Latest results show improvement on 2011-12Everton have announced that the club made an operating profit of £0.7M for 2012-2013, reversing a £6.4M loss for the previous year.
The annual accounts cite a 7.3% increase in turnover, thanks to increased broadcast revenue and gate receipts, a £10.7M swing in net profit on player trading and contracts for the season, and a £1M reduction in other operating costs.
The figures do not take into account the bumper Premier League broadcast deal that took effect last August, nor do they factor in any of last summer's transfer activity, compensation paid to Wigan Athletic for manager, Roberto Martinez, transfer fees of £6M+ which will become due when certain players reach appearance milestones, or signing on/bonus payments of £5m that will come due to current players on specific future dates.
Chief Executive, Robert Elstone said of the latest results: “The Board has consistently demonstrated its commitment to competing at the highest level, in the best league in the world. We continue to invest in a young playing squad through the acquisition of key talent and the excellent work of our Academy.
"This commitment to youth has been supported by the extension of contracts for many of our experienced performers, all of which continues to sustain a high value in our playing squad not represented on our Balance Sheet.
"Away from the pitch, I am also pleased that we have seen growth in all revenue streams, reductions in our cost base and debt levels slightly reduced. It's a very solid financial position that means we are well placed to take advantage of the new Premier League broadcast deal, already flowing through into our 2013-14 numbers.”
Chairman, Bill Kenwright, meanwhile expressed his satisfaction with the accounts in the Annual Report, saying, “Each year, when I sit down to carry out my review of the previous year, I focus on whether our Club is in a better position than it was a year ago.
“And while we have undoubtedly gone through a period of change, the answer can only be a resounding yes.
“On and off the field we continue to push forward on every front, led by the values and ethos that infuse every person and every aspect of the Club's life.”
Though Everton's balance sheet shows a £1.25M increase in debts due in the coming year, it also reflects a £1.6M decrease in Net Assets and Liabilities and a £5.5M increase in fixed assets, largely comprising a positive shift in player value.
Kenwright ended his statement in the accounts with a renewed pledge to find an investor capable of taking the club forward.
"We're making progress, we're optimistic about what lies ahead, but we're undeterred in our search to find the person, or institution with the finance to catapult us even further forward. No-one underestimates the investment needed to take us to the next level. No-one, least of all me, is underestimating the need to find that investment. Again — I promise we will.
"Until then, Everton Football Club will be the major part of my life, and I will do everything I can to support each and every one of us to get to where we belong."
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011 Posted 30/01/2014 at 10:48:06
Nike have had another honourable mention (same wording as last year) for supplying the paint to refurbish Everton 2.
No overall figure for commercial income - but how can receipts for player participation from UEFA for the Euro's be included? Does anyone know? We have increased our commercial income by £500k - Woo-hoo!
It's those sort of sponsorship deals that will give all the other top 8 clubs money for player purchases. The board don't have to inject any cash of their own, that's why we should employ the top people in the business to go out and find new sponsors.
"The Clubs sponsorship, advertising and merchandising revenue has also increased from £7.1M in 2012 to £7.6M in 2013 due to the long term support of key partners such as Chang, Kitbag and Nike. The increase in other commercial activities revenue from £3.0M in 2012 to £4.4M in 2013 is due to receipts from UEFA for players who participated in the European 2012 Championships and solidarity payments."
021 Posted 30/01/2014 at 11:30:12
033 Posted 30/01/2014 at 12:07:24
038 Posted 30/01/2014 at 12:21:14
040 Posted 30/01/2014 at 12:34:35
059 Posted 30/01/2014 at 13:21:54
a) Invest in the squad to give your boyhood team a shot at qualifying for the lucrative CL; or
b) Pay down debt so that if you sell you get more money for your shareholding?
If you answered a) you're probably not in a position to buy Bill out anytime soon, sadly.
108 Posted 30/01/2014 at 15:07:48
Please Bill, where is it?
111 Posted 30/01/2014 at 15:10:38
That's 2 player still needed and supposedly targeted. I have a horrible fear the Roberto bubble may be about to burst come tomorrow night and we are back to the same old. Other teams are paying £15m plus on players. We will get left behind the 2nd half of the season. Mark my words.
112 Posted 30/01/2014 at 15:15:37
117 Posted 30/01/2014 at 15:26:19
118 Posted 30/01/2014 at 15:20:29
But our summer spending will reveal the Board's true ambition unless there is a proposed new stadium in the offing or the club is sold?
