Arsenal Holdings Limited has now published its consolidated accounts for the year ended May 31, 2021. The loss for the year after taxation was £107.3 million (2020 – loss of £47.8 million).
The results for the financial year have been materially impacted by the coronavirus pandemic, which caused the majority of matches for the 2020/21 season to be played behind closed doors. For matches played behind closed doors there was a complete loss of ticket (and other matchday) revenue. Pre-tax losses (unaudited) of £85 million (2020 - £35 million (unaudited)) are considered to be attributable to the impacts of COVID-19.
The result for the year can be broken down into the following key components:
|Adjusted operating profit from football||39.5||37.1|
|Amortisation and impairment of player registrations||(117.4)||(113.3)|
|Sale of player registrations / Loan of players||14.8||63.6|
|Property trading profits||-||0.3|
|Net interest costs (excluding exceptional items)||(7.6)||(13.6)|
|Loss before tax||(127.2)||(54.0)|
Football revenue for the year was £327.6 million (2020 - £343.5 million). Despite playing 31 home matches (23 Premier League, including four fixtures deferred consequent to the 2019/20 season suspension, six UEFA Europa League and two domestic cup ties) only two of these games were played with any fans present. As a result, matchday revenue fell by some £75 million to £3.8 million. However, broadcasting revenues increased to £184.4 million (2020 - £118.9 million) reflecting distributions relating to the completion of the 2019/20 season and the club’s progress to the semi-finals of the Europa League (compared to exiting at round of 32 in the prior season). Commercial revenues were slightly reduced to £136.4 million (2020 - £142.3 million) mainly as a consequence of pandemic-related factors.
Overall wage costs finished at £244.4 million (2020 - £234.5 million) with underlying growth in player wages offset by costsaving measures in response to COVID-19, including a wage reduction scheme agreed by the first-team players. The club incurred exceptional costs of £6.7 million in connection with staff restructuring measures taken in response to COVID-19 impacts.
The total profit on sale of player registrations was £11.8 million (2020 - £60.1 million) and player loans amounted to £3.1 million (2020 - £3.5 million). Player trading profits continue to have a significant impact on overall profitability and the club’s ability to realise profits during 2020/21 may have been adversely impacted by market conditions with reduced overall liquidity as clubs’ acquisition budgets were impacted by the financial pressures of the pandemic. Average annual profits on sale of player registrations over the last five years, including 2020/21, have been £42.2 million.
Net finance charges of £39.8 million (2020 – £13.6 million) were impacted by one-off exceptional costs of £32.2 million relating to the redemption of the Group’s stadium finance bonds and their refinancing via a loan provided by the Group’s ultimate parent company, KSE UK Inc. The refinance was a direct consequence of the pandemic as significant elements of the stadium finance bond arrangements were linked to gate revenues.
Following additions to player registrations at a cost of £114.8 million and amortisation charges, the book value of intangible fixed assets (player registrations) was reduced to £294.2 million (2020 - £303.5 million).
The year-end cash position was significantly impacted by COVID-19 and the delay to the normal season ticket renewals process with closing balances of £18.8 million (2020 - £110.0 million).
Significant funding has been provided by the ultimate parent company, KSE UK Inc., which is wholly owned by the ultimate controlling party, Mr. E. S. Kroenke. During the year KSE UK Inc. provided funds to refinance the stadium finance bonds and for working capital purposes as required. The financial challenge remains significant, but the club continues to have the unwavering support and commitment of its ownership, Kroenke Sports & Entertainment.
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