By David Owen
April 19 – Newcastle United, the north-east club seemingly assured now of retaining its place in the Premier League for at least one more season, has repaid £33 million of the debt owed to owner Mike Ashley (pictured).
Disclosure comes in newly-published accounts for the year to end-June 2018, the Magpies’ first back in the top tier of English football. These reveal that the club made a pre-tax profit of £22.9 million on turnover of £178.5 million. This compares with a big loss of £46.7 million on turnover of £85.7 million in 2016-17, its promotion year.
Managing director Lee Charnley explained that “clearing our short-term debt – some of which was meant to have been repaid much earlier” was “an important responsibility and is a key part of living within our means”. As a result of the repayment, Charnley continued, “the amount due to the owner now stands at £111 million”.
All of this was, he said, considered by the owner to be “long term in nature having been in place for over a decade, and repayable only in the event of the sale of the club”. According to the accounts, the debt is interest-free. The repayment came subsequent to the statement of financial position date.
Media income accounted for the bulk of turnover, weighing in at £126.4 million, against commercial income of £26.7 million and match-day income little-changed from Championship days at £23.9 million. Staff costs actually fell from year-earlier levels to £93.6 million from £112.2 million. According to the cash flow statement, the club spent £46.2 million on players in this latest financial year, receiving £30.5 million from player sales. This compares with £55.5 million spent and £44.4 million recouped from this source in 2016-17.
The new financial report also includes a statement regarding an HMRC claim. It said: “In April 2017 HMRC attended certain group premises and executed a search warrant. Subsequent to these events, Newcastle United Football Company Limited received claims from HMRC relating to alleged underpayment of tax and national insurance, and interest to date thereon. The amount that has been claimed by HMRC has been assessed by the director and an accrual has been made in the group’s financial statements. The amount accrued represents a best estimate at this time of the amount which may be payable. The amount claimed excludes any amount which may be payable in respect of penalties and only reflects amounts the group has been made aware of. Claims have been lodged against these assessments, and the matter remains in the hands of the group’s legal advisers.”
The statement continued: “In the opinion of the director, at this stage of the process, there is insufficient information available to enable him to make a reliable estimate of either the un-accrued amount of any liability which may ultimately arise in this regard, or when any such sums may become payable.”
Contact the writer of this story at moc.l1734891019labto1734891019ofdlr1734891019owedi1734891019sni@n1734891019ewo.d1734891019ivad1734891019