By David Owen
February 18 – Everton’s record £30.62 million post-tax profit would have been even higher but for £7 million of exceptional interest related to settlement fees on the early repayment of long-term debt.
This is explained in the Merseyside club’s accounts for the year to 31 May 2017, which have now arrived at Companies House. These also reveal that, with an operating loss pitched at £12.3 million, the bumper profit was mainly due to a hefty £51.9 million profit on player trading.
With Romelu Lukaku not moving to Manchester United until after the year-end, this welcome gain was presumably due mainly to defender John Stones’s August 2016 transfer to Manchester City. The Lukaku deal suggests that Everton can look forward to another sizeable player transfer-related gain this season.
A feature of the year was the use of a £105 million interest-free loan – since increased to £150 million – from a company controlled by major shareholder Farhad Moshiri, the Iranian businessman who bought a 49.9% stake in the club two years ago, to repay interest-bearing loans.
The £7 million charge was incurred on just under £20 million of loan notes which, at inception in 2002, had what the accounts describe as a “repayable schedule of annual instalments over a 25-year period at a fixed interest rate of 7.79%”. Annual payments of £2.77 million since 2003 had been made via a securitisation agreement serviced by future season ticket sales. The loan has now been repaid in full.
Also fully repaid was a £35 million loan secured by charges over Premier League broadcast revenues. This had incurred interest at a rate of 5.2%.
The accounts also reveal a sharp increase in directors’ remuneration, which more than doubled to £1.62 million, including pension contributions, from £770,000 the previous year.
The accounts note that a deputy chief executive, Denise Barrett-Baxendale, was appointed in July 2016, with Keith Harris, who advised on the deal that brought in Moshiri as an investor, appointed a director in October 2016.
There are six directors in all. The accounts note that the highest-paid director received £588,000, including a £10,000 pension contribution, in the latest financial year, as against a figure of £400,000 in 2015-16.
The club is planning in due course to move from its Goodison Park home to a new stadium at Bramley Moore Dock.
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