Our Club, Our Future
Members of WST are invited to invest to secure a brighter future for our football club.
We know that our members have been fantastic in raising over £600,000 for WST since it was formed, not to mention all those supporters who contributed over £125,000 to a bond, which enabled the Club to start the Football Conference season 2011/12. This enabled supporters to save our Club and take it into community ownership. Now we need to raise additional capital to invest in our Club, grow the business and secure our long-term future.
We aim to raise at least £300,000 by the end of season 2012/13.
The Red or Dead campaign showed the incredible strength of support from fans at a time when we had serious concerns about the future of our Club. More than 90 people contributed almost £60,000 into a secure holding account held by our lawyers Cobbetts. Now that the takeover is complete and we have a greater understanding of the Club and its finances, we hope that both existing contributors and our wider membership will be willing to invest in Our Club, Our Future.
This additional funding will allow us to plan our future in the knowledge that we have the working capital needed to transform a historic loss-making business into a successful, secure and sustainable community football club. The funds will give us time to set about laying the foundations for a long term business plan, which we aim to have in place by the end of season 2011/12 and to be on the front foot from next season and beyond.
Building a brighter future for WFC
Given the past generosity of Wrexham fans we felt it would not be reasonable to ask for further donations. Instead we are inviting you to invest in WST share capital.
We believe that share capital rather than loan capital will strengthen our balance sheet and put us in an enviable position compared to many of our competitors on the pitch. Share capital is a means of raising funds from our members to invest in and grow the business, whereas loan capital is a form of debt which has to be repaid, typically with interest over a set period of time.
As owners of the Club, the community share issue will allow you to continually invest in the business, changing the way that you have engaged with our Club forever.
Wrexham FC’s actual and forecasted financial performance
In the first five seasons since exiting administration in August 2006 WFC accumulated losses of almost £5 million.
Off the pitch the Club sold its development land, the Racecourse Ground and the Colliers Park training facility to pay for these losses after facing a winding up order from HM Revenue and Customs in 2011. During this period the Club also lost its 88-year Football League status.With no more assets left to sell, the only chance for WFC to survive in the long term is to become sustainable. Being a community-owned Club does provide WFC with a great opportunity, but does not solve our problems overnight.
Table 1 below is an extract of WFC’s actual and forecasted financial performance. The forecasts are based upon the assumption that the business is not re-structured and there are no player sales or cup runs next season.
Table 1: Wrexham FC’s actual and forecasted financial performance
This is highlighted most pertinently by a forecasted loss of £398,370 if we remain in the Football Conference and do not restructure the business; that’s an unsustainable forecast of spending £1.27 for every £1 earned. Reaching our £300,000 target (along with our current reserves) would leave us in a better position to deal with this forecasted loss if we are unable to restructure the business in a timely manner.
The previous figures for 2010/11 include income and costs associated with the ownership and running of the Racecourse Ground and the Colliers Park training ground. We have recently agreed a fixed payment to Glyndŵr University for use of these facilities, which is included in the forecasts for the 2011/12 and 2012/13 seasons. The figures for 2011/12 include trading figures prior to our ownership and also include income from our FA Cup run, transfer fee income and increased attendances from competing at the top of the league. This income is not included in the forecasts for 2012/13, regardless of which league we compete in.
The Football Conference forecast for 2012/13 is based upon an average attendance of 3,600, whilst the Football League forecast is based on 4,200. We have already started to address the lack of commercial activity at the Club and have forecasted selling 6 executive boxes, all 23 match and match-ball sponsors and entertaining 100 attendees per games within the hospitality areas next season. We have also forecasted selling the majority of perimeter board adverts and other advertising that you see at the Glyndŵr University Racecourse Ground.
The other major difference between the Football Conference and Football League forecasts is the central subsidy that WFC would receive from the respective leagues. We have accordingly increased the playing budget to reflect this difference if we are in the Football League next season. We have also forecasted no central subsidy for the Centre for Excellence if we remain as a Football Conference Club, as this is our understanding of the rules for next season.
The cost base is calculated from our analysis of previous management information and has been updated to reflect our understanding of the operating costs of the football club since our takeover was completed.
