Wet weather dampens Warwickshire’s financial performance

LAST year’s wretched summer has helped to damp down profits for Warwickshire County Cricket Club with the Bears reporting a £668,000 loss.

The 2011/12 financial year was the Edgbaston club’s first full year of operation at its newly redeveloped ground and its diversified business model.  

Turnover was slightly down on 2011 (£11.7m) at £11.5m.  The club said this in part reflected the lesser appeal of a West Indies Test Match relative to the India fixture in the prior year.   

EBITDA of £755,000 was £254,000 lower than in 2011, reflecting the overall match schedule and the anticipated higher overhead costs associated with operating the redeveloped stadium for a full year.  

The operating result was a loss of £668,000 compared to a profit in 2011 of £327,000. However, the club said this position reflected a full year’s depreciation of £1.4m charged on the redeveloped assets (2011: £682,000).

In overall terms, the club said that given the amount of play lost to rain – which included three days of the West Indies Test Match and a one-day game against the Australians – the performance was satisfactory.

On the field things were much brighter with the side crowned LV= County Champions for the seventh time, while the team was also runner-up in the Clydesdale Bank 40 competition, narrowly losing to Hampshire in the final.

Off the field, the Edgbaston conference and events business continued to trade successfully with year-on-year revenue growth of 50% reported for the second year in succession.

Craig Flindall, Financial Director at Warwickshire CCC, said: “It is always very difficult to compare our year on year financial results given the popularity of the major match fixture list from one year to the next.  

“The relative attractiveness  of staging the Test Match against India in 2011, compared with the West Indies in 2012 meant that a reduction in revenue and profits was always expected and budgeted for.  

“The exceptionally bad weather did nothing to improve this situation, however, the club mitigated the impact of the weather by reducing costs where possible and taking out insurance to cover the catering revenue for the ODI and international t20 matches.”

He said the results of the revenue stream generated by the conference and events business combined with the guarantee of 24 major match days over the next four years would help to validate the WCCC business plan, which underpins the £32m investment in the new stadium.  

Mr Flindall said the success of the redevelopment meant Edgbaston was now an all year round business operation that was less reliant on cricket revenues.

“2012 was also the first year where we accounted for the full year impact of the redevelopment, including depreciation and loan interest.  Both costs were fully budgeted, but given the level of investment we have made, the club will need to generate significant EBITDA to report both operating and retained profits,” he added.

Colin Povey, Chief Executive added: “2012 was a year that presented us with significant operational challenges but this result shows a growing resilience in our operations.  We have made considerable progress in recent times but we need to continue that trend in the years ahead.  We already have a clear strategy and solid operational plans in place for 2013 and beyond.”

The club will be hoping for better weather this summer as the ground hosts the final of the prestigious ICC Champions Trophy in June; the first time that the final of a major international men’s tournament has been staged outside of London.  The initial ticket allocations for the final together with two of the four group matches to be played at Edgbaston – England v Australia and India v Pakistan – have already sold out.

The ground will also host English domestic cricket’s biggest day; the Friends Life t20 Finals Day, as well as a floodlit NatWest Series ODI between England and Australia.

The club is hoping this will go some way towards offsetting the loss of what is considered in cricket circles to be the game’s biggest showpiece event, an Ashes Test Match.