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Financial Results
#1
Results for last year announced:
https://warwickshireccc.com/news/warwick...s-2016-17/
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#2
If people are interested in the county's financial position please see

sideoncricket

Where I've tried to break down what it all means.
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#3
(01-02-2018, 08:10 PM)Reabank Wrote: If people are interested in the county's financial position please see

sideoncricket

Where I've tried to break down what it all means.

Thanks - that's interesting
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#4
Thanks Reabank - as Terry says - very interesting. I can now see why decisions have been made in the past and why this resolution has been put forward. However, I am still of the opinion that members need to protect their own position and not end up with the club being run solely as Edgbaston with the ability to stop actually playing cricket. Also I am convinced the ECB franchise idea will be a monumental failure but can understand the club taking the money while it is available.
LE - aka John
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#5
Thanks for that report Reabank, makes a little more sense to me now with my limited knowledge off accounts. So much for our Chairman at last years AGM saying confidently we would make a profit every year for the next 3 years. Not for the first time Norman Gascoigne has got a prediction wrong. Mayby time for him to step aside, and let somebody younger to take over who knows what they are talking about. So i think the letter he wrote to the members about the resolution, given his track record is a complete load of rubbish, and i will be voting no. Don't know if DJL, still has a look on here, or his accoutent friend Tony who usually stands up at the AGM to give his opinion, be nice to hear there opinions.
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#6
(03-02-2018, 09:19 PM)rednalbear Wrote: Thanks for that report Reabank, makes a little more sense to me now with my limited knowledge off accounts. So much for our Chairman at last years AGM saying confidently we would make a profit every year for the next 3 years. Not for the first time Norman Gascoigne has got a prediction wrong. Mayby time for him to step aside, and let somebody younger to take over who knows what they are talking about. So i think the letter he wrote to the members about the resolution, given his track record is a complete load of rubbish, and i will be voting no. Don't know if DJL, still has a look on here, or his accoutent friend Tony who usually stands up at the AGM to give his opinion, be nice to hear there opinions.

I am interviewing Norman on Tuesday for Deep Extra Cover so I'll pass on your good wishes for his retirement (or maybe not!).
I'll be asking him about the proposed changes so you might at least want to hear what he has to say about them - I will post a link on here.
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#7
(01-02-2018, 08:10 PM)Reabank Wrote: If people are interested in the county's financial position please see

sideoncricket

Where I've tried to break down what it all means.

That's a really good read - thanls Reabank.
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#8
I liked your reply Terry, that did make me chukkle. Seriousley though he does make predictions that are wide off the mark so gives the impression he doesn't know what he is talking about. Also Terry could you ask him what the club thinks about Yorkshire's idea on restructuring the 4 day game.
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#9
Thanks all.

Just on the chairman's prediction, a year ago, of a profit for the next three years.  If you read the chief financial officer's statement in the annual report (And I'm not really reccomending you do.) the "principal measure of profit is operating EBITDA."  So that is profit before taking into account depreciation, exceptional expenses, interest, tax and payments to the catering joint venture.  In 2017 operating EBITDA was £2.4m but the real position was a loss of £0.9m.  There's some merit in quoting the results before and after depreciation (because depreciation is an accounting measure not actual cash payments.) but the other adjustments are difficult to understand.  I suspect Norman Gasgoigne's justification for the comment will be when I said "profit" I didn't really mean profit.
RB
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DJL
#10
A question for you Reabank, given my almost complete non understanding of accounts. In the balance sheet section, total equity 1.9m consolidated, minus 5m club, what do those figures actually mean.
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#11
Rednalbear

Not easy to explain but I'll try, apologies in advance if it just seems more complicated once I've finished.

The accounts have 2 balance sheets, 1 for the club and 1 consolidated.  The consolidated balance sheet is required because WCCC has subsidiary companies, that is companies where it owns 50% or more of the shares.  One of these subsidiaries is Edgbaston Experience which is jointly owned by WCCC and Compass and does the catering. I'm not sure what other subsidiaries there are.  
If WCCC has two subsidiaries A&B then the individual balance sheet is just WCCC.  But the consolidated balance sheet is WCCC + A+B.

