Season Review
The club completed its sixth successive season back in League One with another top-half finish albeit four places below last season. A good start to the season positioned the club in the play-off places by mid-November but a subsequent run of one win in 10 hampered any play-off aspirations.
A respectable league position was achieved given the explosion in player remuneration in League One which saw an increase of more than 50% in these costs. Although player-related spending in League One is governed by the EFL's Salary Cost Management Protocol (SCMP), there is ultimately no limit on what an individual club may spend on player costs. Unlike the Premier League or EFL Championship there is also no limit on the extent of losses a club may incur in League One. Despite our player costs increasing by more than 20% compared to last season, we slipped from the 12th largest budget to 19th and 17th after the summer and winter transfer windows respectively.
We reached the third round of the FA Cup before losing narrowly to League One title winners Birmingham City and lost by the same scoreline to Bolton Wanderers in the last 16 of the Vertu Trophy. The biggest disappointment was a first round exit to League Two Harrogate Town in the Carabao Cup.
Turnover
Overall turnover was significantly higher, up nearly 22% and surpassing £8million for the first time.
Although matchday revenue shows a significant increase this was largely due to the decision to bring bar and catering operations in-house from the start of the season. Excluding this impact, matchday revenue was marginally up due to
higher season ticket sales and slightly better cup revenue offset by a decline in EFL digital sales following the new broadcast deal.
Central distributions increased by nearly £0.5 million, almost solely on the back of the new EFL domestic broadcast deal with Sky Sports. After offsetting the loss in domestic digital sales, the net benefit from the new deal amounted to £0.35
million. Solidarity income from the Premier league increased by just under 3%.
Commercial income again increased by a double-digit percentage while retail and hospitality income were marginally higher.
Football fortune and miscellaneous income increased by more than £200k largely due to more prize money from greater progress in the FA Cup and EFL trophy. Player loan fees received were also higher.
Player Trading
Included in other operating income were player trading profits exceeding £0.5million. This primarily comprised the guaranteed fee and a contingent appearance fee from Millwall from the sale of goalkeeper Lukas Jensen in July 2024. Further net receipts were derived from the sale of Dylan Duffy to Chesterfield, 14-year-old academy player Jaxon Tomak to Nottingham Forest and a contingent appearance fee from the sale of Lasse Sorensen.
Netted off against the receipts were costs arising from the mutual cancellation of Jaden Brown's contract and a contingent appearance fee due to Tottenham Hotspur on the ending of TJ Eyoma's contract with the club.
2024/25 Result
The loss for the financial year was marginally lower than the corresponding year at £2.9 million and in line with projections. Despite the sharply higher turnover, administrative expenses increased by 13%.
As mentioned previously, the decision to bring bar and catering operations in-house inflated turnover as well as increasing costs by £0.45 million. Aside from higher player related expenditure, general business costs continued to increase at well above the rate of inflation.
Balance Sheet
The cost of additional player and management registrations during the financial year amounted to £0.55 million comprising fees for the signings of Rob Street, JJ McKiernan, George Wickens, Dom Jefferies and Erik Ring as well as some minor contingents for players signed previously.
Capital expenditure during the financial year amounted to £0.8 million including £0.5 million at the LNER Stadium and just over £0.2 million at the Elite Performance Centre.
Cash balances at year-end increased to £1.6 million from £1.3 million.
Long term creditors increased further to £2.6 million, attributable to the receipt of further capital grants for the Stacey West Community Hub project. Actual long-term debt which relates to bonds issued to fans for capital projects amounted to £537k at year-end with a further £79k included in current liabilities.
Net assets increased to £4.5 million from £3.8 million.
All additional funding required by the club was provided by shareholders through the issue of an additional 9.9 million shares for £3.6 million.
Future Developments
We were pleased to record our first seven figure player sale with the transfer of academy graduate Jovon Makama to Norwich City in August. Midfielders Ethan Erhahon and Ethan Hamilton were also sold during the summer transfer window.
These player sales will enable a significant reduction in the forecast loss for the 2025/26 year to approximately £2 million. Cash flow requirements will however remain close to previously anticipated levels with significant reinvestment into the squad. Ukraine U21 international midfielder Ivan Varfolomeev was signed from Slovan Liberec in the Czech Republic for the biggest outlay during the summer window, and Ryley Towler and Oscar Thorn were also acquired, from Portsmouth and Colchester United respectively, for low six figure fees.
Gender Pay Report
Due to bringing the catering operation in-house and LCFC on average employing more than 250 people, we have to provide a gender pay report. The report can be downloaded via the below link.
Further reading