Southampton losses widen to £76m

By David Owen

January 13 – Southampton, the south coast club enjoying a strong season under Austrian manager Ralph Hasenhüttl, have become the latest Premier League side to report a big loss for the covid-impacted 2019-20 financial year.

The Chinese-controlled Saints posted a pre-tax loss of £76.1 million at the St Mary’s Football Group Limited corporate entity for the year to end-June. This was up from £41 million the previous year. The club acknowledged that its net loss would have been £47 million even if “the profit which should have been earned and recognised in the financial year had not been lost or deferred due to the pandemic”.

The club said that in order to “mitigate against anticipated further losses” stemming from covid, it had “gained access” to a term loan totalling £78.8 million just prior to the statement of financial position date. This replaced a working capital facility. As a result, the club’s year-end cash balance was more than £40 million greater than a year earlier, with gross debt rising from £31.8 million to £91.3 million.

Notes to the accounts indicate that the £78.8 million loan is repayable in 2025 and has an annual interest rate of 9.14%. The revolving facility is said to have had an annual interest rate of 3.9%.

Turnover dropped from £149.6 million to £126.6 million, with the lion’s share – £93.5 million – coming from broadcasting. The club said that £10.3 million of revenue was foregone as a result of the pandemic, with a further £20.9 million deferred into the current year.

The pandemic was said to have resulted in £1.5 million of net additional costs of sales and administrative expenses; a further £3.6 million of costs has been deferred to 2020-21.

Staff costs edged down to £114.4 million from £115.2 million.

There was an operating loss of £87.3 million, while the profit on player sales for a club which has been a fertile source of talent for the Premier League big boys in recent times was £13.9 million.

It was reported last March that Chinese property magnate Jisheng Gao had instructed brokers to sell his 80% stake for £250 million. In spite of this, Gao is still named in the accounts as the ultimate controlling party.

Toby Steele, managing director, said: “As with many companies and industries, the group is in the midst of a challenging financial environment due to the impact of the covid-19 pandemic. This is reflected in the financial results for 2019-20 and necessitated the group to restructure its debt facility during June 2020.”

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