• The first stage of the forum upgrades has now been completed but they remain in a degraded state and are still being worked on.
    Please read this thread for more details.
    New user registrations are currently disabled.

The 2018/19 accounts - the Grumpy take

Status
Not open for further replies.
I am so confused by this thread. Who are Madrox and SJD? What is a holding company? Why is there both Sunderland Limited and SAFC Ltd? What the fuck is going on?
 

Grumpy Old Man said:
This, hopefully, is the nadir, the final emptying of the cesspit of declining finances. We live in hope.

What can we say from the numbers, and what does it really mean going forward?

First, this year's figures

Income
Obviously, way down on 2016/17. TV income halved as expected. Gate receipts went down by £2.4m, a drop of just under 25%. That's the cost of PL fanboys and stayaways. Sponsorship fell off a cliff, down 80%, while commercial and retail were down about 35%. Depressing, but pretty much what you might expect. Looking at 2018/19 gates, everything but TV income will probably have bottomed out. However, we're looking at another £15m or so drop in TV income in the 2018/19 accounts. That's why the new owners needed, and still need, tocut costs.

Expenses
Staff costs dropped by £35m (around 42%), lower than the fall in income. so staff costs were 73.4% of turnover (2017 - 67.5%). Bain got a £1m payoff (looking at his total pay, that's probably a contractual one year notice). On staff numbers, it looks as though redundancies affected 1 in 6 admin staff. It appeared that we still managed to spend around £2om on other operating costs. This is where Donald is really going to have to wield the axe to get the books balanced.

Other points to note from the P&L: a further £12m was written off player contract values, we made an £8m profit on the sale of the Charlie Hurley centre, and the lawyers and merchant bankers trousered £6.5m for the share issue.

Turning to the balance sheet, transfer debtors were £16.2m (£4.4m receivable next season), while transfer creditors were £19.6m (£3.5m payable next season). Other debtors include £9.6m due from another group company (not Sunderland Ltd). It's unclear who owes this, or why the debt is there. As expected, there arer no external debts, and there was a positive cash balance of £11.1m at the year end.

Looking forward, there are grounds for optimism, although we may continue to make smaller losses while the position the owners inherited unwinds. Clearly, there is much more work to be done on the cost base, particularly player wages, but it's a far brighter picture than when I was writing this time last year.
Click to expand...

Cheers.
Said it before, and I'll say it again - I'm actually quite happy with the idea of being a "local club", running at break even, and really going to town with the academy + a few signings to make it all work.
Long term projects can work for us.

Spending a bomb, and changing manager ever 10 months doesn't. We've proved that already.
 
Chop Buster said:
I am so confused by this thread. Who are Madrox and SJD? What is a holding company? Why is there both Sunderland Limited and SAFC Ltd? What the fuck is going on?
Click to expand...

Madrox is a company owned jointly by SJD, Methven and Sartori. SJD holds Donald's shares in Madrox. Madrox owns the shares in Sunderland Limited (which is the old plc from the Murray days that many supporters had shares in. Sunderland Limited owns the club's properties and the shares in The Sunderland Association Football Club Limited (the original football club set up in the 19th century) and one or two smaller companies (the events management company and the the ladies club. A holding company is one that owns a controlling interest in the shares of another. There's nothing sinister - pretty much every large "company" you'e ever heard of is actually composed of a holding company and subsidiaries, each subsidiary having different activities within the group. Having both Sunderland and SAFC enables a separation of property owning and the main football activity. This separation is very common in larger clubs, not so much in smaller, more traditional ones.
 
Most interesting notes for me are 13 (debtors) and 15 (creditors > 1 year).
Looking at these, as relates to periods over a year away from 31 July 2018, amounts due in from player sales (debtors) exceeds amounts payable on player purchases by c£1m.
As such, from Aug 2019 there can be no chat/ excuses made about future transfer fees relating to legacy business inhibiting our club. We are due in more than what we pay out legacy wise.
 
Jorrd93 said:
@Grumpy Old Man is it possible that 9.6m owed in is Juan? I'm sure I read somewhere that Juan was paying over instalments when it was announced for his 20%
Click to expand...

The instalments have nothing to do with the club - they were the responsibility of the new owners. Also, Sartori is not another group company. The wording refers specifically to a company within the group of companies whose ultimate holding company is SJD.

daveybigpotatoes said:
Most interesting notes for me are 13 (debtors) and 15 (creditors > 1 year).
Looking at these, as relates to periods over a year away from 31 July 2018, amounts due in from player sales (debtors) exceeds amounts payable on player purchases by c£1m.
As such, from Aug 2019 there can be no chat/ excuses made about future transfer fees relating to legacy business inhibiting our club. We are due in more than what we pay out legacy wise.
Click to expand...

The notes only include transfer business up to 31 July last year. Since then we will have added creditors for players bought, and debtors for players sold, in January.
 
Last edited:
Grumpy Old Man said:
The instalments have nothing to do with the club - they were the responsibility of the new owners. Also, Sartori is not another group company. The wording refers specifically to a company within the group of companies whose ultimate holding company is SJD.



The notes only include transfer business up to 31 July last year. Since then we will have added creditors for players bought, and debtors for players sold, in January.
Click to expand...

Now i'm thinking 9.6m doesn't make sense, but isn't Sartori under 'Arvesa Corp' or something similar?

Either way, cheers for all the investigating, I should stop trying to get my head around it really.
 
Grumpy Old Man said:
The instalments have nothing to do with the club - they were the responsibility of the new owners. Also, Sartori is not another group company. The wording refers specifically to a company within the group of companies whose ultimate holding company is SJD.



