In the first full financial year since Farhad Moshiri’s acquisition of 49.9% of Everton Football Club, the club has published the financial results for the financial year to 31st May 2017.
This is not a complete analysis, I have not seen the full accounts yet, the full analysis will follow in the coming days. However, here are some initial thoughts and figures:
Balance sheet – further investment by Farhad Moshiri
The most significant information in this set of accounts is the increase in, and treatment of the major shareholder’s loan to the club.
Having initially loaned the club on an unsecured, no set repayment basis £80m, Farhad Moshiri has increased the loan to £105m in the accounting period and a further increase post 31st May 2017 bringing the total loan amount to £150 million.
I stress I have not seen the accounts nor will do for a couple of days, but it is reported that this loan is being treated as equity. As a result of this and the reported profits the Balance Sheet now shows a positive value of £91.7 million from a previous deficit of -£43.4 million. It is entirely consistent with Moshiri’s stated objective of repairing the balance sheet
|Sponsorship & Advertising||15,400||9,300||66%|
|Post tax profit||30,600||– 24,333|
|Balance sheet||91,700||– 43,417|
The club is reporting an increase in turnover of £49.76 million (41%) over the previous period to a record £171.3 million. Broadcasting revenues increased by £45.3 million (55%) over the period leaving non-broadcasting revenues increasing by 11% to £43.5 million.
As a result of fewer games but more relevantly the continued excellent pricing policies, gate receipts fell by 20% to just over £14 million. Although this obviously impacts the financial results I doubt there’s an Evertonian who wouldn’t welcome the continued policy of affordable pricing. This fall was offset by increase in sponsorship and advertising revenues as the USM Finch Farm, William Hill and Sure deals kicked in.
Increased staffing costs
The increase in non broadcasting revenues and a contribution from player trading profits have allowed the club to increase staffing costs beyond the £7m allowed within the STCC Premier League regulations, from £84 million to £104.7 million.
Bill Kenwright quotes:
On the publication of the accounts, Everton Chairman Bill Kenwright commented: “I would like to congratulate Robert and his teams at Goodison and Finch Farm for the sustained growth experienced across all areas of the Club.
“Of course, the chance to grow further is made possible by the much-improved financial position secured by Farhad’s personal investment in the Club. His support has allowed us to repay the long-term debt, invest in our playing squad, expand and improve Finch Farm and make significant and overdue improvements to how Goodison Park looks and operates. I have always said that I believe Farhad is exactly the right person to take our Club forward; his ambition matches that of every Evertonian and both the financial investment and the time he has put into the Club demonstrates that commitment.
“I’m especially pleased to see young faces filling Goodison Park every week and the ‘investment’ we are making in reduced gate receipts will undoubtedly pay dividends in the years ahead. Our first training ground partner, USM, a new European betting partner in William Hill, our first sleeve partner in Angry Birds and of course, our new main partner, SportPesa will underwrite future commercial income.”
I will do a more detailed analysis in the coming days. There’s no doubt Farhad Moshiri is demonstrating his commitment to the club with his injection of £150 million. The treatment of this injection as equity will make fascinating reading.
The biggest initial issue the club faced was the condition of the balance sheet which has now been resolved. The issue of the stadium is obviously progressing with further details eagerly anticipated. The issues regarding commercial performance, non broadcasting incomes and performance relative to the big 6 still persist. Again it will be fascinating to hear of plans and the changes required to resolve this as we wait for the stadium and improved performances on the pitch.