By David Owen
April 20 – Rising staff costs helped to prevent Premier League club Newcastle United from reporting even stronger financial results for the year to 30 June 2014. Financial statements for the club currently lying 14th in the league table, now available from Companies House, show that overall staff costs climbed 27% year-on-year to £78.3 million, with wages and salaries rising more than 28% to £69.3 million.
An increase from 115 to 133 in numbers allocated to playing squad, academy, team management and support may have been in part responsible, although commercial staff dropped from 68 individuals to 54, leaving overall staff numbers, excluding matchday stewards, unchanged at 288.
This was the chief element in pushing up total operating costs by around 28% to £125 million. These, in turn, absorbed much of the 35% hike in turnover produced, notably, by surging media rights revenues stemming from the league’s new TV deals. The club, based in the north-east and owned by businessman Mike Ashley, was able, nonetheless, to generate a record after-tax profit of £18.7 million, not far off double the £9.9 million achieved in 2013.
Other positive signs were discernible in the detail of the numbers. For example, while debt, as previously reported, in the form of an interest-free loan from Ashley, remained “static” at £129 million, net debt was down sharply from £133.5 million to £94.9 million.
This was said to represent an improvement in the group’s cash position. And indeed, the balance sheet showed £22.5 million of cash, up from nothing the year before, while the bank overdraft, which stood at £16 million a year earlier, had vanished.
Then again, it was disclosed that the club had invested almost £30 million in six new players since the year-end, while realising £12.6 million from player sales. The detailed profit and loss account, meanwhile, stated that the Magpies made a £14 million profit on disposal of players’ registrations in 2013-14, against £10.6 million the previous year. This 2013-14 figure is thought to relate chiefly to the January 2014 sale of Yohan Cabaye to Paris Saint-Germain.
The accounts also disclose that the club purchased goods to the value of just under £2.8 million in 2013-14 from Sports Direct.com Retail Limited, described as “a company connected with Mr M.J.W Ashley”. These transactions were said to be on normal commercial terms.
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