Saturday's Q&A Part 1
The following questions were asked during Saturday's post-AGM Q&A session - there were a number of other questions, but below are those relating to the Club/Society finances and Shareholding. We'll have the others online as soon as we can.
1. Question from Bill McIntosh – How many of the potential investors have specified they want shares in return?
Scott Glenday: A number of potential investors have approached the Club. Of these, those who have indicated a willingness to put money in have all stated that they want shares in return for their investment on the same terms as they were issued to others post CVA.
There will be an invitation to existing shareholders to buy more, the Society and DBBT have targeted £50,000 each to invest in 2012 and there will be a scheme on offer to existing shareholders.
Bill McIntosh: If in 12 to 18 months, the Society share is below a majority shareholding, what will we use in future years for investment?
The club have a substantial football debt and a debt to PKF for Admin costs.
There is a large 6-figure sum (c.£170,000) on the table now. The target is to raise £500,000 via private investors, shareholders, the Society and the DBBT. This will allow the club to budget until the end of the season and beyond.
Mark Gallacher: The Club are in a far better position than they were this time last year. An investment of £500,000 would secure the Club for the next 2-3 years - this is miles better than the vast majority of clubs in Scotland with regard to planning.
Bill McIntosh: would all of the sum raised go to player debt?
Mark Gallacher: that player debt has to be paid either way.
Harry MacLean: First of all there’s the player debt, then PKF settlement. Beyond that, without investment it’s impossible to cut the player budget and put a competitive team on the park next year. Once we get past this, then it means the deficit we have is workable, it might mean tightening our belts a bit, but it would be manageable, any investment means we can get to the summer, and because of the amount of follow up to administration, it means we can’t do it straight away, so this investment, and it is not a stop gap, but an opportunity to put something in place that means we are not in immediate danger.
A year on from that, and it would look completely different. But the player budget for this year, I am sure the board won’t mind me telling you is £600,000, now without that investment, it might need to be cut to £250,000 which makes it hard to be competitive on the park and remain in budget, compare that to maybe cutting £100,000 from the budget.
If there was to be no more investment once the debts are paid off, it wouldn’t be a disaster – it would be a belt-tightening exercise but would not be dangerous.
Without investment we’re looking at halving the player budget for next season.