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NCFC annual accounts

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So they''ve released the accounts for the year ending 30th June 2015.

You can download the full pdf from the website, but the ''key points'':

Revenue down to £53.6m (£95.5m in 2013-14) as a result of a season in the Championship (broadcasting revenue down £39.7m).

Operating loss of £8.5m (Operating profit of £9.5m in 2013-14), although after adjusting for bonus payments of £11.1m that were conditional on a Premier League return, underlying operating profit of £2.6m.

Loss after tax of £5.2m (Profit after tax of £6.7m in 2013-14).

Loss in the year driven by performance-related bonus costs as explained above.

As at 30th June 2015, external debt remained at £0.0m (£0.0m as at 30th June 2014).

Cash outflow in the year of £5.0m, driven by the purchase of players totalling £14.1m (net outflow of £2.7m after player sales) and Corporation Tax payment of £2.4m.

Key actions taken in the business within the last 12 months include:

Building a squad capable of returning to the Premier League at the first attempt despite a significant reduction in revenue following relegation, whilst maintaining a positive cash balance and having no requirement for external debt.

Continued strategy of investing all available cash in to the playing squad.

10 new players were recruited during the 2014-15 financial year to both replace the 5 players who departed and further enhance the Championship squad.

A further 6 new players have been recruited into the squad since the end of the 2014-15 financial year with 2 departing.

In addition, several senior players have had their contracts renewed.

Restructure of the football department and supporting functions substantially complete by the end of the financial year with the Club’s footballing principles being applied at all age levels within the playing squads.

Increasing local community support through official charity partner Norwich City Community Sports Foundation, helping 31,000 individuals through participation in a number of different sporting initiatives.

In addition, the Club has supported a number of national and international charity initiatives.

The Club’s primary objective for the current season is to remain in the Premier League, aiming to finish in the highest possible position.

Norwich City Chairman Alan Bowkett commented:

“We are pleased to report that the Club was successful in returning to the Premier League at the first attempt whilst maintaining a robust financial position, despite a £40m reduction in TV broadcasting revenue.”

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Lots more here
http://www.eveningnews24.co.uk/sport/norwich-city/norwich_city_premier_league_promotion_earned_players_and_staff_11_1m_bonus_club_accounts_reveal_1_4283264

http://www.eveningnews24.co.uk/sport/norwich-city/premier_league_survival_and_100m_in_tv_cash_key_to_norwich_city_s_carrow_road_expansion_1_4283220

As Tilly said no shocks or surprises

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How much did Newton say was wasted on signings? The accounts state £14.1m on the transfer fees plus wages and only really Jerome made any impact of the ten that came in.

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Staff costs were down from £54m to £48.5m... but additional bonus

payments for promotion back to the Premier League cost the club £11m.Therefore, did any of the players make more money from the club being relegated and then promoted than if the club had stayed in the Premier League?

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This is worrying I was hoping that the lack of summer spending was down to high losses last season.

Not the case so where has the money gone why no money spent on the defence. I smell a rat

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[quote user="lappinitup"]Still waiting for Purple''s breakdown. He''s late this year. [^o)][/quote]Ah but you see, lapps, I have been waiting for Newton''s usual magisterial account, so I could then truly say I have stood on the shoulders of a giant. Either that or I have been trying to have a life...[:D]

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I just wondered if there was any clue in the accounts as to whether the three-year ST offer was indeed forced on us, or if it was simply a goodwill gesture.

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There''s just no interest in this anymore[:''(]

 

I''m going to raise a glass to Mr Carrow and Tangie and all our other absent friends.

 

Is there anything about a spine road this year[:^)]

 

 

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[quote user="nutty nigel"]

There''s just no interest in this anymore[:''(]

 I''m going to raise a glass to Mr Carrow and Tangie and all our other absent friends.

[/quote]

Cannot agree with that Nutty as on a lesser site somebody looks as though he has a question lined up for Mr.McNally. He is another one of those absent friends who delights in making snidey remarks aimed quite clearly at the Pink Un. Seems funny to me that they cannot keep away from here yet will not post.

