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Southampton Issue Financial Accounts For 2019/20
Tuesday, 12th Jan 2021 21:20

St Mary’s Football Group Ltd, incorporating Southampton Football Club, has released its financial statements for 2019/20, which highlight the significant impact the devastating COVID-19 pandemic had on the Group’s financial performance.

Saints have understandably lost a lot of money in the Financial period 2019/20, a total of £76 million, first thoughts are that this is a high amount, especially as Covid 19 only reared it's ugly head in the last 3 months or so of the financial year.

The club state that part of the problem is that due to the extended season player transfers out where not taken into account as the financial year closed before the season had ended, but this would have minimal impact given the club spent around £13 million more than the £21 million raked in by the sale of Pierre Emile Hojbjerg and Harrison Reed.

Main problems are the drop in revenue from TV and Premier League placings which due to the season end have been deferred into the 2020/21 accounting period and this could account total around £31 million,if this had been accounted for in the 19/20 financial year as normal, then the real loss would have been reduced to £47 million

As CEO Martin Semmens admitted at the end of last year, the club is now operating at a loss of around £3 million a month, although there is a borrowing facility in place that will cover that over this season.

These are difficult times for football clubs at all levels and Saints like many have had to cut their cloth to enable them to survive, ironically one of the biggest gripes from the supporters was the lack of investment from owner Gao Jisheng, but that has proved to be a blessing in disguise, in that we have been running as a business for several years without the need for financial input to cover our costs, we more than any other club are in a position to get through these difficult times.

The reality though is that the club need all the help they can get from supporters going forward, those that bought season tickets last summer helped cash flow at a difficult time when revenue was deferred to the delayed end of the season and that will be needed again this summer when hopefully we will be able to return normally for season 2021/22.

In the meantime buying merchandise can also help, as many know I am not a buyer of replica shirts etc, but as Semmens said a couple of months ago, he will take all the help he can get and if that is £100,000 here and there, then it all makes the debt a little left and the recovery a little easier.

These accounts don't make good reading, but they will probably make better reading than many other clubs in the Premier League.

A summary of the 2019/20 results is provided below from the club's official statement.

Revenue

Despite finishing in 11th place in the 2019/20 Premier League season (five places higher than the previous season), the Group’s turnover decreased to £126.6m (2019: £149.6m).

Broadcasting revenue fell to £93.5m (2019: £112.8m) as a consequence of the season ending after 30 June 2020, whilst match day revenue fell to £14.5m (2019: £17.0m) due to matches being played behind closed-doors.

The total 2019/20 revenue foregone as a result of the pandemic in the financial year was £10.3m, with a further £20.9m revenue deferred into the year-ended 30th June 2021.

If the revenue which should have been earned and recognised in the financial year had not been lost or deferred due to the pandemic, the 2019/20 revenue would have totalled £157.8m, being an £8.2m (5.5%) increase on the previous season.

Costs

The pandemic resulted in £1.5m of net additional costs of sales and administrative expenses in order to enable the men’s first-team squad to train and conclude the 2019/20 season in a COVID-19 secure environment.

£3.6m of costs that would ordinarily have been incurred in the financial year have also been deferred to the financial year ended 30th June 2021, as they’re directly linked to the matches played.

Player trading

The ability to generate profit on the disposal of player registrations in the financial year was significantly impacted as the Summer 2020 transfer window did not open until July 2020, after the financial year ended.

The profit on the disposal of player registrations of £13.9m (2019: £20.9m) generated during the financial year arose from the sales of Gallagher and Austin in the Summer 2019 transfer window, together with contingent
transfer receipts in relation to previously transferred players being received during the season.

The amortisation of player registrations increased to £56.7m (2019: £51.0m) as a result of the purchases of Adams, Djenepo and the loan of Danso in the Summer 2019 transfer window.

Net loss

A net loss before tax of £76.1m (2019: loss of £41.0m) was incurred.

Taking account of the impact on both revenue and costs, the total value of foregone profit before tax because of the pandemic is estimated to be £11.8m, with a further £17.3m of profit being deferred into the financial year-ended 30th June 2021.

If the profit which should have been earned and recognised in the financial year had not been lost or deferred due to the pandemic then the Group’s net loss for the financial year would be £47.0m.

A full copy of the St Mary’s Group Ltd financial statements can be found here.

Club Statement, Toby Steele (Managing Director):

As with many companies and industries, the Group is in the midst of a challenging financial environment due to the impact of the COVID-19 pandemic. This is reflected in the financial results for 2019/20 and necessitated the Group to restructure its debt facility during June 2020.

Despite these challenges, our Group-wide staff have shown great resilience, facilitating a smooth return to training and matches for men’s and women’s teams across all age groups, as well as the return of fans, albeit briefly, during season 2020/21.

We also have great pride in the work of the Saints Foundation, in particular the collaboration with Group staff in the Saints as One initiative during the early stages of the pandemic.

The ongoing support of our fans, many of whom purchased a 2020/21 season ticket at a time when the return of football was unknown, is greatly appreciated and it is our hope to get fans back where they belong, supporting all our teams in person, in greater numbers as soon as possible.

We wish all our fans a safe 2021.

Photo: Action Images



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saintmark1976 added 10:44 - Jan 13
It appears to me that in the last two years for which accounts are available the club’s accumulated losses are £112 million whilst their nett assets have declined by £61 million.

Even allowing for some distortion for the current plague situation, the last suggested figure that Mr Goa’s 80% of the club is being valued at £200 million for take over purposes, looks beyond optimistic to me. Any thoughts Nick?
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