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CLUB STATEMENT : AGM & Annual Report : 23/11/17

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I'm not a shareholder, so all I have seen is the online statement, but that looks to me to be an open and honest summary of the inherited and current situations, and the aspirations for the future.  Well worth reading.   Communication doesn't win matches, but it surely wins hearts and minds.

Interesting: "The company has reported a loss of £422K for the year ended 31 May 2017. It is the inevitable consequence of relegation. The club had budgeted to finish 7th..."  So, with a brand new, untried manager, the previous regime had expected to match Yogi's last season, and finish 7th.  Optimistic - though of course that's with the benefit of hindsight. 

All in the past now, though. We seem to be in sensible hands.

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Surprised and disappointed that the previous regime factored a seventh place finish into the annual budget.

Yes, we enjoyed success in previous years but a club with our limited resources, particularly with a completely untried and novice manager, should never have assumed better than tenth place regarding anything better as a windfall bonus.

I assume that lessons have been learned and we won't make the same mistake again if and when we gain top league status again.

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Let's not get too caught up in all this new regime guff.

Muirfield Mills might want people to think they had no part in these past decisions but they had representatives on the board at the time and, as such, they are as responsible as anyone else.

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7 minutes ago, Buster said:

Let's not get too caught up in all this new regime guff.

Muirfield Mills might want people to think they had no part in these past decisions but they had representatives on the board at the time and, as such, they are as responsible as anyone else.

Maybe so but they have asked for a fresh start and, in my view, deserve the benefit of the doubt.

We have a club shop fit for purpose after more than a decade with a portacabin, we have better and more regular communication and we now seem to be getting our act together on the pitch for the first time in a long time.

A lot of work still to be done and still huge room for improvement but so far so good.

Edited by Kingsmills
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All I am saying is that you can't criticise what's gone before without acknowledging that Muirfield Mills, who are the current regime, played as much of a part in it as the rest of the board.

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The interesting thing in the statement from my perspective was the bit about last year's playing budget being the 3rd highest in the club's history.  I had understood from what Kenny had previously said that Foran had been given the same funding as Hughes had, minus the extra Hughes received on the back of the injury crisis.  If true, Graham's statement means that either Foran did not receive the same initial budget as Hughes did in his last year, or that Hughes' budget in his final year was cut from the year before.  Either way, this means that S_C's point above is even more pertinent because Foran was expected to match Hughes' league position with a reduced budget.

 

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5 hours ago, Kingsmills said:

Surprised and disappointed that the previous regime factored a seventh place finish into the annual budget.

Are you saying that we should have operated with a much smaller wage budget than we actually had?!

I would have said that basing it on 7th place was a sensible compromise of ambition and prudence. Take a 6 figure sum off Foran’s budget and we would have been condemned to a relegation battle even if he had turned out to be a good manager.

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3 hours ago, DoofersDad said:

The interesting thing in the statement from my perspective was the bit about last year's playing budget being the 3rd highest in the club's history.  I had understood from what Kenny had previously said that Foran had been given the same funding as Hughes had, minus the extra Hughes received on the back of the injury crisis.  If true, Graham's statement means that either Foran did not receive the same initial budget as Hughes did in his last year, or that Hughes' budget in his final year was cut from the year before.  Either way, this means that S_C's point above is even more pertinent because Foran was expected to match Hughes' league position with a reduced budget.

 

He does say "spending on footballing" and while first team wage costs will inevitably be by far the biggest component of that more global category, there may be some distinction on the go there. One important thought about the 2016-17 "footballing" budget is that the players' wages will presumably include very little by way of win bonuses so the wage component will presumably represent basic wages. I wonder if, whichever the two bigger years are, they represent seasons where there was much more success such as winning the cup, reaching the league cup final and finishing third in the SPL which required extra bonuses to be paid - BUT this also resulted in prize money being much greater to offset these costs?

So perhaps the relevant figure is the difference between wage costs and return from prize money - in which case I wonder if this has been the worst year ever... and hence the biggest deficit ever for a season in the SPL.

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Whilst we are still on track to be gifted the stands, the statement makes it appear likely that our landlord is hoping to develop the current car parks into something else. What’s that all about?

Edited by Yngwie

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5 hours ago, Buster said:

All I am saying is that you can't criticise what's gone before without acknowledging that Muirfield Mills, who are the current regime, played as much of a part in it as the rest of the board.

