After Celtic’s reversal in Astana I pinned the decision to allow Kelvin Wilson to leave after the Elfsborg tie as critical. It left us playing an unaccustomed central defensive partnership against Shakhter while generating only £2.5m.
Before Saturday’s game with Dundee United Neil Lennon suggested the player and his agent had been “naughty”, which might explain things.
It is not unknown for players to cite that they are “not in the right frame of mind” to compete for the club which pays their wages while there is an alternative deal on the table. This tactic is a certified banker for the player, who does not need to fail a fitness test, he just needs to look a bit down in the dumps. It is a shocking state of affairs which can cost their employers dearly.
I’m absolutely delighted to see the emergence of some interest in Celtic’s financial position over the last week. The club have long term loan agreements, an overdraft facility, and, at any point in time, cash on deposit. We have preference shares which, as long as the club attains certain financial covenants, will attract a dividend. At any point in time we also money owe trade creditors, utility companies, other football clubs and HMRC, but as you know, for 126 years Celtic have always paid their bills.
Our NET debt position at on 30 June 2012 was £2.77m. Since then we have had an excellent financial and footballing year. In 2005 UK accounting rules changed, re-classifying some equity categories and debt. In their 2006 financial statement, then chairman, Brian Quinn wrote:
“Under FRS 25 the group’s Preference Shares and Convertible Preferred Ordinary Shares, previously defined as equity, were reclassified as a combination of debt and equity; and non-equity dividends were in essence re-classified as interest. As a result, net assets were £3.8m lower, net debt £4.7m higher and interest charges £771,000 higher than would have been reported prior to the implementation of FRS 25.”
This was “hidden” away on page one of the accounts. Further details were published at appropriate places throughout the accounts. A video presentation was also given to shareholders and the media to explain the situation further.
Perhaps the word “transparency” should be used instead of “hidden” by some.
For further reading on FRS 25 see page 5 of this report.
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gebhoy
From the last article, what do you think Celtic should say or do with regard to the hun/sevco situation?
You are “shooting from the hip” at shareholders, yet you admit not knowing what preference shares are.
Think before you type.
Do you honestly believe that our board is trying to defraud the support? You are confusing our board with another club.
Paul67
A simple enough answer but it begs a few more questions from this simpleton.
If, as you said to gebhoy, the share dividend “is an alternative to loan finance.”, is it a good alternative?
Do we pay out (lose) more money via payouts to preference shareholders than we would through taking a loan facility, especially at the Co-op’s seemingly attractive low rates? If so, can we reduce the ratio of preference shares or negotiate the covenants in any way to reduce payouts?
Apologies to the rest of CQN if you know the answer to these questions already.
I got dividends on my shares years ago but have had nothing for years now – should I be getting something ?
Steinreignedsupreme
14:20 on
2 September, 2013
Paul 67 –
Celtic are rubbish at hiding things.
You are right there.I still cant see Hoopers replacement.
If Pukki can get the goals,then I am delighted with the players brought in.Reading up on Biton,I think we have a star here.Van Diyk looks great.Derk has great pace.
Balde,we have to wait and see.Again,it all depends on Pukki.
Can we take players on loan today?.
I don’t know anybody that wants them back. I think most people would like a strong club to create a rivalry and competitive league. It doesn’t have to be The Rangers or some facsimile of them. I’d be quite happy for a decades long rivalry to develop with Hibs.
PAUL67
I doubt that many posters believe out board are running the business side of the operation very well indeed.
There are though many areas of contention elsewhere.
Fans as customers,perceived victimisation of certain sections of the support,transfer policy,etc.
The board really need to address these concerns,IMO,as failure to do so will harden attitudes.
I believe we get so many things right-believe it or not-but poor communication and lack of clarification will always raise the hackles of a support who have had a lifetime of reasons to be suspicious.
It’s their shout.
Or ours. And ours will be louder if so required.
STFB @ 14;23,
DD does get paid a Dividend on his preference shares – quite alot of money actually.
But it’s not stealing.
Hail Hail
Turkeybhoy
14:33 on
2 September, 2013
We can’t take players on loan today. We can only sign free agents, if they signed today they would be eligible for CL if they signed after today we could only use them on domestic games.
Interesting comments re the boards’ attitude towards Sevco and their likely return to the top flight.
