United post loss for season 12/13
Season 2012/13 was a very difficult year for the club both on and off the field. In terms of performance, the team finished seventeenth in League One, having dropped nine places from the previous season’s finishing position.
This meant that instead of the planned push for promotion, or a play-off placing, we flirted for some considerable time around the relegation area and this brought an equal and direct effect on the business.
Turnover decreased from £4.33m to £3.54m (a reduction of £780,000) and the operating loss seen in 2011/12 of £124,329 has increased to a trading loss of £492,464 for 2012/13. The company is posting a total loss of £666,257 after amortisation and depreciation for the year 2012/13.
The above results led to a decrease in net assets from £3.12m to £2.45m at 30 June 2013. There was therefore a need to introduce funds from some of the directors during the year to maintain the cash flow and continue operations.
Some of the key areas of movement year on year are as follows:
+ Match income saw a reduction of £363,000 during this year and this is mainly attributable to the lower gates.
+ We saw an increase of £103,000 in cup income for the season. This was helped by the progression to round three, and subsequent home draw against Tottenham Hotspur, in the League Cup competition.
+ Commercial income saw a reduction of £190,000 against the previous year. There were a number of factors which affected this area of income including a poor year in the club shop, dropping numbers in match day hospitality areas and a reduction in income generated through the official website due to centralised Football League online partnership changes (betting, sponsorship, etc). Again, much of this can also be attributed to the fall in attendance figures suffered throughout the season.
+ Football League income also reduced by £88,000 which was caused by a reduction in centralised TV income leading to smaller distributions being made to clubs.
+ Player transfer income dropped by £392,000 against the previous year. This was due to the fact we had received income relating to the transfers of Gary Madine, Richard Keogh and Danny Graham relating to sell-on clauses, some of which had finished before this financial year.
The first half of the season posed problems around the playing squad due to extended injuries to the main striker and, subsequently, to the full back during the latter stages of the season. Cover had to be brought in for these positions and this continued into the 2013/14 season. Despite finding ourselves unable to avoid using the loan system, loan costs have held year on year at £71,000.
A cost reduction plan was implemented at the end of 2011/12 but, due to results and league position, it became apparent that further work was required and, therefore, further cuts were implemented in the office, commercial and scouting areas of the business at the mid-season point of 2012/13, with coaching and playing staff reductions planned for the close season to coincide with expiry of contracts.
Work carried out in the first six months of 2013 will allow the business to operate in a break-even situation for 2013/14 with the assumption that results, crowds and performances remain in-line with the second half of 2012/13.
