Financial expert's Rangers warning

[Bluedell 5,329]

They didn't have a problem with the veracity of Green, Stockbridge et al, even I concede what we have now is several steps up from there.

 

I guess they may have had a problem if they were still in place. However at the time, were they in possession of proof that they had been less than honest?

[buster. 4,808]

They didn't have a problem with the veracity of Green, Stockbridge et al, even I concede what we have now is several steps up from there.

 

This was at a time when there was cash and when IIRC their fees increased significantly.

 

They signed off the accounts/going concern note that were published in October 2013 when Stockbridge was still at the 'frontline' 'bullshitting' his way through towards December, including a case at the CoS (post sign-off) where RIFC lost and the board were slated and thereafter further diminshed.

 

The 2.5M unsecured facility seemed to be material in Deloittes being able to sign off the going concern note. This then seemed to dissappear when money was required and options were being explored. Not forgetting what was said by those in the so-called 'new board' at the AGM+.... that later didn't reconcile with reallity.

 

The undercurrent and sometimes blatantly in your face poor corporate governence from the 'new' board that has in good part, the same movers and shakers under the hood is there if Deloittes choose to see it.

 

So any assurances that were given that 'change' was on the way with a new coligiete, responsible and dynamic board that could raise sufficient finance and rebuild levels of trust with the fans has been proved to be balderdash. The dogs in the streets can see this (well, there are a couple who can't).

 

 

Bottomline, it looks to me as if Deloittes have been prepared to 'let quite a lot go' and have at times taken their chances, so to speak.........not forgetting a fat wedge.

 

Perhaps this is to a degree, a reflection of UKPLC in the 21st century.

Edited September 15, 2014 by buster.

[Tom Davison 0]

Patey a 'half baked' financial expert ??? LOL Would a real one be you per chance ?

 

Just what qualifications does someone need to be classified as a financial expert?

[buster. 4,808]

Just what qualifications does someone need to be classified as a financial expert?

 

Click 'agree' on related posts by Rab.

 

Edited September 15, 2014 by buster.

[colinstein 294]

I think the AGM will be telling as to what will happen in the second half of the season. Rangers normally sell half-season tickets which I think will possibly be the only route the board will try and rely on without resulting in major fan outrage.

 

If the AGM comes to pass and major changes take place at boardroom level (doubtful, I know) - do we think that will see a high uptake of the half season tickets which would undoubtedly help us see off the second half of the season??

 

why do you doubt major changes could take place at boardroom level ?..............they've already had a merrygoround of different deckchairs on the Titanic and nothing different has happened.

would you be bought off with changes on the board (and the big payoffs following ?)

[BrahimHemdani 1]

I doubt that they would resign because an audit is "hassle" as such. It's not actually that difficult, even with the issues of going concern.

 

If they were to resign then it would be more likely because they did not have confidence in the truthfulness of the directors.

 

That was exactly what I meant by hassle (not the audit per se); trying to reconcile the directors assurances with the actual results and the resultant questions that might be asked as to their own credibility.

 

Didn't have time to express that very clearly this morning.

[BrahimHemdani 1]

Why exactly do you see it difficult for Deloittes to continue in their role ?

 

ps. I'm struggling to understand the enboldened text in your first paragraph.

If you have the time could you spell it out with dates/numbers please.

INTERIM RESULTS FOR THE SIX MONTH PERIOD TO 31 DECEMBER 2013

 

In implementing a professional basis for managing the Club, it remains a significant concern that external comment and ill-informed opinion continues to create uncertainty with regard to future income and cash flows. In particular, recent public comments suggesting season ticket holders divert payment away from the Club has caused a level of uncertainty over the timing and quantum of season ticket cash flowing into the Club, which as with many other football clubs, is Rangers' primary source of income. If this were to happen then there would be a negative impact on short-term cash balances and it is possible that the Club may need to seek alternative additional short term financing. This clearly would not be in the best interests of Rangers and would likely have a significant impact on our ability to progress the development of the Club in the planned manner.

 

 

 

This possibility results in the existence of a material uncertainty which may cast doubt about Rangers' ability to continue as a going concern and therefore that the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making the appropriate enquiries and considering the uncertainties referred to above, the directors have concluded that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the Interim results.

 

The implication of the highlighted section in the second paragraph vis a vis the earlier paragraph relating to income from season ticket sales is that after making due enquiry the directors decided to "continue to adopt the going concern basis in preparing the Interim results." i.e. that ST sales would be sufficient for that purpose.

