Promotion accompanied by £5.7m loss in 2011/12
Huddersfield Town has today detailed its results for the financial year ended 31 May 2012. This was the third full year of Dean Hoyle’s Chairmanship of the Club.
During the promotion winning season, the Club continued to implement the strategy which was developed during early in 2009:
“Working together to be a successful, sustainable and financially viable football club that we can all take pride in”
The strategy continues to be underpinned by the Club’s ten core values, which remain at the heart of everything we do:
“honesty.... integrity.... trust.... character.... commitment.... success.... value....quality.... pride.... respect”
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.
“On-the-field promotion, together with further long term improvements made off-the-field during the ‘New Era’, has provided a solid platform for 2012/13 and future years. The hard work goes on every day right across our community in a tough climate where we will not take any supporter for granted.
“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.”
Chairman Dean Hoyle commented:
“2011/12 was a memorable year and ended on the best possible note, with the fantastic achievement of promotion to the Championship. That success marked a major step forward for the Club on the field and creates many new opportunities for the future.
“Getting the Club back on track is a long term job. Lots of hard work and money has been spent on getting us to this point but the Club must stand on its own feet. We need to start doing things differently.
“The combination of lower losses from Financial Fair Play rules, our own improved commercial trading plus cash from player trading mean this is becoming a more realistic prospect.
“It has brought me immense pride to lead the Club in the Championship for the first time since the 2000/01 season and I am looking forward to continuing the journey.”
Key headlines 2011/12
• Total Turnover £7.39m (2010/11 £7.99m). This headline fall was the result of higher levels of non-recurring income in 2010/11 arising from Cup competitions.
• For the fourth consecutive year, Underlying Recurring Turnover (excluding one-offs like cup runs and TV) was up by +11% (2010/11: +16% increase) at £6.52m (2010/11: £5.86m). This was mainly driven by a +34% increase in Commercial income
• Underlying Contribution was £3.05m (2010/11: £2.78m and 2009/10: £2.37m and 2008/09: £1.5m). This is an increase of +9.4% (2010/11:+17.8%)
• 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% (2010/11.29%) to £8.09m (2009/10: £7.21m)
• £2.36m (2010/11: £306,000) of profit from player sales (excluding the sale of Jordan Rhodes which occurred after the year-end)
• Overall total loss of £5.7m (2010/11: £4.1m)
• £1.074m of capital expenditure investment, primarily on Canalside
• Additions of new player transfers of £2.2m (2010/11: £829,000)
• Overall total asset value of player registrations £2.0m (2010/11: £1.2m) which is considerably below resale value
Underlying Contribution measures the Club’s ability to pay for its football activities and stadium independent of shareholder support. Underlying Contribution is the net of all income and costs from all the Club’s trading but excluding:
(a) Non-recurring activity (one-off activity such as profits from Cup matches, play-offs and TV),
(b) Rental and contribution payments due to KSDL (in respect of the financing the Stadium) and
(c) Total Football Expenditure (costs of on the field activities)
Total Football Expenditure comprises all Player Costs plus coaching costs plus all football operations related support costs (scouting, recruitment, travel, IT, analysis and medical)
Player Costs comprise all football player related employment costs including wages and salaries and taxes and bonuses plus agent fees
For notes on data trends regarding Town's accounts, click HERE to download a PDF