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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OK fess up which one of you is this?
http://www.scotsman.com/news/scotland/top-stories/accountant-on-trial-for-ira-song-at-celtic-game-1-3071648
Teuchter
Just to say what a pleasure it has been to have been in both yours and Mrs T’s company in the last week.
You are the epitome of a great Celtic supporter and I bracket u in the same breath as my faither in passion for this crazy club of hours.
Been a treat for me, though still a bit fuzzy heided wi the bevvy.!
Trust u ghuys are safely ensconced back in old Toronto town?
Hail Hail
Auldheid
“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.”
I don’t remember Skippy having a particularly good game on that occasion though Aiden was very effective. However, in subsequent games, after that LC final, JVOH scored against Hamilton, Falkirk, Hearts, and Aberdeen whilst Skippy scored against United, Aberdeen, and Aberdeen (different match), so they were both fairly equally picked and effective.
McDonald played the full 90 minutes against Hibs while JVOH only came on in the 62nd minute for Sammi.
Nobody else in Russia or with ROI seems to have repeated the McGeady as No.10 experiment.
Ernie
“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.”
Mistake in first principles I’m afraid.
The board has no discretion in the divvy paid on prefs. It is a legal obligation owing to holders of those shares, whether the business is profitable or not.
We make money, we buy players, we pay pref dividend.
We lose money, we don’t buy players, we pay pref dividend.
The two are mutually exclusive until and unless there is an insolvency, and the pref share holders get bumped with everyone else.
Happy to help.
Tet
It is the cost of players in fees and wages that tips the balance, particularly as fees and wages are no guarantee of any return in terms of player performance.
Players wages are the main reason why football clubs do not make a profit to pay a dividend.
been cqn fan for while my first ever post so guys go easy on me not on to slate board or team or lenny just couple of stories like most teams in England went on hospitality to champs league against man u jan scored that was fine everything fine nice applause even from man u fans more wine please then nakas first sensational free kick we all know the second at celtic pk we ie my table jump up 2 mins later heavy handed steward comes over tells us to leave complaints told don’t want your type in here one of my nephews had man u top on 16 keane we were ejected my pointnow is let love the up and coming champions league respect our opposition 3 great teams super Mario of Milan celtic fan said celtic Milan will go through messi we are best fans in the world lets prove it once again enjoy admire applaud my man u experience put me off got the package win loose draw will b in heaven win lose or draw superstars love us welcome them the celtic way
Sftb
It was the pairing that I think worked well in the LC final not being tried again that got me.
Despite the goals scored by the other choices I thought our performance on LC day was the best of that period.
Maybe it was just the occasion but that performance level was never reached in the run in.
Jvoh was returning from injury as I recall and struggled – in my eyes anyway.
Auldheid
So in a nutshell, the board gambled on CL participation without spend.
goldstar10
Humouring a Sevconian is the new thing, and the only way you’d survive especially in Glasgow, tell them it’s a shame and how you feel sorry for them and they’ll pretend back
that Celtic are good for the coefficient, even though it’s got nothing to do with their dead
club.
DD was very humorous with his one and only quote.
Auldheid
As I say, I would not particularly rate Skippy’s performance in that game and, despite your memory both Skippy and JVOH seem to have been equally effective or ineffective on the run in. We failed against Hibs because of a lack of chances made rather than finished. I was there and Hibs were really quite poor. Unfortunately, we matched them.
The LC final also featured Caldwell in midfield and 4 Celtic Centre halfs on the field from the start.
Deserves a re-submission, post of the transfer window IMO. Will we chuckling all day over the last line.
________________________________________________________________________:
the battered bunnet
14:52 on 2 September, 2013
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
The Battered Bunnet
18:20 on 2 September, 2013
‘The board has no discretion in the divvy paid on prefs. It is a legal obligation owing to holders of those shares, whether the business is profitable or not.’
How does a company that hasn’t made a profit pay a dividend?
Where does the money come from?
Looks like the hun misinformation campaign
about Celtics supposed debt is taken hold,
it seems to suit some on here.
TET
CL qualification is always a gamble.
Even though we were match day favourites for each of our 6 ties, that does not mean we would be expected to win them all, far less, do so comfortably.
Bookies would have given you decent odds on Celtic winning all 6 individual matches and we were probably expected to draw a couple of the away ties or lose one of them. All it takes for that to translate into a CL exit is for your loss or draw to have occurred in the same tie with the same team e.g. a home draw with Elfsborg followed by an away defeat to them. That is not such an unlikely occurrence.
That is why we rarely manage 3, 4, and 5 wins in a row in the SPL where we play similar level teams, and it is why we are prone to be knocked out of one of the 2 major cups despite being favourites to win every individual tie.
