Financial Trading 2018

Discussion in 'The Hornets' Nest - Watford Chat' started by hornetboy1, Sep 12, 2019.

  1. hornetboy1

    hornetboy1 First Team

    This has just been posted by Swiss Ramble, but is only looking at trading from season 2017/18, so is a little out of date.
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  2. Lloyd

    Lloyd Reservist

    Who cares? One of the biggest bores about modern football is the way fans are supposed to get excited about their club's finances. Have we made some money? If so, lets blow the lot on a couple of decent centre backs
     
  3. The undeniable truth

    The undeniable truth Squad Player

    No we've lost money, so lets make do with what we have and just add a cheap option from the champ....
     
  4. I assume that loss is wiped out by the Richarlison profit which came post y/e.
     
  5. We hate 48

    We hate 48 Reservist

    Documents lodged at companies house show the club have entered into an invoice discounting type arrangement with Barclays to borrow against the Premier !league income and other broadcasting income

    No details on how much but that’s a lot of future income you can borrow against today - or maybe repay some existing debt ?

    It’s not an unusual thing to do - a bit like borrowing against the future Richarlison money due from Everton which they also did
     
  6. UEA_Hornet

    UEA_Hornet First Team Captain

    No specifics on how much but a rough reading suggests it's for everything we're due for the rest of the season from the PL's central funds, which comprises all broadcast income but not the merit money for finishing position.
     
  7. Hornet4ever

    Hornet4ever WFC Forums Last Man Standing Winner 2018/2019

    Nothing too surprising there.

    Our owners own a PL football club which has a player asset value of millions as well as the freehold of the stadium, but pay no corporation tax because of the'trading loss' they will also no doubt take out significant salaries & annual dividends for themselves in addition to getting their final big lump sum on the horizon when they eventually sell the club. Smart Italian cookies.
     
  8. We hate 48

    We hate 48 Reservist

    Without player sales the club makes a loss. We have seen £70m of sales in last two seasons and we still lost £30m in that period. Reason - wages and other expenses eat up more than we get in unless we sell.

    No dividends paid and only director Duxbury got £630k last year

    Whatever the value of the players we have ( and the ground ) we still owed £94m to the clubs we bought them from and another £80m to third party creditors.

    Without a massive increase in the attendances -(not possible with 20,000 capacity) or commercial income - via merchandise or naming rights- the model doesn’t look attractive to a new owner IMHO
     
  9. Hornet4ever

    Hornet4ever WFC Forums Last Man Standing Winner 2018/2019

    I agree on the face of it, if you are purely looking at the way the accounts are structured, they are losing money, but do you really think the Pozzo's are running a loss making enterprise (& not drawing out any money) in the vague hope eventually player trading will make a profit in the future? Personally speaking I don't think so.

    You are right, who would come in and buy it on the face of the accounting facts? Which then begs the question are the Pozzo's foolish businessmen? I think we could both agree they're not?

    While WFC is in the PL, it's a cash cow.
     
  10. We hate 48

    We hate 48 Reservist

    £16m paid to Udinese in last two financial years so seasons 16/17 and 17/18 might be a way of extracting cash. These are transfer and sell on fees for Ighalo, Vydra and Nyom in the main.

    There is no cash cow for the owners if the club is loss making and can only fund new players -£150m spent in those two financial years-(and £94m still owed) by borrowing hence £80m of debt (of which £25m was lent by a Pozzo entity)-the other £55m is third party debt.

    My original post was partly to highlight why borrow against future income that is coming to you anyway-is it to refinance their own or some of that other £55m of debt-or is it to raise funds to spend in January to survive and thereby retain the value of the players whilst in PL.
     
  11. Hornet4ever

    Hornet4ever WFC Forums Last Man Standing Winner 2018/2019

    The club is designed to be loss making, as with many ordinary businesses, as far as the accounts are concerned.

    It has been documented before Pozzo lends the club his own money & charges WFC interest significantly above base rate for that facility. That's how he does it & probably why he doesn't need or want to draw on a salary. As long as the guaranteed PL cash flow & the various bank facilities are there (player funding vs future PL income) they are rinsing it & not even using their own money.

    There's a few accountants on here that can probably explain the various structures better than I?

    If we got relegated & didn't get back the following season the whole model would probably implode quite badly. Although there are probably clauses in the player contracts in terms of wages in that event that would soften the blow.
     
  12. The undeniable truth

    The undeniable truth Squad Player

    ....unless we are relegated and need to dispose of high earners from the wage bill v quickly and so are forced to move them out at less than market value. Worst case scenario, have to pay off the remaining contracts of Zee, Prodl, Okaka...? Given the level of income I'm surprised we need to borrow against future revenues and bear the interest cost, using funds to acquire a £40m winger who's barely played, and paying off the contract of our most successful ever premier league manager.
     
  13. We hate 48

    We hate 48 Reservist

    I don't know where it was documented as the accounts show a Pozzo entity has lent the club £5m at 2.5% (it was £4m in FY17) and another £20m at 5% in FY18-both loans unsecured as the main funder for £55m lends it at 7% with security so the rate the Pozzo's charge is hardly excessive IMHO and so £62k in FY17 paid to the Pozzos is hardly material-the accounts show that Pozzo £25m loan was due to be repaid in December 18.

    We will find out when the accounts are next out whether it was repaid. The FY19 accounts could well show a profit like they did in 2016 and 2017 due to player sales (Richarlison this time) so it doesn't follow that they are set up to be loss making.

    I agree that relegation might well blow up their model if we stay down for more than one season for whilst the costs should reduce as you say, their value might fall as well. Maybe that is why Gino is borrowing against PL income rather than use third party lenders who might force his hand although if that £55m lender was being repaid they should release their security which hasn't happened yet so maybe its new debt
     

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