Wolverhampton Wanderers reports profit

The Championship club has reported a net profit of £5.2m for the 12 months ended 31 May 2004, compared to a loss of £9.2m the year before. Turnover increased by 133% from £16.27m to £37.98m mainly as a result of the impact of the club’s first season in the top flight arising from the benefits of receiving income from the Sky TV contract. Match-day income rose by 37% from £7m to £10m, 26% of total revenue and commercial income increased by 27% representing 24% of total income. However, staff payroll costs increased by 27% to £19.28m partly as a result of promotion player bonuses. Staff costs have increased steadily at the club from £8.73m in the year ended 31 May 2001 to last year’s figures, but the proportion of staff costs to turnover, a particularly important ratio for football clubs, has declined over the same period from 83% to 51%. The accounts also show a write-off, by way of capitalization, of £38m of loans owed to the Bahamas-based parent company Wend owned by Sir Jack Hayward. According to chief executive, Jez Moxey, “Sir Jack, who has never received any interest for his loans to the club or taken any expenses during his ownership of Wolves, has very generously wiped out the existing debt by capitalizing the loans owed to him. However, at the start of the Premiership season, he also made clear that the company had to stand on its own two feet.” The club has negotiated a banking facility on the basis of its stronger balance sheet and secured finance that included a £4m term loan to build its training ground facilities at Compton and to refurbish parts of the Molineux stadium.

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