[Archived] Venkys London Limited - Accounts

[AndyNeil]

ftp://wck2.companieshouse.gov.uk/image/03/68/14/57/91/35/ce/5b/18/51/a3/33/39/89/22/f4/blREX+0L0329-123257_3-08178118.pdf

discuss...

[T.J.Newton]

its all pretty alien gobbledygook ta me but it read to my eyes that they pretty much broke even(on paper anyway),

does the amount(£4.4million) shown on page 31 section 28 refer to agent fees?

[readsi3k]

its all pretty alien gobbledygook ta me but it read to my eyes that they pretty much broke even(on paper anyway),

does the amount(£4.4million) shown on page 31 section 28 refer to agent fees?

To summarise very basically, my understanding is that it's saying that since 31 March 2012 the club has spent £4,443,332 more on transfer fees that it's received.

[readsi3k]

I would be curious to know how the amortisation of the negative goodwill (an unusual thing to see in a set of accounts anyway) was calculated.

[Mercer]

From a quick scan through, four points stood out to me:

• Impact of £20.4m net profit on disposal of players - presumably, this includes Jones, Samba & Kalinic. Without these.............
  
• Auditors' qualifications / caveats:
  
  • Page 6 - Basis for qualified opinion on financial statements
    
  • Page 7 - Matters of which we are required to report by exception
    
  • Page 12 - Going concern
    

IMO, squeaky bum time and not for the faint-hearted !

[TBTF]

From a quick scan through, four points stood out to me:

• Impact of £20.4m net profit on disposal of players - presumably, this includes Jones, Samba & Kalinic. Without these.............
  
• Auditors' qualifications / caveats:
  
  • Page 6 - Basis for qualified opinion on financial statements
    
  • Page 7 - Matters of which we are required to report by exception
    
  • Page 12 - Going concern
    

IMO, squeaky bum time and not for the faint-hearted !

Administrative Expenses of a £100 million??? FFS !!

[philipl]

Mercerman nails the salient points.

I wonder if KPMG are going to resign. They must be discussing resigning.

[OJRovers]

Why have they produced a consolidated set of accounts? I'd have thought under uk gaap they could've just done a company set.

Also wonder what the 3.3m other investments are?

Mercerman nails the salient points.

KPMG also audit Rovers so the fact they are qualifying the accounts for lack of audit evidence on a company they themselves audit is a huge eye-opener to say the least.

I wonder if KPMG are going to resign. They must be discussing resigning.

The audit qualification is good news for the Trust. In effect saying Rovers could be worthless and the parent cannot justify holding the club at their valuation in the accounts.

I think the qualified opinion was for lack of evidence on the 3m other investment (Venkys xprs?) rather than the 31.6m investment in brfc, which kpmg have no issue with.

[philipl]

The going concern note includes this gem:

"In addition the directors have also considered the potential impact on the group's cash flows were BRFC not to regain its FA Premier League status and have identified mitigating actions that would manage the cash flow requirements of the group in such circumstances..."

Be afraid

In fact be keaning terrified

Why have they produced a consolidated set of accounts? I'd have thought under uk gaap they could've just done a company set.

Also wonder what the 3.3m other investments are?

I think the qualified opinion was for lack of evidence on the 3m other investment (Venkys xprs?) rather than the 31.6m investment in brfc, which kpmg have no issue with.

Gosh it is a while since I was last involved in having to answer questions about going concerns (thankfully) but I guess KPMG were going to qualify the unconsolidated accounts far more severely. The unconsolidated accounts are basically Capital £39m, investment £39m. If KPMG think the investment is worthless, the qualification would have been utterly damning- the accounts are misleading and not the insufficient evidence qualification.

I initially read the qualification that they don't agree/cannot verify the holding value of Rovers in the VLL accounts.

£3.3m other investments would for me be pass immaterial (ie too small to affect the opinion)- not a qualification matter in a £100m set of accounts but that is what the qualification is for.

Incidentally, KPMG were paid £110k. That is a threefold increase over the amount the previous auditors of Rovers were paid plus they took a separate audit fee on Rovers themselves.

Here is a definition of Qualified audit opinion from Moneyterms:

A qualified audit opinion is given in an audit if the auditor disagrees with the treatment or disclosure of information in the financial statements, or if the auditor does not feel that the audit has been too limited in its scope. Except for the qualification of a particular issue, the rest of the financial statements will give a true and fair view.The accounts of listed companies are rarely qualified and it would seriously undermine confidence in the management if they were.

[bluebruce]

The going concern note includes this gem:

"In addition the directors have also considered the potential impact on the group's cash flows were BRFC not to regain its FA Premier League status and have identified mitigating actions that would manage the cash flow requirements of the group in such circumstances..."

