Town Announce £9.8 Million Loss
Thursday, 5th Dec 2013 22:45

Town have announced a loss of £9.776 million in the year to June 2013, down from the previous year’s figure of £15.964 million. The club’s debt rose from £72.481 million to £82.437 million.

The figures were revealed to shareholders at this evening’s PLC AGM in a sheet outlining the financial highlights for the year 2012/13, which can be viewed on the club site here. The PLC is made up of the pre-takeover shareholders and owns 12.5 per cent of the club with Marcus Evans owning the rest.

Wage costs were down from £17.95 million in 2011/12 to £15 million, while the club lost £1.96 million on net player trading.

Gate receipts were down to £5.084 million from £5.363 million in the previous year, while commercial income also dropped slightly from £4.688 million to £4.153 million. Overall, turnover was down to £13.843 million from £15.037 million.

The increase in debt is made up of £7.929 million in loans from other areas of the Marcus Evans Group and £2.203 million interest.

However, interest is now no longer charged on the club’s debt, in part due to worldwide debt cap rules relating to inter-group loans, with only so much debt permitted between companies within the same group. In addition, interest charged on debt counts towards a club’s overall loss under the Financial Fair Play rules.

Joint-managing director Ian Milne told TWTD that fans shouldn’t be overly concerned by the debt, despite its size: “The debt is all contained within the group, there’s no third party debt there.

“Mr Evans continues contributing and will continue to contribute, so we shouldn’t have fear from that.

“What Jonathan and I are trying to do is cash generate to reduce the level of contribution he has to make.

“When we get to that, then fine, but no Championship club is covering its costs and some debts are much, much higher.

“And more concerningly, some of those Championship clubs’ debts are third party bank debts, whereas ours is totally within the Marcus Evans Group, so we shouldn’t be concerned with that. I’m not concerned with that.”

He says the debt is unlikely to come down until the club is in the Premier League: “I think that’s probably correct unless we can generate more income and get more people through the gate. Our gate isn’t bad, it’s going up with the consistent performances we’re having.”

The Financial Fair Play rules mean Evans is no longer able to inject cash at the same levels as in the past and as a result the loss for 2013/14 will be lower.

“We have to come in line with that and that’s what we’re preparing for at the moment,” Milne added.

“It’s going to be interesting to see those clubs who are going to have difficulty meeting those aims and what happens there.

“They risk a transfer ban if they don’t succeed in getting to the Premier League and I know that there a number of clubs who will make sure that’s enforced.”

Milne was joined at the AGM by manager Mick McCarthy and PLC chairman Roger Finbow and several members of the PLC board.

Academy sponsorship manager Simon Milton spoke about the Academy Association and showed the new recruitment video (below).

Milne and McCarthy took a handful of questions from the floor at an understated meeting with the Town manager given strong backing by the majority of shareholders.

The attendance was lower than in previous years with the weather and resultant transport problems presumably having had an effect.

Photo: Action Images

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Rentaghost added 23:00 - Dec 5 Were there any questions of Academy status? Homegrown players are to be the clubs future with the size of the debt .
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Bown added 23:13 - Dec 5 r we going do anything for nelson Mandela before the match on Saturday
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Marshalls_Mullet added 23:20 - Dec 5 RIP football. I hope FFP does have an effect. John Madejski was once asked 'how did you become rich?'. His answer was, I started off very rich, then I bought a football club, now I'm just rich.
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Guthrum added 23:23 - Dec 5 That's quite a significant reduction (nearly 40%) in annual losses. All going in the right direction, while achievements on the pitch are steadily improving.
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PhilTWTD added 23:27 - Dec 5 Rentaghost Milts spoke about the academy but don't think there were any new developments. Cat One ongoing still, audit February, I think off the top of my head. Weren't a huge number of questions and most have previously been covered previously.
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Robbie12345 added 23:44 - Dec 5 Can someone please confirm, is the debt with Ipswich Town, or is it being soaked up by Marcus Evans? Hopefully we can get in the prem and start reducing that debt down :)
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Notts_tractor added 23:46 - Dec 5

"Our gate isn't bad, it's going up with the consistent performances we're having.”. Um, not really evidenced by Tuesday's attendance. The two previous gates would have been nowhere near the 18,000 they attracted without the promotional offers. When will this club realise that people object to being fleeced and that you could actually boost income by charging less and attracting more.

