AGM Report 2003

The Loftus Road Plc annual general meeting for 2003 took place on Thursday 1st May at Bush Hall W12. I arrived with around 15 minutes to go before the start of the meeting and went to register my attendance on behalf of QPR 1st, along with any other collective shareholders' proxies, where I was informed by the Lloyds Registrars clerk that whilst I was entitled to a proxy card in order to vote, I would not be allowed to ask any questions relating to the resolutions. This in spite of my having written to Lloyds a week prior informing them that, as per their request at the last egm, and as the agreed committee representative for the supporters trust, we hoped that everything on the day would run smoothly.

This matter is one which simply must not happen again, and we will be contacting Lloyds to ensure that they fully understand the Trust's situation, and indeed the entire concept of our sharebank scheme, in order to ensure they understand that the Trust is a shareholder entity in its own right. As it is, I did in fact have a question relating to resolution 9 which instead will now be put in writing to the board, and which we will publish on our website very soon, along with any response.

Ross Jones, the Chairman of the Plc started off the proceedings and introduced everyone else who was up on the stage with him. David Davies ~ Chief Executive ~ Nick Blackburn ~ Chairman of QPR and non-executive director ~ Paul English ~ the company's finance director ~ Harold Winton ~ Non-executive director ~ Kevin McGrath ~ Non-executive director.

Before the meeting had started I had placed a Hoops Fund bucket, along with a few explanatory leaflets, onto a table at the back of the hall. After he'd made the introductions, Ross made a point of mentioning the bucket and tongue in cheek style, invited shareholders to donate £10 into it should their mobile phones go off during the course of the meeting. Hence the 100 or so people in the room reaching for their phones to turn them off!

Ross then went on to explain the format of the meeting, how each resolution would be read out, any questions relating to them would be taken, and that the votes would then take place from those in the room entitled to vote. He explained that once all resolutions had been discussed and voted upon, a general question and answer session would then take place, with the final session of the meeting being a q&a with Ian Holloway.
So far nice and simple.

Resolution 1 was to approve the company accounts for the year ending May 2001. There were no questions from the floor relating to this resolution, and as Mr Jones and David Davies were already holding 19,000,000 shares from shareholders who had already voted in favour of all the resolutions, as with all of them, number 1 was passed with 10,000 odd shares being voted against.

Resolution 2 was to approve the company accounts for the year ending May 2002. Ross Jones pointed out that in the report relating to these accounts there was a slight error as regards the £10m loan that was taken out last year, and that it is in fact a new secured loan as opposed to new unsecured loan.

There then followed a number of questions relating to these accounts, some of which, along with the board's responses, are below.

Q. When did the loan interest kick in?
David Davies replied that the loan was given at the end of May last year so all interest relating to the loan will be in the accounts relating to the current year ending.

Q. Why 10% interest on the loan? Could you have not got it at a better rate elsewhere?
Nick Blackburn responded by saying that the board did approach the Bank of Scotland with a deal for 8% interest before taking on the current loan, however as with High Street banks, they were not willing to lend such a large sum of money to a football club for various reasons. He said that they would be talking to the lender to ask about changing the terms.
Ross Jones also said how we can break the clause after 5 years and that they have already had talks with the lender, though there is no obligation from the lender at this moment in time to change anything.

Q. What profit is there from the Fulham groundshare income and why isn't it on the accounts?
David Davies said that this income does not affect these accounts because the deal was taken from August 2002 for 2 years, so as with the interest on the loan, this income will be shown on the current year-end accounts. He informed that the rental from Fulham is 40k a game, amounting to £1m gross. However costs have grown and he went on to say how the council have increased stewarding leaving us with about half the original amount from the agreed deal.

