Reflections on Goalposts


In trying to find if River&Mercantile were one of the …

Comment on Reflections on Goalposts by jockybhoy.

In trying to find if River&Mercantile were one of the institutional shareholders that committed to 3%+ of the IPO I came across an Evening Times interview (19/12/12) with then Chief Exec Charles Green on the successful flotation of RIFC: In it he said :

“In the presentation we did when we were selling the shares, and also in the prospectus, we said that, of the £22million, £10million is put to one side for Ally. Of course, we can’t buy players at the moment, we can’t do that until January 2014.

“But, between now and then, we’ll also have another season’s worth of season ticket sales so the cash position will increase.”

Wow. Just wow. Wrong on almost EVERY level. Is there ANY recourse to investors for such a, let’s be charitable, misreading of the financial prospects of the new company over only 12months? Or is it the old “caveat emptor”? I loved that prospectus – it is actually on my “favourites” I goback to it so often – I couldn’t see how it could possibly happen the way it was laid out…

Rather than having an increased cash position, as Green stated, RIFC’s recently departed finance director said they would be down to £1m in cash by April. Rather than Ally “Alistair” McCoist having a £10m warchest to spend on players in January 2014, with the transfer window shutting if anything it seems more likely a player or two may be sold to reduce the wage bill and improve cash somewhat, the IPO money having been frittered away over only 12 months.

Incredible really…

jockybhoy Also Commented

Reflections on Goalposts
iamacant says: January 27, 2014 at 1:51 pm

I’d say the second disclaimer related to where R&M have regulatory approval to sell their funds and the first is standard on pretty much ANY communication – electronic or print – and basically means “you can’t sue us for giving an opinion that if you subsequently invest on and lose money in”. It’s the financioal equivalent of a “Any similarity between characters in this move and anyone alive or dead is purely coincidental” – even when its a biopic!

Don’t think there’s anything interesting there…

Reflections on Goalposts
posted the following on the LSE site.

Fair play – Hugh Sergeant the very successful manager (AA rated by Citywire) of River & Mercantile’s UK Long Term Recovery Fund (for increasing his holding – having seen a 40% drop in the value of the RIFC shares in his portfolio over the last 3 months he is clearly committed to the share. So he increased his share in the company by over half at a time when the share price was under pressure, and in the absence of any new information (other than the departure of Stockbridge and the appojuntment of this cost-cutter fellow). Intriguing – my first thoughts are: is this opportuntistic buying when there are a lot more shares coming on to the market? Or doubling down? Will be scouring the financial press to hear his thoughts – he’s an infequent blogger himself (2-3 posts a YEAR on his own company blog).

Still, given the spivery and spinning of recent times it’s nice to see a buy & hold investor in the share raise their head above the parapet.

Sorry to disagree Giovanni, but it looks to me like River & Mercantile are longer term investors, given the fund that held the shares previously:

Reflections on Goalposts
TorreJohnBhoy: “Bampots to your stations”


Recent Comments by jockybhoy

Who Is Conning Whom?
“Take away non-reoccurring expenditure like stadium repairs and Sports Direct compensation and add historical retail profits plus some extra football prize money” – so take away actual costs and add hypothetical revenue and hey presto the books will balance!

With financial acumen like that, you should be on the NewGers board!

The Vice Closes
After these distressed assets, only of use to a football team, actively playing in a professional league, were bought, there were immediately revalued:
“Revaluation increase on land and buildings is put at £33.98 million in total, though the club also notes if those properties were to be sold at that value the tax bill would be £7.8 million.
…Finance director Brian Stockbridge said: “A revaluation process was undertaken during the period; Ibrox stadium and Murray Park were revalued at £40 million, and intangibles (brand and er history? JB) were valued at £19 million on acquisition.”
Administrators of the oldco Rangers, Duff & Phelps, sold the “intangible” assets to Green’s consortium for £1.” Source:

Arguably the fact that it was sold to a football team who could make use of the facilities there was a greater value than £4.5m that wasn’t realised, but that may be being churlish.
What we do know is that all the assets of worth were bought for £5.5m and that included everything, property, brand, history, fixtures and fittings, seemingly playing contracts (people are assets too – I’ve been sold in my time! JB) as well as prize money apparently owed to the previous entity…
For the full breakdown I refer you to the sadly missed Paul McConville site:
its clear the assets were hugely undervalued when sold. 

The Lost Voice of the Armageddon Virus
Hasn’t Chris Sutton also said Alves is going to Ibrox? He probably was tipped off by someone and obviously King’s statement was well crafted. Annual PR overdrive.
Remember what they say “loose lips sell tix”

THAT Debate, and the Beauty of Hindsight
IIRC if a loan is received to a company doesn’t it appear on both sides of the balance sheet? As cash in the assets but as a liability in loans liable? Now the interest would make the liability higher than the loan under normal circumstances but if the loan is interest free it’d just be equivalent. Why would anyone do this? As has been said the requirement is for short term cash, the presence of longer term liabilities is apparently of little consequence. Unfortunately, as we know, these liabilities add up over time, until the straw breaks the camel’s back…
I am sure my fellow Essex boy EBC can steer me right on this.

BTW these lessons apparently unlearned down Ibrox (and indeed Hampden) way…

THAT Debate, and the Beauty of Hindsight
I wonder how much will be due to NewGers players in terms of bonuses for qualifying for Europe? If they do fall at an early hurdle in the Europa League then that may leave them further out of pocket, given costs incurred and low prize money…

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