'A messy disputed loan': Football finance expert raises concerns over the latest Peterborough United accounts, but also recognises 'unheard of' positive figures
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Posh presented their accounts for the year ending June, 2022 at Companies House on Friday.
There was good news in a profit for the 12 months of just under £1 million and a sensible wage bill in relation to the club’s revenue, plus positive numbers compared to most clubs operating in the Championship at the time.
But Maguire, author of the respected ‘The Price of Football’ book and host of a podcast bearing the same name, also highlighted a ‘messy’ disputed loan from Old Kent Road (OKR) Finance – the company set up by current club co-owners Dr Jason Neale and Stewart ‘Randy’ Thompson - which involves ‘significant numbers’.
Dr Neale is no longer involved with OKR who demanded £7.16 mlllion in November, 2022, a figure the club are disputing. In March the company that owns the Weston Homes Stadium, London Road Peterborough Properties Ltd (LRPPL) entered receivership because of an ongoing dispute with its primary lender.
It’s known Posh are currently negotiating repayments with OKR.
Mr Maguire also flagged a possible concern for Posh Bond holders.
In a series of tweets yesterday Mr Magure said: “Peterborough United income trebled in 21/22 to £18m. Good cost control & player sale profits meant that the club managed a small profit in the Championship, a rarity compared to most clubs.
“However Peterborough total losses over the years are still over £15m. Club had substantial amounts in the bank at end of 21/22, partly because of borrowing a net £3m in 21/22.
“Less comforting is note (repeated in audit report) in accounts saying there is a material uncertainty over the club’s ability to continue to trade in the future if shareholders fail to give financing support when needed. May be of concern to those who hold Posh bonds.
“Wage bill of 50% of revenue, unheard of in the Championship where the average that season was over 100%. Presumably the wage total would have been much higher had the club avoided relegation and survival bonuses would have kicked in.
“Highest paid director had a £50k pay cut.
“Peterborough spent £2.6m on player signings in 21/22 and had sales of £1.9m.
“Peterborough spent £2.4m on infrastructure projects.
“Peterborough total liabilities are £25m. Includes £6m interest free loans from owner companies, £6m on disputed loan charging 18% interest, £600k on unsecured loan at 12.5% and £2.5m Posh Bond at 9%.
"Club has a disputed loan from Old Kent Road Financial which is best described as messy. Numbers involved are significant.”
The most significant player departures in the accounting period ending in June 2022 were Siriki Dembele and Mo Eisa, although Posh also signed Joel Randall for a seven-figure fee, payments of which are spread over the length of his contract.
Posh transfer-listed several experienced, and higher-paid, players at the end of last season and have sold Jack Taylor for a multi-million pound fee. These deals will be reflected in the next Posh accounts.
Posh raised £2.5 million in a matter of days after launching a Bond scheme in May, 2022 to help raise capital to invest in critical projects at the Weston Homes Stadium.
Bond holders earn 9% interest annually on a five-year commitment. Those payments are up to date.
The highest paid Posh director, believed to be director of football Barry Fry, received £252K compared £302K the previous year.
Copies of the accounts with an invitation to attend the club AGM will now be sent out to shareholders.
Posh have been asked for comment.
Yesterday Dr Neale said: “The club is delighted to have posted positive results with a net income of £932,936.
"Whilst we recognise that we benefited from increased revenues playing in the Championship it should also be noted that we experienced significantly higher costs playing at that level and elected not to sell players, therefore not significantly benefiting from profits on the disposal of player registrations as in prior years.
"As noted in the financial statements we made inroads into reducing our debt. Further, the club has reached a framework agreement with its major creditor and anticipates definitive agreements being executed in the near future.
"Overall, we are excited by what the future holds, both on and off the pitch.”