It has been a year of change for Leeds in a season that started full of promise as they charged towards a playoff place. Unfortunately, this was not to be as a poor run of form in the final weeks of the season saw Leeds just miss out on the playoffs.
A change in ownership was welcome news however it was still a distraction in which a prolonged sell, first 50% in January, then the final 50% in May, was an unwanted mid-season media topic the manager and players had to deal with.
The new owners, Aser Group will be happy to see the club return to profitably at the beginning of their era, making a small profit of £1m after a loss last year of £8.9m and will be hoping this is the start of an exciting period for the club on and off the pitch.
Let’s delve into the numbers.
Revenue Analysis
Leeds saw a healthy increase in revenue this year, rising from £30.1m to £34.1m (13.3%) after growth in all key areas of revenue.
Matchday revenue rose significantly, increasing from £8.2m to £10.2m (24.4%) after an exciting season kept fans at the stadium despite rising prices despite an ultimately disappointing ending, fans were revitalised by a change in the club’s fortunes from years of struggling mid table.
Broadcasting revenue rose sharply, increasing from £5.2m to £7.6m (46.2%) after a good season in the Championship, finishing 6 places higher while also venturing much further in the cups compared to last year, including a big payday in the FA Cup when they played Liverpool.
Commercial revenue saw slight growth, rising from £11.9m to £12.5m as Leeds maintained current commercial partners and added a couple to boost revenue by £600k. A more aggressive marketing strategy may see the club enjoy larger revenues in the future.
Other income, comprising catering income dropped from £4.9m to £3.9m (20.4%) despite rising matchday revenue as Leeds potentially move away from providing so much in hospitality services.
Leeds are likely to see a drop-in revenue this year after a disappointing season as managers continued to be led through the revolving door and fans grow restless again after another potential false dawn. This should lead to lower matchday and broadcasting revenue with commercial revenue increases required to offset this loss of revenue.
Expenses Analysis
Leeds also saw expenses rise at a higher rate to revenue, growing from £37.3m to £43.3m.
Amortisation costs rose from £4.1m to £5.7m (39.0%) after significant player investment by the club as they looked to gain promotion after losing a key player in Lewis Cook.
Leeds’s Lease costs for Elland Road remained stable at £2.1m while depreciation costs fell slightly from £1.4m to £1.2m (14.3%) as the club invested less in infrastructure during the year as takeover talks were ongoing.
Leeds enjoyed net finance income of £1.1m in the year after favourable movements on their financial assets compared to a net finance cost last year of £1m.
Wages rose by a fair amount, increasing from £18.1m to £20.7m (14.4%) after significant player investment and only one significant outgoing. The additional wage costs arose from their signings although the rise is moderate suggesting reasonably low salaries were paid as they picked off players mostly from lower leagues. The additional wage costs work out as only an extra £50k per week.
No directors were paid during the year as the Leeds boardroom shuffled compared to pay of £1,729,000 last year. However, this may have transferred in opaque fashion to another company to avoid scrutiny.
Leeds had no tax expense during the year after utilising previous losses to offset this year’s taxable profit.
Transfers Analysis
Leeds invested in the squad as they looked to overcome the loss of star player and youth prodigy Lewis Cook, bring in 6 players to replacing while only 1 other player replaced him.
In came Roofe (£3.2m), Antonsson (£2.2m), Bridcutt (£1.0m), Ayling (£0.8m), O’Kane (£0.5m) and Sacko (£0.1m – on loan) for a combined £7.7m.
Out went Cook (£6.3m) and Mowatt (£0.5m) for a combined £6.8m.
This led to a modest net spend of £0.9m, down £0.4m (30.8%) from last year as Leeds once again recouped most of what they spent after selling their start player. The additions were good, making sure Leeds didn’t miss Cook too much before faltering towards the tail end of the season.
Due to the sale of cook, the club made an accounting profit on player sales of £8.9m.
Leeds enjoyed a cash infusion from transfers after spending cash of £6.9m while receiving £9.0m due to receiving all the cash from the sale of Cook up front. This is very good compared to the net cash outlay of £3.3m last year.
Further delight for Leeds as they are also owed transfer fees still of £7.8m compared to Leeds only owing £3.8m which is a healthy position to be in.
Leeds do however have contingent transfers fees of £6.3m that they may have to pay in the future should certain clauses be met.
Assets/Liabilities Analysis
Leeds saw a sharp increase in net debt levels during the year as their prolonged stay in the Championship continues to bite the club financially.
Leeds’s cash levels did rise from its modest levels, rising from £2.1m to £4.0m (90.5%) after a return to profitability while the net transfer cash income also boosted this figure. This allowed them to spend £1.2m on the club’s infrastructure as well as they looking to improve performance on the training ground while the club also saw a cash boost from new loans.
Debt levels rose from £16.6m to £24.8m (49.4%) after Leeds’s new owners pumped £14.5m into the club while they also paid off bank debt amounting to £6.5m.
Leeds also have a lease liability of £0.4m that could but hasn’t been included as part of this debt calculation.
Net debt therefore rose from £14.5m to £20.8m (43.5%) as the club remain in a relatively healthy debt position having returned to profitability, being one of the few Championship teams to be in such a position. Leeds could be forgiven for not being excited at the start of their new era however Massimo Cellino believes differently – “If you can survive working with me, you can survive anything.”
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