Wolves annual report and financial statements 2018/19

[The Wolf Of Wombourne]

Not one bit of that article mentions the borrowing figure I've mentioned above, I understand the figures are better, and improved , but that borrowing.....sheesh

Almost every large company in the world has large borrowing figures and they mean absolutely nothing when you take into account that our assets are based on cost and not actual value.

Our Intangible assets are our players and they are easily worth more on the open market than what’s stated in our accounts.

In reality these accounts to the naked eye understate the position of strength we’re actually in.

 

[Flump]

People: wHy w0nt fhosun 1nvest more i wAnt big tronsfers

Also people: omg wE 0we deBt tO ouR owneRs

 

[The Wolf In The North]

In the context of the frankly insane business of football finances, especially this week with the Man City farrago, that's pretty amazing. Interesting to see how much of a wage increase on that 53% has occurred since then, but it can't be THAT massive.

Also puts last summer into a bit of perspective. The idea we would throw £60-70m on Dias - that we had that kind of money, even spread over a period - was obviously nonsense in hindsight.

Can see another £30-40m this summer, more depending on European qualification, plus any additionals from player sales, if the right players are available. But no big, established stars; not our MO. Just hope we can secure two or three more in the 'raw, unpolished gem' category like Traore.

We have fantastic owners. Can't believe our luck, really, after everything that has gone before.

 

[The Wolf In The North]

Also, doesn't half make you wonder how a club like West Ham - a catastrophic polar opposite with high wages and few saleable assets - could possibly survive relegation.

And how the utter living **** have Villa spent so much money? Have they literally spunked three years' worth of PL dolly in advance?

 

[glorybox]

The loans are purely for cashflow as we invested heavily in players before we could generate the cash internally to purchase them. I'm sure Fosun will continue to provide loans, or we will seek other finance, in the future when there is a cash shortfall. Nothing unusual about that.

 

[Deleted member 5635]

That's a very good point I think, with many implications. The elite transfer market remains highly inflated, especially when the restrictions of FFP are taken into account. Club owners cant just pile money in to enrich their squads. Logically it suggests that the market will break at some point soon, as teams have to move on players in order to replenish their squads. Wolves have done well with the Cavaleiro, Costa and Cutrone deals, if they are all followed through on. This plus a relatively lean squad hopefully means some room to manoeuvre in the summer.

Does that £50m possibly mean though(lets use £40m for simple purposes) that because of amortization you could possibly bring in 4 players for £40m each on 4 year contracts each meaning £10m per year?(if that's how it works? obviously wages have to be included as well)

 

[AndyWolves]

Don't mention the borrowing, you will be labelled a WUM

Your first word on our accounts being published was 'scary'

 

[Wolfheart]

The loans form Fosun are irrelevant!

That borrowing is first of all interest free, so will just sit there, and second of all, will be ring fenced to be paid likely only on sale of club therefore, to be cleared by new owners or included within the sale price.

the figures are great. Shows were on our way to being self sustainable.

Next financial results should be even more fruitful.

No massive wage increases, Podence in, Cav, Costa and Cutrone out (£30m+) increased revenue from fashion ranges and megastores, increased kit sales, higher merchandise in general, bigger sponsorships and advertisements, EL football increased prize pot and TV revenue.

Turnover likely to be close to £225-250m add +£30m of player sales with same operating costs more or less profit will be close to £100m

 

[RosehillWolf]

Fosun reveal their plan as Wolves accounts highlight £131m 'debt'

 

[RosehillWolf]

Your first word on our accounts being published was 'scary'

I get scared when I owe £100 on my credit card, so to me ...... SCARY !!

 

[RosehillWolf]

Wolves post £20m profit while debts are up in new club accounts

Debts rose significantly ....not my words ...

 

[wolvesjoe]

Does that £50m possibly mean though(lets use £40m for simple purposes) that because of amortization you could possibly bring in 4 players for £40m each on 4 year contracts each meaning £10m per year?(if that's how it works? obviously wages have to be included as well)

In a simplified way, yes that's how it works. In reality, other things can affect the process, as with raised overheads due, for example, to hiring more middle management staff to deal with more complex demands, such as marketing and media, (as has happened at the club over the last year).

