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City announce £7million loss

The club today announced to the stock exchange today that we had a posted a £7million loss for the six month period upto the end of November 2006.

Below is the statement that appeared on mcfc.co.uk, and I have added some brief comments where applicable - apologies for the briefness but a lack of time permits anything too in depth at the moment:

For the six months ended 30 November 2006 turnover decreased by 9% to GBP25.7million (2005: GBP28.2million). This fall was predominantly due to fewer concert nights being hosted at the Stadium with Take That and Bon Jovi performing for a total of 3 nights, compared with 5 nights being held in the six months ended 30 November 2005.

Not entirely unsurprising and it will be likely that there will be another loss the next time figures are announced - unless we really go deep in the FA Cup and have a late season boost to our current league position.
The interesting point is that the loss was generally explained away by having less concerts held at the stadium!
The increase in TV revenue next season though should see income increase tremendously and as mentioned over at the Supporters Trust, which actually provide an opportunity for the club to finally beginning operating at a profit.

Matchday ticketing sales also fell by GBP1.5million, largely as a result of 1 less home game being played in the comparable period. Conversely the conference and banqueting business continued to grow with a 21% increase in revenue period on period.

A mentioned above, I don't expect the next set of financial results will see a healthy increase in this particular category, but maybe the club will focus even more on the commercial activities which seems to be becoming more of a lucrative area.

Operating costs have increased by 4%, mainly as a result of expenditure on player wages that increased by GBP1.8 million over the same period last year. It is the Board’s strategy to run a higher wage bill in this very important year for the Club.

The club have alluded to this previously how important avoiding relegation is, and it follows a pattern of recent years where they believe paying upper level wages to attract players is a key strategy in maintaing Premiership status.

The sale of former Academy players including Lee Croft, Bradley Wright-Phillips and Willo Flood, as well as the sale of David James helped the Club to generate a net profit of GBP2.0million on disposal of players. The comparative figure for the prior year included the proceeds for the sale of Shaun Wright-Phillips.

This illustrates the benefit of the Academy, not just in terms of players coming through into the first team but in terms of generating revenue for the club when they are deemed to not make the grade.

Net interest payable, before stadium finance lease charges, remained static at GBP2.0 million. Stadium finance lease charges fell by GBP0.8 million as reduced income from concerts and Premier League matches led to lower resultant rental charges.
The retained loss in the period amounted to GBP7.1 million (2005: GBP13.2 million profit).

Would this affect the potential takeover? Probably not, but another loss probably illustrates that there does need to be a change in direction/ownership of the club to be able to re-structure the current financial set-up. It does, however still remain unclear at this stage as to exactly what shape a takeover bid would form and an obvious concern is that any bid could land us in even more debt depending on how it is structured.