QPR post smallest loss since 2006

The authoritative Swiss Ramble reviews the latest accounts of QPR.   Thrpre-tax loss narrowed from £16.4m to £4.5m, despite revenue falling £3.8m (21%) from £18.3m to £14.5m, as profit on player sales rose £11.7m to £17.6m and there was no repeat of prior year’s £4.5m write-off of previous training ground development.

The £4.5m loss is actually one of the better results in the Championship. Even before the full effects of the pandemic were felt in 2020/21, many clubs lost more than £20m, while Bristol City and Millwall lost £38m and £14m respectively last season.

Although QPR continue to lose money, their turnaround is emphasised by the 2020/21 £4.5m loss being the lowest since 2006. However, since Tony Fernandes arrived in August 2011, total losses have been £230m – or £290m if we exclude the £60m loan write-off in 2014.

The £3.8m revenue reduction was entirely due to the COVID driven £3.8m fall in match day income from £4.0m to just £207k. Broadcasting rose £0.1m (2%) to £8.6m, including iFollow streaming income, while commercial was flat at £5.8m.  £15m revenue is now firmly in the bottom half of the Championship, highlighting the club’s ability to punch above its weight, as this is only around a quarter of clubs benefiting from parachute payments

The club have not quantified the effect of COVID, but the Swiss Rambles estimates they lost around £3m revenue in 2020/21, mainly £4m gate receipts, as games played without fans. Partly offset by £1.3m iFollow streaming and £0.5m furlough payments.   They would have been close to break-even without the pandemic.

Financials boosted by £17.6m profit on player sales, £11.6m higher than prior year £6.0m, almost compensating for operating loss.   This was very largely driven by sale of Eberechi Eze to Crystal Palace.  QPR have not traditionally made much money from player sales, but this has been on an upward trend with £26m profit in the last three years. That said, very little has been generated from player trading in 2021/22.

The Super Hoops no longer benefit from parachute payments, having received £90m in the 4 years up to 2019. These are so significant that they make it difficult for others to compete, e.g. in 2019/20 a relegated club received £42m in year one, £34m in year two and £15m in year three.

Average attendance (for games played with fans) was 13,721 in 2019/20, which was down 4,100 since relegation and is one of the lowest in the Championship. However, the club noted that attendance to date this season has seen “a marked improvement”.

The club have been looking for a new ground for some time, as the club “is not financially sustainable in the long-term” at the Kyan Prince Foundation Stadium). The Linford Christie Stadium in Wormwood Scrubs is the preferred choice, but they may have to look further afield.

The wage bill rose £4m (21%) from £20m to £24m, as the number of players, managers & coaches increased from 99 to 113, though wages have still fallen by a staggering £51m (68%) compared to £75m under Harry Redknapp in the 2014 Championship.

Despite the 2020/21 growth, QPR £24m wage bill is still comfortably in the bottom half of the Championship, ahead of Millwall £21m. Far below Norwich City £67m and Brentford £41m in 2020/21, though both of those clubs included hefty promotion bonuses.

The wages to turnover ratio increased from 109% to 166%, which is clearly not sustainable, though was severely impacted by the COVID revenue decrease in 2020/21. Even before the pandemic, most clubs in the ultra-competitive Championship had ratios well above 100%.

The club have spent £25m on new players in the last 5 years, though 2019 included a transfer embargo as part of the FFP settlement. This is a huge reduction from the £124m they splashed out on transfers in the preceding 5-year period.  There has been less than £3m expenditure since year-end.

The gross debt rose £9m from £53m to £62m, including £55m from the owners (£46m loan plus £9m convertible bond issued to Ruben Gnanalingham’s wife) and £7m EFL loan. It would have been much higher without capitalising £232m loans (£17m last year) and writing-off another £60m.