St Mary's Football Group – 2017/18 financial results

By SFC Media time Wed 06 Mar Club
Photo by James Bridle | St Mary's

St Mary’s Football Group Limited, incorporating Southampton Football Club Limited, has today published its audited annual results for the year ending 30th June 2018.

Despite a disappointing season for the club, the directors are pleased to report another year of positive financial performance, achieving profit after tax of £28.6m (2017: £34.1m), with net assets increasing to £126.7m (2017: £79.1m).

Financial Overview

In addition to the lower Premier League finish of 17th (2017: 8th), a reduction in turnover to £152.6m (2017: £182.2) is a direct result of the club competing in the UEFA Europa League and reaching the EFL Cup final in the prior year, but not in the current year. This impacted the three main streams of turnover, being Broadcasting, Match Day and Commercial, albeit somewhat mitigated by the club reaching the FA Cup semi-final.

Profit on player trading grew from £12.3m to £32.3m in 2018. Player trading comprised of profit on disposal of players’ registrations of £68.9m (2017: £42.1m) and movements in foreign exchange of £0.1m (2017: £0.8m), offset by the amortisation of players’ registrations of £36.7m (2017: £29.0m).

Intangible fixed assets, being the capitalised element of each player’s transfer fee, which relates to their registration, increased from £97.3m to £137.0m. This was driven by player acquisitions, with the signings of Bednarek, Lemina, Hoedt, Carrillo (at the start or part-way through the season), Armstrong and Elyounoussi (at the end of the season) to the first-team squad and Brennan, Ferry, Ledwidge, Kozak, Hansen, Robise and Watts to the development squads.

The Group’s net cash position increased year on year, moving from £2.9m at the 2017 Statement of Financial Position date to £19.8m in 2018. This increase was due to the timing of certain transfer fee receivables before year-end in advance of transfer fee payables post year-end.

Key Performance Indicators

Due to the nature of the Group and club’s activities, the directors consider the club’s Premier League position at each season end as its principal key performance indicator.

As well as this, the directors consider further key performance indicators to be:

• The length of the first-team squad playing contracts, with the average length remaining at the Statement of Financial Position date being 35 months (2017: 38 months);
• The wages to turnover ratio, which grew year-on-year from 62% to 74% in 2018, with the growth driven by the reduced turnover for the reasons described in the Financial Overview section. Year-on-year player remuneration reduced from £86.6m to £85.2m;
• The number of players with international recognition at senior or U21 level. The current first-team squad has 26 players (2017:26)
• International honours at youth level. 19 players represented their country at international youth level during the 2017-18 season (17 during the 2016-17 season);
• Number of players signed on scholarship agreements. The club had an average of 26 scholars across the 2017-18 season (29 during the 2016-17 season);
• Academy players representing the first-team. Six Academy players represented the first-team in a competitive fixture during the 2017-18 season (10 during the 2016-17 season).

Girls and Women’s Programme

The Group has been pleased with the continuous development of the Girls and Women’s Programme, with the first-team winning the Hampshire County Women’s Football League Division One, gaining promotion to the Southern Region Women’s Football League Premier Division. During the year, 16 players from the Girls & Women’s Programme received international recognition across various youth levels from Under-15 to Under-19.

People

Investment off the pitch also continued and, during the year, the average number of employees increased by 13% (2018: 429 employees, 2017: 380 employees), with people investment across all areas of the business. This reiterates the Group’s commitment to strengthen and support both footballing and commercial growth, where the directors recognise the importance of its most important asset, its people.

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