BFC Accounts 2021

The headlines for the year to May 2021.

The club lost £4.3m. Turnover fell from £14.1m to £12.5m. Matchday income was down £2m but this was partially offset by about a £1m increase in TV revenue. Wages increased from £11.1m to £14.4m

A further £2.8m was claimed and can be added to turnover in broad terms from the job retention scheme which will have helped meet salary costs.

Overall player trading added around £0.5m although that is included in the losses.

The club has £3.6m of EFL loans to meet the shortfall.

I’ll have a detailed look later but the club is now carrying debt.

 

Thanks for that mate, will be interesting to get your take on it later when you've digested the accounts in more detail.

 

Leave you to the detail but my quick and dirty onceover suggests that taking football turnover, the job retention scheme and the business interruption insurance receipts together, overall income was actually up and the reason for the deficit was primarily the £3.2m increase in wages.

What I can't see evident from the accounts is any split between the amount of the wage increases attributable to performance success bonuses (which won't be replicated this season!) and general recurring pay.

Encouraging for the current season is the cash balance from deferred income relating to large 2021/22 season tickets. Shame that was wasted.

Absolutely no mention of the remaining £2.75m to the Crynes or the court case.

 

I assume the EFL loan was made as part of this scheme, specifically set up to help clubs cover their tax (PAYE) liabilities, following loss of income due to the pandemic effects.

https://www.efl.com/news/2021/march/league-secures-championship-loan-fund/

 

When will it dawn on management across football clubs that players are on too much? I appreciate it's a short career etc, but if players are on a max. of 10k in our division and there is a cap on the amount of players on your books, surely everyone wins (including the players*)

* Maybe not the agents
** £10k a week probably wouldn't help us.

 

Jimmy Hill will be turning in his grave.....

 

I can never criticise football players because it's the one industry where the workers actually get the fruit of their labours rather than the managers or owners.

 

It’s not for the players to be criticised it’s about whats affordable and sustainable for clubs which are continually spending more money than comes in. It’s a basket case and I think when supporters start to tighten their belts when more things like energy prices rocket and cost of living and find supporters putting less and less into clubs I can only see this issue increasing for clubs.

 

I'd never blame the players or the employee. If someone offers you (or you negotiate) a wage, as an employee, you'd take it. I'd just expect that the employer was actually able to afford it.

 

Quiet start to the day so I thought I’d look at player purchases and sales.

Amount spent on new players, £4.3m. I’ve had a rough guess at the fees for each player I can find joining over the year

Herbie Kane £1.2m
Dom Frieser £0.6m
Michal Helik £0.9m
Callum Brittain £0.5m
Carlton Morris £0.4m
Liam Kitching £0.6m

The amounts may be out individually but the total is correct and it then comes down to allocation by player.

Sales is the more confusing bit as I get that to be £6.3m receipts from the following sales:

Jacob Brown £2.2m
Malik Wilks £1m

This leaves another £3m and the only sales I can think of are McGeehan and Struber.

 

The values of Intangible Fixed Assets (Player Registrations) and Tangible Fixed Assets have remained pretty similar to the previous year. Current assets have increased in value by a little over £1m, but this figure masks increased liquidity because the amount owed to the club in transfer fees has fallen to £1.5m from £5.3m and that cash has been moved into our current account which has increased from £0.7m to £3.5m. It is good to have free cash, but the fact is that the club lost £4.2m in the year, and that loss has to affect the Balance Sheet in some way. That effect is shown in the increase in Current Liabilities, which have risen from £6.2m to £11.6m. The current Balance of the loan from the EFL is not shown separately, but the club borrowed £3.6m and I know from reading other club's Accounts that the repayment terms for these loans are very strict and have dire consequences if repayment terms are not met.

There is no mention of the resolution of the dispute with Hull City, and It is not clear if the full effects are included in these accounts. The is no mention of Post Balance Sheet events, so there is no record of the amount received from WBA in compensation for Ismael becoming their new manager. There is no indication of the value of our signings in the Summer transfer Window. There is no indication of how much of the Cash Balance was available for incoming transfers during that transfer window, or how much of it was required in order to reduce Current Liabilities (including the EFL loan).

