Cobbo Posted 22 September 2005 Share Posted 22 September 2005 LCFC Announce Financial Results Leicester City Football Club have today announced a loss after tax of £3.5million for the year ended 31 May 2005 compared to a profit for the same period ended 31 May 2004 of £4.8m. The loss reflects the 2004-05 season which was played in the Football League Championship, as opposed to the previous campaign in the Premiership. Membership of the Championship contributed to an average attendance of 24,062 (2003/04: 30,983), and season-ticket sales of 16,427 (2003/04: 21,133). The financial results are for the second full year of trading since the club came out of administration. City's Chief Executive Tim Davies said: "The results reflect the year to 31 May 2005. "After being relegated from the Premier League in 2003/04, the club has completed its first full season in the newly branded Coca-Cola Championship and its second full year of trading after being successfully acquired out of administration. "We had always expected to make a loss in this transitional year between the Premiership and the Championship and to use most of the profits generated in the Premiership in our aim to get re-promoted. "However, the season saw us finish a disappointing 15th in the Championship, the impact of which is reflected in the loss after taxation of £3,482k. "This is higher than the original budgeted loss for the year, but within one of our budgeted and planned-for scenarios, i.e., finishing below the Play-Offs. "This was mainly because of the shortfall in attendances versus budget and the management restructure in the year. "This was offset to a certain extent by the continued growth in our non-matchday conference and banqueting business (24%)." A summary of the results is shown below. Davies added: "As I explained in my statement last year, the Company continues to place emphasis on the importance of considering and securing its future in decision-making. "Our focus for the long term remains on financial stability and the business plan has been continuously adjusted accordingly to mitigate the impact of these results. "We are still ahead of our original projections when the club came out of administration. "In football clubs, cash flow is the main concern of management and our cash balance at the end of May ended up significantly higher than forecast due to good cash flow management. "The board and everyone connected with the club remain committed to achieving success both on and off the pitch and the funds that we can prudently afford will be channelled into giving Craig (Levein) and his coaching team the best possible chance of securing the best players available to us. "Off the pitch, we are still dedicated to providing all our supporters and customers with the best possible service and facilities. "The club remains committed to further expanding its commercial activities across a wide range of areas and the further development of its already successful community programmes throughout Leicestershire." Davies concluded: "The backing of our supporters has again been magnificent in an especially difficult season. "Special mention must be made to those who went to places such as Blackpool on a rain-swept January night. "And, indeed, to all the full-time and part-time staff from our matchday and non-matchday staff involved at the football club who help make us such a professional organisation." See the OS for the accounts Link to comment Share on other sites More sharing options...
Hullfox Posted 22 September 2005 Share Posted 22 September 2005 See the OS for the accounts Glad my business hasn't made those sort of losses, I'd be papping myself. Link to comment Share on other sites More sharing options...
Fox in a Box Posted 22 September 2005 Share Posted 22 September 2005 Based on Wage structures in the PREM, if you adjust down and look at what CL has done I think The figures look ok. The only adjustments need addressing are the funding streams from ticket sales, merchandise and non match day banqueting. Notice the sharp drop in the other football income colomn this is based on if you are premier based. A steady ship well done TD, just need to improve results on the field hopefully moving up the league with a decent set of cup runs.. Link to comment Share on other sites More sharing options...
supedaj Posted 22 September 2005 Share Posted 22 September 2005 are the parachute payments not shown ? Link to comment Share on other sites More sharing options...
Northants Fox Posted 22 September 2005 Share Posted 22 September 2005 Glad my business hasn't made those sort of losses, I'd be papping myself. I work for the Council here in Northampton and they lose that sort of figure in a month let alone a year, they tell us they don't have any money but buy new machinery in then fine they've over spent, the figures shown on the OS seem alot but it's nothing our Borough Council out goings Link to comment Share on other sites More sharing options...
breadandcheese Posted 22 September 2005 Share Posted 22 September 2005 I work for the Council here in Northampton and they lose that sort of figure in a month let alone a year, they tell us they don't have any money but buy new machinery in then fine they've over spent, the figures shown on the OS seem alot but it's nothing our Borough Council out goings This is why I loathe paying tax. It's good money going after bad. I like the way Tim Davies and the board planned for different scenarios, such that the club is prepared for a loss of this size in advance. Another reason why I am happy not to sack the board as suggested in a previous post. Link to comment Share on other sites More sharing options...
