CHAIRMAN'S STATEMENT
Season 2004/2005
Survival Sunday and the Great Escape! The 2004/05 season will long be remembered by everyone associated with West Bromwich Albion.Having been bottom at Christmas, with 10 points from 19 games, the Club became the first in Premiership history to avoid relegation from such a position. An unforgettable 2-0 victory over Portsmouth on the final day of the season saw us jump from 20th to 17th position and finish the term with 34 points. The Board's congratulations go to Bryan Robson, who joined the Club in November 2004, his coaching staff and the players for this remarkable achievement.
Senior Squad and Coaching Staff
As foreshadowed in my annual report last November, the size of the senior squad has been further reduced from 31 to 26 players.Over the past 12 months, thirteen players have left the Club for transfer fees totalling £1.6m. These include Rob Hulse, who joined Leeds United, and Darren Purse, who moved to CardiffCity.The squad reduction is set to continue through the current financial year and has already seen Jason Koumas join CardiffCity on a season-long loan, while Lloyd Dyer has joined Queens Park Rangers on a short-term loan and Russell Hoult has recently returned from loan with Nottingham Forest. Such reductions are aimed simply at optimising the utilisation of our squad and resources whilst allowing a reasonable contingency for any injuries to our players.This will better enable the coaching staff to manage a squad of players of the requisite quality and quantity to compete at the highest level in English football. Currently, we foresee two new players joining the Club in the January transfer window. If such players join our present intention is to reduce the squad by the same amount. Again, I reiterate that the summer transfer window should be where most squad strengthening takes place, with the January window being used to supplement numbers due to any unforeseen eventualities in the first half of the season.
Since November 2004, during the transfer windows in January 2005 and the close season, the Club has invested £10.5m and up to a further £0.25m excluding the five per cent transfer levy and other costs, in bringing Richard Chaplow, Diomansy Kamara, Darren Carter, Nathan Ellington and Curtis Davies to the club. Furthermore, Kevin Campbell and Steve Watson have joined on free transfers and Chris Kirkland on a season-long loan. In addition, Neil Clement, Ronnie Wallwork, Darren Moore, Thomas Gaardsoe, Geoff Horsfield and Paul Robinson have signed new contracts.Nevertheless the player wage bill remains well under 50 per cent of turnover and, in the event of relegation, will reduce proportionately in relation to revenue. Whilst the Club was the eighth largest spender in the Premier League during the summer transfer window, its wage bill remains third lowest. In future a finer balance between investment in transfers and player salaries will be sought.
There has been, without doubt, an enormous turnover of playing staff over the past few seasons. Despite our relative success and the clear gap between the Premiership and Coca Cola Championship, this has often proved to be an unnecessary dissipation of our comparatively limited resources. Over the past three seasons and the present season spending on transfer fees, player wages and coaching staff salaries aggregate to approximately £92m, some 76 per cent of total turnover.In light of this experience, it is more important than ever that the Club adopts the right policy on player recruitment. During the summer, we strengthened this function by appointing a Head of Player Recruitment for Europe to further the Club's research network. Not only must we research players' ability more thoroughly but also their characters and backgrounds, applying the correct valuation criteria to any transfer fees and to player salaries according to what contribution we believe they will make.
To enable us to maintain the fitness of, and where necessary rehabilitate, our players, we have continued to invest in our coaching and medical staff and we were delighted to welcome Richard Hawkins to the Club as our "Strength and Conditioning Coach" in April 2005.
This season, after 13 games, the Club is in 16th position in the Premiership with 11 points.In addition, the club has progressed to the 4th round of the Carling Cup after a 3-2 victory over Fulham at Craven Cottage on 25th October and will now meet Manchester United at Old Trafford on 30th November.
On the coaching side, Bryan Robson has been ably assisted by Nigel Pearson (Assistant Manager), Joe Corrigan (Goalkeeping Coach),and Gary Shelton (Reserve Team Coach).The Board wishes all of them and our players every success in the current campaign.
Supporters
Season ticket holders number 20,100 compared to20,500 last season, and the Club is extremely grateful for the continued support of so many of our fans. The average price per seat per game, including all concessions but excluding VAT,is now £18, which has bridged the price gap that existed when the Club was first promoted to the top flight in 2002.There has been much comment of late about falling Premiership attendances and the Premiership product. Whilst mindful of the different kick-off times for televised games, our average attendance to dateat 25,075 is 4 per centbelow our average for the whole of last season and a significant proportion of that is down to the reduced number of away fans travelling to The Hawthorns. We are endeavouring, however, to follow the example of Charlton Athletic by providing coach travel for our own fans to home games from certain outlying areas, starting against Everton on 19th November.In addition, we are now selling half-year season tickets which will be on sale up to and including 27th December. These initiatives should enable the reduction in attendances from last season to be minimised.
Generally, whilst trying to increase attendances, we must always be aware of the importance of our supporters and strive to improve their matchday experience. To that end, an improved Customer Charter was introduced in June 2005, in recognition of our various stakeholder groups with whom a regular dialogue and meetings take place.
Academy & Training Ground
The Club has recently been granted Premier League Academy status for its' youth department and is currently constructing an indoor facility on the Tom Silk site in Halfords Lane which will incorporate a full-sized pitch - one of the very few in this country. Additionally, we are seeking to augment the facilities at the training ground to comply further with Academy regulations and to provide better facilities for the first-team squad. We hope to complete both these projects by the start of next season at a total cost of approximately £2.7m.
