i was just looking at how much etc and came across this http://www.ambernectar.org/blog/2012/01/citys-accounts-observations/ Very well written. It doesnt go into details how Allam will/can get his money out but says he can. Any idea if he can? What do Hull Cityâs recently posted accounts tell us? Reader LizinEDI casts an eye on the books of both City and their parent company⦠Club structure Hull City AFC (Tigers) Ltd is part of a group of companies under the aegis of Allamhouse Ltd. Also in the Allamhouse stable are the Stadium Management Company, Allam Marine and Tempest Diesel (dormant). The obvious reason for placing the different companies Assem Allam holds into this structure would be to reduce the tax liability on Allam Marineâs profit, as a way of reducing the tax bill. This is known as âgroup reliefâ, discussed on Wikipedia thus: âThe UK does not permit tax consolidation, where companies in a group are treated as though they are a single entity for tax purposes. Instead, the UK permits a form of loss relief called âgroup reliefâ. Where a company has losses arising in an accounting period in excess of its other taxable profits for the period, it may surrender these losses to a group member with sufficient taxable profits in the same accounting period. The company receiving the losses may offset them against their own taxable profits.â So, the gross profit of Allam Marine has been transferred to debt riddled Hull City AFC (Tigers) Ltd to keep them afloat. HCAFC accounts These are filed season to season, so cover the twelve months ending 31st July 2011. Some facts listed straight off the pages need no real interpretation: Turnover (comprising ticket sales, sponsorship, broadcast deal revenue, retail etc) dropped from £47.4m to £27m, largely because relegation from the Premier League resulted in a precipitous drop in television contract monies, offset slightly by âparachute paymentsâ. The loss before tax increased from £6.8m in 2010 to £20.4m in 2011. In accounting, money owed to you is listed as an asset because it is assumed you will eventually get the money; a loss is only posted when you have given up getting any of that money back. Creative accountants can exaggerate company assets allowing recorded losses to be reduced, and for football clubs it is easy to inflate the value of your playing squad (intangible assets of the company) as the values are subjective and not easily verifiable. In recording these losses, the Club appear to have bitten the bullet somewhat, and are posting realistic values for our players. The club has also taken a loan for £2.8M to Russell Bartlett that the Allams have not retrieved and have agreed to write it off as part of the change of ownership. Interestingly the restructuring of finances saved us £1m in interest compared to the previous season. Both items are posted as exceptional items, this is accounting language to indicate they do not expect such occurrences in the future. The column for 2010 shows we made a profit of £3.8m, which seems somewhat farcical. I suspect the way the increments were structured to pay for players versus us asking for cash up front for players sold in the past results in a positive value. Net debt has significantly increased from £16.7m to £40.4m, this is primarily due to the loan from Allamhouse (the parent company) which does not appear to have a due date against it. Looking closer at our creditors (people we owe money to) we can see that in July 2010 as we were relegated, we had over £43m due within the next twelve months. By July 2011 this had been reduced to £10m, and I suspect these have since also been repaid as there was all the fanfare about us paying the last of the money owed from the last regime. Moving onto the notes: The directors from the previous regime took a total of £613,483 out in the 12 months to July 2010, with the highest paid director taking £275,000. This was reduced to £166,684 the following year. Note 12 discusses the creditors in more detail. We have no bank loans / overdrafts or finance outstanding in the clubs name and as the loan from Allamhouse has no repayment due date, a further breakdown is unnecessary. This compares to the club owing £16.8m in bank loans & overdrafts alone the previous year. Note 22 details the contingent liabilities. This is likely to be the £3.2m due in bonuses to players based on appearances and/or results and any payout due to Jimmy Bullard. These have NOT been included as actual liabilities, and it isnât known if theyâll become liabilities to be paid. Accounting does not look at variables, but it is best practice to note these should they suddenly need to be paid out in the following years accounts. Allamhouse accounts The Allamhouse accounts are far less interesting in comparison, though they appear to show Allam Marine profits used to bail out the club with a loan. The books forecast a sales increase to £170m with an expected profit of £20m. Allam Marine have seemingly posted a healthy profit every year since the Allams took over Tempest Diesel and renamed the company. That money has not always been ploughed back into the business, so the company is cash rich. Some of that cash has been transferred, via the parent company and in the form of a loan, to the club. It is listed on the football clubâs books as a loan, but with no interest due and no repayment date. Crucially it does not appear to have been financed by debt on the part of the parent company or Allam Marine. If something went horrendously wrong with Allam Marine, they could pull back that money from the football club to prop it up, however on the face of things there are no banks or other external finance companies that are likely to come knocking. Simply put, two years of profit have been wiped off the Allam Marine Balance sheet in the form of a loan to another company (the club) in the group. Things will become much clearer next year as the figures in this set of accounts cover both Bartlett & Allam ownership. Also the next yearâs group Allamhouse accounts to December 2011 should show the 2nd amount of £20m being paid out to the club as only the initial payment is included in this set of accounts.The accounts note: âAn immediate cash injection of £22.5m was made up to December 2010, and a further £20m has been injected during the first six months of 2011.â Some have said the debts have not really been paid off, but knowing how business finance works that statement is wrong. The only person the club owes money to is the man who owns it as the major shareholder in the parent company that has lent money. If there was a large debt obligation showing in the parent company accounts I would be more concerned, but as it stands it does look as if Assem Allam has taken cash from his large and profitable business to pay everyone who was knocking on the door. Like all owners if he falls out of love with the Club or if his other businesses suffer he can legitimately start taking back the money loaned, but thatâs as much true for Roman Abramovich as it is Assem Allam. It is not a Glazer type takeover as far as these accounts read and Allam Marine looks to be in a very healthy financial position.
