Nottingham Forest have announced losses of £22.9m for the 2013-14 season, up 34% from £17.1m in 2012-13

Revenues increased from £15.4m to £16.5m with football income, matchday hospitality and events, TV, radio, internet, sponsorship, advertising and merchandising all growing marginally.

However, employment costs increased to £27.2m with wages growing from £18.4m to £24m — a worrying 145% of turnover.

Allowed losses under Financial Fair Play for the 2013-14 season were £8m, hence the transfer embargo imposed on the club in January. This season’s allowable losses are just £6m so it looks likely that another transfer embargo will be enforced in January 2016.

The sale of Karl Darlow and Jamaal Lascelles will help the balance sheet for 2014-15 while the £7m outlay on Britt Assombalonga and Michail Antonio will be amortised over the length of their respective contracts.

But even with the regulations changing from 2015-16 — losses up to £13m — it will still take major financial restructuring for the club to avoid sanctions for a further season; assuming the long-awaited promotion is not finally achieved.

A statement in the accounts said chairman and owner Fawaz Al Hasawi ‘has prepared detailed cash flow forecast scenarios covering a period to 31 May 2016 and have considered reasonably foreseeable material uncertainties in relation to income and costs.

‘The scenarios have been prepared on the basis of both continued Championship status and also Premier League status and indicate that… the club can meet its liabilities as they fall due.

‘The company relies on the continued support of the Al Hasawi family for its day-to-day funding and funds its working capital requirements through a facility provided by the Al Hasawi family that is repayable only at such time as the club is in a position to repay the outstanding loans.

‘Mr F Al Hasawi has confirmed his intention to maintain this support for a period of at least 12 months from the signing of these accounts.’

As it stands there is £36m owing to the Al Hasawi family, with net debt standing at £50.7m.

Steve Wright has taken an in-depth look into the accounts on his blog Mist Rolling in from the Trent.

NFFC Financial Statements 31 May 2014

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