Accounts

[tm4tj]

Club Statement

The Board met earlier this week to approve the financial statement which was audited by accountants, A9 Consultancy.  It reports a loss before tax of £588,053.

Director Panos Thomas said:  “We are doing everything in our power to find new investment in the club.  We are actively involved in discussions with a number of interested parties who have the investment required to ensure a sustainable future for the club we all love.

[STFU]

Are we really trying the 'trust me I'm a doctor ' approach now?

[+snorbens_caleyman]

So that was up to 30 May last year.

Any guesses for the last 13 months?

[+old caley girl]

38 minutes ago, snorbens_caleyman said:

So that was up to 30 May last year.

Any guesses for the last 13 months?

We won't know till posted in 2025

[RiG]

Quote

 “We would like to thank everyone who played for us last season who has left the club.   We greatly appreciate their efforts and wish them well with their future careers.  We now focus wholly on the season ahead with our young squad and all we ask is that our loyal support get behind the team and give them the backing they need.”

Their efforts of course were so much appreciated that most never even got a call from the club regarding their contracts and / or future with the club.

This mob really do think the fans are stupid.

[+snorbens_caleyman]

13 minutes ago, old caley girl said:

We won't know till posted in 2025

That's why I said "guesses".

The 2023 cup final - remember? we were in it! - was on 3rd June, so presumably the proceeds from that will be included in our 2023-24 accounts, which we won't see for another 12 months.

And presumably those cup monies will mean that 2023-24 won't be as bad as 2022-23?  We've had financial setbacks in the past 12 months, but IIRC they are things which have not materialised, rather than real money actually leaving the club.

Still a dire situation, though, even if I'm correct.

[+old caley girl]

11 minutes ago, snorbens_caleyman said:

That's why I said "guesses".

The 2023 cup final - remember? we were in it! - was on 3rd June, so presumably the proceeds from that will be included in our 2023-24 accounts, which we won't see for another 12 months.

And presumably those cup monies will mean that 2023-24 won't be as bad as 2022-23?  We've had financial setbacks in the past 12 months, but IIRC they are things which have not materialised, rather than real money actually leaving the club.

Still a dire situation, though, even if I'm correct.

That's the issue isn't it? By the time posted the situation has changed so much 

[+DoofersDad]

The fact that the accounts have finally been published is good news.  Hopefully someone will correct me if I am wrong, but my assumption is that the delay in submitting the accounts will have been because the auditors needed to be be persuaded that there were legitimate reasons for the directors to prepare the accounts on a going concern basis.  It would appear that the accountants are satisfied that new investment is probably coming into the club sufficient to address the financial shortfalls.

As always, there is little detail in the accounts, but what is there, is not good.   A net loss of £588K is reported.  Following relegation, our income can be expected to be considerably less in the coming year and the operational costs will need to be cut by more than the reduction of income if the loss is to be reduced.  An operating loss is not necessarily a problem as long as there is a source of money to cover the loss.  This is where things start getting worrying and where questions need to be asked.

Under the heading of "current assets", there is a figure of over £1M against "Debtors".  In the previous year, this was just £172K.  So why the big increase?  Who owed us the cash and has it subsequently been paid?  I wonder if it is primarily the money we were expecting for the park and ride scheme associated with the hydro scheme project and which won't now be received?  If so, that will make our net assets position around £1M worse than the 2023 accounts show.

The accounts then show we owe over £3M to creditors.  Does this mainly relate to loans made to the club by Morrison and Munro?  If so, future investors will want to know how much if any, these 2 expect to be returned.  The charges are still in place at Companies House.

From my very amateur reading of the accounts, it looks as though there could be somewhere between £3 -4M required from new investors simply to get us to the point where we can start investing in the football side of things.  That is a big ask of any "investor".  Hopefully Morrison and Munro will write off the loans.  It could be argued that if they can afford to provide the cash as a loan, they can afford to give it.  Some might say that if they claim to have the best interests of the club at heart, they should certainly write the loans off as they must take much of the blame for the situation the club now finds itself in.

And just an observation that the accounts were signed off by Scott Young on behalf of the club.  Scott wasn't on the Board for any of the period to which the accounts pertain.  I wonder why one of the others who were on the Board during 2022/3 and who are responsible for getting the club into its current position, has not put their name to them?

So, whilst there is still serious cause for concern, the fact that the accounts have been signed off on a going concern basis is definitely good news.  Let's hope for more in the coming few days.

