3rd winding up order due

[Beefy]

We have a budget in place. It's not a budget to make a profit or to even break even. It's a budget to keep losses down to an amount which can get covered by the Sainsburys money. I doubt we'll be on track with that budget because at various points of the season we've been reported to be running slightly above the wage budget and because gates are lower than was expected.

We don't have the luxury of putting some cash aside for a rainy day because our earnings don't touch the sides of our outgoings anyway. As I illustrated the other week, the numbers would suggest that it would take eight home matches for us to generate enough cash to cover a single month's wagebill, once things like VAT and Police costs are taken out.

 

[Norfolkshrimp]

We have a budget in place. It's not a budget to make a profit or to even break even. It's a budget to keep losses down to an amount which can get covered by the Sainsburys money. I doubt we'll be on track with that budget because at various points of the season we've been reported to be running slightly above the wage budget and because gates are lower than was expected.

We don't have the luxury of putting some cash aside for a rainy day because our earnings don't touch the sides of our outgoings anyway. As I illustrated the other week, it would take eight home matches for us to generate enough cash to cover a single month' wagebill, once things like VAT and Police costs are taken out.

Yes Yes Yes BUT why wasn't the budget set at a realistic level ? We have to cut our cloth accordingly, in business and specially a failing one you should always take the worst case scenario. We should not have blown the budget by February !

You can make all the excuses you want but everyone knows money is tight so even more reason to have controlled it better.

Has it not dawned on you that the very reason we are in this mess is RM's inability to manage this business ?

 

[TravellingBlue]

My interpretation of the current situatin is thus. We are due monies from Sainsbury's (monies to be deducted from the overall profit on selling RH). These monies were not paid in a one off payment of 5m, but rather in 'milestone' payments. The last milestone payment along with gate receipts etc. was not enough to cover our overheads - indeed we have failed to budget for the three most important aspects of business, the taxman, the players and staff wages. I am lead to believe that we are due our next milestone payment either today or tomorrow from Sainsbury's. This will eleviate our current predicament, HMRC will be paid off, the players and staff will get their wages. It then leads to the question whether the Football League decide to rescind the transfer embargo put on the club last Tuesday (again I am lead to believe this is true - it is automatic when players are not paid). They must see us as a 'fit and proper' club which will meet all it's obligations in the future.

The HMRC is worrying. Solely because habitual transgressors of the rules and regulations are usually beaten with a very large stick!

Having a luxury of putting cash aside is obviously a luxury we do not possess - however, not paying the taxman, players, staff, contractors etc is an untenable situation for any business. If Sainsbury's do not, for whatever reason meet the milestone payment, we are gone - and there's no way back.

I am worried.

 

[Beefy]

Yes Yes Yes BUT why wasn't the budget set at a realistic level ? We have to cut our cloth accordingly, in business and specially a failing one you should always take the worst case scenario. We should not have blown the budget by February !

You can make all the excuses you want but everyone knows money is tight so even more reason to have controlled it better.

Has it not dawned on you that the very reason we are in this mess is RM's inability to manage this business ?

It's dawned on me that football is ****ed. The wage budget is apparently just over £1.3m this year. For me that's too high. I'd have it a lot lower than that and would be willing to accept the fact that we'd have a **** team because we do need to cut our cloth accordingly. I strongly suspect that I'd be in a minority. So we end up with 18 players on 500 quid a week, the quality is **** so gates drop below target, causing further cuts, a further reduction in quality and for gates to fall even lower.

It's the problem that football clubs have.

I doubt that there are more than a handful of football club in the lower leagues which are budgeted to break even. Orient's Cup run means that this season is the first in the 15 under Barry Hearn that they will break even. Colchester lose millions every year. Yeovil are held up by many as the best run club in the lower leagues but their last set of figures showed a £600k loss in the last financial year. The only time we've made a (tiny) profit in the last decade we sold a player for £1.5m and made the last eight of a cup.

 

[EastStandBlue]

It clearly hasn't been used to sustain the club over the course of the season because we're skint again.

