Watford are offering fans shares in the club in a bid to raise money for transfers. This is despite boasting a pre-tax profit of £24.1m in the last financial year – the highest in EFL. The club are offering approximately 10% of the club at a value of £17.5million.
The club statement is here:https://www.watfordfc.com/news/club/news-watford-fc-to-offer-ownership-to-fans
Football finance guru Kieran Maguire is sceptical: 'I think Watford have been a bit disingenuous in their press release too. It says there was a pre-tax profit of £17.5m but this was because the Joao Pedro sale was accelerated into the 22/23 accounts as sold before 30 June. Without the player sales figures looking a bit hmmm.
We had an experienced investor on our podcast recently who
said clubs not in PL are worth 1.5-2x revenue. Watford revenue in 24/25 will be
£30 million max, giving an enterprise value of £60m and an equity value of
<£10m.
£285m Enterprise Value for Watford looks toppy, especially with restricted selling and dividend rights. Valuing a business is like valuing a house. If you owe £100k on mortgage and have equity of £200k then house is worth £300k. Same for business, if Watford say equity is £175m quick look of balance sheet shows net debt of £110m valuing Club at £285m. Newcastle went for £305m when in Premier Legue.'
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