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 How sustainably are we run now?

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Earwegoagain



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PostSubject: How sustainably are we run now?   Tue May 08, 2018 10:03 am

So the evil crew took us to near extinction with debts of £17m when we were in the CCC. Whilst we had a good team and sell out crowds of 18k it was a jolly old time watching our free scoring squad. Then evil Ollie departs to Leicester as we dismantle his squad and replace with pound land pros. The crowds depart as rapidly as the bubble burst and we found ourselves in admin.
As far as I'm aware we now have a £5m loan to Hallett and Brent has ended up with £3m in loans by juggling car parks and ice rinks although I'm sure he's only actually put in £1m of his own cash.
The question is with £10k crowds and debts of £8m are we any more sustainably run than we were back then? There are lots of rumours that we need another £5m to complete mankover pt 1 which obviously would make the debt £13m. Not far short of the never again figure of £17m.
Am I missing something here? Am I just a rabid, tin foil hat wearing finger counter with a class driven agenda? I think not if we get robbed in the summer again, lose Adams, Carey and Taylor we could be looking at crowds of 6k next season with debts of around £8 to £13m. Shorely that is a reason for concern?
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akagreengull
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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 10:56 am

Brent and Silent Si being in charge is a concern full stop.
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Sir Francis Drake

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 11:12 am

This feels a bit like I am defending the indefensible but the logic above is slightly flawed.

At the Q&A Brent said the club was essentially debt-free. It did owe around £300,000 but that was all "normal" and was accounted for by routine bills that had't yet been paid: rates, electric and so on.

Any directors' loans to the club were converted into shares when the £5m for the grandstand was announced. This isn't club debt. The only way the directors will get that money back is if the sell up.

Which does leave £4.1m (the Hallett mortgage) but this has not yet been drawn down.

The sums of money involved here are puzzling. It all seems to be based on the grandstand refurb costing £5m which now seems unlikely given the passage of time and inflation: if it was going to cost £5m then it will cost more now.

That £5m did not include roof maintenance since estimated to cost an additional £1m.

Where do these figures come from? The £900k in new shares seems to be however much the directors had loaned topped up by the maximum allowable to enable Brent to maintain a 50.1% stake and the £4.1m mortgage the makeweight to get to £5m.

So what we actually have is an out of date refurb plan which has seen costs rise since it was created and some arbitrary financial measures to square the numbers up and then the realisation that the roof needs doing too. All of this driven by Brent's flat refusal to put any money into the club to pay for any of this either in terms of shares or loans.

My reading of this suggests that the other directors must be feeling rather less happy with the situation than we might expect because it is all a bit of a dog's breakfast in both financial and construction terms. I'd expect to see this resulting in a few high level departures from the club if it was the case that there was widespread discontent in the boardroom and their replacements being much closer to Brent than those who leave.

As for any club money being diverted into the ice rink, car parks or anywhere else in the planned development... Well that would be an absolute outrage. None of any of it is anything to do with Argyle and hasn't been since Brent acquired the land it is going on back in October 2012 when he assumed control.

So we are not £8-13m in debt. Not even anywhere near close - more like £300,000 which is neither here nor there. Although we will be £4.1m in debt if ever that mortgage gets activated but that pre-supposes that the refurb will go ahead so we're probably on safe ground given Brent's record of delivering on his projects.
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Hugh Watt



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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 12:22 pm

If the mortgage hasn't been drawn down, are we paying any interest on it?
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P.O.I
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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 12:26 pm

Hugh Watt wrote:
If the mortgage hasn't been drawn down, are we paying any interest on it?

Good question. I'm not sure, but, did SFD ask this in a recent fans forum thingy with Brentamir Putin?

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Earwegoagain



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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 12:54 pm

Sir Francis Drake wrote:
This feels a bit like I am defending the indefensible but the logic above is slightly flawed.

At the Q&A Brent said the club was essentially debt-free. It did owe around £300,000 but that was all "normal" and was accounted for by routine bills that had't yet been paid: rates, electric and so on.

Any directors' loans to the club were converted into shares when the £5m for the grandstand was announced. This isn't club debt. The only way the directors will get that money back is if the sell up.

Which does leave £4.1m (the Hallett mortgage) but this has not yet been drawn down.

The sums of money involved here are puzzling. It all seems to be based on the grandstand refurb costing £5m which now seems unlikely given the passage of time and inflation: if it was going to cost £5m then it will cost more now.

That £5m did not include roof maintenance since estimated to cost an additional £1m.

