Luton release accounts for 2021-22 business year as turnover goes up but operating loss increases

Luton Town have released their accounts for the 2021-22 business year which showed turnover up by just under £5m, although the club’s operating loss increased by around £4.4m.

With fans allowed back into grounds once more following the restrictions over social distancing finally ending, it meant the Hatters’ matchday income went up from £1.1m to just under £5m on their way to the Championship play-offs last season, with league distributions and commercial income on the rise as well.

Town paid out just over £400,000 on transfer fees, half of what they did in 2021, but only received around £800,000 themselves which was well under the near £4.3m they gained the season before.

Although Luton’s turnover jumped from £12.6m to £17.6m, with operating costs going up around £5m, it means the operating loss for the financial year increased to £6.3m from £1.9m, although there are mitigating circumstances included, Town having to pay back around £2m of the loans they received from the EFL to support the club during the pandemic.

With the accounts being completed before Luton received a healthy fee from Premier League Southampton for manager Nathan Jones and his coaching staff, then writing in the strategic report, Town CEO Gary Sweet said: “With government restrictions finally lifted and fans returning to Kenilworth Road, all categories of matchday revenue including tickets, hospitality and catering saw a strong recovery.

“Overall matchday related revenue which had dropped from £4.1m to £1.1m in the prior year increased to £4.9m thanks in no small part to the FA Cup tie against Chelsea and the Championship play-off semi-final first leg.

“Central distributions (including broadcasting and media income) increased compared to the prior year, from £9.6m to £10.5m.

"This increase was driven by the team's superb performances on the pitch, leading to extensive media coverage and a larger than expected number of televised matches.

"Other operating income was abnormally high in 2021 due to the settlement of the club's business interruption insurance claim following the pandemic.

"Normal revenue streams returned in 2022, but the cost of sales also rose dramatically due to large labour costs.

"Average month employees increased sharply from 220 to 365 as the need for casual matchday workers returned.

"Aggregate staff remuneration increased from £14.1m to £17.8m, principally driven by the return of the matchday workforce and the team's improved performance translating into high bonus payments.

"For this reason the loss excluding other operating income and player trading profit was similar in 2021/22 (£7.5m) to 2020/21 (£7.1m)

"The lingering economic effects of the pandemic led to a depressed transfer market and player trading profits were significantly down on recent seasons.

"As a result the club's operating loss increased from £1.9m to £6.4m.”

The reports were filed after signing Alfie Doughty and Matt Macey in the summer, but not before Town shelled out a club record fee on striker Carlton Morris.

With Town battling a top six place once more this season, and also selling James Bree to Southampton, plus Harry Cornick to Bristol City, looking ahead to the future, the report added: “Continued investment in the first team has increased the value of intangible fixed assets from £2.8m to £3.5m whilst the return of match day revenue has reduced the wages to turnover ratio considerably.

"The football club continues to make comparatively small financial losses.

“Its existing investors have confirmed their commitment to continue to fund the cub for the foreseeable future.”