Post by QPR Report on Mar 6, 2010 8:37:03 GMT
From March 2000 - What the accounts looked like - a year later: Administration
QPR Official Site - March 2000
PLC INTERIM RESULTS
The interim results for Loftus Road PLC, the holding company for Queens Park Rangers FC and London Wasps RFC, were announced to The Stock Exchange on Friday. In the six months to 30 November 1999 turnover increased by 21% while there was a 26% decrease in operating loss.
Commenting on the results, Loftus Road’s Chairman, Chris Wright said:
"Overall I am pleased with the Group’s performance to date and look forward to further improvement in the second half of the year. We have achieved our stated aim of increasing revenues while reducing costs, but we are still making substantial operating losses. Your board is working tirelessly to ensure that financial stability can be achieved in the long-term whilst providing the successful teams that shareholders and fans want. I consider that the results show that we have taken our first steps on this long road."
The announcement is produced in full below.
Chairman’s Statement
Results and Dividend
The Group recorded an operating loss of £4,332,000 (1998 – loss of £5,833,000) before accounting for profit on disposal of players’ registrations of £41,000 (1998 – profit of £2,216,000). Turnover for the period was £3,381,000 (1998 - £2,805,000).
The loss per share amounts to 7.7 pence (1998 – loss of 9.7 pence). The Directors do not propose the payment of an interim dividend (1998 - £nil).
Net assets as at 30 November 1999 amounted to £10,280,000 (1998 - £16,621,000) representing net assets per Ordinary share of 17.1 pence (1998 - 41.6 pence as previously reported; 31.5 pence (adjusted for the effects of the open offer)). In accordance with Financial Reporting Standard 10, no amount is included in the balance sheet to reflect the value of home grown players or any market valuation of the playing squad.
Operational Review
Football activities
In the six months to November 1999 we have managed to maintain the direct costs of our football activities at the same levels as the comparable period in 1998. This should be viewed in the light of inbuilt increases in players’ contracts which run far ahead of inflation. In terms of the effects of player trading, amortisation for the period has decreased from £941,000 to £674,000 but we have generated profit on disposal of players’ registrations of only £41,000 compared to £2,216,000 in the six months to 30 November 1998.
The issue of player sales is one that your Board is constantly reviewing. In the post Bosman era it has become increasingly difficult to sell players with purchasing Clubs recognising the value of picking up players at the end of their contract for no transfer fee and players being quite prepared to not resign contracts in the hope that their future rewards may be greater because of this. Indeed the last player sold by QPR was Mike Sheron in February 1999. For Clubs like ourselves who have historically relied on balancing the books by player sales, trading conditions in this regard have become much more difficult.
I am sure that all shareholders would join me in thanking Gerry Francis for his hard work in turning around QPR’s fortunes from that of relegation prospects last season to possible play-off prospects this season. The playing performances of Stuart Wardley and Jermaine Darlington indicate to me that good players do not need to cost the earth if they are managed and trained in the right way (and are indeed assets whose value can grow in the future). In addition, the purchases of Robert Steiner and Samuel Koejoe have significantly strengthened our attacking options. Regrettably injuries have affected our ability to put out a settled side, but I see a nucleus of a young stable squad forming which should allow the team to develop further in future years.
We are now reaching a critical phase of the season where a run of good results can project teams into play-off positions. Your Board remains committed to providing Gerry with every assistance in strengthening the squad, but we must remain mindful that the Group is still making a sizeable operating loss. We will continue in our efforts to decrease the costs of our footballing activities balanced by increases in revenues in other areas, yet remaining conscious that decisions on player purchases must be balanced within the overall financial framework.
(b) Rugby activities
As with QPR we have been able to maintain the direct costs of our rugby activities at 1998 levels. Decreases in players wages resulting from the impact of the salary cap (at £1,800,000 for the 1999/00 season) have been offset by increased investment in our youth structure. In terms of the effects of player trading amortisation has decreased from £16,000 to £14,000.
London Wasps was well prepared in terms of its playing squad contracts to remain within the salary cap. We have focussed on maintaining a young predominantly English squad rather than contract high cost foreign stars, with a view to achieving balance within the squad and to prepare ourselves for the further decrease in the salary cap in the 2000/01 season. Such is the quality of our squad that recently 8 players were called up to the England training party.
Playing performances have been somewhat mixed to date. We have reached the quarter finals of the European Cup and the semi finals of the Tetley’s Bitter Cup, but have been inconsistent in Allied Dunbar Premiership One. It is vital that we finish as high as possible in the League to secure European Cup rugby for the following season. Currently I believe that 5th place may be good enough. With terrestrial broadcast coverage of this competition and the additional revenues it generates this is our focus for the remainder of the season and I have been encouraged by our recent performances against Newcastle in the Cup and Saracens in the League.
