Reading FC ltd company announcement

[Stranded]

BE very interesting to see how much of the increase in turnover was due to the good season - must have made a fair bit from the televising of the 3 play off games, as well as the full house at the Madejski and Wembley

Looked like a much improved year on the surface of things.

Did notice in the notes at the end, the cost of recruitment (15.5m) in the summer wasn't included. Think next years accounts may well end up being pretty ugly

Guessing the make up of that 15.5 went something like:

Dadi 2
Bacuna 2
Aluko 5
Mannone 2
Barrow 2.5
Edwards 1
Clement 1

Assuming Ilori is included in the accounts.

The 15.5m is transfers upto 30th June 2017 isn't it, so is money we spent on the likes of Moore, Ilori, Popa, Blackett, Harriott etc

Would also include staged payments on earlier transfers too, so could also include costs associated to transfers of Kermorgant, Bond, Rakkels or deals older than those.

It's the other way around - the 15.5mill is money spent since 1/7/2017. But, yes good point that it would include any staged payments for Ilori, Moore, Blackett etc

Fair enough. Why would they be quoted in accounts ending 30th June though? The value of transfers makes sense of course.

[muirinho]

Fair enough. Why would they be quoted in accounts ending 30th June though? The value of transfers makes sense of course.

It's an accounting thing, where big expenditure that has already happened before the accounts were issued, but is not in the period of the accounts, gets mentioned. So (a) people know that it's coming - or, (b) if they already knew about it, know that it isn't included in that year, but will be in the next year.

It's like when my son tells me he isn't overdrawn - I'll want to know - is that including or excluding the student accomodation fee that I know is due in March. i.e., is he ok, or is going to come looking for a loan in five minutes.

Sadly, it tends to be the latter.

[Stranded]

Fair enough. Why would they be quoted in accounts ending 30th June though? The value of transfers makes sense of course.

It's an accounting thing, where big expenditure that has already happened before the accounts were issued, but is not in the period of the accounts, gets mentioned. So (a) people know that it's coming - or, (b) if they already knew about it, know that it isn't included in that year, but will be in the next year.

It's like when my son tells me he isn't overdrawn - I'll want to know - is that including or excluding the student accomodation fee that I know is due in March. i.e., is he ok, or is going to come looking for a loan in five minutes.

Sadly, it tends to be the latter.

Makes sense. Thanks for the explanation.

[JR]

Looks like the club made a profit last year?

Yes, looks like there was a huge increase in matchday revenue - I'm guessing that will drop quite a bit this year!

And a big increase in commercial revenue (sponsorship and the like). If this is Ron Gourlay's doing, then I can see why they brought him in.

Not quite as positive as it may seem on the face of it - the company is only profitable because of the £9.2m loan write-off in the period. Without that there would have been a loss of £4.6m.

The accounts also do not have a clean audit opinion - there is an emphasis of matter in the audit opinion due to the material uncertainty of the company being a going concern.

I imagine it is not that unusual to see within football club accounts - it first appeared in the Reading accounts in the year ended Jun 16. It occurs because the club is so reliant on funding from its owners - without that continuing support it wouldn’t be a going concern.

[muirinho]

Looks like the club made a profit last year?

Yes, looks like there was a huge increase in matchday revenue - I'm guessing that will drop quite a bit this year!

And a big increase in commercial revenue (sponsorship and the like). If this is Ron Gourlay's doing, then I can see why they brought him in.

Not quite as positive as it may seem on the face of it - the company is only profitable because of the £9.2m loan write-off in the period. Without that there would have been a loss of £4.6m.

The accounts also do not have a clean audit opinion - there is an emphasis of matter in the audit opinion due to the material uncertainty of the company being a going concern.

I imagine it is not that unusual to see within football club accounts - it first appeared in the Reading accounts in the year ended Jun 16. It occurs because the club is so reliant on funding from its owners - without that continuing support it wouldn’t be a going concern.

That's interesting about the loan write off. who was the loan from? Thais?

Yes the "going concern" thing is standard for any club that is kept afloat by its owners. We are not a profitable club, and no hope of being profitable unless we get to the PL. Or head to League 2, close the academy, sell the ground and move to Adams Park or similar.

[Snowflake Royal]

Is the way transfer fees are apparently accounted for across the length of the contract taken into account in that £15.5m?

Could some of it essentially be money we've long since spent that is factored in for this year of those player's long contract?


Great the turnover went up so dramatically. What was the deal with wages in terms of % of turnover and amount compared to the previous season... any sign we'd cut back at all?

[The Real Sandhurst Royal]

Interesting Key numbers:

http://www.readingchronicle.co.uk/sport/16080812.Reading_FC__Club_s_debt_tumbles_by_almost___20m_according_to_latest_financial_figures/

[Hound]

Yes, looks like there was a huge increase in matchday revenue - I'm guessing that will drop quite a bit this year!

And a big increase in commercial revenue (sponsorship and the like). If this is Ron Gourlay's doing, then I can see why they brought him in.

Not quite as positive as it may seem on the face of it - the company is only profitable because of the £9.2m loan write-off in the period. Without that there would have been a loss of £4.6m.

The accounts also do not have a clean audit opinion - there is an emphasis of matter in the audit opinion due to the material uncertainty of the company being a going concern.

