Magpies Close In On Break Even Point
Newcastle United FC has revealed the club came close to breaking even for the financial year ending 30th June 2011, after announcing an operational loss of £3.9m.
The club – which has performed above expectations this season currently sat sixth in the Premier League -filed its annual accounts on Thursday to reveal a vast turnaround from previous years.
In 2009/10 the club lost £33.5m and recorded a £37.7m deficiency 12 months earlier.
The Magpies have now reduced those figures to below £4m in 2010/11, their strongest financial showing for several years.
Wages accounted for 60.6% of a turnover which rose by 69% from £52.4m to £88.4m, a vast improvement from the season the club was relegated from the Premier League in 2008/09, when the ratio was 82.7%.
Funds were also improved through Liverpool’s £35m transfer fee for Andy Carroll in last year’s January transfer window.
The net cash spend on player transfers for the year was a receipt of £5.4m.
Newcastle also cleared its third-party debts under owner Mike Ashley,which stood at £76m in 2006/07 and incurred finance costs of £6.5m.
Ashley is still owed £140m from the club, although the debt is interest-free.
Magpies managing director Derek Llambias told the club’s official website: ‘The club’s financial results for the year end June 2011 are extremely strong. We can now count ourselves amongst the very few clubs across the UK and Europe who are operating at close to break-even.’
‘What is particularly pleasing is that we have achieved this whilst also ensuring we have a strong squad sitting firmly in the top third of the table and currently pushing for a European place.’
‘Some of the key financial principles we set in place when Mike bought the club back in 2007 are now beginning to reap rewards. Most notably, our adherence to a strict transfer policy which avoids, or limits wherever possible, the acceptance of dated payments for players bought or sold. We believe it is a far healthier financial model to settle full transfer fees for players up front, not dated over a period of years.’