It is the duty of the WST Board to update its members regards the financial position of the Club. More detailed financial analysis can be found on the WST website at www.wst.org.uk. Alternatively, members can request a copy of this analysis by sending a stamped, C5 self-addressed envelope to FREEPOST WST. Our recently approved Constitution also requires us to share an outline of the WFC budget at our Annual General Meeting (AGM).
What else do I need to know?
You are investing in WST, registered with the Financial Services Authority as Wrexham Supporters Society Limited on 15th March, 2002 (registration number 29366 R).
The minimum share purchase is £100 and members can invest up to a maximum share holding of £20,000. If you are interested in contributing more please contact WST as there are various ways in which a higher contribution could be accommodated.
Our target is to raise £300,000 by the end of season 2012/13. Shares in WST will be issued immediately and will not be contingent on us achieving these targets.
When the Club can afford it and at the discretion of the WST Board, annual interest may be paid on shares up to a maximum of 2% above the clearing bank base (Bank of England) rate.
On the solvent dissolution or winding up of WST, holders of the shares will have no financial entitlement beyond payment of outstanding interest approved by the Board and repayment of paid up share capital. Previous audited accounts for WST can be viewed at www.wst.org.uk.
Our share offer is exempt from the Financial Services and Markets Act 2000 or subsidiary regulations; this means you have no right of complaint to an ombudsman. The money you pay for your shares is not safeguarded by any compensation; you could therefore lose some or all of the money you invest.
A community benefit society is registered with but not authorised by the Financial Services Authority and therefore the money you pay for your shares is not safeguarded by any depositor investment scheme or dispute resolution scheme.
Enterprise Investment Scheme
We are applying to Her Majesty’s Revenue and Customs (HMRC) for approval for the share offer to be accepted into the Enterprise Investment Scheme. Subject to personal circumstances, this would enable individual members to claim tax relief of up to 30% on investments of more than £500 in the community share scheme. Benefits will depend on personal circumstances and you should seek professional advice. We will update members as soon as we are made aware of the decision from HMRC and members should understand that there is no guarantee that we will be successful.
How we plan to utilise your investment
Depending upon when you invest, the funds will be used in one of two ways:
We hope you will take the opportunity to invest on an ongoing basis and that in time your investment can be repaid, potentially with interest if the Club can afford to in future years.
Withdrawing community shares
Community shares in WST are withdrawable at the discretion of the WST Board and subject to the following conditions:
After three years, requests to withdraw investments will be considered by the Board in the order of receipt and up to the maximum of 10% of the total share capital. In the event that a member fails to renew their membership, their funds will remain invested in the scheme until a request is made to withdraw the funds on the terms above.
Community shares cannot be traded and they cannot go up in value but may go down if the Club incurs sustained losses.
This is an open offer
This offer is subject to FSA approval of our new Constitution which allows community shares to be issued and will remain open indefinitely or until such a time as WST Board Members decide to close the share offer. Although we have set ourselves a fundraising target this offer does not have a closing date and is therefore known as an open offer.
This offer is only open to members of WST
Please note that this offer is only open to individual members of WST. Membership forms are available in the Club Shop, the Trust Shop on Mold Road (next to the Turf) or online via our website: http://www.wst.org.uk. Please contact us if you wish to invest on behalf of a supporters’ group.
As community shares can only be issued to our members, any contributions made on a recurring basis (e.g. by standing order instalments) by an individual whose WST membership has expired will be returned to the lapsed member, with a reminder to renew membership.
There is therefore an expectation that investors will remain members of WST whilst holding community shares.
There are no additional voting rights
Community Shares do not contain additional voting rights, so the one member one vote ethos of WST will always remain. The full rights and responsibilities of members is laid out in the rules of WST and supporting side policies, which can be viewed at www.wst.org.uk.
Investing in the community share scheme conveys a wide range of benefits for WST and our individual members. As highlighted earlier in this document, WST will utilise this funding to help to restructure the Club in the short-term and to grow the business in the medium to long-term.
The scheme provides individual members with a range of specific benefits depending upon the level of your investment. Investors will have the option to receive interest of up to 2% above the Bank of England (BoE) base rate, but it will only be paid at the discretion of the WST Board, if the Club can afford it.
