Wasps Financials

[strawclearer]

Wasps financial results for 2019 are apparently out although many (including me) have not yet been able to find them! Anyway, you can get a flavour from their forum. Under the heading "2019 Financial Results - Adopt the Brace Position", I lifted the following 3 comments - make of them what you will!

Comment 1:

"Key Points on wasps 2019 financials. Will try to keep opinions out of it

- Turnover up overall by 1.6m to 34.5m. In that wasps (sports side) turnover dropped 700k but ACL and IEC (the venue side) up 2.3m
- Operating loss increased by 3m to minus 5.162m. that has to improve it is unsustainable
- Wages were up 900k, f&B costs up by 850K, utilies up 350k, match day & event cost up 1mother costs (?) up 1.4m
- Exceptional item was a positive 16.7m Profit on CVC shares 12.5m (assume proceeds lest value already held) revaluation of the shares still held after the CVC sale 4.1m JR costs recovered 85k
- Finance costs are up 370k interest payable 3.8m in total
- Tax provision of 1m but it is deferred tax (based on a calculation of tax that could be paid in the future) so is not actually paid out
- Overall net profit 3.6m ( but after excluding exceptional items that’s a net loss 13.2m) Not good because wont get exceptional item every year.
- Take off the fall in leasehold valuation after tax provision there is negative of 3.5m although it is a movement through revaluation reserve rather than the P&L
- Total assets have dropped 3.5m to 82.9m
- Total liabilities are 89.9m up by 3.4m
- Balance sheet is negative by 7m but that does include a charge of 4.7m to settle out Compass. Compass has a charge on the group because it wont get all its money back till July 2024
- The group is cash flow positive by 3.1m for the year
- The group spent 1.9m on plant & equipment in the year, including 595k on “other leasehold property”?
- Drew down 1.5m in borrowing but repaid 5.8m other borrowing and had 3.1m in the bank at the year end
- There is a detailed note on going concern which the auditors refer to. Group still relies on Richardson. Not unusual for many sports teams to rely on their owners
- No qualification of the audit report but material uncertainty regarding going concern detailed. Audit fees have increased by 70k to 150k
- Lot more mentions of the refinancing of the bond
- Details of valuation imply that all tenants at 31/03/2019 were included so that would mean CCFC too. Find that odd because even in March they knew there were problems and nothing had been agreed. Was expecting a greater value on the P share.
- They have restructured things since balance sheet date at a cost of £130k, we knew that staff at ACL were leaving for example. That said total non playing staff increased by 12 in year
- Highest paid director £170k
- Amount owed to Richardson 18.3m but that’s 290k down
- Total borrowings down 3m (loans & bank)

Very detailed accounts, but cant hide the fact that exceptional items aside there is a big loss in there. That said the feeling I get is that there is a lot of very careful tidying up of the balance sheet going on, crossing “t’s” and dotting “I’s”. Is there something else going on, say to do with the bond finance? i dont believe they are about to up sticks and move away. Will also be interesting how the new deal with CVC unwinds through future accounts"

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Comment 2:

In addition to Lords comments above , but also an interpretation for the layman and my opinion is also follows:
This is an unmitigated disaster of a set of figures
It follows on from the record breaking loss of £10m in year to June 2018
If you ignore the £16m handout from CVC the loss has risen to £12m
Totally unsustainable
Rugby attendance is only a half full stadium and down with revenues from 2018
Wasps continue to add more Chiefs so now two CEO's - one for venue one for sport - so costs go up and we ask why is that needed
Derek is owned £18m with no way to repay him as well as the bonds due in 2022
A massive £50m in loans and losses risen and no end in sight, with one big ugly asset being the Ricoh
Probably why the bond value has crashed 30% in last weeks and more to come ….

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Comment 3:

I'd change the ownership of the Ricoh and sell it asap. Wasps are a rugby club not a casino or exhibition or hotel owner

They dilute wasps revenues and soak in staff and overheads so sell them

get rid of a vast swath of management Eastwood has bought in - chiefs no Indians

Get a decent sized stadium like the Stoop as near as the Stoop as possible - get a proper rugby stadium and atmosphere back - not the hollow underutilised Ricoh

get rid of useless overseas signings like Lima

Use the money to build a proper club with a great academey like Exeter

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And the results are up now: https://www.wasps.co.uk/your-club/wasps-bonds/

[CitizenSmiff]

Ouch, that messy business with the ownership of the Ricoh seems to have cost them dearly. They do seem to have a gift for bouncing from one financial meltdown to the next.

[Cardiff Tig]

Without the Ricoh they'd be toast. It's the only profitable part of the business. And even the successful hotel and casino won't save them it seems. They don't appear to have learnt anything from having to leave Adams Park the first time around.

[wellstiger]

Sell up move back to London
New /old name London Wasps
Ground share with Sarries

[Flash]

Wasps turnover seems to be about 15m more than Exeter so you do wonder how they seem to get it so badly wrong.

[jgriffin]

Wasps turnover seems to be about 15m more than Exeter so you do wonder how they seem to get it so badly wrong.

Chiefs don't have anywhere near the costs, have a large solid following, and have steady rental income from David Lloyd etc AFAIK. Sandy Park was a dump before Rowe invested there, worthless real estate unlike Digby & Sowton over the bridge, or the area to the South where IKEA is now. Rowe used to hide some stuff in his SW Comms firm, but there are income streams from all over, hence my comment elsewhere that Chiefs spending will explode if Wray succeeds in defeating the cap.

[ourla]

The thread on Rugby Network is very interesting. Lot's of good questioning and discussion of how the move has worked out. But also some thoughts on the game of rugby itself.

For me, the Prem in terms of the competitiveness of the league and the quality of the play on the pitch is probably as good as it has ever been. I genuinely look forward and like watching the games - Friday evening games especially good armchair viewing.

But because so much is televised and the cost/hassle of getting to games, especially with such a variety of playing times is a turn off, it dilutes peoples appetite for going. And I am not sure the match day experience is working everywhere.

[mol2]

Nothing wrong with the Ricoh.

The problem is Wasps don't have the fan base to need a stadium of that size and is it situated in the right place to generate income for the club?

They have lost a few of their more expensive players and the accounts would seem to show why.

[JP14]

I would argue the quality of rugby peaked in 2017, some matches are utterly dire, Prem is as close as it is because all the teams are at the same level of mediocracy.

[jgriffin]

I would argue the quality of rugby peaked in 2017, some matches are utterly dire, Prem is as close as it is because all the teams are at the same level of mediocracy.

Disagree entirely, I'd have said 2007! Since then further rule changes have made it a sumo wrestling contest, not a running and handling game except in patches.

[JP14]

Considering I wasn’t watching rugby properly in 2007 would be the reason we disagree.

[strawclearer]

I would argue the quality of rugby peaked in 2017, some matches are utterly dire, Prem is as close as it is because all the teams are at the same level of mediocracy.

Disagree entirely, I'd have said 2007! Since then further rule changes have made it a sumo wrestling contest, not a running and handling game except in patches.

[mol2]

Or have Sarries grabbed too many of the top players so the rest are weakened as a result?

[sk 88]

Without the Ricoh they'd be toast. It's the only profitable part of the business. And even the successful hotel and casino won't save them it seems. They don't appear to have learnt anything from having to leave Adams Park the first time around.

It isn't really profitable though, the current year drilled down accounts are not on companies house yet but last year's show a £2m loss on just the Arena. Link here: https://beta.companieshouse.gov.uk/comp ... ng-history

No part of the group is particularly profitable, the costs of running it seem to be astronomical compared to the income it is capable of generating.