Newcastle have announced today a profit of £9.9M for the year ending June 30th, 2013, which is the last complete financial year of the club.
Mike Ashley – owner – financial figures are good
The results were shared at the third Fans’ Forum which took place last night, and the figures show the club is in a very good financial condition.
The club issued statement as follows, which is long – but very detailed and the figures are good:
If you don’t want to go through it drop to the end where we review some of the important figures:
Newcastle United has today confirmed its financial figures for the year ending June 2013.
United used the Club’s Fans Forum, which took place at St. James’ Park on Monday evening, to share the results with supporters first; giving an overview of the Club’s performance and the context of the figures before filing them with Companies House.
The Club has continued to make positive progress in line with UEFA’s stringent Financial Fair Play Regulations, with player trading, a strong commercial performance and a significant reduction in operational losses contributing to a profit after tax of £9.9M – up from £1.4M in 2011/12.
Newcastle United purchased six senior players in the period, with Vurnon Anita arriving in summer 2012 and Mathieu Debuchy, Yoan Gouffran, Massadio Haïdara, Moussa Sissoko and Mapou Yanga-Mbiwa all acquired in January 2013. A number of younger players also arrived at St. James’ Park, including Gael Bigirimana, Curtis Good and Kevin Mbabu.
Accordingly, the Club’s cash outlay on players was £28.7M – up more than 30% on the £19.7M spent in the previous season.
While the Club’s cash outlay on transfers was significantly higher in the period than the £11.1M it recouped on outgoing players, including Leon Best, Demba Ba and Fraser Forster, trading profit on players stood at £10.6M after amortization.
The profit equates to the sums received for players in relation to what the Club initially paid for them, with outgoing players’ values having increased during their time at the Club.
The Club’s turnover rose to £95.9M – up from £93.3M – bolstered by a sharp rise in commercial revenue, which is up 24.2% to £17.1M. The Club forecasts similar commercial growth in 2013/14 as a result of strong commercial partnerships.
Matchday turnover, which includes tickets sales and hospitality, also rose by 15.9% to £27.8M, representing a £3.9M increase from the £23.9M recorded in the previous year.
The figures are in light of strong season ticket renewal figures, with the average Premier League attendance rising to 50,517 in 2012/13 and seven additional fixtures in the UEFA Europa League.
Media turnover, which is related to the Club’s success in the Premier League and UEFA Europa League, was down by 8% to £51M with a run into the quarter-final stage of the latter competition unable to fully offset the impact of the Club’s 16th-place domestic finish.
Operational losses were reduced from £5.1M in 2011/12 to just £616K in 2012/13 as the Club continues towards running at break-even and meeting UEFA and Premier League regulations.
The Club’s total wage bill fell from £64.1M to £61.7M and wage-to-turnover ratio now stands at 64% – down 4%. However, this only includes up to six months of the additional wages of six January purchases. The average wage-to-turnover in the Premier League in 2011/12 was 70%.
While Newcastle United’s use of its overdraft facility stood at £4.5M on 30th June 2013 – up from just £0.3M, the Club’s debt remains static in the form of a £129M interest-free loan from owner Mike Ashley.
The Club’s board said:
“As supporters will be aware, finances are a significant issue for all football clubs given the introduction of Financial Fair Play into the Premier League in addition to UEFA’s Regulations.
“Complying with FFP continues to be a key influence on strategy and something we have been working hard at over a number of years.
“Everyone at this club wants to finish as high up the Barclays Premier League table as they possibly can. If the club can sustain itself as a ‘top ten’ team year-on-year with a stable structure and the right finances, it gives itself every chance of pushing even further.”
“Matchday and commercial revenue is a key driver because that’s where the Club can compete with – and outperform – its competitors to enhance its spending capabilities.”
“Ultimately the income the Club generates, particularly, given the restrictions of the Premier League FFP Rules, from matchday, commercial i.e. non-TV income, will directly impact on the strength and quality on the pitch.”
“The process requires patience but we remain absolutely committed to growing the Club in a responsible and sustainable way.”
So in short almost all those financial figures are going ion the right direction.
The revenue is up to £95.5M and the profit after tax is up to £9.9M – which is now 10.3% of revenues – very good for a football club.
The commercial revenue – which has been a weakness of Newcastle’s over the last few years, is up over 24% to £17.1M and that could increase by the same amount next year – which would take it to £21.2M – it’s certainly has some momentum in that important revenue item.
And the club is almost even on operational revenue, losing only £666K, down from over £5M last year..
It’s obvious that Mike Ashley financially has the club in an impressive financial position – there’s just no way of getting away from that.
Now we have to persuade him to spend all the profits and invest them straight back into the club, in the form of player transfers and improvements in the facilities, the Youth Academy and the Scouting network, among other items.
Newcastle have already committed to make the training facilities at Benton some of the best training facilities in Europe and that’s a good start.
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