Directors plough cash into Gloucester RFC
Yesterday Walkinshaw told The Citizen he and 25 per cent shareholder St Quinton are putting in an extra £2,667,000 to the Kingsholm club to keep it on an even keel.
The latest directors report and financial statements reveal that up to May 2009 it lost £669,645 (£756,602 before tax), compared to a £209,580 profit in the previous year.
Walkinshaw owns 75 per cent of the club while Mr St Quinton has the other quarter.
Before the share issue, in February this year, the value of the pair's stake was just over £2.8million.
The new share issue will be split 75/25 again.
"Trading has been poor," Walkinshaw said. "We decided we needed to do something about it. We are both putting in the proportion of our shareholding.
"The club made some losses – we needed to give it a lift. We are in the middle of a recession and we have taken the view we needed to inject money.
"The crowds are down because of the recession – rather than let it sit there like that, we decided that we needed to inject some in there to make sure there was plenty of liquidity in the business going forward.
"We have no idea what will happen in the next year with the economy, and this is to give us some clear headroom for next year."
Though turnover went up slightly at almost £10.2 million, the club made an operating loss of £197,658 – in the previous year it made an operating profit of £902,048.
Wages topped £5.3 million, rising by more than £700,000 compared to the previous year, as the club's playing roster rose from 43 to 51.
Non-playing staff were cut from 181 to 147.
"The 2008/9 season was the most difficult financial climate the company has experienced since the completion of the new grandstand, which has adversely affected the trading performance of the company, fellow premiership rugby clubs and supporters alike," the directors stated in the business review of the year.
"Income from gate receipts and hospitality were lower than in 2007/08 but were offset by increased revenues by the newly established conference and functions business."
The directors paid themselves £284,663, up from £265,866.
The club, with fixed assets valued at just over £10 million, paid £558,537 on bank loans, overdrafts, leases and hire purchase, which was slightly less than the last year.
The club's owner and controller, Try Investments Ltd, made management charges of £271,826, down by £14,000.
The report and statements indicate the club expects to report a profit in 2010/11, as this season gate receipts and hospitality continue at 2008/09 season levels.
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