Saints have made a stock market announcement.
Trading Update
The Board of Southampton Leisure Holdings Plc is today providing a Trading Update prior to the release of its financial results for the year ended 30 June 2008 and in advance of the start of the 2008/09 football season.
Finance Director David Jones said 'The Company has seen a number of management changes during the financial year and with the preliminary announcement of the years results to 30 June 2008 not due for 10 to 12 weeks, we thought it would be appropriate to provide all stakeholders with an indication of the financial results for the year just completed. With the loss of the parachute payment from the Premier League and reduced ticket and commercial income, revenue for the year is expected to be around £14m with a loss before tax of around £5m'.
The financial results will show an increase in the level of borrowings which has necessitated extensive discussions with the Company's bank and loan note holder, both of whom remain supportive of the board's approach.
Chairman Rupert Lowe added, ' The Directors are aware that this is clearly not sustainable and are concentrating on reducing costs, however the Directors remain hopeful about the prospects for the forthcoming season. Jan Poortvliet and Mark Wotte are very excited about what will be a young dynamic team determined to play fast and attractive football. I hope everyone involved with the Club will get behind Jan, Mark and the team.'
Southampton Leisure Holdings Plc expects to release its audited accounts in October.
Im sure that this will cause a flurry of message board indignant posts across the internet, but the truth of the matter is that this statement conveys nothing new in the facts, but does enable the Club to get a few points across.
The first reason why they have put it out now, instead of in three months time is purely to get the bad news out of the way now, rather than announce it in mid season when it could have a detrimental effect on both the team and the supporters.
In truth its doing nothing more than clarify what the fans have known for the last six months, that the club is trading at a monthly loss of around £850k, but it should be noted that these figures are up to 3oth June, so they would include the wages of the players out of contract and now released, a sizeable chunk of that £850k a month as poined out in a previous article on TUI last week, perhaps as much as a third of that monthly loss.
Secondly its making the point that Lowe and the new regime are acknowledging the financial situation and that Crouch and the previous board did not and more than that had done nothing to alleviate the loss in the second half of the season.
Thirdly its pointing out that Lowe is doing something about it, he is talking to the Bank and loan note holder(basically the stadium loan) and taking positive steps.
The fourth and final point is that the Club remain buoyant and hopeful for the new season under a new structure, again this is standard PR spin for any company making stock market announcements.
The real fact of the matter though is that this is going to be a hard enough season as it is, lets get the bad news out of the way now, the club do not need this being announced in November if they are going through a hard time on the pitch, it could be potentially damaging to on field results and if the team are doing badly could spark panic in investors, by releasing this information now we have got all the bad news out of the way now, in theory things cant get worse, at least from a corporate point of view.
The message is clear and simple, whether you choose to believe it or not is another matter.