Motherwell have posted a record profit of £3,575,615 in the year ending 31 May 2021.
It's a substantial rise for the Fir Park side on the £435,970 profit recorded in 2020, with a total increase of £3,139,645.
A £1,518,471 accounting profit attributed to a Scottish Government interest-free loan is included in the figures.
David Turnbull's transfer to Celtic in 2020 from the Steelmen has played a key role in this achievement after he departed the Premiership side for a club-record fee.
The Scotland international was a product of Motherwell's academy and his fee was reported to be above the £3 million mark.
A review by chairman Jim McMahon reads: "The financial results for the 2020/21 season are difficult to compare and contrast to earlier years.
"But despite the financial challenges created by Covid-19, I can report that the profit for the financial year is a club record £3,575,615.
"The pandemic caused a major reduction in our operating income. For example, revenue in the prior year included £1.35m of gate receipts. With matches being played behind closed doors, no such income was generated in 2020/21.
"The restrictions also reduced our commercial income by almost £350,000. There were various other smaller reductions in funding from the football bodies, who had front-loaded awards at the start of the pandemic.
"The club had put measures in place to reduce the impact of the pandemic on its finances. These were very successful and resulted in £4.1m of Other Operating Income being recorded in the financial year. This includes monies from the HMRC Job Retention (furlough) scheme, a business interruption insurance claim and an SPFL Trust Covid-19 grant.
"We also borrowed £2,959,000 from the Scottish Government to further strengthen our position should the pandemic, and the associated restriction to our normal trading conditions, continue for an extended period.
"The borrowings are to be repaid between September 2022 and August 2042 and are unsecured and interest-free. Accounting standards require such debt transactions to reflect normal commercial arrangements, i.e., the interest rate an arms-length lender could be expected to charge on an unsecured 20-year loan.
"Therefore, the financial results recognise the “benefit” of having such a loan interest-free. The total of that computed over the loan’s full term is shown as a credit to Other Operating Income in year one of the borrowing.
"This has been calculated at £1.518m. This amount will subsequently be charged as a finance cost in the club’s future financial results spread over the total period of the borrowing.
"The biggest factor in the profit for the financial year is generated in player registration gains, made up almost entirely of our initial fee from Celtic for David Turnbull.
"That transfer deal, a total that will most probably end as being at least double our previous record sale, also contains several add-ons, one of which has already been achieved during the 2021/22 season.
"It also includes the opportunity to retain future economic rights, should the player’s career continue to blossom. Over the last five financial years, the player registration gains generated by the club have been £6.2m.
"Whilst player registration gains are not incorporated within the club’s operating revenue, they form an integral part of the financial results and strategy, and influence budget decisions such as setting the staff budget.
"The two-pronged approach of generating income through player recruitment and development, together with academy promotion, will continue to form the spine of our model for the future.
"At the end of the financial year at 31 May 2021, and despite all the challenges created by the pandemic, the balance sheet shows we are in a strong financial position with significant net assets and over £4m of bank funds.
This backdrop enabled us to reward and acknowledge the loyalty and support of our fans throughout the pandemic. We were able to renew season tickets to existing season ticket holders free of charge.
"Our season ticket numbers sit at nearly 5,600, our highest ever total, and an improvement of 50% on the Covid-19 impacted 2020/21 total.
"The club’s financial position is healthy in the short to medium term. But we are acutely aware of the potential threats we face. We hope that this is the final spin of the Covid-19 roulette wheel, but it would be imprudent to plan solely on that basis."
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