If there was ever an indication of the challenging environment the club is operating in, it is this; losses of £1.4m for the 2020/21 period.
The club’s official accounts for that time are released today, and they make interesting reading. Before passing a comment, I shall share with you the official press release, word for word, for your consumption.
The accounts for the 12 months up to 30th June 2021 report a net loss of £1.4m. Both income and expenses were lower during a period impacted by the pandemic. Although central distributions declined by £52k, the club received £813k in the form of a grant as part of a rescue package distributed by the Premier League to League One and Two clubs.
Despite impressive attendance figures around the 9,000 mark in recent years, the duration of the 2020/21 campaign was played behind closed doors, which had a significant impact on matchday revenue. The exception was the sold-out Sunderland play-off fixture at LNER Stadium, where 3,145 Imps were in attendance under government restrictions.
There were strong iFollow figures throughout the campaign, with thousands watching online each week; however, the sale receipts were significantly less than physical match ticket sales as many households could watch the game for £10 (which is a net receipt of £8.33 per stream). In addition, there are an average of just over two season ticket holders per household, meaning viewing figures were around a third of the recent in-stadia attendances.
The Impact of Covid-19
As of 2019/20, the club and the community of Lincoln were presented with huge challenges due to the impact of the pandemic, but the club continued to engage with the local community throughout. The generosity from season ticket holders was overwhelming yet again. Many purchased money can’t buy items and Ultimate Imps Raffle tickets with their remaining season ticket credit, which positively affected cash flow.
The club also utilised the Covid-19 job retention scheme and the business rate grant scheme during the year to retain as many staff members as possible.
The company’s turnover decreased from £6.55m in 2019/20 to £5.22m for the 2020/21 financial year. Football fortune income was down significantly as the comparative figures for the previous year were boosted by the departure of the Cowley brothers. The commercial revenue position was still strong through the ongoing support from our club partners during the pandemic.
The decline in turnover and other operating income was offset, to some extent, by a fall in total expenditure. This was due to a significant decrease in activity at the stadium on a day-to-day basis alongside reduced matchday/running costs.
The club was delighted to welcome the Jabara family as shareholders in Holdings, with the family taking an initial 9% stake in June 2021. As part of this investment, the club also welcomed football icon, Landon Donovan as a Strategic Advisor for the club. Directors and key investors contributed £1.28m for shares through Lincoln City Holdings, with a further £139k gratefully received from fans. A further £900k for investment into the club, remained in the Holdings bank account at the end of the financial year.
I’m not a financial expert, my thing is words, so I’m going to leave a slightly more in-depth analysis to those who understand these things. What I would say is the club has always been clear about these numbers, and any fan’s forum etc have outlined the fact we kept investing when the financial climate was tough, for instance installing the fibre sand pitch, renovating training pitches at the Elite Performance Centre and investing into the academy. These things have been made very clear throughout the pandemic.
I did find it interesting that ‘football fortune’ was, in the main, driven by our run in the EFL Trophy. The accounts show that in the previous year, football fortune and other income extended to £1.2m, whereas in 2020/21, it ran to £344,000. Mad isn’t it, that a year in which you finish fifth in the League One table, get to Wembley and face Liverpool in the League Cup, it is a run in the maligned Papa John’s Trophy that boosts the coffers?
Player trading was also down; Tayo Edun’s move was after the accounts closed, whereas Harry Toffolo and the Cowley’s fed into the season before. Indeed, the numbers show a transfer profit in the previous season of £496,974. A year later, the transfer profit was down to just £22,000, with the sale of Jorge Grant to Peterborough mentioned as featuring ‘no upfront fee’. Remember, few clubs had money to spend, even this summer just gone, as a result of the Covid issues.
I’m not alarmed at these numbers, but I do think they serve as an indication that those clamouring for big spends in the summer were not in full possession of the facts. The club’s future is always on a knife-edge; if we went all-in on a big summer, and lost £2m, or £3m as a result, then it could fall one way. Only careful management, and (as some put it) squeezing everything out of opportunities, is keeping us where we are.
By the way, if someone came in with a £750,000 bid for one of our players now, given this information, do you see why it would be accepted?