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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Auldhied,
I understand that we have to pay out on investors who have “preference” shares i understand thats business, and if thats what has to happen then fine, i just dont need to like it.
I want Celtic to spend any profit on Celtic and if that is deemed on players or on a new museum or resurfacing the car park then that is fine by me, it is helping Celtic get better and its investing in the club. Nearly all fans who have preference shares probably think the same way.
Celtic is a very emotive subject for us all, i have been posting most of the afternoon, and not once posted a bad word about any other poster on here until they had a go at me, we all go on about the Celtic family some of the so called “respected” posters on here should take a leaf out of your book, i know you dont agree with my point of view, but you have been nothing but courteous and respectfull, for that thanks!
HH
gebhoy
Morrissey the 23rd
15:44 on 2 September, 2013
DD is the safety net to Celtic that Rangers never had.
####
I can’t see how that works.
It’s not like he would (or could) just give us a sub if we were hard up.
gebhoy
I discovered some time ago that it’s not worth getting involved when talking financials, I am like your good self when it comes to money, I understand the right side of a pound, I understand when I see corruption, I understand when I see money being wasted, as for understanding a PLC, not a chance.
I just let those who know enlighten me >}
HH
What do ya call a half Irish/half Arab window cleaner?
delbhoy
lend us a fiver
TBB
Ha – J says there is something not right about people that keep wearing them when the weather has turned, so had to sneak them on when she went to work.
SFTB
Ha – You can’t take it back when you’ve posted it, and knew I’d erred.
gebhoy
15:07 on 2 September, 2013
I own 4000 shares of mouses mini bus. Never had a dividen payed out. Can borrow his driving gloves and ski mask anytime though.
Shake Ma Shammy.
“He was a £12 million pound player then but is now valued at £42 m ?”
When Ozil went for 12 he only had 1 year left on his deal
Lennons Passion,
Can i have the rohipnol bottle empty or not? You booked for the Dam yet?
gebhoy
The Battered Bunnet
15:53 on 2 September, 2013
‘There are umptreen well worded posts that describe the origins, obligations and value of Celtic’s pref shares
but…
Dividends are bad’
######
I think what’s bad is that one individual can, for all practical purposes, own and control something that is so important to so many people.
Particularly when that individual seems to be on a different wavelength to the rest of us.
And that feeling finds expression, amongst those not well versed in corporate matters, as ‘all dividends are bad’.
SFTB
;)
Natch……………
But what about the original boul’ bhoy……………….Stephano?
Exiled Tim,
Yup, that will be me in the “mineshafting thicko CQN cleek”
back to lurking for me!
HH
gebhoy
16,253,051 of those 6% shares in issue total paid value of dividend based on 3.24p/share is roughly £526,600.
jackie mac
Sorry mate, I’ll need it for Delbhoy Jnr’s half-time snack!
bankiebhoy
Stephen is high risk. A talented footballer but a bit of a fruitcake. Paul Lambert has not seen fit to use him since January and, whilst he can be forgiven for failing to break into Man City’s enhanced team, you have to pretty poor not to get a game for a Villa full of youngsters.
My worry is that Neil fancies himself as being able to tame and get value form wayward, lost, ‘bad boy” footballers (Blackman, Ibrahim, Tomlin).
I’d rather get a bad boy forward.
How many of our bhoys are away on inter duty this week ?
Any word on ML’s injury ?
HH
Tet that goal celebration video was brilliant. Thanks for sharing it.
gebhoy
15:58 on 2 September, 2013
Yeah mate 5 of us via Brussells.At least we are playing in the dam this time. Mouse going aswell with possil Paul. Bus was rocking coming home on saturday. Wee Gerry back.
Ernie
Perhaps fholk don’t realise that the pref dividend was part of the cost of rebuilding Celtic Park, and creating the platform for Celtic to re-emerge as a respected European Football club.
gebboy
Neither Barcabhoy or TBB are amongst the posters who are quick to reach for the invective. I think you suffered more than I did because you were angry before you heard the answers to your questions whereas I was just puzzled and waited for the answers before I decided if there was something wrong.
Keep asking the questions. Just keep your ears open and your mind open for the replies, though.
It seems we were both told that the preference share pay out is a must do and its only 500k or so so not a big deal in the scheme of things.
I guess I just expected a Board to be able to exercise more control on when and how much to pay out. No wonder capitalism’s crocked if payouts are inevitable just for avoiding insolvency :-)
SFTB
……agreed on the position…………..
I think we’ve approached Villa, and they’ve knocked it back tho’……….
It’d make a great jersey……..
Think Neil has probably got a better chance of making a diff with a character like Stephen.
Fruitcake perhaps a tad harsh tho’ – daft bhoy copyright Anto, probably suffices……..
HH.
I ah heard it was good, should be at Tynecastle on the 14th (ticket permitting), looked at flights to Brussels daft prices did you get them cheap, Venga bus via ferry would have been great wee trip!
SC and a few bhoys are going out from Liverpool, they got a good deal, just need to hope for enough tickets!
Back fae work, have not read back….to depressing
these days……so whose getting it the day?
afternoon all
while the subject of shares and the like is popular i got a nice wee cheque from Celtic plc this morn for £32.40 cause i invested under a grand to buy my dads shares from his estate when he passed 4 years ago this month..as i couldnt afford to invest initialy when wee Fergus saved us from the bin..my shares will always be kept and will move to my kids in the hope they’l do the same..the dividend will go back into Celtic to buy my CHAMPIONS LEAGUE package..hail hail to Wee Fergus
Auldheid @ 15:54
Yeah. Sorry for the delay. Things get lost in time. Speed reading yesterday post before I head of to The Celtic Trust meeting tonight.