 

[highlandexile]

11 minutes ago, DoofersDad said:

 

Under the heading of "current assets", there is a figure of over £1M against "Debtors".  In the previous year, this was just £172K.  So why the big increase?  Who owed us the cash and has it subsequently been paid?  I wonder if it is primarily the money we were expecting for the park and ride scheme associated with the hydro scheme project and which won't now be received?  If so, that will make our net assets position around £1M worse than the 2023 accounts show.

The accounts then show we owe over £3M to creditors.  Does this mainly relate to loans made to the club by Morrison and Munro?  If so, future investors will want to know how much if any, these 2 expect to be returned.  The charges are still in place at Companies House.

 

It's always difficult to see the whole picture when there is no p&l accounts posted. But, I'd hazard a guess the debtors will be an accrual done to pull the cup money into that years accounts.  

It's also interesting to see that the appeal for the battery farm with the scottush government was also lodged today.  Maybe that's the way to clear the balance sheet of the directors loans?

 

[+DoofersDad]

20 minutes ago, highlandexile said:

It's always difficult to see the whole picture when there is no p&l accounts posted. But, I'd hazard a guess the debtors will be an accrual done to pull the cup money into that years accounts.  

It's also interesting to see that the appeal for the battery farm with the scottush government was also lodged today.  Maybe that's the way to clear the balance sheet of the directors loans?

 

Thanks.  Good points.  If that is an accrual related to the cup money, then it is money which has already been spent on getting rid of one management team and replacing it with a more expensive and worse one.  Accounts for 2023/4 are going to look even worse, although hopefully we will be in a better financial position by the time we see them.

Under what name was the appeal lodged?  If successful we have to hope that Morrison and Munro can find another company to build and operate the plant.  This could still bring in some significant money for the club, but relying on such speculative ventures is no basis on which to fund a football club.

 

[highlandexile]

16 minutes ago, DoofersDad said:

 

Under what name was the appeal lodged?  If successful we have to hope that Morrison and Munro can find another company to build and operate the plant.  This could still bring in some significant money for the club, but relying on such speculative ventures is no basis on which to fund a football club.

 

It's just been lodged today so the documents have not yet been uploaded.  But I'd assume the appeal would be made in the same name as the original application which was Intelegent Land.

[Yngwie]

The thing that surprises me about these accounts is that we made our pretty normal level of loss for a Championship season despite the very lucrative cup run (and to a much lesser extent, despite the income from renting out the stadium for concerts). 
The underlying trading performance must have been horrific, and I would imagine that the accounts for the season just ended will be a complete car crash, with a large reduction in revenues but not so much reduction in cost.

[STFU]

11 hours ago, DoofersDad said:

So, whilst there is still serious cause for concern, the fact that the accounts have been signed off on a going concern basis is definitely good news.  Let's hope for more in the coming few days.

Not entirely as you are reading it as the auditors stated that they have concerns that the business is a going concern

They will have signed them off because directors have said there is a plan to deal with it.  Their comments do not give any assurances that the plan is viable and they will likely have seen no supporting evidence for it.

The only thing stopping us from slipping into insolvency territory for the period is asset value and (potentially) the accrual of the cup money into those accounts.  As with the move to delay the accounts this is legal but should be raising massive alarm bells.

As with many things the last few years all is not as it is presented.

*The above is following a discussion with a friend more versed in these things than me.

[Yngwie]

1 hour ago, STFU said:

Not entirely as you are reading it as the auditors stated that they have concerns that the business is a going concern

They will have signed them off because directors have said there is a plan to deal with it.  Their comments do not give any assurances that the plan is viable and they will likely have seen no supporting evidence for it

That’s not quite how it works. Forecasts are inherently subjective and nothing is ever guaranteed, but auditors have to review the financial projections and question/challenge the assumptions therein. They can face much worse than reputational damage if they wrongly sign off on going concern.

Nothing is certain, but there must at least be a credible plan for survival.

Edited July 4 by Yngwie

[CELTIC1CALEY3]

Accruals involve certainty. Therefore the battery farm and car park issues would not have guaranteed income in the 12 months after closure of the accounts.  If you cannot see the chicken you cannot count it.

The Scottish Cup Final was on 3rd June 2023, but in the lead up to it there was certainty on prize money and TV income. The Accounts closed on 30 May, 2023 (later changed by a day). 

