Burnden cuts losses but net debt rises to £110m

BURNDEN Leisure, the parent company of Bolton Wanderers Football Club cut annual losses by 26% to £26m in the year to the end of June, despite seeing higher wage inflation and net debt rise to £110.6m.

The club, currently 19th in the 20-team Barclays Premier League, saw turnover boosted by television income rise from £53.9m to £60.7m.

Including the contribution from the de Vere Whites hotel business which is integrated into the Reebok Stadium, Burnden Leisure’s turnover rose 10% to £67.7m.

Chairman Phil Gartside said the 2010/11 period had been a “challenging financial year” for the business with the depressed economy making the sponsorship, hotel, corporate hospitality, commercial property  functions, “difficult to manage and testing”.

He said the influx of foreign investment into the Premier League – most notably into Manchester City – was driving both transfer fee and player wage inflation.

Staff costs at Burnden consequently rose 2% in the year from £54.9m to £56m, representing 82.7% of turnover.

Gartside said: “The financial challenges of the football sector continue to be driven by rising wage costs and transfer inflation in spite of calls for restraint and control from the governing bodies.

“Fuelled by foreign investment in clubs such as Manchester City, the pressure on clubs to compete for players has increased, and whilst we cannot compete at the ultimate level the bar has been raised throughout the entire league.”

Gartside said he was in favour of the the UEFA Financial Fair Play rules, which are being implemented over the next year and designed to make football finances more sustainable.

In the year to the end of June Burnden’s reliance on owner Eddie Davies increased, with the company now owing the Isle of Man-based businessman £110.6m, compared with £93m in 2010.
 
Income from football operations rose £6.8m or 13% to £60.7m, largely as a result of central broadcasting revenues. Thanks to the FA Cup run last season, gate receipts rose too – despite there being two fewer home games (21) than in the previous year.

Corporate hospitality revenues rose 18% year-on-year to £1.8m, reversing several years of decline. Sponsorship and advertising income rose £400,000 to £3.8m, as a result of investment in LED perimeter advertising boards.

Revenues from the De Vere Whites Hotel fell from £8.6m to £7.8m as room rates were cut from an average of £54.93 to £52.11.