It's Chelsea's Financial Statement (EBIT-DOH!!)

Fresh from Chelsea's Media Department, here's a very professionally delivered statement of the financial state of play at Stamford Bridge.

Proof indeed that whichever way you look at it, you can't polish a turd! They paid out £23million in compensation to Jose Mourinho, Avram Grant and a few staff. Chelsea's future is ONLY about the commitment of Roman Abramovich. Good luck Blues!

Chelsea reduce losses again as shareholder ‘debt’ is halved:

Chelsea FC plc today (Friday, February 13 2009) announced record group turnover and reduced losses for a third successive season.

The group results for the financial year end June 30, 2008 also revealed that half of the interest free loans from Chelsea Ltd, whose ultimate controlling party is Roman Abramovich, have been converted into equity demonstrating a continued and strengthened commitment from the shareholder to the football club.

The results followed another year of relative success on the field with football and media revenues all showing large rises on the previous financial year.

The main figures were:

- group turnover up 11.9% to £213.1m from £190.5m (2006/7)
- football activities up 14.8% to £189.8m from £165.3m
- of this media revenues are up 30.4% to £77.6m from £59.6m
- Shareholder loans have been reduced to £339.8m while shareholder capital/equity has increased to £369.9m
- losses reduced by 43% before exceptional items to £42.6m from £74.8m
- losses reduced by 12.2% after exceptional items to £65.7m
- wages and salaries as percentage of turnover before exceptional items 70.6%
- gross turnover of £248m (includes adidas and other merchandise and Chelsea Digital Media not consolidated in group results)

Chelsea Chairman Bruce Buck said: “Following the conversion of half of the interest free loans into equity there should now be no doubt as to the owner’s commitment to the club and the stability of the company’s funding structure.

“We have always believed that this ‘debt’, now reduced by 50%, has been misrepresented. Chelsea has no external debt and makes no punitive interest payments to external funders.”

The results include exceptional items of £23.1m related to compensation payments to two first team managers and five coaching staff.

These are treated under wages and salaries for accounting purposes only. Wages before exceptionals were £148.5m (£132.8m 2006/7) and after exceptionals £171.6m

Chelsea has also conducted independent research by TNS (October 2008) that indicates the club has 110 million “core” fans globally an increase of 20 million on the previous research.

Chelsea Chief Executive Peter Kenyon said: “There is no doubt that the positive upward trends of turnover and the continued reduction in losses shows that Chelsea is building a strong business base to build on in what will be challenging times. This is even more evident given that the results were adversely affected by the exceptional items.

“We have set ourselves ambitious targets to be EBITDA neutral on June 30 2010 and to require zero cash funding from the owner at the beginning of the financial year 2009/2010.

“We have consistently advocated the aim of self-sufficiency which has always been supported by the owner. We are hopeful of being close to these targets in the timeframes we have set given the underlying strengths of the business.

“Success on the field is a key part of this. But in line with our long stated business aims any squad restructuring in the summer will be funded predominantly by sales as we have consistently reduced our net transfer spend over the last five years and will attempt to continue this trend.

“This is the fifth set of financial accounts since the takeover and Chelsea has made huge progress during that period as a football club and a business.

“In that time we have had significant on field success, our turnover has increased by 96% which ranks us 5th in the world and our fan base has increased hugely. That gives us great confidence for the next 5 years.”

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