Statement ahead of the AGM
The operating of the club in season 2011/12 has been very difficult from a financial point of view. This probably reflects the external influences of the UK economy as a whole with commercial income difficult to realise and gate income static, at the same time as expenses continue to rise.
Excluding depreciation and amortisation, the company had an operating loss of £124,329 with some key areas of movement. The turnover was down £652,141 – all of which was attributable to less football income (JPT / Football League Trophy income was reduced by £420k, player sales reduced by £105k and FA Cup income reduced by £41k). In terms of expenses, player basic wages were reduced compared to 2011, although bonus payments for league position were higher, and in return we did not achieve a play-off position or increased crowds. Other areas of increased costs were the investment in setting up a concession store in Debenhams, and subsequent withdrawal 9 months later, legal fees associated with staff reorganisation, motor expenses, rent and rates and administration wages and salaries were also increased due to our commercial reorganisation.
Although we were showing a profit at the end of the third quarter we were well off our forecasts and were aware that with little or no income in the last quarter we were going to see a loss for the year if we didn’t make the play-offs, and it was indicated that a ‘cost reduction programme’ would need to be implemented. At a board meeting in May 2012 this programme was indicated to the directors and potential actions and outcomes were discussed. The programme was actioned with a view to having completion in the 2012/13 financial year; to date the programme has indicated savings of some £230k.
We have indicated that we will push on with the ‘Blue Yonder’ project which is to have a new stadium for Carlisle United in the foreseeable future, although we remain committed to an enabling development as the only way forward.
Currently we are committed to running the club on an operating ‘break even’ basis and all plans for 2012/13, including the cost reduction programme, are designed to do this. Although any ‘Football Fortune' income (cup income and player transfer income) may improve this, we cannot rely on it and have not done so in our projections.
The directors are very grateful to the fans who support us, the companies who back us and the management and team who ensure we have entertainment, results and operating efficiency to keep us progressing year on year.