Club Press Release
By: Rob Sedgwick
Date: 23/07/2000
Press Release From The Chairman Of Grimsby Town Football Club Plc
News From 22nd January 2000
At the Annual General Meeting of the Company held on 16 December 1999 the then Chairman Mr W Carr informed all shareholders present that with an overdraft of only £200,000 attributable directly to football activities, the Company's finances were the envy of all members of the Football Association.
The new Board having been in office just over one month have collectively spent hundreds of hours investigating the Company's current financial position and regret to have to reveal that the suggestion by Mr Carr that the Company's finances were in good order, could not be further from the truth.
The New Board called in the Company's Auditors on 17 December 1999 and asked for a "Statement of Affairs" to be produced as soon as possible for the period 1 June 99 through to 16 December 1999. This became available 13 January 2000 and confirmed the Directors worst fears that during the period the Company had lost a further £580,000 in addition to last year's loss of £1,020,000
· Whilst awaiting the auditors report the new Directors had prepared projections taking the position forward to 31 May 2000. This shows a full year loss of approximately £1,400,000 taking the two years losses to £2,420,000.
Considering the Net assets of the Company as reported by the Carr Board in their 31 May 1999 Statement and Accounts of £1,567,696, it would not be unreasonable for shareholders (some of which were standing as new Directors) to think, when coupled with Mr Carr Statement that the Company's finances were sound and that the business had a strong asset base. However one has to consider that the Ground Improvements figures of £264,190 and the intangible asset figure of £721,750 (Value placed upon players contracts) have as assets, no intrinsic value. Therefore the true net assets were £581.756 at 31 May 1999 and as a consequence of the further loss incurred to the 16 Dec 99 (date of AGM) the Company had no real asset base.
It was further shown that despite Mr Carr's assurances to the contrary the Company's Cash (Liquidity position) was also in dire straits. On the afternoon of the AGM (16 Dec 99) the whole of the old Board gave notice to the Company's Bankers to withdraw the guarantees. As the balance on the account was almost at the limit of the overdraft facilities the Company's Bankers were naturally very concerned about the Company's finances and immediately closed the account and furthermore have not released the guarantees. As the Company was technically illiquid and insolvent the question arises. Did those Directors that voluntarily resigned do so in the full knowledge of the Companies precarious financial position or was it really as they said. "That they could not or did not want to work with the new Directors in the best interests of Grimsby Town FC."
The new Board had immediately to secure the Company's continued trading position and therefore had to make new arrangements with the Bankers. The afore going took place within one hour of the new Board taking office.
The new Board was then confronted with the urgent requirements of the developers of the Great Coates Stadium and Retail Park, Chiltern Investments wanting to establish the position regarding the developments future.
Investigations revealed that the old Board had signed contracts with Chiltern Investments the day before the AGM (15 December 1999) which placed the Company in a "no get out" (for at least five years) position and facing almost immediate preliminary additional cost of in excess of £300,000 should the outline planning approval anticipated by 31 March 2000 be granted. My Directors and I immediately put the Carr Board on legal notice as to certain of their passed actions and this notice is still valid.
The New Board are now faced with a projected trading deficit of £1,400,000 and the imminent additional Consultants fees of £300,000. The funds for which despite Mr Carr's statements to the contrary are NOT in place.
No departmental budgets or overall financial plans had been prepared for the Company's continued trading.
No proposals for the financing of the £4,000,000 contribution by GTFC towards the Stadium development are in place.
No business plans have been prepare to assess whether the Company's business will be viable at the new Stadium.
A letter from the Company's Bankers dated in August 1999 requesting a business plan for the proposed new Stadium was neither acknowledged nor answered.
A further letter from the Company's Bankers dated early October 1999 indicating that the Bank Facility expired on 31 October 1999 was also neither acknowledge or answered.
It will be no good Mr Carr saying well the old Directors had private plans. When you are running a Public Company your plans have to be just that Public. GTFC is not a toy to be played with by the so-called chosen few as they think fit.
In stemming the tide and getting to grips with the above very serious situation I regret that I have been unable to detail to both shareholders and supporters alike the actions that have been taking place. However one consideration given by your Board was whether or not, in the interest of good business practice, the Company's Bankers should be asked to appoint an administrator so as to protect the Company and its employees in the future. Fortunately through strenuous efforts of the new Board the action has proved not to be necessary.
I can assure everybody that my Board of Directors will work untiringly to restore the financial stability of GTFC, which has been so nearly lost by previous poor management.
· Turning to the most important part of the Company the playing staff. Fortunately, the manager and our players have given of their all in attempting to maintain the Clubs equilibrium on the field and whilst results have not all gone in our favour of late that has not been through lack of effort and commitment.
· The players know as do all of our staff and supports that maintaining first division status is vital for our future and as importantly our financial well being. With this in mind everybody is working flat out.
· I hope that the acrimony shown at the recent Annual General Meeting is now well and truly buried by all parties and that we will all work for the immediate and long term benefit of Grimsby Town Football Club PLC
Doug Everett
Chairman GTFC Plc.
18 Jan 2000
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