I imagine it is not that unusual to see within football club accounts - it first appeared in the Reading accounts in the year ended Jun 16. It occurs because the club is so reliant on funding from its owners - without that continuing support it wouldn’t be a going concern.

That's interesting about the loan write off. who was the loan from? Thais?

Yes the "going concern" thing is standard for any club that is kept afloat by its owners. We are not a profitable club, and no hope of being profitable unless we get to the PL. Or head to League 2, close the academy, sell the ground and move to Adams Park or similar.

I'm not completely sure thats true. We've a massive squad - if you sold off the high earners, and instead invested in the academy/young players such as Evans, I could see us being profitable. Even if it involved dropping down a division. The academy continues to produce players who seem to be at League 1/2 level, so would be a mistake to close it.

Problem is we are so tied in now to long high paying contracts, it'd be a struggle to do that

[Snowflake Royal]

I wish we'd try.

[John Smith]

I'm not completely sure thats true. We've a massive squad - if you sold off the high earners, and instead invested in the academy/young players such as Evans, I could see us being profitable. Even if it involved dropping down a division. The academy continues to produce players who seem to be at League 1/2 level, so would be a mistake to close it.

Problem is we are so tied in now to long high paying contracts, it'd be a struggle to do that

The only thing we should be doing with Evans is finding a suitable club to sell him to. Most likely to be in the Scottish 2nd and 3rd tiers

[Snowflake Royal]

I'm not completely sure thats true. We've a massive squad - if you sold off the high earners, and instead invested in the academy/young players such as Evans, I could see us being profitable. Even if it involved dropping down a division. The academy continues to produce players who seem to be at League 1/2 level, so would be a mistake to close it.

Problem is we are so tied in now to long high paying contracts, it'd be a struggle to do that

The only thing we should be doing with Evans is finding a suitable club to sell him to. Most likely to be in the Scottish 2nd and 3rd tiers

What is it that Evans has done to make you hate him so much? He's barely played this season and the entire squad have been shit.

[Sutekh]

I'm not completely sure thats true. We've a massive squad - if you sold off the high earners, and instead invested in the academy/young players such as Evans, I could see us being profitable. Even if it involved dropping down a division. The academy continues to produce players who seem to be at League 1/2 level, so would be a mistake to close it.

Problem is we are so tied in now to long high paying contracts, it'd be a struggle to do that

The only thing we should be doing with Evans is finding a suitable club to sell him to. Most likely to be in the Scottish 2nd and 3rd tiers

What is it that Evans has done to make you hate him so much? He's barely played this season and the entire squad have been shit.

Apart from Bod, Kelly, Moore and Barrow, no 2nd/3rd tier Scottish club would want to take a risk with any of them.

[Winston Biscuit]

£28M of shares issued
https://twitter.com/KieranMaguire/status/1372951714924466179?s=19

[Nameless]

£28M of shares issued
https://twitter.com/KieranMaguire/status/1372951714924466179?s=19

NOmdoubt this sort of thing has been discussed and explained before but am I right that this will be converting debt owed to the owner into shares so massively reducing what we (in theory) owe
Presumably it won’t be classed as income on the accounts and won’t directly affect our FFP position ? More of a housekeeping exercise ?
Or does it represent a new cash injection ?

[Elm Park Kid]

£28M of shares issued
https://twitter.com/KieranMaguire/status/1372951714924466179?s=19

NOmdoubt this sort of thing has been discussed and explained before but am I right that this will be converting debt owed to the owner into shares so massively reducing what we (in theory) owe
Presumably it won’t be classed as income on the accounts and won’t directly affect our FFP position ? More of a housekeeping exercise ?
Or does it represent a new cash injection ?

Correct. It's just an accounting practice used by the owners to manage tax/liabilities etc. The only way it will give us more money to spend is if it reduces interest payments on loans.

Remember that when a club is privately owned that it's total debt isn't that important. Not even really whether it's making ongoing losses, because so much of the income/expenditure is dependent on how the owners have set up the books.

[TheLawnMowerMan]

RFC invoiced Beijing Renhe F.C. £3m for the loan of a player (Sone Aluko) in 2018/19.
It looks like a one-off loan fee as there was nothing in the following year and his loan spanned both financial periods.

[Brogue]

RFC invoiced Beijing Renhe F.C. £3m for the loan of a player (Sone Aluko) in 2018/19.
It looks like a one-off loan fee as there was nothing in the following year and his loan spanned both financial periods.

is this not dodgy? could we get in trouble for that?

[TheLawnMowerMan]

RFC invoiced Beijing Renhe F.C. £3m for the loan of a player (Sone Aluko) in 2018/19.
It looks like a one-off loan fee as there was nothing in the following year and his loan spanned both financial periods.

is this not dodgy? could we get in trouble for that?

I think that this is fairly standard, but the amount is interesting.

[Lower West]

RFC invoiced Beijing Renhe F.C. £3m for the loan of a player (Sone Aluko) in 2018/19.
It looks like a one-off loan fee as there was nothing in the following year and his loan spanned both financial periods.

Probably didn't even cover the full cost of his wages.

[Snowflake Royal]

RFC invoiced Beijing Renhe F.C. £3m for the loan of a player (Sone Aluko) in 2018/19.
It looks like a one-off loan fee as there was nothing in the following year and his loan spanned both financial periods.

Probably didn't even cover the full cost of his wages.

That would mean he was on £60k a week. And that Renhe weren't paying any of his wages separate to the fee