Foxes_Trust Posted 2 March 2013 Share Posted 2 March 2013 From clubs website Leicester City has today announced its financial results for the year ending 31 May, 2012 – a period of further on-going, strategic investment designed to ensure the long-term prosperity of the Football Club. Today’s announcement highlights the Srivaddhanaprabha family’s commitment to deliver sustainable success for the Football Club, and the continued support of KPI which will underpin the realisation of this vision. This whole-hearted commitment has been shown through the following actions. • In September 2012, the Srivaddhanaprabha family placed Leicester City at the heart of their business operations under the direct ownership of King Power International (KPI) - the parent and holding company of King Power Group, whose turnover (US$1.5 billion in 2011) is consistently ranked within the top 10 Duty Free Retailers globally. • Further investment of £36 million from the shareholders during the 2011/12 season. • The Srivaddhanaprabha family’s purchase, through its K Power Holdings company, of the Club’s home, King Power Stadium, in February 2013. • Since purchasing the Club, the owners have undertaken a restructuring of Leicester City’s balance sheet to pay off external third party debt. At the time of purchasing the club in 2010, third party debts owed by the club, amounted to £23.2 million. • The start of a process ensuring compliance with Financial Fair Play regulations which will come into place in season 2013-14 for Clubs competing in the Football League Championship. Continued long-term investment The Club recorded losses in the year to 31 May, 2012 of £29.7m (2011: £15.2m) – an increase of £14.5m on the previous year. Today’s announced results relate to the 2011/12 season, in which the Club was playing in the Football League Championship. The majority of the increase is as a direct consequence of the significant investment made in the playing squad as part of the Club’s on-going efforts to build a talented squad capable of winning promotion to the Premier League. This has led to increased first team player wage costs and amortisation. Total salary costs increased accordingly to £27.7m in 2011/12 from £16.6 million (2010/11). The Club has also invested £4 million into long-term capital and infrastructure improvements to its training ground, match day and stadium facilities, the benefits of which will be felt for years to come. This investment in the team and the facilities of the Club was funded by the shareholders advancing loans of a further £36 million during the year. £31.6 million of this funding was provided by K Power Sports Investment (“KPSIâ€) and a further £4.4 million by King Power International (“KPIâ€). A process is also ongoing to review the capital structure of the Club so that this debt can be restructured into equity, further strengthening the balance sheet. Turnover increased by £4million to £21.4million (2011: £17.4m), primarily a result of increases in commercial revenue, including that generated from a pre-season friendly against Real Madrid in July 2011 and partnership renewals with globally-recognised brands such as Singha Beer and Air Asia. The increase in turnover is also helped by the Club’s progress to the Sixth Round of the FA Cup. Match receipts remained relatively consistent despite the challenging climate faced by clubs of comparable size and league position; with average attendances subject to a slight decrease to 23,036 (2011: 23,709). Season Ticket sales for the current 2012-13 campaign remain stable in comparison with recent seasons. Purchase of the King Power Stadium: ‘Our home back in our hands’ The Club’s financial and operational position has also been strengthened after the year end thanks to the purchase by the Srivaddhanaprabha family, through its K Power Holdings Co Ltd, of King Power Stadium, the Club’s home for nearly 11 years. The stadium was purchased from its previous owner, an American pension fund manager who had owned the stadium, since the Club’s period in administration. Under the ultimate ownership of Vichai Srivaddhanaprabha, the Leicester City Chairman, and Aiyawatt Srivaddhanaprabha, the Club’s Vice Chairman, King Power Stadium joins the Football Club as an integral part of the family’s major business and sporting interests. The purchase also concludes the restructuring of the Club’s balance sheet, to remove all significant third party debt. Financial Fair Play compliance From the start of the 2012/13 season, the Football League introduced a framework for Financial Fair Play regulations, which requires Championship clubs to stay within pre-defined limits on losses and shareholder equity investment. Sanctions for non-compliance will only be imposed in the January transfer window of the 2014/15 season, in relation to the results of the 2013/14 season. Leicester City Football Club has already initiated a series of processes that will help to ensure that the Club is compliant with Financial Fair Play before sanctions become active. As part of these measures, the Club is in discussions to convert its debt, into equity. Leicester City Chairman Vichai Srivaddhanaprabha said:“My vision for Leicester City Football Club remains unchanged since purchasing the Club in August 2010. My vision is for Leicester City Football Club to take its place as a highly respected and successful Premier League club. As a Club, we should centre around the lives of the fans and the community of Leicester. We will hold the Club’s heritage in trust, and develop the Club to ensure sustainability for future generations. My commitment to Leicester City has been gratifyingly reciprocated by the Club’s loyal fans and partners, whose support continues to be valuable in helping the Club achieve its long-term objectives. My thanks go to every one of them for their support from the time of our arrival at Leicester City, and for the support I am sure we will receive throughout 2013 and beyond.†Leicester City Chief Executive Officer Susan Whelan added:“We continue to strive for excellence in every area of the club, with the overall ambition of becoming an established, sustainable Premier League club. This is reflected in the long-term investments we have made in our playing, management and administrative staff and our capital assets, with the on-going support of King Power International. “We remain entirely committed to safeguarding the Club’s future and will ensure Financial Fair Play compliance ahead of 2013/14, regardless of our divisional status. “Considerable increases in turnover brought about by improved commercial performance in challenging economic times are encouraging, and the restructuring of the Club’s balance sheet is a further example of our ambition to develop a sustainable business model that will keep the Club on a sound financial footing in the long term.†Link to comment Share on other sites More sharing options...
