Chairman`s Statement

Monday, 8th May 2017

Chairman, Ross McArthur, is making this statement on behalf of the Board of Directors of Dunfermline Athletic Football Club as an updated end of season report on our club’s affairs, and as part of our ongoing policy of communicating with all stakeholders in an open and transparent manner.

Overview

After winning SPFL League One last year, our first season back in the Championship has been a really positive one, finishing fifth, in such a difficult an unforgiving league. If you analyse the data from this season compared to previous campaigns when the play offs were first introduced, this season’s Championship has been the most competitive to date.

Hopefully, the majority of the squad of players we have assembled, can be kept together as they have proven in the last six months that we can compete with anyone in this league, and we can improve it further with a few more additions in key positions. There is no doubt that we can all look forward to next season with great optimism, and it is of course a special one for our club, as we celebrate the 50th anniversary of the last Scottish Cup win against Hearts. Our “Lap of Honour” Season Ticket Campaign was promoted last week, and we hope we can all draw inspiration next season from that great day at Hampden in 1968.

Without wallowing in self-pity, it feels as though we did not have many breaks during the 2016-17 season, and a lot of crucial decisions went against us. Yes, of course you make your own luck at times, but we certainly hope for better luck next season! Missing out on the Scottish Cup “bonus” ball, in the manner that we did was really tough to take, but collectively as a club and support, we recovered in the right manner with great dignity, and took the positives from our performances against Hamilton into our remaining league fixtures.

However, football paled into insignificance in December when we sadly lost one of our Club Directors, Margaret Ross which was, and still is, a massive shock to us all. As I said at the time, Margaret was an extremely considerate and compassionate lady, who would also muck-in to do anything to help her beloved Pars, and she will be sorely missed. It has been fitting to see the tributes paid to Margaret since, including the one at the Player of The Year function. I am sure Margaret is looking down with pride following our strong end to the season.

Vote of Thanks

Once again I would like to take this opportunity to thank so many people in and around the club. Firstly, I would like to acknowledge the tremendous support and expertise I have received from my Vice Chairman and fellow Board members this year. I would also like to acknowledge the job undertaken by Allan Johnston this season, who kept his focus and determination, despite a challenging start. Allan also continues to professionalise our club, as we look to improve next season. Allan’s backroom staff (Sandy, John, Kenny, Mo, Gary and Davie), along with the players naturally deserve great credit too, and I would also like to thank Dr Bobby, Davie, Ian, Sammi, Alan, Jack and Billy who also help out behind the scenes.

In particular, I would like to pay tribute to Dr Bobby Robertson, who recently retired. Bobby is a true club “legend” having been an inspirational player and club captain, as well as being our club doctor for many years. We wish Bobby well in his retirement, and I am sure he will continue to be a regular visitor to East End Park. Can I also acknowledge our club physio, Kenny Murray for his professionalism, skill and calmness once again on Saturday, who reacted quickly to assist the stricken bus driver, on Saturday traveling home from Dumfries. The driver has made a good recovery so far, and that might not have been the situation without Kenny’s speedy assistance. Saturday’s incident, coupled to the incident at Peterhead last season highlights the crucial importance of our club carrying a defibrillator.

As ever, I would also like to thank our loyal staff who all muck in. So thanks go to Mikey, Shirley, Margaret, Matt, Kevin, Willie, Isobel and Michelle.

There are also so many regular volunteers who help our club on match day in terms of safety, security, stewarding, turnstiles, catering, programme copy and sales, 50-50 tickets, ball boys, mascots, media and photography that I simply cannot mention them all by name, but yet again I acknowledge your fantastic support. As I also do with the incredible team of supporters who volunteer to assist our club outwith match days be it helping in our Club Shop, hospitality areas or with stadium maintenance. In addition, the many people involved with the Centenary Club Lifeline, 1885 Business Club, Pars Supporters Trust, Young Pars, Heritage Trust as well as all of the Supporters Clubs, you have all contributed.

The support we receive from our friends at SRJ Windows continues to be exceptional, as does the support we receive from our long standing and loyal sponsors such as the Purvis Group and Macklin Motors.

Finally, I cannot overlook our wonderful supporters. I would like to thank each and every Pars fan for their loyalty and fantastic support this season. In a like for like comparison (including season ticket holders), we have been the eighth best supported club in Scotland, with only the clubs from Glasgow, Edinburgh, Aberdeen and Dundee clubs us, and that is without the large travelling supports from Celtic, Rangers, Hearts and Aberdeen. That speaks volumes about the level of support our club can attract.

On that particular point, it now appears that the majority of clubs in the SPFL count all of their season ticket holders (even if they do not attend a specific match), into their published match day attendance figure, something that we as a club have never done. Therefore, our Board has decided to change its policy on this as from next season, so that we are on an equal terms, and published figures do not appear to disadvantage our club, which is the case at present.

