Football stadium - Repaid 31/10/2017

I’m torn on this one. The impression I’ve built over last few months on the principal behind B*** FC is that he is a serious & credible businessman, successful in property, & I like the way he talks (not a charlatan or huge ego property wag), he builds a team around him & the club seems to have a sense of purpose.

The problem is it's making substantial (& increasing) losses, & is heavily in debt. Having looked at their last filed accounts (ye 5/15) it appears they are kept afloat by a £7.5m revolving credit facility from a related company (** Sports Man******* Ltd) owned by the borrower, & this company was very recently (20th Sep) dissolved. The first (serious) question MoneyThing  is what impact this will have on the club as a going concern.

Other points/q’s: our loan aiui is mostly (£1.9m) to provide working capital to the club on a 3Y term. I’m less concerned about the footballing prospects as see a very modest risk in the club not still being around for bad football (they've been doing that successfully for 120 years ;- jus' kidding). Debt & losses are more worrying, given that we may have to wait till Feb next year for the next accounts perhaps Ed can get an unaudited set?

The VR mentions B*** has become a commuting town for Manchester (6 min Metrolink service) & whilst I am not familiar with the area, if PP for the resi scheme does come through that should make for a decent uplift in our security value. DCLG’s figure (which I usually find reliable) for B*** land with resi PP is £1.265m/ha = £3.45m for our site. The c. 30% loss to current site value doesn’t make sense (& makes me wonder about the valuation.)

The valuation isn’t clear as to how the various rent components (150 + 100 + 40 + 49.3 + 40 +10.8 + 8.4 k) add up to or relate to the 465k market rent, & whether the implied 9.7% yield on site value is realistic for football clubs. LSH look experienced in sporting valuations, I’d like to see these figures explained.

Exit not clear, “loan will be repaid once the new site has been acquired & 3rd party financing has been concluded” only sounds like more debt needed. The club won’t be able to cash in on the existing site until the new one has been built (or where will they play?)

SD has a number of very profitable property deals coming to fruition & it may well be that he has his ducks lined up with the profits able to fund the club & other ongoing ventures. To my simple way of thinking (& as an investor in his other projects) I’d like to see the following add up to a net result at least better than the situation today:

Net worth football club now = ?

Plus (A) profits expected to be generated over the next 3Y on all SD’s non B*** FC related activities

& (B) likely sales proceeds from the site with resi PP (if achievable within 3Y)

Less (C) losses expected to be made by the club over the next 3Y

& (D) the expected cost of the new site to be built

& (E) any transitional costs for the club (eg renting/sharing a stadium until the new one is ready).

I would like to support this loan, my gut feeling on the people says yes but my head (without more info) is shaking no. Could ofcourse be the first symptoms of Shakerism.

I was sorry that we missed out on the Cardiff loan.
I too also thought the b*** loan would be gone very quickly, having no limits.

I think most MT lenders want there to be more than 20 mins availability in a loan, and it not having totally vanished in such a short space of time doesn't really constitute a failure to me.  Recent loans have gone excessively quickly because of the overhang of money left over from the repayment of the Cardiff loan.  My take on it is that only just over 2 hours later there's over 80% of a fairly large loan tranche gone already; those people who need to get home from work to get onto the sytem will only just be getting there now.  Could take longer to sell the other tranches, true enough, but other loans have taken some days to fill in the recent past.

My First MT Investment...

I feel all warm inside 

Kudos to MoneyThing for depositing my MT account at 06(ish) pm - that's pretty impressive

I've not studied this in any detail, as I have little free cash at present. However I lived in B*** as a child in the 1970's / early 80's and visited regularly through to the mid 90's.

Yes, B*** is indeed a Manchester commuter town, but the sorts of people who are employed in Manchester's legal and financial services industries (the two largest employment sectors outside retail) will tend to live in the better parts of B*** which are north of the town (NW , N, NE). My memories of the area around the football ground (SE of the town centre) is that it is the more traditional working class districts, and now favoured particularly by those whose ethnicity dervives from the Indian sub-continent. Things may have changed over the last 20 years, but my historical view is the football ground would not be considered to be prime real estate, a "must live" place - those are north of the town where the land rises sharply into semi-rural villages.

(Or put another way, the parliamentary constituency "B*** South" always returns labour, whilst "B*** North" is a marginal that usually goes to the governing party.)

'Usually' .. they managed to miss mine, which was partly my fault for not telling them that the money was en-route .. it seems that (unless pre-warned) they consolidate their accounts once a day to pick up unexpected incoming funds, and I did a late night transfer and missed it (and it obviously doesn't happen before 4pm the next day). Lesson learned - tell them (using the website) it's coming .. (although sometimes you don't need to).

4.1m (3.2 net interest & fees) initially rising to potentially 7m+ compared to 2.4m