Cod Almighty | Diary

Diary - Wednesday 2 November 2011

2 November 2011

Due to the directors' complete disconnection with commercial reality, it cost over two and a half million quid to keep Grimsby Town going in 2010-11, but we only stumped up about £1.6m to watch our first season of Conference football. So, in slightly less rounded figures, your Guest Diarist would like to record that Town lost £936,177 last season.

The implication seems to be, in the club's published accounts (pdf, 470kb), that if we had a shiny new stadium to go to, we'd have found that extra million quid or so down our collective sofas, and that the club would be a vibrant going concern. In what can only be the mangled language of ex-chairman Fenty, the report parps: "There are many football clubs less fashionable than our Club which have relocated / redeveloped and prospered leaving Grimsby Town FC behind." I'll leave you, gentle reader, to digest that statement at your leisure.

Because I must move on - if I don't get this accounting carcass dissected quickly, it's gonna smell real bad. Let's cut to the chase: Grimsby Town are no longer a 'going concern'. The accumulated losses have crept over £3.5m. The bank has forced the club to convert its half-million-pound overdraft to a five-year loan (which means they've got to make payments month in, month out, to get the bank's liability down to nil in five years). The auditors can no longer rely on the shareholders' and directors' guarantees to support the club's debts, saying the accounts "indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern".

Unless someone steps forward very quickly to make financial guarantees, then under the Insolvency Act of 1986 (as amended by the Enterprise Act of 2002) the club should declare itself bankrupt. Failure to do so in most cases would result in criminal charges being brought against the directors and their disqualification as company directors.

This is how this delicate matter is approached in the accounts: "The Directors are not at present in a position to provide the necessary assurances that the company will have sufficient facilities to finance it's [sic.] operations and other obligations for at least twelve months from the date of approval of these financial statements, but they are endeavouring to seek the funding necessary to provide the company with financial security." Either the GTFC men in suits are playing a massive, crazy game of poker, then, or hope springs bloody eternal.

But let's remember Fenty's grand plan - it is reprised in the introduction to the accounts: "The company's principle [sic.] short term aim is to return to League football and since the end of the financial year the directors have invested in new players with the expectation of making a promotion challenge. Such investment in additional players being [sic.] within the earnings cap on eligible turnover." The hastily added sentence at the end makes you smile doesn't it? There is the very essence of creative accounting distilled in to the potion mixed to counteract the salary cap. They must have hired Dumbledore for the day to get that spell. And it looks like, for about the fifth season running, the investment in additional players has simply not worked as Town's position in the league ladder declines yet again.

Hey, let's have some good news, I hear you cry. Come on, don't bring my lunch hour down with all this complicated finance talk! Well, this is the best I can do: "Following advice, the Directors believe the best hope of attracting and securing vital funding, is to create a new community stadium company, enabling fresh investment with known and calculable repayment. Rest assured that should a new community stadium company be the chosen direction then there would be appropriate covenants put in place to protect the interests of The Grimsby Town Football Club PLC to ensure that the profits are channelled to benefit entirely the Club's pursuit to play at the highest level."

And Ian Fleming has talked to the Telegraph to claim that all this bankruptcy talk is crazy: "I'm forever optimistic. Because of what happened recently with John Fenty standing down as chairman, but staying as a director, there is uncertainty with the financial position regarding the going concern. It's always challenging and remains so. We are still looking for anyone out there who feels they can assist us with any decision making and financial support - and that doesn't change."

So the club is losing twenty grand plus a week, must be down to its last hundred grand or so, but everything's OK - there's a new community stadium project to keep Fenty excited and the man in day-to-day charge is forever optimistic. Still, only three weeks (and sixty grand) to the AGM. See yer.