rbr 1,247 Posted January 8, 2011 Share Posted January 8, 2011 A point of view on matters financial. Once again like many Rangers Supporters, I am left mystified by the comments of Walter Smith in relation to our position with our Bankers - Lloyds/HBOS - followed by the Club's decision to readily release our own and the SPL's top scorer for the second time in 6 months. I won't use the word 'sell' as Boyd went for nothing and by the time Miller picks up his severance pay off, we will have very little left. I have a background in banking and passed my exams many years ago, but no matter how hard I try, when I look at our accounts, I cannot understand why Lloyds/HBOS are behaving in such a manner towards us. Our published accounts to 30 June 2010 show that our Bank debt incorporating a Term Loan and overdraft facilities reduced by �£3.7m last year to �£22.3m (2009 - �£26.1m). This was despite paying off �£8million in historic transfer fees (which left �£1.2million still to pay). The term loan, repayable over 19 years, stands at �£19m which will mean repayments of �£1million per year + interest. So, if we had Bank Debt of �£22.3m and �£19m of that was a long term loan, then our working overdraft would be �£3.3m, which is well within the �£15m revolving credit facility (overdraft limit) that we have: �£11.7m within it to be exact. A football club's income is loaded to the beginning of the season in terms of season ticket sales, but Champions League participation this season will mean a hefty amount of Euros being lodged in our account with Lloyds/HBOS, before the season ends. Our Champions League campaign this season has guaranteed us 9.2million Euros + TV Revenue (in 2008 Celtic got 6.2 million Euros) + gate receipts, which should easily total around �£16million. On top of that, we will get a further 200,000 Euros for qualifying for the Europa League, plus TV and gate receipts and another �£300,000 Euros + TV and gate receipts should we get past Sporting Lisbon. That amount would, of course, increase with each round should we advance. Putting things into perspective. On 30 June 2010, we had an overdraft of �£3.3 million, but the previous year we managed to reduce our overdraft by �£3.7m, so assuming we have a similar year, that should be wiped out this year and leave us with a small credit balance. However, we should do better than last year, due to a better performance in the Champions League bringing us an extra 1.2million Euros in points payments, compared to last year. Also, last year we repaid �£8m in historical transfer fees, we don't have that to pay this year (maximium should be �£1.2m), so we should be well in credit at the Bank. Allied to that: Staff Costs have been steadily reducing over the last 2 years. In the year to 30 June 2008 they were �£34.3m. In 2009 - �£30.7m. In 2010 - �£28.1m. That equals reduction of �£6.2million in the last 2 seasons and a figure that will again be slashed this year. Our Net Operating Expenses in 2008 were �£56.8m. In 2009 - �£48.2m. In 2010 - �£43.8m. Which is a reduction of �£13million in 2 years and these will also be significantly reduced this year, meaning further profit. By my conservative reckoning, by 30 June 2011, we should have somewhere in the region of a �£10million credit balance at the Bank and our long term loan reduced to �£18m over 18 years. I haven't taken any of our summer transfers into consideration, due to a lack of accurate figures, but I would reckon that the transfer fees and wages for the players who left, should more or less offset the 3 who came in. Our debt to equity (gearing) ratio was reduced last year to 38% (2009 - 47%). again a sign that we are heading in the right direction, though further reduction would be helpful. Crucially, the �£15m revolving credit facility with Lloyds/HBOS, was in place till 31 December 2010 and the only possible explanation could be that the Bank have renewed this at a much lower level. If that is the case, then it could be down to cash flow, as I don't think the UEFA money is received for a few months yet. If I am correct, then it really is a shocking act by Lloyds/HBOS, given that the UEFA money is guaranteed due to what we have already achieved in the Champions League this season. Something about the whole thing stinks more than a Celtc supporters green and grey hooped top after four weeks of constant wear in the summer. There is something that we are not being told and it is now time for the Club to come out and tell us what the problem is with Lloyds/HBOS and whether or not we are being strangled due to our association with the MIH Group, as to me, it is certainly not obvious in our accounts. 0 Quote Link to post Share on other sites More sharing options...
metlika 0 Posted January 8, 2011 Share Posted January 8, 2011 Interesting figures and the ending really probably points to the fact that bank do not wish us to have any sort of bank credit facility which is shocking considering most clubs have it and spread payments of transfers over a certain period. It looks like we have been given what we owe as a credit facility �£3.7m and maybe the bank want that to be �£0? I don't get why the bank are treating us like this but is there any option to move fund to another bank seems unreasonable now because of our debt but if they continue to move the goal posts how are meant to continue to improve and move forward as a club? Lloyds must not want us HBOS did but since they flopped we have no other choice. 0 Quote Link to post Share on other sites More sharing options...
