Financial Results - club announcement

[Enzo]

silly question - sorry. Our loan repayments for the stadium borrowing. Are we repaying capital and interest or just interest?

It's really isn't a silly question, lot's going on there.

The total loan balances reduced from £852.6m to £851.3m in year. The total interest paid on loans in the year was £24m.

That's very little reduction in the capital balance (for that amount of interest), but the majority of this loan balance is structured as interest-only, as below:

- The main Bond Issue (£525m - Sep'19), will only reduce when bonds start to mature, between 15-30 years from issue. Average maturity of the total debt package is 23 years, while the weighted average coupon is 2.66%. (circa £14m interest per year currently).
- The most recent Loan Issue (£250m - Jun'21), this whole £250m is repayable in 2051 (2.8% interest - £7m interest per year.)

 

[JayB]

My read on the situation is that over the past three years we've finally started spending as a club of our means should do, but much of the spend was wasted due to total incompetence within the recruitment setup prior to Paratici's arrival.

That doesn't let Levy off the hook for (1) the period from approximately 2016-2018 where the spending was vastly below what it should have been, which was a deathblow to the Pochettino project and resulted in a golden opportunity having been missed, or (2) the dogshit recruitment between when we loosened the purse strings and when Paratici arrived.

Levy was deeply involved in both of those failures and has proven beyond any doubt that he's ill-equipped to oversee the footballing aspects of the club. We've moved in the right direction in terms of deploying the club's considerable finances to invest in the squad itself, but we're at a crossroads with Paratici likely on his way out and Levy needs to be kept well away from any position of influence over player recruitment.

 

[carmeldevil]

So is our £116m figure a good figure?

need to know what other clubs EBITA are, what is the expected EBITA for Tottenham based on what they have (stadium, attendance, etc). I don't have the complete financial look. Maybe someone else here has.

 

[skiba]

Why’ve we got £226 million in the bank?

https://www.tottenhamhotspur.com/media/4hodwa2a/tottenham-hotspur-limited-300622-signed.pdf

page 29

It's a pretty useless figure without any context as it's just a snapshot in time being the 30 June 2022. For instance we know that season ticket and boxes etc will be being paid around around this time of year so it would be natural for the club to have a lot of cash at this point. Always best to look at the cash flow for the year (pg 17) where you will see £97.5m coming in through the share issue. That probably explains the large cash balance IMO

 

[spursfan77]

It's a pretty useless figure without any context as it's just a snapshot in time being the 30 June 2022. For instance we know that season ticket and boxes etc will be being paid around around this time of year so it would be natural for the club to have a lot of cash at this point. Always best to look at the cash flow for the year (pg 17) where you will see £97.5m coming in through the share issue. That probably explains the large cash balance IMO

It’s all fairly useless information now as it’s nearly 9 months out of date. They were signed off in December.

 

[skiba]

It’s all fairly useless information now as it’s nearly 9 months out of date. They were signed off in December.

I always like to see what's happening tbf, even if it is from the previous season. But then I'm an accountant...

 

[Styopa]

Barring City and Chelsea what other teams don't operate the way we do?

Liverpool have always acted very similar to the way we operate but luckily for them they appointed a top class manager and used the sale of players to build a top team. It wasn't like FSG done a Chelsea and started pumping loads of money into it. They also didn't have to build a £1 Billion stadium during their successful period.

The same can be said for Arsenal where their spending has gone up because they have to rebuild a team. As a result, they have had to overspend due to being out of the CL for a few seasons. Everything they done recently was all aimed to achieve CL football again to increase the revenue stream. I think we will see their spending fall back in line over next 12 months.

The situation really isn't as bad as some believe and if Conte signed the extension to the contract most of the noise would go away

I don't think it's just a matter of just spending more money. I think It's a result of questionable decisions at points where we have stagnated when we could have really pushed on.

Both Arsenal and Liverpool have gone through serious dips over the last twenty years. Yet, during those twenty years, as a whole, both of those clubs have been far more successful than we have been.

Even at points where the opportunity has arisen to push our advantage home (e.g. this season where Chelsea and Liverpool are both having terrible seasons, we make some really questionable footballing decisions, like seemingly not prioritising key positions whilst spending money on non priority buys).

ENIC have a long history of this of course - arguably Redknapp and Pochettino were not backed properly at key periods - times when we legitimately might have gone on and won league titles. Arguably Conte is not being backed properly this season and (especially if Arsenal , a team who finished below us last season, win the league) we may look back at this season as another missed opportunity.

 

[SirHarryHotspur]

Why’ve we got £226 million in the bank?

https://www.tottenhamhotspur.com/media/4hodwa2a/tottenham-hotspur-limited-300622-signed.pdf

page 29

This explains cash equivalents but I don't think I am any the wiser, from some of the explanations I have had a search for it would seem it is a good thing to hold large cash equivalents , shows the company is healthy.

Cash and Cash Equivalents (CCE) Definition: Types and Examples

Cash and cash equivalents are company assets that are either cash or can be converted into cash immediately.

www.investopedia.com

 

[spursfan77]

This explains cash equivalents but I don't think I am any the wiser, from some of the explanations I have had a search for it would seem it is a good thing to hold large cash equivalents , shows the company is healthy.

Cash and Cash Equivalents (CCE) Definition: Types and Examples

Cash and cash equivalents are company assets that are either cash or can be converted into cash immediately.

www.investopedia.com

I think we had to keep a a chunk of cash as a condition of one of the bank loans, but even still that seems a lot of cash to hold.

 

[olithfc]

It's really isn't a silly question, lot's going on there.

