By David Owen
May 30 – Newcastle United, the Tyneside club currently linked with a controversial proposed £300 million takeover by the Saudi Public Investment Fund, has finally brought down the curtain on the 2018-19 Premier League financial results season.
The Magpies reported a thumping pre-tax profit of £41.2 million, not far off double the prior season’s total, in spite of a £2.1 million decline in turnover to £176.4 million.
The performance defies the downward overall trend in English football’s top tier, even pre-coronavirus, and puts Mike Ashley’s (pictured) club third in the profitability ranking, behind just Tottenham Hotspur and Liverpool.
With operating expenses edging up, in spite of a pruning from 152 to 136 in staff members associated with the playing squad, academy, team management and support, and operating profit falling from £17.6 million to £14.9 million, it was largely player transfer accounting that lay behind the improved pre-tax profit performance.
Even though the cash flow statement shows that the club spent nearly £20 million more on players than it received in transfer fees – £58.7 million versus £39.5 million – it was able to report a £24.6 million profit on the disposal of players’ and staff registrations. This was up from just £3.6 million in 2017-18.
The list of players who left the club in the relevant period is headed by centre-forward Aleksandar Mitrović, who departed for Fulham. Arrivals included most notably Paraguayan midfielder Miguel Almirón from Atlanta United.
The accounts note that since the June 30 year-end, the club has “committed to a further maximum net spend of approximately £48 million…in respect of changes to the playing squad and team management”. Much-appreciated manager Rafa Benítez left the club at the financial year-end, being replaced by Steve Bruce. Brazilian centre-forward Joelinton arrived last July.
At year-end, £111 million in interest-free debt was owed to Ashley.
The new accounts include what appears to be the exact same statement regarding an HMRC claim as was in the previous year’s financial report, noting, among other things, that “an accrual” has been made in the financial statements. This is said to represent a “best estimate” of what may be payable.
A separate Note in the accounts concerning “financial instruments” puts accruals at £14.3 million, down from £34.8 million.
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