 

 

I posted at the time and several times subsequently that I did not understand what enquiries the directors could make that would allow them to forecast that notwithstanding the uncertainties referred to they were still of the opinion that the club could operate as a going concern. In other words how could they make the forecast below given the existence of the said uncertainties

 

Note 2 (ceteris paribus)

 

The forecasts make key assumptions, based on information available to the Directors, around:

 

• Season ticket sales - the biggest single source of income. The critical assumptions made are

o the timing of season ticket renewals in line with the Club's historic experience before the turbulent events of recent seasons;

 

o Progressive increases in season ticket prices as the club moves towards the Scottish Premiership, while still remaining below those when the Club was previously in the SPL;

 

o Modest increases in season ticket numbers for 2014/15 and beyond; and

 

o Sensitivity analysis has been applied to the volume and timing of the season ticket income received, and under these more pessimistic assumptions the Group would continue to operate with positive cash balances.

 

The auditors said:

 

In arriving at our review conclusion, which is not qualified, we have considered the adequacy of the disclosures in note 2 to the condensed set of financial statements in the half yearly report for the six months ending 31 December 2013 concerning the Company's ability to continue as a going concern. The Company has made key assumptions in relation to the timing of season ticket monies, the volume and pricing of season ticket sales, increase in matchday income and sponsorship, the timing and value of dividends from Rangers Retail Limited and further cost reductions.

 

This condition relating to the timing of receipt of season ticket monies, along with the details provided in note 2 to the condensed set of financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern and therefore that the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.

 

In other words whilst the auditors considered that there was "material uncertainty" they accepted the directors opinion that the company could continue to trade as a going concern and made no adjustments to the accounts in relation to that uncertainty.

 

So what I am saying is that the auditors may not accept such enquires or statements again in the future and/or may not want to audit the books of a company whose directors make such ill founded assumptions.

 

Lastly this is not a comment on the whys or wherefores of the ST debate. It is simply the case that I do not understand how the directors could forecast an increase in ST sales given the "public comments suggesting season ticket holders divert payment away from the Club".

 

I hope the above helps you to understand the post to which you refer.

 

Now I need to get on with the match preview for tomorrow night's match or I'll be in trouble with Zappa.

[buster. 4,808]

BH

Thank's for taking the time to put that together (post 27).

What is being said by the board does seems contradictory and they also look to absolve themselves of any blame, which can't be seen by any viewer as reasonable.

 

The post I refered to now makes sense to me and I've since further commented on related matters within this thread that also highlight the conduct of the board and the 'reasoning' behind decisions from Deloittes.

[Zappa 0]

Can't help returning to this point from Neil Patey:

 

Broadly speaking, going on the figures the club has given, they will then need to bring in at least £2million to get them through to the end of the season.

 

Broadly speaking? I'd love to know what figures he was looking at when he came up with that £2m figure.

 

Ok, so he did say 'at least' £2m, but the figure seems completely ridiculous.

 

Ten days ago it came out in court during the Ahmad case that there was only £1.2m in the bank.

 

After costs the Open Offer should have raised around £2.76m.

 

So that's less than £4m in the bank before even starting to deduct loan repayments, Ahmad's settlement, potential bonuses (or pay-offs) and other ongoing costs.

 

Even if we assume that Sandy Easdale won't be getting his £500k loan back at the moment (which we don't know for sure, but he did say as much in a recent interview), the combination of the Letham loan repayment and Ahmad pay-off would probably reduce the cash balance to somewhere around £2.6m.

 

There may not even be as much as £2.6m left if other bills unknown to us have to be taken off it (which is highly likely), but erring on the side of being optimistic, let's say there's around £2.6m left after paying George Letham and Imran Ahmad.

 

£2.6m is only enough to pay the September & October payrolls, since our monthly payroll is apparently in the region of £1.3m.

 

As things stand, we've only got 3 home games in what's left of this month and next month and with two of them being midweek, the ticket sales won't be great.

 

So, the board will probably need to raise money in November with 7 months payrolls still to be paid in order to see out the season.

 

Where on earth is Patey plucking the £2m figure from then? Neil? Hello?

 

Earth calling Neil Patey... Earth calling Neil Patey...

[buster. 4,808]

Zappa

I don't think Patey appears to do anymore than have a skim through numbers and thereafter look to adopt a non-controversial, safe and general line in answering questions.

 

It's representative of the way the mainstream have covered our omnishambles.

The so-called expert can't even offer one insightful analysis on our finances during the years that he has been propped up on a sofa to talk about them.

 

If I was a partner or boss in E&Y, I'd be cringing when he appeared.