With the recent release of our Annual Report and Financial Statements, I wanted to take the opportunity to write to you directly as a Leicester Tigers supporter to provide you with some context on the numbers as well as further insight into the progress we are making to ensure financial resilience as a club whilst balancing that with on-field competitiveness and success.
Whilst the P&L account for any business is an important tool in measuring financial success, it is important not to review these numbers in isolation and to understand our underlying performance.
An operating loss of £3.7m compared to £0.9m in 2023 might seem regressive, our actual underlying performance has shown continued progress; stripping out the CVC income of £2.4m (non-cash) and the non-recurring exceptional income of £1m provides us with an underlying loss of £4.4m for 2023. Compare that to a £3m underlying loss (after stripping out exceptional items) for 2024, which shows an improvement of 31%.
As a team we have worked hard to streamline our cost base and improve our revenue during the recent few seasons since club finances were rocked by the COVID-19 pandemic. It is evident from this year’s financial statements that our strategy is working; turnover is up 8% and our recurring cost base is only up 2%, with an 8% reduction in administration costs evidencing more efficient ways of working.
We achieved our budgeted target for the year and have set a new budget for the current year which challenges us even further but, importantly, does so without diminishing the investment required to deliver success on the pitch.
The following table provides you with a more detailed breakdown of our turnover:
To better explain the above, I have added some detail to each section.
Rugby Income
Is the combination of season ticket and match by match ticket income. Season ticket income for the year remained flat, reflecting a small fall in season ticket holders and a small price increase. Match by match tickets sales increased by £0.3m, with some supporters choosing to attend specific games rather than purchase full season tickets. Revenue from our women’s game generated £100k in our first season as part of PWR.
As a club our strategy around ticket pricing has been to provide the best possible value, despite our financial constraints and despite the price increase for the 24/25 season, I believe we provide value for money compared to other clubs in the Premiership. The economic factors that have contributed to the rising costs over the past four years have been stifling and unfortunately some of that cost needs to be passed on to ensure we can continue to invest in our squad, facilities, and our people.
PRL / RFU / PWR Income
Income from these central bodies remained flat for the year. Distributions from PRL increased by 11% but revenues from the RFU decreased by 14%, which is typical in a World Cup year when Twickenham doesn’t host Autumn international games. Welcome income from PWR towards the women’s game ensures revenues at least stayed slightly ahead of the previous year.
Revenues from PRL are expected to stay flat for the next few years and the outcome of the next broadcasting deal, which is negotiated and delivered by PRL on behalf of all clubs will be critical in determining how fast we can accelerate the club to financial sustainability. The positive news is that the Professional Game Partnership [PGP] has now been signed with the RFU and guarantees revenues of £3.3m on average over the next four years, which provides certainty over that cash flow category.
Commercial Income
This combines sponsorship income, Matchday Hospitality, merchandising, and, conferencing and events. The 23/24 season saw a significant 13.6% increase, which was principally driven by sponsorship where we welcomed four new Club Partners. We are grateful to all of our Partners for their continued support which is vital to our continued success.
Matchday Hospitality also delivered incremental revenue with the opening of the Chairman’s Lounge, which in recent time has also gained a naming rights partner in Pay iO, and we will continue to invest in the matchday experience at Mattioli Woods Welford Road for everyone to enjoy. Our hospitality, which is delivered by catering partner Levy on a profit share agreement with the club, is a longstanding partnership which we value not just in terms of the profit it delivers but also in the financial investment Levy commits to modernising the hospitality offering at our venue.
Our retail store, including the flagship Club Shop situated under the voco Hotel, had a strong first full year of trading and, when combined with online sales, delivered a record year for merchandise sales. Additional income from the ground rent we charge the hotel operator further enhanced this income line.
I hope the above is helpful in offering context on what we published last week and answers any questions you may have as a supporter of Leicester Tigers.
Whilst a business is generally judged on profitability, we know that of course cash generation is what ensures a business continues to operate. As described above, it has been a successful year in terms of profitability but, with that now behind us, we need to pay interest on our loans and indeed any related capital. The cash flow statement shows that cash decreased by £5.1m in the year.
However, I believe it is important to provide some context on this: £1.9m of that spend related to the repayment of interest and capital to DCMS and HSBC, most of which was an accumulation of interest from the inception of the DCMS loan two years ago. For the forthcoming year and future years, that interest payment will be much lower. Whilst these payments are penal to the club, the repayment of capital at least reduces the level of debt we hold, which, in turn, reduces the level of interest we pay.
It is essential to note that our club has one of the lowest levels of debt in the Premiership. With cash flow continuing to be negative, it is important to have supportive shareholders, of which we do and remain incredibly grateful to Tom Scott and Peter Tom for their unwavering support of Leicester Tigers.
So, where do we go from here?
We will continue to control our costs and source alternative revenue streams. For example, I am sure you have seen we have secured a Red Roses fixture in April next season against Scotland and will continue exploring further opportunities for events at Mattioli Woods Welford Road.
With a capacity of over 25,000, we are proud to be the biggest purpose-built rugby stadium in the Premiership. With that comes a higher bill in terms of running costs and so your support continues to be vital, whether it be through attending all our games, supporting our women’s programme, purchasing merchandise, joining our clubs and reward schemes.
We need to get to that tipping point where profitability is guaranteed year-on-year and every penny is reinvested into the club, our squad, our facilities, and our people to ensure the success of Leicester Tigers for years to come.
