Everton chairman Bill Kenwright (left), manager Carlo Ancelotti (centre) and majority shareholder Farhad Moshiri (right)

Everton have announced record losses of £111.8m for the year to June 2019 but say they are "committed to operating in a financially sustainable manner".

The losses have been adjusted for a 13-month period to incorporate when players' contracts come to an end.

But after a £30.6m profit in 2017 and a £13.1m loss in 2018, the latest figures show the alarming rate of spending under majority shareholder Farhad Moshiri.

Premier League profit and sustainability rules allow for a £105m loss over three years, with Everton's total loss in the same timeframe at £94.3m.

That does not include spending on Goodison Park and the club's academy, which reduces that loss.

But spending on players has taken wages to £160m, with Everton's wage-to-revenue ratio increasing from 77% in 2018 to 85% for last season.

Moshiri has spent about £450m on players and changed manager four times since he took over at the club in February 2016, leading to questions from fans about the club's sustainability.

The club's plight has not been helped by a poor start to this season, which led to the sacking of Marco Silva and his replacement by former AC Milan, Real Madrid and Chelsea boss Carlo Ancelotti.

Everton sit 11th in the Premier League, 11 points behind fourth-placed Chelsea.

At the club's annual general meeting at Liverpool Philharmonic Hall, the club said their net debt had been reduced from £65.7m to £9.2m over the past year because of a 40% growth in commercial revenue and loans from Iranian Moshiri.

The club also recorded their second-highest turnover of £187.7m, despite not competing in Europe.

Everton chief executive Denise Barrett-Baxendale said: "We have been aware of and planned for the impact the investment would have on our short-term profitability and this is part of a long-term sustainable business plan that demonstrates our commitment to operating in a financially sustainable manner."

Everton secure £30m stadium funding

Moshiri was not in attendance in Liverpool because Barrett-Baxendale said he was in "deep negotiations with one of the funding options" for their new £500m stadium at Bramley-Moore Dock.

She also revealed that Russian billionaire Alisher Usmanov has paid £30m to secure an option on the naming rights of the stadium, which is still awaiting planning permission. The club hope that will be granted this summer with the stadium completed in 2023.

Usmanov's company USM Holdings already sponsors Everton's training ground at Finch Farm.

Together with further investment in the squad and increased revenues, the club believe they can challenge for the top four in the Premier League and for European honours.

"We are working tirelessly to be a club which fits with the very best in world football," added Barrett-Baxendale, who also defended the club's partnership with betting firm SportPesa after a question from a supporter.

"In an ideal world moving forward we would look to have a different type of sponsor on the front of our shirts like all football clubs would, but that is a commercial decision that we make as a football club."

Ancelotti - we are ambitious but it will take time

Ancelotti and director of football Marcel Brands took to the stage during the event in front of several hundred shareholders.

Italian Ancelotti, who has won three Champions Leagues as a manager, praised the club's ambition and said he would use coach Duncan Ferguson to provide "the fire" to help boost his team's position.

He said: "We can have big ambition, but we have to stay together and it takes time. The passion of the supporters has to be strong and in this sense the connection between the supporters and players is really important.

"The goal is to keep this spirit every game and try to play better football."

He added: "I like my job, I don't like arriving in second place. I try to do my best, every time. I like to have a straight relationship with the club, players and the supporters."

Brands, who spent the evening showing how he had restructured the squad, said that Ancelotti's change in formation to a 4-4-2 had left them light on the right side of attack.

But despite the ambition shown during the evening, he added a note of caution regarding the club's spending power after they were linked with Crystal Palace winger Wilfried Zaha.

The Dutchman said that buying players like Zaha for "£60m-£70m was not realistic if you look at our numbers".