Welcome back to Kenilworth Road and happy Easter to you all. It’s felt like a long wait, due to the international break, so much like the rest of you, I can’t wait for the game to kick off.
Clearly this is a critical stage in the season, with games starting to run out quickly. With seven points from the last three games and two more to come in quick succession, this would be the ideal time to put a run of results together, that could still see us make the play-offs.
Today we welcome Peterborough United, who we defeated 2-0 in the reverse fixture way back in August, when goals from Mads Andersen and Jordan Clark proved enough to secure victory. With the clocks now back on British Summer Time and the sun finally threatening to show its face again, let’s hope for a repeat performance today!
As many of you will have seen or read, the club’s accounts for 2024/25 have now been published, showing a profit of £14.3m for our season in the Championship. The club will, as always, hold an annual review with the Supporters’ Trust to discuss these in detail, as it is not always straightforward to interpret financial statements accurately without industry and professional expertise.
The club received its first of two parachute payments from the Premier League and consequently recorded a turnover of £66.8m. As a club committed to financial sustainability, we have relegation clauses as standard in all of our player contracts, so we were able to reduce costs significantly from the start of the season. This, coupled with the sale of a number of players from our Premier League squad, most notably Ross Barkley and Chiedozie Ogbene, contributed to an overall profit of £14.3m.
The club reinvested these profits in both the Power Court project and the playing squad. During the course of both the summer 2024 and January 2025 transfer windows, the club invested £27.6m in the playing squad, including the addition of players such as Mark McGuinness, Thelo Aasgaard and Isaiah Jones. In accounting terms, all of the acquisition costs need to be included in this figure, so it is not simply upfront transfer fees but also contingent fees, agents fees and transfer levies. Following these periods of intense activity and player turnover, the value of the club’s squad (‘intangible assets’ in the accounts) increased by around £7m compared to the Premier League year. In cash terms, the club’s trading activity continues to generate a net surplus, meaning it contributes to the operational costs and avoids the need to call on external funding, something which most other clubs remain reliant on. It is important we maintain this model if we are to try to stay both competitive and sustainable.
The Power Court project also required significant investment in the year which is evidenced in the published accounts of 2020 Developments (Luton) Limited, where tangible assets increased by £23m during 2024/25 to £68.8m. A further £7m was still held in the bank at the year end, earmarked for the stadium project. All of this investment has been funded by the group’s own profits or by its shareholders, and its value cannot be underestimated. Many of these costs were incurred to de-risk the entire scheme and enable construction, which should allow for an efficient and hopefully trouble-free construction.
On promotion to the Premier League the club had to invest significant amounts to make Kenilworth Road compliant. However, even after this expenditure, the capacity was still only around 12,000, with demand for tickets far out stripping this. It therefore wasn’t possible to reap the full rewards of participation in the top tier in terms of matchday revenue. Even in the Championship, average attendances exceed 20,000, so there is only one way to grow and improve as a club and that is to build Power Court.
Despite this huge investment in our new home, external debt will be required to complete the project, which is in no way unusual for a project of this scale, indeed the proportion of debt to equity would ordinarily be higher. Debt is often viewed negatively but it can provide opportunities that might never be realised without it. Much like taking out a mortgage to buy a new house, the benefit of owning your own home needs to be weighed up against the cost of servicing the debt in the future. The club has undertaken meticulous business planning and cost benefit analysis to ensure that the debt is affordable, all verified by independent consultants. Given the enormous upside afforded by Power Court, we will be in a materially stronger position than we are today, even during the period when the debt is being repaid. This is not just our view, but the view of potential lenders, keen to fund this project without exposing themselves to undue risk.
Once operational, Power Court will secure the long-term future of the club for generations to come, so while we absolutely must do better on the pitch in the short term, we cannot take our eye off the future, as shareholders, as employees and as supporters. We all share the common goal of making this great club better and we should continually challenge ourselves, and each other, to ensure that what we are doing is helping to achieve that.
Away from investment and back to the football though, as it’s the reason we’re all here today, it was great to see Ali Al-Hamadi score for Iraq and secure his country’s place in this summer’s World Cup – and we hope Ali can break his duck in Luton colours between now and the end of the season!
I hope today we can build on the recent run of positive results and maintain momentum as we enter the business end of the season.
Join me in getting behind the lads this afternoon.
COYH!
Tom
