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Bolton Nuts » BWFC » Bolton Wanderers Banter » Bolton's Accounts for year ending 30th June 2021

Bolton's Accounts for year ending 30th June 2021

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boltonbonce
karlypants
Natasha Whittam
BoltonTillIDie
Norpig
Sluffy
Ten Bobsworth
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Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

Sorry to keep you all in suspenders but here are a few more snippets on the accounts:

1. The £7.368m in the cash flow statement 'coincides' with:
    Loan Facility of £2m plus £65,379 interest    2,065,739
    UKFF Loan  of £5m plus  £302,466 interest   5,302,466
    Total                                                   £7,368,205

2. I estimate the interest on the three converted loans to total £826K prior to the conversion into 
    shares in October 2021.

3. The total amount of loans and interest converted is therefore £12.826m (including interest).

4. The total 'value' of shares issued totals £15.655m (including £1m unpaid)

5. So where has the other £2.829m come from and why is it not mentioned, referred to or hinted at  anywhere? Does it exist?

6. Is it possible to get in a muddle when you are doing calcs on a fag picket with a pencil? Oh yes!

7. Is it possible to get in a muddle when you are doing calcs on a spreadsheet? Oh yes!

8. Is that what's happened? Dunno.

boltonbonce

boltonbonce
Nat Lofthouse
Nat Lofthouse

Ten Bobsworth wrote:Sorry to keep you all in suspenders but here are a few more snippets on the accounts:

1. The £7.368m in the cash flow statement 'coincides' with:
    Loan Facility of £2m plus £65,379 interest    2,065,739
    UKFF Loan  of £5m plus  £302,466 interest   5,302,466
    Total                                                   £7,368,205

2. I estimate the interest on the three converted loans to total £826K prior to the conversion into 
    shares in October 2021.

3. The total amount of loans and interest converted is therefore £12.826m (including interest).

4. The total 'value' of shares issued totals £15.655m (including £1m unpaid)

5. So where has the other £2.829m come from and why is it not mentioned, referred to or hinted at  anywhere? Does it exist?

6. Is it possible to get in a muddle when you are doing calcs on a fag picket with a pencil? Oh yes!

7. Is it possible to get in a muddle when you are doing calcs on a spreadsheet? Oh yes!

8. Is that what's happened? Dunno.
Give us a minute.
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Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

boltonbonce wrote:
Give us a minute.
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117,857 x 8.48476 = £999,988.35
£1,000,000 / 117,857 = 8.48486 (rounded to 5 decimal points)
Tut tut!

Sluffy

Sluffy
Admin

Very Happy

Good old Bonce, always making us smile!


Bob, I'm well out of my depth on this so I'm no help but I would still like to try to understand it, so thanks for your insights once again.

I'm a bit confused with your workings out though?

I'm reading them as follows

You mention the three converted loan interests to be £826k

You mention the £5m FF loan and the loan facility at just £2m accounting for £368k of them leaving a balance for the other loan interest to be £458k?

If so then presumably that is loan interest on the £4.5m conversion of loan notes plus accruals - which at first glance seems a lot seeing that £7m of the other two loans only attracted £368k.  Obviously agreed rate of interest and existing length of the loan already served will have directly determine this amount.

So what I think you are saying is that the three loans (one at £2m at the time not £3m) plus the £5m plus the £4.5m are the loans swopped to equity totalling £11.5m with interest of £826k added giving £12.326m.

I don't understand why you have stated £500k more?

Is there something on the capitalisation of the loans (prior to interest added) I've not understood following through your workings?

If £12,326m is right then the shortfall between what has been converted and shares issues will increase to £3,229m.

Assuming £1m of that is the remaining £1m balance of the £3m loan capitalisation, that would leave £2,229m

If that was 'new' money put in at the time of an increased share allocation should that have been 'specifically' mentioned as such in the auditors notes and if so why didn't they as they seemed to have mentioned everything else (in Note 24 Events after the reporting date)?

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

Thanks Sluffy. You are right the total capital value of the three loans if fully paid was £12.5m not £12m. Sorry for that.