I was responding to you responding to me about Celtic fans thinking we need ‘A Rangers’.
You posted no Rangers would not effect the volume of our support or revenue raised. I think it will but is a price we should pay.
I think the silence from Spartans for example highlights that Celtic really do stand alone.
ernie lynch @ 15:54
I disagree. He could and he has, for example (Line Nominees Limited).
Seen on TSFM site
Suggested by “not a happy clapper” about spivland :))
seemingly 7k views already
http://www.scribd.com/mobile/doc/164681674
Thanks to the bam pot who posted the 1st Link to the great stadium robbery
. . . Soooooooperb !
More popcorn please. . .
GEbhoy
My issue with your post, isnt that you didnt understand dividends on pref shares, or indeed pref shares.
My issue is that you decided it was a bad thing without understanding it.
If you now understand how pref shares and related dividends works, and the resultant comparison with the alternative of bank debt, and have now decided it’s a bad thing, then fair enough.
It would however be good to understand why you view dividend bearing pref shares as a bad thing, and why the alternative of bank debt is preferrable.
There is a further alternative, and thats effectively free money. This would have resulted in going back to shareholders and asking them for more investment by subscription to non dividend paying ordinary shares.
That would have been cheaper for the club, however not anywhere near as attractive for investors, including ordinary fans, who had already made a substantial committment to previous share issues.
So the choices were
a) Dividend bearing pref shares, where the divi doesnt need to be paid if we cant afford it
B) Bank debt , where interest is never waived and capital needs repaid. This also puts a bank in a position to act in a way harmful to the club if we breach a covenant, as happened pre Fergus
C) Ask investors for more free money
Now given investors were quietly sounded out on c) and said no more free money at this stage , the options were a) and b) . I would strongly advocate a) especially given our previous banking experience and the effect b) would have had on our overall facility.
B) would have meant utilising, and therefore reducing the money available under the bank facility. A) allowed us to keep the facility fully available to support short term cash flow .
Thats my view, and I may be wrong. It would be good to hear your view on why im wrong
SFTB,
I find it funny that some posters first quick response was to ridicule me, I read some rubbish on here but i certainly wouldn’t treat anyone that way, especially when its only a post on a blog. But i suppose that’s just life, and there is much much more to worry about in the grand scheme of things.
Nobodys perfect eh!
HH
gebhoy
Good Afternoon.
Margaret Thatcher put me off buying shares for life– in anything and I do not believe that anyone should be able to own any part of another persons dream!
So I never bought ant shares in Celtic when they were offered– just my personal choice!
My dad bought shares — which I now control, but i don’t really view them as mine or as any kind of investment and I have never checked if they attract a dividend or not !
Now, all of that being said, Fergus could have gone down a membership scheme, as has been advocated on here befor, but chose not to!
Indeed these days he could possibly have chosen to go down an LLP subscriber scheme which might have been better– but that is now– not back then!
When Fergus made his choice, it was vital that people bought shares, and that the business was properly constituted and regulated—– And was seen to be conducted through a proper Ltd Company owned by as many shareholders as possible, but with some big hitters in there.
It is only correct and proper that initial financial participants receive a financial reward for their investment by way of dividend– and that the club are obliged to pay a fixed and pre-determined amount each year. Far better that than having a shower of spivs who can determine salaries, bonuses, dividends etc in private and among themselves as and when they please– think Murray, Bain and various others long before you get to the current crew!
Those thinking of DD by the way should realise that he gets a far higher return on his money elsewhere and that in the past he has personally provided Celtic with soft loan money over and above his shareholding investment and all on terms that are better than the club could do with a bank!
Shares are just not for me but it is far better that they are openly regulated by the club as happens here.
Anyway, I am sitting in A&E in Stirling with a suspected broken arm with it being held in a Celtic scarf sling– so can’t count my loose change let alone count a dividend.
This took ages to type as a lefty BTW!
gebhoy
You are clearly a good tim and not the only bhoy to be bamboozled by the jargon of PLC finances. It’s also healthy for any organisation that its leaders be questioned and their answers to questions scrutinised.
I sometimes feel that there is an unhealthy, and unfounded, basic mistrust of the PLC board stirred up by posters who either enjoy being miserable or who are not Celtic supporters. IMO, you were asking genuine questions.I also think you were treated a bit roughly by some on here.
Your views and opinions are as valid as any so don’t stop posting.
HH
Brogan Rogan Trevino and Hogan supports Oscar Knox, MacKenzie Furniss and anyone else who fights Neuroblastoma
Ouch! Hope your well and recover soon. You’re needed for Walk on in the CL nights.
Stoke City in for Stephen Ireland seemingly.
odemwhinger off to cardiff..hope they let him in the carpark without gettin a riddey
BRTH
You been drinking the Fa’ Doon water again?
DD is absolutely not a safety net for Celtic Football Club. He runs us like any other of his businesses. We must perform independently and be self sustaining. Desmond has never, nor will he ever, be a sugar daddy to Celtic.
Barcabhoy,
I didnt understand the difference between preference shares and ordinary shares, hence my original reaction (to see profits leaving the club in form of a dividend).
Obviously in the scenario you describe i agree with your option. I would hope that that being the case the club do look at contacting these shareholders to see if they would like to re-invest that money in the club whether that be in ordinary shares or some other kind of re-investment maybe a donation for the 125 charity, anything that keeps money in the club.
gebhoy
Bada……..
aye…………………..we enquired as well.