Sir Chips positive as Gunners release annual financial results

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Arsenal have released details of their financial results for the year ended 31st May 2013.

Speaking about the results, which are solid if unspectacular (a bit like the win over Stoke), new club Chairman Sir Chips Keswick remarked:

“It is my job to ensure we steer further along the course we have set. We must continue to grow commercially to provide the Club with the best opportunity to achieve success and we must do this in a way which remains true to our values and which ensures and protects the long-term sustainability of the Club.

“We face a competitive landscape across the top of the Premier League and across Europe’s elite clubs which is tougher than ever. Despite fair play initiatives the financial competition for top players remains intense and transfer prices and player wages continue to move ever higher.

“It is therefore positive that the strong financial platform we have created in recent years allows us to continue to be competitive at the highest level.”

Highlighting in particular the pre-tax profit of £6.7 million, despite it being considerably lower than 2012 thanks to a rise in wage bill and less cash from player sales, Sir Chips paid homage to the hard work of the club’s commercial division.

“Despite one-off costs associated with some rationalisation of the squad at the end of the season, we have reported a profit before tax of £6.7 million. This result has its foundation in the significant progress made on our commercial agenda.

“We have signed a new partnership with Emirates and have brought other commercial partners to the Club. The success of our recent tours to Asia and the growth of our global following have been key factors in this regard.”

It’s fair to say that Arsenal’s next set of results, which will include details of the new kit deal with Puma (?), should make for more interesting reading…

ARSENAL HOLDINGS plc ANNOUNCE FULL YEAR PROFITS

  • Group profit before tax was £6.7 million (2012 – £36.6 million).
  • Profit on sale of player registrations amounted to £47.0 million (2012 – £65.5 million).
  • One-off charges related to the impairment of certain player registrations and associated costs amounted to £10.0 million (2012 – £5.5 million).
  • £58.7 million of investment in new players and extended contracts pushed amortisation charges up to £41.3 million (2012 – £36.8 million).
  • Turnover from football increased to £242.8 million (2012 – £235.3 million) driven mainly by commercial activity including the Club’s extended partnership with Emirates.
  • Taking account of increased costs, principally wage costs, operating profits (before depreciation and player trading) from football decreased to £25.2 million (2012 – £32.3 million).
  • Property revenue rose to £37.5 million (2012 – £7.7 million) inclusive of the sale of the market housing site at Queensland Road. However, the Queensland Road sale was essentially at break even in profit and loss terms. Overall operating profits from property increased to £4.4 million (2012 – £2.2 million).
  • The Group has no short-term debt and continues to have a robust financial platform from cash reserves, excluding the balances designated as debt service reserves, of £119.7 million (2012 – £120.1 million).

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For lightning-quick analysis of the results, check the Twitter timeline of financial-Bergkamp @SwissRamble 

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the only sam is nelson

It’s like a financial trophy

We need commentary from Johann Djourou at this point, as well.

jäck jäck jäck

I would like to gently and inconspicuously point you in the direction of the Swiss Ramble.

I’ll just put it out there that Djourou is from Switzerland and let you connect the dots.

#DjourouRamble

Harsh

so, bottom line, are we better off or worse ??

the only sam is nelson

CASH RESERVES ARE DOWN (£400,000) year-on-year to A MERE £119,700,000

WENGER OUT

goonerbynature

I wonder if that’s the Yaya Sanogo compensation

WA Gooner

Spend some fucking money… oh yeah we did and it was spent wisely

Finsbury Park Gooner

*Spent well

I don’t know if you could say spending over 40million on any one player was “wise”. Worth every penny? Absolutely. But not in any way wise.

Nick

Nike would be kicking themselves for not renewing after Ozil signing..even though a lot of Ozil shirts were sold our strong financial position and good on-field performances will only make us more attractive commercially..

neutral

That’s the thing, if Kroenke wants a better return on his investment he should be looking for success on the pitch, which will bring better commercial deals and prize money.

Problem is that Arsenal have been avoiding that approach for years (I’m sure they are trying, but years a go when we were close they just needed to splash out a little more on 1-2 players, could have changed everything with respect to players like Fabregas and RVP)

Hoosier Gunner

I’m just waiting for one those “I’m a season ticket holder and supporter for 200 years. I don’t like venga so venga out” comments somewhere for any news on Arsenal financials.
They always amuse me and I never fail to read them.

D.Levy

I have been an Arsenal supporter for 200 years and this type of profit loss is not acceptable. Wenger should resign and take that liability Ramsey with him.

