Post by QPR Report on Aug 13, 2009 15:44:44 GMT
The Guardian/Matt Scott
Why Birmingham are right to treat Carson Yeung with caution• Businessman's bid credentials undermined by losses
• British clubs offer gloomy financial outlook
Considering Carson Yeung already owns almost a third of Birmingham City, the board's response to his latest takeover approach seemed unusually cautious.
"The issue of the funding of any possible offer will be a major factor in determining how the company responds," said the club in a statement. Why so? Well, auditors for the accounts of Yeung's investment firm, Grandtop International Holdings, a Hong Kong-based business that is registered in the tax haven of the Cayman Islands, give a pretty stark clue.
"The financial statements have been prepared on a going-concern basis notwithstanding the fact that the Group reported consolidated net current liabilities of HK$27.437m [£2.15m] and consolidated net liabilities of HK$65.223m [£5.1m] as at 31 March and loss for the year then ended of HK$91.677m [£7.18m]," they said. "This condition may indicate the existence of material uncertainty which may cast significant doubts on the Group's ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business."
Ouch! So that is a loss last year of more than £7m (added to about £12m in losses the previous year, when Yeung paid £15m for his Blues shares) and the company's assets are worth less than it owes, to the tune of more than £5m. Fortunately, Grandtop can call on millions of pounds of working capital (£4.5m has been injected since March, on top of £20m from directors and a share issue in the year to March 2008).
But with Grandtop's revenues from clothing and entertainment businesses having been sliced in half, Birmingham's board are surely right to proceed with caution.
Bad times for football
Among the small businesses most affected by banks' tightening of credit conditions are football clubs, a survey of 34 finance directors by the accountants PKF has shown. More than three-quarters of all Championship clubs were using more than 90% of their banking facilities last year. In contrast to other industry surveys, apparently getting worse in football. "Only 21% of respondents expect to make a pre-tax profit in their next accounting period, a fall from 35% in 2008," it said. "[One of] the two most pessimistic leagues [is] the Premier League, where none of the respondents expect to make a profit."
End of road for England
Fabio Capello's England team turns up to its home matches in a coach emblazoned with the respective liveries of the Football Association and National Express. But how long that will continue is another matter. The coach, bus and train company is the FA's and England team's official travel supplier, 3.5 years into a four-year deal that has not been renewed. Richard Bowker, who was shortlisted as the FA's chief executive when Brian Barwick got the job, left his CEO's role at National Express last month after it announced it would hand back its £1.4bn rail franchise to the government. The company said it is in talks with the FA about a possible renewal after the World Cup. But National Express is the subject of a hostile takeover – and sources on both sides of the relationship report that a review of sponsorship practices is expected.
FA snub Stonewall
Perhaps the loudest message of Stonewall's well-researched study on homophobia in football yesterday was the lack of an acknowledgement for the Football Association. Although the game's regulator has been in dialogue with the equality campaign for a few years, there is private dismay in the gay community at the lack of real progress on the issue of homophobia. Attempts to get "senior support", that is from high-profile FA executives who could lend their weight to the publication were, well, stonewalled. But since the FA's chairman, David Triesman, below, said it was not an FA matter but "for the club" to issue sanctions against the Tottenham fans who hurled criminally homophobic abuse at Portsmouth's Sol Campbell in 2008, that might have been expected.
Did fans go to the dogs?
The Independent Police Complaints Commission has fresh allegations of police brutality to consider, this time involving Sunderland fans deposited by a football-special train in the centre of Newcastle on Saturday. The area commander of Northumbria police said: "A section of around 40 fans set upon the officers and dogs, kicking and punching them, and causing injuries to the dogs." Fans insist they were peaceful, but one reports losing four pints of blood from a head wound caused by a police baton, while several others also attest to having been hit on the head by police or bitten by police dogs. The Football Supporters Federation is speaking to its solicitors over the incident.
www.guardian.co.uk/sport/2009/aug/13/birmingham-city-takeover-carson-yeung
Why Birmingham are right to treat Carson Yeung with caution• Businessman's bid credentials undermined by losses
• British clubs offer gloomy financial outlook
Considering Carson Yeung already owns almost a third of Birmingham City, the board's response to his latest takeover approach seemed unusually cautious.
