Everton’s losses quadruple in 2022-23 fiscal year

Everton’s latest finances, released to shareholders today, indicate statuatory losses of £89.1 million, more than doubling the £44.7 million recorded in 2021-22. The Club is now experiencing the full impact of the suspension of key sponsorship arrangements with USM Holdings and its subsidiaries, which began in February 2022 following Russia’s invasion of Ukraine and covered the entire reporting period, as well as ongoing expenditure on the new stadium at Bramley-Moore Dock.

Turnover fell by £9 million to £172.2 million, resulting in an increase in the wage-to-revenue ratio from 90% to 92%, which has yet to benefit from the salary bill reductions that began last summer with the exits of high earners such as Yerry Mina.

Operating costs before player trading increased by £16.4 million to £40.9 million, owing to the cost of pre- and mid-season tours to the United States and Australia, “adverse movements in foreign exchange rates, Premier League retention bonuses for the new coaching staff taken on in the year, and increased new stadium operational expenditure”.

The amortisation of player registrations increased by £9.3 million, and £7.1 million was paid to former managers and their staff, which was insufficient to counterbalance a £42 million profit from player trading.

Sponsorship revenue was £19.2 million, but the Club lost £20 million when its commercial contracts with USM, Megafon, and Yota were frozen.

The club’s debt has climbed to £330.6 million as a result of further loans taken out to support the development of Everton Stadium.

It is unclear how the final figures were adjusted for the purposes of the Premier League’s Profitability and Sustainability Rules, but the latest accounts will undermine Everton’s argument that expenditure has shown a positive trend over a rolling three-year period, as one of their heads of mitigation stated to the first Independent Commission, which originally recommended a 10-point deduction last November.

Furthermore, the 2022-23 financial statements reaffirm Everton FC’s ongoing vulnerabilities. The report reads, “Efforts are currently underway to acquire money as stated in the Directors’ report.

“As a result, the Group may have to seek additional money from either its majority shareholder or the potential new shareholder (whichever was in place at the time).

“Collectively, the above situations suggest the presence of a material uncertainty that may raise serious concerns about the Group’s ability to continue as a going concern. The Board is satisfied that capital will be acquired or refinanced, and that they will be able to reach revenue and savings levels sufficient to allow the Group to continue operating for 12 months following the date of signing these financial statements.”

“However, whilst the Directors acknowledge these uncertainties may cast significant doubt on the entity’s ability to continue as a going concern, they have concluded that it is appropriate to prepare the financial statements on a going concern basis.”