That statement completely disregards the parlous financial state of the club prior to Sainsbury's involvement. You're talking as if running a football club should be a profitable business, and that there's some epic swindle (copyright Tom Hicks) going on. With the revenue streams available to the club, running at a profit is a pipe dream. Hell, to 95% of football clubs any profit is a pipe dream. We've obviously budgeted to keep our losses in check otherwise there wouldn't have been spates of redundancies, made in response to losses.

As Beefy points out, it's a vicious circle. Would you be willing to accept a non-competitive squad for the vague chance of financial security? you'd be in a minority if you were.

 

[turkishm]

We played Torquay in our last game, something like 2500 turned. Now unless they have a rich Chairman, how is a club like that balancing there books, or are they not. Prehaps im being to simplistic. I am imformed buy poster who no far mor than i that its all about cashflow, so either our wages are still far higher tha most, or we cannot seem to cope even on double some clubs gates, and please dont sayhalf our gates are made up by season ticket holders, all clubs have season ticket holders, and i dont see them in and out of court.

 

[Norfolkshrimp]

That statement completely disregards the parlous financial state of the club prior to Sainsbury's involvement. You're talking as if running a football club should be a profitable business, and that there's some epic swindle (copyright Tom Hicks) going on. With the revenue streams available to the club, running at a profit is a pipe dream. Hell, to 95% of football clubs any profit is a pipe dream. We've obviously budgeted to keep our losses in check otherwise there wouldn't have been spates of redundancies, made in response to losses.

As Beefy points out, it's a vicious circle. Would you be willing to accept a non-competitive squad for the vague chance of financial security? you'd be in a minority if you were.

You're the master of taking a post and twisting it beyond all recognition, you talk utter garbage. I have never mentioned the word profit or even alluded to it, grow up. If you can't pull my argument apart without fabricating statements made don't bother.

I have made it very clear that in my opinion RM has failed to budget properly taking into account the ACTUAL funds available. He has a track record of managing in the manner of let's juggle this and that a bit, pay these people late, string them along a bit longer etc. That's actually acceptable up to a point but he has pushed it way beyond an acceptable level and has learned NOTHING from our recent battles with HMRC. It's no wonder they are determined to take him down. If he had shown some humility and worked with them instead of taking the **** at every opportunity we wouldn't be in danger of being wound up every few weeks.

I actually agree with Beefy I would rather have seen a smaller squad and certainly Widdrington was an expensive mistake, his wages would have probably covered the £30k shortfall we have now.

 

[Beefy]

We played Torquay in our last game, something like 2500 turned. Now unless they have a rich Chairman, how is a club like that balancing there books, or are they not. Prehaps im being to simplistic. I am imformed buy poster who no far mor than i that its all about cashflow, so either our wages are still far higher tha most, or we cannot seem to cope even on double some clubs gates, and please dont sayhalf our gates are made up by season ticket holders, all clubs have season ticket holders, and i dont see them in and out of court.

Whisper it quietly, but Torquay are run by a Consortium of 11 local businessmen. The last figures I can find show that they made a £10k profit in their 2008 accounts on the back of a trip to Wembley and a strong FA Cup run. This was up on a £470k loss the previous year.

 

[EastStandBlue]

You're the master of taking a post and twisting it beyond all recognition, you talk utter garbage. I have never mentioned the word profit or even alluded to it, grow up. If you can't pull my argument apart without fabricating statements made don't bother.

I have made it very clear that in my opinion RM has failed to budget properly taking into account the ACTUAL funds available. He has a track record of managing in the manner of let's juggle this and that a bit, pay these people late, string them along a bit longer etc. That's actually acceptable up to a point but he has pushed it way beyond an acceptable level and has learned NOTHING from our recent battles with HMRC. It's no wonder they are determined to take him down. If he had shown some humility and worked with them instead of taking the **** at every opportunity we wouldn't be in danger of being wound up every few weeks.

I actually agree with Beefy I would rather have seen a smaller squad and certainly Widdrington was an expensive mistake, his wages would have probably covered the £30k shortfall we have now.

