Reading FC record loss of £35.5million

Published by

Stephen Emerson

The Select Car Leasing Stadium

The annual financial report into Reading FC plc record a net loss at the club of £35.5 million.

The report filed with Company House this week, questioned the club’s ability to continue as a going concern but concluded that the company was good to continue as such for a period of 12 months from when the accounts were issued.

Auditors stated that the figures: “indicate the existence of a material uncertainty which may cast doubt about the company’s ability to continue as a going concern.”

This uncertainty is somewhat assuaged by the continuing support of the shareholders. The ability of the club to continue as an ongoing concern is dependent, reads the report on a shareholder confirmation: “that they will not seek repayment of their loans to the company unless the company’s cash flow permits repayment to be made without jeopardising the company’s ability to continue as a going concern.”

The report concluded that: "we have not identified any material uncertainties relating to events or conditions that. individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a penod of at least twelve months from when the financial statements are authorised for issue."

The company incurred a net loss of £35, 51 0,176 during the year ended 30 June 2021 and, at that date had net liabilities of £87,670,999 .

Reading will not be the only football club to have revenue streams decimated by covid restrictions and reduced/zero ticket sales for last season.

The accounts also show that wage costs to turnover ratio ran at 234%. However Reading are unlikely to be the only club to have this figure maladjusted due to falling revenues caused by covid restrictions.

Reading were this season docked five league points for pre-covid breaches of the financial fair play rules.

The total wage bill was reduced by £5.2million down to £32.3m from the 2020 figure of £37.5million.

The report states: “Matchday revenue fell by £3 m to £0.58 m compared to the previous year. The majority of games were played behind closed doors with only a small number taking place in front of a reduced capacity crowd. This also impacted commercial revenues which fell by £1.3m to £3.3m for the year to 30 June 2021.

“The loss of matchday and commercial revenues were partially offset by an increase in media and broadcasting revenues which increased by £ 1.2m to £9.4m.”

Key figures from Reading FC’s 2021 annual financial report

Pre-tax loss of £35.7m (down from £42m)

Turnover £13.8m (down from £17.8m)

Matchday rev' £0.58m (down from £3.58m)

Commercial rev' £3.3m (down from £4.6m)

Media rev' £9.4m (up from £8.2m)

Wage bill £32.2m (down from £37.6m)

Stephen Emerson

Stephen Emerson is the Managing Editor of The Business Magazine and is responsible for the publication's print publications and online properties including the newly launched Biz News websites in Hampshire and Dorset. Stephen has been a journalist for 20 years and has worked at local, regional and national publications and led a team which made The Scotsman website one of the fastest growing news sites in the UK with over eight million monthly users. He has a keen interest in technology, property and corporate finance and telling the stories of the people behind the successful firms in these sectors.