The Dons Trust board (DTB) asked Michele Little, treasurer of the Dons Trust and chair of AFCW PLC’s finance committee to prepare an update for members and fans on our current financial postion and where we are with Plough Lane Bond redemptions.
Michele has been working tirelessly on contacting bondholders, managing the process for bond redemption or roll over, as well as all her other work for the Club and Trust. As such she’s in the perfect position to provide us with an update.
We have included a summary of Michele’s paper below, and the full paper is available here too (PDF). The board would also like to put on record our huge thanks to Michele for her significant work on the bonds.
Summary
Before meetings to discuss and open the Majority Rule votes, we wanted to provide a financial update that provides insight into the Trust and Club’s current position and outlook up to 2027.
Despite record revenues and cost controls, the Club continues to face annual losses of over £1 million, like most of our League Two competitors. Player trading has been instrumental in covering these losses and meeting debt obligations, but this cannot be taken for granted.
Key Points
- Debt Repayment: The club has a substantial amount of debt due to bondholders for repayment or renegotiation in the coming years. £3.3m will be repaid or refinanced by June 2025 – there are currently enough funds to cover all bondholders’ requirements. The next window will be £3.3m falling due for refinancing or redemption in Spring 2027 which looks much more challenging.
- Equity: We will be holding a membership vote as to whether or not to allow the sale of more equity below the current 75%+1 voting capacity level, which could provide a significant source of funding
- Challenges: External loans will be difficult and will be expensive. Fundraising efforts may not be sufficient to cover the debt falling due in 2027.
- Playing Budget: The £400k we spend annually on servicing debt would make a significant difference to our playing budget (this year it would probably move us from mid-table to top seven in League Two for example).
- Urgency: Understanding clearly whether or not equity investment is a possible route to refinancing is crucial to the club’s plans for 2027 and beyond, especially when moving on from debt refinancing to considering capital intensive projects such as further stadium expansion or a new training ground
Plough Lane Bonds
Redemption Dates:
Rollover and Donations:
Many bondholders have chosen to roll over or donate their bonds facing due in 2025.
Currently the Club has budgeted £1,750,000 and so this total is within budget.
Financial Outlook
- Forecasted Free Cash Flow: The club’s forecasted free cash flow is insufficient to cover the debt repayment obligations in 2027
Heading into the 26-27 season with no forecasted free cash flow and a potential £3.3m of bonds to repay is challenging. It means that our trading revenues alone will not be enough to enable us to repay bonds falling due if redemptions are requested.
Whilst we have had some excellent income from transfers and cup runs in the last couple of years, these cannot be guaranteed or relied upon. We are one of the few clubs at our level who are continuing to make significant money from selling players. We therefore need a clear plan and options for handling the refinancing challenges of the 25-27 period.
Conclusion
AFC Wimbledon is facing a challenging financial situation and needs to take proactive steps to address its debt and ensure long-term financial stability. The Dons Trust board and the Finance Committee therefore recommend that members vote in favour of making more equity available to minority investors.
We want to remain in control of our own destiny. Making this change now will give us the ability to make the right decisions and to work with good sources of funding on terms that are palatable to us – and in a sensible timeframe. We don’t want to wait for an emergency situation where all these things may be compromised.