Town finances - the full picture
By Mark HeathLIKE their performances on the pitch, the financial fortunes of Ipswich Town have shown a marked improvement over the past year.Ipswich Town chairman David Sheepshanks said the club made a net loss of about £480,000 in 2003/04, compared to a loss of £7.
By Mark Heath
LIKE their performances on the pitch, the financial fortunes of Ipswich Town have shown a marked improvement over the past year.
Ipswich Town chairman David Sheepshanks said the club made a net loss of about £480,000 in 2003/04, compared to a loss of £7.75million the year before.
He added much of that £480,000 loss was made up of a Company Voluntary Arrangement adjustment - left over from the club's time in administration - meaning that they effectively broke-even.
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The Blues also recorded an operating profit of £1.75m in 03/04, a leap from the £15.05m loss of a year ago.
“To put our results into perspective, Sheffield United made an operating loss of £700,000 in the same period,” said Mr Sheepshanks.
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“The reason I make this point is firstly to show the dramatic turn around in our financial performance and to give you some perspective as to our performance against one of our main competitors.”
Elsewhere, revenue increased by 4% to £24.4m - although match day revenue fell by 2% - and non-match day income rose by 4% to £1.3m.
Retail business fell by 7%, again due largely to the aftermath of administration, while the playing wage bill dropped from £14.9m to £9.1m.
“I would like to praise manager Joe Royle and chief executive Derek Bowden,” said Mr Sheepshanks.
“Everything begins and ends as far as a club's performance on the pitch and Joe Royle has done a remarkable job to hold us in contention, despite having to part with a number of players.
“Derek has done an equally tremendous job running the business side of the club.”
Mr Sheepshanks also revealed that Town had managed to retain a “positive cash position” throughout the year without having to sell players in the summer.
“I think our progress is reflected very much in our ability to turn down the bid from Charlton for Darren Bent a couple of months ago,” he added.
“That said, our position remains constrained and we have to manage our position going forward carefully.
“Promotion back to the Premier League is the true panacea in terms of restoring the club to full financial vitality.
“However, we can't gamble on that and Premiership status cannot be achieved at the risk of the club's continued financial viability.”
But Mr Sheepshanks warned fans and shareholders that the club were expecting to record a “sizeable loss” at the end of the current year.
However, he insisted that would be a “one-year blip” and added: “There is no need for any panic whatsoever - it's merely a reflection of the fact that we're operating this year without the parachute payment from the Premier League.”
Mr Bowden said Ipswich Town had raised £2.5m through a share issue, loan notes and debentures.
He also spoke of the club's continued commitment to growing its non-football income to make up for the loss of television money - and urged fans to continue to show their support.
“People voting with their feet and coming to games is incredibly important in this division at this time. Until we get back to the Premiership then our television income will be moderately small,” said Mr Bowden.
“Hence the desire this year to launch concerts at Portman Road. For us, six-figure profits from these events do the club a great deal of good.”
But Mr Sheepshanks said he could not rule out the possibility of launching another share issue in the future, although he added the board had considered it and decided “the time is not right”.
He also stressed it was “highly unlikely” that Darren Bent or any of the club's other top players would be sold in the January transfer window.
“What's important is that we are able to continue to generate revenue and people continue to support the team through the turnstiles and commercially. Then there should be no adverse pressure on finances during the season,” said Mr Sheepshanks.