[STFU]

51 minutes ago, Yngwie said:

That’s not quite how it works. Forecasts are inherently subjective and nothing is ever guaranteed, but auditors have to review the financial projections and question/challenge the assumptions therein. They can face much worse than reputational damage if they wrongly sign off on going concern.

Nothing is certain, but there must at least be a credible plan for survival.

It was explained to me that the auditors have merely evaluated the use of going concern status declared by directors as appropriate.  It does not mean they have done any investigation into the likelihood or reality of what is said.

If directors had put in there that they are flying to vegas to stick everything on number 13 in roulette then that would not be appropriate (even if it does feel like less of a gamble right now) and the accounts would not pass as a going concern.

Provided the claim is plausible then no further responsibility falls on the auditors on this matter.

[+DoofersDad]

9 hours ago, STFU said:

It was explained to me that the auditors have merely evaluated the use of going concern status declared by directors as appropriate.  It does not mean they have done any investigation into the likelihood or reality of what is said.

If directors had put in there that they are flying to vegas to stick everything on number 13 in roulette then that would not be appropriate (even if it does feel like less of a gamble right now) and the accounts would not pass as a going concern.

Provided the claim is plausible then no further responsibility falls on the auditors on this matter.

I'm not convinced.  If what you have been told is true, then why the delay?  The figures pertaining to the the year to May 23 will have been known for certain months ago.  The uncertainty lies in how the club proposed to address the issues the figures indicate so that the business can continue as a going concern.  Earlier in the year the club could easily have told the auditors that over £3M was likely from the BESS and a further £1M from the Park and Ride.  Clearly it was eminently plausible that both of those schemes would generate funds, so why couldn't the auditors not sign the accounts of then?

Yngwie's argument sounds much more likely to me.  The auditors might well have thought it likely that both projects would generate money, but they will also have  been aware that they might not.  Without a more definite assurance and a lack of any information about a more certain stream of funding, they could not sign the accounts off on a going concern basis.  The fact that they have now signed suggests to me that they are now assured that significant funding is coming in from another source (and presumably that operating costs are being significantly reduced).

[CELTIC1CALEY3]

Remember that Morrison resigned on the 30th May 2024, one day before the accounts were due to be signed off. What did he say or do in those final hours? 

[+Fraz]

23 minutes ago, CELTIC1CALEY3 said:

Remember that Morrison resigned on the 30th May 2024, one day before the accounts were due to be signed off. What did he say or do in those final hours? 

"There is… another… Skywalker."

[STFU]

1 hour ago, DoofersDad said:

I'm not convinced.  If what you have been told is true, then why the delay?  The figures pertaining to the the year to May 23 will have been known for certain months ago.  The uncertainty lies in how the club proposed to address the issues the figures indicate so that the business can continue as a going concern.  Earlier in the year the club could easily have told the auditors that over £3M was likely from the BESS and a further £1M from the Park and Ride.  Clearly it was eminently plausible that both of those schemes would generate funds, so why couldn't the auditors not sign the accounts of then?

Yngwie's argument sounds much more likely to me.  The auditors might well have thought it likely that both projects would generate money, but they will also have  been aware that they might not.  Without a more definite assurance and a lack of any information about a more certain stream of funding, they could not sign the accounts off on a going concern basis.  The fact that they have now signed suggests to me that they are now assured that significant funding is coming in from another source (and presumably that operating costs are being significantly reduced).

Confirmation bias.  You're going on the assumption that 'going concern' is the only thing that could delay the accounts and looking for reason to support that.

There are a whole host of reasons and a quick online search suggests:

Financial Difficulties: The company may be experiencing financial trouble, such as cash flow problems, significant debts, or potential insolvency. Delaying accounts can sometimes be a way to buy time while trying to resolve these issues.

Accounting Irregularities: There could be discrepancies or irregularities in the accounts that the company is trying to resolve before filing. This could include errors, fraud, or attempts to manipulate financial statements.

Audit Problems: There could be disagreements or issues with the auditors that need to be resolved before the accounts can be finalised and submitted.

Compliance Issues: The company might be facing regulatory or compliance issues that need to be addressed before the accounts can be filed. This could include tax disputes or other legal matters.

Strategic Reasons: In some cases, companies might delay filing accounts for strategic reasons, such as avoiding revealing financial performance to stakeholders during a sensitive period.

Given the move to deliberately extend the filing period we can probably rule out administrative oversight.