BCFC announce profit of £15.7 mill for year

[hootie63]

BCFC have released Profits of £15.7 million for the year ending 2012, so what the feck is going on and why have we paid somebody who is supposed to pay us 800k for the year IE: Xtep got paid that for "advertisements and promotions in the Far East" being taken for a ride big time.

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[Raters]

Thats almost enough t o pay carsen back what the club owes him

[evergreen blue]

Is this year ending Dec 2012, or end of season 2011/2012? Because it's out damn quick for end of December 2012. Especially considering the holiday break.

[bluenosekev]

Profit will mean fekk all when we are in League 1 next season !

Cos that's where we are heading !

[hootie63]

Is this year ending Dec 2012, or end of season 2011/2012? Because it's out damn quick for end of December 2012. Especially considering the holiday break.

Its states year ending 2012 Trev but who knows with this lot in Charge

[hootie63]

Blues’ cost-cutting will continue – despite the club posting a profit of more than £15 million in newly-published accounts.

The St Andrew’s outfit ended the year to June 30, 2012 £15.7 million in the black, thanks to the sale of a string of players and Premier League “parachute” payments made to relegated teams.

But the directors’ report, accompanying the accounts, made it clear the club’s period of austerity would continue with parent company Birmingham International Holdings Ltd still mired in problems.

“Due to the number of player sales and the support of Premier League parachute payments, this current year shows a substantial profit and positive cashflow,” the document said.

“The directors intend to continue to seek cost reductions to help ensure the financial viability of the club.”

Acting chairman Peter Pannu made similar noises last month when he admitted he was prepared to sell star asset, goalkeeper Jack Butland, during this month’s transfer window to keep Blues afloat.

Players including Roger Johnson, Scott Dann, Craig Gardner, Cameron Jerome, Barry Ferguson, Liam Ridgewell and Jean Beausejour all left Blues during the year to last June.

But the balance sheet revealed turnover dropped from £61 million in the 2010/11 Premier League campaign to £39 million.

And the club made an operating loss of just under £4 million when transfer deals were discounted.

Staff payments, including players’ wages, almost halved to just over £25 million from more than £45 million the previous year.

But boardroom fees rocketed from £80,247 to £687,611.

Match receipts increased to £9.2 million from £9.1 million, but broadcasting revenue dropped to £21 million from almost £44.5 million.

Other commercial income also rose slightly to £8.7 million.

The directors’ report confirmed club bankers had withdrawn an overdraft facility but BIHL had supported the club with loans of £7 million through major shareholder Carson Yeung, who is facing court over allegations of financial irregularities in Hong Kong.

And it said the directors had not received any information that payments made to Blues by Yeung “were sourced from money laundered funds”.

Football finance expert Peter Knowles said the figures showed few surprises. “It’s what we were expecting,” he said.

[Raters]

ANybody else notice the mistakes in that?

Also, where are these players we sold for £19 mill? Who were they?

(the club made an operating loss of just under £4 million when transfer deals were discounted)

[bluenoseghag]

Surely Gardner, Johnson, Dann and Jerome equate to around £19m?

I think Gardner was 5, Jerome 5, Dann, 5 and Johnson 4? Or something like that

[hootie63]

Birmingham City's controversial deal with kit supplier Xtep saw the club paying MORE to the firm to market the strips in the Far East than they received in the supply deal, accounts have revealed.

Blues allegedly paid the company the equivalent of £800,000 for advertisements and promotions during the 2011/12 season.

It has been reported that the deal, valued at £7.2million over five years, was seen as the start of a plan to market Birmingham City in China and to create a huge new revenue stream.

But the new club accounts show the payments from Xtep were reduced by 50 per cent when Blues were relegated from the Premier League.

And in a second ‘unannounced’ controversial contract signed in Hong Kong, former Blues’ directors, including Vico Hui, agreed to return about £800,000 a year to the supplier for marketing.

It is believed the clause resulted in the football club paying more to Xtep than it received in the original kit supply deal.

The Chinese sportswear firm was eventually dumped by Blues last summer after just two years following a host of problems.

Vico Hui
It is has been claimed the deal was signed by Vico Hui and other former executives at parent firm Birmingham International Holdings Limited (BIHL), without authorisation from the football club directors.

Hui resigned from the board of Birmingham International Holdings last June and from the board of Birmingham City FC the following month.

[Raters]

Surely Gardner, Johnson, Dann and Jerome equate to around £19m?

I think Gardner was 5, Jerome 5, Dann, 5 and Johnson 4? Or something like that

Could be. But even though that totals £19 mill, the actual amount will be far less than that due to sell on clauses etc. But what do I know eh?

I have a theory about this 'profit'....


The amount seems very close to the amount the club owes Carson, so perhaps this is part of PP's master plan? Make just enough money to pay him back but still leave the club with running costs?
The sooner the club can break the apron strings with Carson the better, and I mean pay him back.