It just means he can call in his loans, not that the club has the ability to pay them and things have moved to a whole different level since then.
The accounts cover the period up 31 July 2011. Since then the debt to Allamhouse has increased to between £80 to £100 million. Our turnover has increased significantly since returning to the Premier League. The only way he would get all his money back is remaining in the Premier League and taking his interest plus a % of the loan each year. As we have seen with many clubs below us and from our experience under Bartlett, staying in the Premier League isn't cheap. Getting relegated means a whole new ball game. Since the Article was written the profits of Allam Marine have fallen and according to the piece in 200% the group could be on the verge of going into the red. A lot will depend upon the profitability of Allam Marine in the year ending 31 December 2013 when they are published. Without seeing the final accounts for the group my gut feeling is he needs Premier League football for a number of years to get back anything like the money he has put in. I hope this makes sense and answers your question.
A good effort but no im still confused. The two sentences in bold havent been answered. I wonder how the author of them meant it and how he can do it. I've always believed he has an exit strategy and in my experiences of accountants they never lose out.
If Mr Allam where to ride around the pitch astride a white stallion, dressed as a cowboy, throwing cans of Tiger-cola and 7" copies of 'The Tigers Are Back' into the crowd whilst promising us we will soon be playing on the moon, then I think he could get me back onside.
If something went horrendously wrong with Allam Marine, they could pull back that money from the football club to prop it up, however on the face of things there are no banks or other external finance companies that are likely to come knocking. This just means that he's used Allam Marine money to fund Hull City and if Allam Marine started doing badly, then he could try and move things back the other way. Though as it points out, the club would have to be in a position to pass funding the other way and it's unlikely that any banks would want to get involved. Like all owners if he falls out of love with the Club or if his other businesses suffer he can legitimately start taking back the money loaned, but that’s as much true for Roman Abramovich as it is Assem Allam. This merely means that it's his money that's been loaned an if he wants to call in those loans, then he can, whether or not the club has the funds available to repay those loans is a completely different question and at the moment, they don't. In theory, he could buy no more players, sell the players on big wages and let us slide, but as that would be more costly than keeping them(due to relegation), it's not a realistic proposition. Is that any better?
I reckon happy and ass all think we're already playing there, judging by the way they keep barking at it.
Sorry I balls that up. The accounts go up to 31 July 2011. Now edited. As Allam Marine's turnover started to fall they decided to put more money into Hull City to push for promotion. In the year ending 31 July 2013 Allamhouse put another £24 million into the club. So they did the opposite from what was suggested. This article covers 200%'s speculation on the current financial position. I don't know how accurate it is. http://twohundredpercent.net/?p=25235 Yes he can take his loans back, but only if the club has the cash to pay him. The loss of half his turnover due to relegation will have a serious effect on his ability to recover the money. Selling players or not investing in the squad would make that more, rather than less, likely to happen.
If Assem Allam had Don Robinsons personality then we would the perfect chairman/owner. And that person would be a very rich man, a very popular man, and the owner of a very successful football club with EVERYBODY pulling in the same direction. Pity.
I wonder if ALLAM MARINE could suffer with his bad PR? Would you want to do business with him? It's been well documented around the world how he has spoken about CTWD.
just go allam get us in the conference i will still watch but i want to know how many will be on 606 supporting leeds.etc.hahahaha
I'm too young to have supported the club under him but what I have read of Harold Needler, sounds to me like a gentleman and a hero, a man who loved the club and the fans - and had ambition.
