Wolverhampton Wanderers Football Club (Wolves) has released ‘headline’ financial information for the year, which ended May 2013. Wolves has proactively communicated their financial results for many years and has held an advance briefing with the Wolves Fans Parliament, since the supporters body was formed over seven years ago.
Chief Executive, Jez Moxey, hosted the briefing, and a Q&A session, on Wednesday, 4th December 2013 at Molineux. The full discussion and the independently taken minutes which relate to the Club’s statutory accounts will be following later this morning.
The financial year under review covers Wolves’ participation in the Championship and, therefore, the impact of relegation from the Premier League. Turnover for the year reduced to £32.1m (2012: £60.6m), with the decrease primarily attributable to the loss of substantial Premier League central funding and broadcasting revenues following relegation. This accounted for £23.7m of the £28.5m fall in income. Attendances fell to an average of 21,789 in 2013 (2012: 25,670), including a drop in season ticket holders to 15,350 (2012: 18,015), which accounted for £2m of the reduction, whilst Commercial income also fell by £2.8m.
Following relegation, with player payroll costs reduced, total operating costs (excluding player amortisation costs) fell to £42.8m (2012: £51.3m). Player trading generated an overall net profit of £4.9m (2012 loss: £7.7m), representing the sale of players, primarily during the summer 2012 transfer window, offset by the amortisation costs of new players purchased. Wolves sold Steven Fletcher, Matt Jarvis and Michael Kightly and then utilised significant funds to buy players such as Bakary Sako, Razak Boukari, Tongo Doumbia and Bjorn Sigurdarson as part of the then new manager, Stale Solbakken’s rebuilding plans for the squad.
The player trading surplus reduced the operating loss, before exceptional items and net interest, down to £5.7m (2012 profit: £1.8m).
Relegation to League One had been confirmed before the end of the financial year in May 2013. With the Club operating within the third tier of English football the Board decided it was appropriate and prudent to make an impairment provision in the accounts against the value of player registrations (representing transfer and agents’ fees paid, many of which were incurred during the Premier League seasons) of £12.5m and, in addition, to make a further exceptional provision of £15m for continuing onerous contractual liabilities (player contracts signed whilst the Club was competing in higher divisions).
These adjustments, which represent good practice under UK accounting legislation, were considered essential steps to address the significant negative financial impact of consecutive relegations. As a result, the overall loss, after these provisions and net interest, was £33.1m (2012 profit: £2.2m).
Wolves has made a very positive start to the current season under Head Coach, Kenny Jackett. Promotion back to the Championship is the Club’s principle objective this season and the team is currently 2nd place in the division.
This season has seen the emergence of a considerable number of players who have been developed through the Club’s Academy. Without doubt, the introduction of some of these home grown players has assisted in a considerable improvement in performance. It is the Club’s policy to continue to develop its young players, who are seen as the future lifeblood of the Club. Wolves successfully gained Category One Academy status under the Premier League’s new Elite Player Performance Plan (EPPP) criteria in July 2012. This new Academy system is designed to improve the quality of young footballers across the country and Category One status is the highest award a football club can achieve.
The development of the new Academy at Compton Park costing £8.5m, which is fully supported by Wolves Chairman, Steve Morgan, remains on schedule. The former St Edmund’s Catholic School, which is adjacent to the Training Ground, has now been demolished and will make way for a brand new full size indoor Academy arena and ancillary facilities. Construction work will begin early in the new year and will be completed by September 2014. It is believed that the new Academy will be amongst some of the best facilities in the country. This will complete the Club’s Training Ground and Academy development and expansion programme.
The minutes from last night's Fans' Parliament meeting relating to the accounts will follow shortly.