108th AGM for Heart of Midlothian plc
Mrs Budge started the meeting by confirming that no photographers were present in the room and no media was present, other than in an individual capacity as shareholders. She then requested no “live Tweeting” or updates to social media sites during the meeting as the club would put out an update at the earliest opportunity for the benefit of shareholders unable to attend.
(Post meeting note: Mrs Budge would like to extend her thanks to Jambos Kickback and others who instantly complied with her request.)
Following a welcome to approximately 300 attendees, Mrs Budge made the following statement.
“Let me say at the outset that our objective is to share information and plans with you in a clear, concise, open manner, and to answer as many questions as we possibly can, in the time allowed, to the best of our ability. The only constraint we will have, obviously, is that of commercial confidentiality – but hopefully that will be a minimal consideration.”
Mrs Budge talked through the agenda, before introducing the Board members who were in attendance and the Senior Executive Management Team. Mr Ian Murray MP had sent his apologies. Following the introductions, Mrs Budge added:
“The point I would like to stress is that Ian Murray, Chairman of Foundation of Hearts, is not alone in looking after the supporters’ interests on the Board. Every member of the Board is also a member of FoH. The current Board is running the club on your behalf as existing shareholders and on behalf of those members of FoH, who will ultimately become the majority shareholder.
“We are already on a journey to supporter ownership and are trying hard to meet the aspirations of the fans. We are in this together!”
Mrs Budge then presented the chairman’s statement, given below.
“Clearly, it would be normal for me to review the performance of the past year, up to June 2014. Equally clearly, in club terms I can’t really do that for obvious reasons as I wasn’t in control.
“However, we all know that 2013-14 was a momentous year for the club; administration, relegation, achieving the CVA and ultimately change of ownership on 9th May 2014, and exiting administration on 12th June 2014.
“While all of this was going on at the club, I – along with the key players at FoH – was working hard to ascertain whether it was viable to come up with a workable solution to save the club, but equally importantly whether it was even sensible to try!
“We did this against a backdrop of very limited information (please refer to the 'Historical Financials' slide at the bottom of the page). At the time we were evaluating whether we could buy the club, whether we should by the club and if so at what price! As I said, very limited financial information was available in the public domain during this period.
“Certainly, once we submitted our offer we had ready access to the administrators and indeed to more of the club’s finances, but it was difficult.”
After briefly discussing the information on the ‘Historical financials’ slide, Mrs Budge went on to add the following.
“When we took over our expectation was that there would be zero balance in the bank account, which is why we needed an upfront injection of working capital from the supporters through FoH.
“We had estimates of liabilities, of course, but these were estimates and, in most cases, under-estimates!
“So, we’ve said we needed an injection of £1 million to cover professional costs and footballing debt, with any excess going into working capital. In fact, professional costs, footballing debt, costs associated with winding up the administration and sorting out the 2012 share issue totaled £1.38 million!
“So we have had to deal with a few financial challenges in the early days! However, as everyone knows, the supporters have been fantastic and we have been able to ride that particular storm.”
Following the brief discussion around the financials leading up to the change of ownership, Mrs Budge said a few words on culture and values.
“We want to create a culture in the club that extols the virtues of hard work, while at the same time rewarding people fairly for their hard work.
“I have been hugely impressed by the work commitment of our staff – at all levels and in all areas. I want to assure them that they are appreciated.
“You don’t just show appreciation with money, although hopefully our formal accreditation as a Living Wage Employer shows our intent in that regard.
“You do it through treating people fairly and with respect and by ensuring they have the support necessary to help them both enjoy and excel at their job.
“This is the culture we are building at the club.”
Mrs Budge continued.
“I want to say a few words too about values.
“We want to be a family friendly club, as stated publicly on many occasions.
“We want to encourage good behavior and do what we can to discourage unacceptable behavior.
“We want to treat people fairly, as evidenced perhaps by the speed with which we have cleared our football debts, and by the fact that we – immediately on talking control – paid the staff their unpaid wages.
“I will simply conclude by saying that we want to rebuild this club to one of which all stakeholders – shareholders, supporters, employees, business partners – can be proud.”
Following the chairman’s introductory remarks, Mrs Budge moved on to handle the formal part of the AGM.
She reminded all shareholders of the need to visit the Shareview website to confirm their acceptance of electronic communication with shareholders, thereby saving the club substantial costs.
All resolutions were proposed, unanimously accepted and passed.
The formal part of the meeting was concluded.
Eric Hogg, Director of Operations, then provided an update on year-to-date financial performance against budget. He also provided a breakdown of all overhead costs, making the point that approximately £2 million of these costs are, to all intents and purposes, fixed. He concluded his presentation by highlighting some of the key commercial achievements to-date and some of the facilities improvements already carried out (please refer to the slides at the bottom of the page).
Craig Levein, Director of Football, then provided an update on the footballing department. He highlighted that the first challenge when he came back to Hearts was to bring in new managers, staff and players to lay the foundations for the future of the footballing department. He quoted nine new starts and four changes of role; all of which needed to happen before the season started. He went on to praise the hard-work and commitment of both the players and the player management team – naming Robbie Neilson as the most hard-working coach in Scottish football today. He finished by stressing the key role to be played by the Football Academy, including the scouts and coaches, in continuing to develop our young players of the future.
With the presentations concluded, the audience was invited to ask questions. The Q&A session lasted for 45 minutes. A summary of the questions and answers will be put up on the website as soon as possible, along with answers to the questions submitted electronically.