The publication of the 2023/24 Audited accounts for Everton Football Club Company present the final full year impact (to 30 June 2024) of Farhad Moshiri’s disastrous reign as the majority shareholder. For the 7th time in 8 complete financial years under Moshiri, Everton posted a statutory loss.

Although much of the chaos associated with his reign continued to the final weeks of December 2024, yet again these accounts provide proof of the extent of the financial difficulties Everton faced, as credit facilities were extended to the maximum and several takeover bids recommended by Farhad Moshiri failed to materialise for a multitude of reasons.

Profit and Loss Account
Following the trends of previous years, the profit and loss account shows a final loss for the financial year 2023/24 of £53.2 million. The loss for 2022/23 was £89.1 million.
Since 2016, Everton’s financial results are :
2016/17 – £30.7 million profit
2017/18 – £13.1 million loss
2018/19 – £111.8 million loss
2019/20 – £139.8 million loss
2020/21 – £121.0 million loss
2021/22 – £38.3 million loss
2022/23 – £89.1 million loss

2023/24 – £53.2 million loss
The improvement in the profit and loss account is largely due to an increase in turnover from £172.2 million to £186.9 million and a slight reduction in operating costs. At the operating level, losses widened from £24.5 million to £40.9 million.

Turnover
Turnover increased from £172.2 million to £186.9 million largely influenced by an improvement in broadcasting revenues. Broadcast income increased by £13.2 million to £129.2 million, and represented 69% of turnover.
Everton’s decision to maintain price increases in season tickets – Everton, at Goodison Park, sell the maximum number of season tickets permitted by the Premier League – saw an increase in gate receipts from £17.3 million to £19.1 million. Everton’s yield per seat remains significantly lower than most of its Premier League rivals, highlighting the future benefits to be derived from the move to Bramley-Moore.
Sponsorship income bucked the trend of recent years (three successive reductions) increasing from £19.2 million to £21.6 million. Sponsorship, advertising and merchandising includes revenues from sponsor and partner contracts, plus net revenues received from Everton’s outsourced retail operations.
Other commercial activities fell from £19.7 million to £16.9 million– reflecting lower summer tour revenues and the absence of player compensation from FIFA World Cup competition.

Costs
On the expense side of the profit and loss account, non-exceptional operating costs fell considerably by £18.6 million. Exceptional costs of £10.4 million relating to refinancing and legal costs fell from the previous year’s £15 million. This includes legal fees relating to the Premier League Commission hearings re PSR.
Overall staff costs continued their declining trend, falling by £2.4 million to £156.6 million. On average, staff numbers bucked last year’s increase, falling from 555 to 506. Football related employees fell from 193 to 176, whilst non-football management and administration numbers fell from 134 to 111. Similarly, maintenance, security pitch and ground security fell from 65 to 54.
An important measure, particularly in the context of future regulation, is the total wage to turnover ratio. In 2022/23 this ratio was 92% in 2022/23, considerably higher than the levels (70%) thought to be sustainable in the Premier League. In 2023/24 that ratio fell to a more manageable 83.8% but still far higher than what is normally considered healthy.
Directors’ Costs reduced significantly as Everton maintained a minimal number of board members (including Farhad Moshiri). Directors’ costs reduced from £5.7 million to £1.12 million.
The highest paid director (one assumes Colin Chong, the single full time executive on the board) received £433,000 compared to the figures of the previous two years of £3.246 million and £868,000 respectively.
Costs relating to the new stadium no longer feature in the profit and loss account as they are now considered a capital cost as the project neared completion. Total construction costs for the year to 30 June 2024 stood at £312.7 million (as reflected by the increase in assets under construction) compared to £210.9 million, in 2022/23 and £207 million in 2021/22.
The net book value of the stadium (and land) stood at £698.7 million as at 30 June 2024.
Amortisation, much loved by accounting and non-accounting fans alike, continued to fall, reflecting the reduced incomings and continued outgoings of the squad falling from £77.6 million in 2022/23 to £64.6 million in 2023/24.
Total player acquisition costs were £54.8 million, whilst player disposals for 2023/24 amounted to £147.8 million
As a result the total book value of players (intangible assets) continued to decrease from £144.5 million to £120.23 million. (This does not reflect the total market value of the squad, just its book value for accounting purposes).

Interest costs
Total interest costs charged to the profit and loss account totalled £10.46 million (2022/23 £7.86 million). Borrowing costs capitalised during the year amounted to £54.55 million (2022/23 £19.0 million) Total cash payments relating to interest payments were £39.34 million.

Player Trading
Player trading continued to be positive, and alongside an increase in borrowings kept the club in business. Profit on player sales was booked at £48.5 million for 2023/23 (£47.5 million 2022/23).The sale of Moise Kean, Iwobi, Gray and Tom Cannon contributing significantly to these figures.

Cashflow – the life blood of every business
Any observer of a company’s financial performance and health will always point to the company’s cash flow statement. Whilst the P&L grabs the headlines, the most telling information is in the cash flow statements. A business lives or dies by its ability to generate cash.
Cash can be generated from day to day operating activities, from investing activities (player trading, asset trading or shareholder equity injections) and from financing activities (borrowings).
Overall, Everton achieved a net cash increase of £15.6 million compared to 30 June 2023. However, this in no way reflects the huge strain put on the company throughout the year.

