Are we in danger of running out of cash?

[Bluedell 5,614]

We had around �£4.5m in the bank at 30th June and an unused �£15m credit facility (overdraft), but what do we have now?

 

The �£15m credit facility is reviewed each November. I can't see HBOS having agreed to increase it given their current problems, and if they had decreased it thenm we would be in real trouble so I have to assume that it remained at the same level.

 

If we look at the 2007 accounts as a base (being more representative of this year than 2008) it can be seen that we have outgoings of around �£40m for the year. The wages of the squad appear to have increased so let's say it's now �£44m.

 

We get our season ticket cash in largely in May and June so let's say we get in around another �£20m of income during the year.

 

We got cash in for Cuellar but probably spent more in terms of cashflow on Mendes, Davis and Edu, but to offset that we have some Hutton cash to come in and �£1m of a loan repayment to make, so for simplicity let's assume that they all net off to zero.

 

It therefore appears that we an average of �£2m cash per month going out of the club (44m - 20m = �£24m for the year or �£2m per month).

 

We have therefore �£12m of cash going out of the club up to the end of December which means that we have used �£7.5m of the credit facility and have a remaining �£7.5m, or around 4 months of facility left until we run out of cash.

 

Our season ticket money will start coming in during May and should keep us going then, but this shows that we have absolutely no cash available to spend on transfers in the transfer window, and we are down to our bare bones in respect of cashflow.

 

Non-qualification for next season's CL could have severe consequences.

[Frankie 8,552]

Yep, was thinking about this just the other day.

 

I'm actually more worried that the �£15million revolver may have changed and that's why we're suddenly hawking our players throughout the media.

 

I can see another failed share issue on the horizon. Or a sold training facility.

[Bluedell 5,614]

It's the wrong time to sell the training ground and Murray has said that he will not put more cash into the club.....and where would he get the cash for a share issue anyway?

[Frankie 8,552]

I don't disagree with that mate but we're seeing signs of SDM being pushed into a corner financially. I see little alternative other than to approach the fans again (Milan friendly to test the waters) then to move onto other assets if key players can't be sold.

 

IMO, Bougherra is a certainty to go and Mendes also likely. That will address the short term problems and remove the 'initiatives' above but without CL/UEFA participation such ideas may not be as unlikely as they sound.

[ascender 352]

You have to ask, how have we ended up here again? Has SDM not learned anything from his mistakes of the past?

[Guest FollowThe People]

I know little of financial matters but was told we are currently �£2M above the bread line/water mark before the bank moves in.

 

Hence the imminent departure of Bougherra. just to get a couple of million in to keep the bank from the door.