Aston Villa didn’t exactly announce their latest financial results with a fanfare, publishing them on the club website, even though they show an improving picture.
After finances were spiralling out of control, leading to owner Randy Lerner to bring in cost-cutting methods while ensuring the club’s Premier League status, Aston Villa are now out of the woods, according to the club’s chief financial officer, Robin Russell.
Aston Villa didn’t exactly announce their latest financial results with a fanfare, publishing them on the club website, even though they show an improving picture.
After finances were spiralling out of control, leading to owner Randy Lerner to bring in cost-cutting methods while ensuring the club’s Premier League status, Aston Villa are now out of the woods, according to the club’s chief financial officer, Robin Russell.
He said, ‘The 2012-13 accounts effectively close a chapter on a period of heavy losses. As we near the end of the 2013-14 season, the Club is financially self-sufficient, compliant with both UEFA’s and the Premier League’s Financial Fair Play requirements.’
Although Villa posted a loss of £51.8M for their latest accounts in 2012/13, Lerner has waived almost twice the amount in loans – converting them to equity in December last year. This should help with financial fair play.
Increase in turnover in 2012-13 was driven largely by improved on-pitch performance and a higher finish in the Barclays Premier League. Higher average league attendance and a semi-final place in the Capital One Cup also contributed.
Reduction in operating expenses was driven by rationalisation of the playing squad with amortisation of player’s registrations down £3.1million and all other expenses down by the same amount.
Exceptional charges increased by £2.4million to £8.3million and included the accelerated amortisation of certain players’ registrations and their employment costs. The accounts now more accurately reflect the value of the squad utilised by the manager.
As the squad was being rebuilt, there was no repeat of 2011-12’s record-breaking profit on disposal of player’s registrations (£0.3m loss in 2012-13 as opposed to £26.9m profit in 2011-12).
There was also no repeat of the one-off impact in 2011-12 of the waiver of accumulated interest of £20.3m by the owner on loans made to the Club. The group continues to benefit from this largesse to the tune of £6.1 million annually.
Although the operating loss fell by £9.5m, the combined effect of the above was to increase the loss after tax for the financial year by £34.1m to £51.8m. This was primarily due to non-recurrence of the high profit on player disposals in 2011-12 (£27.2 m) and waiver of interest (£20.3m).
Villa are always a paradox to me, but then so is Midlands football generally. Wolves are on loan to League 1 and Birmingham City have had their season overshadowed by their owner’s problems. Coventry City are in League 1 and are playing their home games in Northampton. West Bromwich Albion are fighting relegation. And despite their convincing victory over Norwich yesterday, Villa seem destined for a mid-table finish.
It’s long been my sense that the civic leadership of Birmingham has been eclipsed by that of Manchester, although I have a high regard for the current council leader, the unfortunately named Sir A Bore (he isn’t). However, the city council faces financial challenges and a lot of hope is placed in HST2. In a way the football reflects and reinforces the region’s economic challenges.