Arsenal post half year loss of £2.5m

Mon 28th Feb 2011 | Money & Finance

Arsenal Football Club released their half year financial figures today revealing a loss after tax of £2.5m for the second half of 2010.

This compares to the profit of £29.2m the club made during the same period in 2009. The loss is the result of significant changes in one-off trading such as property and player trading which has reduced over the last year.

However, the club posted an operating profit (before depreciation and player trading) of £12.6m which was also significantly down the same period 2009.

Commenting on the figures, chairman Peter Hill-Wood said, “This is a robust performance in the current climate and is where we expected to be at this stage of the financial year and at this stage in our longer term development plans for the growth of the Club.”

Arsenal, who lost to Birmingham City in yesterday’s Carling Cup Final remain confident that they will achieve their expected financial targets for the year in spite of the difficult economic situation.

“We continue to operate as a self-funding Club. This brings its own challenges in an increasingly competitive environment but provides the platform for a secure and positive long term future.”

The club’s previous strong financial performance had been the result of strong trading at Highbury Square, Arsenal’s property development on the site of their old ground.

“Activity at Highbury Square has continued but at a much lower level as we have fewer apartments left to sell,” Hill-Wood explained.

“In the six months ended 30 November 2010, we completed the sales of a further 50 apartments at Highbury Square generating turnover of £22.5m (2009 – 261 apartment sales generated £96.6 million) and £3.3m of operating profits from property (2009 - £11.3m).

The results also showed a significant reduction of player transfer activity which generated a record profit of £33.9m in 2009 to just £4m for 2010.

“Further significant commitment to a determined policy of investing in the team with the re-signing of several key first team players and Arsène Wenger as the Club’s Manager,” the statement read.

“Our business goal is not to generate profits as such but rather to grow the Club’s revenues so that they can be re-invested in the team and in the long term success of the Club as a whole.”

Arsenal’s cash position continued to be strong with group balances of £110.4 million on hand at 30 November 2010 (2009 - £101.0m) of which £22.5m (2009 - £22.5m) was restricted as debt service reserves. 

The club paid off £5.9 million of stadium financing debt at the start of September 2010 with net debt at 30 November 2010 amounting to £147.4m down from £203.6m (November 2009).

Key figures

• Operating profit (before depreciation and player trading) of £12.6m (2009 – £29.3m) with, as expected, a reduction in the contribution from property.

• Sale of 50 apartments at Highbury Square generated revenue of £22.5m (2009 – 261 apartments sales generated £96.6m) and an operating profit from property of £3.3m (2009 - £11.3m) reflecting the lower number of apartments now left for sale.

• Property business continues to be debt free with all sales contributing to Group’s cash position of £110.4m (2009 - £101.0m).

• Further significant commitment to a determined policy of investing in the team with the re-signing of several key first team players and Arsène Wenger as the Club’s Manager.

• Football operating profits (before depreciation and player trading) of £9.3 million (2009 - £18.0m) reflect this increased investment in football wages and also timing differences in the number of home games played (2010 - 10 home matches in first half of 28 matches, so far confirmed, for full year / 2009 – 12 of 27).

• Significantly reduced profit on player sales of £4.0m compared to £33.9m for the prior year.

• Changes in property and player trading, which are essentially one-offs, impact overall result for the period – loss after tax of £2.5m (2009 – profit of £29.2m).

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