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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Barcabhoy @ 17:04
Feckin great post. Thanks for taking the time to write it.
Brogan Rogan Trevino and Hogan supports Oscar Knox, MacKenzie Furniss and anyone else who fights Neuroblastoma @17:09
Only joking!….Or am I?
Barcabhoy.
The real cost to Celtic of using a bank instead of pref shares is surely liquidation. Which bank would have offered us a credit line that size?
WGS posted this link earlier,
http://www.transfermarkt.co.uk/en/suche/detailsuchespielervertragslos/suche.html
How about this for a team of free agents…
Unpopular choices in there I’d imagine…
Perrier-Dombe, Loovens, Jean-Alain Boumsong, Zaliukas
Steven Hughes, Jody Morris, Simon Davies,
Riordan, Scott Dobie, Sebo
I’ve enjoyed today’s exchanges as I’ve finally found out the amount in dividends that does get paid out and why.
It all seems reasonable to me.
So now we know we are not being fleeced by the Board, who supplied that sheep in Kazakhstan?
goldstar10
17:05 on 2 September, 2013
‘Ole DD never got where he is today without occasionally lying through his teeth.
ReggiePerrinCSC’
#####
If The Great Desmondo does ever resort to lying in order to achieve his goals, and I’m not aware that he does, then I would suggest that he would do so only when absolutely necessary.
Why would he feel the need to tell bare faced lies about something so peripheral to him? It’s just not credible. Nor does it show him in a good light. I don’t believe it. I believe he was being truthful.
Morrissey the 23rd
I’ll see you tonight then.
Auldheid
Can you point me to the post re dividends.
Thanks. .
I’m off to The Celtic Supporters Club for The Celtic Trust Members’ Meeting at 7pm.
Earning a living has kept me off cqn today. Whats the story with dividends? How much do we pay? What is pauls article in response to? I have heard some sevconians claim we are hiding debt (desperation)
Am i missing anything?
And who did what to a sheep?
The Honest Mistake loves being first @ 17:17
Which is why I called him a safety net.
Auldheid @ 17:18
Should I be worried? ;)
goldstar10
17:05 on 2 September, 2013
Fair point but he could have told the truth and said they are dead and if there was a grave I would dance on it. :-)
setting free the bears supports Celtic’s best fighter- Wee Oscar Knox
17:11 on
2 September, 2013
i have never understood after the effectiveness of playing McGeady through the middle with McDonald in the February LC Final, why WGS went back to and stuck with JVOH thereafter.
Gebhoy.
Do you not think he’s winding the Huns up with those comments. He knows as well as anybody else that they are a bust flush that won’t see out the end of the season.
He knows as well as everybody they are doomed to a Prometheus like existence, growing their liver to be devoured by spivs for eternity.
ernie lynch- Personally I don’t think he should have said anything about Sevco.
However, he did, but I do suspect he was purposely over-egging it somewhat.
We are all a bit guilty of telling Sevvies what they want to hear, well I am anyway, just to massage and inflate their misguided ego.
Makes the inevitable fall just a bit harder for them.
Ernie
Couple of things:
1) If you want to know how much DD gets in Pref share dividend, read the annual report which states his divvy bearing shares, multiply by applicable divvy rate. Voilà.
2) We do not pay dividends on ordinary shares, irrespective of how profitable we are. As you know well. I sense you are simply making a little mischief.
RobertTressell
17:20 on
2 September, 2013
Earning a living has kept me off cqn today. Whats the story with dividends? How much do we pay? What is pauls article in response to? I have heard some sevconians claim we are hiding debt (desperation)
Am i missing anything?
==========================
Well I had Crunchy Nut flakes for breakfast but had your window been open you might have heard. :)
Dividend story is that we pay out about £500k a year to investors with preferential shares. They bought them when Fergus put Celtic on the market to raise capital to put is where we are today.
Check back, some interesting info from guys with share dealing experience.
bankiebhoy1
I’ll look out a pound!!
Morrissey the 23rd
17:22 on
2 September, 2013
Naw, unless you like short conversations.
Cue TET….
Here’s a little list of some free agents.
Some of then are a little bit past there best…
Petric
Iaquinta
Milevsky
Maric
Llorente
Cole
Vassel
Bothroyd
Benayoun
Bentley
Murphy
Govou
M.Petrov
Stankovic
Arca
Diarra
Keita
Hitzlsperger
Vicente
Hunt
Gallas
Bouma
Mensah
Onyewu
Madlung
Bramble
Scharner
Obradovic
Del Horno
Honest Mistake,
Dont know if DD was at the wind up or not, but not to hear anything from him for years and then the first you do he pops up to say that, it was strange granted.
I don’t really have an opinion on DD, i think he thought we would be out of Scotland by now when he bought most of Fergus’s shares, then his investment would have the potential on a massive return, who knows if we will ever see that day.
gebhoy
Barcabhoy
17:04 on
2 September, 2013
However over a 10 year term, on £10 million , pref shares produce £7.2 million more cash for the club than a bank loan
________________________
So why did we no sign Finbogs son? :)
Thanks, appreciate the information.
Auldheid
17:17 on 2 September, 2013
The bottom line though is that the board decide how to spend the income.
