by Carlisle United lost £665,000 in the last financial year but also recorded the highest turnover.
The Blues say their 2022/23 audited accounts, which cover the period in which the team won promotion from League Two, show a “sound financial position”.
The CEO Nigel Clibbens has also commented on the major financial developments since then, related to the takeover of the Piatak family.
The director claims the “sword of Damocles” has been pulled over United bosses following a “breakdown in the relationship” between former lender Purepay Retail Limited and “key stakeholders” at Brunton Park, who he does not name.
Untied owed Purepay more than £2.4m before Piataks Castle Sports Group bought the debt as part of their takeover.
Clibbens, in a statement from the club, said that “the heavy uncertainty arising from the continued lack of assurance that Purepay Retail will not demand a full refund immediately but at any time… placed the club in a high risk position during 22/23. and heading in 23/24.
“We also had rapidly accelerating interest charges on this debt.
“The breakdown in the relationship with Purepay and a key stakeholder following the changes in February 2022 left the future of the club at risk, without addressing the debt and ending their involvement with the club.
“Efforts to bring in new ownership and investment were progressing at the end of the year to achieve exclusivity with Castle Sports Group. This led to the sale of the club and a transfer of control in November. [2023] and settling Purepay debts.
“As a result, the material uncertainty surrounding the club’s going concern has now been removed.”
The 2022/23 financial period covers the time before the takeover, and includes, United say, “the best revenue performance on record”.
The newly published accounts show United’s top line turnover was up to £5.29m, up 11 per cent, with the figure boosted by increasing ticket, retail and commercial income as well as replacement income.
“It is at its highest level for over ten years despite a significant drop in player income and exceptional income,” the club said.
Business turnover was up to £3.06m from £1.99m and the club’s recurring income of £4.74m – up from £3.62m – was “again an all-time high”.
United revealed they earned £165,000 from their play-off semi-final, although ‘luck of football’ income from player sales, cup runs and TV fees fell significantly to £373,000 from £761,000.
The club saw an increase from £2.93m to £3.44m from £2.93m to £3.44m, including extra wages and bonuses for players and football staff.
United’s ‘total football expenditure’ also rose by 28 per cent to £2.81m, including travel, medical, recruitment and scouting as the club backed Paul Simpson’s drive to improve the team and their performance.
United’s total debt on June 30, 2023 was £3.03m, most of which was owed to Purepay, including £148,000 of additional interest charges.
Clibbens accepted that the information in the accounts was “very historical” as the end of the financial period was almost nine months ago.
He said United’s six-figure loss was “low in the context of other League Two clubs” and that the accounts “show us in a good day-to-day position at that stage”.
He added: “With £1.6m of cash in the bank, despite no external funding since May 2019, we have had no creditor pressure and all our PAYE and VAT liabilities have been paid in full and on time .
“The club’s underlying business was extremely successful as Business Turnover increased by +54%. The crowds were the best for many years and the fans responded to the success on the pitch.”
Clibbens said United’s player budget was at its highest level since the 2016/17 season under Keith Curle, but also stressed it was “in the bottom quartile of League Two spenders”, admitting that Carlisle’s promotion proved not lower levels of expenditure are a barrier to success. in the division.
“Player transfer income was greatly reduced and cup income was again very poor. These remain critical aspects of our funding and operating model every year, even under the new ownership,” he said.
For the current financial year 2023/24, Clibbens said the Blues are seeing “the best year ever for business trading” to meet their best in almost 50 years.
“This has resulted in a significant increase in resources for the club. All of this additional income as well as more funding has been allocated to the Football Department, regardless of the takeover, to continue to support the plan to improve to put on and success in a sustainable way,” the director added.
Clibbens added that United had once again increased their spending on player costs for the League One season, as well as other football costs, by around 50 per cent.
He added that the additional spending in the January window, after the takeover of the Piataks, would mean “a very significant and higher operating loss in 23/24, despite the biggest year ever off the field.”
Clibbens also commented on the debt situation, adding: “Prior to the sale of 90% of the shares to Castle Sports Group (“CSG”), the relationship with Purepay Retail was terminated in order to avoid the “sword of Damocles”. . held above the club.
“CSG bought the debt which initially increased its value from the £2.1m loan to £2.64m. It was settled at £2.45m and made an immediate cash payment in full. CSG stopped charging interest immediately. Meaning this means we have no interest charges in 23/24 (about £200,000 saved on previous charges) The £2.45m debt to CSG is also to be waived in 23/24.
“The takeover in November 2023 brought £1.35m of new equity into the club to strengthen its day-to-day soundness and provide immediate funding to address the capital investment backlog and fund further resources for the football.”