The £4.5m loan notes had a lower interest rate (4%) but the money had been in for longer than the other two loans.

 I have the total interest at c. £826K making a total of £13.326m in interest and capital with £1m unpaid.

I have the paid shares at £14.655m and the unpaid shares at £1m making an unaccounted for  difference of £2.329m. (£15,655m less £13,326m).

FV made two attempts at filing the SHO1 document at Companies House. The first one was plainly wrong whilst the second raises several unanswered questions.

We can come back to those but if monies other than the three loans  had been received and turned into shares, it should have been shown on BOTH the SHO1 and the post balance sheet events in the accounts. It shows on neither.

Does this help?

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

I haven't read the accounts line-by-line but noticed today:

1. The agreed sale of land to Bellway is not expected until later this year.

The amount received may well depend on planning approval, conditions attached to any planning approval and any abnormal costs of development. These things are rarely completed quickly and this year might be optimistic.

2.  Note 26 says 'There is no one ultimate controlling party'.


    Sorry if this has been mentioned before and I've missed it or forgotten.

Sluffy

Sluffy
Admin

Ten Bobsworth wrote:Thanks Sluffy. You are right the total capital value of the three loans if fully paid was £12.5m not £12m. Sorry for that.

The £4.5m loan notes had a lower interest rate (4%) but the money had been in for longer than the other two loans.

 I have the total interest at c. £826K making a total of £13.326m in interest and capital with £1m unpaid.

I have the paid shares at £14.655m and the unpaid shares at £1m making an unaccounted for  difference of £2.329m. (£15,655m less £13,326m).

FV made two attempts at filing the SHO1 document at Companies House. The first one was plainly wrong whilst the second raises several unanswered questions.

We can come back to those but if monies other than the three loans  had been received and turned into shares, it should have been shown on BOTH the SHO1 and the post balance sheet events in the accounts. It shows on neither.

Does this help?

You are always very helpful to me Bob and thank you for being so.

Also absolutely no need for an apology, I get stuff wrong all the time as you know!

As for the SHO1 forms, the way I've read them is that 'cash' for share purchases are not shown and my thinking for that is because the form specifically asks for non cash considerations to be listed.

Maybe I've simply got hold of the wrong end of the stick again!

Very Happy


Sluffy

Sluffy
Admin

Ten Bobsworth wrote:I haven't read the accounts line-by-line but noticed today:

1. The agreed sale of land to Bellway is not expected until later this year.

The amount received may well depend on planning approval, conditions attached to any planning approval and any abnormal costs of development. These things are rarely completed quickly and this year might be optimistic.

2.  Note 26 says 'There is no one ultimate controlling party'.


    Sorry if this has been mentioned before and I've missed it or forgotten.

I knew about the first, can't recall without looking back that I mentioned this specifically though.

As for no ultimate controlling party that matches up with the double 'strange' filing at CH both on the 18th Feb 2022...

Sharon significant control from 29th October, 2021

Withdrawal made of such from 18th Feb, 2022


(Don't forget that it seems Sharon is holding shares as a proxy on behalf of an unnamed investor).

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

Sluffy wrote:

You are always very helpful to me Bob and thank you for being so.

Also absolutely no need for an apology, I get stuff wrong all the time as you know!

As for the SHO1 forms, the way I've read them is that 'cash' for share purchases are not shown and my thinking for that is because the form specifically asks for non cash considerations to be listed.

Maybe I've simply got hold of the wrong end of the stick again!

Very Happy

No. I think you are right Sluffy. No need to mention the cash, only the loan conversions.

It might have helped to have been a bit clearer on the SHO1. e.g. How much the capitalised interest was.

Similarly the post balance sheet note in the accounts is not as helpful as it could be. But when read carefully it does suggest new investment in October 2021 without saying how much or how much the capitalised interest amounted to.


Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

Sluffy wrote:

I knew about the first, can't recall without looking back that I mentioned this specifically though.

As for no ultimate controlling party that matches up with the double 'strange' filing at CH both on the 18th Feb 2022...

