Co-Chairman Graham Howse provides an off-the-field update written below, which is also included in Saturday's match day programme against Charlton Athletic.
Welcome to the players, officials and supporters of our guests from Charlton Athletic.
There has obviously been some debate of late on the matter of the Club’s ownership following the official announcement that the Club is up for sale. There is clearly a process to be followed here and it’s not something that happens overnight. Having been at the Club for decades, I have seen possible suitors come and go so it’s important that any announcements are from a position of certainty, as with transfers, you only look ridiculous if news is released that then doesn’t materialise.
Since the unfortunate circumstances at other clubs - Bury and Macclesfield of course spring to mind - the EFL have quite rightly, with the support of member clubs, become more rigorous in the control applied to the acquisition of a Club. It has a duty to protect the image and integrity of the EFL and its competitions, the well-being of the clubs, and the interests of all of the stakeholders in those clubs. Accordingly, the EFL requires that any person proposing to acquire control of a Club demonstrates that they are eligible to acquire control and are able to provide the necessary funding to ensure the club can continue to operate.
The current owners and directors test declaration requires completion by relevant persons involved in the acquisition. Just as an aside it has been incorrectly reported that our ownership has been disqualified as director by Companies House. The fact of the matter is that Companies House did issue a disqualification notice, however, this was successfully challenged and replaced with financial penalties in respect of late submissions and the disqualification quashed.
Interested parties in the Club must provide a raft of information to the EFL including future financial information, source and sufficiency of funding, etc. The EFL has the power to set conditions on the Club as part of its approval of the acquisition of control. These conditions will be set out in a conditions letter which will be sent to the Club and will need to be signed as being acknowledged and accepted by the Club and the entities proposing to acquire control.
The Club has ongoing requirements with the EFL around salary cost management protocol, SCMP. These submissions are provided in June and December each year. The return comprises the assumptions, key indicators, relevant turnover, turnover reconciliation, player related expenditure and player salary costs. Relevant turnover is the key driver to how much a club is limited to in terms of the headroom for expenditure for the player’s budget. The amount of headroom means the amount by which player related expenditure is less than the amount equal to 60% of relevant turnover plus 100% of football fortune income. Much of the income from commercial activities is discounted for the purpose of SCMP submissions but equity injections count 100% in the relevant turnover.
As you will have noticed from Ben’s latest update, the ownership purchased 178,000 ordinary £1 shares recently as part of the ongoing support. This equity injection means we are now pushing up against the maximum number of ordinary shares available for allotment, being 5,000,000. Therefore, in order to give a degree of future proofing the availability of shares for either existing ownership injections or indeed new ownership investment, the wheels have been set in motion to increase the ordinary share capital to 10,000,000. The proposed resolution to action this will have deemed to have been passed once approved by those shareholders holding 75% of the shares in the Company, of course the ownership has in excess of this holding to pass the resolution.
As Saturday is the last home fixture before Christmas, I wish one and all a Happy Christmas and a prosperous New Year.
Derek, the backroom staff, the squad and the off-field staff are doing everything in their power to ensure we continue in this division so please get behind the players on Saturday - your contribution is hugely appreciated and priceless!