What's with the petty insults? I said you were disregarding the parlous state of the club and I think you are. It'd be foolish to think that last season's problems were behind us and anything but a small loss would be a hugely enthusiastic guess. This season was always going to be about capping our losses while the relocation plans are progressed with, and it certainly comes at no surprised to me that as soon as funding has been withheld, we've run into problems.

The HMRC aren't determined to take him down. They're determined to get what's owed. Other creditors may take this as a personal crusade, but this is a government body whose sole purpose is to reclaim unpaid taxes. As soon as this has been paid, they'll be on their way. They take the same hardline with every football club, and rightly so.

If you would rather see us maintain a smaller squad, then you're in the minority. Just last week, despite the financial state, people were eyeing up loanees to help us push into the play-offs and disappointment was expressed when January came and went with just one signing. This is largely the same squad that, two months ago, people were labelling relegation fodder before calling for reinforcements.

 

[Norfolkshrimp]

Whisper it quietly, but Torquay are run by a Consortium of 11 local businessmen. The last figures I can find show that they made a £10k profit in their 2008 accounts on the back of a trip to Wembley and a strong FA Cup run. This was up on a £470k loss the previous year.

Interesting, i'd love to see something like that at SUFC, a proper team of people making decisions rather than a dictator with no clue.

A loss of £470k spread over 11 is workable and they probably write that off against profits from their other businesses.

It has to be the preferred solution for us if possible.

 

[Beefy]

Interesting, i'd love to see something like that at SUFC, a proper team of people making decisions rather than a dictator with no clue.

A loss of £470k spread over 11 is workable and they probably write that off against profits from their other businesses.

It has to be the preferred solution for us if possible.

I'd expect that the loss accumulates in the books and is funded by lending from the 11 owners. What is does mean though is that if they are in a position where one month there isn't enough cash in the bank to pay the wagebill or the tax bill then one of them are able to move money around from another company or from their personal finances to cover it.

Our accounts show that that is what RM and the other directors here were doing for several years. Our problems started to show symptoms when RM was unable to organise that sort of movement of funds because of the decline of his own businesses and was unable to get other investment into the Club due to the RH/FF developments both faltering. However the underlying ailment has always been there and isn't restricted to Southend United. It's a broader problem with football finances.

 

[Mick]

The HMRC aren't determined to take him down. They're determined to get what's owed. Other creditors may take this as a personal crusade, but this is a government body whose sole purpose is to reclaim unpaid taxes. As soon as this has been paid, they'll be on their way

...... until the next time.

 

[Norfolkshrimp]

What's with the petty insults? I said you were disregarding the parlous state of the club and I think you are. It'd be foolish to think that last season's problems were behind us and anything but a small loss would be a hugely enthusiastic guess. This season was always going to be about capping our losses while the relocation plans are progressed with, and it certainly comes at no surprised to me that as soon as funding has been withheld, we've run into problems.

The HMRC aren't determined to take him down. They're determined to get what's owed. Other creditors may take this as a personal crusade, but this is a government body whose sole purpose is to reclaim unpaid taxes. As soon as this has been paid, they'll be on their way. They take the same hardline with every football club, and rightly so.

If you would rather see us maintain a smaller squad, then you're in the minority. Just last week, despite the financial state, people were eyeing up loanees to help us push into the play-offs and disappointment was expressed when January came and went with just one signing. This is largely the same squad that, two months ago, people were labelling relegation fodder before calling for reinforcements.

Once again who has said last seasons problems are behind us ?

In any business you set a budget, do profit and loss forecasts and run your business around those. RM knows full well what problems we would face this year but instead of setting a realistic budget and sticking to it he has once again chosen the route of pay people we owe as and when we can rather than ensuring by prudent management we didn't go over budget.

Now which part of that don't you understand ?

Nobody expects to make a profit and nobody expects things not to be extremely difficult but is it too much to ask not to repeat the same mistakes over and over.

One last point, government body or not HMRC will have appointed a case manager to deal with our account and that person or team of people having read statements made in the press and in court by RM about them will not use any of the discretion within their power to work with us now.

