Club hope to Break Even by the end of the season

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PLYMOUTH Argyle are on course to 'break even' at the end of the season, the club's chief executive Martyn Starnes has told Herald Sport.

The Pilgrims posted a loss of £1.46m last year which almost halved the previous period's deficit and Starnes is confident they can continue the trend through 2014/15 which he said 'would mark a remarkable achievement' for a club which went into administration in March 2011.
The break even figure prediction is set before the club charge depreciation on the sum.

Starnes said with Argyle rising to sixth in League Two and looking at back-to-back Saturday home fixtures, the message on and off the pitch from Home Park is a positive one.

"I think when the figure of a £1.46m debit for the previous year's finances was posted earlier this month, it wasn't fully appreciated that we'd cut around 40 per cent off the year before," said Starnes.
"And we're confident of continuing in that vein and that we can break even at the end of this season.

"It's a far rosier picture than when I first came to the club. I was aware that operating losses needed to be eliminated and legacy football creditors had to be managed.

"With substantial debts, trading losses, the club was really struggling in the league, having experienced two agonising periods of relegation, it was clear Argyle had been travelling in the wrong direction for some time.

"A far cry from the days in the Championship, yes, but our ambition is to recover that position and, of course, steer a good sound, passage financially."

"The staff at the club have done a terrific job in turning fortunes around so far and are committed to making further progress."

Starnes added: "The club's finances will be aided by an £800,000, five-year-loan from Plymouth City Council, which will help us to pay off a balloon payment, due in 2016.

"The balloon payment signifies monies owed to creditors when chairman and owner James Brent took the club out of administration three years' ago.

"The council loan is for that specific purpose only and has nothing to do with the grandstand rebuild, which is a separate issue entirely."

Argyle face Carlisle United at Home Park on Saturday and Cheltenham visit the following weekend, which sandwiches a trip to AFC Wimbledon on Tuesday.

"It's very important that we make the most of these two home Saturday games," said Starnes.

"The team have done well at home this season and it's vital we continue in that vein.

"Obviously, the fans' support is equally vital, the Green Army have always been extremely supportive, even when things weren't going well.

"It's a long season, but there is definitely a lot to be positive about right now."

The Cumbrians come to Home Park under relatively new management with former Torquay United boss Keith Curle replacing Graham Kavanagh in mid-September.

Former England international Curle has been tasked with keeping struggling Carlisle in the Football League – a feeling not unfamiliar to previous Argyle managers.

Thus far into Curle's reign, Carlisle have won three out of four games and risen to fifth from last in League Two.

Curle, who managed the Gulls in 2007, saw his team suffer a Football League Trophy reverse at Tranmere Rovers where the Cumbrians went out (5-4) on penalties after drawing 1-1 at full-time.

I wish that we could get someone who actually understands accounting and could explain the position in laymans terms, I read the accounts as saying we were either £4m or £6m in debt, regardless of deficits improving or being managed I would love to know that bottom line figure, it's no wonder we have so much bullshit and speculation, real facts a sooo hard to come by these days.

When you buy a cinema ticket you do not expect to inspect the company accounts before taking your seat, why should football be any different?

pepsipete wrote:

When you buy a cinema ticket you do not expect to inspect the company accounts before taking your seat,  why should football be any different?

Because the cinema don't try and make out that I am one of the family, I would let any cinema go to the wall yet I dug deep, pledged money, spent time and effort to make sure that the club was in a position to be saved by the lacklustre Mr. Brent. I have "bought into the club" over most of my life, the club also likes to include its fans in its business, Thechrisdweeb in particular likes to refer to the "Argyle Family", I feel like I am one of that family and the clubs guardians need to keep people like me onside or next time all the fans are needed to rescue the club I might not want to help. Also if we are informed of the state of the club we could intervene before we got to the parlous state we did last time.
I think you've spent too much time in your word game Pete, you need to get out more.

Iggy wrote:

pepsipete wrote:

When you buy a cinema ticket you do not expect to inspect the company accounts before taking your seat,  why should football be any different?

Because the cinema don't try and make out that I am one of the family, I would let any cinema go to the wall yet I dug deep, pledged money, spent time and effort to make sure that the club was in a position to be saved by the lacklustre Mr. Brent. I have "bought into the club" over most of my life, the club also likes to include its fans in its business, Thechrisdweeb in particular likes to refer to the "Argyle Family", I feel like I am one of that family and the clubs guardians need to keep people like me onside or next time all the fans are needed to rescue the club I might not want to help. Also if we are informed of the state of the club we could intervene before we got to the parlous state we did last time.
I think you've spent too much time in your word game Pete, you need to get out more.

Watch it Pete................................... or he'll knock you out !

I must say I hope to be a millionaire soon - hope being the operative word!!

or is it....

Club hope to Break. Even by the end of the season

I read that ECFC may have to borrow more money from the PFA to cover October and November..

I know it's old news, but I still do a double take every time I read about the 800k loan. It's bad enough by itself, I mean Brent is hardly short of a bob or two, but it's even worse when you consider that the council entrusted so many important projects to him. Incredible stuff.

it's a short term cash flow picture,

Basically what he's saying is we are currently (and through forecasting) generating enough revenue to pay all our expected bills up to year end. Which is positive for us. It's done by measuring something called EBIT.

The comfort is that we're not going to need any handouts/cash injections etc. on this basis.

So break even means trading solvently and being able to service all the debts via our expected turnover as opposed to debt free? Can you tell from the published accounts what the level of debt is at the club at this point in time?

yes, to your first question.

your second question, i haven't seen the published accounts so cant comment.

However, don't get too hung up over debt. The club's cash flow to debt ratio is what's important (whatever that is for argyle, i dont know).

Quick example would be(i'm on a train so forgive me)

annual operating income is say 7m GBP and total debt is 12m GBP the ratio is about 53% which isn't great, nor is it horrendous. The lower the percentage the more the business will struggle to carry its debt. The higher the percentage the better it is.

By definition, any business emerging from Administration is debt free-the debts having been settled by creditors accepting a percentage payment of what they are owed, the percentage reflecting how much cash/assets the business had at the time it comes out of Administration. In simple terms, if a business has £10 million debts and only £100,00 cash/realisable assets, creditors accept a 1% settlement. The "new" business then starts trading with zero debts.

The difference for a football club is that the Football League insists that "football creditors"-playing staff, other staff, other football clubs-have their debts settled in full.

With the PAFC Administration, a deal was done (which the FL expressed serious doubts about) whereby the FC debts would be paid off over a period of five years, with largest payment being made at the end of the five years.

This means PAFC came out of Administration with no none football debts, but an agreed schedule for the repayment of FC debts.

That being the case I struggle to see how Argyle, run by an experienced banker/businessman, with football expenditure curbed by the 55% Financial Fair Play rules, has been either, able to, or allowed to create further debts over and above the original FC debt What is the football club spending money on that requires it to go into further debt?

The question still remains, are Argyle in debt and if so by how much?

Iggy wrote:

The question still remains, are Argyle in debt and if so by how much?

That's two questions, technically......Of course they are in answer to your first question. No idea to the second question