Response to Forest Finances 2019/20

The Trust is fortunate to have qualified financial professionals on the board and following the release of the club accounts, the following response has been produced.

The Trust is fortunate to have qualified financial professionals on the board and following the release of the club accounts, the following response has been produced…

The Football Club released its accounts for the financial year 2019/20 on 11th March 2021.

The headline issues from the accounts are as follows:

  • An operating loss of £31.9m (down from £34.4m)
  • An adjusted pre-tax loss of £15.9m (down from £25.1m)
  • Full compliance with Profitability and Sustainability rules (FFP) – a high priority for the Football Club
  • A small increase in turnover to £25.7m (adversely affected by COVID 19)
  • Wages of £33m (up from £31.4m)
  • Wages to turnover ratio of 148% (slightly higher because of COVID impact on turnover)
  • A spend of £2m on costs relating to the ground redevelopment.
  • The conversion of owner loans of £20.8m to share capital.
  • ‘The owner remains committed to the long-term future of the club and its funding’

Andy Caddell (Acting Trust Chairman) discussed the financial issues with the Nicholas Randall QC, Football Club Chairman, and the first part of the discussion can be accessed on the Football Club website, posted 22nd March, 2021.

The Trust acknowledges that the Football Club remains heavily dependent on owner contributions and net receipts from player sales. Whilst this is a concern, it is a situation which applies across the Championship, indeed Forest are around midway in most of the financial indicators.

Comparisons with other Championship Clubs are interesting as they seem to fall into three main groups:

  1. The clubs in receipt of Premiership parachute payments.
  2. Other clubs who are seeking promotion to the Premier League.
  3. Clubs who seek to stay in the Championship.

The first group greatly distorts the financial resources available to those clubs although several still incur losses despite their revenues (including player sales).

The second group which includes Forest shows that nearly all have substantial losses, including some who have resulted to asset sales other than players (ground/land etc).

The third group is smaller and includes clubs who are likely to budget for modest losses, but also rely upon owner contributions/player sales.

The Trust welcomes that Forest have steadily grown its revenue stream (marketing, sponsorship etc), and remains committed to the Peter Taylor Stand and adjacent area development. This development offers revenue opportunity beyond matchday. COVID-19 will have a detrimental impact on 2020/21 turnover.

The Trust is also pleased to see the ongoing commitment to the Academy including planned improvements.

In an ideal world the Championship would have a different financial approach with less dependency on owner contributions, but with less financial support there would be a further detrimental impact on the player budget, and likely the results.

The Trust welcomes the ongoing dialogue at senior level within the Football Club on these issues.