 

[Norfolkshrimp]

I'd expect that the loss accumulates in the books and is funded by lending from the 11 owners. What is does mean though is that if they are in a position where one month there isn't enough cash in the bank to pay the wagebill or the tax bill then one of them are able to move money around from another company or from their personal finances to cover it.

Our accounts show that that is what RM and the other directors here were doing for several years. Our problems started to show symptoms when RM was unable to organise that sort of movement of funds because of the decline of his own businesses and was unable to get other investment into the Club due to the RH/FF developments both faltering. However the underlying ailment has always been there and isn't restricted to Southend United. It's a broader problem with football finances.

I agree but I also think it's not as simple as not being able to finance through conventional channels due to the recession. My own personal view is people just don't trust RM and even if they initially considered doing business with him, after conducting due diligence and trying to untangle the web of companies he's involved in who in their right mind would invest / loan him even a fiver ?

The underlying issue here is probably greed, he saw RH as a great opportunity to make a huge profit on his own, had there been a group of investors taking over from Jobson rather than one man who has severe credibility issues in business we wouldn't be in such a perilous position. Yes there would still have been big losses but manageable imo.

 

[WESTY_SUFC]

The HMRC aren't determined to take him down. They're determined to get what's owed. Other creditors may take this as a personal crusade, but this is a government body whose sole purpose is to reclaim unpaid taxes. As soon as this has been paid, they'll be on their way. They take the same hardline with every football club, and rightly so.

Sorry for repeating myself here but if Martin paid the small tax bills which the HMRC wanted last year rather than try to bully them then they would of not demanded the whole outstanding debt at once am i not correct? This is HIS fault. Could one of the people sticking up for Martin please give me an opinion on this or do you agree?

ps East Stand Blue. How do you know HMRC aren't determined to take him down or is that your opinion? Im not disagreeing, just interested.

 

[Lester Bangs]

I'm sure its already been mentioned but I'd like to reiterate my concerns about the total reliance on Sainsburys payments to us.

Its clear that our cashflow is in such a poor state that without these monies being received each month we'd be under.

What happens when we stop receipting these amounts? It seems clear that we are not able to satisfy any liabilities as and when they fall due without this money. This is gravely concerning.

 

[shallowshrimper]

The title of the thread is 3rd winding up order due, so just wondering Martin Dawn is one, HMRC late payment for January paye/ni being two, it is now February 22nd and so latest payment should have made on or by the 19th, is this the 3rd order or would it form part of the existing one?

 

[Norfolkshrimp]

The title of the thread is 3rd winding up order due, so just wondering Martin Dawn is one, HMRC late payment for January paye/ni being two, it is now February 22nd and so latest payment should have made on or by the 19th, is this the 3rd order or would it form part of the existing one?

Good point.

Also what will happen if Martin Dawn go to the wall this time ? If they don't how will they get out of it ?

Will some of OUR CLUBS money (sainsbury's) be used to bail them out ?

This will be very interesting, if RM manages to settle Martin Dawns debt why can't he put another £30k into SUFC to prevent HMRC taking us to court ? Is he down to his last £30k or so ?

Keep a very close eye on this one because i'd love to know where the money is coming from for Martin Dawn this time.

 

[EastStandBlue]

Once again who has said last seasons problems are behind us ?

In any business you set a budget, do profit and loss forecasts and run your business around those. RM knows full well what problems we would face this year but instead of setting a realistic budget and sticking to it he has once again chosen the route of pay people we owe as and when we can rather than ensuring by prudent management we didn't go over budget.

Now which part of that don't you understand ?

Nobody expects to make a profit and nobody expects things not to be extremely difficult but is it too much to ask not to repeat the same mistakes over and over.

One last point, government body or not HMRC will have appointed a case manager to deal with our account and that person or team of people having read statements made in the press and in court by RM about them will not use any of the discretion within their power to work with us now.

What would be a realistic budget? £1.3m is the recommended budget of 60% of turnover set by League Two. If we were to maintain a wage bill of around £1mp/a, then it reduces the calibre of player we can attract. Results are expected to be worse, meaning that revenue falls further and the same financial problems are to be expected. Of course, the remedy to this would be to maintain a smaller squad with that budget spread across more players, but Tilson attempted that and we were plagued by injury problems as a result.

