Wednesday 11th November, 2020 at 9:29am
The impact of the Covid shut down on Partick Thistle was revealed today as the Club posted a trading loss of £128,408 in its accounts for 2019/20 against a drop in income of £380,000. The Club’s cash reserves covered the shortfall with the balance of the reserves remaining available for season 2020/21. This trading loss was limited by early action by the Board and CEO to cut expenditure and seek new sources of income as detailed below.
In addition to that trading loss, the Club has had to report a balance sheet impairment loss of £900,000 in relation to the sale of the land at Firhill from Firhill Developments Ltd to Three Black Cats Ltd (3BC). This will be reversed when the land is formally gifted back to PTFC (to coincide with the transfer of a 55% shareholding to the proposed fan ownership body) and will result in an increase in the value of the balance sheet by around £1,900,000. Although the transfer to fan ownership is now forging ahead, as the transfer did not happen in the financial year 2019/20, for accounting purposes the impairment of £900,000 must be included as an exceptional non-trading adjustment in this year’s accounts. The net result is a Loss Before Tax figure of £1.028m when combined with the trading loss of £128,408. This temporary impairment has no impact on the Club’s cash flow or reserves.
As lockdown came in, the Board immediately reforecast the Club’s 2019/20 and 2020/21 budgets to identify the scale of the financial challenges. As a result, we acted quickly to complete a cost cutting exercise across the Club as a whole.
Despite this, with no clear indication of when – or if – fans might return to Firhill, the worst-case budget for season 2020/21 still indicated a significant shortfall, even with access to cash reserves. With the Board in agreement that borrowing was not currently an option due to a prudent “no debt” policy, the current majority shareholder in the Club, Three Black Cats, offered financial assistance through an injection of cash to cover the remaining shortfall indicated in the budget. We are grateful for that support.
Monies from the Jagzone online subscription channel, early Season Ticket receipts, online prize draws, sponsorship deals and exceptional levels of fan donations, which we continue to be thankful for, were all crucial in boosting cash flow in the last financial year and will continue to do so in the coming year. Stadium rentals and the online streaming of matches are also providing new income and the Club will continue to seek to innovate in everything it does, as well as identify new sources of finances. It has been proactive in grant applications throughout this period and will continue to seek out and pursue sources of grant funding for as long as they are available.
As things stand, with the budget notionally balanced, any additional income from now on will strengthen the Club’s position as the financial year progresses. We are grateful to our CEO Gerry Britton for all the hard work he has put in through a difficult time and we thank staff, players and management for getting behind and supporting us.
Although the current trading position is challenging, Directors believe that the Club will recover from this unique situation brought about by a global pandemic. With the ongoing support of the fans, commercial initiatives, majority shareholder and hopefully assisted by government in due course, our priority will continue to be the financial stability and viability of Partick Thistle despite the ongoing uncertainties.