Leicester_Numan Posted 2 March 2013 Share Posted 2 March 2013 Very happy to read this bit "regardless of our divisional status" Link to comment Share on other sites More sharing options...
Thracian Posted 2 March 2013 Share Posted 2 March 2013 Everything in that statement suggests that the club is in capably responsible hands and I'm entirely encouraged. Link to comment Share on other sites More sharing options...
Leicester_Numan Posted 2 March 2013 Share Posted 2 March 2013 Just been reading a bit more from Susan Whelan on the This is Leicestershire site. She says the owners have never set a timeframe for promotion. I hope that these statements will now take a bit of pressure off the manager and the team Link to comment Share on other sites More sharing options...
Libertine Dream Posted 2 March 2013 Share Posted 2 March 2013 Im encouraged by it all especially if foxblogger is right about the debt into equity situation Link to comment Share on other sites More sharing options...
Leicester Lass Posted 2 March 2013 Share Posted 2 March 2013 Im encouraged by it all especially if foxblogger is right about the debt into equity situation The debt/equity stuff is in the quote in the opening post, it's not just what FoxBlogger has said. Link to comment Share on other sites More sharing options...
Jiggers the Fox Posted 2 March 2013 Share Posted 2 March 2013 Not good reading at all in terms of numbers, but I like what i'm hearing from the Thais. A lot of improvements have been made since the period these results relate to which should make a real difference. Link to comment Share on other sites More sharing options...
Happy Fox Posted 2 March 2013 Share Posted 2 March 2013 Other clubs commenting on our situation. Huddersfield Town â€@htafcdotcom “#LCFC results for year ending May 2012. http://www.lcfc.com/news/article/010313-lcfc-announce-201112-financial-results-687151.aspx …†<< £29.7m loss interesting read, good 2 understand reality of competition. Details Link to comment Share on other sites More sharing options...
cc_star Posted 2 March 2013 Share Posted 2 March 2013 And people wonder why NP can't bring in xyz player or so & so from wherever. Whilst he's supported better than most managers, comparatively speaking he has both hands tied behind his back in comparison to this era & even if we don't make it this season what a remarkable job he's doing. Link to comment Share on other sites More sharing options...
Dan LCFC Posted 2 March 2013 Share Posted 2 March 2013 And people wonder why NP can't bring in xyz player or so & so from wherever. Whilst he's supported better than most managers, comparatively speaking he has both hands tied behind his back in comparison to this era & even if we don't make it this season what a remarkable job he's doing. Precisely why he should stay should we even fail to go up. He doesn't actually spend much at all if you compare him to the likes of Sven/Sousa who were given a fair bit, I bet both of them have a higher net spend than Pearson and they were both here for less time. We don't appreciate how well we've done this year IMO. This season for me was expected to be almost a recovery from last year, not a promotion push. Link to comment Share on other sites More sharing options...
bmt Posted 2 March 2013 Share Posted 2 March 2013 Ridiculously high numbers involved for a club in the second tier. However, the words from the owners etc. are more than encouraging. Need the boys to deliver the goods at some point though! Link to comment Share on other sites More sharing options...
C-man Posted 2 March 2013 Share Posted 2 March 2013 129% wages to revenue ratio. Appreciate it's probably lower now but that's disgusting. Link to comment Share on other sites More sharing options...
Deucalion Posted 2 March 2013 Share Posted 2 March 2013 Im encouraged by it all especially if foxblogger is right about the debt into equity situation What does debt into equity mean? Link to comment Share on other sites More sharing options...
Benji Posted 2 March 2013 Share Posted 2 March 2013 What does debt into equity mean? Loans converted into shares. It's one way of making the balance sheet look better which I think is what the FFP rules is all about. Link to comment Share on other sites More sharing options...
cjslcfc Posted 2 March 2013 Share Posted 2 March 2013 My favourite bit is "We will hold the Club’s heritage in trust". F**k off Cardiff Link to comment Share on other sites More sharing options...
Deucalion Posted 2 March 2013 Share Posted 2 March 2013 Loans converted into shares. It's one way of making the balance sheet look better which I think is what the FFP rules is all about. Cheers! Link to comment Share on other sites More sharing options...
cjslcfc Posted 2 March 2013 Share Posted 2 March 2013 Precisely why he should stay should we even fail to go up. He doesn't actually spend much at all if you compare him to the likes of Sven/Sousa who were given a fair bit, I bet both of them have a higher net spend than Pearson and they were both here for less time. We don't appreciate how well we've done this year IMO. This season for me was expected to be almost a recovery from last year, not a promotion push. This is why i think he will stay whatever happens. I feel the Thais have found the right man they need to give us success under a tighter budget (although many championship teams would dream of the budget we have in any case) Link to comment Share on other sites More sharing options...
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