2012/13 financial results released

DMWSL 613 Limited (the “group”) is the holding company for Southampton Football Club Limited and its subsidiary undertakings. The results below are those for the whole group and fully incorporate Southampton Football Club Limited. The principal activities of the group are that of operating a football club and its ancillary activities.

Financial highlights for the Group

• Full year as a member of the Barclays Premier League
• Total revenue increased 213% to £71.8m (2012: £22.9m) with average league attendances up from 26,427 to 30,807
• Broadcasting income grew from £5.6m in 2011/12 to £46.9m in 2012/13
• Matchday income of £11.8m in 2011/12 has risen to £16.9m in 2012/13
• Commercial income increased from £4.8m in 2011/12 to £6.7m in 2012/13
• Profit before player trading increased to £8.7m but with an overall net loss of £7.1m. Player trading included a one-off exceptional cost of a £2.1m impairment charge to write off the carrying value of certain players
• The loss before interest and tax has reduced to £6.6m (2012: £11.9m loss)
• Club wage to turnover ratio reduced to 65% (2012:102% after the removal of exceptional bonuses)
• Total group wages, including player wages, increased to £47.1m in 2013 from £28.7m in 2012
• At 30 June 2013 (balance sheet date) there were £21m of committed transfer fees still to be paid and since this date a further £27m of player transfers were negotiated (in the 2013/14 season). Whilst £21m has been paid in this current season, £27m will still be owed from 30 June 2014, with £22m of this being due in 2014/15 alone
• A £5.6m loan was taken out with Vibrac in September 2012 to enable the Club to take advantage of a lower transfer instalment payment by paying earlier, and so reduce overall cash outflows and liabilities
• Expenditure on the total training ground project now anticipated to exceed £30m. The first phase of the build is expected to open this summer
• Further investment from the shareholder in the year was £12.5m, with another £2.2m in September 2013 bringing the total investment since acquisition to achieve promotion to the Barclays Premier League to £52.7m. £37.9m of this has been converted into equity shares in the year bringing net liabilities down to £1.6m from £32.4m in 2012

Gareth Rogers, Chief Executive Officer, commented:

“The financial results reflect the first full year in the Barclays Premier League and clearly show the impact of promotion two years ago. 

“The Club has risen quickly in a short period and committed itself to high levels of expenditure both on the development of Staplewood Training Ground, which is likely to exceed £30m, as well as significant future transfer fees. This high level of expenditure has required strong support from the Ultimate Shareholder and once again this has been shown. 

“The redevelopment of Staplewood Training Ground will provide the players and Academy staff with the best quality environment to meet the standard set by the First Team who have competed and performed on the pitch at the highest level, and will also help the Academy to continue to develop future talent. 

“In other areas the Club has maintained its prudent approach to the stewardship of the underlying activities required to run the Club. It has also continued to develop the off pitch business and this approach will create a strong future. 

“With the first phase of the training ground due to open this summer, Academy graduates continuing to progress into the First Team, a healthy operating profit position and a strong ownership combined and balanced board we are provided with an excellent foundation from which the Club as a whole can continue to grow. With the continued backing of our fantastic supporters and commercial partners we have every reason to be optimistic for the future.”

Hans Hofstetter, Director, added:

“Whilst I perceive that we have inherited a difficult situation financially, there are now clear and structured plans in place to progress the Club and avoid a similar situation from occurring again.

“The continued support of the Ultimate Shareholder cannot be underestimated, and we are grateful to be able to rely on their dedication to helping us flourish as a Club. 

“In the short time I have been at Southampton it has become abundantly clear that we are blessed with a staff that has all the necessary skills with which to progress, and now that we can supplement that with a strong Board I am sure we will enjoy a successful future together.”