Liverpool make a profit of 7.5m after tax

redspider

Liverpool's Champions League success last season has helped push the club back into the black.
The club's annual report was delivered to shareholders this week and revealed a profit before tax of £9.5 million (£7.53 million after tax) for the year ending July 31 2005. That figure compares with the previous year's loss of £21.9m.

Turnover at the club has risen by 32% to £121.05m compared with £91.57m last year, with the glorious run to Istanbul swelling the Anfield coffers by £28.8m.

Liverpool chairman David Moores, writing in the report, said: "After a disappointing set of financial results last year I am pleased to report that the club is back in the black. The club continues its significant investment in the playing squad in line with the manager's remodelling strategy."

Moores was also keen to praise the work of Rafael Benitez while insisting last season's Champions League success marked "the first chapter in the modern-day history" of Liverpool.

http://www.liverpoolfc.tv/news/drilldown/N151350060203-1437.htm

redspider

mike65

What was more impressive to me was the huge increase in turnover so the wage bill as a % crashed from about 75% to 50%.

Mike.

super_furry

Compare that with Chelsea's £140million loss and it proves that money can't buy you everything - like the European Cup

The new sponsorship deal with Carlsberg and new shirt deal with Adidas should swell the coffers even further for next season.

redspider

The full report is available at:
http://www.liverpoolfc.tv/club/R&A2005.pdf


Just doing a small bit of analysis:

UKP
year-end Jul-2004 Jul-2005
Revenue 91.6 121.1
Costs 113.5 113.6
Profit -21.9 +7.5

Liverpool's succesful run in the CL has been a massive windfall. It is worth a lot more financially than winning the English league. Interesting to see that Liverpool maintained costs across both seasons. This is showing astute financial management. However, what is also clear is that one bad year with non-CL action as in the 2003/04 season is very punishing in the pockets. That loss of about 22m will take 3x years of CL winning equivalent success.

One of the biggest differences between the top clubs are the match-day receipts (ie: the amount of fans they can pack in). Liverpool with 44,000 odd are way behind Man U's 67,000 and those of Barcelona and Real Madrid, so a bigger stadium is essential. As Liverpool dont seem to be able to do that at Anfield Road, a move is the only other alternative.

Whilst football spending rules stay as they are, Liverpool will always be playing catch-up to those other clubs/brands that have the extra resources.

redspider

redspider

More bits of info from the financial accounts:

Total wages of 64.2m represent some 53% of turnover compared to 72% last year (allowing for 2004 exceptional termination costs.) Net debt remains at a controllable level of 17.1m (2004: 15.4m), the increase mainly due to a dispute with Reebok.

League TV revenue decreased from 30.8m to 28.7m. Revenue is expected to remain at this level for the duration of the three-year contract.

League match-related revenue was flat, increasing slightly from 22m to 22.9m. Anfield is operating at full capacity.

Cup competitions increased from 5.4m to 31.7 (28.8m was from the CL alone). This was the big financial driver for the year.

Sponsorship increased from 17.3m to 19.6m.

Merchandising/Retail increased from 11.7m to 12.3m. (not by much).

Wages reduced from 66m to 64m.

Player trading: 24.2m spent, 12.6m sold (net, -11.6m)

Intangible Assets: (Players Values): 80m

Tangible Assets: 36.8m (but surely Anfield + training ground is worth more than that !!)

Tax paid this year: -1.9m
Tax received last year: +3.7m

mike65 wrote:

What was more impressive to me was the huge increase in turnover so the wage bill as a % crashed from about 75% to 50%.

True, that ratio did come down but this was more due to the CL run than due to management cost cutting. In reality wages only came down slightly from 66m to 64m.

I think what surprises me is that Liverpool should be doing more on the merchandising side. 12m is good but you would think that they should be able to get more. Also, the grounds should be worth a lot more than 37m, unless I didnt get into the detail on their actual property assets.

redspider

mike65

Are they judging the value of the current ground(s) against the cost of replacing them? After all a new stadium is on the plans and one day may even get built!

As for marketing/mechandising they are in the h'penny place
compared to Man Utd, where's the Liverpool fc Channel for example? That said I'm kind of glad there is'nt a Liverpool shop in every mall!

Mike.