BrahimHemdani 1 Posted January 8, 2011 Share Posted January 8, 2011 I forecast at the start of the season that we would not have an overdraft at 30 June 2011. It does seem obvious that Lloyds want to reduce or completely wipe out the overdraft facility and that we may well be due to their aversion to the football business model in general terms as much as Rangers business plan. However, if you look ahead and say that we are maybe 50/50 or 40/60? to be in the CL next season then you can see their reasoning more clearly because if you look back to 2008/09 without Champions League football that was when we made a whacking loss and ended �£30+ million in debt. We can't move to another bank unless we can pay off the term loan in full and who's to say that any other bank would be more generous with their money in the present economic climate, never mind the climate in Scottish football, falling attendances etc, falling standards of play etc etc. 0 Quote Link to post Share on other sites More sharing options...
rbr 1,247 Posted January 8, 2011 Author Share Posted January 8, 2011 Brahim I accept your idea re c/l football , however with the group stages of the Europa league and the fact that 2 out of 4 qualify then as we will be seeded and also the fact that there is slightly better monetary deals in place the Europa league is no where near as bad as it once was , we would be looking at approx �£8 million fron the groups which is approx half what we would get from the C/L , that is made up of 3 home games and selling our tv rights for �£500,000 per game , I might be slightly out though , but even �£6million before the group stages would help . 0 Quote Link to post Share on other sites More sharing options...
BrahimHemdani 1 Posted January 8, 2011 Share Posted January 8, 2011 Brahim I accept your idea re c/l football , however with the group stages of the Europa league and the fact that 2 out of 4 qualify then as we will be seeded and also the fact that there is slightly better monetary deals in place the Europa league is no where near as bad as it once was , we would be looking at approx �£8 million fron the groups which is approx half what we would get from the C/L , that is made up of 3 home games and selling our tv rights for �£500,000 per game , I might be slightly out though , but even �£6million before the group stages would help . (If we finish second in the SPL) first we have to qualify for the Europa League! As things stand at present we would have two qualifying rounds to get through and although we would be seeded who's to say we would beat teams from the likes of Croatia, Slovakia, Georgia, Poland etc. I bow to your knowledge of the financial arrangements in the EL but my point is the same regardless of CL (which may involve three qualifiers but more likely 2 and an "easier" route than in the past against the champions of so called lesser countries such as those mentioned above plus Serbia, Czech Rep etc) namely that from the bank's point of view firstly we have a differential in money between the CL and the EL and secondly there is no certainty that we will get past the qualifiers. Football is a very high risk business and when money was freely available it was a different story the odd �£30m here or there was no big deal, now it is a very big deal indeed. One season without CL/EL group stage football could easily see us back at that level of debt in no time at all, my guess is that is what Lloyds are looking at. 0 Quote Link to post Share on other sites More sharing options...
rbr 1,247 Posted January 8, 2011 Author Share Posted January 8, 2011 I will get back to you later on re the seedings for the E/L once our possible league position is clarified , I am still a glass nearly full man 0 Quote Link to post Share on other sites More sharing options...
Bluedell 5,356 Posted January 10, 2011 Share Posted January 10, 2011 A point of view on matters financial. Once again like many Rangers Supporters, I am left mystified by the comments of Walter Smith in relation to our position with our Bankers - Lloyds/HBOS - followed by the Club's decision to readily release our own and the SPL's top scorer for the second time in 6 months. I won't use the word 'sell' as Boyd went for nothing and by the time Miller picks up his severance pay off, we will have very little left. I have a background in banking and passed my exams many years ago, but no matter how hard I try, when I look at our accounts, I cannot understand why Lloyds/HBOS are behaving in such a manner towards us. Our published accounts to 30 June 2010 show that our Bank debt incorporating a Term Loan and overdraft facilities reduced by �£3.7m last year to �£22.3m (2009 - �£26.1m). This was despite paying off �£8million in historic transfer fees (which left �£1.2million still to pay). The term loan, repayable over 19 years, stands at �£19m which will mean repayments of �£1million per year + interest. So, if we had Bank Debt of �£22.3m and �£19m of that was a long term loan, then our working overdraft would be �£3.3m, which is well within the �£15m revolving credit facility (overdraft limit) that we have: �£11.7m within it to be exact. A football club's income is loaded to the beginning of the season in terms of season ticket sales, but Champions League participation this season will mean a hefty amount of Euros being lodged in our account with Lloyds/HBOS, before the season ends. Our Champions League campaign this season has guaranteed us 9.2million Euros + TV Revenue (in 2008 Celtic got 6.2 million Euros) + gate receipts, which should easily total around �£16million. On top of that, we will get a further 200,000 Euros for qualifying for the Europa League, plus TV and gate receipts and another �£300,000 Euros + TV and gate