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Wasps spectacular loses
Discussion started by tigersince74 , 05 November, 2019 21:11
Wasps spectacular loses
tigersince74 05 November, 2019 21:11
Cunningly released to coincide with Salarycens cheating and therefore buried.

Further £12m loss. Debt now exceeds inflated assets which still include CCFC who no longer play at the nest. Bonds now trading 30% less than four weeks ago.

I think we all know where the experiment will end. So sad for the Wasps supporters we used to have a respectful rivalry with.

Re: Wasps spectacular loses
Rich W 05 November, 2019 22:10
Actually I think it's really instructive that it's been released the same day - the other side of the coin.



...

Re: Wasps spectacular loses
jojo 05 November, 2019 22:54
So when the bond issue is due for repayment, do the investors get back the amount they paid or only the market price.

I presume Richardson is buying back the bonds trading at 68% of the original sale price and laughing all the way to his bank.

Re: Wasps spectacular loses
PrestonTiger 05 November, 2019 23:14
Quote:
jojo
So when the bond issue is due for repayment, do the investors get back the amount they paid or only the market price.
I presume Richardson is buying back the bonds trading at 68% of the original sale price and laughing all the way to his bank.

I thought the idea of a bond was you got back what you put in ?? (Otherwise its not much of a bond ).. but that's just my (ill)educated assumption/belief.

Re: Wasps spectacular loses
shendy 06 November, 2019 08:16
Does the price reflect the risk of defaulting? The current price presumably indicates that the market believes there is a more than insignificant chance of that happening - and if it does, investors would lose all of their money.

Re: Wasps spectacular loses
SK 88 06 November, 2019 12:04
Where are you getting a £12m loss from?

These figures show a £6.1m operating loss before the CVC money and the finanace costs

So £9.9m including finance costs but a £4m profit once the CVC money is included.

Re: Wasps spectacular loses
SK 88 06 November, 2019 12:19
One thing I do note is that Wasps highest paid director gets £170k p.a., whereas Tigers highest paid director costs £234k p.a., or 37.64% more.

For a board of directors that has a CEO who is very keen on wage restraint they don't practice it much among themselves.

Re: Wasps spectacular loses
tigersince74 06 November, 2019 14:03
The £12m loss came from analysis on the Wasps board. I take my hat off to you SK88 for working through the accounts to come up with £9.9m. I doubt the odd £m here or there will distort the accumulated debt in excess of £90m.

The bond price is now 40% less than at issue and it is the bond holders who get the assets if Wasps cannot repay the bond in 2022. Rumour in Coventry is that SISU (CCFC owners) who are picking up the bonds so could end up getting the whole lot for around £20m. Far less than Wasps paid.

Re: Wasps spectacular loses
Christofflp 06 November, 2019 14:33
Quote:
SK 88
Where are you getting a £12m loss from?
These figures show a £6.1m operating loss before the CVC money and the finanace costs

So £9.9m including finance costs but a £4m profit once the CVC money is included.

From the Consolidated Income Statement (P18):
PBT of £4.624m minus Exceptional Items of £16.758m = Loss before Exceptional Items of £12.134m.

Think you’ve missed out the depreciation and amortisation of £2.323m.

Interesting that they’ve taken all of the £12.532m CVC investment to the P&L in the current year and not spread it over the period to which it relates (which from the Tigers accounts appears to be 4 years).

Re: Wasps spectacular loses
SK 88 06 November, 2019 14:44
I have yes, thanks! I often forget that because Leicester & Wasps put it in a different place to the other Premiership clubs on their accounts. I remembered someone else did it that way but in my mind it was Saints as we both present our income/expenditure in pretty similar ways historically.

On CVC money isn't the balance of that put into deferred income which has seen a big increase for those figures?

Re: Wasps spectacular loses
Christofflp 06 November, 2019 15:18
It has for Tigers yes - I’m not sure on this point but it appears that Tigers have recognised very little, if any of the CVC money as income in 2019 (which seems reasonable to me given it relates to commercial income for future years).

Wasps have increased Deferred Income of £10.4m up from £4.9m and describe that DI as coming from ‘Licence fees’. Whilst I don’t know the details of the CVC income, it seems unlikely that it should be described as a Licence fee. As I said, they’ve taken all of the £12.5m received from CVC to income in 2019 & so there shouldn’t be any of that £12.5m in DI (which is why I find their treatment of the CVC income ‘interesting’).

Their increased DI could simply be from their other income sources (casino, hotel, etc.) and they have signed a number of new partnership agreements in 2019.

Re: Wasps spectacular loses
Duncan Keene 06 November, 2019 19:41
Thanks guys, very interesting views!

Re: Wasps spectacular loses
PrestonTiger 07 November, 2019 10:08
The bond price is now 40% less than at issue and it is the bond holders who get the assets if Wasps cannot repay the bond in 2022. Rumour in Coventry is that SISU (CCFC owners) who are picking up the bonds so could end up getting the whole lot for around £20m. Far less than Wasps paid.[/quote]

If there is a default then, do / can SISU have the ground and gambling den instead ? That's a tidy 'purchase' for 20m

Re: Wasps spectacular loses
SK 88 07 November, 2019 10:33
Yes the bond is secured on the Ricoh and the surrounding land not the club itself.

If SISU were buying up the bonds the other issue would be renewing them.

Renewing the bonds by effectively selling them to the people that already hold them is cash neutral, you don't have to find any cash to give them.

Renewing the bonds by having to sell an equivalent amount to those redeemed could be tricky if a large number of the bonds are held by either 1) genuine people who invested first time but for whatever personal reason are not willing to do so again, or 2) people deliberately trying to stress the organisation.

If you are selling now you are saying "£70 now is better than £100 in 2 and a half years". Obviously some people will just desperately need the cash but any one else must be looking at the figures and going "are these assets actually going to cover my investment if Wasps did end up defaulting and having to sell?" And deciding no, not surely enough for me.

Re: Wasps spectacular loses
Yorkie 08 November, 2019 01:44
If you believe that SISU are buying up a large amount of the bonds and want the assets at risk when Wasps default then this must lessen the "risk" of hanging on to your bonds? As someone wants the assets, this increases their value?



http://www.jakehowlett.com/tuckshop/wrappers/chocolate/plain/yorkie-nutter.jpg

Re: Wasps spectacular loses
tigersince74 10 November, 2019 14:14


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