A balance sheet includes all the assets (ground cash etc) and liabilities (loans) at a given date.  So WCCC as a stand alone company has £5m more liabilities than assets, bad news.

But not as bad as it seems because WCCC has subsidiaries it controls with more assets than liabilities.  So on a consolidated basis WCCC has £1.9m more assets than liabilities.  But that second figure is misleading because it includes all the assets in Edgbaston Experience some of which belong to Compass.  This is the minority interest of £2.6m shown in the consolidated balance sheet.  So as I say in the blog the "true" position is £0.6m more liabilites than assets.  So if all the creditors asked for their money back right now the county would be in a mess.  But fortunately the council isn't asking for repayment until 2020.
Sideoncricket
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#12
thanks reabank
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#13
(04-02-2018, 05:23 PM)rednalbear Wrote: I liked your reply Terry, that did make me chukkle. Seriousley though he does make predictions that are wide off the mark so gives the impression he doesn't know what he is talking about. Also Terry could you ask him what the club thinks about Yorkshire's idea on restructuring the 4 day game.

I will ask that if I can - though it may be a bit off-topic.  I am specifically talking to him about the proposed changes to how the club is run.
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#14
When I interviewed Norman Gascoigne, we did discuss the Club's finances in the context of Reabank's analysis, which Norman had read.

Here is what he said:

“I read the analysis by Reabank on Bearfans and thought it was very good.

However, all counties are operating in a complex environment and it’s not easy to get underneath the numbers. What it maybe misses is the interaction that we have to have with our stakeholders, such as the ECB and the City Council.

In 2008/9, when the global financial crisis hit, Birmingham City Council were incredibly supportive in helping to preserve Edgbaston as a Members Club, primarily as a facility for the city.
In the circumstances at the time, it would have been tempting either:
  • to sell out and get private investors to re-build the ground
  • to sell Edgbaston and find a place somewhere else (Coventry, maybe) to build a new little stadium
We chose instead to build a partnership with the City Council and the (then) Regional Development Authority. The Council have been very supportive in enabling us to negotiate loan repayment terrms to fit in with our own cash-flow.

Many other counties are in similar situations, except that some of them have taken out short-term funding, which exposes them to what in banking terms are known as re-financing risks, which we don’t have.

So whilst the Reabank analysis is right, over the last eight years, we have had to manage our business through our cash. We can’t afford to run out of cash, which is where Durham and Northants failed. We have succeeded through strong management and cost control whilst still investing in our prime function of playing cricket.

Overall, there are questions about how the ECB are going to spend the revenue from the 2020-2024 broadcasting deal. Is it one of their aims to address the £220 million of debt that sits within the 18 first-class counties – and predominantly within the major match venue counties?
In that context, it really doesn’t matter whether we are first or 18th in the financial league table. But we’ve never had to go knocking on the door of the ECB. They have been very pleased with how we have managed the business.

Do we know what we are doing? I think we do. Are we in a worse situation than we anticipated when we agrees to re-develop? Probably we are, a little bit, because we didn’t get any Test Matches in 2013/14. That took £5 million out of our cash flow. We’ve had to live with that.

So we can’t afford to sit back and think that we are OK but we are in a much better situation than a number of our colleague counties. There would certainbly be more than four below us who are in a worse situation. We don’t have the advantages of a Middlesex playing at Lord’s or the Surrey situation but, those counties apart, we are pretty well in there in relatively good shape.”
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#15
(18-02-2018, 05:46 PM)Terry Wrote: When I interviewed Norman Gascoigne, we did discuss the Club's finances in the context of Reabank's analysis, which Norman had read.

Here is what he said:

“I read the analysis by Reabank on Bearfans and thought it was very good.

However, all counties are operating in a complex environment and it’s not easy to get underneath the numbers. What it maybe misses is the interaction that we have to have with our stakeholders, such as the ECB and the City Council.

