Preston NE operating loss widens

FOOTBALL club Preston North End has increased its half year operating loss to £3.14m in a climate its chairman called “particularly challenging”.

The loss for the half year to the end of December 2008 is £1.35m higher than the loss generated in the six months to December 2007.

Turnover stood at £4m, down on the £4.2m in the same period a year ago. The pre-tax loss of £4.8m is a huge dip on the £1.8m profit the club made a year earlier as a result of player sales.

Meanwhile, wages increased by 26%, which chairman Derek Shaw said reflected both wages of new players added to the squad at the start of this season and contractual rises for players who were already in the squad.

In addition to the operating losses, the club made cash payments of £1.4m to other clubs for players purchased both in the current and previous financial periods.

Mr Shaw said that the resulting cash requirement has continued to far outweigh the income generated with the consequence that the club has required significant further amounts of external finance from its major shareholders.

Mr Shaw said: “The operating and financial climate has been particularly challenging in the first six months of the current financial year.”

The club said one particular highlight of the season so far was its FA Cup game against Liverpool, which it lost, but it said provide a valuable financial benefit, although this will fall into the second half of the financial year.

The club has also started a number of new commercial partnerships in the current season with commercial and hospitality clients, it said.