The recently released accounts of Wycombe Wanderers Football Club PLC (the Club) to June 30th 2008 make for disturbing reading for shareholders and the Club's supporters alike - link here or below for the accounts.

They reveal losses for the year to 30th June 2008 of £1.7 million and large levels of repayable debt, which is estimated at £7.25 million (see below). The cash element of the annual losses is financed by an ever-increasing amount of loan notes from Mr. Stephen Hayes, the Club's Managing Director. Loan notes totalled £5.9 million at 30th June 2008 of which Mr. Hayes had supplied £5.8 million.

The level of annual losses in each of last four years demonstrates an unsustainable imbalance between the Club's income and spending, about which the Trust has consistently expressed concern. The level of debt is such that if it were to require repayment then it would call into question the existence of the Club.

In respect of the debt, it has been reported that Mr. Hayes told the Bucks Free Press "he would be willing to convert his loans into shares in return for ownership of the Club if the supporters let him". The report quotes Mr. Hayes as saying "I have suggested to the Supporters Trust that they need to move things forward and they are dragging their feet." - link here or below for the BFP report.

The Trust's Board is disappointed by Mr. Hayes's reported remarks and denies Mr. Hayes's accusation of feet dragging for the reasons explained below. Nevertheless, having been raised so publicly, the issues of the Club's outstanding debt and Mr. Hayes's stated desire to own more than 25% of the Club require further discussion. The Trust's Board is providing the information below so that members are aware of the issues and how the Trust's Board is approaching the matter.

The Trust's Board has submitted a number of questions to the PLC's AGM on 4th December 2008, including questions about this topic. The Trust's Board will report to members on the answers given and how, if at all, they impact this statement.

Summary
The current 25% limit on individual shareholdings was established during the Club's conversion to a Public Limited Company (PLC) in 2004. It is one of a number of safeguards built into the Club's Articles of Association that are intended to protect the Club's long-term future. Any proposal to change any of the safeguards including increasing the 25% limit requires the Club's Articles of Association to be changed.

In turn, this requires the passing of a special resolution approved by 75% of shareholders at a general meeting. Since Messrs. Beeks, Kane and Hayes each hold 25% of the issued shares, any proposal requires the support of all three to be approved because any one of them could block the change. Additionally, the proposal would need to be approved separately by the holders of Founder Shares.

The Trust's Board has advised Mr. Hayes that he together with the other major shareholders needs make a proposal for the matter to progress. It is not the role of the Trust's Board to make a proposal regarding share ownership.

If a proposal is made that is fully transparent as to its motivation and has favourable consequences for the Club's immediate and long-term future then it will be considered on its merit. When evaluating any such proposal the Trust's Board will be concerned to ensure that appropriate safeguards are included to protect the Club for future generations.

If the Club's major shareholders wish to engage with the Trust's Board to develop a proposal then the Trust's Board is prepared to play a constructive role. Any proposal to alter the current limit needs to be approved by the Club's Board before the Trust's Board would be able to provide any recommendation to the Trust's members and the holders of Founder Shares.

To date no specific proposal for consideration has been presented to the Trust Board. Since the attractiveness or otherwise of any proposal will depend on its detail, the Trust's Board is not in a position to recommend any action at this stage. If the situation changes in the future then the Trust's Board will report accordingly.

Detailed Information
Currently no shareholder can own more than 25% of the Ordinary Shares of Wycombe Wanderers Football Club PLC (Article 2.10 of the Club's Articles of Association - link here or below). This restriction was introduced at the time of the conversion of the Club into a PLC in August 2004. The restriction was one of a number of safeguards that were introduced into the terms of the conversion. Founders Shares were issued to each of the existing 500 members (one share per member), who owned the Club prior to the conversion.

These safeguards were introduced in part because the conversion was controversial and the 500 members rightly wished to ensure that the risks associated with conversion to a PLC be mitigated. The conversion required support of more than 75% of those members who voted. In the event, there was a vote of 78.1% in favour of conversion. The controversial nature of the conversion and the slim margin in favour suggests that without the package of individual and collective safeguards, including the 25% restriction, then the conversion would not have been approved.

One of the rights attached to the 500 Founder Shares is that any proposal to increase the 25% limit must be approved by holders of Founder Shares. Approval would need to be obtained by passing an ordinary resolution at a general meeting of the holders of Founder Shares. A majority of over 50% of those voting at such a general meeting either in person or by proxy would be required to pass such an ordinary resolution.

The Trust holds 150 Founder Shares as at 27th November 2008 and individual members of the Trust hold 178 Founder Shares, together more than 300 Founder Shares. Hence the Trust and its members would have a significant influence on the result of any general meeting of the holders of Founder Shares.

Any proposal to increase the 25% limit would require the Club's Articles of Association to be changed and this would require the passing of a special resolution at a general meeting by shareholders (ordinary and founder shareholders) of the Club. A majority of over 75% of those voting at such a general meeting either in person or by proxy would be required to pass such a special resolution.