In 2008/9, when the global financial crisis hit, Birmingham City Council were incredibly supportive in helping to preserve Edgbaston as a Members Club, primarily as a facility for the city.
In the circumstances at the time, it would have been tempting either:
  • to sell out and get private investors to re-build the ground
  • to sell Edgbaston and find a place somewhere else (Coventry, maybe) to build a new little stadium
We chose instead to build a partnership with the City Council and the (then) Regional Development Authority. The Council have been very supportive in enabling us to negotiate loan repayment terrms to fit in with our own cash-flow.

Many other counties are in similar situations, except that some of them have taken out short-term funding, which exposes them to what in banking terms are known as re-financing risks, which we don’t have.

So whilst the Reabank analysis is right, over the last eight years, we have had to manage our business through our cash. We can’t afford to run out of cash, which is where Durham and Northants failed. We have succeeded through strong management and cost control whilst still investing in our prime function of playing cricket.

Overall, there are questions about how the ECB are going to spend the revenue from the 2020-2024 broadcasting deal. Is it one of their aims to address the £220 million of debt that sits within the 18 first-class counties – and predominantly within the major match venue counties?
In that context, it really doesn’t matter whether we are first or 18th in the financial league table. But we’ve never had to go knocking on the door of the ECB. They have been very pleased with how we have managed the business.

Do we know what we are doing? I think we do. Are we in a worse situation than we anticipated when we agrees to re-develop? Probably we are, a little bit, because we didn’t get any Test Matches in 2013/14. That took £5 million out of our cash flow. We’ve had to live with that.

So we can’t afford to sit back and think that we are OK but we are in a much better situation than a number of our colleague counties. There would certainbly be more than four below us who are in a worse situation. We don’t have the advantages of a Middlesex playing at Lord’s or the Surrey situation but, those counties apart, we are pretty well in there in relatively good shape.”

It's an interesting piece and far more nuanced than the "everything's fine, now go back to bed" tone of the annual financial report. Well done Terry for coaxing it out of NG.  I think NG's narrative is similar to mine (although he of course had a ring side seat for the redevelopment negotiations) but the emphasis and conclusions are a bit different.  A couple of points I was particularly interested in:

1) His comment on the ECB (maybe) not wanting to use its new found wealth to pay down the county's debt.  George Dobell has done pieces for cricinfo on threats to funding for the MCC University sides and Chance to Shine programs for women's cricket in secondary schools.  If the ECB isn't supporting these grass roots initiatives or the counties then what is it doing with all its money?  I did a post on sideoncricket about how the ECB already seems to be an institution where money just trickles away with little accountability.

2)  NG mentions that prior to building the new pavilion the county thought about selling up and letting someone else take on Edgbaston.  With the benefit of hindsight I think this would have been the way to go.  If ECB and The Council had wanted a test ground at Edgbaston they should have raised the money, taken the risks and enjoyed the rewards.  The county would have been free to be a county, playing good cricket and developing the game in the West Midlands.  Either as a tenant at Edgbaston or at a different location.  Instead we are a sports stadium with a county attached, or perhaps a whopping debt with a county attached. Having said that I went to the first half of the member's forum and it seemed most people were happy with the club's direction  - so it's probably just me.
RB.
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#16
(20-02-2018, 09:42 PM)Reabank Wrote:
(18-02-2018, 05:46 PM)Terry Wrote: When I interviewed Norman Gascoigne, we did discuss the Club's finances in the context of Reabank's analysis, which Norman had read.

Here is what he said:

“I read the analysis by Reabank on Bearfans and thought it was very good.

However, all counties are operating in a complex environment and it’s not easy to get underneath the numbers. What it maybe misses is the interaction that we have to have with our stakeholders, such as the ECB and the City Council.

In 2008/9, when the global financial crisis hit, Birmingham City Council were incredibly supportive in helping to preserve Edgbaston as a Members Club, primarily as a facility for the city.
In the circumstances at the time, it would have been tempting either:
  • to sell out and get private investors to re-build the ground
  • to sell Edgbaston and find a place somewhere else (Coventry, maybe) to build a new little stadium
We chose instead to build a partnership with the City Council and the (then) Regional Development Authority. The Council have been very supportive in enabling us to negotiate loan repayment terrms to fit in with our own cash-flow.

