22/23 season accounts

[MadAmster]

... don't make good reading to my untrained accounting eye.

Figures taken from page 4 of the Annual Report and Financial Statements for the period ended 30 June 2023. QUOTE The Company generated an operating loss of £10.6m which included profits on disposal of player registrations
and associated costs, primarily relating to compensation payments and contingent transfer receipts, of £1.6m.
The loss for the period was £30.4m which includes a goodwill impairment charge of £19.7m in relation to the
purchase of the Group (in Administration). The impairment of goodwill relates to the association of negative
cash flow generation from the purchase of the trade and assets of the Group (in Administration). UNQUOTE

I think 23/24 will show less of a loss but, still, a loss. There will still be some fans clamouring for us to spend 7 figures on a striker or some top class Midfielder..... aint gonna happen.

In the event of my having misunderstood the figures and we haven't made a loss, I'd love an explanation from one of our resident number crunchers. Unless, of course, the answer is the loss was covered by the parent company, Clowes Developments Ltd. In that case, the books might show break even but we did make a loss that was covered by a 3rd party...

Full report available at https://www.dcfc.co.uk/media/get/Der...3%20080324.pdf

[Geoff Parkstone]

Go to note 11 to see where the £ 19.7m write off is explained. Likely this will be non recurring, at least at this level - there may be a few tweaks in valuations in future years - eg if unsecured creditors get more than 25p in th £ 1.

The 10.6m is reflective of current trading, although this may have been influenced by being the first year post exit from administration. The administrative expenses of 13.4m do seem high when viewed in the context of the direct expenses of 19m, and may contain some drag over from the exit from administration and the initial set up and creation / rebirth of the club.

So to see the club running at a loss is no real shock, although perhaps the magnitude is somewhat higher than Id expected.

As suspected, the ground is not in the club accounts - the leasehold improvements likely relate to the training ground / assets of the academy rather than Pride Park, although in theory if the club is leasing PP from Clowes Developments then some of these assets could relate to PP too.

Probably show about what I would have expected, likely to look better for 23-24 as the past drifts further into the past - but still in a scenario where the revenue doesnt get close to covering the costs and so continue to rely on benevolence of the ownership. I wonder if the club is paying any rent for PP?

[swaledale]

I've read somewhere that we are, I think it was in an article by Kieran Maguire but can't find it at the moment. Apparently there is also a £34 million loan from Clowes. made before he assumed control of the club and its apparently interest free.

[SithHappens]

Apparently they show we did actually pay Gibson some compensation. Thought Mel paid that.

[swaledale]

Apparently they show we did actually pay Gibson some compensation. Thought Mel paid that.

I can't find any reference to that Sith, as far as i know Mel reached a private agreement with both Boro (Gibson) and Wycombe well before Clowes took over the club, because the administrators claimed that the threat of legal action and the possibility of unquantified damages was putting off potential buyers.

One can see that might be the case, but its not clear there were any potential buyers apart from the fantasist that was Kirchner!

[ramAnag]

Go to note 11 to see where the £ 19.7m write off is explained. Likely this will be non recurring, at least at this level - there may be a few tweaks in valuations in future years - eg if unsecured creditors get more than 25p in th £ 1.

The 10.6m is reflective of current trading, although this may have been influenced by being the first year post exit from administration. The administrative expenses of 13.4m do seem high when viewed in the context of the direct expenses of 19m, and may contain some drag over from the exit from administration and the initial set up and creation / rebirth of the club.

So to see the club running at a loss is no real shock, although perhaps the magnitude is somewhat higher than Id expected.

As suspected, the ground is not in the club accounts - the leasehold improvements likely relate to the training ground / assets of the academy rather than Pride Park, although in theory if the club is leasing PP from Clowes Developments then some of these assets could relate to PP too.

Probably show about what I would have expected, likely to look better for 23-24 as the past drifts further into the past - but still in a scenario where the revenue doesnt get close to covering the costs and so continue to rely on benevolence of the ownership. I wonder if the club is paying any rent for PP?

Sure Stephen Pearce said recently that ‘Derby have never been in a better financial position’. Don’t pretend to understand it all but these figures wouldn’t suggest that to be the case would they?
IF we go up we are going to have to spend to strengthen because, from what I’ve seen, there is a huge gap in quality between L1 and - Rotherham apart - the Championship.
Thoughts/clarification from the ‘number crunchers’?

[Geoff Parkstone]

As regards your first question, minus 10 is better than minus 20 or minus 30.

But generally such statements likely relate to the balance sheet, not the annual profit or loss

[swaledale]

Sure Stephen Pearce said recently that ‘Derby have never been in a better financial position’. Don’t pretend to understand it all but these figures wouldn’t suggest that to be the case would they?
IF we go up we are going to have to spend to strengthen because, from what I’ve seen, there is a huge gap in quality between L1 and - Rotherham apart - the Championship.
Thoughts/clarification from the ‘number crunchers’?

The fact that the club are spending 42% of turnover on players wages suggests Derby do have considerable room to manoeuvre on wages IF we get promotion.

Its true that there would need to be player acquisitions on promotion, for comparison, Ipswich spent just over £2.2 million in their promotion season and have spent an estimated £4.5 million this season.

But I doubt Derby will be spending anywhere near that figure. Some sensible wheeling and dealing with a combination of free transfers and a maximum of £2 million on players would see a squad capable of being competitive in the Championship. I actually expect any expenditure on transfers to be less than that but hopefully we shall see.

[Geoff Parkstone]

It's not quite as simple as operating at 42%.
We only have 18% headroom on the FFP SCMP calculation as we can only spend 60% of relevant revenue on player costs in League 1.

Championship rules are different and in transition years (up or down) there may be some leniency.

But if the club keeps losing money it's academic as there ain't anything to spend even if we're allowed to!

The high admin costs may be what's killing it.

[ramAnag]

Thanks, but not much the wiser. Question remains…can we afford to go up and compete - I’m not expecting us to be instant promotion contenders - or might we face inevitable struggle just to ‘survive’?