Dundee FC have been left counting the cost of first division football after their annual accounts revealed a loss of over £285,000 last year.
The Dens Park side incurred a net loss of £286,330 during the year ending July 31, 2009 a huge increase on the previous season when the Dark Blues only lost £84,178.
However, chairman Bob Brannan said as Dundee no longer owe any money to the bank they will be on extremely sure footing if the team win promotion to the SPL.
Last year’s loss came despite an overall increase in turnover, which rose from £1.8 million in 2007/08 to £2.1 million in 2008/09.
Although the £250,000 the club received from the sale of midfielder Kevin McDonald to Burnley in 2008 was included in the previous year’s results, the Lancashire team’s success in reaching the Premier League resulted in payments from bonus clauses being made to the club.
The club’s total debt now exceeds assets by £700,985 and they owe creditors a total of £947,275.
However, none of that money is owed to a bank.Major backerThe bulk of that debt includes over £500,000 owed to other creditors directors who have made loans to the club, including the team’s major backer, millionaire businessman Calum Melville who joined the club as a director last April.
The accounts’ statutory auditor, David Morrison, notes that without this backing the club would be in serious financial difficulty.
He writes that the company’s liabilities “indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.”
The directors’ own report also admits the club are reliant on financial support from directors until they reach the SPL and income increases.
“The extent of the operating loss indicates the commitment of the board to assist the club on achieving its primary goal, that is ensuring promotion to the SPL,” it states.
“During the year, cash deficits have been met by the directors and other external investors.
“One of the directors has confirmed that he is willing to continue to donate funds to the club in division one of the Scottish Football League and will meet any deficits in the transition period into the premier league, should the club secure promotion.”
The directors’ report also thanks the former management team of Jocky Scott and Ray Farningham but says the board decided to appoint Gordon Chisholm and Billy Dodds because of a run of poor results that could threaten the club’s promotion bid.
However, it says the club will not be at immediate risk if they fail to win promotion this year.Promotion”If the club is unsuccessful in securing promotion to the SPL, then budgets have been prepared showing a significant operating deficit which could only be funded with the support of one of the directors,” the directors’ report states.
“This support has become for at least the period until the end of the 2010/11 season.”
Mr Brannan said wiping out the club’s bank debt will stand the team in good stead in the SPL.
“I think it’s fair to say that would be the same for every club in the first division,” he said.
“We have managed to eliminate the bank debt and that is a significant step forward.
“If we can get back to the SPL it will put us in a very strong position and one of a few clubs in that position.”
He added, “Even post-administration we had £12 million worth of debt so to have eradicated it completely, although money is owed to directors, puts us in a strong position.
“We try to manage the club on a tight budget and, although we have loosened the purse strings this season with the assistance of Calum, we are still paying our way.”