Remember too that the club has to have some margin to work with in case of unforseen expenses such as a new coach, heaven forbid, having to buy a couple of extra players for cover, etc. As long as Wolves compete in European competition then there is only 9m euros loss allowed, while it is 35m pounds if not. The extra income Wolves earn from Europe, however, cancels that out and does not require Fosun putting more equity into the club, (although I am sure they would if they felt it was necessary).

 

[glorybox]

I get scared when I owe £100 on my credit card, so to me ...... SCARY !!

How about your mortgage??

 

[Glow69]

The increasing value of our players aswell if we ever got into a pickle.

I mean Neto value will have doubled by the end of the season no doubt. Hopefully a few more of that ilk in the summer.

 

[reanswolf]

Fosun reveal their plan as Wolves accounts highlight £131m 'debt'

Hmm...thats abit scary.
But I can only read the headline nothing else. just loads of pop up photos.

 

[Deleted member LP 3925]

So could someone summarise:

We have V amount of debt.

We made a profit of W in the 2019 report

Our estimated turn over in the next financial report should be X

Our estimated profit in the next financial year should be Y

We’ve got Z to spend on players in the next year without getting into FFP/Europa League trouble.

There you go, all on one thread and should keep people happily debating/arguing until the next transfer window opens.

 

[reanswolf]

Are our accounts excellent or worrying?
People who are meant to understand finances are saying contradictory things on this thread.

 

[RosehillWolf]

Are our accounts excellent or worrying?
People who are meant to understand finances are saying contradictory things on this thread.

They seem to be both !

 

[wolvesjoe]

Hmm...thats abit scary.
But I can only read the headline nothing else. just loads of pop up photos.

Its the Birmingham Mail trying to find a negative in a highly positive new item.

 

[northnorfolkwolf]

I understand very little about money and so will not comment.
Perhaps that is a good starting point for others on this thread...??

Well said. I expect 99% of posters on here know jack **** about business accounts but, as usual, they will all give their 'informed' view. If one of the Mixers starts his post by saying he is an accountant then he will have my full attention, otherwise it's just a load of waffle.

 

[Werewolf of Wombourne]

Ca

Or we could just take out another loan. It seems to work for Mrs Lupo.

can we get away with offering £5 a week until we get CL football?

 

[AndyWolves]

PriceOfFootball on Twitter

This guy says we have posted excellent accounts

This is who he is

Kieran Maguire - University of Liverpool

 

[AndyWolves]

Wolves post £20m profit while debts are up in new club accounts

Debts rose significantly ....not my words ...

Debts to Fosun, which is them putting money into wolves

Only a problem if Fosun call them in and why would they?

 

[Chris H]

Are our accounts excellent or worrying?
People who are meant to understand finances are saying contradictory things on this thread.

Excellent. (And for northnorfolkwolf's benefit, I'm an Accountant. I'll readily admit though, whilst I understand the basis of the Accounts submitted, I won't profess to be an expert on FFP and what these figures mean from an FFP point of view. I understand the basics but it's always very difficult to compare submitted accounts to FFP rules due to parts of accounts that are outside the scope of FFP but not shown separately within the figures)

Purely from an accounting point of view: -

We posted a profit in the year with a considerable improvement on the previous year. Our wages to income ratio is one of the lowest in the league and in-spite of the fact our debts rose overall the net liabilities (net amount of our assets less our liabilities) reduced from £62m to £40m which essentially means that whilst our debts rose, our assets rose by a greater amount meaning overall our balance sheet is stronger than it was 12 months previously.

Also when you consider that the assets are based on net book value (i.e. cost less amortisation to date over the lengths of the players contracts) is only stated as £102m compare this to what our squad would actually be worth in today's market and we're in a great position. as it means the reality is the net asset position of the company is much better than the balance sheet implies.

The majority of our debt is owed to Fosun who have injected cash in to the club to cover paying up front for players etc. and despite peoples concerns about their ongoing commitment recently this proves they've put £131m in to the holding company (W.W 1990 Ltd) up to 31 May 2019 with £57m of that being in the 2018/19 year (this doesn't include additional income received from them in way of sponsorship such as the £1m they paid for the naming rights of the training ground etc.) which they have stated they have no intention on recalling and are willing to continue to fund the club further where required.

They also appear to be charging no interest on on this loan unlike most owners in the league which further shows their commitment to the club as they'd be well within their rights to but haven't.