121 Posted 30/01/2014 at 15:31:47
Question 1 – where has all the money for Fellaini gone and others.?
Question 2 – other operating costs.?
Question 3 – Why are we spending no money.?
My question when will all be fit to show this league we are as good as the rest with a fully fit team.
The rest, In Everton and its custodians I trust.
Blue Union – where are you when your not wanted.?
125 Posted 30/01/2014 at 15:29:47
£6 million increase overall. Its virtually as if we had a new stadium! Small beer compared to the top 5/6 but going in the right direction.
Cue damning EBITDA figures from BU...choose your spin.
130 Posted 30/01/2014 at 15:42:59
We will also have the increased revenue from BT sport and the new Sky deal which should cover the increase in wages costs as Baines, Coleman and Barkley are all having wage increases with their new contracts.
132 Posted 30/01/2014 at 15:42:13
As with previous published accounts it takes someone independent from the club to spell things out on TW, free of all the spin.
One thing for sure is that the missing millions of season's past will not be so much a concern with the whopping dollop of Sky money coming our way.
As with the whole of the PL era, poor management, no matter the size of the pot of gold, will leave us trailing, so even yet more money should not let us sweep things under the carpet.
The luvvy needs replacing.
144 Posted 30/01/2014 at 15:56:06
Really thought we needed a signing this window to capitalise on the brilliant first half of the season and to really add momentum to our finish!
Just like United have done with Mata, we needed a playmaker along these lines to add to our team.
We've seen it all season with sideways passes and no one really knowing what to do once we enter the final third!
Not surprised just disappointed! Never mind the summer ,this was the season we needed to capitalise on other sides in transition and our loan signings who will be gone.
151 Posted 30/01/2014 at 16:25:32
160 Posted 30/01/2014 at 16:42:25
162 Posted 30/01/2014 at 16:53:47
Question 1 – where has all the money for Fellaini gone and others.?
Wrong financial year Paul
163 Posted 30/01/2014 at 16:47:03
181 Posted 30/01/2014 at 17:15:09
186 Posted 30/01/2014 at 17:18:32
187 Posted 30/01/2014 at 17:22:08
That doesn't stop us spending it this window. I think that may be Paul's point. With the extra tv money and Fellaini's, there should be £38M.
189 Posted 30/01/2014 at 17:26:41
191 Posted 30/01/2014 at 16:53:31
A good bit of news is that the Bank overdraft has fallen from 11m to just 2.3m, which can only be good news as these facilities come at a premium. I think this has been done through a mix of refinancing other deals and cash from player trading although its hard to be sure.
But there is a 10 million loan in the accounts, shown in the cash-flow. I have no idea what that is, and whether or not it was short term loan to finance the Kone/Robles/Alcaraz moves.
Debt has been stable for 5 years now, meaning those who predicted financial meltdown, administration, and harked 'its not sustainable' were clearly wrong, as it has been.....sustained. And looks like it will continue to.
200 Posted 30/01/2014 at 17:36:13
We truly are fighting above our weight when compared to the other clubs in the Premier League. It may be decent management as far as accountants are concerned but have we aided our managers to compete in the PL significantly since 2009?
I don't think we have and that is the main reason I get annoyed by BK and his Boardroom buddies.If we have a truly awful season in the PL the accounts won't look as rosy and the pressure will mount - but until that day arrives let's enjoy being in the top 6 PL clubs - although according to our finances we shouldn't actually be there.
207 Posted 30/01/2014 at 17:39:11
Also surely paying of the debts is equally (if not more) important as investing in the team?
How much better/Worse of would we be if we did sell players purely to get rid of the debt?
What do people predict would happen short and long term?
209 Posted 30/01/2014 at 17:58:20
Seems to me the board have to do a fine balancing act between spending and the teams results. Spend to much and it could really back fire if we don't achieve in line with the spend. Spend to little and we wont finish high enough to bring in cash.
Not saying you are right or wrong but they certainly cannot just say here is 70 million, get us into the champions league. Fine if it works but it could so easily cripple us.
213 Posted 30/01/2014 at 17:47:36
214 Posted 30/01/2014 at 18:09:11
Equally, I don't think the board deserve any credit for the debt position they have maneuvered us in to but the exponentially increasing TV money does rather temper any neurosis regarding the total annihilation of our club from history.