The total loan balances reduced from £852.6m to £851.3m in year. The total interest paid on loans in the year was £24m.

That's very little reduction in the capital balance (for that amount of interest), but the majority of this loan balance is structured as interest-only, as below:

- The main Bond Issue (£525m - Sep'19), will only reduce when bonds start to mature, between 15-30 years from issue. Average maturity of the total debt package is 23 years, while the weighted average coupon is 2.66%. (circa £14m interest per year currently).
- The most recent Loan Issue (£250m - Jun'21), this whole £250m is repayable in 2051 (2.8% interest - £7m interest per year.)

Thank you for this. So by not repaying any capital, isn't this a kick the can down the road situation (to a time where interest rates probably will be higher)? And we aren't in that much of a better position, i.e. debt still there, just we are basically not paying it back ?

 

[Trees]

Thank you for this. So by not repaying any capital, isn't this a kick the can down the road situation (to a time where interest rates probably will be higher)? And we aren't in that much of a better position, i.e. debt still there, just we are basically not paying it back ?

A bit like UK PLC

 

[Neon_Knight_]

he's overseen such a decline that almost 85% of fans want him removed

Did that figure come from a survey or is it your estimate based on what you see/hear from fans?

I would say about 60% of fans who I know in real life are fairly content about the ownership. Maybe about 10% want ENIC out irrespective of who comes in next and the other 30% are keen for change, but only if it's actually change for the better (i.e. not the next Glazers) and only if it's a relatively "ethical" billionaire (unlike the Chelsea, Man City & Newcastle owners). Obviously that's just my small circle though, so I wouldn't assume it's representative of the wider fanbase.

 

[Enzo]

Thank you for this. So by not repaying any capital, isn't this a kick the can down the road situation (to a time where interest rates probably will be higher)? And we aren't in that much of a better position, i.e. debt still there, just we are basically not paying it back ?

Even though we overshot the stadium budget, the resulting debt has been secured at a very decent rate and is serviceable.

From an investment perspective, the new stadium has exponentially increased the value of the club.

Who knows where the club will be in 20/30 years.......

 

[rossdapep]

One thing Ive always wondered is how clubs factor in the firing of coaches.

I mean Poch, Jose and Nuno were all fired within a 2 year period. So does the club put that money in reserve when the contracts are signed?

Because you could end up paying the salary of three head coaches at the same time.

And then what happens with that money should a fired coach find a job and no longer be able to claim

 

[Neon_Knight_]

Thank you for this. So by not repaying any capital, isn't this a kick the can down the road situation (to a time where interest rates probably will be higher)? And we aren't in that much of a better position, i.e. debt still there, just we are basically not paying it back ?

Those interest rates were secured while borrowing rates were relatively low and is well below inflation. The debt is decreasing value, in real terms, even if the monetary figure stays the same. I presume the intention is to pay off the debts as each bond matures / loan deal expires, rather than effectively paying back more now (in real terms).

 

[Hercules]

Even though we overshot the stadium budget, the resulting debt has been secured at a very decent rate and is serviceable.

From an investment perspective, the new stadium has exponentially increased the value of the club.

Who knows where the club will be in 20/30 years.......

With Daniel Levy and ENIC in charge, the same as we are now.

 

[Stamford]

I'm a bit worried that we are banking so heavily on FFP working, just feels naive to me

 

[wrd]

I'm a bit worried that we are banking so heavily on FFP working, just feels naive to me

Yeah it feels like we're banking on being ahead of the curve when restrictions come into play but clubs are given so long to conform that any benefit from being ahead seems meaningless really.

 

[ILS]

I don't think it's just a matter of just spending more money. I think It's a result of questionable decisions at points where we have stagnated when we could have really pushed on.

Both Arsenal and Liverpool have gone through serious dips over the last twenty years. Yet, during those twenty years, as a whole, both of those clubs have been far more successful than we have been.

Even at points where the opportunity has arisen to push our advantage home (e.g. this season where Chelsea and Liverpool are both having terrible seasons, we make some really questionable footballing decisions, like seemingly not prioritising key positions whilst spending money on non priority buys).

ENIC have a long history of this of course - arguably Redknapp and Pochettino were not backed properly at key periods - times when we legitimately might have gone on and won league titles. Arguably Conte is not being backed properly this season and (especially if Arsenal , a team who finished below us last season, win the league) we may look back at this season as another missed opportunity.

Why isn't Conte being backed because he didn't get Bastoni? A player that wanted to stay at Inter and at the time had just had a young baby and felt it wasn't the right time.

Or because he didn't get Zaniolo, a player that will now be slumming it in the Turkish league with Dele because no top team wanted to touch him with a barge pole?

In my opinion Conte has been backed but even if he was at Chelsea now, he is the type of manager that would still be moaning similar to Jose. It's part of their make up.

Maybe as a club we have finally learnt our lessons from wasting money on second choices and in Lenglet we decided to bide our time and get the right defender in next season. Same could be said for Danjuma who I think is a more astute piece of business then taking a risk on Zaniolo.

Yes you can say we have missed an opportunity but Arsenal are a head of us in their process. Let's be honest we finished fourth last year by using 13 players and also bare in mind Arsenal bottled it.
The team against us that played a couple weeks ago only had Zinchenko and Saliba who didn't play last season and only one of them was a brand new signing.

If Arsenal were 10 points behind City no one would be moaning about us not backing Conte.

 

[Archibald&Crooks]

Did that figure come from a survey or is it your estimate based on what you see/hear from fans?

We had a poll on SC, I can't remember what the final figure was but it was hovering around 85%.

EDIT: I just checked it was almost 83%