The Rugby World Cup has resulted in only 4 matches being played at home in the 6 months to 30 November 1999 compared to 7 matches in the comparable period. Currently the Six Nations Championship will remove further weekend playing opportunities and I welcome the current initiatives by the Clubs and the Rugby Football Union to finally achieve some stability in future playing seasons.
Attendances
Across the two sports average paying attendances at Loftus Road have increased by some 43% between the two periods under review. Overall turnover arising from matchday receipts (which also include programme income, Cup shares and other match receipts) has increased by 24%. I am delighted with this improvement which reflects the better marketing of our season tickets and matches together with better performances on the field. The net result is that over 165,000 people have attended events at Loftus Road in the period to 30 November 1999.
For the record season ticket sale volumes have increased by 9% for QPR and 21% for London Wasps.
Commercial and retail activities
Commercial and retail revenues have shown an overall 3% increase between the periods. Increases in QPR commercial revenues and merchandise sales have been offset by a decrease in London Wasps commercial revenues. Our commercial department have found trading conditions on the London Wasps side difficult due to the Rugby World Cup, which has consumed corporate spend and has taken away focus from the Club game. Also, as mentioned above, there have only been 4 home matches in the period (compared to 7 in the preceding period) and consequently this has also had an adverse affect on revenues.
Merchandising sales have increased by 52% primarily as a result of the launch of the QPR Millenium home shirt. I am delighted that we have also managed to increase both QPR and London Wasps leisurewear sales. Historically the launch of a new home shirt has led to a corresponding decrease in leisurewear sales as consumers focus their spend on one or the other. The review of product ranges and changes to the lay out of the shop have certainly assisted in achieving this excellent result.
In order to continue improvement in our commercial and retail activities we have outsourced these operations (together with the box office) to a third party with effect from 1 December 1999. The advantages to the Group will be a fresh regime, highly motivated to introduce superior selling and service techniques and being remunerated on a performance basis (both financially and in terms of service levels).
Overhead base
As I mentioned in my last report we have been taking steps to reduce our cost base. To this end I am very pleased to note an overall 30% reduction in stadium, matchday and other direct overhead costs. These savings have been made across every area of the business and it is a testament to the management and staff that they have embraced the culture of looking for value in everything that they do.
Review of the cost base remains an ongoing exercise. I hope that you will agree that a giant stride has already been made, but there remains further work to do.
Sudbury
As previously reported we completed on the sale of 7.4 acres of the London Wasps Training Ground at Sudbury on 25 January 2000. This will bring some £8,900,000 into the Group, relieving the short term pressure on the Group’s borrowing position. However you should note that the Group’s borrowings at 30 November 1999 totalled some £9,996,000. It is with this in mind that your Board remains focussed on prudent cash management.
Outlook
For the first time in 2 years I feel relatively confident that QPR will not be involved in a relegation fight. Our performances to date are vastly improved on previous years and we have only lost one League game at home all season. In some ways our current position presents a different set of problems. Being close to the play-off positions breeds excitement and expectation for everyone associated with the Club. However your Board needs to balance what it can do to assist in meeting these expectations within the bigger picture of the Group’s financial stability on a go forward basis. To this end I have agreed parameters with Gerry and we continue to work together to achieve the best possible League finish.
London Wasps have two crucial matches appoaching, a semi final against Bristol in the Tetley’s Bitter Cup and a quarter final against Northampton in the European Cup. Nigel Melville has continued his excellent work in managing a young and committed squad and I believe that we will see the best of London Wasps in the months to come.
Regrettably there has been further press about the in-fighting within Rugby Union. I applaud any initiatives that will lead to the end of the stop-start economics in rugby and we have been actively involved in discussions with all relevant parties. I still remain convinced that stability in the playing season is key to the success of both the Club and International game, and I believe that there is a will to produce a structured season which makes sense both financially and in playing terms.
The sale of Sudbury requires us to relocate London Wasps to new training facilities. We have submitted a planning application to build a new facility at our Twyford Avenue site and we are currently reviewing the costs of this together with alternative options. I shall update you on developments in future reports.
Overall I am pleased with the Group’s performance to date and look forward to further improvement in the second half of the year. We have achieved our stated objective of increasing revenues whilst reducing costs, but we are still making substantial operating losses. Your Board is working tirelessly to ensure that financial stability can be achieved in the long-term whilst providing the successful teams that shareholders and fans want. I consider that the results show that we have taken our first steps on this long road.