Q. Looking at note 28 in the accounts, Harold Winton's company, Anaid Holdings, has an unpaid amount of £110k to Loftus Road Plc. What are these debts?
Ross Jones explained that this money related to the funding for the transfer of Danny Shittu and DouDou's salary. He said that basically it had been a timing issue, that nearly half of that figure had now been paid, and that a schedule for the other due payments had been agreed upon.
Harold Winton then said how he would like to also explain and went on to say how the whole thing had an unfortunate timing thing about it. Charlton had allowed them to pay off the transfer money for Danny Shittu in stages, but then how some payments had been missed on the due dates to LR Plc. This has now been resolved but then went on to say that there is also a VAT issue that the club will be paying, and not them. He ended by saying how they (the Wintons/Anaid) had put £375k into the club and how proud the family are of their achievements.
Nick Blackburn backed him up by saying how he wished to extend the board's thanks to the Winton family.

Q. Can we have a general overview of the current situation?
Ross Jones replied that if we could put that question on hold, that the board would come to that in the second part of the meeting when the q&a session takes place.

The next question related to the directors report, and more specifically to the golden share owned by the Trustees of Wasps rugby football club. There was some confusion over how these former preference shares could be converted into 6.2% of ordinary shares. Despite Ross Jones and David Davies conferring with several advisors this conversion could not be explained and it was agreed that the board will look into the matter and would both write personally to the shareholder who raised the subject, along with publishing their findings on the club official website.

The final question on the accounts was about an apparent discrepancy relating to the low figures for the ongoing income with matchday receipts. David Davies replied that the figure was not low and that it reflected quite well when taking into consideration the prices for oap and junior tickets, saying how the club prided themselves on these prices. He said that matchday receipts had been around £10 per head for the 2001/02 season and went on to say how there had been a slight increase for this year. He also said how there is VAT to take into consideration and said that there was only a nett of £17 on a £20 ticket.

One elderly shareholder at the front of the hall then commented on how well the board had done in his view to cut costs from the previous year and I noticed how there was a fair amount of twitching in seats amongst some of the shareholders at that particular time.

The vote was taken for the passing of the approval of these accounts and yet again, Ross Jones read out oodles of millions being voted for, with 35,000 odd against.

Next up were resolutions 3-4-5-6+7 which was for the reinstatement of the current board.

Number 3 was for the reinstatement of Ross Jones as Chairman of the Company and one shareholder who was seated towards the back of the hall, asked why there was a lack of information on the board members within the paperwork. Mr Jones replied that there were brief descriptions and that whilst he believes it unusual for large CV's to be entered into company paperwork regarding board members, he was certainly happy to put something out. The shareholder who raised the subject said that as shareholders would be entrusting the current board with the future of our club, he accepted Ross's reply.

The same elderly gentleman at the front of the room then got his wires crossed by intimating that the shareholder who had asked for further details on the current board was somehow giving the board a vote of no confidence, which erupted into a bit of a spat between the two with the shareholder towards the back of the room demanding an apology and retraction. Ross Jones intercepted at this stage and suggested the two men have a little chat afterwards.

The vote was taken for the reinstatement of Ross Jones, with him reading out squillions of votes in his favour, with 61,000 against.

Number 4 was for the reappointment of David Davies as Chief Executive, with millions of votes being passed in his favour, with 44,000 against.

Number 5 was for the reappointment of Nick Blackburn as Chairman of the football club and non-executive director. Once again millions of votes went in his favour with 81,000 against.

Number 6 was for the reappointment of Kevin McGrath. Millions for with 53,000 against.

Number 7 was for the reappointment of Harold Winton as a non-executive director. Ross Jones read out millions in his favour with 89,000 against. Harold then made an amusing comment of how he had just pipped Nick Blackburn with the most votes against which caused a ripple of humour in the hall.

Resolution 8 was for the reappointment of the auditors with once again millions of votes for with 38,000 against.

We now moved onto the special business of the meeting, and whilst the board had millions of proxy votes in their possession, for the following resolutions there was a requirement for at least 50% of those attending the meeting to vote in favour of the resolutions in order for them to be passed. Though this proved an elementary exercise, but I will come to this shortly.

