Latest Accounts

allezlesbleus · October 31, 2014

Dymak said:
I'm happy with the results, but I just hope everyone doesn't get pre-occupied with reducing the debt. For example, we have chosen to reduce the debt by 17 million pound (21 million Euros), well you can buy players like Cabaye or Firmino for that type of money. And had we done so, our debt still would have been entirely manageable and relatively small in Premier League terms at just 45 million. We would also have another extra 60 million or so coming our way over the next two years. It wouldn't have been risky at all.

The main beneficiaries from the reduction of debt are the major shareholders as it increases their equity and ROI in the event that Everton were sold. It also may make us more appealing to a new owner, and it may also make borrowing for a new stadium easier, but it actually means that the money to pay off the debt would return to Kenwright's pocket in the event of a sale, it wouldn't be going into the club, although we would have a new owner.

I guess I'm asking you what you prefer? A reduction in a debt that was/is entirely manageable, or making our squad strong enough to truly compete in the champions league through signing the likes of Cabaye or Firmino?

Interesting points.

Foot Long Hot Dog · October 31, 2014

angrysoba said:
One question here, (I admit I haven't read the whole thread) but don't we currently have NOBODY sponsoring Everton shirts in the Europa League?

I mean, I'm a big fan of minimalism and all that, but isn't there a wasted opportunity there?

No, Chang are our only shirt sponsor.

If you're referring to Lille, alcohol advertising ban in France

joey_macmo · October 31, 2014

angrysoba said:
One question here, (I admit I haven't read the whole thread) but don't we currently have NOBODY sponsoring Everton shirts in the Europa League?

I mean, I'm a big fan of minimalism and all that, but isn't there a wasted opportunity there?

that was only because it was france, Chang will be back on our shirts thursday

Caolam · October 31, 2014

Surely economic success comes from a range of measures. Debt reduction is one of them, as is increasing your assets and your turn over. We are on an upward market at the moment, TV money is supporting a lot of clubs and it looks set to increase in the next deal but after that it may not be so good. These things tend to go in cycles. CL would certainly give a big boost to our coffers but remember Leeds.
We appear to be on the right road, I would like to see the club being promoted more overseas, especially in America, looks like a big potential football market with the disposable income.
Keep doing what we are doing, plan ahead and let's not have a knee jerk reaction.

Foot Long Hot Dog · October 31, 2014

What we only made £28m and only reduced the debt by £17m?

Fuming here.

Woolly Blue · October 31, 2014

Dymak said:
I'm happy with the results, but I just hope everyone doesn't get pre-occupied with reducing the debt. For example, we have chosen to reduce the debt by 17 million pound (21 million Euros), well you can buy players like Cabaye or Firmino for that type of money. And had we done so, our debt still would have been entirely manageable and relatively small in Premier League terms at just 45 million. We would also have another extra 60 million or so coming our way over the next two years. It wouldn't have been risky at all.

The main beneficiaries from the reduction of debt are the major shareholders as it increases their equity and ROI in the event that Everton were sold. It also may make us more appealing to a new owner, and it may also make borrowing for a new stadium easier, but it actually means that the money to pay off the debt would return to Kenwright's pocket in the event of a sale, it wouldn't be going into the club, although we would have a new owner.

I guess I'm asking you what you prefer? A reduction in a debt that was/is entirely manageable, or making our squad strong enough to truly compete in the champions league through signing the likes of Cabaye or Firmino?

It's a question of balance really. If there's some debt which can be paid off with little or no penalty then it saves us the interest payments going forward.

The other side is committing cash to strengthen the squad, which is the signing of Lukaku and Besic part of it, plus paying Eto'o's wages and getting a couple of young ones in for the future.

Unless an agreement to refinance / pay off early the long-term debt can be reached I'd say reducing the debt by this kind of amount is pretty much a one-off and, as you've already said, if we have to take on more debt for the stadium then there's a certain amount of clearing the decks in preparation going on.

All in all, I'd say we've got it just about right in balancing the two sides. An operating profit of 20 million suggests we'll have some money in the transfer kitty come the summer, but some of the 20 million will go on wages so another Lukaku type signing looks unlikely but I'd guess there'll be a 10 to 15 million fund available.