Sharon significant control from 29th October, 2021

Withdrawal made of such from 18th Feb, 2022


(Don't forget that it seems Sharon is holding shares as a proxy on behalf of an unnamed investor).
The 18 Feb 2022 filings are 'strange' indeed and have left the position very unclear. PSC filings are needed if you own 25% or more. How much does Sharon actually own in her own right?

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

Many thanks to Barry and Sluffy for helping unravel some of the entanglements. I do hope that one or both might feel able to help unravel some more.

FV agreed to pay for about £15m worth of intangibles (thin air?) when acquiring the club and since then they've had to keep finding £millions to keep up with the payments and keep the show on the road. We don't quite know what the source of all this money has been but it has been found one way or another.

However the interest costs were unaffordable and in converting loans to shares they have reduced the balance sheet debts and removed most of the interest costs.

In order to convert the £2.5m COVID loan (plus interest) into shares FV have had to come up with a scheme or plan that left UKFF with less than 10% of the total shares. That plan seems to have involved overvaluing the business and shares by a considerable amount.

Shares to a value of £6.155m have been issued at a price per share of £8.48476 with another £9.5m priced at £6.78780 (a 20% discount on the price per share).

UKFF Nominees qualified for the 20% discount which gave them shares to a value of  £2,673,585 (being £2.5m loan plus interest)  and representing about 8% of the business. But another £6.8m 'worth' of shares have been issued at a 20% discount to FV shareholders.

I think Sluffy and Barry may have spent more than the minimal time I have spent on the T&Cs of the COVID loan and it would be interesting to know if either have an opinion on what was or should have been included in the £6.8m. It does seem high and I'm not immediately seeing why it shouldn't have 'matched' with the UKFF arrangement.

Sluffy

Sluffy
Admin

I don't have time today Bob but I'll try to have another look in the next few days, although I'm really out of my depth on things like this.

However I've been playing about with the share ownership conundrum today but still can't understand it as clearly there is something wrong at the CH end?

Although the from the 27th August, 2019 (filed in September 2019) it has always been clear that Sharon has held a majority shareholding 'Person with Significant Control' for some reason the 18th Feb 2022 notified us that had changed (withdrawn), so far so good...

However the statement on the Filing History summary states that happened on the 18th Feb 2022 BUT the form itself states that it occurred on the 29th October 2021???

The second form stating she had returned to being a Person with Significant Control filed on the 18th Feb, 2022 states that happened on the 29th October 2021, as does the form itself???

It would seem on the face of it that something happened ob the 29th October, 2021 that for a period 'dropped' Sharon's shareholding below 50%, then raised it above it again?

What the Person with Significant Control form states as a definition is this...

NATURE OF CONTROL

The person holds, directly OR indirectly, more than 50% but less than 75% shares in the company'

(Fwiw and for some strange reason that sentence is repeated exactly again directly underneath itself on the form???)

My thinking is that on the 29th October Sharon sold/gave some of her shares to this anonymous 'investor' who immediately gave her proxy rights over them and thus causing her drop of ownership to temporality drop below 50% share ownership (in her own right) but return on that date because of both her direct and now her indirect share holdings.

Thus when the Confirmation Statement for 10th January states the following to be the position of the share holders at that date - I reckon Sharon's share holdings already include some she is already holding as a proxy.

Total Shares issued A shares 4,125,046 (no B shares)

Sharon - 2,393,750 - 58.02%
James - 882,189 - 21.39%
Luckock - 455,226 - 11.04%
FF - 393,881 - 9.54%

Following this statement on the 21st January (which was actually filed BEFORE the 10th January Confirmation Statement a further 471,434 A shares were issued (there were B shares issued to but I've kept these out of my workings below).

We know from the auditors notes that investment was received from a Swiss Consortium (via Luckock's company) and from a person who Sharon is acting proxy for BUT it doesn't give any precise dates as for how much the investment is made from which of the two parties and when the investment was received.

My guess is that the full 471,434 shares to a value which Barry calculates to be £4m where issued to the Swiss Consortium and none to the 'invisible' investor - and that the auditors note acted more as a 'information' item, that there was an unnamed investor Sharon was acting proxy for.

