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Dundee United have posted a record profit of nearly £4 million for the last financial year.

The Tannadice club’s annual accounts for the period to June 2015 have revealed a net profit of £3.94m, an increase of some £2.7m on the previous year.

This represents the largest profit since the club was founded in 1909 and also the fifth time they have reported a profit in the last six years.

The substantial profit includes the millions brought in from the sales of Ryan Gauld, Andy Robertson, Gary Mackay-Steven and Stuart Armstrong.

A statement from United read: “These figures continue the significant improvement when compared to the previous 12 years, a period when the club recorded only one profitable year.

“The profit for 2015 was underpinned by a 4% increase in revenues to £5.82m, reflecting positive on field performance with the club securing a top six finish for the eighth consecutive year and a second consecutive domestic league cup final in reaching the 2015 League Cup Final.

“Successful player trading enabled the club to reduce its net debt, which stood at £7.3m in 2007, to £1.28m in a further step in the club’s strategy to reduce net debt.”

United are of course in a perilous position in the Premiership and next year’s accounts could have an entirely different look to them.

They will also factor in the pay-offs of manager Jackie McNamara and his coaching staff.

The statement continued: “It is noted that the club continues to spend more than it generates in income.

“The operating loss for the year was £799k and only successful player trading can sustain such losses.

“Much work continues to be done on identifying and implementing reductions in operating expenses and the value of this work should be reflected in forthcoming results.”

Naebody

Feb 24 2016, 01:32 PM

Accounts not yet filed at Companies House, so it's impossible to draw any kind of conclusions. The figures, as given, are basically meaningless.

Hamish

Feb 24 2016, 03:01 PM

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Best tell that to the BBC, Scotsman, STV, Courier etc, etc who are reporting them then

As they report on the Chancellor's budget and autumn statement but, as we all know, the devil is always in the detail.

Morvant's Finest

Feb 24 2016, 02:09 PM

So, on a less snarky level, what will/could be the difference between the figures reported and the figures filed?

That aside, anybody else willing to discuss the fact that we're almost certainly likely to have made a massive profit in 2014-15, along with an operating loss (give or take a few quid here or there)?

Naebody

Feb 24 2016, 03:17 PM

This time around we have a "net profit" of £3.94m. (I'm guessing net profit means net income, so will be after tax, though net income's not a UK accounting standard so it's difficult to know for sure.) The operating loss is £800,000, suggesting an exceptional has been booked of about £4.7m. (Bear in mind this figure will net off the cash we've paid for players against cash we've received for sales). What is that exceptional, though? How much is a debt adjustment and how much is retained cash? Much like last year, the answer to that question would tell us how much of the "profit" actually exists.

Setenza

Feb 24 2016, 03:54 PM

Not following that way of looking at it.

This year's operational loss was £800k, last year's operation loss was £114k. Assuming the operational loss is ignoring player sales / buys, then that seems quite a large increase in some aspect of running costs / spending. And a pretty high figure, that it would be hard to cover each year if we can't do it with player sales.

Naebody

Feb 24 2016, 03:17 PM

Morvant's Finest

Feb 24 2016, 02:09 PM

So, on a less snarky level, what will/could be the difference between the figures reported and the figures filed?

That aside, anybody else willing to discuss the fact that we're almost certainly likely to have made a massive profit in 2014-15, along with an operating loss (give or take a few quid here or there)?

No snark, at least from me. I'm just saying the figures, as presented, tell us very little.

It's probably easiest to see things in the context of last year's figures, which we do have detail on.

Last fiscal year, United made a £1.2m profit. But £1.4m of that £1.2m profit didn't really exist, as it was a consequence of unwinding the bank debt. Player transfers raised just £68,000, so operationally the club made a loss of £114,000 (which was covered by an increase in debt). The reasons for that loss were that wages rose 8% to £3.5m and administrative expenses rose 18% to £1.2m. Had that not happened, the club would've broken even at an operational level, so while costs were a concern it looked like things were stable. More or less.

This time around we have a "net profit" of £3.94m. (I'm guessing net profit means net income, so will be after tax, though net income's not a UK accounting standard so it's difficult to know for sure.) The operating loss is £800,000, suggesting an exceptional has been booked of about £4.7m. (Bear in mind this figure will net off the cash we've paid for players against cash we've received for sales). What is that exceptional, though? How much is a debt adjustment and how much is retained cash? Much like last year, the answer to that question would tell us how much of the "profit" actually exists.

Net debt is £1.2m-ish, down from £3m a year ago -- so already we have a rather big gap in the implied figures between a £4.7m exceptional and a £1.8m debt reduction. This is where things get seriously muddy. Debt isn't created equally. Last year there was a rather complicated release of unsecured notes to add to the slew of related party loans we've been surviving on for a decade. It's basically useless to talk about debt without understanding the type of debt.

Awaiting further information, I see two possibilities.

1. United have overspent but retained a million or so in the bank from transfers that can tide them through. The reason the club still has £1.2m of debt, in spite of being net cash, is that the loan's at private mates-rates so cheaper to retain than to pay off. That'd be a good position to be in.

2. Alternatively, United has basically lost all control of its costs while using exceptional cash to pay off privately held debt in a deal that was negotiated on suicidally bad terms, meaning it's had to draw down more debt and/or trust in the largesse of Broughty Ferry's business community just to cover the overspend operating costs. That'd be a very bad position to be in.

As of today, I'm none the wiser about which position we're in.

Quote:

 

United have continued to achieve success in the transfer market this season, selling Nadir Ciftci, Ryan McGowan and John Souttar for a combined total of about £2million.

Naebody

Feb 24 2016, 04:00 PM

Setenza

Feb 24 2016, 03:54 PM

Not following that way of looking at it.

This year's operational loss was £800k, last year's operation loss was £114k. Assuming the operational loss is ignoring player sales / buys, then that seems quite a large increase in some aspect of running costs / spending. And a pretty high figure, that it would be hard to cover each year if we can't do it with player sales.

Yeah, true. But I'm not sure how that relates to what I wrote. Sorry.

Setenza

Feb 24 2016, 04:05 PM

I get the operational loss, don't see how £4.7m fits into it, other then just being the difference between our net profit and operational loss.

Given one contains player sales, and one doesn't, not sure of the relevance of the figure.

Morvant's Finest

Feb 24 2016, 04:03 PM

So can we assume the discrepancy between the £3.9m exceptional and the debt reduction of £1.8m is explained by the debt deal we cut with BOS?

zico

Feb 24 2016, 08:23 PM

I think we need to get to grips with this massive increase in operating costs. Why aren't questions being asked as to why we went from 100k to nearly 800k in 12 months?