Be afraid

In fact be keaning terrified

Why? Doesn't that just mean that, if we don't get into the Premier League we will have to cut our cloth accordingly? Which is just basic common sense? And surely better than risking administration (not counting that the Trust would find it easier to get the club in such circumstances). I think we all know Venkys aren't going to just pour loads of their own money in year after year (if they have at all). Therefore I'd be far more worried by a statement that said anything along the lines of "we will continue incurring debt until we get to the Premiership dammit"

[OJRovers]

Read the qualification again, it explicitly says "with respect to investments held at £3.3m...".

[philipl]

Read the qualification again, it explicitly says "with respect to investments held at £3.3m...".

Yes you are right which seems even weirder to take a qualification of that nature.

It feels like they negotiated until they got their least worst qualification possible.

[Mercer]

As a Rovers' supporter, I personally feel very, very uncomfortable about those accounts.

I seem to recall that the 'football club' accounts were qualified when published in Dec. 2011 and I think Paul Hunt refers in his, allegedly, leaked letter to Mrs Desai, that 'negotiations' that had taken place with KMPG around these matters.

My experience tells me that what we are seeing from the auditors', in both sets of accounts, are qualifications / caveats that arise more on an exception basis rather than representing standard practice.

[Exiled in Toronto]

Did I read it correctly in that someone has bunged 12.5 million in and doesn't want it back? Bloody asset strippers...!

[Amo]

Be afraid

In fact be keaning terrified

Oh, you say that so much it's lost all meaning.

[Baz]

So operating losses of £19m whilst still in the premier league offset only by player sales, further acquisitions outside the period amount to a further loss of £6m (rhodes). Plus a massive share issue, is this debt or investment? We also are charging the community trust £190k+ in rent?

Promotion or bust?

[yoda]

What it does show is that the supporters trust is dead in the water without having about 30 million in cash for operating for the next 2 years, plus the purchase price.

Someone would need in the region of 70 million in cash or a very understanding bank to aquire the Rovers in its present state whereas the Venky's can finance it from India by covering the loan and interest payments and hope they get back to the PL quickly, the new TV deal would clear any debt in 2 years if wages are kept under control

[glen9mullan]

Having read these from front to back and drawn a few conclusions , I took the liberty of asking an accountant who is involved in football of the implications.

On this occasion I do not agree with the , we are up poop creak .

Most people were expecting poor accounts , however what these accounts show is after everything is taken into account including player trading , rovers made a slight profit , not the £3 million loss per season as it was under the walkers trust .

Player trading is nothing new to rovers.

More importantly it also shows the £20 million debt we had was paid off in may 2012 , yes accounts run to march 2012 however this amendment is important .

It also shows venkys have also in these accounts alone given the club a further £12.5 million pound with no agreement for this to be repaid , this is purely a gift . Had these been the walkers trust , it would of been a loan. The report shows the committed to keep ticketing prices low , whilst also stating the owners are in a position to and have agreed to put any other money into the club to keep the club in a trading position . In addition to this , it states we have a banking relationship with no present concerns and none foreseen.

Pitch performance on ALL footballing clubs accounts will show expectations and turnover issues if certain things are not achieved . For e.g Chelseas will have forecasted getting a lot further in the champions league the year than it looks like they will. This will be shown in their accounts next year as a concern , despite a billionaire owner .

There is many things which need to be done at the club for supporters to be convinced about the owners , however in the words of the accountant I have spoken to he said "this is one stick you can't use to beat venkys with"

That is good enough for me and is consistent with the owners public statement that the club is debt free.

Having spoken to Derek Shaw on Friday too , he had no concerns about finance (yes club making a daily loss , but it would be under anyone at this moment in time ) gate receipts would not cover 2 players wages . The club will make funds available in January whilst more cash is being injected into other projects directly from the owners , which will be announced in the coming weeks .

The next set of accounts for this season will be the ones which will be of greater interest , should the club gain promotion then the ones the year after will be. Should we not get promoted then it's only then that anyone can make a professional opinion on rovers financial position as a self sufficient entity . If the owners continue to put their own money in as it clearly shows they have on this set of accounts , then I guess it's all irrelevant and only becomes relevant when that day comes when they decide not to put cash in. However you could say that about nearly every club , whilst some clubs have much larger liabilities and hundreds of millions of debts .

Sorry for any typos , I have typed this on my I phone

[tomphil]

Having read these from front to back and drawn a few conclusions , I took the liberty of asking an accountant who is involved in football of the implications.

