I am grateful to another Addick who knows more about how to read a set of accounts than I do for the following analysis of the club's financial position:
Additional concerns / confirmations of how precarious the finances were in June / are now, are as follows :-. Charlton now have gone from net Funds of 204k at the end of June 2006 to a net debt of 23.35m at the end of June 2007. The cash balances in the bank have reduced from 8.9 million to 34k. So in short, in one season they went from a position of having a significant balance in the bank to next to nothing in the bank, and went from a position of no overall debt to a situation where the club has debts of 23.35 MILLION. This new debt includes a 9.2 million overdraft with the banks and 6 million of new loans from directors, the 6m of directors loans were scheduled to be repaid in Sept 2007. The overdrafts are paid back in instalments upto 2013.
Sky revenue was 3.4 million lower than 2006 and match day ticket revenue 2.1 million lower. Last season Charlton's revenues were 35.9 million in total and the payroll bill was 34.3 million compared with 41.9 and 34.2 in the previous year. So in short last season we went from being a "prudent" well financed premiership club to a debt ridden relegated Championship club.
Repayment of the Directors' loans has been delayed until June 2008. The loans will be paid back plus with Interest of Base Rate + 3.5%. So the Directors are getting in the region of 8.75% interest, which is a good rate of return and are secured against The Valley. The directors have also pledged a further 4 million if required. The club have sold on the Darren Bent debt to receive a smaller balance but get the cash straight away rather than waiting for Spurs to pay in dribs and drabs. Player transfers during this season have generated about 1 million profit.
6 comments:
Unbelieveable, years of prudent financial planning and stability thrown away by business men who know better. Eventually, if we were ever going to compete in the Premier league, a gamble with the finaces was going to have to be taken, but to entrust a second rate manager with 11 million was a joke. How The Orange One must be laughing at us now!
I don't pretend to understand all this financial mumbo jumbo. But i'm pretty sure the D.Bent money is not included in the figures. If i'm correct, the debt must be about £15m less!!!!!!!!!!
In Reply to Daggs, Bent's Sale was recognised as revenue in the 2006/07 accounts reducing the overall loss, as the transaction was completed prior to the financial year end of 30/06/07. However as the money was not received in the same financial Year as the revenue, it would have been shown as Debtor at year end, so I am afraid the Clubs net Debt figure is as stated, and not 15.5 less as you suggested. Effectively the club took out overdrafts and directors loans to provide cash at the end of last season on the basis that the Bent cash would be forthcoming in 2007.
Cheers "someone who understands the financial Mumbo jumbo and read the accounts in detail"
so is it correct to say, the Bent money will be used to repay the directors' loans? Therefore the net debt remains at £23M ish ?
Yep, that is one way of looking at it, another way to view it is that Bent's sale was to enable the club's survival and reduce the financial impact of last season's mistakes. The only real benefit for this season is that we continued as a football club. The debt breakdown is something like 9.8 Overdraft, 9.0 long term loans (these existed before last season and probably relate to the North / East stand), but in the 2006 accounts was offset by the 8.8 million in the bank, and 6.0 of directors loans. On top of this we will have normal trading debts / creditors with "customers" and suppliers. All in all a sorry state of affairs and indicates why "unpopular" decision such as staff redundancies / closing the womens team had to be made.
All in all, still a lot better than some clubs. Coventry etc.
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