Everton has posted a second consecutive year of record revenues totalling £189m - a 10 per cent increase on the previous year.
Commercial revenue from sponsorship, advertising and merchandising grew by 34 per cent from 2017, reaching a record £20.7m, with the Club’s first African main partner, SportPesa, and the innovative engagement with sleeve partner Rovio and its iconic game, Angry Birds, augmented by a growing portfolio of Official Club Partners.
Combined with gate receipts, sponsorship and other commercial income increased by 45 per cent from 2017.
Driven by a record 31,282 Season Ticket holders, an average attendance at Goodison Park of 38,797 demonstrated the unwavering support of the Club’s fans - with every home seat sold for every Premier League match in the 2017/18 season.
Premier League attendances and participation in the UEFA Europa League combined to achieve a 16 per cent increase in gate receipts when compared to the previous season.
Broadcasting revenue - which makes up 69 per cent of the Club’s total revenue, a reduction from 76 per cent in 2017 due mainly to the increase in commercial revenues – dropped only marginally from £130.5m in 2017 to £130m.
An eighth-place finish secured the Club £25.1m in merit payment and contributed to the eighth highest Premier League broadcasting distribution, down from seventh in 2016/17.
Continued investment in the first-team squad, which included the additions of Michael Keane, Gylfi Sigurdsson, Cenk Tosun, Theo Walcott and Jordan Pickford, led to the doubling of intangible assets from £121m in 2017 to £240m in 2018 and was the main driver for rising staff costs from £104.7m in 2017 to £145.5m in 2018 and an increase in player amortisation from £37.3m in 2017 to £66.9m in 2018.
As a result of this investment, the Club’s total wage to turnover ratio has risen from 61 per cent in 2017 to 77 per cent in 2018 (this figure would be 73 per cent with outsourced operations in retail and catering taken into account).
The Club incurred £34m exceptional costs in 2018, not present in 2017, £14.4m of which related to settlement costs for the termination of former employees and other costs in relation to the change in coaching staff in the year.
In addition to the first team’s wage bill, other operating costs, such as the Academy and first-team support, also increased. The Club also incurred costs from competing in the UEFA Europa League as well as a cost of £11.4m for the design and other work relating to the new stadium. These costs cannot be capitalised until planning permission has been granted.
As a result, the Club made an operating loss of £22.9m compared with an operating profit of £25m in 2017 (both excluding player trading).
The Club reported a loss after tax of £13.1m compared to a profit after tax of £30.6m in 2017.
The shareholder loan, which reached £150m in 2018, is accounted for as equity. Bluesky Capital Limited continued to support the Club post-year end with an additional shareholder loan of £100m received.
Everton Chief Executive Officer, Denise Barrett-Baxendale, said: “For the second consecutive year the Club has generated record revenue. Gate receipts, sponsorship and other commercial income increased significantly by 45 per cent and the continued and quite magnificent support of our fans meant that Season Tickets reached the cap with more than 10,000 on a waiting list. This commercial growth demonstrates our progress and we have a vision for the Club that is shared on and off the pitch by our Majority Shareholder, Chairman, our Board of Directors, the Everton Leadership Team, our Director of Football and Manager.”
Everton Chairman Bill Kenwright said: “With Farhad continuing his outstanding commitment, Marcel and Marco driving our first team forward, Unsie continuing to develop some of the best young talent, Denise thrusting our operations ever onward and a fanbase that continues to inspire our ambition, we look forward to the next 12 months with purpose and anticipation.”