Moshiri’s struggling Everton post third consecutive £100m-plus loss

By David Owen

March 30 – Everton, the Merseyside club in danger of losing its English top-flight status for the first time since the 1950s, has posted its third consecutive loss in excess of £100 million.

The Toffees, currently just one position above the relegation places in 17th spot, recently suspended commercial sponsorship arrangements with the Russian companies USM, Megafon and Yota, while expressing shock at the “appalling events” in Ukraine. However, its fundamental problem is that operating expenses continue to run far in excess of turnover.

In these circumstances, the main shareholder, Farhad Moshiri, is continuing to pump huge sums into the club, which has also embarked on a costly new stadium project.

During the year to end-June 2021, a share issue was completed that involved Moshiri’s introduction of £100 million of new funds into the club and the capitalisation of £100 million of loans previously made. An additional £97 million interest-free loan has been received since the year-end.

Notes to the new accounts indicate that at year-end the loan from Moshiri’s Bluesky Capital totalled £250.25 million. The conditions attached to it enable it to be classified as equity.

The accounts also show that year-end borrowings have more than doubled to £128.3 million from £58.7 million. Included in this is a £100 million five-year facility with Right and Media secured by a charge on club assets incurring interest at “a market value rate”. To help cope with the fallout from covid, the club also took out a £30 million government-backed facility, repayable over three years.

Revenues edged up by 7.3%, but remained below £200 million at £193.1 million. As with other Premier League outfits, a big hike in broadcasting revenue more than offset the virtual elimination of gate receipts owing to covid.

Operating expenses, however, weighed in at £318.8 million. This resulted in an operating loss of £125.6 million and a pre-tax loss of £120.9 million. This was actually an improvement from the prior year’s loss of £139.9 million. The cumulative loss over the last three financial periods now exceeds an eye-watering £370 million.

With staff costs in the most recent period climbing to £182.6 million, the wage:turnover ratio for 2020-21 stood at a lofty 95%. The new accounts show that remuneration of the highest-paid director climbed almost 65% from £1.24 million to just over £2 million.

Since year-end, Everton Stadium Development Limited has entered into a £77.8 million contract with Laing O’Rourke for the completion of enabling works on the site of the new stadium at Bramley Moore Dock.

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