AFC

You certainly meant “re-sign”, didn’t you?

Double98

Top of the league
Loaded

Sack the board
Wenger out
Aaarrgggh

Anton

keeeeeeeeeeeeeeeeeeerrrrrrrrrrrrrrrrrrrrrrrrrrrccccccccccccccccccccchhhhhhhhhhhhhhhhhhhiiiiiiiiiiiiiiiiiiiiiiinnnnnnnnnnnnnnnggggggggg

Anton

Ah fuck, that didn’t go well 🙁

DöubleDöubleDöuble

ng!

You’re welcome.

Marty

So strange to see figures released and nobody complaining about having cash in the bank. Just goes to show that seeing investment in the squad and making us competitive on the pitch is the answer to happy fans. Who would have known?

Paul S

operating profits (before depreciation and player trading)….. £25.2 million

Group profit before tax was £6.7 million

We took £47 million in player sales and spent £47 million on Giroud, Podolski, Cazorla, Nacho = break even. Does that mean the club lost nearly £20 million in a year through depreciation? Is that normal?

The More You Know

Depreciation is a non-cash expense. Businesses don’t pay the amounts of depreciation seen on their year-end, that amount is their mathematical estimation of how their fixed assets (the stadium, equipment, various other fixtures, etc.) have devalued over the course of the year. You know how people sell their old cellphones when a new one comes out? Think of depreciation as the difference between what you paid for the phone originally and what you sell it for 1-2 years later. You don’t actually spend that cash difference out of your pocket and neither do businesses that record depreciation expense. That amount… Read more »

the only sam is nelson

so what’s the difference between amortisation and depreciation?

enquiring minds want to knoa

The More You Know

Essentially nothing. Both are non-cash expenses, they’re just applied to different assets. Depreciation only applies to fixed, tangible assets. Amortization only applies to intangible assets such as patents.

the only sam is nelson

thanks, i’ll try and remember that. tangible assets depreciate, intangible assets can be amortised.

but can you amortise a cost that doesn’t depreciate? for eg if you paid £1m to re-house your star player, that cost is fixed and tangible and you’re paid it out, but can’t you amortise if over the length of that player’s contract? so instead of a lumpy £1m cost on your P&L there’s £1m/60 to give you a monthly cost over a 5 yr contract? or is that depreciation and i’ve just never really understood it properly?

karma

amortisation also applies to players, or more accurately player’s contracts (which is how a player is accounted for in an financial sense)

so as you increase player sales, particularly older players (with less re-sale value) then amortisation also increases.

2013-2014 = 2003-2004

Wowee. Didn’t know so many brainy folk supported the Arsenal.

Can’t imagine a single Spud fan would even manage to pronounce ‘amortisation’ or ‘depreciation’ correctly.

Prouder than ever to be a Gunner!

rawgooner

I think it’s a shame that with all that effort you put in, nobody even gave you a thumbs down. So the first thumb’s from me. Great reading BTW.

Pearson

The stadium is not depreciated.
Movables like vehicles, furniture, beer dispensers etc are depreciated over the estimated useful life of the moveable asset as they become older and lose value (impairmernt)
It is assumed that fixed property does not lose value and may even improve in value.
Depreciation is a provision for replacement and amortization is write off of sunk costs like intangibles or up front cost on purchase of players (if you assume that the player will walk away on a free at the end of the contract.

the only sam is nelson

mind the GAAP

as it were

*gets coat*

Double Canister

Well there are life cycle costs and repair costs.
For instance, the pitch got relayed this summer,
Those plastic seats only last 15 years or so before needing replacing,
The stadium roof will need maintenance and so on and so on.

Geezer

Wow. You got a blog or something?

AFC

Proper comments, that’s why I love Arseblog. And Arsenal of course.

Lockednloaded

spend some more f’n money lol would love one or two more top top top quality signings that don’t mess up the team chemistry

Why do you ask my name? It is beyond understanding.

