Thursday, May 28, 2020

News: Rotherham United in £2m share issue


Rotherham United has made a £2m share issue as COVID-19 creates an uncertain financial future for football clubs.

The League One promotion contenders have allotted 2,000,000 new shares at £1 per share in Rotherham United Football Club (RUFC) Ltd, according to documents filed with Companies House.

Businesses often use a share issue to raise cash, sometimes to pay off some debt, or enable employees to "buy-in" to the company that they work for. They can also be used to offer some shares to family members in return for salaries or dividends.

Football clubs could use a share issue to create an Equity Participation Scheme for fans. National League side, Hartlepool United has recently floated the idea.

The first team at Rotherham United has not played a game since March and the English Football League (EFL) and clubs have so far failed to agree on a solution to end the League One season.

With nine matches to go and the Millers sitting in the second automatic promotion spot, clubs are due to vote on whether to curtail the season now. If that happens then Rotherham would finish second and gain promotion back to the Championship on an unweighted points per game basis.

The EFL established a £50m short-term relief package to assist clubs with cash flow as they are without matchday income. The EFL said that "solutions are still required to fill the financial hole left by the crisis" adding that "the consequences of the COVID-19 pandemic will not be rectified simply by a return to play behind closed doors."


It has been estimated that having to play out the remaining games could cost between £250,000 and £600,000 per club, on top of revenues already lost.

Even before coronavirus outbreak, 47 of the 71 clubs playing in the EFL, posted an operating loss in their most recent accounts and six clubs are in serious financial trouble, according to the latest Begbies Traynor Football Distress Index.

Chairman Tony Stewart OBE (pictured), founder of successful Rotherham firm, ASD Lighting, saved the Millers in 2008 when he brought the then League Two club out of administration via a Creditors Voluntary Agreement (CVA). Rotherham United Football Club (RUFC) Ltd is wholly owned by ASD Holdings Ltd, which is owned by the Stewart family.

For the twelve months ending June 2019, the last available RUFC accounts, turnover was £14m for 18/19, up from £10m in the previous season and higher than the £13m recorded the last time the Millers were in the Championship.

Profit before tax was £2.74m, up from a £500,000 loss the previous year and losses of over £1m in previous Championship seasons.

Unlike many clubs in the Championship, at Rotherham United, the wage bill sat well within its income, which was mainly made up of sponsorship (£3m), matchday income and season ticket sales (£2.58m) and central distributions via the Football League (£7m).

As reported by Rothbiz, a number of sponsors have remained united with the club during the pandemic by signing up for new, or extending, commercial partnerships.

RUFC website

Images: RUFC


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