Director of Business Shaun Grady summarises the key points from Saturday’s Shareholders Meeting referring to the breakdown of 2018 losses, the steps taken since to improve the budgeting which had led to the deficit as well as the Club's head count.
Grady reflected on the financial losses of the year ending 2018, as a result of over-budgeting across a number of revenue streams - a perspective shared by Majority Shareholder Paul Barry.
Grady said: “We circulated and published the accounts on the club website the day they were released on Companies House in order to be as open and transparent as we can be, and the shareholders meeting was a great opportunity to talk in more detail about those numbers. Duncan Foyle [Finance Director] spent a big part of the meeting talking through the loss.
“If you distill it all down as to how did we get to over an £800,000 deficit, it was by being over-optimistic and too bullish about the revenues that we could bring in on the non-football side of the Club.
“We were over confident in budgeting for the School Sport Programme and that we could also deliver the China Summer School programme quicker than it turned out to be the case. Those two items alone make up a large proportion of the short fall.”
Describing the changes that have been made since the end of the 2018 financial year to ensure that repeat mistakes are not made, Grady explains the shift and improvements in how the club now budget on non-football related revenue streams to provide a more realistic and achievable outlook.
He said: “We must avoid it happening again and since then [June 2018] we have thought very carefully about how we put our budgets together.
“When you look back to the numbers of the year ending June 2018, there was more of a top down approach to budgets in terms of previously it was based on ‘what is the figure we need to reach to match our football ambition?’
“That has been improved since and now we are looking more closely at what is the revenue opportunity from all of the different aspects of the business, and we can be much more confident that the forecasting is more realistic. It must still be challenging because we don’t want to give people soft targets but ones that ensure they do their absolute best.”
He continued: “In the last year, the aforementioned School Sport Programme has been moved out of the Club’s business operation into the Community Trust. That means that the really good work of the programme continues but the cost is no longer with the Club but is instead within its charitable arm.
“It was previously an area that wasn’t contributing towards the business operation hugely, and therefore it sits more comfortably within the Trust as part of their community activities rather than a commercial opportunity for the Football Club.”
Finally, Grady also addressed the concerns raised by shareholders during the meeting when it came to a head count of staff at the Club.
He said: “It was a good discussion and the concerns seem to stem back to a few years ago when the club ran on a much more volunteer basis, and therefore people were perhaps rightly sceptical about the contribution that more paid staff make when they themselves may have previously been involved and the club ran on that voluntary basis.
“Paul Barry made a very good point that that was during a different time when we were in the Conference and we were at a smaller level financially, the gates were much smaller and the growth and change has been significant in the period between.”
He continued: “We were also happy to share with shareholders in the meeting that the Board of Directors are acutely aware of managing and controlling costs. We regularly and routinely review staffing levels, in which we regularly look at the contribution and the profit that individuals bring in, so that we know the money we are spending on salaries is money well spent, which it is important to say is the case across the board.
“There are also a number of important roles that you have at the Football Club which are done by very talented people, which you can’t measure by profitability or by a balance sheet and we are very conscious of that as well.
“We are very lucky at Cambridge United to have a young team of really dedicated people who are passionate about the Football Club and do great work, not to mention more than pay their way.”