P1 Imps Fans Meeting – Finance
The ten members of the Lincoln City board met with 8 fans last night, for an open meeting based upon a seven point agenda. The event was covered by Mr Leigh Curtis (Lincolnshire Echo, Mr Michael Hortin (BBC) and Neil Gentleman-Hobbs (STMI); with LCFC CEO Steve Prescott filming proceedings.
The following sees a transcript of comments by the parties concerned related to the financial part of the agenda and are not the views of STMI. We thank LCFC for their hospitality and the opportunity afforded. Thank you for reading Neil Gentleman-Hobbs
Finance, including LCH;immediate and long term future & community.
The meeting opened with a question from Keith Roe (KR) on Lincoln City Holdings, the business. model and on whether any new investment would go into LCH as opposed to the club. Bob Dorrian (BD) suggested there was no business model in place at LCH, it was purely there to hold shares and not assets within LCFC. It had been felt that the requirement of £500k+, to keep the club going and to be held as shares, within LCH, would be advantageous in attracting new investment. It would be easier to buy out the club and, BD was confident, short and long term, that people would come in to invest or take over the club.
KR then referred to Chris Travers (ex-Vice Chair) use of the word Cabal in a radio interview. BD reiterated his belief that there was still broad share ownership of the club. 95% of LCFC shares are held by over 800 shareholders with little more than a £10 share holding. These had little or no desire to consider it as an investment, nor influence policy. A caveat had been added by LCH, that, anyone would have to, not only buy out the LCH board, but, additionally invest extra in the football club.
KR was concerned that he had still not had responses to four written questions, relating to LCH. BD replied that LCH is a private limited company, information is within the public domain, its purpose is to hold shares. KR submitted that they were not prepared to answer questions. BD replied that they had a lot on their plate and that the information was in the hands of solicitors. BD himself, was awaiting the answer to some questions.
A fan then asked why they had chosen to use a holding company model. BD said that broad ownership does not work within the game. JP (Jane Powell) said she believed there was broad ownership. JB (Jonathan Battersby) felt the current set up was against the broad (community ownership) ideals of The Lincolnshire Co-operative. (The controlling interest in LCFC is in the hands of 9 individuals within LCH). JP disagreed (Trusts membership). BD felt you can still have a community ethos even without broad ownership. It was then established that the funding was largely BD (£432) plus Co Op & Lindum (at £40k each).
BD had been approached by a third party, representing a mystery consortium, in October (no year confirmed but 2010 appears likely). They had not turned up on the day of the meeting. This had resurfaced in January but LCH was already formed. BD was still unaware who ‘they’ were. David Parnam and David Featherstone both stated that the door was still open. BD observed that people only come forward for serious causes in relation to the football club. KR pointed out that their had been £1.5m of inward investment plus BD and the purchase of £2m shares. BD confirmed his personal investment to be £432k. Another board member (apologies my sight and the note taking) said that without the steps being taken the club would have gone into administration. The clubs League position and a 10 point deduction would have worsened the situation for the club. JP attempted to move matters on, commenting that people had homes to go to (the meeting was 28 minutes in).
One of the group then asked whether investment in LCH or LCFC were possible. It was confirmed that a £50k investment would allow either. A desire for LCH shares would then see LCH purchase the shares within the club at 50p each, prior to a subsequent transfer. The message to the fans is that all money will go into club shares, so they still have a value. KR asked how much it would cost to buy out LCH and how much extra would subsequently need to be invested in the club. BD replied that he could not answer that one as it had never been discussed within LCH. A figure of £200k was thrown from the floor. BD said they would say no to £200k but was prepared to confirm an additional figure of £500k in investment into the football club would be required. PW (Paul Wilson) stated that it would be hard to get anyone in and that LCH valued their shares at 10p each, giving a value of £320K.
RB (Roger Bates) also pointed out that this would depend on how many board members were retained. It was also pointed out that the more LCH got, the more the Trust percentage would yield for the club. KC (Kevin Cook) confirmed that there would need to be 60% of LCH in favour, to get control of LCH. JP interjected, reminding the meeting that it had been agreed that finance issues be completed by 7.20 (the meeting commenced promptly at 7p.m.) PW Paul Wilson observed that the fans had not agreed to that.
The Liabilities of the club were confirmed as £650,000, a £250,000 improvement in the last 13 months. Trade creditors were at their lowest for 10 years. A loss of £118,000 would be recorded as of June 2012, with depreciation this would total £206,000. The recorded loss at June 2011 had been £484,000 and DF (David Featherstone) felt a £150,000 loss would be right for 2013. BD had been told there were only 3 solvent clubs in the BSP last year of which LCFC was regarded as the most solvent. Most clubs were subjected to director loans (thus their loan book far exceeds the assets of the clubs concerned). LCFC were reducing the losses and making sustainable losses despite having lost a million or so in annual income over the last 18 months. DF felt we would be break-even by 2014 and confirmed that we had lost 30% of our annual income. JB (Jonathan Battersby) asked what we were left with as the meeting moved to football matters.