Chief executive Mark Jenkins insists West Brom's future financially sound despite £7.5m losses
Chief executive Mark Jenkins insists Albion remain on a ‘solid financial footing’ despite making a pre-tax loss last season of £7.5million.
The club’s accounts for the 2017/18 season, which are due to be made public today, reveal a startling downturn of £47.2m from a pre-tax profit of £39.7m the season before.
Despite receiving income of £124.8m, down £13m from the season before, the Baggies recorded a loss in 2017/18 for the first time in a number of years.
This was because a record £45.9m was splurged on transfers in a disastrous season that ultimately ended in relegation from the Premier League.
That unsuccessful spend was enough to convince Chinese owner Guochuan Lai to axe chief executive Martin Goodman and chairman John Williams in February 2018.
Jenkins, who had been chief executive under former owner Jeremy Peace, returned to the club at that time and has been on the board ever since.
There have been concerns over Albion’s financial situation this season after the club took out an overdraft in December against parachute payments due at the end of this season to help their cash flow from January to July this year.
The board then sacked head coach Darren Moore in March because they lost faith in his ability to deliver promotion.
But Jenkins insists the club can still look to the future ‘with confidence’, regardless of whether the Baggies go up or not this season.
"The accounts underline the comments I made on my return in February 2018,” said Jenkins. “The cost of a season which ended up with the club relegated from the Premier League exhausted our funds.
“But I also wish to make it clear that, regardless of our fate this season, the club remains on a solid financial footing and can look forward to the future with confidence.
“Clearly, there are extreme differences between competing in the Premier League or the Sky Bet Championship but we are equipped to tackle those challenges from a sound position.”
A directors’ report in the accounts signed by Jenkins states the board believe they will not need another overdraft facility at any stage over the next 12 months.
The report also reveals the club has spent an initial £11.8m on players since June 2018, although that figure does not include potential add-ons in transfers for Sam Johnstone and Kyle Bartley.
The Baggies will receive £16.4m for selling players, such as Nacer Chadli, Ben Foster and James McClean.
Last season, total wages at the club increased £13m to £92m from £79m the season before, and accounted for nearly three-quarters of the club’s income (74 per cent).
The first team players and coaches received £83m of that figure.
Albion spent a total of £1.12m on paying directors of the football club, with the highest paid director from West Bromwich Albion Group Ltd receiving £210,000.
Gate receipts for the 2017/18 season were up to £7.4m from £6.7m, and commercial income rose to £12.8m from £9.6m.
But TV money fell to £102m from £118.7m, largely due to Albion finishing bottom of the Premier League and receiving less prize money than they did for coming 10th the season before.
Money made from merchandise fell to £2.5m from £2.8m.
Cash reserves fell from £39.5m to £9.2m, although this final balance would have been lower had Jonny Evans not been sold to Leicester for £3.5m prior to 30 June 2018.
The club also received some money from the Premier League earlier than expected last summer.