Club reassures fans

By Duncan Brodie

IPSWICH Town yesterday announced a loss of nearly £3.2million for last season - but the club sought to assure fans and creditors that their finances remained under control.

A significant loss for the year to June 30 was expected due to the end of “parachute” payments from the Premiership television deal to which Town were entitled for two years following their relegation from the top flight in 2002.

The loss announced yesterday was, in fact, slightly smaller than that budgeted for under the terms of the company voluntary arrangement (CVA) into which the club entered with creditors following its spell in administration in 2003.

Chief executive Derek Bowden said yesterday that a smaller loss was forecast for the current season and the club was targeting break-even in 2006-07.

The loss of the parachute payment, worth £6million in 2003-04, was largely responsible for a decline in the club's turnover last year from, from £24.371million to £17.482m.

An operating loss of £3.451m, compared with a profit of £1.745m the previous year, was partially offset by a profit of £2.531m on transfer dealings.

This was the result of selling striker Darren Bent to Charlton Athletic following the end of last season, and it was also this which enabled the club to better its budgeted loss under the voluntary arrangement.

Other summer transfers, including the sale of goalkeeper Kelvin Davis to Sunderland, took place after the club's financial year-end and so will be included in the figures for the current year.

The profit from player sales left a loss before interest and taxation of £884,000, compared with a profit of £2.136m the previous year.

An increase in net interest charges left a bottom line pre-tax loss of £3.166m, against a loss of £480,000 the previous season.

The club's balance sheet showed a net deficit at June 30, 2005 of £7.379m, up from £4.488m the previous year.

However, Mr Bowden said yesterday: “While the profit and loss account and balance sheet are clearly important within a football club, the management of cash is crucial.

“With no overdraft facility this club must remain cash positive at all times, which was the case for 2004-05 and is forecast to continue for the season ahead.”

He continued: “Within the context of our CVA plan, a sizeable loss was always forecast for the year when our parachute payments ended.

“The plan allowed for this and all payments due under the CVA have been met.

“We are budgeting for another loss in 2005-06, but less than last year, and are targeting break even next year, which is pretty much in line with the CVA plan of three years ago.”

Mr Bowden added that there would be no need for the club to sell players during the current season and the objective was to avoid the need for sales next summer. However, there would be little scope for manager Joe Royle to strengthen the squad during the January transfer window, although the board would review the situation at the end of December.