Liabilities of a company are always something to be wary of however a large increase doesn't point to any issues, especially when compared to the relative increase in both assets on the balance sheet and hugely improved P&L from last year.

For Fosun to inject cash in to the club they will always have to have a "loan" on the balance sheet as the accounts have to be put together within company law and for every debit (money in the bank) there's always a credit on the other side (money owed to Fosun). They will have consciously decided to inject this money and I see no reason for people to worry about them taking it back now, especially considering they've stated within the accounts when discussing cash flow forecasts that they prepared including some that cover worst case scenario, i.e relegation, its stated that "Fosun International Limited has indicated its intention to continue to make available such funds as are needed by the company, and that it does not intend to seek repayment of the amounts due at the balance sheet date, for the period covered by the forecasts."

All in all, these figures are much improved on last year and show exactly why Fosun threw everything they could at gaining promotion.

We are a club in a very good position both on and off the pitch.

 

[Sussex Wolf]

This guy says we have posted excellent accounts

This is who he is

Kieran Maguire - University of Liverpool

He knows what he’s talking about and is very complimentary about our finances. That’s enough for me.

 

[Sheffield Wolf]

Excellent. (And for northnorfolkwolf's benefit, I'm an Accountant. I'll readily admit though, whilst I understand the basis of the Accounts submitted, I won't profess to be an expert on FFP and what these figures mean from an FFP point of view. I understand the basics but it's always very difficult to compare submitted accounts to FFP rules due to parts of accounts that are outside the scope of FFP but not shown separately within the figures)

Purely from an accounting point of view: -

We posted a profit in the year with a considerable improvement on the previous year. Our wages to income ratio is one of the lowest in the league and in-spite of the fact our debts rose overall the net liabilities (net amount of our assets less our liabilities) reduced from £62m to £40m which essentially means that whilst our debts rose, our assets rose by a greater amount meaning overall our balance sheet is stronger than it was 12 months previously.

Also when you consider that the assets are based on net book value (i.e. cost less amortisation to date over the lengths of the players contracts) is only stated as £102m compare this to what our squad would actually be worth in today's market and we're in a great position. as it means the reality is the net asset position of the company is much better than the balance sheet implies.

The majority of our debt is owed to Fosun who have injected cash in to the club to cover paying up front for players etc. and despite peoples concerns about their ongoing commitment recently this proves they've put £131m in to the holding company (W.W 1990 Ltd) up to 31 May 2019 with £57m of that being in the 2018/19 year (this doesn't include additional income received from them in way of sponsorship such as the £1m they paid for the naming rights of the training ground etc.) which they have stated they have no intention on recalling and are willing to continue to fund the club further where required.

They also appear to be charging no interest on on this loan unlike most owners in the league which further shows their commitment to the club as they'd be well within their rights to but haven't.

Liabilities of a company are always something to be wary of however a large increase doesn't point to any issues, especially when compared to the relative increase in both assets on the balance sheet and hugely improved P&L from last year.

For Fosun to inject cash in to the club they will always have to have a "loan" on the balance sheet as the accounts have to be put together within company law and for every debit (money in the bank) there's always a credit on the other side (money owed to Fosun). They will have consciously decided to inject this money and I see no reason for people to worry about them taking it back now, especially considering they've stated within the accounts when discussing cash flow forecasts that they prepared including some that cover worst case scenario, i.e relegation, its stated that "Fosun International Limited has indicated its intention to continue to make available such funds as are needed by the company, and that it does not intend to seek repayment of the amounts due at the balance sheet date, for the period covered by the forecasts."

All in all, these figures are much improved on last year and show exactly why Fosun threw everything they could at gaining promotion.

We are a club in a very good position both on and off the pitch.

Excellent post which makes a lot of sense. Thanks for taking the time to do that.

 

[Monketron]

In reality the money owed to Fosun won't be an issue as they won't wish to wreck their main asset (the club) by bankrupting us or making sure we're relegated due to under-spending caused by paying them back. That money will be recouped if they ever sell the club.

 

[OLDGOLD]

This guy says we have posted excellent accounts

This is who he is

Kieran Maguire - University of Liverpool

It is possible of course that Man City posted excellent accounts....

Just saying..

 

[The Wolf Of Wombourne]

Debts to Fosun, which is them putting money into wolves

Only a problem if Fosun call them in and why would they?