It will be interesting to see the next half year results. I would love to know how much the club saved by clearing Mannone, Squillaci, Djourou, Coquelin, Arshavin, Gervinho, Chamakh etc. off the wage bill as well as getting loan fees and transfer fees. And I would love to know how much that contributed to being able to shell out a monster transfer fee for Ozil not to mention his and Flamini’s wages. Yeah Nick, I wonder if Nike will be reconsidering their position re: the kit deal given the increase in kit sales following Ozil’s arrival and the good… Read more »

I don’t believe Nike’s just let us go. They just didn’t offer what PUMA would, so its not so much Nike didn’t want us, they just didn’t believe in our potential commercial value like PUMA did. They’ll be happy they get some of the initial rush on shirts from our recent transfer activity for sure, but the way to make them not sleep at night is to continue to make strong on the field improvements through getting our guys (like Ramsey now) to really kick on and bringing in more great talents to compliment our squad. We already have massive… Read more »

Jason

235 to 242 because of the Emirates deal don’t make sense the Emirates deal is worth 30million a year right? The increase should be higher !

the only sam is nelson

Financial year ending May 31st 2013 means that the bulk of the money will appear in the 13/14 accounts, I would suspect

Yas

As a accountant gooner i am going to have a wank over our gearing and debt/equity ratio

the only sam is nelson

our debt/equity ratio occupies pride of place in the trophy cabinet

Woolwich Peripatetic

Nice to see that our short term debt is a big fat Ö.

I’ve heard rumöurs of a big bid for Wayne Röoney in January.

DöubleDöubleDöuble

And it’s Arsenal,
Arsenal FC,
We’re by far the most fiscally responsible team, the world has ever seen…

gunsen gunner

These numbers seem interesting but what is our current long term debt?

godonner

I won a hundred on Ramsey yesterday for the first goal so I’m happy good man rambo

Comedian

How much more do we get after winning the League.

Clock End Mike

Early days yet…

Double Canister

£55m

A N Other

I think next season fiscal results would be even more interesting.. 30 million from Emirates deal, 30 million extra from primer league tv rights and year next would be 30 mil extra from puma deal. All in all we are looking at extra 100 million in
2 years from now. So, that means we can add a ozil type of signing every season until we reach the English summit again. 🙂

non-mouse

Other Premier League clubs will also see their income boosted by the new TV deal which, in turn, gives club sponsors like Puma and Emirates further confidence to sign more lucrative deals. A lot of these new financial bonuses we’re championing apply across the board to all clubs in the top flight, especially within the top six. The extra money isn’t an automatic leg up, Arsenal will still have to spend more wisely than their rivals to succeed. However, the new cash should significantly improve PL clubs relative to clubs in the rest of Europe. With the decline of some… Read more »

Goona Ben

Just got off a Garuda Indonesia Airlines flight and they have marketed the hell out of LFC, they even had Stevie G and co on billboards and in flight videos and such. I heard from the crew that they spent a boatload on a 5 year deal with Scousers, so you’re right to point out that while we may be getting a boost of funds, it applies to pretty much everyone in the top 6-7, especially to Liverpool, Arsenal, Man City, Man United and Spurs, though to a lesser extent due to their brand recognition not being that high yet.… Read more »

Goona Ben

And no before anyone asks Garuda isn’t a dodgy airline they were amazing, much better than the likes of BA and Virgin.

TommyGun

That would be nice.

Eric Irish gunner

€120 profit on a 3-1 Win yesterday ;):):)

Eric Irish gunner

And believe it or not gunners aguero was 8.5 on sky bet for first goal and I stuck a tenner on him out of the winnings, great day, pays for me next trip to the emirates 🙂

shitbird

Off topic, but holy shit was that Park Chu Young in the Arsenal first team photo? And is Nicky B sporting a beard?

Why is there not an article on our Korean striker being pulled out of his spider hole?

swing

I don’t want to be a spoilsport but if anyone believes we can compete with any of the big 3 commercially (Chelsea, Man City, Man Utd,) then they are delusional. If even Man Utd can’t compete with Chelsea or Man City how can we, I believe the only difference is we are in a better situation to hold onto our players now, but 2 believe we can compete on an equal basis with Man City is wishfull thinking. To put this in perspective özil is earning less than a majority of the players who play for Man City or Chelsea… Read more »

the only sam is nelson

Read the word of God here http://www.theguardian.com/football/2013/sep/21/dennis-bergkamp-arsenal-love-game?INTCMP=ILCNETTXT3487 and reflect that Ozil is at the Arsenal earning half of what he could get elsewhere And what does DB10 say about players chasing fat contracts? “I’m not sure that’s drive at all. It’s not a passion from the soul. And that’s what you’re looking for: the real passion that comes from inside.” This is why I hope to God we don’t sign Wayne Rooney, amongst others. That’s why I’m feeling a little bit excited about this season – Sunday felt like a routine, workmanlike victory over a side who never threatened to… Read more »