Fwiw I've calculated the revised share ownership following the new 471,434 shares being issued ALL to the the Swiss Consortium just to check if it would have reduced Sharon's holding to below 50% - it didn't.

Total Shares issued A shares NOW 4,596,480

Sharon - 2,393,750 - 52.08%
James - 882,189 - 19.19%
Luckock - 455,226 - 9.90%
FF - 393,881 - 8.57%
Swiss Consortium - 471,434 - 10.26%

I can't say for certainty that the above was the share holding as at the 21st January, 2022 but I suspect it probably was.

I'm more than happy for anyone to check my sums and logic.

boltonbonce

boltonbonce
Nat Lofthouse
Nat Lofthouse

Sluffy wrote:

I'm more than happy for anyone to check my sums and logic.

I'm on it, Sluffy. Should be on your desk first thing Monday.


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Sluffy

Sluffy
Admin

boltonbonce wrote:
Sluffy wrote:

I'm more than happy for anyone to check my sums and logic.

I'm on it, Sluffy. Should be on your desk first thing Monday.


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Very Happy

Hope you don't find too many mistakes in my workings!

boltonbonce

boltonbonce
Nat Lofthouse
Nat Lofthouse

Sluffy wrote:

Very Happy

Hope you don't find too many mistakes in my workings!
I'm well taught. Very Happy

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

Thanks Sluffy

I wouldn't spend much more time looking into this UKFF stuff unless you want to. It all looks to me like an exercise in financial alchemy.
 
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Let me put it this way, if somebody charges eight hundred quid for a job that should cost no more than a hundred, they're not actually doing you a favour if they give you a 20% discount.

As for Persons with Significant Control, the rules require disclosure of anyone who owns as much as 25%.

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I'll have another look at all the numbers again but it does seem to me that FV's Companies House returns may be deficient.

Perhaps we should just all take a leaf out of Professor Claptrap of Karlsruhe's book and put our faith in the Beeno's chubby-cheeked charmer to tell us what's going on.



Last edited by Ten Bobsworth on Mon Jul 25 2022, 11:31; edited 1 time in total

BarrygoestoBolton


Mario Jardel
Mario Jardel

In case it’s of help, there’s a difference between being ‘A person of significant control’ and being ‘an ultimate controlling party.’

The first requires more than 25% and the second more than 50%.

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

BarrygoestoBolton wrote:In case it’s of help, there’s a difference between being ‘A person of significant control’ and being ‘an ultimate controlling party.’

The first requires more than 25% and the second more than 50%.
The first is quite clear, Barry, but what about the second?

I expect you will be aware that most companies with auditors will rely on the auditors to tell them what is required to be disclosed in the audited accounts.

As it happens Cowgills audit both Fleetwood Town and BWFC. In the accounts of Fleetwood's owners, Jaymel Ltd, the relevant statements says:

'The ultimate controlling party is deemed to be A J Pilley by virtue of his majority shareholding'.

Pilley, in fact, owns 100% of Jaymel Ltd.

On the other hand on both occasions the accounts were signed off, the accounts of BWFC owners, Football Ventures Whites Ltd, state that:

'There is no one ultimate controlling party.'

What does that statement actually mean?

Does it mean that Sharon has never owned more than 50%, or that owning more than 50% is insufficient to be deemed the 'ultimate controlling party'?

BarrygoestoBolton


Mario Jardel
Mario Jardel

Regrettably, a question I can’t answer. I was just clarifying the difference between the two.

Ten Bobsworth


El Hadji Diouf
El Hadji Diouf

BarrygoestoBolton wrote:Regrettably, a question I can’t answer. I was just clarifying the difference between the two.
Me neither, Barry, but you were right to draw the distinction.

Financial Reporting Standards are subject to change over the years though the current general practice seems to be to name any individual who is the 'ultimate controlling party', if there is one. FV seem to be saying there isn't.

I'll get round to looking at Sluffy's numbers in due course. Lets see if we can figure out any more from documents on the CH file.

Just seven more days for settlement of the PBP debt within the agreed (3-year) time frame. Will it happen or won't it? Place your bets.

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