By David Owen
February 18 – Leicester City, the Thai-controlled English FA Cup holders, have posted a pre-tax loss of £33.1 million for the year to end-May 2021 – about half the prior year’s level.
The result benefited from a hefty 34% jump in turnover, from £150 million to £226.2 million, in spite of gate receipts being cut almost to nothing as a consequence of covid. The increase is largely explained by the delayed staging of the last nine games of the 2019-20 season. This prompted the club to recognise 20% of 2019-20 Premier League and sponsorship revenue in 2020-21. A number of rivals adopted a different approach to this unique conundrum, instead pushing their financial year-ends back by a month to as late as end-July.
The club’s cost of sales and administrative expenses combined added up to close to £300 million – well in excess of turnover. However, the operating result was ameliorated by a £43.9 million profit on player sales, stemming largely from full-back Ben Chilwell’s sale to Chelsea.
In spite of this, the consolidated cash flow statement indicates that the Foxes ran up a cash deficit on their transfer-related transactions during the year, raking in £55 million from the sale of players, or “intangible fixed assets”, but spending £79.3 million on player purchases.
Company staff costs jumped quite sharply from £157.5 million to £191.2 million, but this was attributed mainly to 20% of player and management bonuses for the 2019-20 season being charged to the current financial year.
All told, the operating loss was reduced from £59.3 million to £21.8 million.
Net debt at the year-end had pushed beyond the £200 million barrier, rising to £217.1 million from £161.6 million the previous year. The club revealed that, since the year-end, it had entered into a five-year loan facility for a total of £42.5 million with King Power International to finance working capital requirements for the next twelve months. It had also replaced its £52.5 million facility with Macquarie Bank with an £80 million four-year facility.
Susan Whelan, chief executive, said: “The growth in our revenue streams is an encouraging indication of progress in our pursuit of sustainable success, particularly in the context of the obvious limitations brought about by the pandemic.”
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