Chris Wright
Chairman
QPR Official Site - March 2000
PLC INTERIM RESULTS
The interim results for Loftus Road PLC, the holding company for Queens Park Rangers FC and London Wasps RFC, were announced to The Stock Exchange on Friday. In the six months to 30 November 1999 turnover increased by 21% while there was a 26% decrease in operating loss.
Commenting on the results, Loftus Road’s Chairman, Chris Wright said:
"Overall I am pleased with the Group’s performance to date and look forward to further improvement in the second half of the year. We have achieved our stated aim of increasing revenues while reducing costs, but we are still making substantial operating losses. Your board is working tirelessly to ensure that financial stability can be achieved in the long-term whilst providing the successful teams that shareholders and fans want. I consider that the results show that we have taken our first steps on this long road."
The announcement is produced in full below.
Chairman’s Statement
Results and Dividend
The Group recorded an operating loss of £4,332,000 (1998 – loss of £5,833,000) before accounting for profit on disposal of players’ registrations of £41,000 (1998 – profit of £2,216,000). Turnover for the period was £3,381,000 (1998 - £2,805,000).
The loss per share amounts to 7.7 pence (1998 – loss of 9.7 pence). The Directors do not propose the payment of an interim dividend (1998 - £nil).
Net assets as at 30 November 1999 amounted to £10,280,000 (1998 - £16,621,000) representing net assets per Ordinary share of 17.1 pence (1998 - 41.6 pence as previously reported; 31.5 pence (adjusted for the effects of the open offer)). In accordance with Financial Reporting Standard 10, no amount is included in the balance sheet to reflect the value of home grown players or any market valuation of the playing squad.
Operational Review
Football activities
In the six months to November 1999 we have managed to maintain the direct costs of our football activities at the same levels as the comparable period in 1998. This should be viewed in the light of inbuilt increases in players’ contracts which run far ahead of inflation. In terms of the effects of player trading, amortisation for the period has decreased from £941,000 to £674,000 but we have generated profit on disposal of players’ registrations of only £41,000 compared to £2,216,000 in the six months to 30 November 1998.
The issue of player sales is one that your Board is constantly reviewing. In the post Bosman era it has become increasingly difficult to sell players with purchasing Clubs recognising the value of picking up players at the end of their contract for no transfer fee and players being quite prepared to not resign contracts in the hope that their future rewards may be greater because of this. Indeed the last player sold by QPR was Mike Sheron in February 1999. For Clubs like ourselves who have historically relied on balancing the books by player sales, trading conditions in this regard have become much more difficult.
I am sure that all shareholders would join me in thanking Gerry Francis for his hard work in turning around QPR’s fortunes from that of relegation prospects last season to possible play-off prospects this season. The playing performances of Stuart Wardley and Jermaine Darlington indicate to me that good players do not need to cost the earth if they are managed and trained in the right way (and are indeed assets whose value can grow in the future). In addition, the purchases of Robert Steiner and Samuel Koejoe have significantly strengthened our attacking options. Regrettably injuries have affected our ability to put out a settled side, but I see a nucleus of a young stable squad forming which should allow the team to develop further in future years.
We are now reaching a critical phase of the season where a run of good results can project teams into play-off positions. Your Board remains committed to providing Gerry with every assistance in strengthening the squad, but we must remain mindful that the Group is still making a sizeable operating loss. We will continue in our efforts to decrease the costs of our footballing activities balanced by increases in revenues in other areas, yet remaining conscious that decisions on player purchases must be balanced within the overall financial framework.
(b) Rugby activities
As with QPR we have been able to maintain the direct costs of our rugby activities at 1998 levels. Decreases in players wages resulting from the impact of the salary cap (at £1,800,000 for the 1999/00 season) have been offset by increased investment in our youth structure. In terms of the effects of player trading amortisation has decreased from £16,000 to £14,000.
London Wasps was well prepared in terms of its playing squad contracts to remain within the salary cap. We have focussed on maintaining a young predominantly English squad rather than contract high cost foreign stars, with a view to achieving balance within the squad and to prepare ourselves for the further decrease in the salary cap in the 2000/01 season. Such is the quality of our squad that recently 8 players were called up to the England training party.
Playing performances have been somewhat mixed to date. We have reached the quarter finals of the European Cup and the semi finals of the Tetley’s Bitter Cup, but have been inconsistent in Allied Dunbar Premiership One. It is vital that we finish as high as possible in the League to secure European Cup rugby for the following season. Currently I believe that 5th place may be good enough. With terrestrial broadcast coverage of this competition and the additional revenues it generates this is our focus for the remainder of the season and I have been encouraged by our recent performances against Newcastle in the Cup and Saracens in the League.
