Following on from this blog last year, Gillingham FC held its AGM in December 2012, and has also published its accounts to May 2012, helpfully including the detailed profit and loss account. The Chairman's statement in the accounts says "Off the field, the year also concluded an internal financial restructuring that had been ongoing for almost five years, resulting in the ownership of Priestfield Stadium returning to Gillingham Football Club and all liabilities to the Clubs bankers being satisfied in full, leaving the Club with a far healthier platform on which to build"
The club bought the stadium back for £1,050,000 in August 2011, just three years after selling it to Priestfield Developments for £10,100,000, backed by loans from Bank Of Scotland. At the end of May 2012, the ground was revalued at £3,000,000.
The Profit and Loss account shows restructuring costs of £858,796 and also Other Operating Income of £3,250,000, described in the trading profit and loss account as "debt release".
The Related Party Note tells us that Larchpoint Ltd, a company owned and controlled by Paul Scally, acquired the bank debt of Gillingham FC and released the company from its liabilities. Larchpoint's Accounts to May 2012 are abbreviated, so there is very
little to see, apart from a £1 debtor and £1 of share capital. It
doesn't show any bank debt outstanding as at 31 May 2012, nor any profit
or loss on this debt, but it is possible that all of the transactions
have been and gone with zero profit or loss. So either the
restructuring of the bank overdraft debt was within Gillingham FC, and
the "other operating income" of £3,250,000 relates to the bank writing off this
debt, or Larchpoint have somehow taken on and had written off exactly £3,250,000 so there is no profit or loss or balance at year-end.
Three Directors Limited are also now owed £1,800,000.
In a rough calculation, Overdraft at May 2011 = £(3,683,424). less: Purchase of stadium £(1,050,000) = £(4,733,424). add: loan from Three Directors of £1,800,000 = £(2,933,424). Restructuring costs of £(858,796) = £(3,799,220). Debt release of £3,250,000 = £542,220, and this has been repaid.
Larchpoint's Accounts to May 2012 are abbreviated, so there is very little to see, apart from a £1 debtor and £1 of share capital. It doesn't show any bank debt outstanding as at 31 May 2012, nor any profit or loss on this debt, but it is possible that all of the transactions have been and gone with xero profit or loss. My guess is that the restructuring of the bank overdraft debt was within Gillingham FC, and the "other operating income" of £3,250,000 relates to writing off this debt.
Priestfield Developments 2012 accounts also show the sale of the ground to the football club for £1,050,000, however still show £9,050,000 as a long term creditor "for which security has been given". However, in August 2011, the company filed statements of Satisfaction in Full of both of the mortgages and charges held by Bank of Scotland.
