Carlisle United say their current cash reserves are the biggest they have had for nearly 20 years.
The balance at June 30, 2021 was already significantly increased on the £500,000 balance at June 30, 2020, and has grown since.
But the club’s chief executive Nigel Clibbens says this has to be judged in the context of some difficult previous years, and recent football fortune.
“It is critical we have it now and maintaining reserves is essential given our funding model; self-funding ongoing annual trading losses and the absence of a benefactor to subsidise the club or cover emergencies, or unplanned events both on and off-the-field,” he tells fans in the latest up-date on threw club website.
But he goes on to warn: “The forecast trading loss in the second half of the year means from the end of January 2022 until the year end in June 2022, we will now see cash payments each month being far in excess of our receipts.
“Extra football spending from the January window increases this. Our cash reserves will reduce accordingly. This cycle is expected and normal every year.
“By continuing to be in a sound financial position, with cash reserves in the bank, it means the club can also still support the manager without any day-to-day money troubles. This includes the current window.
“The Holdings Board has reiterated its commitment to Keith, to make available whatever finance is needed to help him move the team up the division.
“Of course, on top of this spending, any debt repayments reduce our cash reserves for the future, and impact on the future spending we can afford, and the risks we then face.
“In football, with high fixed costs each month, cash can very quickly flow out and is very difficult to replace as we have seen in the past. Just because you have good year, there is no guarantee on future player sales and cup runs next year, or that new cash will come in when you need it.
“While we have cash now, we must all remember the underlying risks our funding model carries, and remember the lessons from the recent past. Without the comfort of a benefactor to help provide financial cover for ‘rainy days’ we need to keep cash in reserve and replenish it, to avoid running out.”
Clibbens went on to say that no debt repayments have been made in the financial year 2021/22 so far, except £40,000 to the EFL.
“We have received no additional debt funding this half year. No new funding is planned from PurePay (last funding was May 2019) or externally from any other third parties in the rest of the year.
“We have no plans to make any other debt repayments at this time, including to PurePay – but interest continues to accrue on the PurePay loan.
“However the club is discussing the loan arrangements with PurePay. It cannot be ruled out that it will require cash repayments in the rest of 2022, and beyond,” he added.