receipts should we get past Sporting Lisbon. That amount would, of course, increase with each round should we advance. Putting things into perspective. On 30 June 2010, we had an overdraft of �£3.3 million, but the previous year we managed to reduce our overdraft by �£3.7m, so assuming we have a similar year, that should be wiped out this year and leave us with a small credit balance. However, we should do better than last year, due to a better performance in the Champions League bringing us an extra 1.2million Euros in points payments, compared to last year. Also, last year we repaid �£8m in historical transfer fees, we don't have that to pay this year (maximium should be �£1.2m), so we should be well in credit at the Bank. Allied to that: Staff Costs have been steadily reducing over the last 2 years. In the year to 30 June 2008 they were �£34.3m. In 2009 - �£30.7m. In 2010 - �£28.1m. That equals reduction of �£6.2million in the last 2 seasons and a figure that will again be slashed this year. Our Net Operating Expenses in 2008 were �£56.8m. In 2009 - �£48.2m. In 2010 - �£43.8m. Which is a reduction of �£13million in 2 years and these will also be significantly reduced this year, meaning further profit. By my conservative reckoning, by 30 June 2011, we should have somewhere in the region of a �£10million credit balance at the Bank and our long term loan reduced to �£18m over 18 years. I haven't taken any of our summer transfers into consideration, due to a lack of accurate figures, but I would reckon that the transfer fees and wages for the players who left, should more or less offset the 3 who came in. Our debt to equity (gearing) ratio was reduced last year to 38% (2009 - 47%). again a sign that we are heading in the right direction, though further reduction would be helpful. Crucially, the �£15m revolving credit facility with Lloyds/HBOS, was in place till 31 December 2010 and the only possible explanation could be that the Bank have renewed this at a much lower level. If that is the case, then it could be down to cash flow, as I don't think the UEFA money is received for a few months yet. If I am correct, then it really is a shocking act by Lloyds/HBOS, given that the UEFA money is guaranteed due to what we have already achieved in the Champions League this season. Something about the whole thing stinks more than a Celtc supporters green and grey hooped top after four weeks of constant wear in the summer. There is something that we are not being told and it is now time for the Club to come out and tell us what the problem is with Lloyds/HBOS and whether or not we are being strangled due to our association with the MIH Group, as to me, it is certainly not obvious in our accounts. I believe that the difference in the way that the OP and the bank are looking at things is that the OP is looking at our financial position as at 30/6/10 and 30/6/11, but no further but the bank are taking a more medium term approach to the finances and are looking at the positions in 2012, 2013 and 2014, based on the worst case scenario of no CL football in these years and ensuring that we stay with our credit facility, given that we have shown an inability to do it in the past. The OP highlights a small reduction in staff costs between 2009 and 2010. It has to be remembered that our loss before tax and before the profit on the sale of players (which can't be guaranteed) in 2009 was �£20million! When looking at our the bank views us, I believe that a 36-48 month scenario needs to be considered and not just the position at the best point in the current year. A far bigger question to me is why there are conflicting messages about the bank being put out by AJ and Walter. One of them is misleading the support and the support deserve to have the situation clarified (again!). 0 Quote Link to post Share on other sites More sharing options...
calscot 0 Posted January 10, 2011 Share Posted January 10, 2011 My theory is that Walter is being told one thing one minute (say limited spending on a signing and maybe a loan player) then being told something else when it comes to the crunch (no new players at all). I think the frustration to Walter and us all is that common sense says that ok we need to cut back to pay our debts, but we can't go so far as to make too great an impact on our ability to compete. It's like being a passenger in a car, knowing you need to slow down for a junction a hundred yards up the road but the driver is almost doing an emergency stop. Or like when a big bill comes in you don't just cut back the booze and luxuries etc, you cut back the proper food and start to suffer from malnutrition. When you're shopping in Lidl and still told you can't spend any money, you know it's all going too far... 0 Quote Link to post Share on other sites More sharing options...
CumbernauldGers 0 Posted January 10, 2011 Share Posted January 10, 2011 Best way to describe the Rangers accounts, Black Hole. 0 Quote Link to post Share on other sites More sharing options...
chilledbear 16 Posted January 10, 2011 Share Posted January 10, 2011 '' believe that the difference in the way that the OP and the bank are looking at things is that the OP is looking at our financial position as at 30/6/10 and 30/6/11, but no further but the bank are taking a more medium term approach to the finances and are looking at the positions in 2012, 2013 and 2014, based on the worst case scenario of no CL football in these years and ensuring that we stay with our credit facility, given that we have shown an inability to do it in the past''. Worst case scenario is a certainty, if we have no additions to the squad. 0 Quote Link to post Share on other sites More sharing options...
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