Carlisle United made a loss of £665,000 in the last financial year but also recorded record turnover.
The Blues say their 2022/23 audited accounts, which cover the period the team won promotion from League Two, show a “sound financial position”.
Chief executive Nigel Clibbens also commented on the significant financial developments since then, including the Piatak family takeover.
The director claims he removed the “sword of Damocles” from United’s head following a “deterioration in relations” between previous lenders Purepay Retail Limited and a “key shareholder” whom Brunton Park did not name.
Untied owed Purepay more than £2.4 million before Piataks’ Castle Sports Group acquired the debt as part of the acquisition.
Clibbens said in a club statement: “The significant uncertainty arising from the ongoing lack of confirmation that Purepay Retail will not seek a fully immediate refund at any time has placed the club in a very high risk position in 22/23.” and we are heading towards 23/24.
“We were also experiencing rapidly increasing interest charges on this debt.
“The breakdown in relations with Purepay and a key stakeholder following the changes in February 2022 meant that the future of the club was at risk without the debts being resolved and their relationship with the club terminated.
“Attempts to bring in new ownership and investment were progressing at the end of the year to achieve exclusivity with Castle Sports Group. This led to the sale of the club and the transfer of control in November. [2023] and resolving Purepay debt.
“As a result, the material uncertainty regarding the club’s direction is now gone.”
The 2022/23 financial period covers the period before the takeover and includes the “best revenue performance on record” according to United.
Newly published accounts show United’s headline turnover rose 11 per cent to £5.29 million; this figure was boosted by increased ticket, retail and commercial revenue, as well as play-off revenue.
“This is the highest figure in the last decade, despite significant declines in player income and exceptional income,” the club said.
Business turnover increased from £1.99 million to £3.06 million and the club’s recurring income (£4.74 million from £3.62 million) was “again a record high”.
United announced they had won £165,000 from their play-off semi-final; but ‘football wealth’ income from player sales, cup runs and TV fees fell significantly from £761,000 to £373,000.
The club saw its wage and salary expenses at Brunton Park rise from £2.93 million to £3.44 million; This includes additional player and football staff salaries and bonuses.
United’s “total football spend” also increased by 28 per cent to £2.81 million; this includes travel, medical, recruitment and scouting, as the club supported Paul Simpson’s bid to improve the team and its performance.
United’s total debt as of 30 June 2023 was £3.03 million, with the bulk of this debt owed to Purepay, including £148,000 in extra interest charges.
Clibbens acknowledged that the information in the accounts was “very historical”, given that the end of the financial period was almost nine months ago.
He said United’s six-figure loss was “low in the context of other League Two clubs” and that the accounts “show we are in a solid position on a day-to-day basis at this point”.
He added: “Although there has been no external funding since May 2019, we have not experienced any creditor pressure with £1.6 million cash in the bank and all our PAYMENT and VAT obligations have been paid in full and on time.
“The club’s core business was record breaking, with Business Turnover up +54%. Attendances were their best in recent years as fans responded to the success on the pitch.”
Clibbens said United’s player budget was the highest since the 2016/17 season under Keith Curle, but also stressed it was “in the bottom quarter of spenders in League Two” and said Carlisle’s promotion low spending levels were not a barrier to success He admitted that he proved it in the episode.
“Player transfer revenues decreased significantly and cup revenues were still very weak. “These continue to be important elements of our financing and operating model each year, even under new ownership,” he added.
In the current 2023/24 financial year, Clibbens said the Blues had seen their “best ever year for the trade” with their best attendance in nearly 50 years.
“This results in a significant increase in the club’s resources. All of this extra income and further funds have been allocated to the Football department to continue to support its plan to develop and achieve success in a sustainable manner, regardless of its takeover,” the director said. Additional.
Clibbens also said United had again increased player spending and other football costs for the League One season by around 50 per cent.
He added that additional expenses in the January window following the Piataks takeover would mean “a very significant and higher operating loss in 23/24 despite a record-breaking year off the field”.
Clibbens also commented on the debt situation, adding: “Prior to the sale of 90% of the shares to Castle Sports Group (“CSG”), the relationship with Purepay Retail was terminated to remove the “sword of Damocles” hanging over the club. was kept.
“CSG bought the debt, which grew from an original loan of £2.1 million to £2.64 million. It settled for £2.45 million and made the full cash payment immediately. CSG immediately stopped charging interest. This means : we have no interest charges 23/24 (saving approximately £200,000 in costs we incur) The £2.45 million debt to CSG will also be waived on 23/24.
“The takeover in November 2023 provides the club with £1.35 million of new equity capital to strengthen its already solid day-to-day position and provide immediate funding to address the capital investment backlog and provide further resources for football.”