The Club held its AGM this afternoon (April 17) at the Matchroom Stadium.
The company revealed it made a pre-tax loss for 2012 of £1,420,180 compared to the exceptional 2011 which made a pre-tax profit of £379,151.
There are a variety of explanations for the change of fortunes with the main one being due to the Club not repeating its success of the previous season in the FA Cup where we reached the fifth round of the competition and earned a replay at the Emirates Stadium after a 1-1 draw with Arsenal at Brisbane Road, with the whole cup run having an approximate impact on profit before tax of £1,680,000.
Average attendances were also down in 2012 as the average home gate dropped from 4,937 to 4,298 whilst away turnouts were down from 806 to 681 which overall translates to a reduction in revenues of £148,489.
The ongoing legal battle over the Olympic Stadium has also had an impact with the legal costs incurred by the company for actions against the government and Premier League up until the date of signature of the financial statements given at the AGM are estimated at £372,000 (of which £215,681 was incurred in this financial year and £138,460 was incurred in the 2011 financial year).
Total wages were up £129,751 compared to last year due to an increase in playing staff. Playing wages were 80% of turnover, but formal wage capping at 65 percent for this season should improve our trading results this year, and that figure will improve further when that drops a further 5 percent to 60 percent next season.
Club Chairman Barry Hearn said: “Obviously we’re operating in testing financial times, and our figures for the last year reflect that. Playing staff costs were too high, which is a situation that the Football League’s new financial regulations will improve, but it’s still important that we don’t take our eye off the ball with regards to spending efficiently and striving to maximise our commercial expenditure.
“Supporters need to be aware that we can only spend 60 percent of our revenue on players’ wages next year and that we will do that – so 60p of every £1 the Club generates goes on the playing staff and it’s up to us to try and meet the remainder of our costs with the balance.
“We have the nucleus of an excellent squad, which we are looking to improve on for next season so if we do fall a little short of the play-offs this year we can push on to go one better next time around.
“The Olympic Stadium legal situation continues and has been well documented elsewhere but we intend to continue fighting our corner and doing what’s right for the long-term future of the Club.”