"The issue of the funding of any possible offer will be a major factor in determining how the company responds," said the club in a statement. Why so? Well, auditors for the accounts of Yeung's investment firm, Grandtop International Holdings, a Hong Kong-based business that is registered in the tax haven of the Cayman Islands, give a pretty stark clue.
"The financial statements have been prepared on a going-concern basis notwithstanding the fact that the Group reported consolidated net current liabilities of HK$27.437m [£2.15m] and consolidated net liabilities of HK$65.223m [£5.1m] as at 31 March and loss for the year then ended of HK$91.677m [£7.18m]," they said. "This condition may indicate the existence of material uncertainty which may cast significant doubts on the Group's ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business."
Ouch! So that is a loss last year of more than £7m (added to about £12m in losses the previous year, when Yeung paid £15m for his Blues shares) and the company's assets are worth less than it owes, to the tune of more than £5m. Fortunately, Grandtop can call on millions of pounds of working capital (£4.5m has been injected since March, on top of £20m from directors and a share issue in the year to March 2008).
But with Grandtop's revenues from clothing and entertainment businesses having been sliced in half, Birmingham's board are surely right to proceed with caution.
Bad times for football
Among the small businesses most affected by banks' tightening of credit conditions are football clubs, a survey of 34 finance directors by the accountants PKF has shown. More than three-quarters of all Championship clubs were using more than 90% of their banking facilities last year. In contrast to other industry surveys, apparently getting worse in football. "Only 21% of respondents expect to make a pre-tax profit in their next accounting period, a fall from 35% in 2008," it said. "[One of] the two most pessimistic leagues [is] the Premier League, where none of the respondents expect to make a profit."
End of road for England
Fabio Capello's England team turns up to its home matches in a coach emblazoned with the respective liveries of the Football Association and National Express. But how long that will continue is another matter. The coach, bus and train company is the FA's and England team's official travel supplier, 3.5 years into a four-year deal that has not been renewed. Richard Bowker, who was shortlisted as the FA's chief executive when Brian Barwick got the job, left his CEO's role at National Express last month after it announced it would hand back its £1.4bn rail franchise to the government. The company said it is in talks with the FA about a possible renewal after the World Cup. But National Express is the subject of a hostile takeover – and sources on both sides of the relationship report that a review of sponsorship practices is expected.
FA snub Stonewall
Perhaps the loudest message of Stonewall's well-researched study on homophobia in football yesterday was the lack of an acknowledgement for the Football Association. Although the game's regulator has been in dialogue with the equality campaign for a few years, there is private dismay in the gay community at the lack of real progress on the issue of homophobia. Attempts to get "senior support", that is from high-profile FA executives who could lend their weight to the publication were, well, stonewalled. But since the FA's chairman, David Triesman, below, said it was not an FA matter but "for the club" to issue sanctions against the Tottenham fans who hurled criminally homophobic abuse at Portsmouth's Sol Campbell in 2008, that might have been expected.
Did fans go to the dogs?
The Independent Police Complaints Commission has fresh allegations of police brutality to consider, this time involving Sunderland fans deposited by a football-special train in the centre of Newcastle on Saturday. The area commander of Northumbria police said: "A section of around 40 fans set upon the officers and dogs, kicking and punching them, and causing injuries to the dogs." Fans insist they were peaceful, but one reports losing four pints of blood from a head wound caused by a police baton, while several others also attest to having been hit on the head by police or bitten by police dogs. The Football Supporters Federation is speaking to its solicitors over the incident.
www.guardian.co.uk/sport/2009/aug/13/birmingham-city-takeover-carson-yeung