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CHIEF EXEC: Financial results for 2019/20

First of a five part update

3 May 2021

Following the detailed update in late February, and picking up from the updates on the football side of things from David Holdsworth last week, we’ll be running five articles through the course of this week from chief executive Nigel Clibbens.

Click HERE to read the February update again [once the new page has opened scroll down to view the relevant series of articles].

The subjects covered will be as follows:

+ Financial results 19/20, and the audit.

+ The financial impact of coronavirus on club income in 20/21.

+ Dealing with that lost income.

+ Implications looking forward.

+ Events behind the scenes affecting the club.

Part 1 - financial results 19/20

Under normal circumstances we would have filed the club accounts and held our AGM by 31 March 2021. 

The audit of the numbers was fully completed by October last year, as you would expect. However, the coronavirus crisis means there is a general exemption from the Government which allows companies like us to file later this year, by 30 June 2021. As I said in February, we will be doing that. 

The specific circumstances of the EWM administration, and its implications for the debt we owed them, mean that despite the audit being substantially completed some time ago, using this extension is unavoidable. 

Some clubs in League Two file abbreviated accounts only, with no detail of income or costs. It is just a basic summarised balance sheet and the insight is very low.  We are transparent and provide very comprehensive details, and even though the timing means they are historic, all the information is there. 

As an aside I personally strongly believe EFL regulations should require all member clubs, as a minimum, to file audited accounts for medium sized companies (regardless of their size) before 31 December (before the winter transfer window) in normal circumstances. This would improve governance and transparency of clubs.

Our audit has taken place and as we have agreed numbers, in advance of the filing I want to share some headlines. 

This period covers the first three months of the coronavirus crisis in the year ended 30 June 2019:

  • Club will report a profit after tax of in excess of £750,000, and that is after the impact of coronavirus in 19/20.
  • Headline turnover of £4.5m is the highest since before 2015 (in part due to player transfer income).
  • We suffered a reduction in ‘normal’ recurring income of £345,000 due to the coronavirus. This would have been far higher but for donations in lieu of refunds from fans and businesses. We are very grateful to everyone for that.
  • Player transfer income of £1.1m was earned (not all of that was cash received in the year).
  • £361,000 of income was received from the Coronavirus Job Retention Scheme (CJRS) to protect jobs. No jobs were lost due to coronavirus.
  • Net assets of £4.9m at 30 June 2020.
  • Cash in hand at 30 June 2020 of £500,000 - important heading into the current 20/21 season.
  • Total debt £3m (including a new £120,000 short-term loan from the EFL).
  • No cash advances or repayments from EWM in the year. £2.25m of capital and interest due at the 30 June 2020.
  • Club had £0.3m of PAYE and VAT payable under deferred agreements with HMRC (PAYE all paid by 30 November 2020 as agreed, with VAT payable in 21/22 under the Government scheme).

We fully absorbed all adverse financial effects of coronavirus in the year to 30 June 2020 by cost savings, donations in lieu of refunds and CJRS, before player sales.

This meant the Football Fortune from cup runs and cash from player sales earned in 19/20 was not needed to pay for coronavirus impacts. 

This was crucial in leaving cash reserves to firstly cover the significant normal losses and the cash needed in 20/21, which we incur every year and, secondly, to provide a financial cushion to cover any of the expected £1.2m of coronavirus related ‘lost income’ we might not be able to mitigate by ‘self-help’ or other measures.

In a normal year we still need around £400,000 to £500,000 of new cash. This usually comes from football fortune or, when we are not self-funding, from external sources. In 19/20 that came from player sales.

A full and detailed explanation of 19/20 will be given when the accounts are filed, in due course.

As I said previously, this meant we entered 20/21 in a sound position, even though we had no external finance expected.

Part two, on the official website tomorrow, covers the financial impact of coronavirus on club income in 20/21.

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