The Imps have recorded a £1.09m loss for the financial period ending 30th June, a seemingly huge figure given the recent successes on the field.
It certainly isn’t as bad as it sounds, with few football clubs running at a profit. Our previous season was incredible and allowed us a platform on which to build, but to accumulate a club must speculate, sensibly. That is one of the reasons behind the loss this season, despite the Wembley run, the charge to the play-offs and the 70% increase on average attendance. Those factors might have an ill-informed fan believing we have made a huge profit, but that is not the case.
There’s been investment off the field, not in players but in Danny and Nicky’s new deals, in the training ground and some of the backroom staff. it all goes towards the success we’re experiencing on the pitch, even if at times it frustrates those who wanted to see another big name striker come in because they don’t rate the one we got in the summer.
That won’t happen. We’re not going to put all of our eggs in one basket, Mansfield style. The club have still got to work within a strict budget, one that does seem to be top three level this season. The numbers only reflect on last year, but even then our budget certainly wasn’t bottom half.
What is interesting is that even without the FA Cup run, the club’s turnover increased by around £600,000. That’s due to the increase in season ticket sales and of course, the additional payments made to League Two clubs. It does go to show the imparity between non league and Football league and only serves to further highlight the job Bob Dorrian and the board did in the wake of our relegation.
All of this will be of little interest to a layman though. They’re likely to see losses of £1m and wonder if we’re in trouble? The ill-informed might start asking where the money has gone, but fear not. we’re not in trouble, the club’s official statement on the website ended by saying: “The balance sheet remains strong with cash resources of £2.36 million. This was supported by strong season ticket sales for the current season as well as further equity injections.”
The key here is ‘further equity injections’ doubtless a referral to the ongoing recruitment at board level that not only brings fresh faces and ideas to the club, but also fresh money to further strengthen our future. It’s true that with every announcement people are expecting huge spending, but that won’t happen. Clive Nates won’t put the future of the club at risk and he’s outlined his thoughts in an open letter, released at the same time as the accounts.
“We are at a pivotal moment as a club. We have momentum thanks to a remarkable two years of success and progress.
“We believe this represents a rare opportunity to transform the running of the club and attempt to establish ourselves higher in the football pyramid.
“We recognise that we are in a development and growth phase requiring significant investment in assets, systems and people, which will have a negative effect on the income statement in the immediate future.
“It is critical however that we ensure that these investments deliver their expected returns in order to ensure the long-term sustainability of the club.
“We believe that the structure of the board and diverse ownership allow us to seek out like-minded individuals who together with existing investors will continue to fund this growth phase.
“We are also committed to searching out ways to make us more than just a football club, by giving back to the community and making lives better. The recently rebranded Lincoln City Foundation will play a critical role in developing our community strategy.”
The loss we’ve discussed today is sustainable and the club has cash reserves on which to draw, meaning we’re living within our means. we’re not propped up by one company or individual who, if their interest wanes, could leave us broke. We’re spending for the future, investing in the infrastructure and the staff to ensure we’re not just at the top of League Two for a season or so, but that we have a long-term future that looks rosy and ethical.
By ethical I don’t mean we use recycled horse manure on the pitch or serve or food on bio-degradable trays, but that we’re operating as a business should, not making grand outlays we can’t afford and not making promises the cheque book is unlikely to back up.