As flagged yesterday, the financial report and accounts for Charlton Athletic for the year ending June 2015 are now available at Companies House.
The group consists of three entities:-
1. Baton 2010 Limited, the holding company
2. Charlton Athletic Football Company Limited, the company that operates the football club
3. Charlton Athletic Holdings Limited which is a property holding company
I use Baton 2010 Limited to give a proper overall view
of the club’s finances as it encompasses the results of all the subsidiaries and
includes all of Charlton’s activities. This
was the original vehicle set up by Richard Murray to rescue the club.
General Comments
The loss for the year was £4.4m (compared to £5.9m last year) rather
than the widely reported £3.78m which only accounts for the football
subsidiary.
Turnover was down in all areas, despite a small increase in
crowd attendance. The outsourcing of the
catering to Delaware North explains most of the drop in match day income. The deal is similar to the Nike deal with the
superstore in that the club does not take the risk of purchasing and selling
foodstuffs but takes an agreed percentage of turnover. This results in a reduction in both turnover
and costs but hopefully an improved profitability.
Staff & Player Costs
The cost of player salaries remained flat at around the £10.2m
mark
Noticeably the number of non-football staff fell from 60 to
45 and the temporary match day staff has fallen from 306 to 112. The
fall in the latter number is probably due to the catering being outsourced to
Delaware North. I would expect this
figure to fall even further next year as the automated entry system no longer
requires the gate booths to be manned.
The book value of the squad remained flat. Bauer and Ba were acquired in June (other
players were purchased after the financial year end) but their cost was offset
by player amortization in the profit and loss account.
The club benefitted from player sales to the tune of £4.4m. This was mainly from the sale of Gomez and
Poyet. As these two players came from
the academy and so would have been carried the books at zero cost so the entire
transfer fee would be accounted for as profit.
As expected, it looks like the club sold Morrison for a pittance but
surprisingly it looks like they managed to make a little bit of money of
Lepoint too.
The club continues its policy of applying add on fees for
players sold (based on appearances, call ups to the England squad etc). This contingent revenue increased by £2m over
the year. However, the club also looks
like it is trying to reduce the upfront costs of players it acquires by
agreeing to pay contingent fees too as these roughly rose by £1.3m. As they are contingent we do not know if and
when these might be received or paid.
Poyet’s current form would seem to rule out further payments from his
sale, although I suspect we will see more money from the Gomez deal once he is
fit again.
There are no directors’ fees shown in the accounts. The only director probably taking a salary is
Katrien Meire and it’s probably coming from Staprix or another part of
Duchatelet’s organisation. It is
reasonable to expect her to take a salary even though we might question her
experience for the role but this move takes out a level of transparency that we
would expect.
Club Financing
As we all know, the club is mainly financed by its parent
company Staprix NV which is Roland Duchatelet’s holding company. However, rather than putting money in as equity
it has been lent to the club at a rate of 3%. These loans increased during the
year from £28.5m to £38m. This covers
the club’s losses, capital investment and repayment of some of the bank debt.
Interest of £955,000 was charged on these loans during the
year. While the rate is a very
reasonable commercial rate it misses the point in that it is paying the owner. If this was equity then it is unlikely that a
dividend would be paid out owing to the losses incurred by the club. This makes Staprix a creditor rather than a
shareholder which puts Duchatelet’s money on par with the milk bill.
The only reason I can think for this is that interest is tax
deductible and the money is being recycled anyway in additional loans. However, you can only claim the tax back if
you actually pay tax in the first place and the company needs to be profitable first
before it can offset this.
The Future
The focus on next year’ accounts (to June 2016) will be on
player costs and turnover. We brought in
a number of players in the summer and a lot of players on short term loans and
contracts in January. This, combined with new contracts for Gudmundsson in the
summer and more recently for Lookman are bound to increase the wage bill. This will probably be partially offset by the sale of
Lookman to a Premier League club.
I expect turnover to be down on the basis of falling
attendances as results on the pitch failed to live up to expectations. It will be interesting to see the impact of
the Charlton Card campaign too. The
rumours are that Delaware North are not happy with how things have turned out on their contract.
#support the team not the regime
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