Carlisle United announces profits but also an increase in debt in the latest accounts
Carlisle United made a profit of nearly £400,000 in 2020/21 – but saw their debt soar to £3.16million.
The figures were published in the Blues’ latest audited accounts.
United announced their financial results this morning.
The Cumbrians have seen their turnover decline after a season affected by the Covid-19 pandemic.
But their latest benefit saw chief executive Nigel Clibbens conclude United’s financial results were “excellent”.
The scale of the debt, however – up to £100,000 due to ongoing interest payments to Purepay Retail Limited – also highlights a major issue that remains to be addressed if the club are to move forward under a new regime.
Clibbens admitted that meant there was still some “uncertainty” over Brunton Park’s long-term image. United, at the end of the year, owed Purepay £2,329,699.
United auditors MHA Moore and Smalley also note that United “have not received confirmation from [Purepay] that they will not claim reimbursement of the sums due to it for a period of twelve months from the date of closing of these accounts, and that consequently PRL may claim reimbursement of the balance.
This uncertainty, add the auditors, “indicates that there is a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”
For the year ending June 30, 2021, United made an after-tax profit of £397,000, having reported a profit of £782,000 the previous year, despite a season in which fans were mostly unaware. been able to attend games due to Covid.
Overall revenue was £4.06 million, down from £4.59 million, with recurring revenue of £616,000, down from £1.36 million – the reduction of the effect of the pandemic on ticket sales, retail and business activity.
Non-recurring and one-off revenue rose from £200,000 to £825,000 thanks to Premier League grants, iFollow streaming and fan donations resulting from the pandemic.
United received £242,000 from the government furlough scheme, up from £361,000 in 2019/20, meaning total one-time Covid-related income of £1.07m.
The Blues said this, along with other cost savings, “fully offset the £1.2m reduction in our ‘normal’ recurring turnover.”
In terms of ‘football fortunes’ – income from player sales and cup races – United’s figure fell from £1.45m to £1.07m, but the club said that he had not yet received all that money.
The amount from player sales alone was £977,000.
Carlisle’s wage bill fell by £100,000 to £2.4m while football spending remained at £2m.
The Blues’ net assets were valued at £5.3m with net cash on hand dropping from £396,000 to £1.24m.
United still owe £213,000 in player sales revenue.
Chief executive Clibbens, commenting on the figures on the club’s website, said: “The filing of the audited annual accounts and the details made public now are entirely historic.
“However, major financial headlines have already been shared in detailed financial updates given to fans since the end of the year.
“The 20/21 financial results are excellent under the circumstances and show us in a good position on a daily basis.
“The club’s underlying trading continued to hold up well in the difficult circumstances on and off the pitch.
“We have fully absorbed all the exceptional negative financial effects of the coronavirus [through a combination of cost savings, fan donations in lieu of refunds, claims under the HM Government Coronavirus Job Retention Scheme and other one-off Coronavirus related income, such as iFollow and grants from the Premier League].
“Obviously player transfer revenue was important again. It remains a crucial part of our funding and operating model every year.
“A full and detailed explanation of the results of 20/21 is contained in the annual accounts. Again this year they provide comprehensive information. This year we have added additional disclosure of a statement of cash flows.
“It’s part of the commitment to be transparent about the club’s finances and the issues and challenges we face.
“As of June 30, 2021, we had cash on hand and other cash transfers due, and no creditor pressure or debt repayments scheduled for 21/22, except for small amounts on the ‘EFL. The old VAT deferral in progress at the end of the year has since been settled.
“We are pleased to have been able to emerge from a difficult period, financially well positioned, with few legacy issues from the coronavirus. commercial liabilities remaining low.
“All of our PAYE and VAT liabilities continue to be paid in full and on time. We also recognize that the club faces uncertainties and challenges going forward.
“As we changed course and takeover talks ceased towards the end of 2021, there is some uncertainty until the issue of repayment of the PurePay loan is resolved.
“The support of everyone who has supported us has been crucial and we hope this will continue going forward. Thank you all.”
In his notes to the accounts, Clibbens added: “In 2021/22 we expect to incur a very significant operating loss before any new fortunes in football.
“With no anticipated shareholder support or new financial backing under the Purepay Retail Limited commercial loan facility, this means that the new unbudgeted football fortunes and existing cash reserves will continue to be very substantial. to fund the club.
“We expect that most of our cash reserves in June 2021 and any anticipated deferred revenue from previous year player sales will be required to fund the club’s normal financing needs, anticipated increases in total expenditure football, the new unknown impact of the coronavirus and the financial legacy issues related to the coronavirus from March to June 2021.
“These challenges will make the year ahead difficult from a loss perspective, although our cash reserves will be adequate. We expect to be able to operate without any external third-party cash support, as we have done since May 2019.
“By June 2022, we could then have little financial liquidity reserves and a cushion for 2022/23 without further new non-recurring business income, football fortunes or external support.
“With our cash reserves depleted by 2021/22 losses, the club could be in a much higher risk position in 2022/23.”
Clibbens also comments in the debriefs that the long-term stadium issue remains key to United’s future.
“Significant progress beyond the current approach of emergency renewals only [to Brunton Park] will need a united and communal approach, with fans and the public and private sectors working together,” he said.
“This inevitably requires long-term planning and leadership and, above all, certainty about the future direction of the club.
“That remains the case, the stadium’s issues cannot be resolved until the issues over long-term ownership, direction and vision for the club are resolved – that means succession must first be decided. resolved, before action can be taken.”