On this occasion I do not agree with the , we are up poop creak .

Most people were expecting poor accounts , however what these accounts show is after everything is taken into account including player trading , rovers made a slight profit , not the £3 million loss pet season as it was under the walkers trust .

Player trading is nothing new to rovers.

One thing i have to pull you up on there is "if this had been the Walkers Trust" the same Walkers Trust who converted about 80 milllion pounds into shares?

More importantly it also shows the £20 million debt we had was paid off in may 2012 , yes accounts run to march 2012 however this amendment is important .

It also shows venkys have also in these accounts alone given the club a further £12.5 million pound with no agreement for this to be repaid , this is purely a gift . Had these been the walkers trust , it would of been a loan. The report shows the committed to keep ticketing prices low , whilst also stating the owners are in a position to and have agreed to put any other money into the club to keep the club in a trading position . In addition to this , it states we have a banking relationship with no present concerns and none foreseen.

Pitch performance on ALL footballing clubs accounts will show expectations and turnover issues if certain things are not achieved . For e.g Chelseas will have forecasted getting a lot further in the champions league the year than it looks like they will. This will be shown in their accounts next year as a concern , despite a billionaire owner .

There is many things which need to be done at the club for supporters to be convinced about the owners , however in the words of the accountant I have spoken to he said "this is one stick you can't use to best venkys with"

That is good enough for me and is consistent with the owners public statement that the club is debt free.

Having spoken to Derek Shaw on Friday too , he had no concerns about finance (yes club making a daily loss , but it would be under anyone at this moment in time ) gate receipts would not cover 2 players wages . The club will make funds available in January whilst more cash is being injected into other projects directly from the owners , which will be announced in the coming weeks .

Sorry for any typos , I have typed this on my I phone

[yoda]

_{Is that an echo Tomphil, or where you going to say something?}

[Blue n White Rover]

The main point that I picked up from the accounts that the bank loans are secured against the assets of VHL and not BRFC, so if the worst did happen and the bank decides to call the loan in, it would result in VHL assets being sold off (presuming they can't facilitate another bank loan and have no money of their own).

We are making losses and rely heavily upon player sales, like most other clubs. Reading the Going Concern note, it reads to me as though Venky's are willing to continue to pump the money in and so is the bank.

Biggest plus point today was the fact that our stands are finally looking a bit more filled with sponsors, which in turn means more revenue (although it is not substantial). Hopefully a shirt sponsor can be found very soon and inject some much needed revenue.

The club needs the fans and although Venky's have made some really damning mistakes, 13,000 turning up is a poor excuse. Some have fallen out of love with Rovers and possibly the game, but our club needs the fans, especially now, so it's time for the 'boycotters' to turn up.

[bluebruce]

The main point that I picked up from the accounts that the bank loans are secured against the assets of VHL and not BRFC, so if the worst did happen and the bank decides to call the loan in, it would result in VHL assets being sold off (presuming they can't facilitate another bank loan and have no money of their own).

Ok, but what ARE VHL's assets? Pretty sure their largest asset is some sort of football club in Blackburn...

[Blue n White Rover]

Ok, but what ARE VHL's assets? Pretty sure their largest asset is some sort of football club in Blackburn...

No. I believe it will be the assets within the accounts. So in simple terms, whatever they use to manufacture their products, e.g. Plant and Machinery, usually being the main assets. I suspect these to be of a substantial amount as VHL would rely heavily upon them for their business to be successful.

[yoda]

The main point that I picked up from the accounts that the bank loans are secured against the assets of VHL and not BRFC, so if the worst did happen and the bank decides to call the loan in, it would result in VHL assets being sold off (presuming they can't facilitate another bank loan and have no money of their own).

We are making losses and rely heavily upon player sales, like most other clubs. Reading the Going Concern note, it reads to me as though Venky's are willing to continue to pump the money in and so is the bank.

Biggest plus point today was the fact that our stands are finally looking a bit more filled with sponsors, which in turn means more revenue (although it is not substantial). Hopefully a shirt sponsor can be found very soon and inject some much needed revenue.

The club needs the fans and although Venky's have made some really damning mistakes, 13,000 turning up is a poor excuse. Some have fallen out of love with Rovers and possibly the game, but our club needs the fans, especially now, so it's time for the 'boycotters' to turn up.

Bit of a contradiction there!

VHL is the venkys hence the 12.5 million write off

[Blue n White Rover]

Bit of a contradiction there!

VHL is the venkys hence the 12.5 million write off

The first bit was to outline the consequences if the bank decided to call the loan in. The second part proves that it isn't the case. 4am, cut me some slack!