Huddersfield Post £5.7m Loss Despite Promotion
Thu 10th Jan 2013 | Money & Finance
Huddersfield Town’s promotion to the Championship has resulted in a loss of £5.7m according to their latest set of accounts released for the financial year ending 31 May 2012.
Total turnover of £7.39m was down on the previous year (2010/11 £7.99m) the result of higher levels of non-recurring income in 2010/11 arising from Cup competitions.
However, for the fourth consecutive year, Underlying Recurring Turnover (excluding one-offs like cup runs and TV) was up by 11% at £6.52m (2010/11: £5.86m). This was mainly driven by a 34% increase in commercial income.
The club’s the rent and other contributions payable to KSDL in respect of Stadium infrastructure was £838,000 (2010/11: £830,000) excluding the match day costs of stewarding
Total Football Expenditure increased by 12% to £8.09m with £2.36m of profit from player sales (excluding the sale of Jordan Rhodes which occurred after the year-end).
Huddersfield spent £1.074m on its continued investment of the Canalside complex.
Commenting on the results Chief Executive, Nigel Clibbens commented, “The level of overall losses incurred in 2011/12 was as expected and planned.
“The headline increase is, in large part, due to one-off player and staff promotion bonuses and contract termination costs plus lower non-recurring income from cup runs and TV; however, large recurring losses and continued significant shareholder support are unsustainable.
“Dean Hoyle’s continuing funding for the transfers of new players, football expenditure and long term investment in projects like Canalside has once again been very significant, but critically this has been accompanied by promotion. Championship football is very important to the sustainability of this Club.
“We must be successful on and off the field, so the continued growth of the club’s own recurring income and further improvements in its ability to pay-its-way with contribution from its everyday business operating activity is encouraging. This is especially noteworthy, in such tough economic times for our supporters and also after a prolonged stay in League 1.
“For the first time, our long term improving trading has been supplemented by significant income from player trading. Promotion plus these combined effects point towards financial viability and sustainability for the club.
“The cost of the Stadium continues to be a very heavy and increasing drain on the Club, but our ability to pay for it is also improving year on year.
“The Championship is a highly competitive league with hugely differing levels of resources for spending on Football Expenditure, driven by the size of clubs, shareholder support and Premier League parachute payments. We cannot compete financially in the Championship by seeking success based on spending more money.
“We must go down a different route, but this takes time. We are building and developing our own approach with strong values and a clear philosophy; we have a clear vision of what we want to be. In this context we will continue to have realistic expectations, financial prudence and adopt sound business practices; we will seek to be innovative, risk taking and not follow the pack.
“We are long term advocates of the need to change the finances of football and wholeheartedly welcome ‘Financial Fair Play’, which we believe is consistent with our own long term strategy and the interests of the wider game.
“Looking forward, even though we will benefit financially from promotion, we expect 2012/13 to be a challenging year commercially for the Club as we adjust to life in the Championship.
“We forecast Underlying Recurring income will increase by circa £4m to circa £11m, with a £3.5m rise in Underlying Contribution. However, in the short term this will be matched by modest increases in our Football Expenditure as we seek to compete on-the-field. Operating losses will be incurred again, but defrayed by record profits on player trading following the sale of Jordan Rhodes in August 2012.”
Posted by: Aaron Gourley
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