CEO Anniversary Report to the PST
By Mark Catlin
Added on 22 April 2014
Before starting this anniversary review I would like to express my congratulations to all of you present here today, shareholders, the PST, and supporters generally for achieving the milestone of your first year as a fan owned club.
As we exited administration the first year was always going to be one fraught with difficulties, a club was inherited that had suffered years of both on and off field decline and neglect, and here will be the first and last time during this report that there will be any direct reference to the past, we have now had a year to sort out those problems, and whilst the past year will be reviewed in this report it is vital that we now concentrate on the future.
Although a football club functions as a whole business, it can effectively be broken down into two specific areas, one being the running of the business based upon it's off field performance, the other naturally how it is functioning on the field.
I will begin by speaking about our on field 'results'.
Despite the bookies making Portsmouth early season favourites, it was generally accepted that we started the season with a mid-table player budget, and a new management and playing team that was effectively built from scratch.
Yes, as CEO I sounded out plenty of warnings pre-season that it is difficult for clubs to arrest consecutive relegations, and that staying in League 2 was our absolute first priority, however a year ago almost to the day, following the momentous events that unfolded in court, Myself, along I would say with many others sat in this room, believed that the biggest challenge facing us during our first year would be trying to financially stabilize the club off the field of play, and stability was the word that was continually used to describe what we wanted to achieve during the coming season.
As the season has unfolded trying to reverse the clubs on-field performances has in fact proven to be the biggest challenge that we have faced. Two managers leaving the club, injuries to key players at key times, a conveyer belt of players in and out, has led to a season where we have constantly sailed in choppy waters having to react quickly as events unfolded. Unfortunately football is not an exact science, and as a club our 'interference' in the playing side must always remain at working to create the best financial and physical environment conducive for the manager and players to work in.
Whilst we have shown at times just how good a team we have, unfortunately achieving any level of consistency through the season has proven to be our greatest undoing. Our first 'back to back' win of the season happened only in the last few weeks, and this was quickly followed by another victory on Saturday to make it three wins in a row.
I can 100% assure all supporters that both managers benefitted from a prudent but continual increase in the playing budget during their tenure and that the board and executive supported them both right up until their last respective game in charge.
Subsequent to Richie Barkers departure the PFC board has correctly taken the decision to delay the appointment of a new manager until our league 2 status has been confirmed, and whoever is chosen as the new manager will once again enjoy the full support of both the board and club executive in what I expect will be another busy summer for the management team.
Despite the fact that we are still well within reach of a top half league finish, we have to be honest as a club and board and say that generally our on-field performances during this first season, whatever the reasons, has been disappointing.
Our off field performance has however exceeded all expectations.
In addition to the problems that we inherited as we exited administration, the club embarked quickly on an ambitious plan in trying to fulfill many of the promises that were made whilst being a 'board in waiting'.
Examples of our first year work/achievements include;
1) Kiosks were upgraded and brought under the direct control of the club.
2) The whole C&B department was brought 'in house'.
3) A complete rebranding of the matchday programme.
4) The launch of completely new official website.
5) Launch of Pompey Player.
6) TV's installed in the concourse areas.
7) General refurbishment of matchday facilities.
8) A new ticketing system.
9) All supporter group meetings fully supported by the club/players/board/executive.
10) Continued and enhanced support for PITC.
11) An extremely healthy matchday corporate hospitality % occupancy rate.
12) Season ticket sales in excess of 10,600.
13) Average attendance in excess of 15,200.
14) Supporters voting on third kit for next season (we are hoping to extend this for the coming season).
15) A comprehensive fans survey that is currently being dissected and results shortly to be published as a report for supporters.
Furthermore work has been undertaken this year in preparation for the coming season in regards of;
1) A new training ground.
2) Work at Fratton Park to increase capacity back above 20,000 for next season.
3) The main pitch to be completely upgraded and re-laid during the summer.
4) The launch of a new Pompey Lottery.
5) The Tesco development.
6) A strategic five year plan.
7) A new disabled section.
8) A new Pompey interactive commercial website.
Of all the above proposed projects for the coming season the training ground is of the utmost importance for both our short and long term ambitions, and we are hopeful that we can make an announcement regarding this project imminently.
We have successfully managed to source external funding for much of our capital expenditure this past season via the purchase of additional shares by our Presidents and the PST, and the club owes all of those that have continued to invest in the club a huge thank you for enabling these essential works to take place during our first year of trading and beyond.
Financially we have worked diligently in adhering to, and actually progressing, the budget that the PST prepared for our first year of ownership. Increased revenue streams and the continual driving down of costs across the business to a level more aligned to a League 2 club have resulted in our ability to increase the original playing budget, whilst at the same time we have continued to reduce budgeted first year losses. Our whole focus has been on achieving sustainable growth, and despite this increase in our playing budget we are currently on course to achieve a first year P&L trading loss of approx 300k, compared to the original 750k that was budgeted for. This equates to a substantial 450k improvement on budgeted first year operating figures.
Tony Brown (Financial Director) has been one of a number of new personnel added to the off-field team that has not only streamlined, but increased productivity across a number of key areas. This work will continue into our second year of ownership as we continue to work towards a break even operating Profit and Loss and further reduction in club debt.
Our financial aims are clear;
1) To be debt free
2) To operate a financially neutral operating profit and loss budget.
3) To continue to invest in our infrastructure.
4) To continue to increase our playing budget whilst at the same time working within the parameters of 1-3 above.
Tony has faced many extra challenges in his role as FD as a result of the various reporting processes that he has to go through monthly with the relevant football authorities (Football League and PFA to name just two). Unfortunately this will continue until such time as we manage to become debt free. Whilst these reporting responsibilities continue to be extremely time consuming, Tony has continued to devote considerable additional time and resources on assisting the club executive in implementing much needed financial good housekeeping and processes throughout the business.
Behind the scenes at Fratton Park, and following on from various in-house business reviews, there has been a gradual restructuring of the off-field team. Notable additions during the year have arrived in the form of Tony Brown as Financial Director, Ian Home as Human Resources Manager, and Mark McCominskey as Catering & Banqueting Manager. We are also in the process of bolstering our sales team across both the C&B and Commercial departments.
External reviews of our Operations and Security departments have recently taken place and a further in-depth review is about to commence in our C&B department.
As you would expect many lessons have been learnt during the first year of PFC being the country's largest fan owned club. The business that is football is completely different to any 'normal' business and it is very difficult to judge the success of any club as they each have different goals and ambitions.
As I write this report on the anniversary of the first year of fans ownership, the off field business model itself is performing extremely robustly compared to the original business plan prepared by the PST, and we are confident this will remain the case as we enter our second year.
Our focus during the coming season must be to continue to drive down costs, increase revenue, rebuild our infrastructure, whilst all the time trying to deliver the highest possible playing budget to give the club the maximum possible chance of on-field success, as ultimately this is the area in which we will eventually be judged.
I would like to thank the board of PFC, the Trust board, our Presidents, shareholders, PST members, and supporters generally for the support that they have given the club during this last year, and I look forward to us continuing to build in year two on the strong foundations that we have laid during our first season as a fan owned club.