Accounts reveal annual revenues for the year to June of £189m and also a further loan from majority shareholder Farhad Moshiri of £100m. Tony McDonough reports
Everton FC is reporting record annual revenues of £189m but also a loss of £13.1m following hefty pay-offs to staff including former head coach Ronald Koeman.
It has also revealed a further injection of capital, in the form of a shareholder loan, from majority shareholder Farhad Moshiri who has put another £100m into the club via Bluesky Capital. This adds to the existing shareholder loan of £150m.
The loss compares to a profit of £30.6m for the previous year with the Premier League spending significant sums on new players and incurring exceptional costs of £34m, £14.4m of which related to settlement costs for the termination of former employees.
This would have included the departure of Koeman and his staff. He was replaced by Sam Allardyce who later also moved on to be replaced by current head coach Marco Silva.
The latest figures for the club, which is looking to move out of Goodison Park and into a new stadium in Liverpool’s docklands, cover the 12 months to the end of June 2018 and they show total revenues for the year of £189m – a 10% rise on last year.
Commercial revenue from sponsorship, advertising and merchandising grew by 34% from 2017, reaching a record £20.7m, with the club’s first African main partner, SportPesa, and the innovative engagement with sleeve partner Rovio and its iconic game, Angry Birds, augmented by a growing portfolio of Official Club Partners.
Combined with gate receipts, sponsorship and other commercial income increased by 45 per cent from 2017. Driven by a record 31,282 season ticket members, an average attendance at Goodison Park of 38,797 demonstrated the unwavering support of the club’s fans – with every home seat sold for every Premier League match in the 2017/18 season.
Premier League attendances and participation in the UEFA Europa League combined to achieve a 16% increase in gate receipts when compared to the previous season.
Broadcasting revenue – which makes up 69% of Everton’s total revenue, a reduction from 76% in 2017 due mainly to the increase in commercial revenues – dropped only marginally from £130.5m in 2017 to £130m.
An eighth-place finish secured the club £25.1m in merit payment and contributed to the eighth highest Premier League broadcasting distribution, down from seventh in 2016/17.
Continued investment in the first-team squad, which included the additions of Michael Keane, Gylfi Sigurdsson, Cenk Tosun, Theo Walcott and Jordan Pickford, led to the doubling of intangible assets from £121m in 2017 to £240m in 2018 and was the main driver for rising staff costs from £104.7m in 2017 to £145.5m in 2018 and an increase in player amortisation from £37.3m in 2017 to £66.9m in 2018.
As a result of this investment, the club’s total wage to turnover ratio has risen from 61% in 2017 to 77 per cent in 2018 (this figure would be 73% with outsourced operations in retail and catering taken into account).
In addition to the first team’s wage bill, other operating costs, such as the academy and first-team support, also increased. Everton also incurred costs from competing in the UEFA Europa League as well as a cost of £11.4m for the design and other work relating to the new stadium. These costs cannot be capitalised until planning permission has been granted.
As a result, the Club made an operating loss of £22.9m compared with an operating profit of £25m in 2017 (both excluding player trading). The club reported a loss after tax of £13.1m compared to a profit after tax of £30.6m in 2017.
Everton chief executive, Denise Barrett-Baxendale, said: “For the second consecutive year the club has generated record revenue. Gate receipts, sponsorship and other commercial income increased significantly by 45% and the continued and quite magnificent support of our fans meant that season tickets reached the cap with more than 10,000 on a waiting list.”