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Exeter City AGM report

2 March 2014

Joint report from the Exeter City FC board and the Exeter City Supporters’ Trust board

ECAFC Club AGM (Finance items – year ending 30th May 2013) 
St James Park, Friday 28th February 2014

The Chairman’s introduction set the scene by explaining that ECAFC was not only a ‘people’ business, but was in effect a collection of a dozen businesses that come together to deliver what we know as The Club.  He said that it is very easy for examples to be given of businesses with larger turnovers and lower staffing, but these invariably relate to operations where the product is consistent and of high value and doesn’t require the level of people involvement that a football club does.

In his address to the Club Board last week the Auditor stated that he thought that we were actually understaffed for the complexity of operation, where he has identified over 60 separate business aspects. 

The Chairman paid a compliment to all paid and voluntary staff for the hard work and effort they put in to try and achieve the best for the whole of Exeter City FC. 

The Finance Director presented the Accounts and explained that relegation from League 1 had had a serious impact on various income streams, such that the turn-over dropped by 22%.  He went on to say that playing performances do have an impact on the finances and the statistics of gate income over the years bear this out.  Another 1,000 on the average attendance would make a significant difference to financial outcome.  However, he reported that even in those circumstances the company made a trading profit of over £53k.

The Statutory Accounts have to take notice of depreciation, short/medium term loans and provisions against previous grants and the final outcome is an operating loss of a shade over £55k.

The Balance Sheet includes long term liabilities such as the Trust main loan, which is not required to be repaid in the foreseeable future.

The Trust and other shareholders asked a series of technical questions on the accounts, concerning what items made up ‘other operating income’; the structure of pensions provisions; and the rental arrangements with OTR Ltd for the lease on the St James Centre, which were answered by the Finance Director who also explained that the £21k of directors fees was split into £16k specifically listed as directors fees and £5k which is accounted for under finance costs.  The Finance Director also explained the procedure by which the former CEO was paid via a service agreement with his private company.

The adoption of the Accounts was proposed by Andy Bratt on behalf of the Trust and seconded by Cliff Rice and was accepted by a unanimous vote of the shareholders present.

Shareholders asked about the financial impact of the current cash flow situation.  The Finance director explained that the original structure of the fixtures list that gave us fewer home matches in the first 7 months of the financial year than in the last 5 months had set us a challenge, which has not been helped by having key matches postponed and lower income levels when they have been played. 

Results on the field have also impacted on attendance numbers as has the general economic climate.  He said that in these circumstances, the lack of a working capital fund has meant that the club has asked the majority shareholder for some short term assistance to weather this period, because whilst the income is intermittent, the bills, especially wages and taxes have to be paid on time.  The Finance Director is confident that all is in under control and with a third of the season still to go there is every prospect of a successful financial outcome for the year. 

The Trust asked if the Board were aware of some of the real concerns being expressed by some fans at the announcement of next season’s prices.  The reactions of ‘senior’ supporters were specifically mentioned.  The Chairman said that they were, but that prices hadn’t really increased for the last 3 seasons and this was against a backdrop of ever-rising overheads.  One move had been to adjust slightly the price differentials between Adult and Senior tickets, although the latter could still be bought at considerable savings in all sections of the ground.  He agreed that explaining such increases and remaining sensitive to fans’ views were very important, but that these moves had been made after very careful deliberation involving the full membership of the gates Committee.

As income falls, it makes satisfying all the competing needs of the club more difficult whilst always bearing in mind the need to ensure the manager can fund a competitive team.  Questions were asked about repairs to the Old Grandstand and floodlight upgrading.  The Finance Director explained that work on formulating budgets for 2014/15 is underway, even though there are still 3 options of which division we will be playing in.  Clearly these works will need to be done, but no definite plan can be made until there is some more certainty as to the key budget elements for next season.

The Chairman spoke to a question from the majority shareholder regarding staff employment terms and conditions and said that these matters are considered to be personal and private and subject to contract.  He would discuss this further with the Trust but through the Joint Boards mechanism. 

The Trust representative acknowledged the hard work of the Club Board in this challenging climate, and said the Trust looked forward to playing its part in progressing the future fortunes of the Club. 

The Chairman thanked shareholders present for their questions and in particular the Trust for articulating the views of many supporters at this time and their efforts to explain the Club’s workings to supporters.  He welcomed continuing to explore with the Trust ways in which communications between all sectors of the Club and its supporters could be improved.

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