Sheffield United and QPR show heavy losses in post-flotation results

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The Independent Online
Two quoted First Division football clubs, Sheffield United and Queens Park Rangers, yesterday reported large losses roughly equivalent to their annual income in their first results since they joined the stock market. Both blamed heavy spending in the transfer market for adding to their trading difficulties. Clifford German investigates the high costs of competing to reach the Premier League and join football's top flight.

Sheffield United the First Division football side that reversed into Conrad, the Manchester-based sports consultancy last January reported a 33 per cent jump in attendances and trebled sales of merchandise through the club shop in the new soccer season, chief executive Charles Green said yesterday.

A plan to build a hotel and leisure park on a 14-acre site and expand the ground capacity at Bramall Lane has been approved, licences have been granted to open bars in the stadium concourses and the shirt-sponsorship deal with Vaux breweries comes up for renewal at the end of the season.

The club is now third in the table with games in hand. But the company that owns the club made a pre-tax loss of pounds 5.88m for the combined businesses in the year to the end of June compared with a loss of just pounds 59,000 the previous year, due to spiralling wages costs. Alan Kelly, the goalkeeper, and the Norwegian international Roger Nilsen, two players currently out of favour with the new team manager may have to be sold soon to raise the best part of pounds 3m.

Turnover reached pounds 8.9m of which pounds 2.35m came from the football club, but costs swallowed up all but pounds 13,000. After adding in a pounds 2.44m loss on the sale of Sportswinner clothing businesses, and a loss of pounds 2.96m in the transfer market the company fell sharply into the red. The football turnover could treble this year and the sports promotion business of Conrad will be retained, Mr Green confirmed, but the shares fell 4p to 53.5p, barely half the price they reached just after the merger in January.

It was a similar story at Loftus Road, the holding company that owns Queen's Park Rangers football club and Wasps, the Rugby Union league champions. Promotion for QPR, currently third in the table, will transform the financial prospects for the group and attendances are up 6 per cent so far this season, while the club is reviewing the options for enlarging the Loftus Road stadium or moving to a new site to the west of London, the chairman, Chris Wright, said yesterday.

Loftus Road also intends to invest in and develop its off-the-field activities in the area of merchandising and other commercial activities in order to broaden the commercial base and lessen the dependence on success on the field, the chairman said.

The company has appointed a new chief executive, Stephen Oakley, a former finance director of Hartstone to run the club, but it kicked-off its first published accounts with a loss almost equal to the annual turnover. The clubs generated an income of pounds 7.5m, playing staff and match day costs absorbed pounds 7.47m and the stadium cost pounds 920,000 to run. Together they added up to an operating loss of pounds 3.61m and a net loss of pounds 3.55m on player transfers resulted in a total loss of pounds 7.16m. After crediting interest income of pounds 112,000, the published loss reached pounds 7.05m, equal to 20.1p a share.

Loftus Road shares eased 1p to 44p compared with the high point of 106.5p at the peak of the season of soccer mania in January. other quoted clubs have also fallen over the year. Spurs were unchanged at 92.5p yesterday, 40 per cent below their high in February. Even Manchester United, near the top of the Premier League fell 2p on the news that their captain, Roy Keane, is out for the season to 669p, 8 per cent below the peak.