The notes only include transfer business up to 31 July last year. Since then we will have added creditors for players bought, and debtors for players sold, in January.
Click to expand...
Which is why I said legacy. January was SD et al.
 
Jorrd93 said:
Now i'm thinking 9.6m doesn't make sense, but isn't Sartori under 'Arvesa Corp' or something similar?

Either way, cheers for all the investigating, I should stop trying to get my head around it really.
Click to expand...

Arvesa Corp owns 20% of Madrox. Not enough to make it a group company - it's simply a shareholder in Madrox. And, in any event, this is money owed by, not to, another group company.
 
Grumpy Old Man said:
Madrox is a company owned jointly by SJD, Methven and Sartori. SJD holds Donald's shares in Madrox. Madrox owns the shares in Sunderland Limited (which is the old plc from the Murray days that many supporters had shares in. Sunderland Limited owns the club's properties and the shares in The Sunderland Association Football Club Limited (the original football club set up in the 19th century) and one or two smaller companies (the events management company and the the ladies club. A holding company is one that owns a controlling interest in the shares of another. There's nothing sinister - pretty much every large "company" you'e ever heard of is actually composed of a holding company and subsidiaries, each subsidiary having different activities within the group. Having both Sunderland and SAFC enables a separation of property owning and the main football activity. This separation is very common in larger clubs, not so much in smaller, more traditional ones.
Click to expand...
Thanks for the explanation. So Madrox is a company owned partly by SJD which is a company owned by Stewart Donald and the shares in Sunderland are under the name of that company? And Sunderland Limited own both SAFC and the SOL etc? So is it possible this 9.6m is owed by SAFC to Sunderland Limited? Maybe for transfer payments or something.
 
Grumpy Old Man said:
Arvesa Corp owns 20% of Madrox. Not enough to make it a group company - it's simply a shareholder in Madrox. And, in any event, this is money owed by, not to, another group company.
Click to expand...
whats the definition of a group company in that context? sjd leisure has precisely the same relationship to safc as does arvesa-why is sjd a group co but not the other one?

Chop Buster said:
Thanks for the explanation. So Madrox is a company owned partly by SJD which is a company owned by Stewart Donald and the shares in Sunderland are under the name of that company? And Sunderland Limited own both SAFC and the SOL etc? So is it possible this 9.6m is owed by SAFC to Sunderland Limited? Maybe for transfer payments or something.
Click to expand...
right about all of it except the last bit..gom has checked and it isnt owed to sunderland limited-but to one of he other group companies..
 
Chop Buster said:
Thanks for the explanation. So Madrox is a company owned partly by SJD which is a company owned by Stewart Donald and the shares in Sunderland are under the name of that company? And Sunderland Limited own both SAFC and the SOL etc? So is it possible this 9.6m is owed by SAFC to Sunderland Limited? Maybe for transfer payments or something.
Click to expand...

No, because there's no equivalent creditor in Sunderland Limited or its other subsidiaries. That means it must have been owed by Madrox or SJD.
 
Got to love this thread. Whilst I don't pretend to follow all (or very much) of it, it does highlight the 'talent' in the fan base. Doesn't matter what the issue is, the SMB will have experts. In this case accountants.
The response from SD which is now necessary with this amount of learned analysis will be interesting.
 
kildaremackem said:
whats the definition of a group company in that context? sjd leisure has precisely the same relationship to safc as does arvesa-why is sjd a group co but not the other one?


right about all of it except the last bit..gom has checked and it isnt owed to sunderland limited-but to one of he other group companies..
Click to expand...

Percentage of ownership. At over 25% ownership, a company can treat another as an associate, and include an appropriate proportion of that company's profits in an accounts. When a company owns more than 50%, then that company becomes a subsidiary, a group is formed and the two companies results are consolidated as of they were one. Any profit attributable to minority shareholders is deducted from group profit when calculating the group's reserves. Madrox is a subsidiary of SJD, because SJD owns 74% of the shares. At 20% ownership, Avesa is only a minority shareholder. Sunderland Ltd is a subsidiary of Madrox because Madrox owns 100% of the shares. And so on down the line.
 
Grumpy Old Man said:
Percentage of ownership. At over 25% ownership, a company can treat another as an associate, and include an appropriate proportion of that company's profits in an accounts. When a company owns more than 50%, then that company becomes a subsidiary, a group is formed and the two companies results are consolidated as of they were one. Any profit attributable to minority shareholders is deducted from group profit when calculating the group's reserves. Madrox is a subsidiary of SJD, because SJD owns 74% of the shares. At 20% ownership, Avesa is only a minority shareholder. Sunderland Ltd is a subsidiary of Madrox because Madrox owns 100% of the shares. And so on down the line.
Click to expand...
thank you.
 
Grumpy Old Man said:
Percentage of ownership. At over 25% ownership, a company can treat another as an associate, and include an appropriate proportion of that company's profits in an accounts. When a company owns more than 50%, then that company becomes a subsidiary, a group is formed and the two companies results are consolidated as of they were one. Any profit attributable to minority shareholders is deducted from group profit when calculating the group's reserves. Madrox is a subsidiary of SJD, because SJD owns 74% of the shares. At 20% ownership, Avesa is only a minority shareholder. Sunderland Ltd is a subsidiary of Madrox because Madrox owns 100% of the shares. And so on down the line.
Click to expand...
And SAFC Ltd is a subsidiary of Sunderland Ltd!
 
Status
Not open for further replies.
Back
Top