Resolution 9 was for affirmation from the shareholders relating to the transaction for the disposal of certain Sudbury land and buildings to a company named Sudbury Holding Limited, who would pay the company (Loftus Road Plc) £255,000 on completion.

There were no questions from the floor regarding this resolution, and as previously mentioned, because there is a slight issue relating to this matter that I was unable to raise on the day, we ourselves abstained from voting on behalf of the supporters trust, as indeed we did with most of the votes. I noticed others in the room abstaining on this issue, though the majority of votes from those present went in favour, and the resolution was passed with millions of votes in comparison to 70,000 against.

Resolution 10 was to seek the approval from the shareholders for the increase of the share capital of the company from 750k to 1 million shares basically meaning that there will be an extra 25m shares in the company on offer to potential investors.

In reply to a shareholder's question on whether this could lead to a change of control at the club, Ross Jones replied that he felt that unlikely and went on to say that the largest single shareholding are the ones that himself and David Davies have been entrusted with - QPR Nominees at 25.7% - with the next being Chris Wright's personal shareholding of 16.4%. Ross explained how he felt it more likely that the 25m shares on offer, subject to the shareholders approval, would be on offer to separate individuals, and that the main reason for the increase of the share capital was to bring in extra investment.

Harold Winton then spoke and said how he himself is keen to see people putting money into the club, and how he believes that small investors will allow us to regain a firmer footing. He went on to say how he feels that investment from shareholders and the supporter base is to be encouraged, how he supports any fan venture which encourages financial help towards the club, and that how the raising of 25m shares will allow us to do this.
Ross Jones then commented on how he agreed with Harold's sentiments, and also how he hopes that the board gain credibility with the fans in order to ask them for their money.

A lengthy discussion then took place between one shareholder, Ross Jones and David Davies. The shareholder raised the issue of the new 25m shares and asked about the ones in QPR Nominees, and if they are also on offer? To put it in a nutshell, when the trustees of QPR Nominees were first entrusted with these shares last year, they had heard of a new law that was about to come into force whereby the sale of current shares would not attract any tax liability. This law has not yet come about, which basically means why the ones in QPR Nominees are not being offered currently, and why the new ones worth 25m are being issued instead.

The vote was taken, and Ross Jones read out the millions of votes they already had in their possession for favour of the resolution, with 35,000 votes against.

Resolution 11 was for the power of the board to allot shares, and after one shareholder asked for an amendment of this to be reviewed annually, rather than the 5 years as mentioned within the paperwork, the board agreed to this and the resolution was passed.

Resolution 12 was to seek the shareholders' approval to disapply their pre-emption rights. In company law there is an act that requires directors to firstly offer any unissued shares for cash to their existing shareholders. It basically meant that if passed, this motion would allow the board of the company to allot shares for cash, up to a maximum of 37m ordinary shares representing the company's current authorised but unissued ordinary share capital, without the shares first being offered to current shareholders.

A number of questions were raised relating to this issue. One shareholder asked as pre-emption is a normal provision for shareholders, why do they wish to waive it? Ross Jones, who up until this point had been quite impressive with regards to answering queries, skirted around this question and just said how it would allow the Plc the right to remain and how it was also hoped that investors would not take up their rights. He did say though that whilst the extra shares would not have to be offered to existing shareholders under their normal pre-emption rights issue, anyone is more than welcome to contact the club should they wish to buy any shares. He also mentioned how a substantial amount of shareholders did not take up their rights in the past.

Another important question asked by a shareholder sitting just behind me asked if the waiving of the pre-emption rights would affect the shareholders right to VETO any possible incoming takeovers, particularly if it was felt that any such takeover would be from a possible unsavoury source?
Ross Jones responded by saying that it does, which caused a ripple of unease amongst some in the room, but then carried on to say that the board, as custodians of the company/club, would have a responsibility to ensure that any major investors would be for the sole good of the club. He said that the going rate is 6.5p per share at the moment and that anyone who would be looking at buying over 29% of the shares in the company would have to make a bid to all shareholders as well as complying with stock market rules and regulations. There will be up to 37m of unissued shares available.

