Season review
Exeter City competed in its ninth successive season in the EFL League Two in 2020/21. Over the past five seasons, the club has finished in the top 10 as it strives for promotion. Exeter City narrowly missed out on the play-offs by a measly two points in 9th place.
From a financial perspective, it was a lucrative season for the club despite revenue halving. The sale of Ollie Watkins by Brentford netted Exeter City a sizeable cheque which saw the club record its highest ever profit.
This article analyses the 2021 finances of Exeter City.
Note: Exeter City’s accounts are not very detailed which unfortunately limits the amount of analysis that can be performed. This year was the first year an income statement has been prepared so we can only compare 2021 to the prior year.
Revenue
Exeter City saw its revenue almost half from £4.5m to £2.4m (48%) as it counted the costs of a season without fans.
Matchday Revenue
The club does not provide a breakdown of its revenue; however, it is almost certain that the decline in revenue is due to all games in the 2020/21 season being played behind closed doors, eliminating almost all matchday revenue. Fortunately, the return of fans in 2021/22 will see this revenue return.
Broadcast Revenue
Broadcast revenue is likely to have remained at a similar level, however progression to the FA Cup Third Round would have boosted broadcast revenue. An FA Cup run could be a huge financial boost in the current season.
Commercial Revenue
Following the collapse of Flybe, Exeter City agreed a deal for Carpet Right to become its new shirt sponsor. This may have boosted commercial revenue slightly. Carpet Right remained its sponsor for 2021/22 (as did Joma as its kit sponsor) and therefore any uplift in commercial revenue is likely to be driven by hospitality packages following the return of crowds to stadiums.
Other income
Other income rose from £1.0m to £1.5m (50%). This was driven by a significant rise in grants and donations, while the club also received £0.3m (2020: £0.4m) in government support.
Looking ahead, Exeter City has welcomed fans back which will be a sizeable financial boost which should see revenue recover to 2020 levels and may even reach £5m depending on sporting performance.
Operating costs
Exeter City provide next to no detail behind its operating costs. Operating costs fell from £6.6m to £5.3m (19%) as the club found some costs savings as its revenue plummeted.
Cost savings likely came from a combination of wage savings and savings in respect of matchday operations.
Costs are likely to be at a similar level in 2021/22, increasing slightly following the rise in revenue.
Transfers
Exeter City unsurprisingly had a quiet transfer window as clubs were cautious in the 2020/21 season’s transfer market. The club made no signings or sales for a reported transfer fee in 2020/21 but that did not stop the club making a sizeable transfer profit…
Amortisation
Exeter City had minimal player amortisation charges in the year due to rarely signing players for substantial transfer fees. This remains the case in 2021/22.
Profit on player sales
Exeter City recorded a profit on player sales of £4.9m, up from £0.5m in 2020. This more than made up for the shortfall in revenue due to lost matchday revenue.
This was generated following the sale of Ollie Watkins by Brentford to Aston Villa for £31m. Watkins sell-on is a rare but welcome event which Exeter will be looking to replicate in future through its academy.
Exeter City don’t rely, but obviously welcome lucrative transfer sales. This financial boost will go a long way to securing the financial future of Exeter City in a league where there are multiple financial challenges.
Profitability
Watkins sell-on fee helped Exeter City record its highest ever profit as they thrived rather than survived following the financial impact of the pandemic.
Operating profit / loss before player trading
Exeter City recorded an operating loss before player trading of £1.4m, up from £1.0m in 2020. This was driven by the reduction in revenue due to lost matchday revenue. This may improve in 2021/22 as matchday revenue returns. However, the loss of some government support and cost growth may offset this.
Operating profit / loss after player trading
After player trading, Exeter City recorded a profit of £3.5m, compared to a £0.5m loss in 2020. This is unlikely to be replicated in 2022 unless a huge sell-on fee materialises elsewhere.
Profit / loss before tax
Exeter City also recorded a profit of £3.5m before tax due to minimal finance costs.
Watkins drove record profits in 2021 despite the financial impact of COVID-19 in what was a huge payday for the club. This is unlikely to be the case next season or in most seasons, but should be enjoyed nonetheless.
Assets / Liabilities
Exeter City improved its balance sheet considerably following the Watkins sell-on fee.
Cash flow
Cash levels rose from £1.3m to £1.9m as a result, with the club abled to pay back the funding of £0.8m provided by the Fan’s Trust previously.
Debt
Consequently, debt levels fell from £1.3m to £0.4m, and hence a small net debt position turned into net cash of £1.5m.
Final Remarks
Exeter City is in a great place financially following the cash influx following the Watkins sell-on fee. The club is relatively debt free and can look forward to the return of matchday revenue which will boost finances. Exeter City will be hoping to now take this positive financial momentum and finally achieve promotion to EFL League One.
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