Argyle to 'sell' Home Park and issue shares in bid to cut debt as company loses £2.8million
PLYMOUTH Argyle made a £2.8million loss last year, the football club's accounts reveal.
The
club would not discuss the current financial situation, but has
announced money-spinning plans to sell the Home Park stadium and issue
90,000 shares to raise £2million.
Shareholders should today be
receiving the accounts for the year to May 31, 2009, and an invitation
to Plymouth Argyle Football Company's annual meeting at 4.30pm on March
31.
The accounts are likely to reveal a loss shown in the Financial Statements of £2.8million.
The club blamed this on a huge playing squad. This led to its wage bill for 2009 being the highest in the club's history.
Combined with the average attendance falling for the fourth consecutive year, it caused the financial woe.
An
Argyle spokesman said that after eight consecutive years of on-field
improvement, the club 'came down to earth with a bang in 2009'.
"It
is true to say that some of the permanent signings did not produce the
required effect, for whatever reason, and we had to rely heavily on
loan signings," he said.
"The trading position continues to be
challenging, with revenues from gate receipts lower than planned and
the cost-base higher as PAFC has not been able to transfer players no
longer required for the core squad."
The club is now looking to reduce costs and find ways to increase commercial and gate income.
The squad has been reduced by loaning out players, but, in many cases, Argyle still has to contribute to their wages.
The
club's board is working with partners to use the stadium as an
entertainment venue so costs can be spread over more than 23 home games
a season.
The board is also seeking further commercial partners and looking at what it can do to encourage more spectators to matches.
It is in light of this that the club has written to its 1,000 shareholders with details of an open offer of 90,000 new shares.
These
are valued at £22.22 per share, which is 70 per cent less than the
price K&K Consortium Limited paid to take over the club in July
2009. The offer will represent 60 per cent of the enlarged share
capital.
Shareholders will be able to buy three open offer
shares for every two existing ordinary shares. A club spokesman said:
"People will have an appetite for it."
Sir Roy Gardner, PAFC
chairman, said: "This is one small step in the overall plan to
strengthen the club, not just on the field, but also the facilities the
club uses and the balance-sheet of the club.
"We are hoping
shareholders will support this by subscribing for their allocations and
passing the resolutions laid before the AGM."
The share offer is
being underwritten by Argyle's holding company, Plymouth Argyle
Football Company (Holdings) Limited, in the event the open offer shares
are not taken up in full by existing shareholders.
The holding
company would, in this eventuality, either pay cash or write the value
off against debts, probably loans, owed by the football club.
In any event, the football club will receive a net benefit of £2million, after expense, it said.
The
board is also proposing to sell the football club's interest in Home
Park to Home Park Properties Limited (HPPL), a wholly owned subsidiary
of PAFCH.
The proposed sale will be for not less than £7.5million, which may include the assumption of any liabilities.
This
figure is the amount CB Richard Ellis, an independent firm of property
valuers, put on the ground last month. Plymouth City Council sold the
ground to the club in December 2006 for £2.7million.
The board
considers the sale will 'significantly enhance' the ability to raise
funding for the proposed stadium development. It said financial
institutions were currently reluctant to lend directly to football
clubs. This could mean securing loans and mortgages against the
stadium, which is already mortgaged.
The club said the proposed
sale will help reduce in the club's operating costs as the stadium will
be marketed for use by other organisations by a venue operating company.
"The board believes these measures will significantly improve PAFC's balance-sheet," a spokesman said.
124 Comments
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by Brighton Born, E.Cornwall
Wednesday, March 10 2010, 11:13PM
“SHONAN =
Secretive Hostile Orientals Negotiating Argyle's Nemesis
Is Home Park the new Goldstone Ground?”
by johnno, pennycomequick
Wednesday, March 10 2010, 9:21PM
“this Tory council have shafted the people of Plymouth big time , they sold the football ground for peanuts and now they are building a swimming pool that will cost £46.5 million ,
Then knocking down the pool we already have , so we still only have one pool , well done Viv”
by Mark, Plympton
Wednesday, March 10 2010, 8:51PM
“True Arfer Daley business logic at work here, the club will buy something they already own?
