From where should I begin? The boring stuff or the interesting stuff? If I start to bore you with news about the finances you’ll probably just moan and say “can’t we talk about the Stoke game” and if I decide to talk about the Stoke game and injuries you might say “I heard we made a profit of 35m quid, how true is it?” In life you can never please anyone so I guess I’ll take if from the top and work my way down to the bottom and who knows, there might be a surprise in there for one or two.
This morning, the club announced the half-year financial results which show significant reduction in group’s debt following progress at Highbury Square. You see I know what that does to your more having only repaid a significant portion of my own debts in the last month or so. That means more disposable income to the layman. Also, it also shows that the strong policy of prudence that has been adopted by the club in the last few years is finally paying off. I won’t bore you with too many details as you can do that yourself but here are the major highlights as reported on the official website.
- Profit before tax of £35.2m (2008 – £24.5m) with increased contributions from both the Group’s football and property businesses.
- Sale of 261 apartments at Highbury Square generated revenue of £96.6m (2008 – £58.4m) with all proceeds used in repayment of the project’s bank debt. The Group’s property business recorded a pre-tax profit of £9.3m (2008 – £4.9m).
- Pre-tax profit from the Group’s core business of football increased to £25.8m (2008 – £19.7m).
- Completed first stages of a programme of capital investment in the appearance and “Arsenalisation” of Emirates Stadium.
- Further significant investment in determined policy of re-signing first team players to new long-term contracts.
- By 30 November 2009, the Group’s total net debt had been reduced to £203.6m (31 May 2009 – £332.8m).
- Since 30 November, there have been a number of further positive developments in relation to the Group’s property projects:
- Of the 655 private apartments in the Highbury Square development, sales have now completed on 524 units with a cumulative sales revenue value of £217.0m.
- The balance on the Highbury Square bank loan has been further reduced, from £35.7m at 30 November, to £12.9m (31 May 2009 – £123.6m).
- Sale of part of the Queensland Road development site means that the Group’s other property activities are now debt free.
While Messrs Ajani, Atoki & Akanni might probably in a better position to analyse these results, allow me to point out my joys and personal observations.
Let’s not kid ourselves, Arsenal Holdings Plc is a business. End of story! The sooner the vast majority of fans understand that, the better for us all. Nevertheless, the group is involved in several business of note are the Football and Property sides. What many do not understand and find hard to appreciate is the fact that they both go hand in hand. Whilst an outlook on the results look thrilling, it is important to keep it all in perspective with our overall objectives. This is a view also held by CEO Ivan Gazidis. He said;
“The reason we run a responsible, profitable and self-sustaining business is so that we can deliver success to the Club and invest in the Club and ultimately deliver success on the pitch, something that our fans can be proud of. That’s what we’re after. So while we’re satisfied with the results, that’s not the end objective.”
That my friends is the reason for it all! Sucess on the pitch ultimately results in better financials and a better financial state can more often than not end up in sucess on the pitch. I am cautious as I use those words as the standards for measuring sucess over the last few years have been skewed for many a football fan.
I’m also happy that the club is sticking to its policy of reinvesting all revenue generated back into the club both in the existing squad and on the transfer market. I know it is the transfer market dealings that get most fans excited but we must give credit to the club for being able to offer our present squad improved deals and guarantee their long term future with us. At least even if we don’t end up buying, we shouldn’t lose the players that we already have. We’ve got tremendous talent available in our young squad but then I won’t go into discussing that just yet.
My biggest joy is the fact that we have been able to significantly reduce our debt on the Higbury Square project by about 80% in the last 9 months. Note that the balance has shrunk from £123.6m as at 31 May 2009 to £35.7m on 30 November and now it stands at £12.9m. That to me is the biggest achievement of the club and the fact that this was done without jeopardising our success on the pitch shows that we indeed have a tremendous squad which when the time comes to add to it will definitely be world beaters at any level in the not too distant future.
In the light of our financials, and the high level of prudence observed at the club, I stand at a cautious distance to mourn over Portsmouth who have just become the first Premier League club to enter Administration. It is a sad day for football and I cannot imagine what hurt and pain Pompey fans will be experiencing at the moment. They’ve gone from the highs of winning the FA Cup and European Football to the lows of battling against relegation, four different owners in a season and now administration. They will be docked 9 points and will certainly be relegated at the end of the season. I wish them all the best for the future and truly hope that the will be able to pick up the scraps of whatever is left of their football club.
I leave you with the words of Arsenal Chairman Peter Hill-Wood in response to the recently released financial results.
“There has been remarkable progress at Highbury Square over the last twelve months and it is clear that the next couple of years will see our property activities delivering surplus cash. This is very good news, although I would not want to speculate on the exact quantum or timing of this. How we will use this surplus remains undecided but, in addition to investing in the team, I think we will examine investment in Club projects and infrastructure, both in and around Emirates Stadium, which will provide a long lasting benefit to the Club and our tremendous, loyal supporters.”
I leave you to speculate for PWD on that.
Till later when I do the regular blog …Victoria Concordia Crescit.
