Carlisle United’s latest accounts show a small profit and directors say the club is “well-placed” financially – but uncertainty remains over the debt situation.

The Blues’ audited accounts for 2021-22 show they made a profit after tax of £33,000.

It is the third consecutive year United have made a profit.

But United’s long-term prospects remain unresolved regarding their seven-figure debt to Purepay Retail Limited.

And the lack of assurance that the lenders will not call the debt in has led to a note of concern in the accounts from the Blues’ auditors.

United owed Purepay £2.411m by June 30, 2022 – the amount increasing by £81,301 over the year – with the club having since been unable to progress discussions with the company over a repayment plan.

Auditors MHA Moore and Smalley draw attention to the debt and say: “The company [United] has not received confirmation from [Purepay] that they will not seek repayment of the amounts owed to it for a period of 12 months from the date of approval of these financial statements, and as a result [Purepay] could seek repayment of the balance.

“The uncertainty around the repayment of the [Purepay] debt indicates that a material uncertainty exists that may case significant doubt on the company’s ability to continue as a going concern.”

United have for several months reported no progress in their attempt to secure talks with Purepay over the debt, which is a legacy of loans from Philip Day’s Edinburgh Woollen Mill.

John Jackson, a Purepay director, is also a director of CUFC Holdings yet has never commented publicly on the situation.

The increase of £81,301 on the debt over the 12-month accounting period suggests that interest of about £6,775 per month has been accruing on the total.

Carlisle have since said they will owe “significantly more” this year because of rising interest rates.

The £2.411m debt is secured against United’s assets and subject to personal guarantees by some of the club’s owners.

The club’s overall debt stands at £3.15m, a small reduction based on repayments to the EFL and an overdraft reduction.

The Blues’ long-term ownership issue is a subject also raised by chief executive Nigel Clibbens in his detailed notes accompanying the accounts.

Pointing out that Holdings directors “have made it clear” they cannot “provide capital to fund the club’s needs”, he adds: “Attempts to bring in new ownership and investment have been unsuccessful.

“As time goes on, the ownership, liquidity and competitive risks are all increasing.

“They are all combining together to raise the overall club risk.

“The club has no reserve source of funding. Currently these risks are partially mitigated by actual cash reserves with additional, contingent player transfer assets increasingly important in the short and medium term in the absence of ownership succession.”

Commenting on United’s financial performance and position in the 2021-22 period, Clibbens said it was “the best for many years”, though this should be weighed against the fact the 2021/22 season – when the Blues were fighting League Two relegation – was the worst for some time.

United’s headline turnover was up from £4.06m to £4.74m, with business turnover from commercial activities up to £1.99m from £616,000 – returning to pre-Covid levels.

Retail also had its best year for some time, with sales of £291,000 representing an £84,000 increase.

The accounts also show how Carlisle increased their football spending by £380,000 in 2021-22 – a figure that includes the recruitment of new players and staff, and the termination of contracts of previous individuals, in a period when United parted company with two managers (Chris Beech and Keith Millen) and a director of football (David Holdsworth).

Some £87,000 was spent on settling contracts, it is revealed.

Carlisle earned less ‘football fortune’ from player transfers and cup runs in 2021-22 than the previous year, the figure down to £806,000 from £1.07m, with some of that income still to be received.

Transfer receipts alone were down from £1.35m to £606,000.

The club’s overall wage bill rose by more than £500,000, from £2.39m to £2.93m.

Clibbens said some of these figures also reflect a return to “normal trading” in the post-Covid period.

The chief executive acknowledged the accounts for the year ending June 30 2022 were “very much historic” and that much of the information had already been shared with fans.

He said the figures show that United are “in a sound position day to day”.

“The underlying trading of the club continued to hold up despite the worst season on the field for many years,” he added in a statement.

“We are pleased that we were able to get through a turbulent season on the field and continue to be well-placed financially day-to-day.”

He said the appointment of Paul Simpson as manager on a three-year deal in 2022 was designed to “bring stability and a platform to develop the playing squad and improve football results in a sustainable way.”

“This will take time to repair the issues of the past, but we are very pleased with the progress since,” added Clibbens.

“We have increased our player cost spending in 2022/23 again, after the increase in 2021/22, along with increased spending on other football costs as we invest in football staff and operations.

“This reflects the need to compete on-the-pitch after the serious problems in 2021/22 to support the manager and his plans.” 

United’s accounts show that the Blues had increased their football spending by 20 per cent under Beech and further again under Millen last season.

But Clibbens notes that such spending was offset by a lack of bonus payments due, because of Carlisle’s struggling results, as well as some of the budget going “unspent”.

United’s spending was again “in the lowest quartile” of League Two in a season the Blues finished 20th in the table.

The full accounts can be accessed via United’s website and will also appear on the Companies House website in the coming days.