Swansea City published their accounts for the year ended 31 July 2018. The club’s operating losses more than doubled to £933,000 a week despite being in Premier League as revenue was flat but costs increased. Turnover declined marginally at £126.8m. Matchday revenue was broadly static at just under £7.4m or six per cent of turnover.
The lower league finish for the Swans caused broadcasting prize money to fall by £5 million, partly offset by new commercial deals. Broadcasting will fall by a further £60 million in 2018/19 and then £10m and £20m and £7m unless promoted back to the Premier League. Media accounts for 83 per cent of turnover, a high but not unusual figure for wha was then a Premier League club.
Swansea interest cost up and now £36,000 a week although Kieran Maguire of the PriceofFootball says that 'over half of this is due to the dark arts of accounting rather than payments to banks.' Borrowings were up from £9m to £15m.
Player trading in 2017/18 was made up of player purchases of £55 million and player sales of £61 million. Since 31 July 2018 there have been Swansea player sales of £22.7 million and purchases of £1.6 million which will show up in next year's accounts.
Swansea spent £1.3 million on infrastructure spending in 2017/18 and bought land in October 2018 next to the Liberty Stadium for £1.4m for expansion of the ground. The strategic report that 'expanding the capacity will only be considered should we return to the Premier League.'
Kieran Maguire commented, 'Swansea paying out £101 in wages and transfer fee amortisation for every £100 of revenue. Leaves no money to pay the other overheads and club relying on player sales and owner injections to cover the bills although club not alone with this lack of cost control.' Football employees increased from 264 to 287. Maguire also noted, 'One eyebrow relating cost in the Swansea accounts is the auditors charging just £25,000 for the audit and over £306,000 for tax avoidance advice.'
Total renumeration to directors at the Abertawe club increased broadly in line with inflation to £654k.
'Going concern' risk
The report from the independent auditors, responding to a note in the accounts from the company, states: 'Should the forecasts, which include receipts from player trading, continuation of external facilities and operating cost reductions, prepared by the board not be realised, the company would need to find further sources of funding in order to bridge its cash flow position until appropriate player transactions are fulfilled. These conditions indicate the existence of a material uncertainty which may cast significant doubt on the company's ability to continue as a going concern.'
This is essentially a precautionary statement, but emphasises the reliance of the board strategy on successful player trading. In the strategic report it is stated that the primary source of income is from player trading.
Comments
Post a Comment