Summary of the main points
- the strategic report dresses things up as would any such report. Tells you what the directors & owners want you to hear - so look beyond it. It refers to investment but the only new monies have come from the EFL.
The auditors have not qualified their audit report. They do draw attention to the going concern, and to some extent the going concern basis is backed up again by a written undertaking to not call the owners loans in and to source additional finance. It is not a legally binding undertaking so could change.
Turnover was up in total over £6m. It would be interesting to see how much was covered by the business interruption insurance. There wont be that this season so i don't think anyone should expect because we have had good attendances that it will mean a massive increase in turnover for 2022
It seems that what we have gained in turnover was allocated to paying wages including bonuses for promotion. I don't see that changing in 2022 in terms of overall wage spend even without promotion. We have added to wage costs with the signings this year so any additional turnover has been allocated. Perhaps why limited signings in January with shipping players out to meet it. The number employed has also increased by 15 (only 1 on the admin side)
ground rental was down by £700k but the new agreement at CBS will reverse a big chunk of that at least. It is likely due to larger crowds etc that the direct costs in 2022 will increase. Yes F&B will be more but enough to make a massive difference?
Interest is down slightly, but in hard times it is still being charged. It could have been waived but it wasn't. The 2.2m is again added to debt
There was 1.7m spent on player purchases, and 1.6m received from player sales. Contracts are amortised over the period of the contract and as we have spent on better players over last couple years then that charge increases. It isn't money out as such because the money was spent when player bought but it does increase losses. Net cost of buying & selling players was £100k out.
2.4m was received in loans from EFL which are interest free, only to be used to fund day to day expenses like HMRC PAYE, and repayable over 3 years. That 3 years is important, because it means for each season there is 800k to be found out of the funds available to the club to repay it. Which means it comes out of total budget and restricts any money for player purchases
at the year end the club had 2.5m in the bank up from 1.1m previous year. I assume it was kept back to meet the cost of players eg Sheaf & Gyokeres (although will be staged payments) and to keep club going over the summer. The last two years have been cash flow positive by over £1m per year so the club is not spending everything it has available in 2021 or 2020. The club spent £1m on new players after the year end
The club lost 4.7m in 2021. Probably better than a lot of Championship teams, given the lack of actual financial support from the owners and lack of other assets not exactly great
other than player contracts there is little by way of fixed assets. Current assets (debtors, money bank ) were up 3.6m but current liabilities were up 8.8m. Creditors due in more than 1 year further increase the gap by 1.2m
Balance sheet deficit has increased 27.8m. People might say are but the value of certain players would clear much of that, but if sold they have to be replaced with players capable of keeping us in the Championship. So it would most likely still leave us with a big deficit.
Yes the pandemic has had an effect, quite correct to point to it, but not all negative in terms of working the financials ........ otherwise how did they get more in the bank by 31/05/2021
It is clear that the club is run well within its means and people should forget the notion that MR gets all the money available. I dont think that will change in the forseeable. 2022/23 budget will rely on player sales to balance the books.
Deeper in the hole, and perhaps certain fans will now see the myth of financial support for MR and the team from the owners for what it is .... a MYTH. They have not made a net investment financially in the 4 years to 31/05/2021. The only support they have provided is a non binding agreement not to call the loans in................. (a) the club couldnt pay it and (b) they would be shooting their "investment" in the foot by bankrupting the club
Not great, and getting worse
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