Glad to see that 'Other Operating Costs' were greedy Moyes' "keep quiet" money and have now been partially removed from the balance sheet presumably to further reduce next year when we have our first full year without his services.
221 Posted 30/01/2014 at 18:06:42
Last January we did nothing save buying Stones, and the team ended up not achieving tangible success, the same seems to have happened this year as well. Injuries and loss of form are part and parcel of the game and therefore every pound spent is a gamble to some degree.
If we were in the bottom three in the PL would people still be saying that not buying in January is a good idea and gambling our PL future on a make-shift forward and as yet unproven loan signing would be acceptable?
Different circumstance but the same principle. If we are happy to finish in seventh or eighth as a club then fine stick to the budget and we'll all adjust our horizons accordingly.
Things have not altered a great deal since 2005 for the club as a business apart from the level of debt we now hold which is when compared to 2005 is radically higher - see figures on the other financial thread,
We have enjoyed some good football and some nice days out, but despite the lucrative TV deals and other sources of income the only beneficiaries at Everton FC have in real terms been the players.
231 Posted 30/01/2014 at 18:22:59
Any credit agency is still advising 'cash transactions only' if you were conducting any business with the club.
I think the £10m loan is short term finance from Vibrac. We have used this facility for the past 3 seasons.
We're treading water and relying on profit from sales to keep in touch, but hopefully the new T.V. money will enable us to keep Barkley for another season.
We are a little hamstrung on the commercial side because the Kitbag deal has a few more years to run. We get £3m every year no matter how much merchandise we sell, the accounts show a £500k increase on that side of the business - Liverpool get that much per week off Warrior alone.
233 Posted 30/01/2014 at 18:39:22
236 Posted 30/01/2014 at 18:43:21
243 Posted 30/01/2014 at 18:57:53
Even if we have, say, £15m from player sales we might have given some or all of this to the bank by now.
Of course our CEO says the RM and DM before him got the majority of the money we make on player sales but I'd rather here what the bank have to say.
248 Posted 30/01/2014 at 18:35:03
â€œAnd while we have undoubtedly gone through a period of change, the answer can only be a resounding yes.
â€œOn and off the field we continue to push forward on every front.... "
I have severe doubts about the second and third paragraphs. I hope to be proved wrong in the relatively near future but I am not holding my breath.
252 Posted 30/01/2014 at 19:12:15
£35m over the past 5 years - £7m per season. I would be surprised if it wasn't the same this year, but those accounts will be posted shortly.
256 Posted 30/01/2014 at 19:19:22
268 Posted 30/01/2014 at 19:23:58
269 Posted 30/01/2014 at 19:31:51
271 Posted 30/01/2014 at 19:33:50
276 Posted 30/01/2014 at 19:39:15
279 Posted 30/01/2014 at 19:47:40
294 Posted 30/01/2014 at 19:53:40
297 Posted 30/01/2014 at 19:47:18
As I see it, Everton FC Ltd took out a securitized loan in March 2002 for £30m, they got the loan because they could use future season ticket sales and Goodison Park (the actual stadium) into the holding company Goodison Park Stadium Ltd.
Everton Investments Ltd held the loan notes and subsequently moved the money to Everton FC Company Ltd. I assume that this loan was taken out to facilitate the failed Kings Dock project and was the money that BK referred to as ring-fenced?
Obviously the loan must have been written in stone and has been used to run the club in the initial few years following 2002. But I also seem to remember that an amortisation had taken place since that time – I assume this is what is now referred to as BVI?
Anyway it is as clear as mud and Everton FC's recent accounts don't truly reflect the economic state of the Corporation? Or am I being a little naive and far too cynical all at the same time?
299 Posted 30/01/2014 at 20:11:50
Why do the accounts say 30 December 2012 to 31 May 2013 for transfers?
303 Posted 30/01/2014 at 20:17:44
My point was receiving £4.3m is a lot less than we expected is my point. Certainly not the figure we thought we had to spend.
Could be wrong, Fellaini £27.5m, Victor £5m Victor, less £13m McCarthy = £20m net. This would suggest Kone, Robles, Del Boy, Barry, sell ons, and Lukaku cost £16m.
