Cambridge United Annual Shareholder's Meeting: Non-football revenues contribute to shortfall of around £600,000. Director of Business Shaun Grady and Director of Finance Steve Chamberlain discuss the U's shortfall read more here
Annual Shareholder's Meeting: A new stadium is 'critical' to the long-term sustainability of Cambridge United. Read what director of business Shaun Grady click here
Manchester United money invested on facilities, operating losses and recovering from deficits. The whereabout the FA Cup money has been a hot topic for fans. Read here for more details
Dave Doggett breaks silence after Cambridge United exitThe former chairman left Cambridge United in December of last year read here
Listen to BBC Radio Cambridgeshire Shaun Grady and Steve Chamberlain explain Cambridge United's current financial situation. click here
Matt Ramsay report of the meeting
This is going to turn into a bloody big post. It will probably be a little scattergun as I've written down in chronological order as it happened in the meeting, even though certain things were revisited out of turn. Graham Daniels did his bit so he could head off to a meeting before people got back to laying into Shaun Grady and Steve Chamberlain. All directors were there except Eddie Clark and Paul Barry but those three were the ones presenting and answering questions.
I'm aware there are a lot of differing opinions on different people so I'll try to present things down the line as they happened rather than trying to steer people. What I will say is that SG and SC have got a big job on their hands to win people over and faced a real barrage this evening, so the pressure will be on to prove they can improve the situation the club finds itself in.
Even before the introductions had finished a chap asked if anybody was up for re-election - board members come up for it by rotation every few years. SG said that nobody was up for it under the new articles of association that was voted through last July. In the current memorandum Paul Barry has the power to add and remove board members. This was clearly news to a good number of shareholders. SG said the onus is on shareholders to write to the company secretary and gain enough votes in order for a board member to be removed. However I asked what would happen if we got every single shareholder together and Paul Barry voted the other way now he has 50.1% of the shareholding, SG said that Paul's vote would be casting.
Were some very rich or shady character to come in, Paul would not be able to sell the club - that being the distinction between majority shareholder and owner of CUFC as a business - as 75% of votes would need to be in favour for this to happen.
SC talked about the board's finance objectives moving forward. They are maintaining a competitive budget on the pitch and being able to fund operations without the need for external investment. In practice, this requires being able to develop additional revenue streams and having an academy with saleable assets.
Talked through average losses for L2 clubs in 15/16 (£387k), the usual about what makes up the club's income and expenditure. Costs are mostly fixed except adding / decreasing the number of players you have, while most income is variable except EFL funding etc.
The budget for the year was to make a profit of £200k. The final adjusted result was a loss of £580k EBITDA. SC: "Let's not hide away from this. It was a terrible financial performance."
Variances came from unplanned for pitch and stadium maintenance, a poorer commercial contribution such as failed outsourcing of criteria and retail revenue falling below plan. Holiday courses failed to deliver a net contribution (they basically broke even but didn't make anticipated profit after James Cutting left the club for a different career). Added spend on players like Halliday and Ikpeazu to rescue the awful start to last season.
Poor performance vs budget can be broken down among these departments: Football (£175k), Club (£125k), Commercial (£250k), Non-football (£225k). The summer schools is the non-football bit. There is now a finance team "proportionate to the size of the business" to deal with going through figure moving forward.
This year, the non-football revenue is yet to be generated, soccer schools go on sale on Tuesday this week. China is still expected to make a profit.
The statements at the last AGM which painted a better picture than the actual results were brought up, ie even if 1,000 fell off the gate (which they didn't) for the four remaining home games at the time of the meeting last year then it would only have made a difference of 48k net on ticket sales. Focus was on how there could be such a big difference to projected figures when there were only three month of the financial year left. Defending it, SG said that January month end figures were the most recent even though it was a March meeting. At that time they hadn't identified a 100k error which led to the departure of finance staff (perhaps someone else could jump in on that as I lost where that occurred). Summer school revenue was yet to start coming in.
Dave Doggett said that at May's board meeting it was said that the loss for the year was going to be 150k. The year ended six weeks later and the final loss was 580k. Some time was spent trying to explain this with quite a few questions from assorted people but we never got further than the 225k summer schools, which as mentioned was a break even so impacted variance vs budget but wasn't actually loss making, and the 100k error.
SC was brought on to what this performance means for the famous Man United money. "There is no money ring fenced." Earnings were quoted as £1.2 - £1.3m, of which a third went on facilities like the Premier Travel Suite and commercial spend, a third went towards accumulated capital deficits and a third was left. He denied that money was ever ring fenced. I have since dug out my notes from the shareholder meeting on 8 February 2016 where shareholders were told that the final third was "locked away for doing up the Habbin when the time comes" (quote is my notes rather than Dave or anyone else directly).
SC said no cash has been set aside in a separate account that can't be touched. With operating losses in 15/16 and 16/17 this money has now been consumed. As the club made losses that cash was used to make sure the club was still solvent moving forward.
DD believed that the structural loss of the football club is around 250k per year, assuming no bonus income from Cup runs and director input. SC believed the figure was higher. DD said it needn't be if the club cut its cloth appropriately with the number of people it employed etc.
There will be cost reductions. There is "not an army of people here with nothing to do... We don't have a collection of overpaid people." 2 or 3 heads may be coming out as a result of reviews.
DD said his attempts to drill down into the figures weren't supported, that he could see things were going south but couldn't get hold of the figures to investigate. SG responded that they didn't know what the financial outturn was going to be at the end of the financial year. CFU chairman Robert Osbourn brought up the accounts being fully audited moving forward. If this is supported by 10% of shareholders within 30 days of the year end this can be done and would be reported to shareholders rather than just directors.
DD made mention of the fact that with the information available in December he would have answered Chris Mann on the radio in the same way SG did.
Graham Daniels did his piece now, speaking with his usual unfailing enthusiasm about life, the universe and everything. News on the manager role will follow after the end of the season. Having coaches, fitness guys etc around a head coach meant that Shaun Derry's severance pay was the only cost to the club when he departed. Plans for hoped for summer signings are in place, pre-season etc. He spoke about how pleased he was by the style of football under Joe Dunne. Ambitions for the club to be promoted despite the club being lighter on "big money people" next season.
SG - lots of momentum on the stadium with "intense work behind the scenes." Jez is involved in a consultancy role here. Grosvenor and Wrenbridge still the relevant parties. Housing provision around the site will be key to development to help deliver a stadium to CUFC "relatively free of charge" if people can see the benefit to the Abbey ward and Cambridge. No timescale promised or even guarantees that the development will go ahead. The new stadium would have a 250 year lease for the club at a fixed agreed rent. It was repeated that spending some time elsewhere would be almost inevitable.
At this point DD gave his statement.
SC said the club will not make a profit this year but it will not be anything like the previous P+L figure. SG said Paul Barry's intention is not to write a cheque that big every year. While reiterating cost savings being implemented throughout the business it wouldn't touch the competitive playing budget.
SG was asked about China, which has plenty of rumours around it. He categorically said no financial investment had been made by the club besides the time of coaches who they employ. Being linked with the Judge School adds the University name which helps for marketing. It's risk free if it were to go wrong in terms of not losing money and might generate meaningful revenue in future. The plan is for around 120 kids to come over in the summer, all children of high net worth individuals.
7,000 tickets have already been sold for the A-ha concert at the Abbey in the summer.
The answers to CFU's list of questions that were put to directors in a meeting will be made public soon.
There you go. 1,600 words. Told you it would be a long read.