Personally, I never want to see a Rangers franchise team at Celtic Park ever again, but I fear it is an one inability, even should the current franchise holders go belly-up.
The really important thing for me is that whatever ersatz Rangers ends up in the top league, by that time this same-club nonsense will have been knocked on the head.
I’ll never attend a game against a Rangers franchise side until that point is hammered home by the governing bodies in no uncertain terms.
No surprise ! .
Palermo’s owner [ a man fond of hiring and firing Managers ] has told Gattuso —–
” After watching that [ Palermo 1 —–Empoli 2 ] I didn’t sleep . You need to do better , much better “.
Palermo fans have taken to booing Lafferty . He lasted 30 minutes before being substituted
Nir Biton reminds me of Sergi Busquets of Barca.
If he turns out half as good as him I’m quite sure we will all be delighted.
HH!!
No matter what we do some people won’t be happy.
Even if we delivered the CL itself, some would still say “aye, and what about the dividend on preference shares?”
BOBBY MURDOCH’S CURLED-UP WINKLEPICKERS forza Oscar and Mackenzie
14:13 on
2 September, 2013
Best regards to
WEEFRATHETIM
TALLYBHOY
STARRY PLOUGH
ROBINBHOY
PETEC
and their friends or relatives who are in poor health.
Also to everyone else who has similar problems either personally or with close family.
……………
BMCUW
Excellent. I have added PETEC to the list as the last I heard his Mum was poorly. Hope you don’t mind.
This should be bumped on for the rest of the day with names added.
HH
P67
thanks
Ooooops
My 1435 post should have started
I doubt that many posters believe our board are NOT running the business side of the operation very well indeed.
Kinda screwed up my whole argument just by missing out a wee word.
Muppetry…..
Paul67,
Got it, thought you might have fallen into the newco fans trap about the ’34m-36m in debt’.
In the accounts it shows we have a ‘loan and overdraft facility of 34m or 36m’
Posters asking about paying out a dividend, we pay out about 500k each year to preference share holders, in a year we make the CL we should be paying out 6% on these shares and the years we don’t make the CL it’s 3%, the board has paid out a standard 4% each year. (even the years we make the CL)
BARCABHOY,
regards the SFA.We were informed of this months ago.Why did we not say something then.
Its no use bumping our gums now.We were always going to be the team most affected,so forget about anyone else saying something.Its a ridiculous decision,and we are as culpable in it as the SFA.Stupidity.
If The Rangers do end up back in the top league we should knock that giving them 7500 seats on the head. Who cares if we get a reduced allocation for Ibrox. Just give them what we’re required to by the rules.
Turkeybhoy 14:33 on 2 September, 2013
I posted the other day – a mate of mine is a Schalke supporter and I emailed him when I knew the deal was happening.
He said Pukki was very popular among the Schalke fans and highly-rated. They have spent more money on other players, and our new Bhoy fell down the pecking order.
But he described Pukki as a goal-scoring midfielder, rather than striker.
I don’t know anything about the guy, but I’ll do my usual and make judgement on him after about three months when he should have settled.
Although some of them, Hooper included, settle quicker – hopefully he’ll hit the ground running.
Chairbhoy/ Paul 67
I was not serious about the “stealing” accusation. However, since we are told that it is better to be run by a benevolent prudent major shareholder than by a bank, I am asking directly how much does DD take out per year and how much would the Co-Op Bank take from us if we took our loans and loan guarantee insurance from them rather than preference shareholders?
Are we inevitably doomed to pay out to preference shareholders but not ordinary shareholders and are our ratios of preference/ordinary fixed and inevitable?
RALPH
I left PETEC out of that list as I couldn’t remember how much he had said on the blog,and how much by mail.
You are right,of course.
Sorry,Pete-not intentional.
Paul (or any other account types)
we apparently owe around 36 million to the cooperative, is that correct?
if so, a certain amount of that sum will be due to be repaid on a certain date.
from an accountancy point of view ie as per our recent or upcoming accounts
will our books show that we have 36 million in the debt column?
if for example, only 5 million was due to be paid now, would our books show that we had 5 million in the debt column?
one more question, or maybe two
when did we borrow thwe cash from the coop bank?
what was it used for?
Barcabhoy / Paul,
I havent got a clue about preference shares or optional shares or what and when or how they attract dividend, but what sticks in my craw is when i hand over £84 of my hard earned cash for UCL tickets, or £450 for season tickets, or pay my celtic pools every week i want that to stay in the club, not to be paid out as a dividend.
