DEEP inside annual accounts are often several nuggets of information relating to the running of a Premier League football club.

Saints have filed their financial report for the year ending June 30 2022, posting a pre-tax loss of £6million – an improvement on the previous year (£13.7m).

We have had a deeper look at the report, signed off on behalf of St Mary’s Football Group’s directors by Southampton FC’s managing director Toby Steele.

Here are some of the points you might find interesting explained…

READ MORE: How much Saints spent on agent compared to Premier League rivals

Season 2021-22 versus 2020-21 (financial year 1 July to 30 June)

Loss on ordinary activities (before interest) before player trading - £(2.4m) (2021: profit £16.8m)  

In simpler terms, this pretty much means 'loss on activities before interest and tax’ (£5.9m), excluding the ‘profit on disposal of players’ (£31.2m) and amortisation (£35.1m).

The previous year, 2020-2021 made a ‘non-player’ profit mainly due to the benefit of the one off extra broadcast revenue from the extra six games in that financial year (from season 2019-20).

You can see higher broadcast revenue in the report, with likely very little associated variable cost with this revenue so the extra goes straight to profit.

Loss on player trading £(3.6m) v £(30m) 

A significant improvement despite still taking a small loss on player trading. This is firstly due to good profits on sale of Ings, Vestergaard and more in summer 2021, and lower amortisation costs of player costs in the year.

This could be by holding a combination of a higher number of individually less expensive players over longer contract lengths in 2022.   

For example, Ings and others would have been individually high cost in 2021 and their costs were over a short contract so, therefore, amortised quicker in the previous profit and loss account of 2021.

Employee cost – average wages and salaries by employee

Group staff costs, including directors’ remuneration, totalled £113m, when including wages and salaries, social security costs and pension costs.

You can divide ‘wages and salaries’ by total average monthly number of employees.

- 2022: £98,872,000  / 408 = £242,333 

- 2021: £99,158,000 / 385 = £257,553

These numbers include players, directors and every employee (so it’s a crudely extreme mix of averages - players and normal staff).

The average is down probably due to more (lower paid) employees (non-players or on women’s side diluting the average), not players getting paid less.

There are six listed directors. Directors’ remuneration totalled to £1.89m with the highest-paid individual director receiving £831,000 (2021: £971,000).

Average length of players' contracts at balance sheet date 

31 months (2021: 27 months) 

This data will have been superseded by signings since 30 June 2022, of which there have been 15 in the first team. The likes of Moussa Djenepo have also signed extended contracts.

Contractual agreements for player purchase and sales since 30 June 2022: 

Over the last two windows, the club entered into sale and purchase agreements with net transactions amounting to £100.5m payable (2021: £8.3m).

That figure is the value (paid and future instalment payments etc.) of all the club’s net transfers (at nominal value not discounted) from 30 June 2022 to 24 Feb 2023.

(page 41 note 32)

Outstanding player transfer fees to settle

These will be discounted amounts (historical transfer values payable are discounted marginally when recorded to match amortisation with to date value of money).

However, outstanding player transfer fees due are:

Due within one year: £24.9m (2021: £24m).

Due after one year: £26.6m (2021: £16.3m).

Total: £51m (2021: £41m).

Stadium capacity usage 

2021-22: 93.4 per cent.

2018-19 (last season unaffected by Covid): 94.7 per cent.

Contingent liabilities

Potentially, current player transfer contracts could lead to a further £35.9m being payable on the current squad not currently recognised in the accounts.

The report details these are "dependent on first-team appearances and other factors”. These could also be based on winning trophies, international appearances and other bonuses.

These are only disclosed here and not recognised in the balance sheet as they are not considered likely. All clubs have this in their financial reports.

Balance sheet  - net assets and net current liabilities.

Net assets are listed at only £4m. However, since 30 June 2022, the group have issued new share capital at £48m so they have the support of shareholders.

Net current liabilities £(6.3)m - this means if all their liabilities due within one year (£72.5m) were called upon their current assets (£66.2m) would not be sufficient to settle. 

Interest on loan

Interest payments on loan £8m (2021: £7.4m).

Going concern

When a company operates as a going concern, it means that it is expected to carry on trading with no threat of liquidation for at least the next 12 months.

The report details: "The directors have prepared cash flow forecasts for scenarios in which Premier League status is retained and for relegation.”

This is not unusual; all the clubs in the bottom half and probably higher would be required to do both scenarios this year and every year unless relegation was extremely unlikely.

As well as the £48m already subscribed, this note says the directors "have indicated their willingness and intention to continue to provide financial support to the group”.

Again, this is not unusual disclosure in this situation for any company but it is a commitment.

They also note the playing squad's fair market value is in excess of the balance sheet (which does not show current value, the balance sheet only shows amortised purchase cost).

Debt

Liquidity - net debt £(70.8m) (2021: £62.2m). This is comprised of a bank loan - £91m (2021: £90m) and less cash held this year - £21m (2021: £29m).

The bank loan is marginally higher due to the change in the exchange rate of Swiss Francs to £ Sterling – they must have borrowed in Swiss Francs, not £.

The bank loan now has £12m payable in the next 12 months from 30 June 2022 (previously on 30 June 2021, it was all due after more than 1 year).

Revenue

Revenue has fallen but it is 2021 that is unusually higher, not 2022 deteriorating, due to broadcast revenue of six additional Premier League games that were suspended from the 2019-20 season into the 2020-21 financial year.

Broadcasting revenue: £115 vs £136m.

Matchday (stadium/tickets/concessions): £17.4m v £0.6m (due to COVID in prior year) – this figure shows how valuable matchday revenue remains even with television.

Headcount

The report explains this with staff headcount increasing from 385 to 408. The increase is partly due to increased commitment to women's team set-up.

Capital commitments

Amounts committed with contractors to spend on capital items (fixed assets stadium, training ground etc): £3.5m.