PhilTWTD added 23:52 - Dec 5 Robbie12345 The club's debt is owed to companies owned by Marcus Evans, who also owns the club.
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Tractorog added 00:11 - Dec 6 Phil you say "the loss consisted of £7.929 million in loans ....and £2.203 million of interest" Whilst a loss can be created by interest payments and (as our banks prove) loans made to others going bad, they can't be created by receiving a loan. The loan funded the losses it did not create them. So what did create £7.9m of losses?
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Tractorog added 00:24 - Dec 6 Ok had a look at the statement and the £2.203 m is not interest it's loan notes used to fund the losses. If you change your sentence from"consisted" to "was funded by " it makes more sense, but I'd change "interest" to (probably interest bearing) "loan notes". Then pedants like me will relax.
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PhilTWTD added 00:54 - Dec 6 Tractorog My error, will amend, I meant the increase in debt as opposed to the loss. The £2.203m is interest on Loan Notes 2026 which is the club's historical debt from the pre-Evans era.
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Taricco_Fan added 00:56 - Dec 6 If only there was a way to sell those 15,000 empty seats? Hmmmm.......
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arc added 02:11 - Dec 6 £82.437 million. Jesus. I hope everyone remembers that when they make demands for new players.
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ArnieM added 04:09 - Dec 6

At the end of the day this debt is now a book keeping fig because the club is owned by Evans . He owes himself and the debt he has spread amongst his other companies. Large though the debt sounds I suspect it pales into insignificance when compared to debts of other clubs whoowe ttheir debt to banks or other lenders. It will no doubt provide an opportunity for Norwich media and fNs to focus on to xdflect from their own problems.

budgieplucker added 05:43 - Dec 6

I am struggling to remember exact details but I seem to recall when ME bought the Club he paid approx. £6m - in effect he bought the debt at the time of somewhere near £35 million for that £6 million (so the previous shareholders wrote off £29 m) that debt of £35 million was then presumably transferred to the ME Groups balance sheet, so in real terms ME has invested approx. £47 million into the club? Perhaps any one can recall and confirm my assumptions?

Keaneish added 07:17 - Dec 6 2 million lost on player trading which could easily have been avoided.
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brittaniaman added 08:59 - Dec 6 I think that we have paid almost every player who has left the club in the Marcus Evans era ????? Previous managers poor dealings !!!!!!
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cphtractor added 09:11 - Dec 6

I really think that ME should write large sums off that debt. He bought Towns debt at a discount of 83% but didnÂ´t write it off, but used it to bolster the balancesheet of ME groups. Every loss since then has gone via the same route so on paper his investment into the club hasnÂ´t yielded any losses. ME should atleast write those £29 mio he got as a discount off a debt that is £82.5 million.

bluefeast added 09:36 - Dec 6 without evans we would be history , remember that
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cphtractor added 10:04 - Dec 6

Still creating profit by interest on a debt where the borrower and lender is one and the same, let alone not writing off the initial discount. It is unnecessary and puts us into a vulnerable and negative light. I want ME here and appreciate his investment but I am worried, we are only one step away from receiving unwanted, unrelated debt from other areas off ME group. He should post the net. debt of the club and write off that debt that has nothing behind it but could be collected if we reach the Premiership.

Bergholtblue added 10:33 - Dec 6

Whilst ME owns the debt we may be 'unconcerned' the worry is that one day he may decide to call it a day and sell the club. He will sell it for the £82.5 M he is due (or whatever the debt has risen to by then) plus a nominal sum.

Then it will be down to how the purchase has been financed by the new owners. If they take loans (as in the case of the Glazers at Man U) we would be in a precarious position.

So have a mind next time you bemoan ME for a 'lack of investment' and demand more money spent on better players. Whilst ME is in charge we are OK, if he goes he takes the paddle with him.

regan90 added 10:35 - Dec 6

Guys, don't forget that this debt works in the ME Groups favour... for every £ lost by Ipswich in the ME Group means that the profit made by the other companies in the group are taxed less. Based on last years figures he has made 9.8 Million tax free in another area of the company. We have to remember that ME is a town fan but also very sensible when it comes to business he will know the benefits of this for his company.

regan90 added 10:38 - Dec 6 Sorry forgot to add my point to the bottom, he could either pay the tax man or pump Money into Ipswich each year the club he supports....
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Kesgraveblue57 added 10:47 - Dec 6 Gate receipts are down that is a fact. Why? Simply because the current side like many others in the past years at Ipswich fails to entertain, it's a living hell to watch crap football week after week, what puts new bums on seats is exciting football this is not rocket science.
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