In brief, it is a great achievement by Neil to have guided us through two qualifying campaigns, despite the wild dismissal of the teams involved. Look at Celtic from 1975 to 1999, where some fairly unglamorous clubs of similar stature to Helsinki, Helsingborg and Elfsborg knocked us out of Europe. We did not always lose to good teams like PSG.
corkbhoy
Welcome.
Are you related to corkcelt by any chance?
HH!!
Saw a brief piece on the funeral of Seamus Heaney in Dublin today.
Very moving.
RIP Seamus.
HH!!
Paul67
Are you any further forward with your search for the £17mill loss / deficit / negative cash flow?
Only asking like.
Finally any news on when the accounts come out?
Citibhoy Shoulder to Shoulder with Neil Lennon
17:56 on 2 September, 2013
‘Ernie 17.46
there is no “conflict” as they are “cumulative” the Company must pay them at some point as the coupon rolls up’
###
But is it not the case that the dividends can only be paid from profit?
And the board will decide from year to year how the income is spent and can therefore decide whether there is a profit?
Looking for some advice… I dropped my phone and the screen is cracked…it’s a Samsung 3 mini…I didn’t insure it :-((
I would like to get it repaired, I hail from Glasgow…any help would be appreciated. HH
Ftsfa
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
Bloody impressive if he manged it!
So, let me get this straight…..
We issued preference shares years ago. Some on this blog bought some. The nature and status of these shares have not changed over the years.
A sevco blog ‘discovers’ them.
Sevconians on here start talking about them.
The blog erupts and folk who might (or might not) know better now proclaim that preference shares are a bad thing?
You think Media House might be dragging you along and winding you up?
dearie, dearie me…..
corkbhoy……..welcome hope your as positive
about our club as corkcelt is…….we need all
the help on here nowadays.
Evening cqnrs
Not been on all day.. the price of fame :)
So … oor paul says the books add up and were no skint.
Paulo knows how to do his sums .. of that there is no doubt … so … read it and weep hunterlopers .
We’re smarter than the average (deady) bear .
Panic averted. Being similarly in the setting free the bears remedial class of financial dunderheids, I duly asked some American pals who’s stock in trade is balance sheets, while also accumulating wealth for the 1% to look over Celtic’s numbers.
I received a baleful glare when I asked: “would we be safe to spend a little more?”. The response: “maybe, but I would invest in a sporting franchise to begin with”.
Their hmm’s and arghh’s, however were preceded by a very solemn declaration that Celtic PLC is indeed in very “robust” health.
Get it up yea huns.
Sipsini
My bhoy done his…cost £20 in a wee place in Motherwell….am sure there are plenty wee shops in town that would be similar in terms of cost…
Kikinthenakas
corkbhoy
Welcome aboard
celtic & CQN will keep you busy :))))))
Hail Hail
*wouldn’t
weeron
18:57 on 2 September, 2013
Well said .
If there had been as big a reaction to canamalars AGM resolution then he would have got his 100 shareholders in about 5 minutes instead of having to constantly ask people to get involved .
Sipsini
If you type ” mobile phone screen repairs glasgow” into Google. . Loads there.. about £20
Anyone know how many tickets we are getting for Milan and when they are going on sale?
All booked up and keen to get tickets sorted ASAP.
Ernie
“How does a company that hasn’t made a profit pay a dividend?
Where does the money come from?”
From reserves (accumulated from prior years). Then from capital (equity shareholders’ funds). Provided the company has sufficient resources to pay the div without becoming insolvent or risking insolvency, the div must be paid.
Corkbhoy
Ive got a problem with you pal ….. I cba writing the whole blog name .. so my pal corkcelt gets shortened to corky…
Wtf do I call you …
Btw… as im tbj.. bt is bt … t2 … t3… t4 .. sftb .. crc .
What do you reckon valentines day is ?
guys thank u for your nice welcome not related to cork celt but im sure he love it when I tell him im a Norrie and a sorrie and some of my family are blowins cove term hh
NB My post above refers to dividend to be paid on pref shares.
glendalystonsils
17:58 on
2 September, 2013
He could always have body swerved the issue.
STV’s “The Big Call” is just hunnish resentment masquerading as you’re-the-ref type even-handed debate.
A quick scan over Newsnow headline articles would indeed confirm there are a bunch of perma-raging huns associated with the media.
FourGreenFields supports Wee Oscar…..
Thanks,
CQN was one of the thoughtful blogs. Paul and others brought good info to bear over the years.
Why wouldn’t the other side want to derail it?
I am fairly certain that among the well kent names on here, are positive Celts and less-postive Celts…..and more than a few sevconians whose business is to stir and deflect. Probably more than a couple of red-top journos as well.