Over the last seven months, no fewer than seven directors have resigned from the Board which initially had six members but now, as indicated in the Chairman's statement, has a strength of three. Two of that current  three are MM representatives but that presence of two has only been the case since May. However, over the period April - now, there have been no fewer than ten different individuals on the Board. Of these, only three in total have a connection with Muirfield Mills - the current Chairman, who only became a director on 22nd May, nine days before the end of the financial year in question, Alan MacPhee whose appointment dates from January 2015 and Richard Smith who, in April, was the first of the seven to resign and had held office since February 2012. Richard, as I understand it, was not a direct member of the MM consortium but appeared to be their sole link with the Board until 2015.

So, although MM have clearly had a boardroom presence for some time, what I have described above doesn't strike me as an especially influential one - until the period after May, by which time the financial year in question had ended.

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18 minutes ago, Yngwie said:

Whilst we are still on track to be gifted the stands, the statement makes it appear likely that our landlord is hoping to develop the current car parks into something else. What’s that all about?

I think you have created an interface between the hammer and the blunt bit that doesn't go into the wood!

The statement implies that the proposal is to gift the buildings etc to the club while Tullochs retain the lease. This would presumably mean that the stadium fabric will be owned by the club but built on land which Tullochs will continue to have an option of leasing until 2093 and they will also retain the lease of the rest of the 12.88 acre site, which clearly includes the car parks.

Whilst not presuming to anticipate any action or attitude on Tulloch's part, this does create a theoretical situation where they could potentially divert use of the car parks for development of their own. This in turn would leave the club without car parking, which would have been a major condition of the original 1994 planning agreement.

There is a stark bottom line here going back almost two decades. By 2000, the club had built up a £2.3M debt and would very possibly... indeed probably.... have gone out of business but for the intervention of Tullochs who were the only game in town. Five years later they were playing SPL football, debt free, in an SPL compliant stadium in Inverness. Tullochs' various interventions played the overwhelming part in that massive transition so the reality is that people can complain as much as they like, but the FACT (which I state objectively) is that Inverness Caledonian Thistle benefited massively over several years from interventions by Tullochs and would probably not have survived, never mind enjoyed over a decade in the SPL, without them.

Edited by Charles Bannerman
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Correct me if I am wrong but wasn't ICT due to receive a big bonus from Europe only a few months ago. The talk online recently was that one of the wealthy twins had already received their big chunk(Rangers?)  and, If that has been paid out to all who were going to get it, doesn't that  mean that much of last Year's deficit has now been paid off..?

Just a bit puzzled on that front.

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One other point that I picked up on was the reference to the " leaseholder". Meaning there must be  a landlord and a lease from an owner,.

But who is the owner if the stands have been gifted (outright?) to ICT? And, in that scenario, who and what has been  leased to ICT.?

 

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24 minutes ago, Yngwie said:

Whilst we are still on track to be gifted the stands, the statement makes it appear likely that our landlord is hoping to develop the current car parks into something else. What’s that all about?

They started turning them into a car and mini-bus hire storage lots months ago.

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18th December isn't the greatest date for an AGM.  Lots of folk are involved in lots of events in the week before Christmas and I, for one have already shelled out for a Christmas "do" on that evening.  As with the CJT AGM, there is so little notice of the date that attendance will inevitably be affected.  The distribution of formal papers is required to be done within defined timetables but those organising these meetings obviously know the date a good bit before they actually issue the formal paperwork, so why not just communicate the date earlier so that people who may wish to attend can put it into their diaries?

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17 hours ago, Charles Bannerman said:

 seven directors have resigned from the Board .....ten different individuals on the Board. 

 

Apologies - I seem to have managed to include a double entry for Willie Finlayson from the Companies House list. That should therefore read six resignations and nine different individuals, but this doesn't alter the meaning of what I was saying.

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17 hours ago, Scarlet Pimple said:

One other point that I picked up on was the reference to the " leaseholder". Meaning there must be  a landlord and a lease from an owner,.

But who is the owner if the stands have been gifted (outright?) to ICT? And, in that scenario, who and what has been  leased to ICT.?

 

As far as I am aware the ground is owned by the council

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1 hour ago, caleyboy said:

As far as I am aware the ground is owned by the council

Correct. The Inverness Common Good Fund to be precise. In 1994, Inverness District Council, through the Fund, leased 12.88 acres of land at East Longman for 99 years to Caledonian Thistle FC at a rental of £12,500 per annum. In the early 2000s that lease, along with ownership of the stadium fabric, was passed to the ICT Charitable Trust in exchange for spiriting away a potentially fatal debt of around £2.3M. The Trust was, in effect, a vehicle for one of several interventions by Tullochs, to whom by a convoluted process, these assets then passed - hence the offer now from Tullochs to gift the fabric back to the club.