As highlighted in my previous statement following the recent Falkirk game, in discussions with Police Scotland, regrettably we have now been left with no option other than to close the section of the North West stand nearest the half way line next season. There has unfortunately been a number of issues relating to standing, too many people crowded into the same row and of course a missile was thrown at the recent Falkirk match. It is unfortunately a minority of people which spoil things for others, and having been a North West season ticket holder myself for 20 years this decision has clearly not been taken lightly. As highlighted in my previous statement, we certainly don’t want to sanitise the atmosphere at East End Park so I intend to meet personally with a number of the supporters in that area, to see how we could create a safer “singing section” at the opposite end of the North West stand. I do appreciate that this is not the best solution for everyone, and a number of people will be disappointed and frustrated so I have written out of courtesy to all season ticket holders in that area, in advance of this statement.

Football Squad

The Manager’s intention is to operate with a slightly smaller first team squad next season. He is continuing to work on the basis of quality rather than quantity, so the recruitment of the right type of players to strengthen the existing squad will again be so important, if we want to improve upon this season.

Contract negotiations can prove a difficult and arduous time at any club, and we are starting discussions with our existing players, who are out of contract. The Manager hopes to retain most of the current squad. Inevitably when contracts expire, it is not always possible to match everyone’s expectations so it may be the case that we will lose some players who we would otherwise have liked to keep. Once again, I would like to categorically assure our supporters that we will do everything in our power to retain, and attract, the best possible players at our disposal and offer them the best possible contract terms we can, but we have to balance our books, based on the budgeted income we expect to earn in the league next season.

A lot of strategic change is underway within Scottish football, through the SFA’s Project Brave. Essentially, this will result in fewer “Elite” Academies, with fewer players, but with more coaches and ultimately much more resources being required. At the same time, the proposed changes create a lot of uncertainty and make considered planning difficult. Therefore, I would like to outline clearly for our supporters where we stand as a club, for next season, following many considered discussions taking place by our Board and management team.

As part of FEFA, we have agreed with the three other Fife professional clubs that we will apply to the SFA, to be considered as one of the “Elite” Academies, but at the same time it is with a lot of caveats in terms of contingencies, as otherwise the anticipated level of resources required would simply be out of the reach of FEFA and/or DAFC. The new structure commences as from Season 2018-19. In the meantime, we continue to honour our club’s financial commitments to FEFA, so that Season 2017-18 continues as proposed.

Another change is that at the start of Season 2018-19, as a result of the Project Brave proposals, the Under-20 SPFL Development Leagues will be replaced by a Reserve Team League. As a result, our club has taken the decision not to apply for the Under-20 Development league next season, and instead get ready for the impending changes to reserve team football, the season after next. This was a difficult decision to take, but we believe it is in the longer term interests of our club at this time. Morally we would be put in a difficult position whereby we were offering to recruit young players, with the prospect of only a one year development programme. However, we will still retain our pathway to professional football at DAFC from FEFA, and intend to offer Paul Allan professional terms for next season, recognising his undoubted potential. In addition, we believe that our current contracted group of younger players, would be better served next season playing first team football by going out on loan, rather than playing in the Development League for another season. Conner Duthie, for one, has excelled out on loan at Stenhousemuir. Finally, this will allow us the best possible chance of maximising playing resources, with the previously mentioned drop in income.

Through the support of our Stadium Company, Pars United (EEP) Limited, our new bespoke Strength & Conditioning Gymnasium in the existing directors’ car park, will be fully operational for the start of pre-season, and will provide a fantastic facility for the further development of our playing squad.

We continue to appraise and improve the availability of the training pitches at our disposal. However, I would like to thank the three main parties we have worked closely with this season which are the McKane Park trustees, Fife Sports & Leisure Trust, and last but not least, Kelty Hearts Junior Football Club.

Financial

With three weeks to go until the end of this current financial year, it is anticipated that our club will be very close to break even. As highlighted before, the peculiarities of the fixture card provided us with four prime fixtures at East End Park in the month of April. Thankfully, we were rewarded with a strong financial performance last month, so many thanks to our loyal supporters yet again who attended all of the matches to support our club, as it was a big commitment.

This current financial year we have also had to “take the hit” and undertake a significant £40,000 overhaul of the pitch before the start of the new season, as it was long over-due. To be completed in time, the pitch work had to commence on 1 May, which meant we are effectively covering the cost of the pitch maintenance work twice within the same financial year, which was clearly not budgeted for. Nonetheless, it is reassuring that our club now has the means to be able to meet these exceptional items, as and when they arise.

It is tough managing the financial situation of our club, even in the SPFL Championship, but I feel we have managed to cope with the transition to a higher league this season, and the likely closing position is a very good result, taking into account the mitigating factors.

