Season review
Plymouth Argyle returned to EFL League One in 2020/21 after a one-year hiatus. Under the ownership of Simon Hallett and behind closed doors, Plymouth Argyle secured an 18th placed finish to consolidate its status. A run to the FA Cup fourth round was also welcome.
Financially, a huge insurance pay out of £2.5m on a business interruption insurance policy helped Plymouth record a £0.4m profit. Such policies will now be commonplace in sport but kudos to Plymouth Argyle’s management for being ahead of the curve.
This article analyses the 2021 finances of Plymouth Argyle.
Revenue
Plymouth Argyle saw revenue fall from £7.0m to £5.7m (19%) as a full season behind closed doors depleted matchday revenue.
It is worth noting that Plymouth Argyle had significant other income of £4.0m (2019: £0.5m). This was largely due to a maximum insurance pay-out on a business interruption policy it had in place.
In addition, the club also received £1.2m in Premier League solidarity as Premier League clubs distributed some of their wealth among the EFL pyramid.
Matchday
Matchday revenue fell from £2.7m to £0.8m (68%) as Plymouth Argyle played the season behind closed doors. The financial picture would have been even worse had it not been for many fans turning down refunds to support the club.
Plymouth Argyle can expect a bounce back to previous levels of matchday revenue of around £3m following the return of fans for the 2021/22 season.
Broadcast
Broadcast revenue rose from £1.4m to £1.8m (35%) as the club returned to EFL League One. In addition, a run to the FA Cup fourth round was a financial boost.
Plymouth Argyle’s 2022 broadcast revenue will be driven by league (strong so far) and FA Cup performance.
Commercial
Commercial revenue remained flat at £3.0m as Puma and Ginsters remained partners. Plymouth will be hoping the return of fans can see a boost in commercial opportunities that may boost revenue.
Plymouth Argyle will see revenue rise following a return of fans to Home Park which will be a welcome financial boost. A good FA Cup run could boost this number further as they chase promotion to the EFL Championship.
Operating costs
Plymouth Argyle’s operating costs remained flat at £9.3m as it returned to League One. The revenue reduction however harmed profitability.
Wages
Wages also remained flat at £4.8m as the club managed its cost base knowing it was facing a fall in revenue. Due to this, Plymouth Argyle saw its wages to revenue ratio increase to 85% from 69%. This is above the level of 70% which is generally seen as financially stable. The short-term nature of this hike means it should be of little concern.
The club is currently chasing promotion in its second season back in League One which may see wages rise for a good reason if bonuses are payable.
Other costs
Other costs remained relatively flat at £4.6m. This may rise next season due to matchday related costs.
Plymouth Argyle managed its cost base well, balancing the need to be competitive in EFL League One with its financial stability.
Transfers
It was a quiet transfer window for Plymouth Argyle as they saw no incoming or outgoing signings for a transfer fee. The subdued transfer market following the financial impact of COVID-19 driving this.
Amortisation
Player amortisation charges remained relatively flat at £0.1m. With no signings for a transfer fee in the 2021/22 summer transfer window this number is likely to fall close to zero.
Profit on player sales
After the profit on player sales of £1.1m, limited transfer activity in 2020/21 saw this fall to £0.1m. Unless any sell-on clauses on former players are triggered during the season, this number is likely to be low again in 2022.
Plymouth Argyle is a club with limited resources and therefore often rely on free transfers and loans in the transfer market. The occasional significant sale can be a big boost to its finances.
Profitability
Plymouth Argyle recorded its first profit since the 2016/17 season (where it broke even). This was largely due to a shrewd insurance policy.
Operating profit / loss before player trading
Despite falling revenue and flat costs, Plymouth Argyle turned a £1.7m operating loss before player trading into a £0.4m profit. This was entirely due to its insurance pay out and Premier League solidarity receipt. With these not due to be present in 2022, it is almost certain Plymouth Argyle will be loss-making again.
Operating profit / loss after player trading
After player trading Plymouth Argyle recorded a £0.3m profit, a £1m improvement on 2020 driven by the income mentioned above.
Profit / loss before tax
Plymouth Argyle also recorded a profit before tax of £0.3m due to no finance costs in the year.
Plymouth Argyle has a nifty insurance contract and the Premier League to thanks for its 2021 profit. Interestingly the club saw its revenue decline by £1.3m in the year but received a pay out of £2.5m so were likely better off all things being equal (the club was promoted which would have offset some of the lost revenue).
Assets / Liabilities
Plymouth Argyle is almost debt free. Simon Hallett stated he has injected his last funding into the club with the plan to now focus on becoming a financially sustainable Championship club.
Cash flow
Plymouth Argyle saw its cash reserves increase considerably from £3.7m to £6.8m. This was driven by a significant cash inflow of £3.6m driven by its insurance pay out and Premier League solidarity (2020 saw an outflow from operations of £1.1m). This was offset by cash outflow on transfers of £0.2m and capital expenditure pf £0.4m.
Debt
Debt levels fell from £3.7m to next to nothing. Simon Hallett injected £3.5m into the club. Initially this was a loan that was quickly converted to equity funding. He has since stated that he will not be providing any more funding to the club. This is with the hope of Plymouth Argyle becoming a financially sustainable Championship club.
Net debt
Plymouth Argyle hence has a net cash balance of £6.7m as it begins its road to financial sustainability.
Final Remarks
Plymouth Argyle is flying high in EFL League One at the time of writing and will be looking to keep this form up. The club is striving for financial stability and having managed its costs well during the pandemic is on its way to achieving this and promotion. It will be an interesting watch…
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