And when asked from another shareholder as to what sort of criteria would the board be looking for, the reply was someone who can show a business plan to prove they can take the club forward.

Ross Jones also mentioned how there is one potential investor who has several contacts and is considering helping with players from Australia and New Zealand, and went on to comment about the possibility of a sponsorship deal with this individual.
Nick Blackburn chipped in then to say that at present the income from sponsors is substantially lower in the game than in previous years and said how we do not yet have a shirt sponsor for next season.

There were no further questions on this resolution and the vote was taken firstly in the room (because it was special business), and because the vote was not unanimous with a number of shareholders voting against the motion, including the supporters trust, Ross Jones announced the need to do a poll, in which the registrars would hand out papers and do a count-up of the votes.

The final resolution was number 13, which asked for approval of the change of name of the company from Loftus Road Plc to QPR Holdings Plc. The board explained that it was felt that the change of name would reflect importantly upon the QPR-ness surrounding the company now that the disposal of Wasps and its assets to Chris Wright had been completed.

The resolution was passed by millions of votes, the majority of shareholders in the room voting in favour for the motion, with 44,000 being read out by Ross Jones as against.

This then brought about the end of the formal part of the meeting, except for the poll relating to resolution 12, so whilst the registrars were getting together whatever was necessary for this to proceed, the general Q&A began.

The first question was about Philip Englefield and the circumstances surrounding his resignation from the board?
David Davies replied that in May of last year, just after he had joined the board, matters came to light that should have been brought up beforehand. The board had a discussion with Mr Englefield on this matter and he stood down. Relations between the board and Mr Englefield are good and he still represents the lender's interests.

And did this affect the relationship between the board and ABC Corporation? No, not at all, was the response.

Next up was a question asking for a current overview of the financial situation and for an update on the current operation situation? David Davies replied by saying that the board forecast losses of about £2.5m for this year though the play-offs might bring in a bit of unexpected income for us. Season ticket sales are looking good already and there are still more to be processed. He repeated what Nick Blackburn had said earlier about the bad market for sponsorship within the game at the moment.
He spoke of the harsh decisions that all clubs are having to make in the current climate and went on to speak fairly at length regarding the fall-out from the Football League and Government funding for youth football, as per mentioned in his programme notes from a couple of weeks ago. He also mentioned about how the club will not be seeing any of the money that fans pay on their credit cards for their season tickets until possibly 12 months time because of the way Visa and Barclaycard have decided to put a stop to football clubs receiving this money up front (as in previous years) in case of any football clubs going bust in the near future.

Next question was about stadium guidelines and if it is true that Loftus Road does not come up to Premier league standards?
David Davies replied by saying that as far as he is concerned, there is nothing in the guidelines that would mean we couldn't play in the premiership at Loftus Road in the future.
Nick Blackburn also mentioned how there is a certain criteria, such as dressing room facilities etc but how there is absolutely nothing of any concern that would prevent us from playing in the premiership.

This then led into a question regarding the groundshare with Fulham and how the board see the situation developing with both Fulham and Wasps in the future?
Nick Blackburn replied that Fulham have another year at Loftus Road. They have been in talks with Chelsea for groundsharing at Stamford Bridge for the season after, but there have been various problems including residents' concerns. Fulham fans themselves just want to return to Craven Cottage and have been making contingency plans as regards a move back to the Cottage. Wasps do have the right to return to Loftus Road, because when we did the deal with Fulham, an agreement was made with Wasps that they could return once the groundshare deal with Fulham ends. On speaking with Chris Wright, he understands that Wasps would like to stay at Wycombe.

There then followed a short break in the q&a session to enable the poll for resolution number 12 to take place, with the registrars handing out voting papers to the shareholders, who were asked to fill in their details, along with a cross to signify their vote. These were then collected and the registrars went back outside to count the ballot, whilst the remainder of the q&a carried on.