So they are 2.8 million down on the last season, what happened to the 7+ million from sales of Gosling, Buzsaky, Halmosi, Norris and Ebanks Blake before that?? Then the quarter final cup run under Holloway and the Arsenal tie and the Holloway compensation? Can't all have been wasted on crap signings?
Then, more recent, we loan out our best defender out to TWO rival clubs in one season while our centre halves struggle, get told the Japaness investors are a good thing (they don't actually invest, but that's a small matter of course) and we have an invisible chairman.
No wonder Holloway jumped ship when he did, I think he saw this coming. Stapleton and the past board has sold the club out, big time, but as they say, everyone has his price and they had theirs in seems.
As for Mariner, he seems to be keeping the Strurrock playing style going; endless long balls up to Fallon who achieves little while the best talent still at the club (Noone, Mason, Cooper, Bolasie) sit on the bench every week. Just why is n't Cooper playing instead of Fallon?????? And dropping Mason for the QPR game after he had the teams only two attempts on goal against Preston?
We'll be in another relegation fight next season in league one that's for sure and probably end up back where it all started ten years ago, struggling at the foot of league two.
Loyal supporter feeling very shafted .”
by CG, Plymouth
Wednesday, March 10 2010, 8:51PM
“Chris Plymouth, Plymouth...maybe you should revisit the dictionary for the definition of 'supporter'?. Nowhere does it say "to bury one's head in the sand".
Leaving the off the pitch activities to those who are supposed to know and understand hasn't exactly worked has it.
May I suggest that it's your ilk and its 'burying one's head in the sand' that is the real reason our Club will never progress?. Until you start taking on board other people's views and accepting their valid points and uniting as a fanbase our 100+ years sorry history will never change.”
by Toby A Pilgrim, london
Wednesday, March 10 2010, 7:24PM
“John London - yes professional (perhaps) on the business side (for the clubs benefit i can only hope) but hopelessly clueless on the team/management and football matters and therefore unless they get more proficient the business side will be restricted to minimal success if any success!!! in the lower leagues.”
by Dave, Plymouth
Wednesday, March 10 2010, 7:18PM
“So The real truth is out, this club was sold by the city council ie us as com charge payers for next to nothing, then this japanese board want to sell it again to a property holding company, the club is back to paying rent, so many clubs have done this and got into real finacial problems, now we know why they don't care about the team the pitch the manager etc all this board is interested in is the property
Mr Mariner is the fall guy brought in as a stooge, last nights performance says everything about what is going on here, shame on this board”
by will, exmouth
Wednesday, March 10 2010, 6:10PM
“Oxford, Brighton, Wrexham, Portsmouth - all destroyed as clubs by this sort of financial move by remote directors. And you know what - we're the next club on that list.”
by Chris Plymouth, Plymouth
Wednesday, March 10 2010, 5:35PM
“I will be first in line for my season ticket next year come what may !!
Look up the word supporter in the dictionary please it's self explanitory. Just support the on field activities and leave the rest to those that know and understand.”
by argyleultra, DeRbY
Wednesday, March 10 2010, 4:17PM
“I doubt anyone will have the 'appetite' to spend 2k on shares in a firm thats assests are worth sod all. if you want to burn your money buy Lloyds shares !!!!!!!!!!:-)”
by Bob, Plymouth
Wednesday, March 10 2010, 2:55PM
“Well I think the current problems started over 12 months ago when we had to see our best players to raise capital. The players that came in as replacements were to be honest just dire. We have never recovered from that and its now the slippery slope. We need a board who will invest heavily in the club, we need a manager that has a track record and once we start to win at home and make it our fortress, the crowds will return. We really need a massive investment and and that wont come from the supporters like they think it will.”