Many other counties are in similar situations, except that some of them have taken out short-term funding, which exposes them to what in banking terms are known as re-financing risks, which we don’t have.

So whilst the Reabank analysis is right, over the last eight years, we have had to manage our business through our cash. We can’t afford to run out of cash, which is where Durham and Northants failed. We have succeeded through strong management and cost control whilst still investing in our prime function of playing cricket.

Overall, there are questions about how the ECB are going to spend the revenue from the 2020-2024 broadcasting deal. Is it one of their aims to address the £220 million of debt that sits within the 18 first-class counties – and predominantly within the major match venue counties?
In that context, it really doesn’t matter whether we are first or 18th in the financial league table. But we’ve never had to go knocking on the door of the ECB. They have been very pleased with how we have managed the business.

Do we know what we are doing? I think we do. Are we in a worse situation than we anticipated when we agrees to re-develop? Probably we are, a little bit, because we didn’t get any Test Matches in 2013/14. That took £5 million out of our cash flow. We’ve had to live with that.

So we can’t afford to sit back and think that we are OK but we are in a much better situation than a number of our colleague counties. There would certainbly be more than four below us who are in a worse situation. We don’t have the advantages of a Middlesex playing at Lord’s or the Surrey situation but, those counties apart, we are pretty well in there in relatively good shape.”

It's an interesting piece and far more nuanced than the "everything's fine, now go back to bed" tone of the annual financial report. Well done Terry for coaxing it out of NG.  I think NG's narrative is similar to mine (although he of course had a ring side seat for the redevelopment negotiations) but the emphasis and conclusions are a bit different.  A couple of points I was particularly interested in:

1) His comment on the ECB (maybe) not wanting to use its new found wealth to pay down the county's debt.  George Dobell has done pieces for cricinfo on threats to funding for the MCC University sides and Chance to Shine programs for women's cricket in secondary schools.  If the ECB isn't supporting these grass roots initiatives or the counties then what is it doing with all its money?  I did a post on sideoncricket about how the ECB already seems to be an institution where money just trickles away with little accountability.

2)  NG mentions that prior to building the new pavilion the county thought about selling up and letting someone else take on Edgbaston.  With the benefit of hindsight I think this would have been the way to go.  If ECB and The Council had wanted a test ground at Edgbaston they should have raised the money, taken the risks and enjoyed the rewards.  The county would have been free to be a county, playing good cricket and developing the game in the West Midlands.  Either as a tenant at Edgbaston or at a different location.  Instead we are a sports stadium with a county attached, or perhaps a whopping debt with a county attached. Having said that I went to the first half of the member's forum and it seemed most people were happy with the club's direction  - so it's probably just me.
RB.

For me, what comes out of this is that, especially if members do get out of bed and question things, the Chairman and others at the Club are prepared to listen and give answers.  You will note that Norman had read your piece on the finances; and I picked up that he had also read the comments on Bearsfans about the proposed changes to the constitution. 

The interview with Norman was willingly offered - I didn't have to go begging for it. Also, I have interviewed Neil Snowball (I think) three times and he has never refused to answer a question. Some may not like all of his answers but he certainly hasn't held back. 

My assumption is that, although of course the whole world hangs on every word that Deep Extra Cover publishes, Norman and Neil are aware that the main readership for my interviews with them comes from Bears members and supporters.  So they are keen to use this as one means of getting messages across; and they know that, because of my contributions to Bearsfans, I am likely in my questions to reflect the opinions and concerns that are expressed on the Forum.