A question was asked again about the financial structure and the board were again asked to confirm that a loss of £2.5m was expected this year. David Davies re-confirmed this.

Another shareholder then asked a couple of questions regarding the lack of shirts in the clubshop, particularly leading up to the play offs when sales from shirts could have been a good money making venture, and also asked why the catering facilities were so poor in the Ellerslie Road stand?
David Davies responded by saying that shirts take around 4 months to be delivered from ordering and that whilst he understood fans' frustrations in being unable to buy a shirt in the clubshop, the club will be doing their best to maximise sales from other merchandise, particularly during the play offs.
As regards the poor standard of catering, whilst he accepted that there are not enough food kiosks around the ground, he said that there had been improvements and that further ones will be looked at for next season.

A question was then asked about the ticketing arrangements for the play offs and the inconvenience caused to many fans due to the personal callers only stipulation.
David Davies said that turnaround would be a problem and that, as we did not even know which leg would be first until after Saturday's game timescale was a problem. Some confusion then occurred when the question was asked about the cash only stipulation and why had this been put in place? David Davies was originally under the impression that credit card payments would be taken, and then after consultation with Samantha Taylor, QPR's Marketing director, he said that payments would be acceptable by either cash or cheques because the pdq's would cause a problem with queues.
Steve Russell of the LSA then queried if this really would help keep things to a minimum regarding queue problems and went on to say how the LSA have a membership of many people who live far and wide, and mentioned how the personal callers only stipulation was causing many of them problems and distress.
At this point David Davies became unnecessarily defensive and a disagreement broke out between the two before Ross Jones intervened and suggested that they both have a chat with one another regarding this issue after the meeting.

A question was then asked about the possible docking of points, as mentioned in the press, following the pitch invasion at our game against Crewe.
David Davies replied that he did not mention points docking to the press and expects us to receive a fine, suspended or otherwise.

Another shareholder then spoke passionately about the current youth set-up, and how he feels it is in a dreadful state, along with the training ground pitches!
Nick Blackburn did concur that the entire youth set-up, along with the training ground arrangements and facilities need an overhaul and that these are two of the things that the board will be looking at during the Summer.

By now time was getting on and Ross Jones mentioned how he was going to accept only a couple more questions from the floor because he wanted to bring Ian Holloway in, who by now was sitting amongst the audience, to have a little chat before the end of the meeting. I was next up to speak, as I had a couple of issues to raise. I firstly asked David Davies about the mini meetings for shareholders he had mentioned at the last egm and if there was any progress with the setting up of them? He replied that he hadn't had time to set them up yet and will look towards them for next season.
I then brought up the subject of the Hoops Fund, and how fans and shareholders alike were already digging deep to help the club, and informed them how I had been asked by the rest of the Hoops Fund sub committee to ask the board at the agm if they themselves would wish to make their own personal contributions, and pointed out to them the bucket at the back of the hall. The top table took my request with good humour and both Ross Jones and Nick Blackburn informed me they would indeed make personal contributions into the bucket following the meeting.

Finally, I wanted to bring up the subject of the sale of the Twyford Avenue ground, and started off by asking surely it is now time for shareholders to receive a clear and concise breakdown relating to this sale, particularly regarding the 3-way split that Chris Wright had agreed upon at the egm two years ago relating to any proceeds from any future sale of this area of land.
I wondered why I had been receiving some rather peculiar looks from the top table at this stage and it transpired that I had actually started off by saying the Sudbury issue, rather than Twyford, (I still had resolution number 9 on my mind, and being unable to ask what I had wanted to on the issue was obviously still at the back of my head) but hopefully most people there realised what I was waffling on about once the initial confusion had been cleared up!
I went on to say that QPR 1st have had several communications with Chris Wright relating to this matter, and that his last correspondence had been a letter in which he had copyrighted, therefore basically preventing us from reproducing his actual words. However one of the basic things mentioned had been his agreement to the 3-way split on any future proceeds, but that this would be effective up to a certain amount of years.

