Co-Chairman issues warning as Morecambe FC announce £1.2m loss for second consecutive year

Tuesday, 25 February 2025 15:34

By Dave Salmon @dpsalmon

Morecambe FC has announced a loss of around £1.2 million, for a second consecutive year.

The financial year 2023/24 – the club’s first season following relegation to League Two - was Morecambe's 17th consecutive season in the English Football League, and represented its seventh year operating a Category 3 Academy.

The Shrimps posted a loss before tax for the year of £1,194,057, adding to the loss made in 2022/23 of £1,269,916, according to audited accounts filed for the year ending May 31^st 2024, and published today.

By contrast, the 2021/22 financial year – following Morecambe’s promotion to League One - ended with the Shrimps posting a profit of almost £1.3 million.

On the field Morecambe finished 15^th in League Two, comfortably retaining Football League status, and also made it to the third round of the FA Cup.

Football revenues – which would include matters such as ticket sales – dropped by almost £350,000, falling from £3.33m to £2.97m, while revenue from the club shop, corporate sources and hospitality decreased by just over £70,000, to just over £1.6m.

The total wage bill of the club - which includes 203 employees, both playing staff as well as management and non playing staff, plus pension and social security contributions – decreased by around half a million pounds to a little over £3.5m.

To mitigate the loss in revenues, the club borrowed money, with accounts showing £3.1m – up from just over £2m - being owed to creditors, while just over £275,000 in interest charges on loans, overdrafts and other financial liabilities also on the balance sheet.

No capital through share issues was raised during the 2023/24 financial year, but since then, to date a further 315,000 shares have been issued, up to and including February 14, 2025.

Total turnover dropped from £5.26m to £4.94m.

Overall, the accounts show Morecambe FC with ‘tangible fixed assets’ of £7.95m, down from just over £8m, with the Club’s Net Equity valued at around £3.8m, significantly down from £5m the previous year.

Player sales netted the club £332,000, up from £241,000 the previous year.

Bond Group Investments Limited own the majority of the company's share capital and are the ultimate controlling party of the business.

Timeline: How the Morecambe FC sale saga has dragged on for two years

Writing in the Club’s Strategic Report, Co-Chairman, Graham Howse, issued a warning over the future financial sustainability of the business, in the wake of the ongoing protracted sale process the club was currently going through, in addition to the uncertainty of retaining Football League status, and assumptions regarding repayments on borrowings.

Mr Howse said: ‘’The directors have prepared projections up to 31 May 2026. The projections indicate that, during the year ending 31 May 2026, further funding of between £950,000 and £1,650,000 will be required.

‘’This range takes account of various assumptions including the league status of the club for the 2025/26 season. The projections also assume there will be no repayment of loans due to the company's key lenders.

‘’Post year end, the company has agreed formal loan terms with certain key lenders who were owed £775,000 at 31 May 2024. Under these terms, the loans are now repayable five years from drawdown, so will be repayable between April 2028 and May 2029.''

Above: The Mazuma Mobile Stadium

Mr Howse continued: ‘’There are no formal loan terms with the majority shareholders, who were owed £1,338,243 at 31 May 2024. This balance has increased to £1.535,971 as at the date of approval of these financial statements. At the date of approval of these financial statements, the majority shareholders continue to explore the sale of their shares in the company, and the Board are confident that they will not seek repayment of their loan balance.

‘’The board are confident that additional funding will be made available for the company to continue to operate and meet its obligations as they become due over the period to 31 May 2026, whether this be from the current majority shareholders or other key lenders, or by way of new investment following the conclusion of the sale process.

‘’Whilst the directors believe that the company will be able to continue to operate and meet its obligations over the next twelve months, the impact of the ongoing sales process and requirement for additional funding which is at the discretion of the key lenders naturally brings uncertainty as to future ownership, financing and investment.

‘’The…uncertainty around the future ownership, financing and investment constitutes a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern and, therefore, to continue realising its assets and discharging its liabilities in the normal course of business.’’

You can read the accounts in full here