As you probably already know Everton posted their results for the financial year 2010/11 last week. However, numbers and figures can be twisted in any way you like, to highlight or cover-up strengths and weaknesses.
The club were always going to put a positive spin on things, with the £500,000 loss seemingly not that bad to the untrained eye.
But that, of course, was only half the story and others half looked into more detail to find more worrying trends in the Toffees’ finances. Though it doesn’t take an expert to get a rough idea considering we haven’t spent any money on players for two and a half years!
I confess that I am not one for number crunching so when it comes to looking at the results in more detail I asked fellow RBM writers Darren Melling and Daniel Miller to give their take on where Everton are and where the club is headed.
I would like to point out first though that this is just their opinion after briefly casting their eyes over the numbers, it should in no way be taken as anything other than that!
In 2011, according to the figures, we lost £17.1 million. £7.5 mil of this was lost (?!) on players leaving the club. £8.5mil was lost on fixed assets, that is things such as land, machinery, buildings etc.
However, the figures show a profit of £1.9million. this is mainly due to a decrease in money owed to "debtors" of £470,000 and £16.6million raised by selling players (notably Arteta £10mil, Beckford £4mil, Yakubu £2.5mil).
Now, the debts:
As of May this year, the clubs overdraft stands at £9million. By May 2012 we need to have repaid £14.9million. Beyond this (no timescale given) we need to repay £23.6million. The total owed is £44,914,000. That is an increase in money owed out of £51,000.
So, in brief, despite selling probably our most saleable asset in Mikel Arteta, and then shifting on Beckford and Yakubu, as well as receiving a loan fee for Joseph Yobo, the debt actually INCREASED.
It’s worrying reading to be honest. One explanation could be the increase in wages given to playing staff when negotiating new contracts. Jagielka, Hibbert, Osman, Rodwell, Coleman, Anichebe, Vellios and Gueye are all named.
I'll try to find some positives
1) Treading water - financially (yeah, going backwards again but not so much as to be beyond the pale
2) Stability - we are not overspending but it's affecting our results (performance) having a small(er) squad - leading to reduced SHARE of the prize money (even if the total prize/tv money is set to rise a bit in the next couple of years at least)
3) The relative comforts achieved - such as they are - in the past FY have been from the sale of Bellefield
4) The Amortisation Charge for the players' transfer fees remains relatively constant - I expect this will diminish for (part of the current FY - all if we don't buy anyone in January).
If I make a quick estimate of the financial performance for this current year I'd be inclined to expect - turnover to be similar (some reduction based on lower crowds offset by some increases in prize money). Some wage reduction from sale of 3 important players (presumably on around £8-10M pa wages). There will be a significant profit on the sale of the 3 players concerned:
Amortisation (10-11) £16.6M (I can reasonably see £13-14M from the 10-11 squad - I guess the other £2M odd related to Agents' Fees etc. in those transfers. With the sale of Yakubu this might be reduced to £12M. - so an improvement of say £4M
Transfers - Beckford £1.5M & Arteta (circa £10M) will be against a nil book value so another £10M on the right side of things. Yakubu was sold for current net book value (give or take).
So, right now, assuming no significant change in all other things (major purchase, wage bill, massive reduction in turnover/relegation etc. we might look at a Trading Profit of around £5-6M this current FY which would put us back on a more even keel.
So, to summarise - nothing to be greatly delighted about but with costs under control we might emerge with a stronger 11-12 position thanks to some careful management, which in turn could see us turn the corner next season if our borrowing costs / facilities were to improve as a consequence.