Operations
In 2023/24 normal operating activities before movements in working capital saw negative cash flow of £24.6 million. (2022/23 minus £42 million)
After the change in balances of creditors and debtors, the negative cash flow from operations improved significantly to £3.1 million, largely as a result of an increase in creditors (ie people waiting to be paid) of more than £20.6 million (2022/23 £320,000) and a significant decrease in debtors (people owing Everton money) by more than £12.7 million.

Investing
Cash from investing activities saw an increase in cash generated from player disposals, an improved inflow of £80.2 million (2022/23 -£72.3 million). Player acquisitions created a broadly similar cash outflow of £57.6 million to the previous year (£58.7 million in 2022/23).
The new stadium and other fixed assets saw increased cash outflows of £210.5 million. For 2022/23, the previous year, the figure was £194.35 million which was slightly less than the 2021/22 figure of £210.5 million.
As a result investing activities saw a total cash outflow of £227.3 million for 2023/24 – an increase on the £199.7 million figure for the previous year

Financing
Financing contributed a net £246.0 million for 2023/24 (2021/22 – £277.75 million).
In what was an incredibly complex and often fraught year, existing lenders were repaid £179.3 million of loans and new loans totalling an incredible £429.6 million were secured.
As a result of the above, cash in the bank increased from £10.8 million as at 30 June 2023 to £26.4 million as at 30 June 2024.

Borrowings

The figures below relate to the position at 30 June 2024. Obviously, the situation has changed significantly since the acquisition of Everton Football Club by the Friedkin Group. However they amply illustrate the dire state of Everton’s finances in the early summer of 2024.
As at 30 June 2024, Shareholder loans totalled £450.75 million. The loan agreement stated the loan was to be repaid at a date mutually agreeable to Bluesky Capital and Everton Football Club. The loan was interest free.
Aside from shareholder loans, as at 30 June 2024, Everton have a £150 million 5 year facility with Rights and Media Funding, a further £30 million three year facility and an additional 34 month €18 million loan with the same lender. The above loans were secured by a fixed and floating charge on the assets of the club. These loans attracted interest at 5% above the current base rate.
In addition to the above there were further facilities including a 34 month $49.9 million facility and a one year facility totalling £200 million. These loans related to short term loans and the 777/A-Cap facility administered through Rights and Media Funding.
The CLBILS facility with the club’s bankers Metro Bank which had stood at £11.25 million at the beginning of the financial year (£26.25 million on June 30 2022) was repaid in full (as per the loan agreement) in the year ending 30 June 2024.
In total, Group borrowings (excluding the shareholder loans) stood at £593.7 million as at 30 June 2024. (£341.4 million at 30 June 2023) an increase in borrowings of £252.3 million

Share capital and reserves
At the time of the accounts, £135,000 of ordinary shares, a share premium account of £324.9 million, a negative profit and loss reserve (accumulated losses) of £469.9 million and £447.25 million shareholder loan from Bluesky Capital, a company controlled by Farhad Moshiri, resulted in shareholder funds of £302.5 million (2022/23 £312.1 million)

Post balance sheet events
Since 30th June 2024, Everton entered agreements to acquire Ndiaye, Obrien, Harrison (loan), Lindstrom (loan), Mangala (loan), Broja (loan) and Begovic (free agent).
Onana and Djankpata were sold, together with temporary loans of Holgate and Maupay.

On 22 September 2024, The Friedkin Group Inc signed an agreement to acquire his (Blue Heaven Holdings) full stake (94.1%) in Everton Football Club.
Concurrently, Bluesky Capital’s shareholder loan of £450.75 million was capitalised and converted to equity taking the holding to 97.2%.
Immediately following completion, Roundhouse Capital Holdings (UK) – the club’s parent company – further equity was invested totalling £233.44 million, taking the Roundhouse equity holding to 99.5%.
The transaction formally completed on December 18th 2024 after receiving regulatory approval from the Premier League and FCA.
Further to the above the club completed a 5 year revolving credit facility with JP Chase Morgan Bank (this is separate to the recently announced senior debt package relating to the stadium).

Summary
For once, the accounts only reflect part of the story – a story spanning more than 8 years since Moshiri’s initial acquisition. 8 years that saw massive losses, and huge borrowings as Moshiri’s ability to fund the losses and stadium build were washed away in the events of early 2022 with Russia’s further illegal invasion of Ukraine.
The end of the financial year 2023/24 saw Everton in a desperate position with total debts including trade creditors (but not Moshiri’s shareholding loan), greater than £787 million.
The pursuit of 777 Partners as potential purchasers by Moshiri, and their inability to close their acquisition added hugely to the debt pile and the associated interest costs. Some of those costs will continue to be felt in the next accounts covering 2024/25.
The toll of the Bramley-Moore build costs along with lower than expected revenues as a result of poor performance on the pitch, and the failure to secure a purchaser before the Friedkin’s eventually acquired the club, almost put the club out of business.
Fortunately, today, under the ownership of the Friedkin’s, the strengthening of the balance sheet plus working capital and long-term stadium finances in place, puts the club in a far stronger position to become competitive once more.
The move to Bramley-Moore, increased match day and commercial revenues, professional management and increased Premier League security under David Moyes’s stewardship, should be sufficient to never again see the extreme financial mismanagement and risks the club faced, particularly in the accounting period just reported.
For those that say Bramley-Moore is a credit item on Moshiri’s balance sheet regarding his tenure at Everton, then they should never forget the state of Everton’s finances, the costs and the existential risks Moshiri bestowed upon the club particularly in the final 18 months or so of his ownership.
These accounts, as do the previous, bear testimony to that.

Analysis of the 2023/24 Everton Stadium Development Company Accounts is available here