305 Posted 30/01/2014 at 20:22:08
309 Posted 30/01/2014 at 20:28:20
But if the figure for transfers is as you say then the loan fees for Lukaku, Barry and Del Boy must be significantly more than many have suggested which might explain the figure of £4.3m but your guess is as good as mine. Tablets nurse! where's me tablets.....
310 Posted 30/01/2014 at 20:34:48
313 Posted 30/01/2014 at 20:38:19
It's bad enough worrying about how the team will perform - but these other results are very important too - and I hope more people will continue to dig beneath the headlines and examine the story they tell as that is the only way to fully appreciate in what direction the club is going.
314 Posted 30/01/2014 at 20:41:39
319 Posted 30/01/2014 at 20:45:53
328 Posted 30/01/2014 at 20:43:48
If it meant putting the club back in the red who cares? The aim of this football club is to compete and win things, but without this one vital ingredient, we will continue to dominate games frustratingly while not having the ability to win games. Please Messrs Kenwright and Martinez, find one ASAP or we will forever be also-rans.
331 Posted 30/01/2014 at 20:57:39
339 Posted 30/01/2014 at 20:51:05
As the figures show, a higher league finish means extra income (prize money and TV rights) and a Champions League finish would mean a huge boost in income. It makes good business sense to invest the money we have available to try and attain this massive financial reward. If we fail then then this seasons figures would be no worse than the ones just published (IE we will still be making modest progress towards reducing the debt). I'm not a financial expert, but I know you have to speculate to accumulate and if this can be done within our means then why not go for it?
It is possible that Martinez's stance that January is not the best time to recruit new players may well be true and he would prefer to bide his time and do a proper job in the summer. If that really is his plan then I think we have to respect that. I would not be happy if we rushed out and paid over the odds on risky overpriced deals now to chase a goal that may well be unobtainable and then have nothing left to spend in the summer when the transfer market comes to life.
Martinez does not strike me as a dishonest man or a man who will cover for the boards lack of ambition. I expect the financial plan was discussed when he signed and that he has formulated a long term plan to build his team. Its quite possible that our succesful season has come as a bit of a surprise and I'm sure he has considered ways of boosting the team for a Champions League charge, but if the players are not available then sticking to the long term plan would seem like the wisest move. Just my take on things.
341 Posted 30/01/2014 at 21:07:14
How many more times do we have to put up with the same year in, year out.
It's not rocket science we need a striker, even the new signing is 16 days away from playing, m surprised we have not gone for remy now he has a 3 match ban, be alright in 4 weeks time.
This is not a knee jerk reaction to the Derby result, we need a striker and now.
346 Posted 30/01/2014 at 21:21:59
With the change of manager I thought Martinez would have had a few young arteta type players in mind from la liga, who maybe he couldn't attract to Wigan but could to a top 6 side.
Can't fault him with Barry and McCarthy the so called defensive side of midfield,
Apparently Newcastle are in for a young French player to replace Cabaye, excellent techniquely with an attack minded side to his game for 7million?
We must have double that to attract a little bit of flair to this side?
379 Posted 30/01/2014 at 23:12:49
Those who were wondering why the accounts are not showing a bigger 'profit' on the summer transfer window need to remember that
1) Any new player we have just bought ( Kone, McCarthy) is going to have a big year 1 write down
2) In addition to loan fees, which may well be higher than some thought, there may well have been agents fees, and other costs associated with player trading. It will always be hard to separate these out.
With regard to point 1), the way we deal with players in the accounts might take some thinking time. We effectively reduce the value of the player from the point they are bought (assuming we bought them at all, if not, their accounts valuation will be minimal e.g Barkley). This may not reflect the reality of their current valuation. A player we buy for £10m will always be valued a year on at less than that in the accounts. But obviously, if he has had a good season, we might be offered much more than £10m.
Without getting into a deep conversation about this, one might reasonably argue that McCarthy is now worth considerably more than his accounts valuation, whereas Kone probably isn't.
Overall, these accounts are fine if you just want to bob along outside CL qualification, and wait for a buyer who might invest to get you there. That is basically where we are. Everyone, I think, knows this. But because we all like to dream, to one extent or another, we like to think that a truly great manager, maybe Martinez for example, could pull the rabbit out the hat and get us CL on a bottom half table transfer budget (at best).
Maybe so, but probably not...
