Wolves accounts 20/21

[Monketron]

https://twitter.com/x/status/1499271837255098369

Great to see Fosun have written off the £126m owed to them.

 

[Olivergoldblack]

So does that mean for FFP reasons we're about 18m in profit?
23.7m profit-5.3m interest payments and ignore the 126m Fosun loan.

 

[Chris H]

W.W. (1990) LIMITED filing history - Find and update company information - GOV.UK

W.W. (1990) LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

Full accounts for the group can be found here for anyone who is that way inclined.

The football club part of the group is here-

WOLVERHAMPTON WANDERERS FOOTBALL CLUB (1986) LIMITED filing history - Find and update company information - GOV.UK

WOLVERHAMPTON WANDERERS FOOTBALL CLUB (1986) LIMITED - Free company information from Companies House including registered office address, filing history, accounts, annual return, officers, charges, business activity

find-and-update.company-information.service.gov.uk

 

[Chris H]

It’ll be interesting to see the clubs statement when released but initial things having a quick flick through:

- Fosun have written off their £126m debt and we now owe them nothing (or did as of 31/05/21)

- We made an overall loss on player trading (net spend) in 2020/21 of £10.8m

- Jeff took a pay cut from £520k to £400k

- Fosun paid £1m for the continued sponsorship of the training ground

- There was a net SPEND of £4.9m detailed in the post balance sheet events (I.e net spend in the 2021 summer window presumably)

 

[Chris H]

It’ll be interesting to see the clubs statement when released but initial things having a quick flick through:

- Fosun have written off their £126m debt and we now owe them nothing (or did as of 31/05/21)

- We made an overall loss on player trading (net spend) in 2020/21 of £10.8m

- Jeff took a pay cut from £520k to £400k

- Fosun paid £1m for the continued sponsorship of the training ground

- There was a net SPEND of £4.9m detailed in the post balance sheet events (I.e net spend in the 2021 summer window presumably)

Interesting that the loan is wiped and we had an overall net spend in 2020/21 and again in the summer window.

I was reliably informed Fosun were pocketing the money…

 

[Ponty]

Why would they write debt off? Is it to make things more straightforward to sell the club? Or does it free you money to spend under FFP?

 

[Chris H]

We value permanent losses from Covid as £18.7m.

Villa posted yesterday that theirs were £56m! How’d they manage that then, when we’d have lost more due to Europe? Almost like they’ve massaged the figure to meet FFP…

 

[Chris H]

Why would they write debt off? Is it to make things more straightforward to sell the club? Or does it free you money to spend under FFP?

Neither, probably.

As long as the debt is on the balance sheet it has to be treated as a payable liability. Even if Fosun never intended to recall it it affects the strength of the balance sheet. By writing it off they confirm it will never be recalled and free the club of that liability.

 

[Chris H]

https://twitter.com/x/status/1499271893886586881

 

[Wolf316]

Can someone who knows about these things explain why Fosun would just wipe that debt off?

 

[Halesowen wwfc]

Can someone who knows about these things explain why Fosun would just wipe that debt off?

Seen as it has no impact on ffp apparently, i really dont know. What it has done is taken the balance sheet from 'insolvent' to positive so perhaps comments from some saying its them getting ready for a sale has some truth in it. The only other thing i can think of is maybe the loan company macquarie insisted on it in order for them to be preferential creditor, although this could be easily resolved with a charging order.

 

[Mile End Wanderer]

So we now know why we don’t want to qualify for European football a serious overhaul ahead

 

[Darvo]

I’m no accountant but how could the debt being written off not be looked at as nothing other than a very generous act by Fosun?

My only other thought is ... could this be in preparation for a sale?

 

[Flump]

Football clubs get sold with debts all the time - just like houses get sold despite being mortgaged all the time. Especially when it's a straight forwards interest free debt to the owners, it wouldn't complicate things.

 

[WolvTown]

Abramovic said he was writing off his debt, £1.5b just as he is selling up too?
Is this comparable or different?
Do owners who usually have no interest in having the money back just write it off every few years, just to "clear the decks" so to speak?

 

[Flump]

Abramovic said he was writing off his debt, £1.5b just as he is selling up too?

No, he said he "will not be asking for any loans to be repaid".

That leaves plenty of wriggle room for it to be paid by the new buyer at the point the club is sold, i.e. rather than by the club now, which would obviously be impossible.

 

[Jonzy54]

I don’t confess to know how all of this works but come the summer subject to Fosun wanting to that is are we in a strong position to buy players?

 

[WolvTown]

No, he said he "will not be asking for any loans to be repaid".

That leaves plenty of wriggle room for it to be paid by the new buyer at the point the club is sold, i.e. rather than by the club now, which would obviously be impossible.

That sounds different to us then?
Have Fosun written off a debt before, wolves or other company?

 

[hollo]

No as we made a loss again.

