Wrecsam

[JackSomething]

Not making comment on Wrexham’s finances, but the ‘fact’ going round that Wrexham have only made a loss dues to repayment of owners’ loans cannot be correct as repayment (or receipt) of a loan does not affect profit or loss. It’s a balance sheet and cash flow issue.

In the same way an owner putting in equity also does not affect profit and loss.

Rules are around profit and loss as well as cash flow. Owners can directly affect one (cash flow) but not the other.

Where Wrexham do win out is their ability to attract sponsorship due to their owners. Sponsorship income does affect profit and loss and allows them to spend more and remain within rules.

Thanks for the clarification. I looked at some of the articles written when the accounts were published and where the repayment of loans was mentioned, I overlooked this bit: "According to the strategic financial report accompanying the accounts, a key event after the financial year end was the repayment of loans from Reynolds and McElhenney, that had grown to £15m.".

I didn't clock that meant the repayment of loans wasn't actually in the accounts.

 

[Londonlisa2001]

Thanks for the clarification. I looked at some of the articles written when the accounts were published and where the repayment of loans was mentioned, I overlooked this bit: "According to the strategic financial report accompanying the accounts, a key event after the financial year end was the repayment of loans from Reynolds and McElhenney, that had grown to £15m.".

I didn't clock that meant the repayment of loans wasn't actually in the accounts.

It’s not that repayment isn’t in the accounts because of timing, it’s that repayment will never be included in the profit and loss account because it’s not a profit and loss item and therefore can’t be included. It only affects to the balance sheet and the cash flow. Rules are largely around profit and loss for football clubs and their ability to spend.

Them loaning the club money (which was ‘repaid’ as they converted it into shares instead by the way) doesn’t affect their profits. Ever. So it can’t be used to, for example, pay a load of players if they don’t earn the revenue to support it.

Added - the only aspect of owners loans which does affect the profit and loss is interest on those loans which are substantial as R&R are charging 3% over Bank of England base rate.

I’ve just had a Quick Look and despite large commercial income for the division, the club are making a relatively substantial loss. They are only a going concern because the owners have committed to support the club, same as us.

 

[MrSwerve]

Where do we see them finishing? I think they'll stay up fairly comfortably, probably around 15th-16th.