Where do these figures come from? The £900k in new shares seems to be however much the directors had loaned topped up by the maximum allowable to enable Brent to maintain a 50.1% stake and the £4.1m mortgage the makeweight to get to £5m.

So what we actually have is an out of date refurb plan which has seen costs rise since it was created and some arbitrary financial measures to square the numbers up and then the realisation that the roof needs doing too. All of this driven by Brent's flat refusal to put any money into the club to pay for any of this either in terms of shares or loans.

My reading of this suggests that the other directors must be feeling rather less happy with the situation than we might expect because it is all a bit of a dog's breakfast in both financial and construction terms. I'd expect to see this resulting in a few high level departures from the club if it was the case that there was widespread discontent in the boardroom and their replacements being much closer to Brent than those who leave.

As for any club money being diverted into the ice rink, car parks or anywhere else in the planned development... Well that would be an absolute outrage. None of any of it is anything to do with Argyle and hasn't been since Brent acquired the land it is going on back in October 2012 when he assumed control.

So we are not £8-13m in debt. Not even anywhere near close - more like £300,000 which is neither here nor there. Although we will be £4.1m in debt if ever that mortgage gets activated but that pre-supposes that the refurb will go ahead so we're probably on safe ground given Brent's record of delivering on his projects.

So the only time we would be strapped for cash is when Brent leaves hell want £3m for his shares £3m for Hallets if he leaves and the club will have a loan to repay of £5m. So the cost to anyone buying the club would be about £6m with debts of £5m?
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Sir Francis Drake

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 1:03 pm

If the grandstand goes ahead then the £4.1m kicks in which we have not yet drawn down and are not paying interest on yet.

The club is worth whatever somebody is willing to pay for it and not a penny more.

If Brent has £3m worth of shares, in his mind, he'll want £30m at least for them. Whether or not he gets £30m is another matter.
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harvetheslayer

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 1:26 pm

If Halletts funds havent been drawn down in any shape or form why has he had a charge over HP since February 2017....??
Surely the charge only goes "live" when the funds are "utilised" ??
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beesrus

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 1:38 pm

I understand earwig's logic and agree with it. In effect the present owners have swallowed up the value of the stadium freehold for themselves rather than the club benefit.
If that value was there right from the off at admin, which it was, they should have paid the going rate for it, which of course they didn't because of the admin stitch up. Basically, anyone who wants to takeover would have to pay anything from £6m to £10m and inherit a debt of at least £5m, AND put up with the likes of Wrathall and Newell hanging around like a bad smell. No one is going to touch the club at that price with a half completed stadium and most of the value already lifted. The only thing left to interest people is the stadium corners. Not a good situation to be in. Looks like Brent and Hallet's bankers' austerity will be still de rigeur in Plymouth decades after it's long since been rubbished elsewhere.
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Sir Francis Drake

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 2:07 pm

harvetheslayer wrote:
If Halletts funds havent been drawn down in any shape or form why has he had a charge over HP since February 2017....??
Surely the charge only goes "live" when the funds are "utilised" ??

Odd, isn't it.

The deal is in place but has not been activated. (I paraphrase)

That's what they said when the question was asked. That's all I can say.
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PlymptonPilgrim
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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 2:10 pm

Sustainability and football clubs do not go well together - particularly if the football club is ambitious and wants success on the pitch. If a club wants to be sustainable, expect it to be bouncing about in L1 or L2.

An ambitious club will actively seek out investment, not be afraid of manageable debt, have a 3 year, 5 year, 10 year plan and try and attract players and staff who will be able to help them on the way and be well rewarded for their efforts. This approach does not entail throwing money at the club, but controlled investment over a period of time, feeding in when necessary. This ambitious club would also ensure that it's facilities for staff and fans were the best they could be, looking at options for increasing the capacity, not at the expense of the playing budget.

This is not sustainability in it's true sense. Outgoings would be higher than income, but the debt would be manageable. The aim is obviously to get to the Premier League with all it's riches.

That's about as far as you could possibly get from the current set up at Home Park. Whilst the current owner is there, no investment will be sought, minimum funding will be given to the playing side, his own agenda will take priority.

If any owner says he wants his football club to be sustainable, wave success goodbye.

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Sir Francis Drake

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 2:12 pm

beesrus wrote:
I understand earwig's logic and agree with it. In effect the present owners have swallowed up the value of the stadium freehold for themselves rather than the club benefit.
If that value was there right from the off at admin, which it was, they should have paid the going rate for it, which of course they didn't because of the admin stitch up. Basically, anyone who wants to takeover would have to pay anything from £6m to £10m and inherit a debt of at least £5m, AND put up with the likes of Wrathall and Newell hanging around like a bad smell. No one is going to touch the club at that price with a half completed stadium and most of the value already lifted. The only thing left to interest people is the stadium corners. Not a good situation to be in. Looks like Brent and Hallet's bankers' austerity will be still de rigeur in Plymouth decades after it's long since been rubbished elsewhere.

