Debt 2014 £28m

Borrowings 2013 £48m
Cash held 2013 £3m
Net Debt 2013 £45m

So total borrowings have actually increased by £1m rather than fallen. Now let's say that the cash held was not used to pay off some of these debts, let's say it was given to Chelsea for Lukaku - this means that the debt situation has not really changed - we still need to give £49m plus interest to someone at some point.

By the way, two further things from these accounts

1) interest payments on debt has increased from £4.2m to £5.2m (interest only, doesn't include repayments of original amount)
2) within the debt structure, the club is borrowing even more against future incomes at high interest rates than they were previously -
Other loans also include £20,924,000 (2013: £12,868,000) secured by legal charges over the Company’s guaranteed Premier League broadcast revenues. This loan incurs interest at a rate of 8.8% and was repaid in August 2014. The Group has obtained further funding post year end as described in note 1.

I could be completely wrong here, but the 49 million pound figure you refer to seems to constitute the outstanding 28.1 million that is remaining on the fat loan taken out by Kenwright in around 2002 after the NTL fiasco, plus the short-term 21 million pound that we borrowed on the back of future TV revenue. That loan was paid back in August 2014, but of course we took another one out straight after.

If that is correct, then it means that our debt has been reduced by 17 million, and that our debt does stand at a mere 28 million pound. However we continue to have short-term 12 month long advancements on the back of future TV revenues.

In other words our mortgage has now been reduced significantly, we are making good money, but we are in a type of 'pay day loan' situation when it comes to our TV revenue. We have to pay the previous years loan back as soon as we receive the TV money, but we then take out another one immediately, so it's very similar to the situation people find themselves in as soon as they take out a pay-day loan advance.

Whoever the pay-day loan company is (hmm?) will be making good money. But overall we are in a very good state at the moment, and our debt is tiny for a Premier League club.

 

[Dithering Dougie]

Mull the statistics over, muse about where it leaves the club, speculate about the possibilities now open with debt reduction and increasing revenue...I'll guarantee you that, regardless of all that, in 5 years time we'll still be owned by the same people, still penny pinching in the transfer market, and still dreaming up stadium schemes that never come to fruition.

Christmas Eve 1999. The blackest day in Everton's history when Kenwright and his fellow carpet baggers seized ownership of the club.

£28m on Lukaku isn't penny pinching Dave

 

[Visitor22]

I could be completely wrong here, but the 49 million pound figure you refer to seems to constitute the outstanding 28.1 million that is remaining on the fat loan taken out by Kenwright in around 2002 after the NTL fiasco, plus the short-term 21 million pound that we borrowed on the back of future TV revenue. That loan was paid back in August 2014, but of course we took another one out straight after.

If that is correct, then it means that our debt has been reduced by 17 million, and that our debt does stand at a mere 28 million pound. However we continue to have short-term 12 month long advancements on the back of future TV revenues.

In other words our mortgage has now been reduced significantly, we are making good money, but we are in a type of 'pay day loan' situation when it comes to our TV revenue. We have to pay the previous years loan back as soon as we receive the TV money, but we then take out another one immediately, so it's very similar to the situation people find themselves in as soon as they take out a pay-day loan advance.

Whoever the pay-day loan company is (hmm?) will be making good money. But overall we are in a very good state at the moment, and our debt is tiny for a Premier League club.

I don't think this is the case, the notes to the borrowing section appears below and seems to indicate that the mortgage is just decreasing by the amount that you would expect from paying off about three million every year. More concerning is the increase in the "Vibrac" loans from roughly 13m to 21m at an interest rate of 8.8%. I would guess that is why annual interest has increased by about 1m

"Other loans include £22,127,000 of loan notes (2013: £23,095,000) which are repayable in annual instalments over a 25 year period at a fixed interest rate of 7.79%. The first payment under the agreement was made on 30th September 2002 amounting to £1,588,000 with subsequent annual payments of £2,767,000 (including interest) starting on 30th September 2003.

The notes will be repaid in a securitisation agreement serviced by future season ticket sales. The costs incurred in raising the finance, amounting to £710,000, have been offset against the original £30,000,000 loan, and are contained within prepaid finance costs and charged to the profit and loss in line with the interest charge over a period of 25 years.

Other loans also include £20,924,000 (2013: £12,868,000) secured by legal charges over the Company’s guaranteed Premier League broadcast revenues. This loan incurs interest at a rate of 8.8% and was repaid in August 2014. The Group has obtained further funding post year end as described in note 1. "

 

[Dymak]

I don't think this is the case, the notes to the borrowing section appears below and seems to indicate that the mortgage is just decreasing by the amount that you would expect from paying off about three million every year. More concerning is the increase in the "Vibrac" loans from roughly 13m to 21m at an interest rate of 8.8%. I would guess that is why annual interest has increased by about 1m

"Other loans include £22,127,000 of loan notes (2013: £23,095,000) which are repayable in annual instalments over a 25 year period at a fixed interest rate of 7.79%. The first payment under the agreement was made on 30th September 2002 amounting to £1,588,000 with subsequent annual payments of £2,767,000 (including interest) starting on 30th September 2003.

The notes will be repaid in a securitisation agreement serviced by future season ticket sales. The costs incurred in raising the finance, amounting to £710,000, have been offset against the original £30,000,000 loan, and are contained within prepaid finance costs and charged to the profit and loss in line with the interest charge over a period of 25 years.

