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Another financial snag for Southampton
England - 28 July, 2008
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English Southampton may be subject to GBP 5 million in pre-tax losses from the past year. The club is already in financial trouble on account of decreased ticket sales, a shortage of commercial income, and a cease in parachute payments from the Premier League. The final numbers presented as of 30 June 2008 shows the club in a discouraging state. The official results will be published in October.
"The Company has seen a number of management changes during the financial year and with the preliminary announcement of the years results to 30 June 2008 not due for 10 to 12 weeks, the board have decided that it would be appropriate to provide all stakeholders with an indication of the financial results for the year just completed.
"With the loss of the parachute payment from the Premier League and reduced ticket and commercial income, revenue year on year looks to have dropped to around GBP 14 million and with the club's costs base this forecasts a gross loss of around GBP 8 million and an operating loss before player trading of around GBP 13 million," said Finance Director David Jones.
"With the year completed likely to show income down by over 35 percent and player and coaches wages rising by over 15 percent year on year the operating loss was all too predictable," said Chairman Rupert Lowe.
"We expect to report a substantial loss before tax of around £5m, (after player trading and interest charges) and this is despite a profit on disposal of players amounting to over GBP 12 million.
"With the last financial year now completed, the new board felt it was right to make this update as the figures are radically worse than those reported for the year to 30 June 2007.
"Sadly this financial legacy has meant we have had to take some tough decisions to immediately change the business dynamics of the club, and with little spare family silverware left to sell, we are, as we will continue to concentrate on, reducing the costs at operating levels.
"The financial results will show an increase in the level of borrowing which has necessitated extensive discussions with the company's bank and loan note holder, both of whom are supportive of the board's approach to returning the company to financial health.
"Whilst the figures are disappearing, the club is quietly optimistic about the prospects for the forthcoming season.
"The Company has seen a number of management changes during the financial year and with the preliminary announcement of the years results to 30 June 2008 not due for 10 to 12 weeks, the board have decided that it would be appropriate to provide all stakeholders with an indication of the financial results for the year just completed.
"With the loss of the parachute payment from the Premier League and reduced ticket and commercial income, revenue year on year looks to have dropped to around GBP 14 million and with the club's costs base this forecasts a gross loss of around GBP 8 million and an operating loss before player trading of around GBP 13 million," said Finance Director David Jones.
"With the year completed likely to show income down by over 35 percent and player and coaches wages rising by over 15 percent year on year the operating loss was all too predictable," said Chairman Rupert Lowe.
"We expect to report a substantial loss before tax of around £5m, (after player trading and interest charges) and this is despite a profit on disposal of players amounting to over GBP 12 million.
"With the last financial year now completed, the new board felt it was right to make this update as the figures are radically worse than those reported for the year to 30 June 2007.
"Sadly this financial legacy has meant we have had to take some tough decisions to immediately change the business dynamics of the club, and with little spare family silverware left to sell, we are, as we will continue to concentrate on, reducing the costs at operating levels.
"The financial results will show an increase in the level of borrowing which has necessitated extensive discussions with the company's bank and loan note holder, both of whom are supportive of the board's approach to returning the company to financial health.
"Whilst the figures are disappearing, the club is quietly optimistic about the prospects for the forthcoming season.
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