Babylon Posted 22 September 2005 Share Posted 22 September 2005 This is why I loathe paying tax. It's good money going after bad. I like the way Tim Davies and the board planned for different scenarios, such that the club is prepared for a loss of this size in advance. Another reason why I am happy not to sack the board as suggested in a previous post. Yeah and the plan was as follows... Plan c) If in debt flog your best player to Wigan for 2 million. Link to comment Share on other sites More sharing options...
Babylon Posted 22 September 2005 Share Posted 22 September 2005 Now the tigers aren't sharing the stadium costs and the fact the parachute payments stop along with reduced crowds means only one thing.... we are fcuked. Link to comment Share on other sites More sharing options...
Fox in a Box Posted 22 September 2005 Share Posted 22 September 2005 Now the tigers aren't sharing the stadium costs and the fact the parachute payments stop along with reduced crowds means only one thing.... we are fcuked. Not a constructive comment... look at the bigger picture. Stability is the key here, Id rather have 5/6 home grown players giving 100% then some wage squeezing 50%er. The results will come in time. Relax Link to comment Share on other sites More sharing options...
breadandcheese Posted 22 September 2005 Share Posted 22 September 2005 Yeah and the plan was as follows... Plan c) If in debt flog your best player to Wigan for 2 million. Nothing wrong with that. We set a valuation (that is fair) and Wigan matched it. Good business. Takes Connolly's wages off the wagebill (I imagine he was one of the higher earners). Let's be honest, it wasn't as if the sale of Connolly derailed our promotion push. Link to comment Share on other sites More sharing options...
Babylon Posted 22 September 2005 Share Posted 22 September 2005 Not a constructive comment... look at the bigger picture. Stability is the key here, Id rather have 5/6 home grown players giving 100% then some wage squeezing 50%er. The results will come in time. Relax I'm talking financially not football wise. Link to comment Share on other sites More sharing options...
Babylon Posted 22 September 2005 Share Posted 22 September 2005 Nothing wrong with that. We set a valuation (that is fair) and Wigan matched it. Good business. Takes Connolly's wages off the wagebill (I imagine he was one of the higher earners). Let's be honest, it wasn't as if the sale of Connolly derailed our promotion push. I didn't say anything was wrong with it did I???? If it has to be done it has to be done. You said "I like the way Tim Davies and the board planned for different scenarios, such that the club is prepared for a loss of this size in advance". My point was their plan isn't any different to what the worst board would have done. Link to comment Share on other sites More sharing options...
breadandcheese Posted 22 September 2005 Share Posted 22 September 2005 I didn't say anything was wrong with it did I???? If it has to be done it has to be done. You said "I like the way Tim Davies and the board planned for different scenarios, such that the club is prepared for a loss of this size in advance". My point was their plan isn't any different to what the worst board would have done. Apologies, I misunderstood. I thought you were criticising the sale of Connolly. I now know this not to be the case. True, the last board would have sold Connolly to pay the debts, but the old board would have helped contribute to those debts in the first place through their inept management i.e. taking loans based on the best or middle case scenario rather than the worse (as was evident from the building of the new stadium against loans of finishing no lower than 12th in the premiership over 3 seasons - admittedly at the time we had finished top ten for 2 seasons in a row). At least we can say that the reason for this loss is not down to poor financial management but rather our results on the pitch. Link to comment Share on other sites More sharing options...
step Posted 22 September 2005 Share Posted 22 September 2005 maybe people will start to realise why it is so hard for CL and the board to succeed Link to comment Share on other sites More sharing options...
Jordan Posted 22 September 2005 Share Posted 22 September 2005 Just goes to show how much relegation makes like difficult--Leicester cut their "staff costs" (presumably the total wage bill of the players/coaches) by 7 million pounds--almost 30%--and there was still no way to avoid being in the red. One thing that worries me a little bit is that the second image seems to show that LCFC's debt is starting to grow again (or maybe I'm misinterpreting the balance sheet). With the club's turnover being so much lower in the CCC than the Prem., is there any hope of the team catching up to its creditors if they stay in the CCC for a long while, especially when interest rates are considered? Link to comment Share on other sites More sharing options...
