Hammers’ £16m loss (From Echo)

Hammers’ £16m loss

10:18am Tuesday 2nd March 2010 in

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WEST Ham United have reported a loss of £16.2 before taxation for the 2008/09 season but joint owner David Sullivan is confident the Premier League club will overcome its financial difficulties.

Sullivan and co-owner David Gold said the Hammers were more than £100m in debt when they took over in January.

The latest figures released yesterday show the £16m deficit came on a turnover of £76.1m.

“These results testify to the amount of work that has to be done to restore this club to a position of financial strength,” Sullivan said in the statement of accounts.

“Our new board will work ceaselessly to put the club back on a stable financial footing and I believe that it has the expertise and experience to achieve this.

“Everyone at the club is working tirelessly to secure our future in the Premier League. Once this is secure I believe we can face the future with optimism.”

Current initiatives include trying to raise £20-£40m of investment, while the new owners have already warned staff at the club they face pay cuts in the summer.

The report says that the club’s previous owners had attempted to slash costs during the 2008/09 season following two seasons of heavy trading losses and investment in the playing staff which had increased the club’s debt.

Bank debt increased from £42.8m to £44.9m for the period in question while transfer fees netted the Irons £7.4m.

The figures released yesterday include details of the club’s financial standing over the past five seasons and show the only pre-tax profit came in 2005/06 when West Ham made £6m on a turnover of £60.1m.

Turnover dropped to £57.3m the following season but the club posted a pre-tax loss of £22m. That figure increased to £37.4m in 2007/08 while turnover shot up to £81.5m.

The report explains that the £5.4m reduction in turnover in 2008/09 was largely as a result of the loss of holiday firm XL’s sponsorship and outsourcing the Irons’ catering and hospitality.

Yesterday’s figures also showed wages accounted for nearly 80 per cent of turnover — £63.3m in 2007/08 and £60m in 2008/09.

The report says: “Clearly this is unsustainable but, more importantly, it must be concluded that the investment in the playing squad has not generated an appropriate return, either financially or in terms of performance.”