The Board is delighted with the progress that Dan Ashworth, our Academy Manager, and his team have made over the past 16 months. As the Club competes in the Academy League for the first time, the Board's best wishes go to all of those involved.
Sandwell Academy
The Sandwell Academy, which will offer the standard secondary school curriculum to boys and girls and specialise in Business and Sport, is due to open in September 2006. We are delighted that the Club is a sponsor of this project and will have completed our investment of up to £0.2m by the opening date. Rapid progress is being made in the construction of the school off Halfords Lane, with the application list for Year Seven pupils closing well over subscribed on 4th November.We are looking forward to forging a close working relationship with Head-teacher Simon Topper, his staff and the school over the coming years.
Community Programme
Our Community Programme goes from strength to strength and has enjoyed great success with its Academic Coaches Ensuring Success (ACES) Project set up in the autumn of 2004 to improve qualifications at GCSE level by linking academic mentors associated with West Bromwich Albion to selected pupils from Sandwell Secondary schools. After just a few months, the programme has had a very significant and measurable impact on Sandwell results for this target group with GCSE results for 2005 having shown a remarkable improvement within the Borough.All involved with this project deserve congratulations, with the West Bromwich Albion Community Team being particularly well led by Fraser Foster. Otherwise, the Staff have continued to excel with their normal duties in respect of coaching and general community relations.
Stadium
The Board is still considering plans to develop further the stadium, particularly the Halfords Lane Stand. After much debate, it has decided that a partnership with Sandwell Metropolitan Borough Council, whose support we greatly appreciate, with the Sandwell Academy, the Urban Regeneration Company ("Regenco") and other similar organisations, will over time, produce the best outcome for the Club whilst regenerating the area. The target of a 40,000 capacity stadium remains on our agenda but any additional capacity will be added only when demand dictates. Therefore, the Club expects this figure to be reached on a graduated basis over a considerable time.Meanwhile, the new ticketing system which was fully installed in June 2004 has functioned well over the past seventeen months and all turnstile readers have now been upgraded to accept both stilecards and paper tickets.
Financial Results
West Bromwich Albion Holdings Limited
The consolidated accounts for West Bromwich Albion Holdings Limited are prepared only for the nine months from its date of incorporation up to 30th June 2005 and encompass a proportion of the results of West Bromwich Albion Limited as referred to below.
West Bromwich Albion Limited (Formerly West Bromwich Albion Plc)
Turnover for the year to 30th June 2005 was £36.5m against £20.6m the previous year when the Club competed in the Football League. Profits before tax for the year were £5.0m against a loss of £0.1m for the corresponding period.
During the period West Bromwich Albion Holdings Limited offered the shareholders of West Bromwich Albion Plc the opportunity to sell their shares for cash. A contemporaneous alternative offer was made whereby the shareholders of West Bromwich Albion Plc could exchange their shares for shares in West Bromwich Albion Holdings Limited. Following these offers West Bromwich Albion Holdings Limited became the owner of 99.95 per cent of West Bromwich Albion Plc and the latter company was delisted from the Alternative Investment Market on 11 January 2005. Shareholders in West Bromwich Albion Holdings Limited are able to deal in its shares through JP Jenkins Limited (020 7767 3050) on a matched bargains basis.
Net funds
Net funds for the West Bromwich Albion Holdings Limited Group were £5.8m at 30th June 2005. However, the Club owed £4.5m at that date in respect of players previously purchased. Since then, the Club has contracted to pay a further £9.8m, including the 5 per cent football levy, on the purchase of new players.
Dividend
As a result of the retention of Premier League status, underlying profitability and underlying net funds, the Board recommends that West Bromwich Albion Holdings Limited pays a final dividend of 400p per share, an increase of 60 per cent on that paid to the shareholders of West Bromwich Albion Plc last year. Following the reduction in share capital, as a result of the change of ownership detailed above, the payment is approximately quantitatively unchanged. Had the club been competing in the Coca-Cola Championship this season, the Board would have recommended a payment of 200p per share.
Charities, Memorabilia and Former Players
Last year's four nominated Charities enjoyed a successful year with the Club and we arepleased to be supporting the following Charities this year: The Albrighton Trust (Recreation and Education for the Disabled), The Mayor of Sandwell's Fund Raising Appeal (Prostate Cancer and Guide Dogs for the Blind), Action Heart (Cardiac Care) and The Louise Willgrass Tsunami Fund (Construction of a School and Orphanage in Phuket, Thailand).In addition, the Club and its supporters, together with local Rotary clubs, raised £27,000 for the Tsunami Appeal.This was augmented by a donation of £50,000 towards the same cause by the Premier League on the Club's behalf.
Once again, we have added to our memorabilia collection and continue to work with and increase our support for the Former Players Association.
Organisation and Staff
The Board has implemented a new organisational structure within the Club.This has resulted in the operations being segmented into four discreet areas namely, Sales and Marketing, Finance and Operations, General Administration and Football.
As ever, none of our achievements would have been possible without the full participation of my Board colleagues and all of the club's staff, both playing and non-playing. To them, I give my grateful thanks.
Strategic Aims
As we compete for the third time in four seasons in the Premiership, we continue to strive on behalf of our stakeholder groups and community to establish the Club at this level, whilst continually improving all areas of our infrastructure. To be successful in these endeavours, the Club must maximise revenue whilst controlling costs. Mindful of our comparative size and in order to compete effectively on the pitch, the Club has to become more forward thinking, organised and professional in the way it brings players to the Club.
Jeremy Peace
Chairman
21st November 2005
