The full accounts for Charlton Athletic Football Company Ltd for 2017-18 can be seen here:
https://beta.companieshouse.gov.uk/company/01788466/filing-history
But for those who prefer a simplified narrative version, Richard Wiseman asks CAST Treasurer Nigel Kleinfeld to talk him through what the figures reveal:
RW: Nigel - am I right in thinking that these are just the accounts for the football club (Charlton Athletic Football Company Ltd) up until June 30th 2018?
NK: Correct. A separate Duchatelet controlled company - Charlton Athletic Holdings Ltd - owns and rents the freeholds of The Valley and Sparrows Lane. Both companies are owned by the parent company Baton 2010 Ltd. The accounts for these companies can be found at the foot of the page. To complete the picture Baton 2010 Ltd is owned by Staprix NV - a company 95% owned by Duchatelet and incorporated in Belgium.
RW: How much did the football club lose last year?
NK: In the financial year ending June 30th 2018 the club posted a loss of just over £10 million.
RW: What about income from transfers? Doesn't that reduce the loss?
NK: Unfortunately, the £10m loss already includes £4m profit on disposal of players (mostly Konsa and Holmes).
RW: You mean the football club lost £14m on day to day operations?
NK: Well, it was actually £13.3m plus interest payable bringing it up to £14m. The Baton 2010 accounts show interest payable of £1.15m in the year to the parent company.
RW: So, before transfer income and interest payable, the club lost £256k per week?
NK: Yes. Income fell by £300k from £7.6m to £7.3m. There was a small increase in match day income and commercial activities but this was more than offset by a £400k drop in TV and broadcast income. The increase in match day and commercial income is mostly explained by the small increase in average gates and the extra games - the play off semi final with Shrewsbury.
RW: What about expenditure?
NK: The club succeeded in reducing expenditure by £1.25m. This was largely achieved through savings in salaries and staff restructuring costs. The company actually employed more people than the previous year (148 v 146) but they cost just under £900k less.
RW: So, the operating loss of £256k per week has at least been reduced from £275k per week in the previous year.
NK: Correct.
RW: So how much in debt is the club now?
NK: The big number is the almost £62m owing to the parent company Baton 2010 and ultimately to Roland Duchatelet through his company Staprix NV. This debt has increased by £4.2m since the previous accounts to June 30th 2017 were published.
RW: If there was a loss of £10m why has the debt only increased by £4.2m?
NK: It is a question of how the cash flow is managed.
RW: These figures are already nine months out of date. How do we imagine this year's numbers are looking?
NK: The club claims to have made savings on day to day expenditure but it is hard to see this having a major impact. The most important factor in keeping losses to a minimum is transfer income. Two years ago (2016/17) CAFC Ltd actually made a profit of £16m on player sales (Lookman, Gudmundsson and Pope etc) which meant an overall profit of £1.1m.
However, last year the profit on disposal of players' registrations only brought in £4m. Page 3 of the accounts shows that this includes contingent clauses triggered from historical sales (eg Gudmundsson, Gomez, Lookman) as well as player sales - eg Konsa and Holmes. This helped reduce the overall loss to £10m.
But this year, in terms of transfers out, we are only really looking at Grant and Magennis so the amount of income is unlikely to be anywhere near what was generated last year. So, unless there has been a dramatic reduction in salaries or substantial income is being triggered from historical sales, the overall loss may well increase.
RW: What about the value of the property - The Valley and Sparrows Lane? That seems to be the main issue for Duchatelet in fixing his asking price.
NK: The Baton 2010 accounts disclose a net book value of £53.8m. These are valuations made by the directors in line with external professional valuations at 30th June 2016. They don't necessarily reflect a price that a purchaser would be prepared to meet.
RW: Is there any good news?
NK: There is £7.6m worth of fees payable if players sold make specific numbers of appearances, so it is good for us if Gomez, Lookman, Pope etc succeed at their new clubs. On the other hand we are liable for nearly £1.9m if incoming players do the same.
In the light of recent events at Bolton it has to be seen as good news that the board of directors has reviewed the future cash flow projections of the company and, in their opinion, the company is able to continue its normal day to day operations for at least 12 months from the date of approval of these financial statements (14th March 2019). This is based on the receipt of a letter of support from Staprix NV. Accordingly the accounts have been prepared on a going concern basis.
Charlton Athletic Holdings Ltd:
https://beta.companieshouse.gov.uk/company/02689249/filing-history
Baton 2010 Ltd:
https://beta.companieshouse.gov.uk/company/07326155/filing-history