Naturally, it is also pleasing to note that we also expect to finish this season with an increased aggregate cash balance between the DAFC and our holding company, Pars United CIC, which again represents a fantastic closing position from where we were last year. As I have said many times, it is vitally important moving forward that we continue to build up the capital reserves on our balance sheet, as our club has no further means of borrowing or raising capital other than through new equity or donations. Naturally, if we had managed to boost our capital reserves with a big, televised cup tie that would have been extremely welcome, but sadly fate conspired against us. We might have better luck next season, but we will not budget on that, of course!

Our income this season has remained strong with higher than budgeted average attendances, albeit the number of concession tickets sold and level of walk up fans per game, caused our original budget analysis to be out. Thank you to all of our regular supporters who cajoled friends, family and former supporters along to East End Park this season.

Our income from commercial activities, season tickets, retail, and hospitality activities (match day) all more or less met budget. However, our non-match day income was well down on our budgetary expectations, which reflects the increasingly fierce and competitive marketplace for that area of activity. As outlined last week, our match day admission prices will be increased by a further £1.00, across all stands next season, which is the first increase in a good number of years. In addition, like many other businesses the effects of the rates revaluation, fuel costs and of course, Brexit, are now starting to hit, when for example we are dealing with a kit supplier based in Spain.
We continue to be faced by a number of significant stadium repair bills, so much so that we have budgeted on a much increased maintenance figure next year. East End Park feels like the Forth Railway Bridge at times, as no sooner one thing is fixed when another thing goes wrong! During the course of the season we have to deal with system problems, turnstile issues, electrical faults and ongoing issues with the undersoil heating system. As you would expect our staff and administration costs have also increased this season, stepping up a level. We would also like to improve our software systems covering ticketing, retail and general administration but cost constraints and existing contractual terms prevent us at present.

It is so important for all of us on the DAFC Board to demonstrate clearly to our supporters that we are managing your club diligently and prudently, and are doing our best to protect the very many “investments” you make in our club.

Again, I am sorry to repeat this but as a club, it is also important that we continue to carry out our business in an honourable way. paying our employees, HMRC and our suppliers in full and on time. Integrity and respect, alongside dignity and humility will always remain important characteristics of our new DAFC.

As I stated last week when we launched our Season Ticket initiatives, it is fair to say we have learned a number of things, on and off the field, in terms of what it takes to run and manage our club at a higher level, in the SPFL championship. Whilst our income has risen overall, so have a number of associated costs, as highlighted earlier. As ever, we have tried to balance as fairly as possible any increased costs, maintaining a competitive playing squad and not making tickets too expensive. Our supporters are genuinely the lifeblood of our club, and contribute so much more than just attending matches, so we are acutely aware of not taking their support for granted. However, it is fair to say that we have been one of the cheapest in the league in terms of admission prices, despite having one of the best stadiums, so as previously outlined we do need to address this without alienating our home support at the same time. In addition, with Hibernian being promoted as worthy champions, and at this stage, we continue to be uncertain if two of the next three teams with the next best away supports, will remain in the Championship, it will create a significant drop in our income (potentially six figures) next season.

We continue to need your help

Therefore, this takes me on to another few points I always like to reiterate, and I know they may sound repetitive, but they are so, so important.

DAFC is now a widely owned community club, and clearly needs the support of the community every season. It is the collective responsibility of us all to work together so that our club is here for future generations. The future of our football club is now ultimately in the hands of its own supporters as it has been since we came out of administration.

So, once again next season the three key areas where we really need fans to continue to support our club are as follows:

» Renewing their season tickets for next season.
» Attending home matches. and
» Maintaining their Centenary Club Lifeline memberships.

Even in the SPFL Ladbrokes Championship, the Centenary Club Lifeline and season ticket sales are the lifeblood of our club.

We launch our “Lap of Honour” Season Ticket campaign this week, and the regular monthly income from the “Lifeline” is now a core part of the cashflow of our club. It effectively allows us to enjoy a real competitive advantage over other clubs of our size. The Centenary Club Lifeline contribution together with the donations received from the 1885 Business Club, the DASC Shop and the Pars Supporters Trust will once again be part of our budget next year and allow Allan Johnston to look at bringing in a better quality of player to our club, as well as paying the bills in and around our club.

As continually highlighted, the key to success has been everyone pulling in the same direction, and we need to keep this positivity and momentum going once again into next season, so your ongoing support, be it by renewing your season ticket or subscribing to your Centenary Club Lifeline membership, would be warmly appreciated.

As we also keep saying, your support of this great club will never be taken for granted by this current Board of Directors - we cannot operate and run this club in its new form without it. In addition, thank you once again for your unbelievable support to date, it is as always greatly appreciated, and we look forward to your continued support next season. The Board do what they do, as fans themselves, because of the magnificent support our club receives from its supporter base.

Myself, and other members of the Board will be present at the Supporters’ Council Meeting on Thursday (18 May), where we will be happy to answer questions.

In the meantime, I hope all of our supporters have a great summer.

Come on Ye Pars!
Ross McArthur
Chairman