On the application form, investors have the option to tick whether they would like to receive no interest, interest at the level of the BoE base rate, interest of 1% + BoE base rate or 2% + BoE base rate. We cannot guarantee that investors will receive a return, but if we are successful in transforming the business then we hope to share our success with our members.
As a community-owned football club, we believe it is essential that we offer our support to other local community-based organisations. We are therefore offering all members who invest £250 or more the opportunity to donate a free match ticket to a local charity for each season that their share account holds £250 or more. Tickets will be donated subject to availability and at the discretion of the Club.
During the 2012/13 season, the WST Board has decided to support Hope House, a local charity offering support to life-limited children, young people and their families. Going forward we will ask investors to vote upon which charity or charities they wish to support in order to give each individual member a say regards the good cause(s) WST should support each season.
Subject to personal circumstances and the outcome of our Enterprise Investment Scheme application, tax relief of up to 30% may be available for individual members who invest £500 or more. In addition, every individual member that invests £1,000 or more will become lifetime members of WST. To remain a lifetime member of WST, investors will need to continue to have a minimum of £1,000 invested in their share account. Members can invest up to a maximum of £20,000.
Table 2 below illustrates the range of benefits available to individual members.
Table 2: The benefits available to individual members
1 Interest of up to 2% above the Bank of England (BoE) base rate will only be payable at the discretion of the WST Board if the Club can afford it.
2 Please note that tax relief will only be available if our Enterprise Investment Scheme application is successful.
|Finally and most importantly, this scheme provides a unique opportunity for all our individual members to play a role in transforming Wrexham FC into a successful and sustainable community enterprise. For the first time in our long and distinguished history, it also provides all supporters with the opportunity to have a stake in Our Club, Our Future.|
WST and WFC: 10 years on the road to community ownership
WST was officially registered on 15th March, 2002 with the Financial Services Authority with the main aim to raise money to support the acquisition of players through the ‘beer a week’ campaign.
The initial launch was a success with almost £43,000 donated to WFC in the form of player subsidies to help then manager Denis Smith sign Marius Røvde, Dan Bennett, Paul Edwards, Scott Green, Chris Armstrong and Chris Llewellyn.
With widespread off-field financial problems and the change in ownership it became apparent in the summer of 2004 that the focus of WST had to change. WFC entered administration in November 2004, but WST’s support for the Club did not stop. Over £30,000 was donated to the administrators to help them win a legal battle to secure the return of ownership of our historic Racecourse Ground.
Support for WFC continued, with the successful running of the Club Shop on behalf of the administrators that took the total amount donated to WFC to almost £100,000 by the end of 2006. In the same season WST donated a free replica shirt for every junior season ticket purchased, as it is widely said that your first shirt ties you to your Club for life.
As the Club exited administration in 2006 the focus of WST changed to supporting the local community. WST donated a further £25,000 to WFC to enable them to purchase a mini bus for the Centre for Excellence. Our sponsorship and executive box hire on behalf of local hospices and charities enabled them to raise money from lotteries and ensured that local volunteers were rewarded for their efforts.
In 2010 WST commissioned the largest ever survey of WFC supporters. The ‘Big Red Survey’ covered every aspect of the football club, with admission prices, the match day experience, Club Shop, communications and supporters’ groups all coming under the microscope.
After the Club survived a winding up order in May 2011, the Racecourse Ground and Colliers Park were sadly sold to pay off its debts. Following a long running membership drive and media campaign, WST members voted unanimously for the Board to proceed with its acquisition of the Club in August 2011.
Lengthy negotiations by the WST bid team came to a successful conclusion and in November 2011 the footballing authorities gave the approval for WST to acquire WFC. After 10 years of hard work the membership of WST had grown to a record high. WFC is now owned by fans and run by fans, for the benefit of our community.
Our partners – Supporters Direct
Supporters Direct was formed in 2000 as an initiative of the UK Government. Its goal is to ‘promote sustainable spectator sports clubs based on supporters’ involvement and community ownership’.
Like us, Supporters Direct is a community benefit society registered with the Financial Services Authority and owned by its member supporters’ trusts, of which WST is one.
Summary of key points
Key WST facts
It really is Our Club, Our Future!