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Boro post £10m loss giving stark reminder of job ahead
MIDDLESBROUGH have not given up on achieving promotion but have had a further reminder of just how difficult it is going to be to achieve their goals after posting their annual accounts.
For the year ending June 30, 2012, the Teesside club posted a loss of £10.05m despite a turnover of £18.13m for the same period which included a player trading profit of £2.78m in player sales.
It is difficult to gauge the extent of the differences between their last two accounts at the Riverside since they last released their financial figures, given how the previous statement was for an 18-month period after changing their accounting date last year.
What is clear is that Middlesbrough continue to be indebted to the backing of chairman Steve Gibson, who has sanctioned the replacement of all external debt with owner, interest free loans. £50m of inter-company debt was also converted to equity by the Gibson-O'Neill Company Limited, the club's parent undertaking.
An overall wage bill, which has been reduced further in the months since June last year, stood at £19.26m, contributing to a high wages to turnover ratio of 119 per cent.
And the situation was not helped by a significant reduction in cash received through media payments, with Middlesbrough's £7.4m for the year ending June 2012 much lower than the £26m they received in the 18 months previous.
But that does not put the club off their immediate aims of returning to the Premier League at the earliest opportunity - while hoping to receive backing from the fans.
The report stated: "The club will continue to keep control of operating costs and aim to make as much income as possible available for the manager to invest in the football team.
"The club will continue to strive for promotion to the Premier League whether through automatic promotion or through the play-offs."
It continued: "The company continually faces the risk of the team underperforming against crowd expectations which can have a significant impact on revenue streams and cash generation. The company makes prudent financial planning assumptions with regards to match attendances and cup success."
The chances of Middlesbrough going up this season have nose-dived in recent weeks and there is a five-point gap separating them from the final play-off spot.
If Middlesbrough are playing Championship football for a fifth successive season in August, manager Tony Mowbray has already admitted there is likely to be further cost cutting carried out in the close-season.
The Boro boardroom are readying the club's finances to fall in line with the Financial Fair Play regulations which will officially come in to force next year.
And the financial statement admitted there is a greater need for Middlesbrough to be self-sufficient, which is why Mowbray has changed the scouting network at the club and there has been a drive to maintain Category One status in the Elite Player Performance Plan.
"The company's performance depends largely on the team manager and his staff and players," it read. "The resignation or transfer of key individuals and the ability to recruit people with the right experience, skills and potential is a major key to performance.
"To manage these requirements the company is constantly analysing its market place and has performance reviews together with performance related remuneration in place to retain key individuals."
Before focusing on what is needed during the summer, Mowbray intends to push Middlesbrough as hard as he can in the final eight matches of the season to try to revive their ailing promotion bid.
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