427 Posted 31/01/2014 at 02:30:28
434 Posted 31/01/2014 at 05:32:56
463 Posted 31/01/2014 at 08:45:01
Only if you want to make a lot of money from the sale of your majority shares. But then neither the net debt nor net liabilites have significantly decreased while the total debt has increased.
467 Posted 31/01/2014 at 08:29:38
470 Posted 31/01/2014 at 09:02:07
474 Posted 31/01/2014 at 09:01:40
The figure quoted in the accounts was lower than he was expecting.
478 Posted 31/01/2014 at 09:09:08
But the real question is why did the club need to borrow that original amount of £30m in the first place?
646 Posted 31/01/2014 at 17:27:57
Perhaps the reason for the original £30m loan was to address the aggregate £26m losses we had between 99/00 and 00/01 but then we had another two years of heavy losses in 02/03 and 03/04 which combined equalled £28m and yet another heavy loss of £20m in 05/07 and 06/07. Then in 2007/08 we broke even. But have the losses in the accounts only been removed due to loans or re-financing or did the club borrow lots of money in the same years that it made heavy losses?
Year Turnover Profit/loss Wages (%) Employees
2007/08 75.65 0 58.8 210
2006/07 51.41 -9 74.7 227
2005/06 58.12 -11 63.6 259
2004/05 59.95 24 51.4 893
2003/04 44.30 -15 74.2 979
2002/03 46.78 -13 63.6 999
2001/02 38.23 2 76.5 975
2000/01 32.85 -4 80.2 214
1999/00 28.14 -11 79.4 197
1998/99 25.46 -11 79.5 199
1997/98 22.67 1 61.1 195
1996/97 18.88 -3 57.9 177
1995/96 17.00 -8 59.2 170
1994/95 13.55 -9 142
Whatever the sequence of events it just shows why nobody is likely to buy the club in the near future.
933 Posted 01/02/2014 at 12:18:51
995 Posted 01/02/2014 at 12:59:04
These are my observations:
1. From a footballing standpoint, wages of 63m v turnover of 86m is a 73% wages to turnover ratio. I believe the recommended norm (from Deloitte's and such like) for financial stability is a ratio of around 66-70%. So no complaints here.
2. Consequently, around 25% of turnover is spent on effectively running the rest of the football club, given that our EBITDA pre-player trading is negligible. This again, does not sound unreasonable - only a handful of clubs are profitable, most of them spend 66-70% of turnover on wages, therefore most of them incur around 25-30% in non-wage costs to run the football club.
3. Our wages, according to Joe's summary, were largely flat year on year at 63m, yet our turnover grew 7% to 86m. We therefore swung from a large negative loss to a small (effectively break-even level) of EBITDA. With wages held constant, our EBITDA swung from a loss of 5.6m to a profit of 1.5m, a 7m swing. Turnover grew by about 6m, so almost every additional pound of revenue fell through to the EBITDA line ( a reduction in operating costs also contributed to the swing).
4. Our interest bill stands at 4m on net debt of 45m. This is about a 11% rate. Not usurious by any means.
5. Before capex and player trading, we therefore need to generate EBITDA of 4m to cover our interest payments. Assuming no change in wage costs, we should be able to achieve this if our turnover grew to over 90m - highly probable in the coming financial year given the new TV contracts and the level of coverage we have had this year.
6. Given we were unable to cover our interest payments, and the small amount of non player related capex from our operational cash flow, this meant we ran a cash flow deficit at the operational level. We financed this by showing a small surplus between player purchases and player sales
7. We then had loan repayments to make. With no free cash flow to speak of, this was funded by borrowing.
8. The accounts show an increase in longer term loans which more or less was applied to reduce our overdraft. As a consequence, no change in our net debt.
Conclusion: Nothing new, but disconcerting all the same. The club remains in a fairly parlous financial state - reliant on selling players to fund purchases of new players and cover cash shortfalls in trading and interest payments. The shareholders are funding the club only through debt - whether from third parties or themselves, and as a result there is no relief from the obligations the club has to service its debt.
We remain at the glass ceiling as far as finances and wages are concerned - our best players are likely to leave if we fail to keep up with the Joneses as far as wage growth is concerned. With the shareholders not putting their hands in their pocket to fund the club through proper equity, we are reliant on growth from turnover to finance any expansion in our wage and transfer budget.
CL qualification would clearly change this dynamic - as will the new broadcasting contracts. Next year's accounts should therefore make interesting reading.
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