Wed Feb 24, 2016 4:56 pm
Throwing the January Financial Fair Play embargo into question
Vital Football
Wednesday 24th Feb 2016
Throwing the January Financial Fair Play embargo into question - at least in my simple mind - is proof from the club that we registered a profit following relegation from the Premier League.
It's also the first profit at the club since Cardiff were taken over by Vincent Tan.
Headline's from the accounts probably are the £3million+ it cost to sack Ole Gunnar Solskjaer and it also revealed after the drop that income to the club halved.
The 2014-15 accounts did register a £3.8million profit though - albeit with debt remaining at more than £100million at the time of submitting to Companies House, it did also confirm that £13million had been written off that year by the owner and that £3million was turned into loans.
The debt as per the accounts has now dropped to £101.6million, down from £122.8million and he has recently stated that a further £68million would be turned to equity, £10million to be written off and a plan to reduce what would then be a remaining £40million by £8million a year.
The accounts also showed that the debt is now classed as a 'non current liability' which translates as a due period of two to five years, leading the strategic report to state 'liquidity risk is no longer a significant factor for the company.'
For the embargo, with the profit itself coming from a reworking of Tan's loans largely - that was what caught the club it seems unfortunately as it came under applicable amounts an owner could put into their business.
With known transfers figuring in the rest of the profit, the wage bill also dropped by almost £10million to £30.8million which is reported as being lower than the wage levels when we won promotion to the Premier League.
Revenue and income also dropped 52% though - down to £40.2million from the previous years £83.1million.
Putting that into perspective - £25million of the income was Premier League parachute payments and that will reduce by £5million this year and drop to £10million for the next two seasons.
All in all though positive news and at least the financial preference on things this year has paid off and whatever may happen with Russell Slade's hopeful charge for promotion once again this year, come the end of the embargo the club should be in a more balanced place come the summer.