Financing West Bromwich Albion plc - 13/04/03

New Premiership club West Bromwich Albion were relegated after their first season. Controversial chairman Paul Thompson stood down and was eventually replaced by Jeremy Peace. In April 2003 Peace purchased around 28,000 shares from his predecessor Paul Thompson to give him a stake of just over fifty per cent. Earlier, shareholders representing some 40 per cent of the company had become increasingly concerned at Mr Thompson's management style. Rank and file supporters who own around 20 per cent of the club were angry at Mr Thompson's treatment of Gary Megson who is revered for taking the club back to the top flight after a sixteen year absence. The Financial Times quoted someone close to the club as saying, 'If Mr Thompson wanted Mr Megson to leave he should have the courage to fire him. We will back Mr Peace because he seems prepared to lead and unite the club and work with Mr Megson to establish West Bromwich Albion in the Premier League.' Peace has made it clear that Megson is part of his long-term vision for the club. Turnover more than doubled in the six months to 31 December to £14.8m from £6.1m. However, there was a pre-tax loss of £345,000, compared with a profit of £3.89m last time, but this included a £4.52m surplus from player sales. The club has stated that it might want to raise additional funds from shareholders within the next twelve months. Despite impending relegation, the club, which has spent prudently, aims to bounce back and become an established Premiership club within five years. Finance will be needed to fund infrastructure projects such as stadium improvement during this period. This might involve a mixture of project finance and more traditional fund raising from shareholders.