It is not often possible to make an investment in a football club. Stevenage FC is offering an opportunity to do just that. Funds raised through the sale of shares will be invested into the playing budget with the objective of securing promotion to EFL League One and subsequently to the EFL Championship. If the club can achieve these aims, it expects to deliver entertaining football, higher group revenue and, ultimately, an increase in the value of the Club and the Shares.
HOW THE FUNDS WILL BE USED
Stevenage FC will use the proceeds of the offer to increase the Club’s wage and transfer budget. By injecting the funds raised directly into the playing budget, the Club aims to close the gap between its spend and the average spend of clubs in EFL League Two. In this way, the Club believes it will increase its chances of getting promoted. Last season, Stevenage FC missed out on the EFL League Two promotion playoffs by one point.
THE IMPACT OF PROMOTION
Achieving promotion would trigger an immediate increase in the Club’s broadcasting revenue (based on the current distribution mechanism for broadcasting revenues in the EFL) and would be expected to have a positive impact on all other revenue streams e.g. ticketing and commercial/sponsorship revenues.
AN INCREASE IN CLUB VALUATION
The methodology frequently used for establishing the indicative value of a football club is known as the “Revenue Multiple” method. This method measures the value of a club by taking the revenue that it generates and multiplying it by a factor based on precedent transactions and case-specific circumstances. The Directors of Stevenage FC have valued the Club at £8.8m corresponding to a revenue multiple of 1.94x. When divided by the number of outstanding shares, this implies the price of £25 per share.
The Club believes that through promotion and increased revenue, it can generate value for shareholders. As an example, applying the Club’s revenue multiple to the average revenue of an EFL Championship club (£30.0m) implies a hypothetical value of ca. £144 per Stevenage FC share, over 5x the issue price.
You should note that valuation analysis generally involves a large number of subjective assumptions, that capital is at risk and that a return on your investment cannot be guaranteed. For further information in respect of the Club and its valuation, see section 4 (the Offer) in the Offering Document. Please ensure that you have read and understood all of the Offering Document, including the risk factors, before applying for Shares.