Skip to main content Skip to site footer
Club News

CHIEF EXEC: Looking forward from the current position

Part four of a five part update

6 May 2021

In the fourth part of the update from chief executive Nigel Clibbens he discusses the implications for the club as we look forward from where we are now.

Club News

CHIEF EXEC: Dealing with the £1.2m of lost normal income

5 May 2021

Pulling all of that together, and after nine months of this financial year of 20/21, we still expect a ‘hole’ of £1.2m in our normal income due to the coronavirus pandemic (£975,000 suffered in the nine months so far). 

In February 2021 I said: “Right now we’re looking ok and it’s really good and comforting to know that’s the case. We have no concerns on that level, we’ve done what we’ve needed to do without the need to take support from anybody externally.”

This remains the case.

We expect to fully absorb all the adverse financial effects of coronavirus in the year to 30 June 2021 with new replacement income and cost savings (£1.065m achieved to date already) from:

  • iFollow income £350,000 (with £280,000 achieved already).
  • Government support measures £175,000 (with £160,000 achieved by the end of March 2021).
  • Premier League ‘bailout’ support of £360,000 received.
  • Cost reductions of £300,000 (with £250,000 achieved to date).
  • Maintaining football spending at pre-coronavirus levels.
  • No reliance on Football Fortune or possible insurance claims being pursued.
Club News

CHIEF EXEC: £1.2m of normal income lost in 20/21

4 May 2021

This means the Football Fortune from cup runs and player deals earned in 20/21 will not be needed to pay for coronavirus. This was also the case in 19/20 [see part 3].

This fully addresses the exceptional financial impact of coronavirus without damage to the longer-term financial planning of the club that was in place before it hit. 

However, the normal recurring losses which we incur year-on-year (unless football costs are slashed or we achieve unprecedented income increases), still needs to be funded as usual in 20/21. This will again be the case in 21/22, regardless of coronavirus. In the absence of external funding sources, we must self-fund these normal recurring losses, and they have to be paid for from Football Fortune.

Recent Football Fortune from historic deals has been crucial in the last 18 months, and should help balance the books in future. However, and despite reports elsewhere, these historic deals are unlikely to be so significant as to allow us to transform the club.

As I have explained before, this is why growing income before external funding or Football Fortune, to improve the long-term sustainability of the club, remains our biggest challenge going forward.

This becomes more difficult as the stadium ages, and the longer we remain in League Two. The long-term impact of coronavirus on attendance, and on commercial and fan spending, remains unknown, but is unlikely to make this less challenging.

Presuming no extra external funding is available, it is imperative we conserve cash when we have it, especially from Football Fortune. If this cash is required to fund coronavirus impacts, or if the normal losses of the club increase (due to lower income or higher spending) then it is inevitable this will further impact and increase our risks.

Club News

CHIEF EXEC: Financial results for 2019/20

3 May 2021

So, not needing to utilise our recent Football Fortune to pay for coronavirus in 20/21 or 19/20 is crucial in leaving cash reserves to:

  • maintain football spending at current levels.
  • fund the significant normal trading losses in 20/21.
  • fund the significant normal losses expected again in 21/22.
  • provide a financial cushion again in reserve, to help cover any further coronavirus related ‘lost’ normal income in 21/22 (which is important as the longer this crisis goes on, the more cash is needed)

As coronavirus issues persist it’s clear the damage done already will affect many clubs long into the future as we all then seek to recover. We are not in that position – yet, but that can change depending on 21/22.

The Holdings Board continues to balance the demands to spend on players and football operations to support Chris and David, with the funds we have and reasonably expect to earn. That is a challenge, especially when the prospects for the return of fans in 21/22 remains unclear. 

Our planning and operational decisions prudently presume no benefit of shareholder or external funding to increase our spending power, or provide an emergency cushion if required in 21/22. 

As I said previously, looking forward, we are presuming and planning to operate on this same self-sufficient basis. This means we need to remain cautious and prudent in our financial affairs, whilst supporting David and Chris with all the help we can as we look forward to 21/22.

As I have also said relentlessly, our approach must be different and smarter - and it is. We know this creates challenges for everyone, but we always reflect them in our expectations and decision making - to be crystal clear, it does not reduce the ambition or passion to succeed. 

The desire to achieve is actually fuelled by our circumstances – it drives us on. Promotion would improve all aspects for the club and everyone connected with it. It would help accelerate change for the better. Which is why it remains the top priority.

In part 5 there is an update on events behind the scenes at the club.


Advertisement block