Jay Posted 22 September 2005 Share Posted 22 September 2005 we had lots of expensive dead wood floating around last season Matt Elliott (close to £2million per season) + Trev and Scowcrofts wages and you have more than the total loss already! Link to comment Share on other sites More sharing options...
Foxes_Trust Posted 22 September 2005 Share Posted 22 September 2005 are the parachute payments not shown ? They are included in the figures Link to comment Share on other sites More sharing options...
cisono Posted 22 September 2005 Share Posted 22 September 2005 Just goes to show how much relegation makes like difficult--Leicester cut their "staff costs" (presumably the total wage bill of the players/coaches) by 7 million pounds--almost 30%--and there was still no way to avoid being in the red. I believe that they also reduced support personnel at several levels... not that those staff costs are really high compared to the players' but... Link to comment Share on other sites More sharing options...
Foxes_Trust Posted 22 September 2005 Share Posted 22 September 2005 Yeah and the plan was as follows... Plan c) If in debt flog your best player to Wigan for 2 million. That is the harsh reality, particularly if sizeable income areas significantly fall - ie attendances or other financial savings plans don't succeed, ie ground sharing Link to comment Share on other sites More sharing options...
Foxes_Trust Posted 22 September 2005 Share Posted 22 September 2005 I didn't say anything was wrong with it did I???? If it has to be done it has to be done. You said "I like the way Tim Davies and the board planned for different scenarios, such that the club is prepared for a loss of this size in advance". My point was their plan isn't any different to what the worst board would have done. Oh yes it is, suggest you follow the Derby situation closely. They also sold a £2m player plus others in the summer, however their debts are increasing alarmingly per season. Our club is managed well financially Link to comment Share on other sites More sharing options...
Foxes_Trust Posted 22 September 2005 Share Posted 22 September 2005 Just goes to show how much relegation makes like difficult--Leicester cut their "staff costs" (presumably the total wage bill of the players/coaches) by 7 million pounds--almost 30%--and there was still no way to avoid being in the red. One thing that worries me a little bit is that the second image seems to show that LCFC's debt is starting to grow again (or maybe I'm misinterpreting the balance sheet). With the club's turnover being so much lower in the CCC than the Prem., is there any hope of the team catching up to its creditors if they stay in the CCC for a long while, especially when interest rates are considered? If we stay in the Championship, then we don't cover the interest on the stadium payments, so we would never be able to own the stadium outright, unless we come to a new financial deal. However we make great strides in paying it off each year we are in the Prem Link to comment Share on other sites More sharing options...
Foxes_Trust Posted 22 September 2005 Share Posted 22 September 2005 we had lots of expensive dead wood floating around last season Matt Elliott (close to £2million per season) + Trev and Scowcrofts wages and you have more than the total loss already! Yes 5 players wages in last years figures easily cover the losses Link to comment Share on other sites More sharing options...
Marcoos Posted 23 September 2005 Share Posted 23 September 2005 My reading of these figures (for what its worth) is that they are not as bad as the headline (£3.5m) suggest. The fall in turnover is always going to happen due to Premiership revenue and all that goes with it (Sky, sponsorship, corporate hospitality and ticket sales). These figures do not include the Connolly sale or the drop in wages as they are for the year to 31/5/05. We still have a net worth of £3.25m. However I have concern over wages increasing from 61% of turnover to 76% and the interest payments. We are not fcuked as someone put it and done ok considering relegation. Link to comment Share on other sites More sharing options...
Scow Posted 23 September 2005 Share Posted 23 September 2005 I think Babylon was over reacting. The club plan for every possible scenario financially. As Marcoos said, the Connolly sale and the considerable drop in wages ensures we're doing fine. If Wigan stay up, then the extra £1 Million should help further. If we don't get back in to the Premiership over the next few years, then that will obviously make life harder for us, but we'll never be in a situation where we face administration again. Link to comment Share on other sites More sharing options...
Guest Posted 23 September 2005 Share Posted 23 September 2005 Considering the sizeable drop in revenue from being in the PL, a £3.5m loss isn't that bad. I'm sure we'd make more than £3.5m extra a season if we went up. Edited to make a bit more sense Link to comment Share on other sites More sharing options...
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