Northampton Saints plc has today announced a pre-tax loss of £1.2million for the year ending May 31, 2017 - the first time the club has ended a year in the red in the 16 years since it became a plc.
Turnover at Franklin’s Gardens was increased to £16.7m, but the club made a loss which they are putting down to increased spend on ‘playing-related costs’ as well as a series of ‘one-off costs’, including changing caterers at the club, and new appointments to the management structure and board,
The increased ‘player-related costs’ were down to a ‘much larger salary cap framework and the related inflation in player wages, and strong competition from within the Aviva Premiership and overseas for player signatures’, while both chief executive Allan Robson and finance director Richard Deane retired, and had to be replaced.
There was also a ‘stock write-off as the business restructured for the future’.
John White, who took over as chairman from Tony Hewitt earlier this year, insists he is very optimistic about the future, despite the news of the substantial loss.
“We remain a club that is determined to achieve the balance of success on the field with profitability off it, and plans are in place to return us to the black over the next few years,” said White
“We have a strong balance sheet, minimal debt, and the backing of thousands of season ticket holders and supporters, as well as a fantastic group of club sponsors and partners.
“Furthermore, the £1 million additional investment from our major shareholders in April 2017 was testament to their ambition and continued faith in the people who are managing the club.
“On the field we have made some exciting new signings, and we will continue to seek further opportunities to strengthen the squad for future seasons. Jim Mallinder has also reviewed how we do things in his department and has implemented a number of changes in order to refresh and improve things.
“Away from the playing front we have appointed Mark Darbon as our new chief executive.
“Mark will bring a fresh approach to how we run our business, which of course in turn is essential in supporting a successful playing effort.
“My ambitions for the club are quite simple.
“I want to build on previous successes by bringing together the best of what we have already while improving how we operate as an organisation, both on and off the field. It is critical that we do this to ensure that we maintain our status as one of the best clubs in Europe and our hard-earned high reputation across the rugby world.”
A club statement read: “Northampton Saints plc, the parent company of the Franklin’s Gardens-based Aviva Premiership rugby club, has today announced its financial results for the 12 months ending on May 31, 2017.
“Although increasing turnover to £16.7 million, Northampton Saints is declaring a pre-tax loss of £1.2 million, the first time that the club has ended a financial year in the red since it became a plc in 2001.
“There are two significant reasons for these results, namely:
“Dramatically increased playing-related costs, with a much larger salary cap framework and the related inflation in player wages, and strong competition from within the Aviva Premiership and overseas for player signatures.
“A number of one-off costs and a stock write-off as the business restructured for the future.
“These included a mid-season change of caterers to Levy Restaurants UK, part of Compass Group, and costs related to a number of board appointments as the club’s management was reorganised and strengthened to tackle the challenges ahead
“The financial results also see the Saints joining the majority of Aviva Premiership clubs that have made losses over the past few seasons.
“Nevertheless, Northampton Saints plc has maintained a strong balance sheet, with nearly £20 million of net assets, and there have been some significant commercial deals which are essential for the club’s future.
“On the field the club is bringing in new international players to join the 2017/18 squad like Piers Francis (England), Rob Horne (Australia) and Cobus Reinach (South Africa), who are joining a group which includes the current England captain, Dylan Hartley, and two members of the successful British and Irish Lions touring party to New Zealand, Courtney Lawes and George North.”
The news of the financial loss comes off the back of what was a disappointing season on the pitch by Saints’ high standards.
Jim Mallinder’s men struggled in Europe, failing to get out of their group, and endured a difficult Premiership campaign, finishing outside of the European qualification places in seventh.
That meant they had to go into an end-of-season play-off to claim the final Champions Cup place on offer, and they finished with a flourish to beat Connacht and Stade Francais to clinch their place in the forthcoming season’s premier competition,
The announcement also comes on the eve of the new Aviva Premiership season, with Saints due to kick-off the new campaign next Saturday when they play Saracens at Twickenham.
Mallinder’s men wrap up their pre-season campaign on Friday night when they host Ulster at the Gardens (ko 7.30pm).