By David Owen
March 19 – AFC Bournemouth, the Russian-owned south coast club enjoying an extended Premier League adventure under manager Eddie Howe, have announced an increased annual loss.
The Cherries posted a pre-tax loss of £32.4 million for the year to end-June 2019, up from £10.9 million. This was on turnover that declined for a second straight year from £134.9 million to £131.1 million.
The club’s core financial issue is that it is probably more highly dependent on Premier League TV money than any of its top-tier rivals. Since this will not substantially increase for at least another two years, it needs to exercise rigid cost control, or engineer a charge up the league table, just to tread water at the operating level.
In the year under review, wage control was not too bad, with staff costs climbing just £9 million to £110.9 million. Yet the operating loss tripled from £9.1 million to £27 million.
According to the cash flow statement, the club shelled out approximately four times more on the purchase of intangible assets (players) than it received from player sales, at £46.8 million versus £11.2 million, with the likes of Jefferson Lerma, Diego Rico and David Brooks arriving to bolster a lively squad.
It pointed out that three players had been disposed of after the year-end for a profit of £22.6 million. Much of this is likely to have been derived from the sale of England centre-back Tyrone Mings to Aston Villa.
Equally, notes to the accounts disclose both that the club has spent £35.4 million on new players since the year-end and that it has received £13.7 million in relation to the “forward funding of future transfer receivables”. The gross receivable was said to be £16 million.
Pay restraint seems to have been less rigidly applied in the boardroom. Overall directors’ remuneration jumped from £1.7 million to £2.24 million, with the amount received by the highest-paid director up more than 40% from £1.32 million to £1.86 million.
Year-end cash totalled just under £10 million. On this same date, the club owed its British Virgin Islands-registered parent £99.9 million. The loans are non-interest-bearing and were said to be repayable as follows: just over £33 million on demand; £41.2 million this coming August; and £25.6 million in January 2024.
At time of writing, the club sits in the relegation zone on goal difference with nine games left, assuming the season can restart, in which to stave off the drop.
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