Player sales and budget cuts to continue at Saints (From Daily Echo)

Player sales and budget cuts to continue at Saints

8:00am Monday 24th November 2008 in

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Saints finance director David Jones has warned that further player sales and budget cuts will have to follow as the board try to ensure the club remains “sustainable.”

The warning came in Jones' Financial Review as Southampton Leisure Holdings released their annual accounts for the financial year ending June 30 2008.

Among the headline figures was confirmation, following a trading statement by the club at the start of the season, that the club made a loss of £4.9m even after making £12.7m through player sales.

While the net profit Saints made from player trading was up £4.4m from the previous year - from £5m to £9.4m - the club's pre-tax loss figure increased, by £4m from £0.9m.

The accounts also reveal how Saints’ suffered a drastic 36 per cent drop in turnover, from £23.3m to 14.9m.

Jones attributed this loss to the board making money available to spend on players in an ultimately unsuccessful bid to secure promotion.

As a result the club's wage bill also leapt from £10.5m - 45 per cent of the club's turnover - to a huge £12.1m, which was 81 per cent of the turnover in the 2007/08 financial year.

The impact of that failed promotion bid was compounded by the loss of the parachute payments Jones said.

In a statement to the Stock Exchange Jones said: “The financial statements have been prepared for the 12 months ended 30 June 2008 and for the first time the Group accounts have been prepared in accordance with the principles of first time adoption of International Financial Reporting Standards (IFRS).

“The 2007/08 football season was a major disappointment with the Club finishing 20th in the Coca Cola Championship, only surviving relegation on the final day of the season.

“Having been so close to promotion in the 2006/07 season, and losing in a penalty shoot out in the play off semi-final, the Board backed its football manager George Burley, to strengthen the squad with transfer fees and increased player wages to make a further challenge for promotion to the lucrative Premier League.

“This challenge did not materialise and the poor football performances had an impact on attendances and all other commercial revenue streams.

“The cost of this player expenditure, together with the loss of the parachute payment from the Premier League, has had a materially adverse impact on the financial results, which show a 36% reduction in revenue from £23.3m to £14.9m and an increase in the loss before taxation from £0.9m to £4.9m, despite a £12.7m profit on disposal of players' registrations.

“The net decrease in cash and cash equivalents for the period was £9.2m, with a net overdraft of £4.4m at the period end.

“The Board is working hard to bring costs back into line with revenue and is working closely with the bank and loan note holder, to ensure the Group is sustainable in the long term.

“This is involving major costs reductions and asset disposals, in particular player sales, a process which is not yet over.

"Until that is the case, the Group remains reliant on the continued support of the bank and loan note holder.”

Comments(20)

UTS says...
11:43am Mon 24 Nov 08

Well i think Dave Jones should be sacked for incompetence on a huge scale. I mean what the hell does he do for his paid role ? Has he ever said 'NO' to more spending ?

Can someone also explain why the bank where happier with leon Crouch running the club !!!

Whats that i hear because he was going to put money into the coffers with others..........