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PNL... the new Bury?

Part of an interesting article taken from the Oxford forum, not looking too rosy for our deluded "big club" neighbours.

"As year on year losses mount up the debt the club is saddled with naturally grows. A vital question is then, where does that debt sit, how is it being funded and is the owner of that debt in a position to bring the football club down?

In the 2018 accounts the auditors tell us that “a material uncertainty exists that may cast doubt on the company’s ability to continue as a going concern. The company has £10,855,864 more liabilities than assets”. Deep breath, but anyone following closely what has been happening should not be surprised in the least. The auditors add that “the financial statements have been prepared on a going concern basis, based upon the continued support of the company’s ultimate controlling party”. So we have Tiger and his men to thank for small mercies I suppose.

We probably don’t need to go much further than a paragraph under “events after the reporting date” in the 2017 accounts, “In February 2018, Ensco 1070 Ltd was granted a fixed and floating charge over all the assets of the company in respect of monies owed to it”.

That charge was created as part of the deal that saw Tiger buy the club from Ensco on 21 February 2018 and is lodged in the terms of a debenture at Companies House. Since Frank Waterhouse resigned on 31 March 2016 Ensco 1070 has had just one Director, Darryl Charles Eales. NB: Mark Ashton resigned from that company on 18 December.

This debenture (long-term security yielding a fixed rate of interest, issued by a company and secured against assets) is 22 pages long. The devil is in the detail. Legal experts out there will know exactly what this means but wearing my novice hat I’ll pick out a few things.

The default interest rate is 10% per annum.

The secured loan note is for £4,275,708.

Listed under “Permitted security” is a debenture date 11 January 2009 in favour of Barclays Bank plc. The amount secured by this charge is “all indebtedness now or in the future due, owing or incurred (before or after demand) to the bank in any manner by the Chargor (Oxford United Football Club Ltd) and all other Companies, including in each case all interest, commission, fees, costs and expenses which the Bank may charge in the course of its business. The interest will be calculated and compounded in accordance with the Bank’s usual practice before and also after any demand or judgement”.

Schedule one – “Material contracts” lists the financial agreements of various dates between Oxford United and Sheffield United, Bristol City, Leeds United and Middlesbrough relating to the transfer of John Lundstram, Callum Joshua Ryan O’Dowda, Kemar Roofe and Marvin Nicholas Nathan Jonson respectively.

Material evidence that DE would be getting the money that came/comes in for these guys. This supports those who back then were having a go at our former owner saying the transfer money would go to him. Whilst not totally ignoring this I in a way overlooked it because there was more outright abuse and bad language than clear argument and reference to this debenture.

There’s a long list of admin expenses that make up the total but the standouts are rent re operating leases and stadium service charges and over heads, i.e. what the football club pay Firoka. In 2016 this was £485k and £281k, in 2017 £492k and £317k and in 2018 £433k and whooping £810k, meaning an increase in nearly £400k in the service charges & overheads. If that wasn’t bad enough we’re paying for repairs and maintenance too. Why the **ck the contract allowed for that only the dickhead who signed it on OUFC’s behalf will be able to answer. This amount was £92k in 2016, £183k in 2017 and another significant increase in 2018 to £246k. Yes, we are being well and truly shafted. Oh, and let’s remember that the club paid £170k to have the pitch replaced in 2016.

Legal and professional fees have jumped from £89k in 2016 to £315k in 2018. This all really adds up and ends up in the debt figure dragging our football club down. I guess most of that figure is incurred in legal battles with FK, battles I doubt can ever be won.

Tiger and our current board have shown nothing other than keeping us ticking along and slowly drowning in debt. I’m still none the wiser what any of his board members have brought to the party. In fact their profile is so low that I’ve just about forgotten who they are. All this talk about exploiting the name Oxford because it is known around the world to increase the OUFC brand and make us a success so far has just been talk. What actually has been done on this front? F**k all from where I’m sitting. Come on we can’t even get a tiny shop in the Covered Market right, can we?

And as for “sustainability”, again please tell me exactly what. Facts not bullshit. (That was kind of rhetorical but if anyone really can enlighten and give cause for hope please feel free).

Can’t blame DE for getting the best deal (for himself) I suppose. That’s the way business men including owners of football clubs operate. We’re at the mercy of each and every one of them when they are in charge and thereafter. It seems mess after mess is created yet somehow we struggle on. But for how long? Do Tiger and his men have a workable plan of any description or is it all Walter Mitty fantasy? Meanwhile I’d argue that Firoz Kassam, Daryl Eales and Barclays bank have OUFC by the short and curlies. That’s bloody painful.