[Raters]

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Birmingham City FC released their accounts yesterday which showed a profit of £15.7million after player transfers. There was an operating loss of £3.988mil without transfers on a turnover of £39mil.
Having thought about it for a while, I have decided it would be better rather than to give an accountancy analysis which is complex and difficult for the layman to understand I will break down the figures to make it easier for people to see why Blues are in the difficulties that they are suffering.
It’s not all about Profit.
The initial reaction from many seems to be – wait a minute, if we’ve made a profit why are we in trouble? The issue is that the profit is fairly meaningless when taken into context. Firstly, on it’s own it’s good but when one considers that it immediately follows a £10million loss then one can see how it would cancel each other out. The profit made by Blues has gone to pay historic debts owed by the club and has put it into a healthier state, debt-wise – but not one that is going to be free-spending.
The operating loss shows the bleaker picture – that without selling players, Blues cannot keep themselves solvent. With a backer that can bankroll a club that isn’t an issue – but this isn’t a situation Blues find themselves in and thus with no overdraft either the club finds itself in a situation whereby it needs to sell players to keep itself in the black. This stark warning is given in the report whereby it clearly states that Blues will need to continue selling players to ensure it remains a going concern.
So why can’t Blues fund itself?
This comes down to two factors. Firstly – staffing costs. Last season Blues spent £25mil on wages, on a turnover of £39mil. That means for every £1 that Blues took in last season, they spent 64p on wages – wages for players predominately but also for the staff at the club. Whilst a wages to turnover ratio of 64% is actually reasonably healthy for a football club and within Football League guidelines it does mean it’s hard for the club to turn a profit.
Secondly, ticket sales have fallen due to being relegated. Whilst Blues ticket income went up slightly in the 2011/12 accounts in comparison to the 2010/11 accounts, (£9.276mil from £9.142mil), Blues played three more home games in the 2011/12 season. Furthermore, that revenue will have dipped further this year as Blues haven’t had a single home attendance this season that has been above the average attendance last year. Quite simply, Blues fans staying at home when they might have attended the game have and are affecting the profitability (and thus viability) of the club.
Cashflow is king
The chief problem, as stated many times before is cashflow. Whilst the company is run as a tightly run ship, Blues are forced to spend only what they receive due to a lack of overdraft facility and a lack of funding from BIH. Unfortunately, money doesn’t come into the football club spread out over the year – there are big lumps at the start of the year in season ticket money and parachute payments but then it’s all about making that last until the end of the season. Wages aren’t going to have massively changed from last season and with reduced incomings from matchday sales and commercial revenue one would think this season will be even tighter in ensuring the bills get paid.
Speaking of being paid…
The directors wage costs came to £687,611 – of which £687,611 was paid to one director – who isn’t named but I would assume is Peter Pannu as he is the only director who actually works at the club on any basis. This is a massive increase on the previous year where it was just over £80,000 – notably Mr Pannu was not a director at that time. There is also a note that the club paid £60,000 to a company called Asia Rays (of which Peter Pannu is the sole director) to lease a property for Peter Pannu for business purposes. In comparison, Karren Brady was paid £179,000 per annum just prior to her exit.
Xtep
The accounts also explain what happened in detail with respect to Xtep. Essentially, the deal was done by Vico Hui, Pauline Wong and another executive director called Li Yiu Tung. Whilst Mr Li did the original deal, the accounts state that a second unannounced counter-deal was done by Mr Hui whereby a payment was made back to Xtep to purportedly pay for promotion and advertisement of BIH and BCFC in China.
The fees to be paid by Xtep were HKD16mil, 17mil, 18mil, 19mil and 20mil over the course of the five year deal. The counter-deal would see Xtep paid HKD10mil in return. This on it’s own is a bit strange but it became worse when the relegation clause which would see Xtep pay half the original figure comes into play – especially when it turned out that the counter-deal had no such clause. The effect was that in the 2011/12 season Xtep were effectively paid around HKD1.5million (around £120k) to supply BCFC shirts rather than the other way around.
So where has the money gone?
What these accounts show is that football outside the Premier League is almost impossible to be profitable. These accounts show that in it’s current situation Blues would have to turn over around £40million to make a profit – and many Championship clubs struggle to make half that. Championship clubs have three options – a rich benefactor like Forest or Wolves who is prepared to dump money in and not worry about it; go into a hideous amount of debt to try and make it like Portsmouth or Leeds, or operate on a shoestring and hope for a managerial miracle. The pure, brutal fact of the matter is that the majority of the money goes into the pockets of the players – as I have continually stated on here.

So we are about bankrupt.

And the sad thing? People have stopped going because of the mess, which is exaggerating the problems still further. That's not a dig at them because I understand why. It's just a fact.

[SimonBCFC]

What I get from this is that we are no more in financial trouble than the majority of other clubs in the Championship that don't have a sugar Daddy

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