 

[clivewolves]

Obviously Guo got kaylied one night, called up Jeff and said "I bloody love you Jeff. You and the lads, Vinny, Russ and Matt are doing a great job. Y'know what I'm gonna do Jeff. I'm gonna wipe the debt off. There,it's gone. No more debt."

He gets up the next day with a blinding headache, can't remember thing, but old Ms Guo has a right cob on. He only came stumbling in at four in morning while she was trying to watch Grasshoppers. Then it all comes back to him.

He's straight on the phone to Jeff. "You've made me look a right tit. Now I've got to buy the old ball and chain a 20 year old Filipino striker to make up for it. Well, it's the last time you make a fool of me old pal. I'm slashing your pay. Let's how many orange chips you can buy with only four hundred thousand quid a year."

 

[Flump]

That sounds different to us then?
Have Fosun written off a debt before, wolves or other company?

It's very different - ours is a proper change made in official accounts, Abramovich's is a carefully worded statement on a website, so means very little at all in real terms.

They definitely will have.

 

[Dingle Chris]

I don’t think writing the debt off makes much difference to Fosun. The only time it would get paid back would be when the club is eventually sold. For example you could sell the club for £300 mill with a £126 mill debt or just sell it for £426 mill with no debt either way Fosun would get the same amount back.

 

[sc91]

Umm writing off the debt is just another way of saying they've converted it into equity. They'll get that money back when Wolves are sold, if anything this points further in the direction of wanting Wolves gone.

 

[Boss Hogg]

Presumably in Fosuns own accounts writing off the debt we owe will give them a charge they can get tax relief on?

 

[sc91]

Also, if you really want to be technical, the writing off of the loan is a strong indication that the taps are well and truly being switched off.

 

[Mile End Wanderer]

Maybe Fosun can loan us 200m again and write it off as a loss two years later lol

 

[SteveBullsKnee]

The wiping of debt from the club regardless of motives is surely a fantastic thing in the current economic climate. I couldn’t care less if this does or doesn’t affect investment, I’d much prefer a club to be here in 5-10 years time.

 

[sc91]

Maybe Fosun can loan us 200m again and write it off as a loss two years later lol

It's not wrote off, per say. Its just added to the value of the company. Easiest way to see this is on the Consolidated Balance Sheet you can see we no longer have negative reserves but positive.

This could mean numerous things, better for financing, a great investment for a new owner (debt free), better for the value of wolves, and so forth.

Writing off of a loan is that Fosun won't demand it, but that's not meaning they're not expecting to get it back, it just means the value of Wolves has gone up for any potential sale, if anything, like I predicted months ago, its window dressing and goes hand in hand with our near net neutral spending.

 

[Black Country Wanderer]

I love how some people are trying very hard to turn this into a negative
Perhaps to fit their own narrative/agenda that Fosun are using Wolves as some sort of cash cow and easy profit, fast buck enterprise

Maybe, just maybe, they never intended to call in the "loans" ,and just invested in their project to make us successful?

I know its hard to believe for some,but do you really believe investing in football clubs is a viable concept for serious business companies?

They know you have to sink hundreds of millions into the project, with slim hopes of hitting any form of gravy train unless you suddenly become part of the big 4/6, and even then you have to sustain it for years to reap the rewards
No one has done it in the last 20 years and its seriously rigged to stop anyone from doing so

Why cant we just be grateful for what we have?

It may not be the perfect scenario,you wont always get what you want,but sometimes you get what you need, as someone once wrote

 

[Chris H]

To those saying it makes no difference, why would you write the debt off that you can be repaid tax free, to then sell at a higher price for which you’d pay tax on the gain made at sale?

They may well get it back one way or the other, but yes, it does make a difference.

 

[sc91]

To those saying it makes no difference, why would you write the debt off that you can be repaid tax free, to then sell at a higher price for which you’d pay tax on the gain made at sale?

They may well get it back one way or the other, but yes, it does make a difference.

Window dressing for either selling or seeking additional financial input from other sources, be that from another investor, a bank loan and so forth.

The debt can be repaid, do Wolves have that physical cash flow to pay it back (a quick glance will suggest no), yet in a sale, the value of the club with include the equity it holds, you can take the tax hit knowing cash will be received rather than a loan that has little chance of realistically being paid.

Is it good? Yeah, its a more secure form of financing and makes Wolves on the face, profitable. Wolves are a top flight club with no stones around its neck, a rarity. That on the business front is brilliant.

Is it bad? Yeah, wanted confirmation that Fosun are done with investing in Wolves, writing off a loan that you intend to add to isn't a smart move. This signals that we are now on our own. Given this was signed off in October 2021 it would match some of the decisions made since.

To me? Its both, its means they'll be on there way but they're happy to keep us ticking along.

 

[Chris H]

Window dressing for either selling or seeking additional financial input from other sources, be that from another investor, a bank loan and so forth.

The debt can be repaid, do Wolves have that physical cash flow to pay it back (a quick glance will suggest no), yet in a sale, the value of the club with include the equity it holds, you can take the tax hit knowing cash will be received rather than a loan that has little chance of realistically being paid.

