FAo Johnny Come Lately and EOH - Do I have this right?

Taking 1996 as a base the debt was £8 million. In 2007 it had risen to roughly £20 million. The increase equalling very roughly the cost of the two new stands. So it seems to me that ignoring the new stands the club's financial position has not changed much (a position described by Ms Smith as "on the verge of total bankruptcy - I am not talking administration".

However during that period some £13 million flowed into the club by way of conversion of loans into equity, 2 share issues and the Watling bequest. Additionally in the 5 years from 2002/3 there was an operating profit of roughly £11 million. So it seems to me that there is £24 million over that 11 year period that has gone somewhere - namely:

1. Tax over the period (really can't have been much I reckon at least 9 of those 11 years can have been little better than break-even, and in most cases much worse)
2. Interest over the period
3. Operating losses in the 6 years 1996 - 2002 (which there must have been)
4. Depreciation and amortisation ( although how these affect actual cashflows seems opaque)

Which actually makes sense - with items 2 & 3 being the biggies.

As to wages being the drag I don't entirely agree: obviously it is the biggest item of expenditure, and obviously there have been some huge blunders made BUT is our record actually any worse than an average Championship club? We cannot avoid paying wages to footballers. As regards the debt it appears that we could have reduced it in 2004/05 but opted instead to pay it out on footballers' wages. Also could we have built a cheaper South Stand? Not built the infill at all?

Posted By: Mr Creosote, May 29, 15:37:43