DRFC accounts year end June 2016

[VSC]

Analysis of Patienceform Ltd financial statements year ended June 2016

As usual the financial statements up to the 30th June 2016 for Patienceform Ltd (the trading name of DRFC) have been completed and were passed to the Viking Supporters Co-Operative for analysis.  The results of which are provided below.

Change in Structure

The biggest item contained within the accounts is the change in shareholding structure.  Within the year a large amount of shares were issued to Club Doncaster – thus making Club Doncaster a large shareholder within the football club.  This was an expected move as outlined in this very article last year and runs parallel to the change in financial structure provided by the key owners.  This move aligns with the Club Doncaster project and is something that the football club has been transparent about over the past few years.

Debt to Equity conversion

The second major item was the conversion of debt to the owners to equity provided by Club Doncaster.  Whilst largely an accounting move it means that the club is now free of the large amount of debt in place to the owners.  This adds a layer of security and is a move that should be welcomed by all supporters.  This means the level of loans within the club sat at £614k at the year-end versus the £12.4M value previously stated.  As this debt was largely to the owners, this is in line with expectations.

Accounting Loss

As is normal for football clubs in the modern day the accounts demonstrate an accounting loss within the year of £2.083M.  This is in line with what we would have expected the loss to be on the basis that most elements remained fairly static or showed small elements of growth in the year to June 16.  This is broadly similar to the loss incurred last year when the exceptional event of a loan write off is discounted.  Furthermore it’s worth pointing out that this is an accounting loss that was wholly and fully covered by Club Doncaster.

Income Growth

Despite what we would all agree was a disappointing season on the pitch, revenues increased by 350k.  This is largely due to strong commercial performance (again increasing) and increases in broadcasting and other revenue.  Matchday revenues were very static, again not surprising.

Wages

The total wage bill increased by nearly £650k.  This is partly due to an increase in stadium staffing, however, given the value this also demonstrates that there was a slight increase in the footballing wage bill also.

Overall

In summary the accounting position of the football club is as expected with no great surprises. It’s also worth making the point that very few football clubs operate with such a low level of debt and as such DRFC is in a secure and stable position.

[Syme]

£650k increase in wages for a third tier club to find its way to the fourth tier.

It's certainly not a cheap hobby for The Board members.

[SydneyRover]

So the loss incurred by DRFC is covered by Club Doncaster and the owners have offset their losses by taking more shares/equity in Club Doncaster. Is Club Doncaster making a profit? Big thanks to the owners especially as they made a huge commitment to invest in DF and the club, hopefully they will be repaid somewhat in the coming years.

[Chris Black come back]

What proportion of the issued share capital in Patienceform is now held by Club Doncaster and who controls Club Doncaster please?

[Jenny]

Share capital in Patienceform is:

80,000 Michael Garrity (0.3%)
107,000 VSC (0.4%)
334,684 Michael Collett (1.3%)
1,000 Joseph Cartwright (0.003%)
25,890,924 - Club Doncaster (98.02%)

[Jenny]

As at 20 September 2016, Club Doncaster share capital was:

707,611,710 Terry Bramall (44.048%)
707,611,710 Dick Watson (44.048%)
183,863,347 David Blunt (11.445%)
3,713,452 Andrew Watson (0.231%)
3,659,903 Sarah Kell (0.228%)

[Chris Black come back]

Thank you Jenny.

Am I missing something here?

Why has the controlling interest in Rovers (Patienceform) been transferred to Club Doncaster, even if the exact same folk are still effectively in control of the vast majority of share capital in Rovers (Patienceform) due to their control of Club Doncaster?

[Chris Black come back]

PS - this was all notionally I know, but the VSC did for some years seek to acquire further shares in Patienceform. Should I presume this has now ended, or is it that the share capital has been diluted such that it is not really worthwhile to acquire more?

[Jenny]

Thank you Jenny.

Am I missing something here?

Why has the controlling interest in Rovers (Patienceform) been transferred to Club Doncaster, even if the exact same folk are still effectively in control of the vast majority of share capital in Rovers (Patienceform) due to their control of Club Doncaster?

It is very common to have a holding company in a corporate structure (just in general business). Rovers specific - I think it also helps circumnavigate FFP rules etc.

[big fat yorkshire pudding]

PS - this was all notionally I know, but the VSC did for some years seek to acquire further shares in Patienceform. Should I presume this has now ended, or is it that the share capital has been diluted such that it is not really worthwhile to acquire more?

It's basically pointless. Unless the vsc can find 2m a year it's not going to get anywhere.

Putting funds through club doncaster is not an issue really it matches the model so no real concern.

[Chris Black come back]

I know the long-term plan is to build up Club Doncaster so that everything within the structure is greater than the sum of its parts - but, the vast majority of the share capital in our club is controlled by an entity that has a core purpose not the furthering of Rovers, but the furthering of Club Doncaster (which is more than just Rovers).

There is logic to this move I know, but thought this worth highlighting.

[SydneyRover]

But isn't the idea of Club Doncaster to broaden out the base and bring in more elements so that revenue is not solely reliant on a single income stream (DR) thereby making it stronger and build for the future?