Companies house

[P/T Indie]

What does that mean? Is it that the articles of association that were filled a few weeks ago have now been replaced?

[Gone_Shrimping]

What does that mean? Is it that the articles of association that were filled a few weeks ago have now been replaced?

Yes the new articles of association have substituted for the existing ones.

[BerlinWaller]

Anybody checked tonight?

[Gone_Shrimping]

Yes , as Barry Davies once said , interesting , very interesting !

https://find-and-update.company-informa ... download=0

[black morse]

So what does all this mean?

[captain sparkle]

It's a bit scary!

Authenticated
This form was authorised by one of the following:
Director, Secretary, Person Authorised, Administrator, Administrative Receiver, Receiver, Receiver
Manager, CIC Manager.

Do we have to guess which one?
I just wish I knew what it meant!!

[Gone_Shrimping]

It's a bit scary!

Authenticated
This form was authorised by one of the following:
Director, Secretary, Person Authorised, Administrator, Administrative Receiver, Receiver, Receiver
Manager, CIC Manager.

Do we have to guess which one?
I just wish I knew what it meant!!

The authorisation options just cover all bases.

The share issue itself could be something or it could be just converting a loan into share capital. No doubt all will become clear soon.

[BerlinWaller]

Kieran McGuire tweeted somebody has bought £178,000 worth of shares which values the club at over £5,000,000

[Gone_Shrimping]

Kieran McGuire tweeted somebody has bought £178,000 worth of shares which values the club at over £5,000,000

Who is Kieran McGuire ?

The share issue takes total issued Share Capital over £5,000,000.

[BerlinWaller]

Probably spelt his name wrong but he is a football finance expert on Twitter.

https://twitter.com/KieranMaguire/statu ... sM-YQ&s=19

[P/T Indie]

See Ben Sadler's update apparently the Bond group have bought them to inject some cash!

How on earth can they afford it aren't they broke after the WW shambles.

[RedRedWine]

a) If we are self sufficient, why does the owner need to inject cash for operational purposes?

b) A share issue and capital into the business rather than additional debt/charge against the club is beneficial - perhaps even an indication that a sale is closer; as intimated by Charlie Appleyard on the Shrimps Trust Podcast

c) Worcester Warriors is a completely separate business from Morecambe FC, each with independent limited liability. That the owner(s) has chosen to invest in one company and not the other is their prerogative; for all we know it is to obtain the best value for their asset in the event of an imminent sale.

[Gone_Shrimping]

a) If we are self sufficient, why does the owner need to inject cash for operational purposes?

b) A share issue and capital into the business rather than additional debt/charge against the club is beneficial - perhaps even an indication that a sale is closer; as intimated by Charlie Appleyard on the Shrimps Trust Podcast

c) Worcester Warriors is a completely separate business from Morecambe FC, each with independent limited liability. That the owner(s) has chosen to invest in one company and not the other is their prerogative; for all we know it is to obtain the best value for their asset in the event of an imminent sale.

Hopefully (b) and indicating a sale is closer and reflecting the fact that an EFL 1 club is worth more than an EFL 2 club , so maybe to help Derek's recruitment.

[RedRedWine]

'operational' I interpreted as running costs, in addition to the share issue being close to month-end/payday.

If a sale is imminent, I doubt the current owners would be investing money into the playing squad.

[Gone_Shrimping]

'operational' I interpreted as running costs, in addition to the share issue being close to month-end/payday.

If a sale is imminent, I doubt the current owners would be investing money into the playing squad.

I saw the "operational" but also it could be a recognition that an EFL 1 club is more valuable than an EFL 2 club and that they hope to recoup it quickly if a sale does go through. Let's all hope there is light at the end of the tunnel and that it isn't a train coming !

[P/T Indie]

Did we have some visitors again in the sponsors box? At this rate they are becoming regulars.

[marky No.1]

More shares allocated yesterday

[Gone_Shrimping]

More shares allocated yesterday

Yes , 54,921 to take issued ordinary shares total to £5,000,000. I think they said that that was the limit until a resolution is passed to increase authorised share capital to £10,000,000.

[Gone_Shrimping]

https://find-and-update.company-informa ... download=0

[Bare bum]

Ok, can anyone explain in fairly simple terms what this means?

My thoughts and confusions -
What's the difference between shareholders and owners and why do the owners (Bond Group?) buy more shares? (as they did in December - £178,000, I think). Shares represent a portion of ownership, I believe, so do the existing shareholders, about 100, I think, have to agree to new share issues?
Why increase / double the share capacity to £10,000,000? What's the thinking here?
If the capacity is increased and if the Bond group are buying more then where is that coming from? Another loan? I'm sure Bond group don't have spare money.
Doesn't an increase in shares dilute directly the value of the existing shares? What are the implications of that?