Messrs. Beeks, Kane and Hayes each hold 25% of the issued shares and hence, in practice, any proposal requires the support of all three of these shareholders to be approved because any one of them could block the change. The Trust's Board does not know if all three wish to change the 25% limit.

It is the responsibility of the Club's Board to draft any proposal regarding the share ownership limit. Provided that such a proposal includes sufficient safeguards then the Trust's Board would be willing to engage in a constructive debate regarding its merits. If the Club's Board were to ultimately put a specific proposal to shareholders then the Trust's Board would advise members and Founder Shareholders according to the merits or otherwise of the proposal.

Having explained the background to the 25% limit and the necessary process to make changes, the Trust's Board wishes to highlight that it will be mindful of the following things when evaluating any proposal:

1. It is inappropriate that any safeguards be removed only four years after conversion to a PLC without equally good, if not better, ones to replace them.

2. On numerous occasions Mr. Hayes has referred to "spending his money" when referring to spending at the Club that has been funded with loan notes. The statement that it was his money is only true if it is gifted to the Club. If the loan notes are a debt of the Club then the money spent was the Club's money rather than Mr. Hayes's money and it was merely funded by loans from Mr. Hayes. In his role as a director of the Club, Mr. Hayes should have only spent the Club's money to the extent that it was covered by the Club's income.

In not restraining the Club's expenditure, the Club's directors are collectively responsible for creating the current level of debt. The Club's Accounts refer to the existence of an agreement between Messrs. Beeks, Hayes and Kane that prevents the repayment of any of the loan notes without their collective agreement. The Trust's Board accepts that the loan notes are a legal liability of the Club but does not believe that the loan notes should be repaid from the Club's operations. Any repayment of the loan notes to the disadvantage of the Club will bring great opprobrium upon those directors

3. At the time of the conversion, the Club's members were presented with a business plan showing that the Club would be run after the conversion so as to breakeven - link here or below for the business plan presented as part of the scheme of arrangement. This plan was as material as the various safeguards in persuading the Club's members to agree to the conversion, . Unfortunately the business plan was discarded as soon as the conversion was completed. Rather than being run at breakeven levels, the Club has been run in such a manner that it has lost £5.1 million in 4 years. Given the failure to even try the implementation of a plan to breakeven, it is hard to justify the transfer of more than 25% of the Club to any one person to clear outstanding debts.

4. The unsustainable finances of the Club, the relationship with London Wasps, the possible development of a new stadium with the potential for associated enabling development and the interaction of these elements combine to create an air of uncertainty around the Club. The Trust's Board would wish to have complete transparency in how these matters are impacted by any change to the share limit before any changes would be recommended.

5. At the time of the conversion, the Club's members were only presented with one option i.e. to proceed with the conversion. The Club's members were effectively forced into approving the conversion by the indication that failure to do so would result in the Club's imminent bankruptcy. It was felt by many of the Club's members that they should have been presented with more than one option. For example, it would have been possible, if unpleasant, to scale back the cost structure of the Club so as to balance the revenues. The Trust's Board will not be coerced into recommending an inappropriate proposal simply because it is presented as the only available option.

Conclusion
The issues of the scale of the Club's continuing losses, the accumulated debt and the uncertainty as to how the debts are to be cleared are issues of great concern to the Trust's Board and many supporters. They will remain so until they are satisfactorily resolved. The Trust's Board calls upon the Club's Board to resolve these issues as a matter of urgency so that they cease detracting from the many successes and proud record of Wycombe Wanderers, which the Club's Board has played its part in creating.

The size of the Club's Net Repayable Debt as at 30th June 2008
The Club's net repayable debt as 30th June 2008 is estimated at £7.25 million

Repayable Debt
Loan notes	£5,936,460	Hayes £5,847,492, Beeks & Kane £44,484 each
Other Loan	£ 416,667	Outstanding balance of loan that replaced Brewery loan
Bank overdraft	£ 895,241
Trade creditors	£ 152,282
Taxes and Social Security	£ 244,214
Other creditors	£ 23,864
Accruals & deferred income	£ 100,000	Reported as £809,818. Estimate of repayable element.
Less Current Assets	£ 521,302
Net repayable debt	£7,247,426	Total of figures above

	Report and advice on Wycombe Wanderers Football Club PLC Annual Report and Financial Statements to 30th June 2008 together with the Trusts' Boards recommendations regarding the resolutions that are to be voted upon at the AGM
	Bucks Free Press Article Entitled "Hayes: Let me own Blues"
	Wycombe Wanderers Football Club PLC Articles of Association As adopted at the General Meeting on 5th July 2008
	Wycombe Wanderers Football Club Limited Scheme of Arrangement Notice of Members Meeting Dated 5th July 2004
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