Posted on 20/02/2019
CHAPTER TWO What’s the story with the accounts, Norman?
“A riddle wrapped in a mystery, inside an enigma”
It is not clear if Churchill had the Vale finances in mind when he made this statement but it pretty much describes what has been happening at Vale since the club was bought out of administration in November 2012. The lack of transparency in the accounting practices, whilst legal, makes it extremely difficult to work out what has been going on with the club’s finances during that period.
* The original new company taking over the club was PVFC Ltd. It had four directors - Wildes, Anderson, Aspinall and Smurthwaite. The latter has claimed he was a sleeping partner who only provided the finance and was not involved in the running of the club. Remember, at this stage the club had absolutely no debt and inherited a squad of players whose wages had been paid by the Administrator whilst the club broke even.
* The covenant on the ground, which was issued by Stoke-on-Trent City Council to the new owners of the ground lists Alchemy Land Ltd, not PVFC Ltd, as the owner. The date of issue is November 2012, so the ground and club were split from the very beginning of the new ownership. Alchemy Land had three directors listed at this stage – Wildes, Anderson and Aspinall. The accounts for the year end August 2012 show no fixed assets for the company. In August 2013, the three directors named above resigned and Mr Smurthwaite became sole owner of the company. The accounts for year end August 2013 show fixed assets of £700,000 listed as an addition. There is also a detail showing an interesting transaction with a director. It seems that the £700,000 loan to purchase freehold property came from Falcon Alliance Ltd, a company owned by Mr Smurthwaite. So Mr Smurthwaite loaned the money to buy Vale Park but is now the sole owner of Alchemy Land and thus Vale Park. The question is, has his ownership of Alchemy Land and Vale Park meant the debt to his company Falcon Alliance is paid or is it still on the books? Does he have the ground and the debt in other words? The limited accounts aren’t clear.
* For all their faults (and there were many) V2001 always produced comprehensive accounts giving much detail about the club’s finances. The current owner adopts the policy of filing abbreviated accounts at Companies House – perfectly legal because of the size of the company but very frustrating from the point of view of fans who would like to know more information about how the club is doing financially. PVFC Ltd, however, the company which took control of the club after administration before being succeeded by the current Port Vale Football Club, never filed any accounts covering its period in control of the football club. The first accounts filed post administration were by Port Vale Football Club Ltd for the year ending 30 June 2015. These show that Mr Smurthwaite has a director’s loan of £2,549,579. That has been accumulated in two and a half years since the club came out of administration with no debt, on the verge of promotion and with the 2013-14 and 2014-15 seasons showing the club’s highest average attendances for a decade. Why on earth was a subsidy of a million pounds a year from the owner needed in this period?
* Another company which was incorporated during this period (in April 2014) was Port Vale Retail Limited. It’s one shareholder was Mr Smurthwaite and the nature of its business is described as “Retail sale of clothing in specialised stores”. In other words, it is the company that controlled the club shop. This company never produced any accounts before being dissolved in July 2016.
We have seen a copy of the Profit and Loss account for 2015 for the football club and it shows no income under the heading “Shop sales”. Interesting.
The main question to which there appears to be no answer is why has Mr Smurthwaite found it necessary to make such a large director’s loan to the football club? Is this down to huge expenditure on players, a failure to maximise non-matchday income or some other reason? Will we ever know?
Chapter 3 Where’s the money gone, Norman?
Chapter 4 Why won’t you sell, Norman?