And that can come down to new signings or dividends, albeit only on a certain class of share.
They could spend enough to break even ie no profit, no loss.
So how do they resolve a conflict between success on the field and a dividend (albeit only on a certain class of share)?
Ohmni
12:57 on 2 September, 2013
Sandman,
I would be very surprised if the other mobs “masterplan”
involved pressuring us signing into an emerging prolific goalscorer,
who even at an inflated price could later be sold at great profit
after significantly contributing to our on field success…
Not too sure about your critical faculties there…
============================================
Goddamn, where were YOU when Lenny, PL and the board were discussing Finbogasson?
You obviously have specialist knowledge as to the boy’s ability, current and, very importantly, sell-on value!
Don’t stand in the shadows next time – let PL,e tc know who we should be spunking multi-millions over the odds for…
.
.
.
.
Now can we have a minute’s silence for the slef-respect of many posting on here?
Within the last day or so that mouthy, pumped-up wee cockerny bawbag ‘o wind Barry Fry, has become the bastion of virtue to some as he let rip about PL’s approach for Tomlinson.
You (you know who you are) would take, and use, that notoriously bombastic wee clown’s word over and against the CEO of Glasgow Celtic?
You would wring your hands with him over big bad Celtic’s method of ‘unsettling’ his player?
Pathetic. Like a gang of wee school bullies latching onto any method of persecuting your perceived ‘enemy’. Shame on you.
Barry Fry; Jee-sus H…
If you bought £600 of shares in the first share issue you get £15 or £16 a year as your dividend then it goes up depending how many shares you have
Am I correct in thinking that you can no longer by the preference shares and if you wish to sell they’re converted to ordinary shares. So over time the number of preference shares and therefore the divided reduces.
Just had a look at the CQN predictor table
4th to 38th in two weeks
Morrisey23rd fell downwords out the plane slower than that
must try harder, must try harder csc :))))
You don’t need a weatherman to know which way the wind blows…
Ernie 17.46
there is no “conflict” as they are “cumulative” the Company must pay them at some point as the coupon rolls up
Regarding dividends being paid out on preference shares, Celtic made it possible for preference shareholders to take shares in the form of ordinary shares instead of a dividend. This meant that the cash would remain within the club. I bought shares both ordinary and preference when Fergus had his initial share issues, these were bought because of my love of Celtic and not as a financial investment. I elected several years ago not to take a dividend but to have more ordinary shares, I intend to completely wallpaper a room with these certificates before I snuff it ;-)
I’m not sure if this facility is still available, but I’m sure that the Club also have to pay the inland revenue a sum equivalent to basic rate tax on the value of these shares despite no money changing hands.
DD’s comments on der hun were so over the top ,it had to be a wind up.
If he had come out and said good riddance, rot in hell, the MSM would have had a field day.
Morrissey the 23rd @17:03
cheers for that
BARRY FRY recalls trying to urinate in all four corners of St Andrews to lift a “gypsy” curse on Birmingham City.
Barry Fry is a clown
dixiebhoy
17:51 on 2 September, 2013
If you bought £600 of shares in the first share issue you get £15 or £16 a year as your dividend then it goes up depending how many shares you have
Correct with the £15 – £16 bit but Im pretty sure the dividend is only based on your initial preference share allocation .
I take my dividend in the form of more Ordinary shares in the Club , my Preference Share number stays the same but my Ordinary Share numbers increase .
At least I think that’s how it works :-)))
I have absolutely no time for Desmond at all. He is a ruthless business man who has amassed an incredible amount of money. No one gets that rich without leaving a lot of broken bodies in their wake.
However I’m absolutely sure he did not invest in Celtic to make money. He has described it as his only emotional investment. As I have said a couple of times it is his children more than himself who are Celtic fans. He was once asked about selling his stake and made a jocose remark about his children disowning him if he did. Another thing I am certain about, is the Club will never get into financial difficulty under Desmond’s watch.
weeminger
That seems to be the case.
They are Convertible Cumulative Preference Shares.
Wiki definition:
Convertible preferred stock—These are preferred issues which holders can exchange for a predetermined number of the company’s common-stock shares. This exchange may occur at any time the investor chooses, regardless of the market price of the common stock. It is a one-way deal; one cannot convert the common stock back to preferred stock. A variant of this is the anti-dilutive convertible preferred recently made popular by investment banker Stan Medley who structured several variants of these preferred for some forty plus public companies. In the variants used by Stan Medley the preferred share converts to either a percentage of the company’s common shares or a fixed dollar amount of common shares rather than a set number of shares of common.[9] The intention is to ameliorate the bad effects investors suffer from rampant shorting and dilutive efforts on the OTC markets.
Cumulative preferred stock—If the dividend is not paid, it will accumulate for future payment.
What I don’t quite understand…….
Dividends are paid when the club make money, albeit they are not great, but income all the same.
The club only make money because of the success or not of the team on the pitch.
The better the product on the park, more chance of a better turn out through the turnstiles, the more chance of sustainable CL participation.
Would it not be more beneficial to the shareholders to have as good a team on the park ?
Or am I missing something here, serious question ?
corkcelt
Can’t disagree with a word of your last post