Evans' cash underpins �5.5m Town loss

AN increase in transfer fees and players' wages, funded by new owner Marcus Evans, saw Ipswich Town Football Club chalk up an annual loss of nearly �5.

AN increase in transfer fees and players' wages, funded by new owner Marcus Evans, saw Ipswich Town Football Club chalk up an annual loss of nearly �5.5million last season, it has been revealed.

The Ipswich Town Football Club Company, in which Marcus Evans Investments holds an 87.5% stake, is expected to report a bottom line deficit of �5.492m when its full accounts are filed at Companies House.

As a private company, ITFC Co is not obliged to disclose detailed accounts at this stage but at the time Mr Evans took control of the club a year ago it undertook to release financial highlights in addition to the full accounts still published by Ipswich Town plc.

The ITFC Co's loss for the year to June 30, 2008, compares with a marginal profit of �93,000 for the 2006-07 season.

However, the previous year's figure benefited from a �3.5m profit on player transfers, including a sell-on fee of around �2m from Charlton Athletic's sale of former Town star Darren Bent to Tottenham Hotspur.

Last season, in contrast, the club acquired eight players at a cost of �4.1m and sold four for proceeds of only �400,000. Since the year end, a further �1.9m has been spent on transfer fees and �900,000 realised from player sales.

Most Read

Player and coaching staff costs also rose substantially, from �6.24m in 2006-07 to �8.34m last season, and also represented an increased proportion of turnover, up from 40.5% to 49.2%.

Turnover for 2007-08 was up on the previous season, from �14.558m to �15.812m, despite a dip in average league attendance from 22,443 to 21,932. Season ticket sales fell by a wider margin, from 15,850 to 14,824, although they have recovered to around 15,500 for the current season.

The profit from commercial activities grew from �2.71m to �2.86m, assisted by the successful Rod Stewart concert held at Portman Road in July 2007 and the club's continuing partnership with the Britannia Building Society.

Despite the loss, the club insisted in a statement accompanying the financial highlights that it was “now better placed financially than most other leading football clubs”.

It said that, since the year-end, its remaining external debt had largely been cleared, leaving it only with the now intra-group debt of �32m acquired by Marcus Evans from Norwich Union and Barclays as part of the deal which gave him control of the club.

It added: “While the club will incur costs to provide it with an opportunity to challenge for promotion, the directors and owner are mindful of only incurring short to medium term financial commitments which can be met from committed investment, rather than risk incurring any debts or deferred costs which would leave the club with additional long term liabilities.

“For example, unlike many clubs, Ipswich does not currently make staged payments on player purchases and all purchases are funded out of existing resources.”

Club chief executive Derek Bowden described the deficit as “a budgeted loss”, roughly equating to the increase in transfer fees and player wages.

Ipswich Town plc, formerly the club's main holding company but which following Mr Evans' investment now owns only 12.5% of the club, also reported a bottom line loss of �3.759million, against an �11,000 surplus the previous year.

However, this was almost entirely due to a �3.745million “impairment loss” - a write-down in the paper value of the company's reduced interest in the club.

Shareholders will be able to have their say at the plc's annual general meeting, which is being held in the Sir Bobby Robson suite at Portman Road on Wednesday, January 28, starting at 7.30pm.

n Evans to step up investment? - See Back Page