My conclusion from all of this is that, regardless of the results of the vote on the constitution changes, it is important that members and other Bears supporters seek to keep up the dialogue, to ask questions, seek answers - and also to give praise where it is due.  On which note, I think we should acknowledge that not all county Chairmen and Chief Executives are so willing to engage with members in the way that Norman and Neil have done recently.  And the latest future match allocations suggest that the Club has a solid foundation for future income, which again says something positive about the way matches have been staged at Edgbaston and the strength of the case that the Club has been able to make for being allocated those future matches.
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#17
(21-02-2018, 11:22 AM)Terry Wrote:
(20-02-2018, 09:42 PM)Reabank Wrote:
(18-02-2018, 05:46 PM)Terry Wrote: When I interviewed Norman Gascoigne, we did discuss the Club's finances in the context of Reabank's analysis, which Norman had read.

Here is what he said:

“I read the analysis by Reabank on Bearfans and thought it was very good.

However, all counties are operating in a complex environment and it’s not easy to get underneath the numbers. What it maybe misses is the interaction that we have to have with our stakeholders, such as the ECB and the City Council.

In 2008/9, when the global financial crisis hit, Birmingham City Council were incredibly supportive in helping to preserve Edgbaston as a Members Club, primarily as a facility for the city.
In the circumstances at the time, it would have been tempting either:
  • to sell out and get private investors to re-build the ground
  • to sell Edgbaston and find a place somewhere else (Coventry, maybe) to build a new little stadium
We chose instead to build a partnership with the City Council and the (then) Regional Development Authority. The Council have been very supportive in enabling us to negotiate loan repayment terrms to fit in with our own cash-flow.

Many other counties are in similar situations, except that some of them have taken out short-term funding, which exposes them to what in banking terms are known as re-financing risks, which we don’t have.

So whilst the Reabank analysis is right, over the last eight years, we have had to manage our business through our cash. We can’t afford to run out of cash, which is where Durham and Northants failed. We have succeeded through strong management and cost control whilst still investing in our prime function of playing cricket.

Overall, there are questions about how the ECB are going to spend the revenue from the 2020-2024 broadcasting deal. Is it one of their aims to address the £220 million of debt that sits within the 18 first-class counties – and predominantly within the major match venue counties?
In that context, it really doesn’t matter whether we are first or 18th in the financial league table. But we’ve never had to go knocking on the door of the ECB. They have been very pleased with how we have managed the business.

Do we know what we are doing? I think we do. Are we in a worse situation than we anticipated when we agrees to re-develop? Probably we are, a little bit, because we didn’t get any Test Matches in 2013/14. That took £5 million out of our cash flow. We’ve had to live with that.

So we can’t afford to sit back and think that we are OK but we are in a much better situation than a number of our colleague counties. There would certainbly be more than four below us who are in a worse situation. We don’t have the advantages of a Middlesex playing at Lord’s or the Surrey situation but, those counties apart, we are pretty well in there in relatively good shape.”

It's an interesting piece and far more nuanced than the "everything's fine, now go back to bed" tone of the annual financial report. Well done Terry for coaxing it out of NG.  I think NG's narrative is similar to mine (although he of course had a ring side seat for the redevelopment negotiations) but the emphasis and conclusions are a bit different.  A couple of points I was particularly interested in:

1) His comment on the ECB (maybe) not wanting to use its new found wealth to pay down the county's debt.  George Dobell has done pieces for cricinfo on threats to funding for the MCC University sides and Chance to Shine programs for women's cricket in secondary schools.  If the ECB isn't supporting these grass roots initiatives or the counties then what is it doing with all its money?  I did a post on sideoncricket about how the ECB already seems to be an institution where money just trickles away with little accountability.

2)  NG mentions that prior to building the new pavilion the county thought about selling up and letting someone else take on Edgbaston.  With the benefit of hindsight I think this would have been the way to go.  If ECB and The Council had wanted a test ground at Edgbaston they should have raised the money, taken the risks and enjoyed the rewards.  The county would have been free to be a county, playing good cricket and developing the game in the West Midlands.  Either as a tenant at Edgbaston or at a different location.  Instead we are a sports stadium with a county attached, or perhaps a whopping debt with a county attached. Having said that I went to the first half of the member's forum and it seemed most people were happy with the club's direction  - so it's probably just me.
RB.

