The extent to which City directors Delia Smith, her husband Michael Wynn Jones and Banham poultry chief Michael Foulger continue to keep the Canaries afloat became clear again tonight as the Championship club released its latest set of accounts.
As was the importance of the recent car park sale to Broadland Housing Association – a £2.1 million deal that enabled City to immediately pay off £1.9 million owing to its two, principal lenders AXA and the Bank of Scotland.
Though the overall loss after tax for the year rose to £5.8 million – an £800,000 increase on the £5 million figure for 2009 – the club’s overall level of debt was reduced to £20.9m (£22.9m 2009).
Once again, that was helped by the financial input of the Smith and Foulger families; Delia and her husband offering a £300,000 personal guarantee to the Bank of Scotland during the course of the summer, whilst Foulger now has an interest-free loan of £1.44 million invested in the Championship club.
The long-serving City director also gifted the club a further £360,000 in May, 2009, in respect of his offer to match pound for pound everyone who opted not to re-claim their season ticket rebate following City’s relegation to the third tier of English football.
The Smiths on-going ‘loan’ stands at £2.1 million; their overall contribution to the Canary coffers over the course of their 14-year reign now sailing way beyond that.
The extent to which new chief executive David McNally has pushed through crucial savings has, likewise, helped; as will a new understanding with lenders AXA and Lloyds Banking Group who have agreed to a re-financing package through to 2022.
“It has been a year of positive progress on and off the pitch thanks to some very hard work by all concerned, “ City chairman Adam Bowkett told the club’s official site this evening.
“The numbers show a club in transition, but we are now showing positive results on an operating level for the first time since 2007.”
A season in League One was never going to see the club’s financial position improve dramatically; the fact that the club can still command a season ticket fan base of 21,000, however, gives the likes of AXA and Lloyds Banking Group the re-assurance they need to agree to the new repayment terms.
“The long-term future of the Club is now much more secure thanks to the refinancing of our debts to 2022 and we are forecasting increased revenue and improved profit before tax in the next financial year,” added Bowkett, with the new AXA deal only agreed this week.
The challenge, he admitted, was ‘on-going’.
“The hard work from everyone at the club will certainly continue in the months and years ahead.
“Our football management team and the players have set the benchmark on the pitch as to what is expected of all colleagues at Norwich City Football Club. We aspire to replicating their success off the pitch.”
Such is the madness of English football that the Canaries financial health changes in the instant that they get promoted to the Premiership – a £60 million ticket to the big-time.
Of course, it then comes with perils and pit-falls of its own as players’ wages soar likewise.
Tonight and the club were keen to stress that they remain ‘a buying club’ – proof of that particular pudding may yet come in the shape of a full-time deal for defender Leon Barnett once the January transfer window opens next month.
Indeed, last week’s arrival on Gunners youngster Henri Lansbury shows similar intent – he won’t have arrived in Norfolk without a clutch of associated ‘costs’.
There’s no such thing as a ‘free’ loan in football; however much the switch might be of benefit to the young man’s footballing education.
Today’s accounts also reveal the possibility of a further land sale in the future – subject to planning permission being granted for a further housing development.
The Canaries have also set themselves a stiff target for the year ahead – to increase revenue by at least £5 million, to return its biggest operating profit since 2007 when the club was still in receipt of parachute payments from the Premier League and to reduce that net debt figure by a further £1 million.
Staff costs overall demonstrated a drop of £1.6 million year-on-year as McNally sought to save every off-field penny he could find; promotion bonuses still totalled £856,000 as the Canaries clawed their way out of League One at the first attempt.
The cost of Paul Lambert’s recruitment from Colchester United was also made clear – and that of the legal wrangle that followed. Together they added £626,000 worth of ‘exceptional costs’ to the 2010 accounts.
Many might argue that – given his achievements since – that remains an exceptionally good piece of business; that the Scot and his management team were worth every penny of that sum.