25 October 2012
Dundee United's Annual Accounts for the period to June 2012 reveal that the Club achieved a net profit of £1.449m for the year, and that the bank term loan was reduced from £5.4m to £3.93m. A further reduction of £225,000 was made in July 2012, reducing the outstanding loan amount to £3.7m - a reduction of over 30% from 2011.
Despite a challenging financial environment, another successful season by the first team ensured that revenues reflected only a small reduction of 3% to £5m. Administration and wage costs were consistent with the prior year, although the drop in revenue and an increase in employer's NIC rate resulted in the percentage of wages to turnover ratio increasing slightly from 74% to 76%. Since the end of the financial year, the Club has made progress in significantly reducing its overall wage costs and this will be reflected in the next financial statements.
During the year, the Club made a profit of £2.135m from the transfer of player registrations. At the end of the year the term loan had reduced to £3.93m and a further reduction of £225,000 was made in July 2012. Bank interest paid was reduced from £240,000 to £203,000. Revised bank facilities were agreed during the course of the year, with the bank overdraft facility next due for review in September 2013. During the year, Directors' Loans were also reduced from £435,000 to £377,000.
A further sign of improvement concerned the audit report which last year included an emphasis of matter paragraph concerning the going concern status of the Club. No such paragraph has been required this year, which highlights the continued efforts of the Board to reduce the Club's debt and improve the working capital management of the Club.
Chairman Stephen Thompson said, "In what most people recognise as one the most difficult financial periods affecting Scottish football in many years, it is pleasing to be able to report a healthy net profit and a significant reduction in bank borrowings. It is particularly pleasing that the financial position has improved as a direct result of our long term investment in the Club's youth development policy, which produced the receipt of significant transfer fees during the year from the sale of David Goodwillie and Scott Allan.
"It is equally encouraging that astute signings by the Manager and the introduction of further exciting youth development players not only allowed the team to remain competitive, but also provides optimism for further financial improvement. This underlines the importance to Dundee United of having a strong and vibrant youth policy. I would like to pay tribute to the Manager Peter Houston, Youth Director Stevie Campbell and all of the coaches for their patient nurturing of our youth players, many of whom promise an exciting future.
"However, I must also caution that the current and forecast economic situation continues to present challenges and whilst the Board remains committed to ensuring a team capable of producing performances on the park and entertaining the supporters, we must also ensure that a prudent fiscal policy is maintained. Our supporters have responded to the recent challenges in magnificent fashion, culminating in a significant increase in season ticket sales. We must continue to work together to ensure the long term sustainability of our Club. We must continue to move forward united as one."