Birmingham City owner issues profit warning
The cost of mounting a promotion push for Birmingham City Football Club has led to its owner issuing a profit warning to shareholders.
Hong Kong-based Birmingham Sports Holdings, which acquired the former Birmingham International Holdings after a protracted bidding process last year, has warned shareholders the business is likely to face a substantial increase in full year losses.
An increase in players’ wages associated with new manager Harry Redknapp’s bid for Championship glory during the current season have been cited as the main factor for the hike in costs.
In a statement to the Hong Kong Stock Exchange, BSH said: “The board would like to inform shareholders and potential investors that, based on information currently available to the board, the group is expected to record a substantial increase in loss for the year ended June 30, 2017 as compared to the previous year.
“The increase in loss was mainly due to the increase in operating costs which (are) largely attributable to the higher spending on players’ registration and staff costs as a result of the change of the new club manager and signing in of a number of new players during the season with an aim to strengthen the competitiveness of the football club.”
It adds that an impairment loss incurred after the assessment on the fair value of the intangible assets of the group was also a factor in the profit warning.
BSH, which is currently finalising its annual results for the year ended June 30, 2017, concluded by adding: “Shareholders and potential investors of the company are advised to exercise caution when dealing in the shares of the company.”
The tale of woe has become an all-too-familiar one for fans of the club is recent years.
What is more disturbing for them is that even after the arrival of the new manager and his new signings, the football club is in a no better position – and some might say even worse – than it was last year.
A 2-0 loss to table-topping Leeds Utd last night has pushed the team into the Championship relegation zone.
