Bristol City Confirm Successful Financial Restructuring
Fri 10th Jan 2014 | Money & Finance
Bristol City Holdings Limited have announced the successful negotiation between the board and Steve Lansdown which has seen £35m of debt removed from the club’s balance sheet.
At the Annual Supporters Meeting in December 2012 the Board said it would approach majority shareholder Steve Lansdown to remove a substantial part of the loan debts from its balance sheet.
Any remaining debt is interest-free, with no fixed repayment date, and any new funds required by the Football Club will be introduced as equity rather than further debt.
The news comes as the company’s accounts are published, showing a loss of £12.9m for the year ending May 31st 2013 compared with a loss of £14.4m for the previous financial year.
Turnover dropped from £11.8m to £9.9m, but staff costs also fell from £18.6m to £16.8m. There was significant investment in the Academy throughout the year resulting in the achievement of Category 2 status, underlining the club’s strategy to grow talent for the future.
Bristol City chief executive Doug Harman said: “We have made it clear that financial prudence and control is one of our five strategic pillars. Actions speak louder than words and after completing this transaction the football club has cut its total debts by nearly 65 per cent and what remains is at no ongoing cost to the club.
“The club continues to make significant progress in reducing its annual losses and reshaping the way in which it does business, while seeking to ensure it remains competitive on the pitch. This is a difficult balancing act, but is crucial to the long term sustainability of the club.
“Relegation from the Championship, coupled with long-term player contracts meant the club could not achieve its target of £10m losses; however EBITDA (earnings before interest, taxes, depreciation and amortization) did drop to £10.9m.
“Losses have fallen substantially in the first half of the current financial year, despite relegation to League One, and we are seeking to maintain this progress to year end.”
Writing in the Chairman's statement to accompany the 2013 Accounts, Keith Dawe says: “I said at the Annual Meeting in December (2012) that we face many challenges in the months ahead and that has proved to be the case. The debt for equity switch we talked about has taken place during this year and the balance sheet is much stronger for it.
“Much work has taken place to reduce long term costs during the year, although this has proved difficult with players on fixed term contracts. Income was affected by the team’s on-pitch performances and ultimate relegation from the Championship to League One.”
He adds: “It has been well publicised that our strategy for the club is based around five pillars of player recruitment; player development via our Academy; vastly improved facilities; our work in the community; all underpinned by financial prudence and control. Enhanced stadium facilities – either at Ashton Vale or a redeveloped Ashton Gate – are key to the club’s ability to drive significantly higher commercial revenue streams."
Image: Action Images / Steven Paston
Posted by: Aaron Gourley
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