Newcastle United today released their latest financial figures which are up until the end of June 2011.

The good news has to be that the club, more or less, is breaking even  – something which could become essential if FFP (Financial Fair Play) is strictly enforced and NUFC have ambitions of playing  in Europe.

Whatever Mike Ashley has done right or wrong while at St.James’ Park is really irrelevant when it comes down to bringing in enough to pay the bills over the longer-term.

Any club/business can’t keep on spending more than they were bringing in and the way the Halls and Shepherds had ran the club into the ground can be seen by the fact the club in Summer 2007 owed £36m on players they’d previously ‘bought’.

Having said that I think Mr.Llambias is stretching the point when he talks as though there was a great plan in place when Mike Ashley came in.

The running of the club on and off the pitch has largely been a shambles and the combined signings and financial deals for Viduka, Smith, Xisco, Barton and Geremi were no better than those for Luque and Michael Owen.

Recent times have seen fortunes rise with Hughton then Pardew, along with Graham Carr, doing wonders with relatively limited resources. Ashley & Llambias must be given credit for their appointments and their part in the improved showing this year.

Although again I’d have to say the club have carried the luck this season and could have been undone by having such a small squad, not the ‘strong squad’ Derek claims, more a strong core of a team. Without Ba you’d be guessing as to where we’d be, while having only Steven Taylor as a long-term casualty has meant that vital core of the team have been pretty much available all season.

What the club reported today;

NEWCASTLE UNITED LIMITED ACCOUNTS FOR YEAR END 30 JUNE 2011

Newcastle United Limited today filed its annual accounts for the year end 30 June 2011.

2010/11 was a landmark year for the Club financially, achieving close to break-even for the first time in its recent history, whilst at the same time retaining and building a strong squad which is currently sitting sixth in the Premier League.

The overall operational loss for the year after amortisation (depreciation of players over length of contract) was just £3.9m, compared to a loss of £33.5 million in 2009/10 and £37.7 million in 2008/9.

Promotion to the Premier League resulted in a 69 per cent increase in turnover, from £52.4 million in 2009/10 to £88.4 million in 2010/11, principally the result of a three-fold increase in TV revenue.

Ticket sales revenue rose 16 per cent, from £20.9 million in 2009/10 to £24.3 in 2010/11, largely the result of an increase in corporate hospitality income associated with the Club’s return to the Premier League.  Just under a million fans visited the stadium in 2010/11, the third highest attendance in the country.

The Club has worked to bring its wages-to-turnover ratio down to a long-term sustainable level. In 2008/9 wages accounted for 82.7 per cent of turnover, rising to 90.5 per cent in the Championship season 2009/10.  For the year 2010/11, wages accounted for 60.6 per cent of turnover.  

The net cash spend on player transfers to June 2011 was a receipt of £5.4 million, which includes the fee for the sale of Andy Carroll to Liverpool FC in January 2011.  The Club has since spent a further £25 million in cash on players and wages.

The Club has a strict policy in respect of player transfers, with the emphasis on paying and receiving full transfer fees up front rather than accepting dated payments over a number of years.  When Mike Ashley acquired the Club in the summer of 2007, he inherited outstanding deferred transfer payments totalling £36 million for players past and present.  Under the new policy, the Club is now owed £5 million.

Thanks to the financial support of the owner Mike Ashley, the Club has now cleared all of its third party debts, which stood at £76 million in 2006/7 and incurred finance costs of £6.5 million.  The debt to Mike Ashley remains £140 million, which continues to be provided interest-free by the owner. 

Newcastle United’s Managing Director Derek Llambias said:

“The Club’s financial results for the year end June 2011 are extremely strong.  We can now count ourselves amongst very few clubs across the UK and Europe who are operating at close to break-even.  What is particularly pleasing is that we have achieved this whilst also ensuring we have a strong squad sitting firmly in the top third of the table and currently pushing for a European place.

 “We have dealt wisely in the transfer market and reinvested the income received from player sales into improving the squad.  Our net cash spend on player transfers to June 2011, which includes the sale of Andy Carroll, was a receipt of £5.4 million, with a further £25 million in cash spent on transfers and players’ wages since June 2011.

“We have also worked hard to address an inherited wages-to-turnover ratio which was unsustainable.  Wages now account for just over 60 per cent of turnover and we feel this is a healthy and affordable level.

“A further significant achievement has been to clear all of the Club’s interest-bearing debt, which in 2006/7 was costing £6.5 million a year just to finance the debt.  Mike Ashley continues to provide loans totalling £140 million interest-free, for which we are extraordinarily fortunate. Once again, Mike has not taken any money out of the Club.”     

The full annual accounts, including the financial statements of the Group and the Independent Auditors’ Report for the year have been submitted to Companies House today.

 

  • Mal

    ‘The net cash spend on player transfers to June 2011 was a receipt of £5.4 million, which includes the fee for the sale of Andy Carroll to Liverpool FC in January 2011.’

    I’ll be interested to see the accounts. We also sold Nolan in this accounting period which means £38million of incoming transfers. I can’t quite work out where the £33million spending on player transfers has gone. Whilst the club has to be applauded in getting the financial side of things in order, why is it that many of us feel we aren’t told the whole story, but instead some sort of doctored version which makes Derek look good and implies that almost the whole of the money that came in from sales was spent on buying new players by the end of June 2011. We know that they didn’t do this and they should just say so and be prepared to justify it honestly.
    Good though that they got rid of the interest charges on the external debt and that Mike Ashley is providing his loans interest free – credit where credit’s due. If only he did things differently, and didn’t keep thinking of ways to upset us, he could become quite popular.

    • Dunston Mag

      ‘The net cash spend on player transfers to June 2011 was a receipt of
      £5.4 million, which includes the fee for the sale of Andy Carroll to
      Liverpool FC in January 2011.’

      Something definately does not add up. Here’s my maths:

      Players IN: Perch 1.0m, Tiote 3.5m, Ben Arfa 5.75m, Cabaye 5.0m = £15.25m

      Players OUT: Carroll 35.0m, Nolan 3.5m = £38.5m

      Net cash spend should be receipt of £23.25m, nearly £18m difference to what Derek is claiming. Some of my transfer fees may be out and we might have spent some money on ‘agents fees’ but it is still a big difference.

      I’ll echo your comments 1) that Ashley should be given credit for getting the finances in order, and 2) it doesn’t feel like we’re being told the whole story – finishing the statement with ‘Once again, Mike has not taken any money out of the Club’ does not fill me with confidence, its as though he thinks he needs to clarify this because he knows the numbers do not add up.

  • Juniorchubbs

    the man is a businessman. he is only doing his job, running a business. the fact that he has no respect for the fans overshadows the money bit. theyre a pair of nobs.