Yeovil Town have now formally published their 2006-07 accounts to the club's shareholders. The accounts, under their formal name of the Yeovil Football And Athletic Club Limited, which take the club's financial position up to June 30th 2007, have been available from Company House for a couple of months, but have now been published to all shareholders. If you are a shareholder and have not received a letter from the club, then we'd recommend that you get in touch with the football club to ensure they have your correct postal address.
The bottom line is that the Glovers made a profit of £112,764 during the 2006-07 season. All of the main financial figures are roughly in line with the preceding season, which showed a profit of £123,543. In fact with the club making a £13K profit during the 2004-05 season and a £405K profit in the 2003-04 season, the club has come out in the black during every season since it joined the Football League, with an accumulative profit of 605K across the last four seasons.
Turnover is roughly flat against the preceding season, with just a slight drop-off down to £3.90m. The club has a small borrowing of £26K, down from the preceding year's £39K, but overall is firmly in the black with the accounts reporting a figure of £1.1 million recorded as either cash in the bank or in hand.
The club's overall wage bill has increased slightly above the rate of inflation, rising from £2.2m in 2005-06 to a total of £2,391,431. The club's accounts recognise an average number of 81 employees on the Huish Park payroll, with 32 allocated to playing staff, 19 as management and administrative, 11 as stadium and maintanance whilst 19 are listed as catering staff. The club don't break down their wage bill to separate the playing budget from the backroom wage costs.
The club also detail that director(s) were paid £32,000 in wages during the 2006-07 season, with an additional £10,000 allocated to a pension fund. The name(s) of those receiving a salary are not revealed, however past understanding is that this is the salary that has been allocated to the club's Chief Executive, which would have been Chairman John Fry during that period. This week's Western Gazette lists six directors, including Fry, as being in receipt of that accumulated sum, however our reading of the accounts is that the distribution of that amount is non-specific, and thus some of those directors named by the Gazette are likely to have not received a salary, particularly as most act in a non-executive capacity.
The accounts also declare Directors' interests, where a club director is also employed by an external firm that provides a service to the Football Club. These firms are listed as accountants Albert Goodman, who were paid £1,200, solicitors Clarke Willmott who were paid £11,000 and insurers Budden Smales Insurance, who were paid £3,430. Directors Paul Sargent, Stephen Allinson and Ron Budden were partners of these firms during the accounting period, although Mr Allinson has since left his post with Clarke Willmott.
The accounts presented do not include the transfer of Chris Cohen and Arron Davies to Nottingham Forest. However, a footnote to the accounts reveals that in July 2007 "the company concluded a transfer deal for the sale of two players, realising a net surplus of £686,375, receivable over a period of two years".
Despite what the accounts say, Chief Executive Martyn Starnes states that Forest paid up the whole amount during last season, and reiterated his previous position to the Gazette that the money had already been spent:
"Certainly in the 2007-8 accounts the budget that was provided to the football team was increased because of that transfer income. But it was only increased when we had that transfer income to play with. Once it is spent, it is spent. The budget for this year, 2008-9, does not have that supplement that was provided in last year’s budget."
The club are not holding a Shareholders' AGM this season, and the plan is for a more informal shareholders meeting to be held in early 2009. The view of the club is that this delay will allow them the chance to distribute to shareholders an early copy of the 2007-08 accounts, allowing both years to be discussed at the meeting. Starnes explained to the paper:
"We are no longer required to hold an annual meeting and a letter has gone out to shareholders explaining that to them and letting them have a copy of the accounts for 2007. We have had them ready for a while but they are overdue for submission to the shareholders. We are getting the 2008 accounts ready now and the auditors will be in from the beginning of next week. We will be holding a shareholders’ meeting at a date early next year where the 2008 accounts will be submitted."
The club are clearly still trying to operate on an even keel, with no "sugar daddy" available to subsidise operations or provide loans to act as investments. A useful comparison can be made with Saturday's opponents Hartlepool United, who with average crowds of 4,507 last season and currently 3,874 this season ought to be one of Yeovil Town's peers in League One.
Conveniently, Hartlepool have also published their own accounts for 2007, and the situation couldn't be more different. Whilst the Glovers have made a profit across the last four seasons, Hartlepool have announced an operating loss of £1.6m, with owners Increased Oil Recovery Limited pumping £1.8m of loans into the club. Hartlepool now owe over £9 million to the company. Hartlepool lease Victoria Park from their local council and are attempting to purchase the lease from the council but have so far been unable to do so.
Whilst the Glovers recorded a turnover of £3.9m for their 2007 accounts, Hartlepool could only manage a £2.7m turnover figure. Despite that, Hartlepool's football wage bill alone rose 24 percent to £2.12m - almost the level of the entire wage bill at Huish Park for both on and off the field, giving an idea of how much extra money even Yeovil's peers are spending at present - money they clearly can't afford in the long run. Hartlepool have admitted that they are 17 percent over the Football League's salary capping guidelines and recently took striker Kevin Kyle on loan from Coventry City - a player Glovers boss Russell Slade had tried to bring in, but couldn't match the proportion of the reported £6,000 a week wages that Kyle was claimed to be on at Coventry.
To be fair, Hartlepool are far from unique and that there is a long list of Football League clubs that are living beyond their means. The recent problems experienced by Rotherham United, Luton Town and AFC Bournemouth are clear evidence of that, and the Football League have called an EGM for December 18th where the issue of salary capping will be back on the agenda again. However, the authorities are likely to receive significant opposition from certain clubs, particularly those at Championship level who are trying to compete with clubs recently relegated from the Premier League carrying parachute payments. We suspect that once again any proposals to bring in a firm salary cap will be thrown out again. What the Football League should be doing instead is to ensure that rules are put in place to force clubs to pay common debtors (for example HMRC, St John's Ambulance, football creditors) within a set period of time, and to make the penalties for breaching those rules, or falling into administration significantly punishing to act as a clear deterrent to those clubs who refuse to act on an even keel.
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