As I pointed out, this is wrong because the original agreement had not mentioned any kind of timescale/period (as in the board statement following that egm) and, because it is also in the board's best interests to follow this matter up in order to maximise as much money as possible from the proceeds of any possible sale of this former company asset, I asked them if they would follow this up with Chris Wright in order to clarify the situation?
Nick Blackburn told me that he would contact Chris Wright and would get back to me in due course. Another shareholder also asked for any information on this to also be published on the club's official website.

The final question of the q&a session came from a gentleman behind me who asked Harold Winton about WeareQPR, how he had been willing to invest originally, and asked if there was any latest news on the venture?
Harold replied that though it was his sons' scheme, he is currently looking at the possibility of putting the money from the sale of two properties in order to relaunch the venture.

At this point, Ross Jones said he was putting an end to the formal q&a session and invited Ian Holloway onto the stage. He was welcomed with rapturous applause and in typical Holloway style launched straight into a long speech about the current youth set-up, saying how we were paying for the past mistakes of others. He spoke of the contracts "big contracts" that some of our former youth players had been on and said that when Leon Knight joined us on loan he was on £500 per week, whereas some of our own youth players at that time were on £1600 a week!

Listening to him speak, it became obvious that he sees the way forward for new players coming through is either via loan signings or picking players up on the cheap as their contracts expire. I get the feeling that QPR are going to be using the latest news of the collapse of the FL/government funding for youth football as whilst not exactly an excuse to cut our youth set-up even further, but more as putting this particular exercise into practice because of the enforced lack of funding.

There then followed a little break as the registrars entered back into the hall to present the board with the results of the poll. Basically, as mentioned previously in this report,
unless there were millions of votes which could have changed the outcome of the vote, the concept of polls/ballots on the day regarding special business is just a standard measure in order to comply with the relevant rules because the resolution was carried by votes of 34m in its favour (percentage rate of 92.8%), in comparison to 2m against (percentage rage of 7.62%).

Ross Jones then carried on to say that he would be bringing the meeting to a close in around 15 minutes time or so and asked for anyone else with any questions for Ian Holloway to bring them to Ian's attention.
Ian was asked about contracts and said that he himself is out of contract next year. He then went on to mention players out of contract include Chris Day, Gino Padula, Steve Palmer, Chris Plummer and Karl Connolly. He is very keen to try to keep hold of Stephen Kelly and mentioned how he might have the chance to borrow Tommy Williams again, who to quote Ian "loves Tommy to bits".
There's no chance of us getting Lee Cook and Kevin McLeod will be going back to Everton. Richard Pacquette and Wes Daly are both out of contract but do have clauses in them.

He went on to say that for the first time in his managerial career, he has been given a budget to work with for the summer. Though it's only a small one, he is thrilled to bits. He also said how he had enjoyed the experience of being at the AGM, saying how he had learnt a lot within those couple of hours and went on to give an amusing story about shares/shareholdings at Bristol Rovers during his time there.

He himself has been doing a lot scouting of late and Kenny Jackett has been taking main training. Somebody else asked about Gary Penrice and Ian said how he is going to speak with the board as regards keeping him on because he is specialised in forward coaching.

Ross Jones then brought the meeting to an end at approximately 6.15pm and I hung around and was one of the last to leave the hall because I wanted to maximise the potential of our directors digging deep into their pockets in order to donate into the bucket. To be fair, the majority of them did contribute, with Ross, Nick, Harold and one of Harold's son's, all making a point of showing me the colour of their money, though it was noted who didn't put in!
Along with the director's own donations, some of the shareholders there present contributed with some loose change and on counting the proceeds of the bucket afterwards a grand sum of £95.18 was raised.

I hope you have enjoyed reading this report and if you have any further questions/issues relating to the agm then please contact us on info@qpr1st.co.uk

Tracy Stent

Hon. Secretary QPR 1st Supporters Trust