Tottenham profit from Champions League experience
Fri 1st Apr 2011 | Money & Finance
Tottenham Hotspur have announced a 49% increase in revenue in their interim results released yesterday. Their financial results for the six months ending 31 December 2010 showed revenue had increase to £79.8m from £53.5m for the same period of last year.
Increased revenue and sensible financial management has resulted in a profit from operations before football trading and amortisation for the period of £18.3m (2009: £4.9m).
Tottenham’s participation in this year’s UEFA Champions League was cited as the main contributor to the significant increases in revenue across the commercial areas of the club.
Commenting on the figures Daniel Levy, Chairman of Tottenham Hotspur plc, said: “Our first half figures reflect a strong performance, buoyed by the contribution from our participation in the UEFA Champions League.
“Our investment over the years in the First Team has produced our recent successes. Our challenge going forward will be to continue our success on the pitch, to create and produce greater revenue streams and to invest prudently in capital growth projects, alongside controlling our operating expenses.”
The figure showed that Cup competition income and gate receipts had increased from £1.9m (for a period during which the Club was not competing in Europe) to £20.3m, despite an early exit from the Carling Cup. Merchandise benefitted from UEFA Champions League participation and saw a 22% increase.
Media and Broadcasting revenues stayed largely consistent with a small rise from £18.6m to £21.1m which reflects the incremental income from the current broadcasting deal. Consistent with the prior period, Premier League gate receipts rose marginally to £10.8m (2009: £10.6m) as they continue to sell out stadium capacity at 36,240.
Tottenham also benefitted from the strong growth in its sponsorship and corporate hospitality with revenues increasing 27% from £12.7m to £16.0m as a result of the innovative split of the shirt sponsorship inventory and Champions League matchday income.
Operating expenses before amortisation of intangible assets have increased by 25%, a figure the club states ‘reflects the size, strength and depth we retained in our squad and which served us well as we competed at the highest level in our first season in the Champions League.’
Total non-current assets continued to increase, underlying the on-going long term investment in the Club’s future, in particular the new Training Centre construction.
The current debt profile continues to reflect the significant property holdings acquired as part of the Northumberland Development Project. These loans are underpinned by specific property assets and planning gains. However, Tottenham were keen to stress that the board considers this level of debt to be manageable and in line with capital growth plans.
Tottenham’s net assets increased, in the main due to the conversion of the Convertible Redeemable Preference Shares into Ordinary Shares. This also led to the release of a credit of £4.2m to Finance Income which would have arisen over the three-year redemption period had the shares not been converted early. The result was a 19% increase in net assets to £84.8m and a retained profit for the period of £4.2m from a loss of £6.1m in the same period in 2009.
The strong results are pleasing for the club who are looking to consolidate their position in the top four of the Premier League. However, the club’s position with regards to the viability of the Northumberland Development Project remains unchanged. Having lost out on the opportunity to take over the tenancy of the Olympic stadium to West Ham, the club has said it will continued to consider all options for the development of a new stadium with increased capacity.
Tottenham are now working constructively with Haringey Council and the Mayor of London to see if it is possible to enhance the feasibility of the current planning permission for the Northumberland Project and have welcome the recent announcement that a Mayoral Development Corporation is proposed for Haringey.
They have identified that an increased capacity stadium is a vital element of the growth of the club as they currently have a waiting list for season tickets, currently at 35,500, almost the capacity of White Hart Lane.
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