If you haven't seen them, you can see a summary here and a more in depth review here.
On the day that Portsmouth have become the first Premier League club to enter administration, Arsenal announce profits and revenue are both up (again) but the biggest story to emerge from these results is the fact that total net debt as at 30 November has been reduced to £203.6m compared with £332.8m as at 31 May 2009. A massive drop i'm sure you will agree.
This has largely been achieved from the sale of 261 apartments at Highbury Square which leave just 131 out of the 655 apartments built as part of the development left to be sold. This has reduced the Highbury Square bank loan to £12.9m from £35.7m at 30 November and is a massive reduction to the £123.6m as at 31 May 2009. Finally they say that a sale of part of the Queensland Road development site means that the group’s other property activities are now debt free. whatever these "other" activities are this can only be good news.
Indeed the chairman, Peter Hill-Wood confirms that
"There has been remarkable progress at Highbury Square over the last twelve months and it is clear that the next couple of years will see our property activities delivering surplus cash. This is very good news, although I would not want to speculate on the exact quantum or timing of this. How we will use this surplus remains undecided but, in addition to investing in the team, I think we will examine investment in Club projects and infrastructure, both in and around Emirates Stadium, which will provide a long lasting benefit to the Club and our tremendous, loyal supporters."I bolded that bit. I can't think what investment the club needs in "projects and infrastructure" but I can think of a few ways to invest in the team.
Also mentioned quite prominently in the statement that accompanies the results is the money spent holding on to our players. Again an admirable aim even if this means we now have one of the highest wage bills in the league. Player wage costs rose by £8.6m which took football operating costs, excluding player trading and depreciation, to £82.1 million from £74.1 million in the previous year.
This next paragraph is so amazing i'm just going to quote it all:
"At 30 November 2009 the Group had cash and bank balances of £101.0 million (2008 - £75.7 million) of which £22.5 million was restricted for debt service (2008 - £22.6 million) and an overall net debt balance of £203.6 million (2008 - £332.8 million). The significant reduction in net debt reflects the repayments made on the Highbury Square loan. Because the majority of the Group’s debt is at fixed rates of interest the most significant impact of the fall, over the last year, in the level of interest rates has been on the interest we are able to earn on our cash deposits rather than on our debt service costs. Interest receivable for the period was £1.7 million down on last year and as a result the Group booked a higher net interest cost of £9.2 million (2008 - £7.9 million)."
So in short Arsenal have £101m cash in the bank. And the second part I have highlighted basically means that because the interest on Arsenal's loans are fixed, the current low interest rates have only impacted the interest on Arsenal's cash in the bank rather than any loans they may have.
The next part of interest is "Ivan Gazidis has initiated and is leading a strategic process to develop the vision, direction and comprehensive plan which will take the Club beyond its move to Emirates Stadium and into the next phase of its growth. This review is at an early stage and our strong financial base allows us the time to take a measured and diligent approach to this important process."
What exactly this means I am not sure but I think most fans would say that Gazidis has done a good job so far in his time at the club. The "Arsenalisation" (decorating the blank parts of the stadium with Arsenal stuff) has largely been a Gazidis project and it is fantastic. I look forward to what Mr Gazidis delivers as part of his "strategic review".
I am thankful to Arsenal and Arsene everyday that we have not joined in the transfer madness that has threatened Portsmouth and many other clubs. I am also truly thankful that Arsenal are not in a Man Utd/Liverpool situation where debt used to buy the club has been loaded on to it by the new owners (are you listening Mr Kroenke?)
But these financial figures show that the club is practically swimming in money. I'm not advocating massive money spent on one player, and being irresponsible. But the right money, spent in the right areas can make a huge difference. The £10m or so spent on Vermaelen has shown what the right signing can do. He has been one of Wenger's best signings in his entire time at the club and has transformed the defence.
I truly believe that with 2 or 3 good signings Arsenal could take the last small step to being back amongst the trophies. And I truly feel that Arsenal are not that far from being right back in the hunt for trophies. Do it Arsene. You have shown us you can run a club on peanuts with young players and still consistently deliver Champions League football. Now show us you haven't forgotten how to build a trophy-winning team.