The Rugby World Cup has resulted in only 4 matches being played at home in the 6 months to 30 November 1999 compared to 7 matches in the comparable period. Currently the Six Nations Championship will remove further weekend playing opportunities and I welcome the current initiatives by the Clubs and the Rugby Football Union to finally achieve some stability in future playing seasons.
Attendances
Across the two sports average paying attendances at Loftus Road have increased by some 43% between the two periods under review. Overall turnover arising from matchday receipts (which also include programme income, Cup shares and other match receipts) has increased by 24%. I am delighted with this improvement which reflects the better marketing of our season tickets and matches together with better performances on the field. The net result is that over 165,000 people have attended events at Loftus Road in the period to 30 November 1999.
For the record season ticket sale volumes have increased by 9% for QPR and 21% for London Wasps.
Commercial and retail activities
Commercial and retail revenues have shown an overall 3% increase between the periods. Increases in QPR commercial revenues and merchandise sales have been offset by a decrease in London Wasps commercial revenues. Our commercial department have found trading conditions on the London Wasps side difficult due to the Rugby World Cup, which has consumed corporate spend and has taken away focus from the Club game. Also, as mentioned above, there have only been 4 home matches in the period (compared to 7 in the preceding period) and consequently this has also had an adverse affect on revenues.
Merchandising sales have increased by 52% primarily as a result of the launch of the QPR Millenium home shirt. I am delighted that we have also managed to increase both QPR and London Wasps leisurewear sales. Historically the launch of a new home shirt has led to a corresponding decrease in leisurewear sales as consumers focus their spend on one or the other. The review of product ranges and changes to the lay out of the shop have certainly assisted in achieving this excellent result.
In order to continue improvement in our commercial and retail activities we have outsourced these operations (together with the box office) to a third party with effect from 1 December 1999. The advantages to the Group will be a fresh regime, highly motivated to introduce superior selling and service techniques and being remunerated on a performance basis (both financially and in terms of service levels).
Overhead base
As I mentioned in my last report we have been taking steps to reduce our cost base. To this end I am very pleased to note an overall 30% reduction in stadium, matchday and other direct overhead costs. These savings have been made across every area of the business and it is a testament to the management and staff that they have embraced the culture of looking for value in everything that they do.
Review of the cost base remains an ongoing exercise. I hope that you will agree that a giant stride has already been made, but there remains further work to do.
Sudbury
As previously reported we completed on the sale of 7.4 acres of the London Wasps Training Ground at Sudbury on 25 January 2000. This will bring some £8,900,000 into the Group, relieving the short term pressure on the Group’s borrowing position. However you should note that the Group’s borrowings at 30 November 1999 totalled some £9,996,000. It is with this in mind that your Board remains focussed on prudent cash management.
Outlook
For the first time in 2 years I feel relatively confident that QPR will not be involved in a relegation fight. Our performances to date are vastly improved on previous years and we have only lost one League game at home all season. In some ways our current position presents a different set of problems. Being close to the play-off positions breeds excitement and expectation for everyone associated with the Club. However your Board needs to balance what it can do to assist in meeting these expectations within the bigger picture of the Group’s financial stability on a go forward basis. To this end I have agreed parameters with Gerry and we continue to work together to achieve the best possible League finish.
London Wasps have two crucial matches appoaching, a semi final against Bristol in the Tetley’s Bitter Cup and a quarter final against Northampton in the European Cup. Nigel Melville has continued his excellent work in managing a young and committed squad and I believe that we will see the best of London Wasps in the months to come.
Regrettably there has been further press about the in-fighting within Rugby Union. I applaud any initiatives that will lead to the end of the stop-start economics in rugby and we have been actively involved in discussions with all relevant parties. I still remain convinced that stability in the playing season is key to the success of both the Club and International game, and I believe that there is a will to produce a structured season which makes sense both financially and in playing terms.
The sale of Sudbury requires us to relocate London Wasps to new training facilities. We have submitted a planning application to build a new facility at our Twyford Avenue site and we are currently reviewing the costs of this together with alternative options. I shall update you on developments in future reports.
Overall I am pleased with the Group’s performance to date and look forward to further improvement in the second half of the year. We have achieved our stated objective of increasing revenues whilst reducing costs, but we are still making substantial operating losses. Your Board is working tirelessly to ensure that financial stability can be achieved in the long-term whilst providing the successful teams that shareholders and fans want. I consider that the results show that we have taken our first steps on this long road.
Chris Wright
Chairman
