Kent County Cricket Club Ltd Releases 2009 Financial Results

Monday 8th March 2010

Kent County Cricket Club will inform its members at the AGM on Monday 29 March that the club operated at a post tax deficit of £802,452 for the year ending 31 October 2009.

The Treasurer“s Report from the Annual Report is published in full below:


The financial results for the year were again very disappointing. The continued delay of the Club“s redevelopment scheme and the most difficult trading conditions for generations wreaked havoc on our finances. The Income and Expenditure Account showed a post tax deficit of £802,452 for the year ended 31 October 2009 (2008 – £691,722). Actions are being taken to redress this situation.

Our overall revenues grew by almost £500,000 (11.0%), although this figure is inflated by the inclusion of the concert receipts. The adjusted growth rate was 5.4%. Match receipts were up by nearly £150,000 (27.9%). This improvement derived principally from our home T20 quarter final, the England Lions game with Australia, much better weather than in 2008 and a concerted effort by our marketing team to improve attendances at every game. Our ECB distribution was also significantly greater, increasing by just over 20%.

Receipts from the concerts conceal a significant drop in commercial income, which derived from the reduction that businesses made in non-essential spending, such as corporate hospitality and marketing, during the worst recession for decades. Our commercial income was down by over £235,000 or 28.3% – a huge blow, mitigated by switching the focus of the marketing team to maximising attendances.

The two concerts incurred losses of over £190,000, which was an acute disappointment, given that our budget was predicated on very significant returns. This led to budgeted costs being set at too high a level. We also increased the marketing expenditure, only for the recession to bite subsequently. Marketing expenses are inflated by the costs of staging and promoting the concerts.

Additional costs relating to redundancies and staff settlement amounted to £150,000. In addition, a number of items have been identified, amounting to £140,000 and relating to earlier years, which we have to accept are now payable or irrecoverable. These include bad debts and certain VAT payments.

On the asset side, we commissioned Strutt & Parker to revalue our freehold land, which previously stood in the accounts at only £6,621. The new valuation ensures that we have a balance sheet that more accurately represents our true financial position and will strengthen our ability to raise funds.

Lessons clearly need to be learned from the sorry tale of the past few years. Firstly our budgetary and management accounting processes have been overhauled and we now have a far higher level of insight into the performance of the business and where we are spending our money. Further cost savings have been identified and considerable management focus, across all aspects of the business, is being given to ensuring that every pound spent secures the maximum possible value. We are also able now to identify, much more quickly, areas of the business where sub optimum performance is occurring and take corrective action.

When constructing the budget for 2010, the Committee and our Executives faced a very difficult balancing act. Cricket Management has painstakingly built a team to be proud of, which is highly competitive every time it takes the field. The easiest way to cut our losses would be to dismantle the team and replace our much valued, high performing players with cheaper, less talented alternatives. This is a route that nobody wished to entertain (as evidenced by the success in retaining the nucleus of the team for at least the next two summers). Instead, a decision was taken to deploy a huge amount of additional effort and energy by the Executives and the Committee, much of it unseen, into generating additional revenue streams, controlling costs and getting the redevelopment scheme under way.

The redevelopment scheme should enable us to change our business model completely and generate the revenues needed to enable us to remain a competitive cricket force. Until the scheme has been completed and the facilities are up and running, the aim will be to try to steer a path between investing in cricket and not damaging the long term health of the Club.

To this end, a five year financial plan, which accepts that it may be some time before healthy economic conditions return, is now being constructed to make sure that we get the balance right. Managing this balance will not be straightforward!

Given the horrible economic conditions of the past twelve months, never have we been so grateful to those sponsors who stuck with us, when budgets were being cut and priorities reordered. Particular thanks should go to our main sponsor, Shepherd Neame, but every sponsor at whatever level should be recognised.

We are also very excited about our new partnership with Canterbury City Council, whose faith in the Club and the redevelopment is reflected in their proposed loan of £4 million. We will be working closely together over the coming years and we are much stronger for their support.

At the AGM, our Chairman will be giving details of the now signed development scheme that will go a long way towards assisting in resolving our current situation.

Finally, I would like to pass on my thanks to Club Executives for their time spent inducting me into the role of Treasurer, to Jamie Clifford and Karl Smith, our Finance Manager, for their huge efforts to construct our new budgetary and management accounting platform and our Executives and Cricket Management who have enthusiastically contributed a great deal to the new approach.

Simon Philip, Hon. Treasurer
March 2010

The Annual General Meeting will be held at the St Lawrence Ground, Canterbury on Monday 29 March commencing at 7pm. Details have been mailed to members and they are encouraged to attend.