I am sorry I do not know as much as you two regarding company shares, hence i asked somebody to explain it.
It must be great to be perfect eh?
gebhoy
Kayal33 14:38
We can’t take players on loan today. We can only sign free agents, if they signed today they would be eligible for CL if they signed after today we could only use them on domestic games.
Maybe Sandy Bryson’s Sevco calendar is stuck on August because it’s Lee McCulloch…..?
RWE
Had not read about Petec’s mum being unwell. Thank you for highlighting
Petec, thoughts and prayers for your mum
KTF
How much more would you pay for Wotsits that didn’t leave the evidence behind?
I just want to put on record that I do not want any re-incarnation of the team formerly known as rangers playing at Celtic Park.
They are a rotten disease of a club, a stain on Scotland.
Their latest stunt with the memory of the soldier killed by the phsycotics on a London street is a new low.
What exactly was the point in that?
A pub even sponsored the event, how devoid of class, dignity and respect for the dead boy is that?
WGS-Tamas fae West Brom was a guy we were in for last week i heard.
TAMRABAM
As someone pointed out on here,having access to a £36m facility only puts you in debt by that amount if you use it.
Like having a £10k facility on yer credit card,but with zero balance,it is there if required.
If not required,zero balance equals zero debt.
I’m Neil Lennon (tamrabam)
14:46 on
2 September, 2013
We don’t owe them £36M. We never owed them £36M.
As of the last accounts (ie before all the money rolled in)
We have around £34M available in loans and overdrafts, of which we have around £22M still available ie we owe £12M.
However there’s about £9M in the bank as cash (or equivalents) meaning we have net debt of circa £3M.
£3M debt. (before last seasons CL and the sale of the spine).
gebhoy 14:46 on 2 September, 2013
Never mind. That Barcabhoy and Paul are just teacher’s pets with all of that financial malarkey.
You come with me the the progress class. It a better laugh in there – we throw paper stones at each other and everything.
SFTB
Back in the day, when Fergus was going about the business of raising the necessary cash to rebuild the club from the bottom up, the term “White Light” financing was de rigueur. Just as white light is made up of assorted colours, so it’s analogy in business finance terms equally comprised assorted ‘colours’ of cash brought together in an overall financing package.
The principle colours are bank debt (borrowings), equity (ordinary shares) and debenture stock (pref shares).
Fergus offered equity and debenture stock in a ‘package’ to investors to fund the rebuilding of the stadium, and additionally negotiated an overdraft facility with the Co-op to fund short term cash flow. Anyone who bought in with Fergus got a ratio of 10 ords to one pref in return for their cash.
The debenture stock offered by Fergus pays an annual ‘dividend’ of 6% to the holders in perpetuity – not a bad old offer these days btw, but a modest one back then when interest rates were considerably greater.
Fast forward to 2013
We remain obliged to pay the dividend on the Prefs Fergus issued.
There is a scrip scheme for those who prefer to swap their pref dividend (6%) for ordinary shares.
We have an overdraft facility and a term loan with Co-op that we don’t need and will not use because we have now a mountain of cash that we don’t know what to do with.
Hope that helps.
TBB
It would seem that Southampton had a 25% sell-on clause on Gareth Bale but cashed it in for 3 million pounds a couple of years back due to their financial difficulties, anyone else heard anything on that.
At least those financial half wits that run our club have not taken us down that road yet.
Sftb:
Investment by shareholders is one of the reasons we get a credit line at the bank. Could dd get a better return in a different business? You bet your bottom dollar.
weeminger
14:35 on 2 September, 2013
I would be quite happy with that scenario. As for the seats allocation the less seats we give them if they do come back, the less we have to repair, makes sense to me.
On a personal level, I hope we have seen he back of them for good!
HH
gsu
Baesman-seemingly Ramsdens Cup Final will be at CP,if Sevco get there.I think Hampden getting tarted up for Commonwealth Games.
So preference shares attract fixed dividends, well who owns the preference shares and what is the fixed dividends %, or is it a secret?
So can it be explained in plain English who owns the preference shares what they would be paid and when, I am sorry if it offends the perfect police, but for mere mortals like me it would be good to know.
#CBB
gebhoy
he=the
gsu