Preston suffer big loss on operations – owner injects more capital
5 March 2019
Owner Trevor Jemmings has injected more than £36 million into the club since 2010.
Club needs more capital to pay the bills, but owner seems keen on supporting the club financially.
Preston North End recorded a loss of £7.1 million before player sales in its financial year ending June 2018, according to the club’s latest accounts.
The accounts for Deepdale PNE Holdings Limited - the company behind the club - show losses widened from the previous season.
The £7.1 million loss - almost £140,000 a week - compares to a £5.7 million deficit in 2017.
The club posted a £4.3 million loss before player trading, and a further £2.8 million in depreciation and amortisation of player registrations.
However, the club did make a profit on player sales with £5.4 million paid out for players versus sales of £10 million.
Most of this large figure for sales is likely to have come from Jordan Hugill's transfer to West Ham United in January 2018 - a deal reportedly worth a total of £10 million.
Continued support from shareholder
Preston North End saw an increase in their wage bill in the 2017/18 year, with £15 million paid in salaries compared to £13.5 million in the previous trading year.
The club’s reliance on owner Trevor Hemmings to subsidise the club was evident in the accounts.
The group has therefore continued to be reliant on the financial support of its shareholder
Hemmings put in £5.7 million in loans to meet the costs of running North End during the year. And this situation is commented in details in the annual report.
“Cash flow continues to be adverse as the club has contracted a squad with wages which are high in comparison to its revenue. The group has therefore continued to be reliant on the financial support of its shareholder.”
“Support amounting to a £5,680,000 loan was advanced to the group via its intermediate holding company.”
It remains extremely likely that the club will continue relying on Hemmings, despite the fact the owner has injected over £36 million into the club since acquiring it in 2010.
Loans with no fixed repayment
The accountants, KPMG, said:
“The group’s cash flow forecasts show that it requires additional funding of approximately £6,717,000 during the twelve month period after approval of the financial statements."
The continued availability of such financial support as may be required from the relevant shareholders, constitute a material uncertainty that may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern
“It is likely that this additional funding will need to be financed by further shareholder support."
“In addition, loans with no fixed repayment date provided directly or indirectly by the ultimate controlling party totalling £36,331,000 as at 30 June 2018 remain outstanding."
“The continued availability of such financial support as may be required from the relevant shareholders, constitute a material uncertainty that may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern,” the accountants said.
North End’s turnover for the year was £13.3 million, compared to £13.5 million the year before.
New training ground
Average attendances were 13,776 for 2017/18, compared to 12,611 in 2016/17. Season ticket numbers increased to 8,298 in 2017/18 from 7,605 in 2016/17.
North End received £7 million from televised games and solidarity payments from the Premier League.
Season and match day ticket sales fell to £3.4 million in 2017/18 from £3.7 million, while commercial and media revenue slid to £1.2 million from £1.3 million. Merchandising increased slightly to £109,000 from £104,000.
Also included in the annual figures is a sum of £1.5 million, which North End have paid to Cleator Manor Limited, for land on which the proposed new training ground at Ingol is to be built.
North End's financial figures covered the period to June 30, 2018, and were submitted on February 28.