As I've pointed out, this is the only month this season that I've seen us incur the wrath of HMRC, this being the same month that Sainsbury's have allegedly held back on finance until the development plans were approved. Had that finance come in, then I'm fairly sure HMRC would've been paid and nobody would have been any the wiser.

Sorry for repeating myself here but if Martin paid the small tax bills which the HMRC wanted last year rather than try to bully them then they would of not demanded the whole outstanding debt at once am i not correct? This is HIS fault. Could one of the people sticking up for Martin please give me an opinion on this or do you agree?

ps East Stand Blue. How do you know HMRC aren't determined to take him down or is that your opinion? Im not disagreeing, just interested.

Purely my opinion... I can't see how a neutral body could make a case of intentionally going after an individual if s/he has shown the ability to pay.

What happens when we stop receipting these amounts? It seems clear that we are not able to satisfy any liabilities as and when they fall due without this money. This is gravely concerning.

I'd hope that, if we're no closer to FF, we'd rebudget. That would mean significantly capping the wage expenditure and other costs, such as the youth development programme, but that'd be necessary. I'd be extremely concerned if we maintained this level of expenditure if Sainsbury's were to pull the plug.

 

[Yorkshire Blue]

My interpretation of the current situatin is thus. We are due monies from Sainsbury's (monies to be deducted from the overall profit on selling RH). These monies were not paid in a one off payment of 5m, but rather in 'milestone' payments. The last milestone payment along with gate receipts etc. was not enough to cover our overheads - indeed we have failed to budget for the three most important aspects of business, the taxman, the players and staff wages. I am lead to believe that we are due our next milestone payment either today or tomorrow from Sainsbury's. This will eleviate our current predicament, HMRC will be paid off, the players and staff will get their wages. It then leads to the question whether the Football League decide to rescind the transfer embargo put on the club last Tuesday (again I am lead to believe this is true - it is automatic when players are not paid). They must see us as a 'fit and proper' club which will meet all it's obligations in the future.

The HMRC is worrying. Solely because habitual transgressors of the rules and regulations are usually beaten with a very large stick!

Having a luxury of putting cash aside is obviously a luxury we do not possess - however, not paying the taxman, players, staff, contractors etc is an untenable situation for any business. If Sainsbury's do not, for whatever reason meet the milestone payment, we are gone - and there's no way back.

I am worried.

I'd say that's a pretty fair assessment, but with the qualification that Sainsbury's missing a milestone payment isn't that much of an issue (assuming we have a written agreement in place with them), it's us missing a milestone that's the potential problem.

It's dawned on me that football is ****ed. The wage budget is apparently just over £1.3m this year. For me that's too high. I'd have it a lot lower than that and would be willing to accept the fact that we'd have a **** team because we do need to cut our cloth accordingly. I strongly suspect that I'd be in a minority. So we end up with 18 players on 500 quid a week, the quality is **** so gates drop below target, causing further cuts, a further reduction in quality and for gates to fall even lower.

It's the problem that football clubs have.

I doubt that there are more than a handful of football club in the lower leagues which are budgeted to break even. Orient's Cup run means that this season is the first in the 15 under Barry Hearn that they will break even. Colchester lose millions every year. Yeovil are held up by many as the best run club in the lower leagues but their last set of figures showed a £600k loss in the last financial year. The only time we've made a (tiny) profit in the last decade we sold a player for £1.5m and made the last eight of a cup.

I'll ask the question again, why are we paying higher wages than some league one clubs?

Also, why am I the only one questioning this?

Sorry for repeating myself here but if Martin paid the small tax bills which the HMRC wanted last year rather than try to bully them then they would of not demanded the whole outstanding debt at once am i not correct? This is HIS fault. Could one of the people sticking up for Martin please give me an opinion on this or do you agree?

ps East Stand Blue. How do you know HMRC aren't determined to take him down or is that your opinion? Im not disagreeing, just interested.

Wasn't it £2.3m or some similar amount where we tried to use HMRC as a bank?