By Neeraj Gangal
Substantial investment has had significant impact on this year's financial results.
Manchester City today announced its financial results for the year ending 31st May 2009, according to a report on Saturday.
This is the first period under the ownership of Sheikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, newswire WAM reported.
The financial year to May 2009 marked the beginning of a period of significant planned investment in all areas of the Club; the playing squad, the youth academy, infrastructure, website and technology applications and our people.
Not surprisingly, this substantial investment has had a significant impact on this year's financial results, WAM added.
This investment is also forecast to similarly impact the financial results of the next several years as the Club seeks to achieve success both on and off the field.
Turnover for the year ended 31st May 2009 increased by 6% to 87.0m Sterling Pounds (2008: 82.3m Pounds), with this increase being offset by a significant increase in operating expenses to 121.2m Pounds (2008:83.9m Pounds) primarily driven by increased playing staff costs.
This resulted in a Net Operating Loss of 34.2m Pounds (2008:1.6m Pounds) and a Net Loss for the Year after amortisation of player contracts and financing charges of 92.6m Pounds (2008:32.6m Pounds).
Match day attendances were up to 42,890 from an average of 42,081 in the previous season, with ticketing revenues ahead by 1.8m Pounds mainly as a result of the extended UEFA Cup run.
TV Revenues were up 12% to 48.3m Pounds mainly as a result of UEFA cup performance, offset partially by a lower league placing than in the previous year.
Revenues from other commercial activities decreased by 8% to 23.3m Pounds mainly due to a 4.5m Pounds reduction in events revenues, primarily as a result of having no events based activities in the 08/09 season, whereas in the prior year the Stadium held the UEFA Cup Final as well as music concerts and a major boxing event.
This decrease was offset by significantly improved performances in the Club's core commercial areas of Retail and Partnerships.
Costs relating to amortisation of player contracts increased in the year, rising to 39.4m Pounds from 25.4m pounds in the previous year and reflecting again the costs of building a new young playing squad. Interest payable and similar charges increased significantly as a result of the increased level of shareholder loans made to the business during the year.
Manchester City also confirmed today that subsequent to the end of the financial year, it has restructured its Balance Sheet with owner Sheikh Mansour converting all of his existing 304.9m pounds shareholder loans made to the Club into equity. Sheikh Mansour has also purchased further shares to a value of 89.6m pounds as a measure of his long term commitment to the Club.
Commenting on the financial performance and balance sheet restructure, Chief Financial and Administration Officer Graham Wallace said: "The financial results reflect a period of rapid change at the Club, the result of long-term planning and investment by the Board and our owners, to create a sustainable business in the future. We have always said that this transformation will take a number of years and these figures reflect that.
"The owners' decision to convert debt to equity is in line with their previously-stated financial strategy and is fantastic news for supporters of Manchester City, whose Club is now on a secure financial foundation that gives a tremendous platform to build from in future years."