Conway complained that reaching the play-offs had cost him £500k, but wages have increased by £3.1m and along with the reduction of the transfer surplus (£2.2m) this more than accounts for the increase of £4m in Net Losses last year. Conway blamed Ismael's style of play for the loss of transfer income, but it is clear from other Accounts that clubs were simply not spending as much on transfers because they did not have the money. If Barnsley FC is no longer able to rely upon making good losses through the sale of players, and this situation carries on over the long term, then the club is in trouble, and I say that in spite of the large cash balance in these accounts.

 

The increase in cash can be attributed to the loan proceeds.

The worry is that the Balance sheet has fallen from £9.4m to £1.4m over the last three years. The position inherited by the current owners has rapidly deteriorated, although COVID can be blamed for a significant part of that decline.

I think the EFL loan has around £3.4m outstanding and is shown as ‘other creditors’. £1.468m due this year and a further £1.896m due beyond one year.

No cash to the Cryne family and amazingly there is no deferred liability shown in the accounts despite ‘all parties agreeing to these payments’ I would suggest that this is not clear cut hence the legal case.

 

Currently part way through a first read of them and two things leap immediately off the page to me so far:

The auditors have reported a material uncertainty related to going concern in their audit opinion. This falls short of being a qualification of the accounts (the worst case outcome of any external audit) but suggests that they have some doubts about the robustness of the going concern assumptions adopted by the directors (most likely their cash-flow forecasts). The going concern statement itself is quite bland in nature, but for it to be highlighted in this way by the auditors is a concern.

The other issue, probably related to the above is that the accounts are now showing net current liabilities of £1.7m compared to net current assets of £1.1m last year. Taken purely as a snapshot of the balance sheet date, it suggests that BFC will struggle to meet its liabilities as they fall due. Cash has increased to £3.5m, and there are a further £4.2m owing to BFC as debtors. However there are £9.5m of liablities falling due within 12m which outweigh this (the liabilities are up from £5.5m last year).

So, as at page 21 of the accounts being read so far, I'm seeing signs of a company in financial distress.

 

Over £1m for Herbie Kane has to be up there in the worst transactions in the history of the club.

 

Maybe so.. maybe not. But the very basics of economics is you can't pay out more than you get in.
Some people change their career 2 or 3 times in life. I've know hairdressers become nurses, teachers become truck and bus drivers. There is nothing special about footballers. They have no devine right to be set up for life just through playing football every Saturday.

I remember a great young striker in the seventys called Mick Butler who took a *pay cut* from the pit to play pro football.
You may say that's different times and maybe so,but just because times moves forward doesn't mean everythng else does. Something's go backwards and actully get worse.

 

Is this not the case at most other clubs our size at the minute?

 

Some interesting changes in the directors' assessments of principal risks and uncertainties too, which now includes:

"The threat of relegation and the material negative impact on revenue" and
"Impairment of player registration values and onerous player contracts resulting from loss of form or long-term injury."

The second one in particular is as close to an admission of failure of the current season's strategy as you're ever likely to see.

 

The appalling results of the other clubs reported in the separate thread tracking their accounts are generally a result of owners propping them up via loans, etc so the main implied risk to them is an owner withdrawing financial support or calling in their debts (as happened with Wigan).

In our case, as the owners aren't providing financial support to the club, the going concern issues are much more of an immediate threat, as the club has to generate the funds to pay these liabilities. The accounts are telling us that they are potentially unable to do so (and this data is timed in advance of a Championship season after our most successful campaign in years). Things will have no doubt deteriorated since then, although we won't know the extent of this for another 12 months.

 

I think this thread will confirm what a lot of supporters have suspected for a while. It is sad but I remember Gordon Shepherd saying the club was basically insolvent without Mr Crynes support, that was in a season after promotion. I accept the loss of income from the effects of Covid-19 but there seem to be poor decisions made and poor future planning. Am I mis-remembering? I thought Dane Murphy said the club didn't need the EFL loans,last year.

 

It just doesn't read that bad to me considering the financial climate and the state of football in general.

There are probably 50 other clubs that would go to the wall before us.

Maybe my optimism is misplaced?