Following on from my piece yesterday I sent this to Rugger Guy to crunch the numbers for me.
Here is what he sent back.
Phil, you sent me a companies house link to Parks of Hamilton and asked me for some comments.
I looked at two things. The list of charges which were filed almost one month ago, and I also had a cursory look at the annual accounts for last year which were filed in November.
Regarding the charges, there seems to be an update on bond and floating charges. There is a floating charge over the whole property and assets. There is a legal charge on Temple green Leeds. There is a standard security over the assets in the following areas, Inverness, Stirling, Perth, Glasgow, Ayr, East Kilbride, Hamilton, Irvine, Coatbridge, and Motherwell.
The standard charges allow priority over debt of £60m plus one year’s interest charges and expenses. This is substantial but needs to be put in context when you look at the accounts.
On the accounts, Parks of Hamilton had a turnover of some £800m and profits before tax of £16.5m.
It appears that the company effectively pays out almost all post-tax profits in dividends, and last year dividends paid out were £12.5m. Dividends paid out for the previous year were almost £8m. Parks of Hamilton continues to trade with deficient working capital of £27m, in line with the year earlier. The company has £120m of fixed assets, and within this total, the freehold property is valued at just over £80m. Total assets incorporating debts is £66m.
Looking at the loans in some detail, excluding trade creditors, the company’s indebtedness is challenging.
Debts due within one-year show bank loans of £13.3m, hire purchase debt of £6.6m and director loans of £5.5m, a total of £25.4m. Debts due in more than one year shows loans and overdrafts of £5.7m, other loans of £57.5m ( This is effectively their trading assets, new and used vehicles addressed under the charges section above), and hp contracts of £3.8m. A total of £67m.
Trying to put this in some form of context, I would summarise the main observations as follows.
- The company, Parks of Hamilton, has a comprehensive charge over the assets of the company, all new and used cars. This has been in place for some time but has been updated recently. There is also a floating charge over all the properties.
- It looks like the directors have used the post-tax dividends to finance investments in private interests, Rangers International football club, perhaps.
- The company is very heavily geared to the economy, and the COVID crisis will have a very serious negative impact on the business.
- Most companies are advised not to pay dividends in order to strengthen their balance sheets at present. Most large plc’s are following this advice. Parks of Hamilton would be well advised to follow the lead of these companies, who incidentally have far stronger balance sheets.
5 Parks of Hamilton will not be paying dividends for the foreseeable future at best, realistically with the amount of charges over the business, and the substantial gearing of the company, it is conceivable that the current bankers to the company, will be monitoring the health of the company on a very frequent basis. The outlook for this company is very challenging, indeed.
Ok, my take on the foregoing was that Mr Park would not be able to use future dividends, that is if there are going to be any, on funding his beloved Sevco.
I was rather chuffed when I called Rugger Guy, and he told me that I had comprehended the basic thrust of his analysis.
Dear reader, he sounded quite proud, like he was at a parents teachers night.
There is no holding me now!
I might even start to look at the situations vacant column in the Wall Street Journal.
After all, I’ve seen the Big Short at least four times.
Well, maybe not…
However, I will continue to ask the awkward questions on your behalf.
Stay well all of ye!
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Respect to Rugger Guy for his usual thorough analysis.
However, he mislabeled the debts due in one year and debts due in more than one year. Reversed them.
Douglas Park is the interim chairman. He doesn’t want the gig.
He wants to pass it on ASAP.
Very much interim.
No football folks until 2021. Football is unimportant and it will be a globally enforced agreement.
I prefer to think of the workers at Parks, some with families whom I know, and hope they don’t lose their jobs.
I have no time for hatred, especially at the present time.
God help us all, we certainly need it.
Douglas Park is, first and foremost, a successful businessman. It is not in his interest for the business to go under, but it is less of an issue for Sevco to go under as this hurts his pocket less. He is smart enough to have taken the advice on dividends, of that I am in no doubt. He didn’t become one of the richest men in Scotland by accident.
I think sevco were doomed before covid. But covid has really tightened the screw. By far the worst case scenario for them is closed dorrs completion of season- exactly what UEFA seem to be pushing for. Interesting times agead.
Its progression in the Europa these last 2 seasons which has probably kept the lights on as well as the board digging deep.
With the merchandising shambles slowly wending its way towards Edmiston Drive a £20m contribution from that chap in the Far East would be very welcome.
Note contribution not ‘investment.’
With no chance of football for months and who knows when next season will kick off, we may well see the June transfer window put back so that the various league teams finish with the squad they had before lockdown.
Any club budgetting on selling players in June will have to think again.
I’m now not only doubtful that this season will finish, I’m doubtful that next season will start. AT ALL!!
Just as Phil’s number cruncher guy has blown the ibrox money machine to smithereens up pops Bamber Gascoigne at ibrox noise with 2 signings on their way to ibrox from Liverpool . Clyne & Lalana apparently the Klan have nothing to worry about wage wise as they brought in Defoe on huge wages and that worked out ok so why not these 2 players as well . Ah the smokes must be good tonight either that or it’s vintage buckie he is drinking .
UEFA might want it, governments are unlikely to allow it.
Wonder how the statement writers will spin that statement. Probably some kind of Latin European tim conspiracy.
Before the lockdown, ‘the dugs in the street’ already knew that RIFC/TRFC was financially knackered.
Park senior is 70 years old.
His first loyalty is actually not to ‘The Rangers’ but to his own family.
You would think he would be fully focused on trying to save his main business – and legacy.
Would you Phil, (or anyone?), have any idea if the Ibrox chairman is hands-on at TRFC currently?
(The latest, wild attacks on the SPFL suggest, IMO, that he’s not involved at all, but I’m happy to be corrected.)
Companies House has him domiciled in Switzerland if that helps you. I posted this along the lines of your question a couple of days ago but doesn’t seem to have made it online for some reason.
Erra sports carzzz… twofurrapound-ah!! Heehee!!
Never mind – I’m sure Park Jnr will bail daddy out with the profits of his scaffolding business… or, maybe not.
Tick tock, tick tock🤞
He might not be able to use funds from parks of Hamilton, but he does have a personal wealth of over £100m. It will be interesting to see if he is staunch even to use that money to fund sevco
Oh dear…
Paul
Perhaps you jest ! But, you do understand that personal wealth is not pound coins stacked up behind the sofa? Don’t you?
A big chunk of Park’s $100m is the value of his shares in the various Park companies – a value that has nose dived since last calculated.
A smaller chunk is the value of his shares in RIFC plc that last “traded” at 18p (Dec 19) on J P Jenkins “exchange” – and collectively their true market value – calculated by accountants – not alchemists – would not buy a barrel of West Texas Intermediate.
We are teetering on the edge of the worst recession / depression for 300 years – “wealth” can be as much a millstone as a life raft in such times.
When Black Friday comes
I stand down by the door
And catch the grey men when they
Dive from the fourteenth floor
Black Friday, Steely Dan
Steely Dan went through session musicians like sevco go through €A$H
They were the ultimate perfectionists,snobs,if you like,of the music scene they inhabited.I honestly cannot see past them,as they forever seemed to be searching for musically perfect tunes.
Rolling Stone has called them “the perfect musical antiheroes for the Seventies”.
Very true, but as Phil points out he takes dividends from his company every year.
He obviously has a fair old whack in the bank, what my point was , will he use that money to save his favourite club
more like, tick,tick,tick. 💥
The big short, I would say you would be better guided by wolf of Wall Street, oh wait that’s what guides every rangers/sevco billionaire.