The mortgage doesn't exist in isolation, though, does it?

PAFC now owns the stadium so there is an asset to offset against the liability of the mortage and that asset will, presumably, enhance in value if the mortgage ever is activated as well as increment with inflation.

Nor is the debt due imminently given the 30 year aspect of the deal.

I think the asking price for the shares will be a far more significant factor in any future purchase of the club.
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Innocent Egbunike

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 2:28 pm

Agree with SFD's analysis, though didn't realise the mortgage had not yet been activated. Thought PAFC was already paying it back.

Of bigger concern is that the £5m is now far too small an amount to achieve something half-decent and a. take us forward in terms of larger gates/facilities and so, b. make us attractive to an owner who has some genuine funding and vision for the club.
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Earwegoagain



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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 2:50 pm

Brent won't be going anywhere until he has done the refurb, seven more years anyone?
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beesrus

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 3:40 pm

Sir Francis Drake wrote:
beesrus wrote:
I understand earwig's logic and agree with it. In effect the present owners have swallowed up the value of the stadium freehold for themselves rather than the club benefit.
If that value was there right from the off at admin, which it was, they should have paid the going rate for it, which of course they didn't because of the admin stitch up. Basically, anyone who wants to takeover would have to pay anything from £6m to £10m and inherit a debt of at least £5m, AND put up with the likes of Wrathall and Newell hanging around like a bad smell. No one is going to touch the club at that price with a half completed stadium and most of the value already lifted. The only thing left to interest people is the stadium corners. Not a good situation to be in. Looks like Brent and Hallet's bankers' austerity will be still de rigeur in Plymouth decades after it's long since been rubbished elsewhere.

The mortgage doesn't exist in isolation, though, does it?

PAFC now owns the stadium so there is an asset to offset against the liability of the mortage and that asset will, presumably, enhance in value if the mortgage ever is activated as well as increment with inflation.

Nor is the debt due imminently given the 30 year aspect of the deal.

I think the asking price for the shares will be a far more significant factor in any future purchase of the club.

But Frank, the gist is Brent and Hallett have put in little, apart from the former standing for/underwriting the £1m or£1.5m loss that was unavoidable while big contracts ran down. And of course, much of the ongoing big wages were seen to by half the unbudgeted income. That is pure shareholder gain, monies disappearing from the football itself.
While we're on your figures, I thought the bankers said there would be no HHP uplift present for Argyle because Lombard have to be satisfied. That sounds like a debt to me, even if it's not an official balance sheet debt.
And then there's the loan notes to Todd and the boys, again not on the balance sheet, but little is in these days of post decency capitalism, until push comes to shove and the crabs come a crawling.
No one is going to stump up big bucks for a continuing lower league presence in Central Park now these characters have just about hoovered up any shareholder "uplift", bar the corners, and of course a neighbour in spitting distance who didn't seem much concerned about club needs when he turned the car park, and assumed land for part football club use into private "town use". Or maybe they would if Brent set about being clever and obstructive in the near future over anything from the ice rink to the cost of the refurb. We've seen the tactics at Olway. He's still the same animal that threatened to bully the local council through the courts. All these deliberate leaks coming from Brent and Hallett stink
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Sir Francis Drake

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 4:07 pm

The terms of the Lombard deal remain unclear but if Home Park is worth £x with a knackered grandstand then it is worth £x+with a "new" one no matter what form it takes. So there is uplift in the value of Home Park. Does Lombard get it? I don't know. I rather suspect that the shareholders get it when/if they ever sell up. It would certainly be interesting to know what actually triggers Lombard getting some cash.

Much the same goes for Mastpoint, I guess.
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Earwegoagain



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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 4:18 pm

Re Lombard and Mastpoint the uplift regards the HHP scheme of which PAFC is not involved. I'd be amazed if they got anything from the refurb, I'm sure that deal was agreed so that Brent could steal the car park from the club.
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sufferedsince 68

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PostSubject: Re: How sustainably are we run now?   Tue May 08, 2018 6:45 pm

Ten and a half thousand fans is nowhere near enough to run a third divison club paying fourth division wages, let drop into the western league where Jimmy and Si might be able to compete.
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