Other loans also include £20,924,000 (2013: £12,868,000) secured by legal charges over the Company’s guaranteed Premier League broadcast revenues. This loan incurs interest at a rate of 8.8% and was repaid in August 2014. The Group has obtained further funding post year end as described in note 1. "

But the likes of the Guardian are reporting a 17 million pound reduction in debt, and they are stating that our debt now stands at 28 million pound.

The 49 million pound borrowings figure you refer to includes the 21 million pound cash advancement that has since been paid back in August 2014. But we have taken out another cash advance almost immediately.

Our debt has been reduced and now sits at 28 million pound. We also have an ongoing pay-day loan issue on the back of future TV money of about 20 million pound a season it seems. I guess you can class the 'pay-day loan' as debt, but it's more like a cash flow issue, imo.

 

[Neiler]

The downward cycle won't necessarily happen anytime soon though.

Hard to know mate, if we did than we would all be millionaires, i will say his eventually Sky, BT etc will hit a saturation point were its not viable to keep increasing in terms of their own revenue and what they can make out of customers.

You dont wan to be holding a lot of debt when that eventually happens.

Its intersting overall, these set of figures especially if you coralate them to Financial fair play.

 

[Visitor22]

Net debt in a set of company accounts has decreased by £17m. This is true however this is not debt as you or I would normally refer to it.

Net debt equals total borrowings minus cash held

This is a slightly simplified version but it will do for the point. Two things have essentially changed since 2013. Firstly the money borrowed has increased by 1m. Secondly the cash in the bank has increased from zero to 18m. The difference is the 17m reduction. My point is that the money in the bank has not necessarily been used to pay off some of the borrowings (we cannot possibly know what it has been used for or whether it is still there). However, I would make an educated guess that most of it has been used to pay for Lukaku. This means that our borrowings (what you and I would normally call debt) have increased or stayed around the same.

Neither the Guardian nor the club are inaccurate or dishonest by stating a 17m decrease in net debt - it just doesn't necessarily mean what many people think it does

 

[Woolly Blue]

But the likes of the Guardian are reporting a 17 million pound reduction in debt, and they are stating that our debt now stands at 28 million pound.

The 49 million pound borrowings figure you refer to includes the 21 million pound cash advancement that has since been paid back in August 2014. But we have taken out another cash advance almost immediately.

Our debt has been reduced and now sits at 28 million pound. We also have an ongoing pay-day loan issue on the back of future TV money of about 20 million pound a season it seems. I guess you can class the 'pay-day loan' as debt, but it's more like a cash flow issue, imo.

It's net debt mate.
We still owe much the same but we have more cash in the bank so, from an accountancy point of view, it's much better.

It actually is much better because it means the money we've paid for Lukaku was from cash in the bank. The whole accounts are still good news because we're actually making money without having to sell players, but it looks like we've basically paid our overdraft off but havn't paid any more debt off apart from that.

 

[MickA]

Net debt in a set of company accounts has decreased by £17m. This is true however this is not debt as you or I would normally refer to it.

Net debt equals total borrowings minus cash held

This is a slightly simplified version but it will do for the point. Two things have essentially changed since 2013. Firstly the money borrowed has increased by 1m. Secondly the cash in the bank has increased from zero to 18m. The difference is the 17m reduction. My point is that the money in the bank has not necessarily been used to pay off some of the borrowings (we cannot possibly know what it has been used for or whether it is still there). However, I would make an educated guess that most of it has been used to pay for Lukaku. This means that our borrowings (what you and I would normally call debt) have increased or stayed around the same.

Neither the Guardian nor the club are inaccurate or dishonest by stating a 17m decrease in net debt - it just doesn't necessarily mean what many people think it does

Cheers. I think it's clear that we have used that money for Lukaku and that another VIBRAC loan will be incoming (again ahead of TV money).

In simple terms then is it safe to say we're talking bigger numbers but standing still? There is no excess money for squad additions unless we sell and none for improvements to infrastructure.

 

[Visitor22]

It's net debt mate.
We still owe much the same but we have more cash in the bank so, from an accountancy point of view, it's much better.

It actually is much better because it means the money we've paid for Lukaku was from cash in the bank. The whole accounts are still good news because we're actually making money without having to sell players, but it looks like we've basically paid our overdraft off but havn't paid any more debt off apart from that.

This ^

Better explained than my attempt

 

[Prevenger17]

Mull the statistics over, muse about where it leaves the club, speculate about the possibilities now open with debt reduction and increasing revenue...I'll guarantee you that, regardless of all that, in 5 years time we'll still be owned by the same people, still penny pinching in the transfer market, and still dreaming up stadium schemes that never come to fruition.

Christmas Eve 1999. The blackest day in Everton's history when Kenwright and his fellow carpet baggers seized ownership of the club.

Come on, Dave. After the inaugural year of the new TV licensing deal we smashed our transfer record and laid out 28 million smackeroos. That's a huge fee for most clubs.

 

[LinekersLegs]

However, I would make an educated guess that most of it has been used to pay for Lukaku.

Seems a bit high of an amount just for Lukaku isn't it?

Surely some of 28m will only be paid out based on future performance (cups/CL/EL qualification) and the rest staggered over two/three years. Would have guessed that Lukaku would only cost us ~10m for the upcoming accounting period. On the other side, would not have expected the full amount to have been received for Fellaini yet either.