Chairmans Statement
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Dear Shareholder The press speculation and interest in our operations as a football club is relentless so, I thought it would be appropriate to write to you explaining where we are in terms of restructuring the Company, its Balance sheet and its operations.
In terms of the capital reconstruction, we now have outline terms and conditions from the Bank of Scotland to enable us to do this.
As outlined in our document "The Road to Premier League Football" issued to you earlier in the year, the proposal is basically the same and includes -
The formation of a new Trust called the Inverness Caledonian Thistle Trust Ltd. This is a company limited by guarantee and the terms of the Trust are as outlined in our document.
The stadium is transferred to a new property company, 75% owned by the Trust in as fiscally expedient a manner as possible and at a value which - a) removes the debt from the football club; b) gives us cash breathing space; c) lets us build a new enclosure.
The football operation then rents back the stadium on terms to be agreed but substantially less than the interest costs.
The terms of the sub-lease will mirror the terms of the existing head lease with Highland Council.
We obviously need SFL and SFA agreement to this procedure and the acquiescence of the grant authorities to avoid any grant claw back on the original grants tabled to enable the stadium to be completed.
At the same time, we are working diligently to secure a structure which has no VAT, stamp duty or tax implications of any significant nature.
One of the major conditions precedent in the offer from the Bank of Scotland is that we raise share capital of £600,000 within the Trust's Property Company and we are endeavouring to secure this from major shareholders given the risk profile attaching to this.
This £600,000 will represent 24.9% of the issued capital of the subsidiary of the Trust called Inverness Caledonian Thistle Properties Ltd who will, in turn, own the stadium on behalf of the Trust. The residual 75.1% of the share capital will be owned by the Trust.
The objective is that this company, ie. Inverness Caledonian Thistle Properties Ltd undertakes further development at the stadium with, hopefully, a deal to be announced shortly and, when the time comes for a major stand to be constructed, given our progression through the football leagues, we have a vehicle within the camp to do this.
The only stumbling block therefore is the £600,000, but we are in the process of raising this.
At the same time, we are launching a share issue within the existing Inverness Thistle & Caledonian Thistle FC plc company, ie., the company in which you currently own shares and funds received here will be used to bolster the team, and the associated income generating activity is so necessary to help balance the books.
Our Sports Bar in Church Street is now well on its way to creation with planning and licence now secured and building warrant now requested.
We hope to be operational here by April/May.
The refit of the premises is to be carried out via support from the brewers so we should not have a drain on our resources here.
The social clubs are in the process of being rationalised through the Greig Street operation and in addition the buying power identified via the Sports Bar is being used to good effect through the social clubs.
We are using an external consultant to help us set this operation up.
Our operators at the stadium in terms of catering, conferences, etc. have been represented this season in a new mode which has been received most positively by the public and supporters alike. Having taken the bull by the horns earlier this year and improved the position, we will not rest there and, for next season, another theme will be introduced, all in pursuit of providing what the customer is looking for in terms of value for money.
Servery areas are currently receiving strategic evaluation, as is a pub within the curtilage of the stadium at the Longman with the slant on match day.
You will no doubt have read the speculation in the press and on the internet re Catriona Bissett, our Chief Executive but, for avoidance of doubt, we knew when we employed Catriona earlier in the year that she would have a change of career direction if the premises she had secured in Inverness obtained planning consent for a restaurant.
Catriona happily has secured a consent, but she is not abandoning the ship as some sources have suggested, more moving on to a part-time consultancy role.
At the same time, we were bolstering our backroom teams across the spectrum, including the management committee and valuable additions should be signalled shortly.
Catriona staying as a Consultant with us is a positive move both in terms of cost control and maintaining the standards which have been set over the past 9 months.
The transformation of the hospitality vista at the stadium is there for all to see and as signalled, we hope to build on this.
You have read it here first, for a change, in that John Sutherland is retiring as General Manager but in line with Catriona, will also stay on as a part-time Health & Safety Consultant to us on match days. This then leaves Gary and David to run the business under the control of the Board and/or Catriona.
We are also evaluating, with others, the question of a Highland Football Academy to help with the training and honing of our youngsters who will be the players of tomorrow with an announcement to be made here shortly.
Last, but not least, our team has, despite a poor start, moved to its highest place within the League system since its inception and move from the Highland League, a testament to Graeme Bennett and Pele Paterson as well as all the players.
In common with many other clubs within the game we are striving to make ends meet in terms of our income and expenditure curves, and whilst we have strived to ensure that we maintain momentum within the league, we are also looking at every angle to preserve football at as high a level as practicable in our current league.
We are, I repeat, at the highest level in the league system, we are not far away from the top 3 and as we move forward, who knows!
Meantime, I hope the above commentary gives you a flavour of, "where we are at", and if the final parts of the restructuring can be put in place by then, you can expect documentation on the plc share issue pre Xmas.
At the risk of repeating myself, with the support of certain major shareholders, we have an opportunity of removing our debt and leaving ourselves modestly cash positive. Additionally, we remove the burden of the past once and for all and move the stadium into a mode which sees it held in Trust, the remaining 94 years of the current lease, with the material benefit being the removal from the equation of the monumental interest charge which our financials simply do not digest (for avoidance of doubt, the footballing operation keeps the revenues from all activities associated with the stadium such as boards, gates, hospitality, etc.)
What a way for Inverness Caledonian Thistle to start the new millennium and hopefully you can see your way in this millennium year of supporting football via subscribing to the share issue.
Could I wish you and your friends and family, a merry Xmas and a prosperous New Year.
David F Sutherland
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Scotty in News 2000-01 ·
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