For me, what comes out of this is that, especially if members do get out of bed and question things, the Chairman and others at the Club are prepared to listen and give answers.  You will note that Norman had read your piece on the finances; and I picked up that he had also read the comments on Bearsfans about the proposed changes to the constitution. 

The interview with Norman was willingly offered - I didn't have to go begging for it. Also, I have interviewed Neil Snowball (I think) three times and he has never refused to answer a question. Some may not like all of his answers but he certainly hasn't held back. 

My assumption is that, although of course the whole world hangs on every word that Deep Extra Cover publishes, Norman and Neil are aware that the main readership for my interviews with them comes from Bears members and supporters.  So they are keen to use this as one means of getting messages across; and they know that, because of my contributions to Bearsfans, I am likely in my questions to reflect the opinions and concerns that are expressed on the Forum.

My conclusion from all of this is that, regardless of the results of the vote on the constitution changes, it is important that members and other Bears supporters seek to keep up the dialogue, to ask questions, seek answers - and also to give praise where it is due.  On which note, I think we should acknowledge that not all county Chairmen and Chief Executives are so willing to engage with members in the way that Norman and Neil have done recently.  And the latest future match allocations suggest that the Club has a solid foundation for future income, which again says something positive about the way matches have been staged at Edgbaston and the strength of the case that the Club has been able to make for being allocated those future matches.

Hi Terry.  I think you are being too modest but I do agree the club engages with its members.  Certainly Neil Snowball is prepared to explain decisions to individual members which is impressive given the demands on his time.  Hopefully this will continue once we've taken a vote to end all the voting.

RB
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#18
Very true Reabank and Terry.... excellent work and its great the club do listen.... also with memberships decling around the country for many reasons (interest, time, cost etc.) he also needs to engage with the wider support base and not just a narrow membership. After 3 decades of being a member; for the last three seasons.... I pay at the gate, buy international tickets and have a T20 season ticket / membership... it works well for me and many others.... the world is changing and its time the clubs massive T20 were also listened to. After two decades, the future has to be embraced as it helps fund the club. The T20 season ticket holders must be recognised by being given a 50 percent vote share.
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#19
I think our membership has gone up a little bit over tha last 2/3 years, which might buck the trend across the country. Numbers today along way of the 13000 of the mid nineties.
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#20
(05-02-2018, 05:48 PM)Reabank Wrote: Rednalbear

Not easy to explain but I'll try, apologies in advance if it just seems more complicated once I've finished.

The accounts have 2 balance sheets, 1 for the club and 1 consolidated.  The consolidated balance sheet is required because WCCC has subsidiary companies, that is companies where it owns 50% or more of the shares.  One of these subsidiaries is Edgbaston Experience which is jointly owned by WCCC and Compass and does the catering. I'm not sure what other subsidiaries there are.  
If WCCC has two subsidiaries A&B then the individual balance sheet is just WCCC.  But the consolidated balance sheet is WCCC + A+B.

A balance sheet includes all the assets (ground cash etc) and liabilities (loans) at a given date.  So WCCC as a stand alone company has £5m more liabilities than assets, bad news.

But not as bad as it seems because WCCC has subsidiaries it controls with more assets than liabilities.  So on a consolidated basis WCCC has £1.9m more assets than liabilities.  But that second figure is misleading because it includes all the assets in Edgbaston Experience some of which belong to Compass.  This is the minority interest of £2.6m shown in the consolidated balance sheet.  So as I say in the blog the "true" position is £0.6m more liabilites than assets.  So if all the creditors asked for their money back right now the county would be in a mess.  But fortunately the council isn't asking for repayment until 2020.
Sideoncricket

As you point out it doesn't matter how the figures are set down but the Club at this time could not meet its financial obligations and is therefore INSOLVENT or to put it more simply BUST - I concur that the Club made a 900,000 plus LOSS for the last financial year and that going forward I cannot see how the Club will make PROFITS and as we all know IN BUSINESS CASH IS KING and we ain't got any. Infact the Club has borrowed more money in the past few years to keep trading - Sooner or later the manure will hit the fan and then what?
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