Where’s the money going to come from to pay the creditors? In the 2018 accounts amounts falling due within a year totalled £13.1m made up of trade creditor £1.9m, amounts due to group undertakings £2.2m, other tax and social security £342k, and other creditors £8.7m. Included in this latter amount is £2.4m due to Ensco in respect of the loan notes. On the other side of the coin there was £2.7m of debts due to come into the football club.

A going concern? I have to say I’m concerned on an on-going basis. Very concerned. I see no light at the end of the tunnel."

Comments

  • Perhaps our Power Group deserve a bit more credit than they may have been given in the past...

    👍 👎 ( 3 )
  • The way things are going we might end up laying less games this season than the one whoever it was dug up for their predictions from a century ago

  • @RogertheBandito said:

    Schedule one – “Material contracts” lists the financial agreements of various dates between Oxford United and Sheffield United, Bristol City, Leeds United and Middlesbrough relating to the transfer of John Lundstram, Callum Joshua Ryan O’Dowda, Kemar Roofe and Marvin Nicholas Nathan Jonson respectively.

    Material evidence that DE would be getting the money that came/comes in for these guys. This supports those who back then were having a go at our former owner saying the transfer money would go to him. Whilst not totally ignoring this I in a way overlooked it because there was more outright abuse and bad language than clear argument and reference to this debenture.

    I'm trying to remember the exact details, but isn't this the same third-party ownership issue that we got done for under Hayes?

  • Haven’t they just sold a player to Cardiff for £3M and acquired Woodburn on loan from Liverpool for the season. Sounds like that bit of business has helped them greatly.

  • Yep Gavin Whyte for an initial £2M.
    For me all this highlights the importance of our ground ownership being in safe hands.

  • @bookertease said:
    The way things are going we might end up laying less games this season than the one whoever it was dug up for their predictions from a century ago

    Get what you meant, but are there a few words, commas, or something missing from that line?!

  • I need to give something for @micra to chew on after the witching hour @malone.

  • Playing for laying should do it. Fewer for less of course and it was LX1 I think (or possibly @ChasHarps) who dug up the century old season’s results.

    I wasn’t going to bother but felt I had to chip in when my name came up.

    Incidentally, has there ever been a longer or more impenetrable post in Gasroom history than @RogertheBandito’s opener?

    👍 👎 ( -3 )
  • Ya I nodded off a couple of times reading it on the PNL forum, the salient point(s) though are the £10M deficit & spiralling costs of the upkeep of the ground.

  • Thanks @micra. I am a fan of a good, old-fashioned grumble as being good for the soul and I like to imagine my own (and others) grammatical laziness allows you a soupçon of pleasure as you chunter away to yourself about the low standards of the youth (anyone below 60) of today.

    👍 👎 ( 1 )
  • @RogertheBandito said:
    Ya I nodded off a couple of times reading it on the PNL forum, the salient point(s) though are the £10M deficit & spiralling costs of the upkeep of the ground.

    Yep, and it's only got 3 sides, so can't be as expensive as ours.

  • @bookertease said:
    Thanks @micra. I am a fan of a good, old-fashioned grumble as being good for the soul and I like to imagine my own (and others) grammatical laziness allows you a soupçon of pleasure as you chunter away to yourself about the low standards of the youth (anyone below 60) of today.

    Beautifully put @bookertease as your contributions inevitably are. I’m sure you are right too about the “soupçon of pleasure” but I rarely chunter and I don’t see a stab at clarification for my friend @Malone as a grumble. I’m keenly aware of my high-functioning form of autism and I wish I could bite my finger as often as I’ve learnt to bite my tongue!

    I have said some outrageous things in my time and I reached a peak thirty odd years ago when I was a London commuter. The Chiltern Line trains at that time had one and a half seats on one side of the gangway and two and a half on the other. I was sitting on the former. A large gentleman got on at Gerrards Cross and plonked himself down next to me, unfurling his Times (then broadsheet of course) more or less into my face. I must have grunted rather audibly because he muttered “it’s the way these trains are designed, you know”. I find it hard to believe now but my response was “it’s partly the way you’re designed”. Anyway, I got away with it.

    👍 👎 ( 3 )
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