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1 hour ago, Charles Bannerman said:

Correct. The Inverness Common Good Fund to be precise. In 1994, Inverness District Council, through the Fund, leased 12.88 acres of land at East Longman for 99 years to Caledonian Thistle FC at a rental of £12,500 per annum. In the early 2000s that lease, along with ownership of the stadium fabric, was passed to the ICT Charitable Trust in exchange for spiriting away a potentially fatal debt of around £2.3M. The Trust was, in effect, a vehicle for one of several interventions by Tullochs, to whom by a convoluted process, these assets then passed - hence the offer now from Tullochs to gift the fabric back to the club.

Granted but the "fabric" has, in its current format, absolutely no value to anyone other than the football club. The car parks are however a completely different story. Nice bit of business Mr S.

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My tuppence worth...

Turnover was about £3.7m - they haven't given a figure but we know what the drop from last year is, and what the drop from the previous year was. That was our lowest turnover since 2013-14.

Budgeting for seventh isn't as crazy as it sounds. Firstly, there is a big leap between sixth and seventh in terms of prize money, income from post-split games etc (assuming one at home against Rangers or Celtic) compared to between seventh and tenth. Moreover, the nightmare scenario is relegation. Budgeting for seventh should get you a squad which at worse finishes tenth - in which case you run at a loss for the season, but its not a disaster by any means (Of course, we gave said budget to Richie Foran, which resulted in said nightmare scenario).

Our footballing budget was £2.7m, the third highest in club history (but I assume a little bit lower than in Yogi's last season). Whilst I daresay that includes coaches, we don't have too many of them. Given that 20 players on £1k a week would give you an annual bill of just over £1m, it begs the question - what sort of stupid wages were we paying our players - particularly some of the complete duds?! That said, an oft-recommended ratio of playing staff wages/turnover is about 60% so we should have been close to that mark.

The main worry is the prospect of being outwith the top flight beyond this year. Whilst the board seem to have got us sorted till the summer, obviously significant cuts will be required if we are still in the Championship next season (as is likely). That in turn will weaken the playing squad, and we are at risk of being stuck in a cycle where the longer we are out of the Premiership the harder it will be to get back.

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1 hour ago, hislopsoffsideagain said:

 Given that 20 players on £1k a week would give you an annual bill of just over £1m, it begs the question - what sort of stupid wages were we paying our players - particularly some of the complete duds?! 

I think that is the vital area of concern. Firstly, we must accept that there will be "football" costs other than first team wages, but wages are bound to have grabbed the lion's share of that £2.7M. You therefore do indeed have to wonder about "stupid wages". Furthermore, this third largest football budget ever has been spent in a season when performances were so poor that there would presumably have been very little paid by way of bonuses. This large sum will hence have been overwhelmingly for basic wages so you do have to wonder how excessive these were? I woyld also guess that the two bigger football expenditures will have been in seasons where there were big performance bonuses - and hence a quid pro quo to the club of team performance earnings. I wonder how last season compared with others for total basic wages? And for doing what?

My impression since returning to the SPL in 2010 under Butcher is that he was pretty good at squeezing extra cash out of the board for players - but justified that by making some superb signings and achieving generally good results with accompanying windfalls. Then enter Hughes who initially looks like a hero, largely on the strength of Terry's signings. I am guessing that he squeezed even more cash out of them, but when he started to have to rely on his own signings - very expensive ones, I suspect - the whole thing begins to unravel. The next step along the road - then appointing Foran -  is a further rung down the managerial ladder and he is entirely unable to do anything at all with a team increasingly peppered with over priced duds, to whom Foran also added. The result - a hugely expensive dysfunctional team which can no longer perform well enough to bring in the windfalls, nor even to remain in the Premiership, so the end product is relegation and a £422K loss.

That is merely my impression of what may have happened based on fairly regular observation.

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It’s easy to look back and learn the lessons.

The hard part is taking the lessons and moving forward in a sustainable way and I believe that the coherent statement from the board is a positive step indeed. We can all share opinions and feel closer to the club knowing more about the goings on, which can only help encourage fans back to their seats.  I’ve think there’s strong grounds for optimism here. 

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On ‎23‎/‎11‎/‎2017 at 11:54 PM, Scarlet Pimple said:

One other point that I picked up on was the reference to the " leaseholder". Meaning there must be  a landlord and a lease from an owner,.

But who is the owner if the stands have been gifted (outright?) to ICT? And, in that scenario, who and what has been  leased to ICT.?

 

The soil below belongs to the Inverness common good fund, a 99 year lease was given. The stands were built. The North/South stands were built by Tullochs and rented back to club. They are the assets (and players). The lease lies not with club anymore but some Tulloch control. Anyway see what happens Monday!

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