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AGM 2020 Video

The video is on line!!

Have a good weekend! :dragon:

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Thanks, Taffy. Watching now, with a strong cup of coffee :+1: :coffee:

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You are very welcome. :wink: :dragon:

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Thanks so much Taffy! I was just on my way to post it :laughing:

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I got tipped the wink at 07:24 this morning!! :grinning::+1: :dragon:

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At around 14’ 12" Sarah Evans said that our “cash balances” have gone up from £13M at the beginning of this year to a current £30M.
Does anyone actually know, NOT surmise, speculate or guess actually what this means??
It is meant to mean something, TBH I am not clear what that something IS. :grinning: :dragon:

I might be missing your question, but this is indicating that Cash has increased from c. £13m at 31 Jan 2020 to c. £30m at the AGM date.

That is probably a good thing, but doesn’t provide enough information to really assess!

@Nfrost00

As far as I am aware, Cash Balance has a very specific meaning in accounting terms.
The fact that last week the number is £17M more than last January, is obvious (Sarah told us that) but is that ALL the Societies money, is it made up of profit & some element of liability - or what?
That is why I phrased the 2nd sentence of my post, the way that I did.

So please, there must be someone out there who has accounting skills? :dragon:

I am a chartered accountant for my sins.

In this sense, cash will likely be actual cash in the bank (as I assume no other types of cash equivalents). The cash balance being higher is usually a good thing, and is likely to be made up of cash generated from profits but also due to cash collected from say future revenue not yet booked (such as EP) and cash not yet paid to creditors. Hence a bit tricky to say too much without more information. Though more cash is always better than less cash!

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Thank you so much.
The number sounds impressive +£17M, but we have no idea whether EP Rhone 2018, EP Bordeaux 2019 EP Burgundy (So far 12 EP Offers this year) biils have in part or full been paid.
We know EP Offers are less profitable than retail sales, which are up.
I agree, more cash is good but how much of that can be retained to pay for projects, remains to be seen.
I think that if Sarah had said that due to favourable trading conditions in the first 9 months, the Society has made a likely increase over plan of £1.5M profit, that might have meant something real.
+£17M sounds good, but means very little (as you say) without additional and defining information. :cry: :dragon:

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I would hazard a guess that much of that extra cash is from EP offers.
I understand that TWS can use the cash received from EP sales for whatever it likes including perhaps paying a deposit to the relevant producers. When the wine ships any amount owing to the producers will become payable and the sales can then be accounted for as sales on the P&L account.
In the year in question deliveries were often delayed possibly magnifying the effect.
I seem to remember someone saying during the AGM that the plan for the future is to do more EP rather than less.

This procedure is different from many holiday companies where the funds are held in trust and only paid over to the operators after the holiday and in time for them to pay their suppliers’ invoices.

Perhaps you could help my understanding?

In the accounts note 10 it says:-

                                                                    19/20               18/19
                                                                     £'000            £'000

Non-current: Accruals and deferred income 6,495 3,439

Am I right in thinking there is roughly £3m in the bank which will be required in future for 2019/2020 EP invoices?

If you have a look at note 10 it has, for 2019/20 a value of:

£19,324k - current accruals and deferred income
£6,495k - non-current accruals and deferred income

What this tells us is they have liabilities falling due in the next 12 months of £19,324k and liabilities falling due after 12 months of £6,495k. What those liabilities are isn’t specified, but it is likely to be primarily EP related (though it could relate to things like costs incurred but not yet paid on other things they’ve purchased).

It also doesn’t tell you that there is actually cash in the bank to pay those balances (if you look at the balance sheet that shows you the cash & cash equivalents balance of £12,968k as at year end) or if they will need paying (deferred income, which will mostly relate to EP, is where TWS has sold EP which won’t be delivered until a future financial period, so can’t be recognised in the current financial period as revenue. It is held as a liability until it can be recognised, and i suppose there is some risk that some of the EP orders will be cancelled and hence the cash returned to the customer).

Unfortunately financial statements often don’t really tell you much of the underlying story!

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Hear hear…they are a snapshot in time and can be ‘massaged’ to a degree by changes in assumptions and timing.

That said, it’s pretty difficult to manipulate the cash balance in the accounts, unless you are Wirecard of course, and/or have the connivance of the auditors…

I suspect that the cash balances have probably risen in part due to the timing of EP offers as has been noted, and they will in due course fall again. It would be useful to have some context of the cashflow patterns over the year. Cash balances at year end were pretty similar to the previous year in my recollection.

From both the accounts and what said at and before the AGM, I think that stock levels have increased a fair bit too, in preparation for Brexit and all the hell that entails. Having both increased cash and stock probably means that creditors are up a bit too.

Bear in mind too that the scheduled contributions to the DB pension fund were accelerated, and the funding level there at year end was a lot better (though might well have worsened a bit since), so this further improves the balance sheet position.

Overall, it’s no bad thing to have plenty of liquidity at this time…

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Not as hard as you might imagine to manipulate your cash balance in a non fraudulent sense!

A big business favourite is packaging up trade receivables and selling them on to a bank (or similar) just before your reporting date. Or failing to pay one’s suppliers just before year end too always works. There are a few more options too!

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Yes indeed, but in the first instance I was referring to an incorrect/fraudulent amount of cash being shown. Yes, invoice factoring would work for some but not really for TWS due to customer base and business model.

I did note that I’d expect to see creditors a fair bit higher too, particularly if stocks have also risen as flagged. Overall, it’s net current assets which should tell the story here.

These are all legitimate if perhaps slightly underhand ways to dress the shop window at the year end date, but I doubt if TWS would be doing that, and in any event the statement about current cash at the AGM was presumably just to illustrate that there is decent liquidity, as it’s not a reporting date or close to it.

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