Lancashire County Cricket Club has confidently predicted a return to profitability in the next financial year after significantly reducing its net debt and despite making an operating loss of just over £1.5million for the year ended 31 December 2012.
With major redevelopment works due to be completed at the end of May, the recent announcement of the ground-breaking ten-year partnership with Emirates Airline and the return of the Investec Ashes in the summer, the financial outlook for the County going forward is in a healthier position.
Major construction activity at Old Trafford commenced in late 2008 and for a period spanning nearly five years the Club has been forced to suffer the impact of losing Test Match cricket alongside a loss of key operating facilities and seating capacity. In addition there has been a significant amount of site disruption to day to day trading along with the associated cost of providing temporary facilities both at home and at out grounds.
Of all the intervening years, 2012 was always envisaged to be the most challenging with nearly three-quarters of the site under reconstruction. However, what further compounded the situation was the impact of an appallingly wet summer, with both domestic and international cricket revenues being seriously curtailed by the abandonment of the majority of our major matches and the continuation of the economic downturn.
From the outset of the project a lengthy period of poor trading results was always anticipated which the Club believes was a key and necessary price to pay as part of the development of the new £45million Emirates Old Trafford which will safeguard the future of both the Club and of international cricket in the region for many years to come.
Despite the loss incurred in year, the Club’s net debt was reduced by more than £3.1millon and even though there has been significant investment in the ground, the underlying level of debt will only represent a very manageable 30% of the cost of the new stadium. This position stems from the success the Club achieved in obtaining cross-subsidy and public funding as part of what is a sports-led regeneration project.
The new facilities will be unrecognisable to anyone who hasn’t visited the ground in the last three years. Supporting The Point are new grandstands, a world class Players and Media Centre and a new Members’ pavilion, which combines fantastic new facilities alongside the retention of heritage that ensures it remains at the heart of the new Emirates Old Trafford. A second electronic scoreboard and replay screen will also form the final piece of infrastructure in advance of what will be an exciting summer for the Club.
Lee Morgan, the Club’s Finance Director, said: “When we embarked on this journey back in 2007 with the creation of our detailed business plan, we knew we had many obstacles to overcome; however, nobody could have foreseen how high and how many there were going to be, much of which is well documented. Rebuilding nearly an entire stadium on an existing site whilst still trading throughout is fraught with risk and stacked with difficulty, but was absolutely necessary to protect the history, the heritage and most importantly the future of this great venue.”