Wycombe Wanderers Football Club PLC has recently published annual accounts for the 11 month period ending 30th June 2005.

As a service to members you can download below scanned copies of:
1. The AGM Calling Notice that includes the four resolutions referred to below;
2. An addition to the Chairman's report that presents Resolutions 3 and 4 in plainer English and explains the directors reasoning behind them (note: the word "Draft" in the title is an error;
3. A proxy form containing resolutions that the Board hope to pass at the AGM which may be used by shareholders unable to attend the meeting in person;
4. The Directors Report and Accounts to 30th June 2005; and
5. A note correcting an error in the accounts.

The Trusts hope to publish a more detailed analysis of these accounts and the four resolutions that shareholders are being asked to approve. Here are our current comments and recommendations. These are subject to change as more information becomes available.

Two disturbing highlights are: The loss for the priod of £926,040 and the Net Assets of the PLC reduced to just £106,062.

Our first observations is that the losses are unsustainable.
It is legitimate for shareholders to ask the directors how they are planning to stem these losses.

Shareholders are being asked to approve four resolution.
Of these, the Trusts' Boards believe that three are appropriate but that the fourth is inappropriate and unnecessary.

Resolution 1: To adopt the directors' report and accounts for the period ended 30th June 2005
The accounts have been audited and are likely to be accurate, notwithstanding the poor financial performance.
The Trusts' Boards advise shareholders to vote for receiving the accounts.

Resolution 2: To re-appoint BDO Stoy Hayward as auditors.
BDO Stoy Hayward are a reputable firm of accountants.
The Trusts' Boards advise shareholders to vote for re-appointing BDO Stoy Hayward as auditors.

Resolution 3: To give the directors power to allot shares.
The rules that govern the running of a company such as the PLC are contained in two documents, known as the Memorandum and Articles of Association.
The Articles of Association can be viewed via the link below.
The Trusts' Boards and the PLC's directors were under the impression that the PLC directors already had the right to issue shares - see clauses 7.1 - 7.4 on page 9 of the Articles of Association.
The Trusts' Boards have discussed this matter with the PLC and have learnt that the PLC's current legal advisors have told the directors that the existing clauses 7.1 - 7.4 are inappropriately worded and they need the words in Resolution 3 to be appropriately empowered.
Without taking potentially expensive legal advice on the details of the Companies Act 1985 and its amendments, it is impossible for the Trusts' Boards to have an independent view on the exact wording.
Nevertheless, given the level of losses, it is better that the Club reduces its reliance on debt financing and hence the directors should be allowed to allot those shares that are currently authorised but not yet issued.
The Trusts' Boards advise shareholders to vote for giving the directors power to allot shares.

Resolution 4: To dis-apply pre-emption rights.
This is the resolution that in the opinion of the Trusts' Boards is both inappropriate and unnecessary.
If this resolution is passed in its current form then it will give the directors the power to allocate up to 2,000,000 shares to new shareholders without first offering them to existing shareholders.
This power would exist until the next AGM of the PLC i.e. probably approximately 12 months.
As stated under our response to Resolution 3, the Trusts' Boards believe that it is better that the Club reduces its reliance on debt financing and hence are supportive of the directors selling additional shares.
It is, however, an important cornerstone of corporate governance that pre-emption rights do apply i.e. that the existing shareholders of an entity should be offered first any new shares that are to be issued.
This is the right that protects shareholders against shares being sold to outside investors too cheaply.
This is why dis-applying pre-emption rights is inappropriate.
Whilst there is no evidence that the intention of the current directors is to sell shares too cheaply to outside investors, the Trusts' Boards have not been given any compelling reason to recommend deviating from the principle of retaining pre-emption rights.
Dis-applying pre-emption rights is also unnecessary because it remains possible for the directors to sell additional shares.
In summary, the mechanism involves the directors first deciding on the amount of new capital required, then offering the required number of shares to the existing shareholders and then, only if the existing shareholders were unwilling or unable to buy all the shares offered, the balance would be offered to third parties.
Whether or not existing shareholders would choose to buy more shares is a personal decision for those shareholders but they should be given the option.
The Trusts' Boards advise shareholders to vote AGAINST disapplying pre-emption rights.

The topic of pre-emption rights may be difficult to understand for those not familiar with company law and the issuance of shares.
The topic has recently been studied in some depth by Paul Myners on behalf of the Department for Trade and Industry (DTI).
A link to the DTI report dated February 2005 can be found below.
Whilst not everything in this report applies to the situation at Wycombe Wanderers Football Club PLC, Paul Myners concludes on Page 7 that:
"A shareholder's right to pre-emption is a valuable one. I agree with all those who see it as a cornerstone of UK company law and UK capital markets which should not be removed or eroded"

The Trusts' Boards are writing to all Trust members seeking mandates on how to vote the Trusts' holdings of shares.
The Supporters Trust holds 100,000 Ordinary Shares in the PLC.
The Founders Trust holds 77 Founder Shares in the PLC (as at 14th November 2005).

We hope that you find the information above instructive and the comments and advice both thoughful and helpful.
If you are not a member of BOTH the Supporters and Founders Trusts then please join BOTH (subject to eligibility).
This is the best way to stay well informed about this and future debates at the Club and to ensure that your voice is heard on matters important to the future of the Club.
Application and eligibility details can be found via the links below.

	Download the notice of the 2005 Annual General Meeting Includes the four resolutions to be voted upon as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document
	Download the Addition to the Chairman's Statement Presents resolutions 3 and 4 in English and explains the directors reasoning behind them as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document
	Download the Form of Proxy as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document
	Download the Annual Report and Financial Statements as an Adobe Acrobat file ** Beware this is a very large 14.2 MB file ** Right click on mouse button and select Save Target As ... to download the document
	Download the note correcting an error on Page 19 of the Annual Report as an Adobe Acrobat file Right click on mouse button and select Save Target As ... to download the document
	PLC Articles of Association
	DTI Report on Pre-emption Rights
	*** Join the Supporters Trust *** Click here for link to application details
	Founders Trust The Board of Wycombe Wanderers Supporters Trust urges everyone who is eligible to join Wycombe Wanderers Founders Trust in addition to joining the Supporters Trust - see here for links between the two Trusts
	The latest news on the Supporters Trust
	Information page on the Supporters Trust
	Supporters Trust Home Page