MickA · October 31, 2014

Remember this increase in the main is due to BSkyB and BT. Other PL sides will also see similar boosts so it's a case of how individual clubs manage this income. People expecting an EFC with greater muscle in the transfer market will be sorely disappointed I feel.

Dithering Dougie · October 31, 2014

Foot Long Hot Dog said:
What we only made £28m and only reduced the debt by £17m?

Fuming here.

Osman's fault again

terraloon · October 31, 2014

So turnover increased by £34 million. TV money (which cant be used to fund any wage growth over £5 million) went up by £32.8 million. no problem with UEFa version of FFP however.

Wages went up by £6.3 million and operating expenses went up by £19.1 million.So allowable wage growth under the FA version of FFP is £6.2 million very close to £6.3 million

What is my concern is what has forced operating expenses up so much . Have the club left fees paid to loan players (in respect of their wages)in this category which if they I am pretty sure will be added back into wage expenditure under FFP rules at the PL

Visitor22 · October 31, 2014

Hate to piss on everyone's chips but you need to take a closer look at the actual accounts, particularly at Borrowings and Net Debt. Borrowings is what you owe people you lend money from whilst net debt is borrowings minus cash held.

These are the figures from the report - rounded off for simplicity

Borrowings 2014 £49m
Cash held 2014 £21m
Net Debt 2014 £28m

Borrowings 2013 £48m
Cash held 2013 £3m
Net Debt 2013 £45m

So total borrowings have actually increased by £1m rather than fallen. Now let's say that the cash held was not used to pay off some of these debts, let's say it was given to Chelsea for Lukaku - this means that the debt situation has not really changed - we still need to give £49m plus interest to someone at some point.

By the way, two further things from these accounts

1) interest payments on debt has increased from £4.2m to £5.2m (interest only, doesn't include repayments of original amount)
2) within the debt structure, the club is borrowing even more against future incomes at high interest rates than they were previously -
Other loans also include £20,924,000 (2013: £12,868,000) secured by legal charges over the Company’s guaranteed Premier League broadcast revenues. This loan incurs interest at a rate of 8.8% and was repaid in August 2014. The Group has obtained further funding post year end as described in note 1.

angrysoba · October 31, 2014

joey_macmo said:
that was only because it was france, Chang will be back on our shirts thursday

Foot Long Hot Dog said:
No, Chang are our only shirt sponsor.

If you're referring to Lille, alcohol advertising ban in France

Ah! Thank you for the explanation. That makes sense, although isn't alcohol advertising also banned in Russia? What about the Krasnador game?

Woolly Blue · October 31, 2014

Visitor22 said:
Hate to piss on everyone's chips but you need to take a closer look at the actual accounts, particularly at Borrowings and Net Debt. Borrowings is what you owe people you lend money from whilst net debt is borrowings minus cash held.

These are the figures from the report - rounded off for simplicity

Borrowings 2014 £49m
Cash held 2014 £21m
Net Debt 2014 £28m

Borrowings 2013 £48m
Cash held 2013 £3m
Net Debt 2013 £45m

So total borrowings have actually increased by £1m rather than fallen. Now let's say that the cash held was not used to pay off some of these debts, let's say it was given to Chelsea for Lukaku - this means that the debt situation has not really changed - we still need to give £49m plus interest to someone at some point.

By the way, two further things from these accounts

1) interest payments on debt has increased from £4.2m to £5.2m (interest only, doesn't include repayments of original amount)
2) within the debt structure, the club is borrowing even more against future incomes at high interest rates than they were previously -
Other loans also include £20,924,000 (2013: £12,868,000) secured by legal charges over the Company’s guaranteed Premier League broadcast revenues. This loan incurs interest at a rate of 8.8% and was repaid in August 2014. The Group has obtained further funding post year end as described in note 1.

Good info that mate.
Have you got a link to the actual accounts rather than the press statement then ?

Visitor22 · October 31, 2014

All accounts from last ten years or so can be downloaded here

http://www.evertonfc.com/content/club/shareholders-association/statement-of-accounts

Page 84, section 16 of Notes to the Accounts deals with Borrowings