[Gone_Shrimping]

Ok, can anyone explain in fairly simple terms what this means?

My thoughts and confusions -
What's the difference between shareholders and owners and why do the owners (Bond Group?) buy more shares? (as they did in December - £178,000, I think). Shares represent a portion of ownership, I believe, so do the existing shareholders, about 100, I think, have to agree to new share issues?
Why increase / double the share capacity to £10,000,000? What's the thinking here?
If the capacity is increased and if the Bond group are buying more then where is that coming from? Another loan? I'm sure Bond group don't have spare money.
Doesn't an increase in shares dilute directly the value of the existing shares? What are the implications of that?

Graham the Co Chairman explains the implications of the above on the Morecambe FC Facebook page.

[Bare bum]

Graham the Co Chairman explains the implications of the above on the Morecambe FC Facebook page.

Crikey! That makes me feel like I haven't read my reading list homework. Do you have a teaching background perchance?

Anyway, thanks, I found Graham's post then searched back for the December statement.

https://www.morecambefc.com/news/2022/d ... room-view/

which does answer a few of my ignorances. However still not sure how and why the Bond Group are putting money in, where the money is from nor why the club need the further capacity for shares doubling. It must devalue the existing shares - a bit like quantitive easing?

[Morecambe Jack]

When someone puts money into a business they can do so as a loan (which is repayable, so sits as a liability to the company) or equity (i.e. a share issue, which isn't a liability to the company and is not repayable, typically).

The benefit of a share issue is that it strengthens the balance sheet of the company. A loan does not, as it is repayable, creating debt.

The owners and shareholders are one and the same thing. Bond group are the majority shareholders, therefore exercise control as owners, but there are technically other minority "owners" (or shareholders). Bond group have sufficient % of the share capital to control the company without involving the minority shareholders.

Doubling the ability to issue share capital from £5m to £10m is a legal matter - it doesn't actually mean anything. The previous articles only permitted share capital up to £5m, the amendments mean up to £10m can be issued. Changing them allows the flexibility to issue more shares. It might be that any new owner would want to inject capital into the company - it would certainly be better for us if it went in as share capital than a repayable loan.

That's the basic concept behind it. I believe also that share issues count towards the EFLs Financial Fair Play rules whereas a loan would not. Not sure if that has any bearing on this case, but it is a reason for wanting to issue more shares in the future.

With regards to the impact of the value of shares being diluted - its a moot point. Other than Bond Groups shares, they are entirely worthless as any new owner would only be purchasing Bond Group's shares as the majority shareholder, not those of the other minority shareholders (they have no need to purchase these, as they are not sufficient in % to mean anything to control of the company).

Hope that helps a bit.

[Bare bum]

When someone puts money into a business they can do so as a loan (which is repayable, so sits as a liability to the company) or equity (i.e. a share issue, which isn't a liability to the company and is not repayable, typically).

The benefit of a share issue is that it strengthens the balance sheet of the company. A loan does not, as it is repayable, creating debt.

The owners and shareholders are one and the same thing. Bond group are the majority shareholders, therefore exercise control as owners, but there are technically other minority "owners" (or shareholders). Bond group have sufficient % of the share capital to control the company without involving the minority shareholders.

Doubling the ability to issue share capital from £5m to £10m is a legal matter - it doesn't actually mean anything. The previous articles only permitted share capital up to £5m, the amendments mean up to £10m can be issued. Changing them allows the flexibility to issue more shares. It might be that any new owner would want to inject capital into the company - it would certainly be better for us if it went in as share capital than a repayable loan.

That's the basic concept behind it. I believe also that share issues count towards the EFLs Financial Fair Play rules whereas a loan would not. Not sure if that has any bearing on this case, but it is a reason for wanting to issue more shares in the future.

With regards to the impact of the value of shares being diluted - its a moot point. Other than Bond Groups shares, they are entirely worthless as any new owner would only be purchasing Bond Group's shares as the majority shareholder, not those of the other minority shareholders (they have no need to purchase these, as they are not sufficient in % to mean anything to control of the company).

Hope that helps a bit.

Brilliant, Jack, thank you.

Now you can be my go to accountancy / economics teacher from now on

[Keith]

...Hope that helps a bit.

An excellent explanation, thanks.

Among the minority shareholders, are a large number of people who bought single shares back in the 1980's, when you had to buy a share in order to become a member of The World Cup Bar. I think they were £1 each.