Following the conclusion of the 2022/23 season, we can provide the below update from the Board:
Firstly, we would like to sincerely thank our staff, players, sponsors, supporters and the wider community for the endeavour, effort and resilience shown over the past season. On the pitch, the team battled bravely, falling narrowly short of avoiding relegation in our second season in League One, which would have been a magnificent achievement. Off the pitch, our staff have continued to work in a professional and positive manner throughout the season, leaving many aspects of the Club in a much better position once again than which we started.
As most will be aware, this season has been overshadowed by matters away from the pitch. As some background, which is or will shortly be in the public domain, after year-on-year losses for a sustained period, the Club posted a healthy profit for the first time in 2021, and we will shortly be publishing our 2022 accounts, which will show a profit just over £1 million. This income was derived over those periods from on pitch success, cup runs and associated TV & sponsorship income, significant player sales, Premier League and EFL grants, insurance claims and prudent cost management through the pandemic and improved commercial performance across the Club. This was particularly prevalent in 2022, with over £2.4million income received from the ‘one-off’ streams. During year end 2022, almost all the remaining loan and interest owed to the owners, Bond Group Investments, was repaid at their request and within their rights. It made sense to clear this debt which had attached a high rate of interest agreed before the current owners secured a majority share. In the 2021 accounting year, around £647,000 was also repaid. We would all have wanted this money to stay within the Club to allow investment and growth, but the clearing of the debt served to strengthen the balance sheet in advance of a sale.
The result of this left limited cash reserves coming into this season. In our 2023 accounts, which will be published in due course, we will be reporting a significant loss in the region of £750,000 to £800,000. Our playing budget, which is a significant proportion of our annual expenditure, was set in the summer of 2021 upon promotion, for a two-year period due to the number of contracts of this length we were required to hand out. This represented a doubling of our 2020-21 League Two playing budget. Over the first year of those contracts, around £1.8million was repaid to Bond Group against the aforementioned loans, leaving us virtually debt free but with limited cash at bank.
We were unable to make any adjustments or reductions to the playing budget in summer 2022, as the majority of contracts still had 12 months remaining, and we wished to remain as competitive as possible in League One. Whilst we have continued to grow revenues across the Club this season, we have only been able to repeat a fraction of the ‘one off’ income streams in 2023, resulting in an operating loss which the owner has underwritten with a mixture of loans and equity investment, as well as a mixture of loans and equity investment from Sarb Capital, as has previously been communicated.
The Club was publicly placed for sale in September 2022, and since then there has been a lot of noise externally in the media, which has been somewhat destabilising for players, staff and supporters. Wages were paid late in March 2023 by a matter of days, which was devastating for everyone concerned at a critical point in the season and a totally unacceptable situation.
We are now here, 8 months after the Club went up for sale, and we remain in a state of uncertainty as to when a sale is going to be completed, which severely hampers future planning on and off the pitch, until this is resolved and stability ensured. We have been informed by Bond Group that we need to work to a breakeven budget at the moment, resulting in a very much reduced playing budget and leading to the release of all our out of contract players earlier this week.
Having seen such marked progress on and off the pitch since the beginning of 2020, through the collective effort of every single person associated with the Club, we urge Bond Group, who remain solely and completely in control of the sale process, to complete a suitable sale of the Club as quickly as possible to ensure we have the best possible opportunity to continue to grow as a football club and focal point for the community in the Morecambe and wider North Lancashire area.
Thank you once again to our staff, players, supporters & sponsors who continue to fight every day to keep us moving forwards.