Is it good? Yeah, its a more secure form of financing and makes Wolves on the face, profitable. Wolves are a top flight club with no stones around its neck, a rarity. That on the business front is brilliant.

Is it bad? Yeah, wanted confirmation that Fosun are done with investing in Wolves, writing off a loan that you intend to add to isn't a smart move. This signals that we are now on our own. Given this was signed off in October 2021 it would match some of the decisions made since.

To me? Its both, its means they'll be on there way but they're happy to keep us ticking along.

That’s a fair and balanced assessment, and I’ve no issues with that even if I don’t necessarily agree that they are looking to sell (neither of us can truly know this so neither is definitively right or wrong).

My issue isn’t with you opinion, it’s with other posters who will only take the negative view because they’ll look for any reason to believe Fosun are the devil because it suits a narrative.

As you say, regardless of their intentions it’s a positive from a business point of view as Wolves balance sheet at 31/05/21 is far stronger than it was at 31/05/20 when the loan was still there.

 

[Chris H]

https://twitter.com/x/status/1499319713482039298

 

[Black Country Wanderer]

Window dressing for either selling or seeking additional financial input from other sources, be that from another investor, a bank loan and so forth.

The debt can be repaid, do Wolves have that physical cash flow to pay it back (a quick glance will suggest no), yet in a sale, the value of the club with include the equity it holds, you can take the tax hit knowing cash will be received rather than a loan that has little chance of realistically being paid.

Is it good? Yeah, its a more secure form of financing and makes Wolves on the face, profitable. Wolves are a top flight club with no stones around its neck, a rarity. That on the business front is brilliant.

Is it bad? Yeah, wanted confirmation that Fosun are done with investing in Wolves, writing off a loan that you intend to add to isn't a smart move. This signals that we are now on our own. Given this was signed off in October 2021 it would match some of the decisions made since.

To me? Its both, its means they'll be on there way but they're happy to keep us ticking along.

They have openly stated they want some minority shareholders to invest over 2 years ago
They have openly stated they want us to be self sufficient
I dont see anything that points to selling up
You may be right that they wont invest more,but equally i dont see that as a major problem,we sell players and buy new ones,pretty much as every other club has to do, its football,you cant have what you cant afford,thats life,we may not like it but it really does make sense

 

[WKFWolf]

I love how some people are trying very hard to turn this into a negative
Perhaps to fit their own narrative/agenda that Fosun are using Wolves as some sort of cash cow and easy profit, fast buck enterprise

Maybe, just maybe, they never intended to call in the "loans" ,and just invested in their project to make us successful?

I know its hard to believe for some,but do you really believe investing in football clubs is a viable concept for serious business companies?

They know you have to sink hundreds of millions into the project, with slim hopes of hitting any form of gravy train unless you suddenly become part of the big 4/6, and even then you have to sustain it for years to reap the rewards
No one has done it in the last 20 years and its seriously rigged to stop anyone from doing so

Why cant we just be grateful for what we have?

It may not be the perfect scenario,you wont always get what you want,but sometimes you get what you need, as someone once wrote

bang on for me mate. well put

 

[Bill McCai]

If Fosun were selling up, there would be no point in all of the stuff they are putting in place at Grasshoppers.

 

[Wolf316]

Is it possible that Fosun may be looking to sell due to the strong indications that china will invade Taiwan in the next couple of years?

 

[sc91]

That’s a fair and balanced assessment, and I’ve no issues with that even if I don’t necessarily agree that they are looking to sell (neither of us can truly know this so neither is definitively right or wrong).

My issue isn’t with you opinion, it’s with other posters who will only take the negative view because they’ll look for any reason to believe Fosun are the devil because it suits a narrative.

As you say, regardless of their intentions it’s a positive from a business point of view as Wolves balance sheet at 31/05/21 is far stronger than it was at 31/05/20 when the loan was still there.

Oh no, I am literally sitting here with my auditors hat on giving a view on what I'd perceive Fosun to be doing with Wolves.

Do they actively want to sell? Unsure, signs say yes but they've done the hard part of investment, why give over now.
Do they actively want outside finance? For sure.

And with the latter, having that positive balance sheet makes it all the more appealing to investors.

My thoughts on the latter is that Fosun will slowly sell their stakes in Wolves and become a minority partner able to draw dividends down in the company over the long term as any smart investment company would do.

Purely on a business front, they've done a fantastic job turning a loss making ship (see brought forward tax losses, 139million is a bit nuts) into one that is face value profitable. It just means that on the football front, fans will have to taper expectations down into knowing that this is a balancing exercise to remain profitable.

 

[Ernie the Wolf]

So we now know why we don’t want to qualify for European football a serious overhaul ahead

How do you arrive at that conclusion?

 

[jonesy]

So with the debt written off do we expect the sale or a massive spend this summer???

My guess is we are for sale with a higher sale fee