Background
Shamrock Rovers are in affect managed through 2 legal entities, Shamrock Rovers F.C Ltd (245954) (Trading Company) and Shamrock Rovers Members Club CLG (419156) (Holding Company) which came about when the club was rescued by the 400 club. The first company carries out the trade of the football club and was set up in May'96 where as the members club was set up in Apr'06 after the examinership process in 2005. Unlike Derry and St Pats the 2017 accounts are not yet submitted so I have looked at the 3 years to Nov'16 and will update in due course as the 2017 accounts are due to be filed soon. In these 3 years Rovers finished 4th in 2014, 3rd in 2015, 4th in 2016 and for the record also finished 3rd in 2017. At Nov'16 The Trading company was 93.27% owned by the 400 club members, but this will have changed with the injection of cash from Ray Wilson post this date. http://www.extratime.ie/articles/16110/rovers-invest-in-youth-as-route-to-success/
Profit & Loss Account
As I mentioned above you need to consolidate 2 sets of accounts to see the full picture at Rovers but most of the activity goes through the trading company.
As you will note in the 3 years Rovers lost circa (€1.2m). Most of these losses came in 2014 (€0.5m) and 2016 (€0.65m). Unlike Derry & Pats as explained in earlier posts, Rovers had no benefactor in the P&L so the losses came through very visibly in the P&L's in this instance. Rovers finished 5th in 2013 and thus had no European football in 2014 which would have hit their income. In 2015 Rovers won their first round in the Europa league, going out in round 2 and pocketed €410k that year which significantly improved the P&L. In 2016 Rovers were again in Europe, but lost in round 1 and their income reduced to €215k this year. You would expect an improvement in 2017 as again they progressed in Europe through round 1 and pocketed €440k in 2017. Like Pats, Rovers were in Europe 2 of the 3 years, they progressed through 1 round in 1 year and made circa €655k from the Europa League but still lost (€1.2m) over the 3 seasons. Another potential cause of the losses in 2014 and 2016 was that in August of both years the respective managers left. In Aug'14 Trevor Crolly left and in Aug'16 Pat Fenlon left, any compensation for their exits would be in these years but are not disclosed in the submissions.
The period is a year out compared to the St Pats P&L but the story is very similar, in both instances the clubs are losing circa (€1.2m/€1.3m) even after being in Europe 2 of the 3 years. Derry also lost a substantial sum in the last 3 years and I suspect their underlying loss would be higher if I could see the donations to the development committee.
The balance sheet of the holding company is fairly simple, the principle and only asset is its shares of the trading company. The club takes in membership subscriptions which in turn it passes to the trading company to further increase its shareholding. You would not expect much in its balance sheet as a result.
The trading company had a deficit of (€0.8m) at the end of November'16. This was made up of assets of circa +€0.6m and liabilities of circa (€1.4m). The 2 principle assets at November'16 was the investment in the youth facilities at Roadstone and at that point circa +€0.2m had been invested (this will rise to +€0.4m) and another +€0.2m owed to Rovers for their European participation.
The liabilities are not broken in any detail so their is no breakdown of the (€1.4m). From the going concern note it would appear some of this was owed to Ray Wilson as their is a commitment from a key shareholder to support the club. Again like Pat's if a lot of this debt is owed to 1 shareholder it is a better position to be in that owing lots of people monies.
I have looked at 3 clubs so far, Rovers, Pats and Derry and the trend across all 3 is very similar. When you strip out loan write off's (Pats) or very big donations (Derry) the underlying financial performance is big losses. Rovers is the clearest example of this as in these 3 years they didn't have any big write offs or donations so everything went through the P&L as normal. Rovers lost slightly less than Pats over the 3 year period but in both instances the losses were over (€1m). There is a clear trend here in terms of the profitability of teams even with European football, the 3 clubs I have covered so far between them have pocked +€1.4m over 3 years and can still run up these losses. I would expect the Rovers 3 year period to Nov'17 to improve as one of the big loss years (2014) will fall out and be replaced with 2017. Rovers now have a benefactor as well to help underwrite these losses and invest in the youth side, a move I strongly agree with as the current model is not working, clubs are running up big losses to chase a pot of money that may not exist.
Depending on how the investment from Ray Wilson is treated, the balance sheet and shareholding will look different in the future. If like the Derry chairman the monies are given as a donation the P&L will look very different too, but if it is given as a loan as reported above the underlying P&L should still be a true reflection of the clubs financial performance. Given the sales of players in 2018 so far, the P&L for this year when available might look very strong.
The period is a year out compared to the St Pats P&L but the story is very similar, in both instances the clubs are losing circa (€1.2m/€1.3m) even after being in Europe 2 of the 3 years. Derry also lost a substantial sum in the last 3 years and I suspect their underlying loss would be higher if I could see the donations to the development committee.
Balance Sheet
The balance sheet of the holding company is fairly simple, the principle and only asset is its shares of the trading company. The club takes in membership subscriptions which in turn it passes to the trading company to further increase its shareholding. You would not expect much in its balance sheet as a result.
The trading company had a deficit of (€0.8m) at the end of November'16. This was made up of assets of circa +€0.6m and liabilities of circa (€1.4m). The 2 principle assets at November'16 was the investment in the youth facilities at Roadstone and at that point circa +€0.2m had been invested (this will rise to +€0.4m) and another +€0.2m owed to Rovers for their European participation.
The liabilities are not broken in any detail so their is no breakdown of the (€1.4m). From the going concern note it would appear some of this was owed to Ray Wilson as their is a commitment from a key shareholder to support the club. Again like Pat's if a lot of this debt is owed to 1 shareholder it is a better position to be in that owing lots of people monies.
Summary
I have looked at 3 clubs so far, Rovers, Pats and Derry and the trend across all 3 is very similar. When you strip out loan write off's (Pats) or very big donations (Derry) the underlying financial performance is big losses. Rovers is the clearest example of this as in these 3 years they didn't have any big write offs or donations so everything went through the P&L as normal. Rovers lost slightly less than Pats over the 3 year period but in both instances the losses were over (€1m). There is a clear trend here in terms of the profitability of teams even with European football, the 3 clubs I have covered so far between them have pocked +€1.4m over 3 years and can still run up these losses. I would expect the Rovers 3 year period to Nov'17 to improve as one of the big loss years (2014) will fall out and be replaced with 2017. Rovers now have a benefactor as well to help underwrite these losses and invest in the youth side, a move I strongly agree with as the current model is not working, clubs are running up big losses to chase a pot of money that may not exist.
Depending on how the investment from Ray Wilson is treated, the balance sheet and shareholding will look different in the future. If like the Derry chairman the monies are given as a donation the P&L will look very different too, but if it is given as a loan as reported above the underlying P&L should still be a true reflection of the clubs financial performance. Given the sales of players in 2018 so far, the P&L for this year when available might look very strong.
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