If Fosun called them in we would have to go and get a bank loan on less favorable terms but as you said why would they.

I’d encourage anyone to go and and look at the accounts of any large company and look at debt levels because the whole economy operates on borrowing. If you’re worried about wolves you should be far more worried about the UK as we owe trillions.

 

[AndyWolves]

It is possible of course that Man City posted excellent accounts....

Just saying..

If you are implying that wolves have posted dodgy accounts you better have a reason for thinking that

Just saying... ;-)

 

[SteveBullsKnee]

Scary ..... we have borrowed £164million ?? which is payable within 12 months...have I read this correctly ? I assume this includes the two tranches of Macquarie money..... so when we get our PL payment and TV rights, that will have to go towards paying this off , and will still leave monies owing. Add to this the escalating salary bill due to contractual obligations , deduct season ticket revenue and we are in a big hole by the looks of things
My question is , where are the funds for new players ?? and to me, it looks like we need to sell in the summer ..... and I have to say, if I've read those figures correctly we are totally ****ed if we get relegated !

Yawn, the prophet of doom speaks

 

[wolvesjoe]

They seem to be both !

If it helps to reassure you, the accounts show how much better a situation Wolves are than most of the
other clubs in the division. There is a real lack of ability to manoeuvre in the transfer market for many other clubs
now, including some of the big 6. Wolves are well-placed.

 

[Fenrir_]

Don't get the negativity nor the assumptions that we might spend a modest amount in the summer. That's a £10m operating profit despite spending a huge amount on players, wage bill is low to turnover. The value of the club will have shot up and more than balance out what we owe Fosun if they decided they wanted out, and regarding FFP, that £10m operating profit will be absolutely dwarfed by the figure you end up with when you take off all the exemptions.

We're in a great position

 

[Flea]

I really don´t understand a thing about these accounts,despite me owning a biz of me own.

Some time ago,I did predict a slight profit for last season..and a bigger one for this season..so I guess I follow that far anyways.

Regarding FFP we are very fine if looking at Prem regulations.It is my understanding we are also dandy regarding UEFAs rules.

We get our big loss from promotion season out of the way..then it is up to Fosun how much we spends.

 

[Flea]

Villa,for example..will be interesting in the future.
Their FFP must be a mess by now.
They will probably have to sell Grealish in the summer if I get it correctly.

 

[DPE]

From Spiers broken down.


Wolves accounts for 2018/19 are out

Key figures (17/18 figure in brackets)
- Profit £19m (loss of £57m)
- Turnover £172m (£26m)
- Transfer fees £80m (£25m)
- Wages £80m (£44m)
- League cash £114m (£7m)

Borrowed £57m from Fosun, total borrowing now £131m. Spent £95m this season

looks bloody good to me.

 

[SingYourHeartsOut]

Hilarious that the squad is valued at 102m when Traore would cover most of that on his own. Almost as funny as the fact that the people moaning about the debt are the same ones who moaned about lack of investment in the window.

 

[Flea]

Anyone knows how much it would be worth to us to qualify for Champions League?

We will need additional investments for us to be able to reach CL,so it is perhaps an act of balance.

 

[Black Country Wanderer]

Fosun have already said they have no intention of calling in any repayments,plus they are interest free,also added they will invest further if needed but would like the club to be self sufficient as soon as possible
So on that basis we are indeed looking good,with what should be good profits this season
It also tells you why we didnt go overboard on transfers the last 2 windows,we needed a couple of sets of good figures to offset the huge loss in our Championship season,thats done now and the purse strings can be loosened slightly
Dont expect a huge increase in spending,but we could see our record broken easily this summer

 

[northnorfolkwolf]

Just had a look at the accounts at Companies House - turnover from Champs to Prem is amazing:
Gate receipts 7mil to 11 mil
Sponsorship and advertising 2 mil to 15 mil
Broadcasting revenue 1mil to 18 mil
Commercial 6 mil to 10 mil - but all this is small beer when you see
Football league to Premier Lg distributions 6 mil to 114 mil !
Total turnover risen from 26 mil to 172 mil!!!!!!
To think we've caught up in the league in 2 seasons with the likes of Utd, Spurs and Arsenal who have been turning over all this and much more for years now is incredible.
Onwards and upwards!