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The basic picture was expected, because of the known fall in TV money. But there are a few points to make, bearing in mind that accounts (just like ones''s personal finances) are only a snapshot of a moment in time and so can produce a misleading impression. And can, given our recent visits to various divisions, be dislocated from the current reality, and mean in some cases the relevant comparison is not with the previous year but with the last time we were in the Championship (2010-11). This dislocation may also provide various accounting ironies. Hence we made a profit the season (2013-14) we went down and a loss the season (henceforth referred to as last year) we went back up.1) One of the club''s key indicators is player wages as a percentage of turnover, the aim of which, presumably, is to show we don''t pay more than we can afford. In the three Premier League seasons that rose only from 34 per cent to 40 per cent but last year was 67 per cent, or £34.8m*. Not only sharply up, but much higher than the 47 per cent figure when last in the Championship. A sign that even with the contractual relegation clauses the wage budget was not slashed by way of a fire sale of players (perhaps it would now have been if we had not gone straight back up) and our wages were almost certainly among the very highest in the division. Despite those reduction clauses that wage spend of £34.8m last season was only slightly down on the £37.6m from the relegation season and markedly higher than the £25m and £29m we spent in the first two PL seasons. Of course wage inflation has paid a part there, and having a large parachute payment, but even so the comparisons are striking.2) What was also not slashed was the number of non-football staff  - the human cost of relegation for them being often forgotten. That figure only fell from 154 to 149. The number of footballing staff rose by 2 to 119.3) A professional accountant might be able to spot a clear reason for the unexpected offer of three-year season tickets, but it is not obvious to me (I doubt it has anything to do with stadium expansion - see below). Even financially stable clubs have short-term cash flow problems (although we have - or had - an overdraft facility with Barclays for such an eventuality). So my best guess remains that this apparent need for cash was occasioned by a combination of wanting to boost the January transfer kitty and promotion triggering substantial extra payments to clubs from which we had bought players.4) Whether David McNally (and none of what follows is a criticism of him) should have received a finance-triggered bonus despite relegation is a question for moralists rather than accountants. There is now, though, a change in wording that may be significant. In the past it was specified that he was paid separate bonuses for meeting financial targets and footballing ones. So in that relegation season  the much-reduced overall amount (down by £0.5m) was effectively explained by there being no mention of having hit the footballing target, which plainly we did not do.Now those two specific footballing and financial targets are not mentioned. Instead a vaguer "performance related bonuses...for achieving targets" phrase is used to explain a payment of £551,250 (up from £367,500), so potentially it will be harder to pin down the justification (or lack of it) for bonuses. In terms of openness and accountability a backward step.The argument here being that while McNally deserved a footballing bonus (for promotion) he did not deserve a financial bonus because relegation meant we then missed out on £40m or so of PL money (turnover slumping from £94m to £52m). If morality comes into it then over the two seasons he should have ended up missing one footballing bonus and one financial bonus, but whether he did now seems impossible to tell. The accounts also have McNally getting £0.3m accrued from a previously unmentioned (as far as I can see) long-term incentive scheme.That said, in the seasons we stayed up McNally received successively £1.38m and £1.64m, which fell to £1.11m (relegation) and now  £1.13m (promotion from the Championship), so the changes in his overall pay package have reasonably reflected our fortunes.**5) I had a discussion here a few days ago over whether we were paying off (ie had started and were carrying on) the debt owed to Smith and Jones, which threatened to become very semantic, and so got sensibly curtailed. What these accounts show is that we are not regularly paying off the debt, because we did not do so in this last financial year.We paid Foulger back £80,000, so we now owe him £460,000. But the amount for S&J remained the same, at £1.529m. It may be they decided not to ask for any money back while we were in the Championship and now want repayment to start again. But two things need to be remembered. In our three years in the PL we only paid back £580,000 from the £2.1m owed them at the start, so there is no sense of a continous and inexorable  process. Secondly. there is no certainty we will ever have to pay them back. They might decide to turn some or all of the remaining debt into a gift, or into shares.What is sure is that, for whatever reason, Alan Bowkett''s comment two years ago - "Internal debt to the directors is around £2.1m and we will be budgeting to eradicate that in this current financial year" - has not been borne out, but then in the same speech he said the aim was a top-ten finish that season...We are, much trumpeted, free of external debt. In the past I have seen it suggested we might have carried on being weighed down by debt by using money from another lender to pay off Axa and Bank of Scotland, and recently that we could have borrowed money to fund a more expensive transfer policy. Given that if we opt for stadium expansion that will almost certainly involve heavy borrowing I cannot see there would have been much support in the boardroom for either notion.6) The optimistic comments, albeit heavily caveated, from Bowkett and McNally on stadium expansion are not entirely surprising. Early in September I posted:"There is a need and a long-term financial argument, which is why the idea hasn''t been forgotten. True, the project was kicked into the long grass in September 2012. I get the sense circumstances may more recently have nudged it a smidgen back towards the boundary edge. We shall see."Perhaps we are now seeing the project edging into the shorter grass. My reasoning (very briefly) was as follows. Nothing is certain in football, but the directors may have come to the reasonable conclusion, based on our performance over the last five decades (and specifically the way we recovered from dropping for the only time to the third tier in 2009) that at worst we will end up yo-yoing between the top two divisions. So we are either in the Premier League or in a promotion fight in the Championship. Either way, Carrow Road will often be struggling to cope with demand or unable to do so.Demand hardly dropped off last season in the second tier (an average of 26,367 compared with 26,805 in the PL) and and the accounts show how important ticket revenue is in the second tier when the TV money is missing  - at £10.7m a fifth of turnover as against a still respectable 12 per cent in the PL. It is a fallacy that in the top flight the TV money means we don''t need more revenue from elsewhere - on the contrary it is because everybody get that windfall that we need extra non-TV income.---* This £34.8m figure is different from the figures you will see quoted in most of the various surveys and league tables of player wages, which are for overall staff costs. In NCFC''s case last season that was £48m.** I am assuming all these figures refer only to McNally as the only paid director.

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[quote user="lappinitup"]Thanks Purps. You have a terrific eye for detail and I really appreciate you sharing with us. [Y][/quote]Lapps, the figure I did find particularly interesting was that for player wage costs. The rumour, true or not, was that the relegation clauses imposed a 40 per cent pay cut. Based on those figures, with a fall only from £37.7m to £34.9m, that is only a 7.4 per cent cut. And the other figure given, for all staff costs, only shows a 10 per cent drop. I imagine the disparities (if 40 per cent was roughly right at the outset) can be at least partly (and probably mainly) explained by £11.1m paid in promotion bonuses to football and non-football staff.

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