Over the past two weeks, accounts for both Birmingham City FC and the parent company Birmingham City PLC have been released.

Examining the accounts, it is clear that the Club is making a very substantial loss, driven predominantly by a sharp fall in revenue, as well as having to seek additional funding to ensure the club’s operations can continue for a further twelve months.

However, there is little mention in the accounts of any potential sale of the Club, asserting this to the assumption that there are no plans to sell from the current regime in the short term.

Further, auditors Edwards Chartered Accountants have again been unable to express an opinion on the financial statements and, in particular, around whether the club has sufficient funding in place to continue operating as a going concern. It is however noted that this is only due to lack of evidence concluding whether this is appropriate, as opposed to not believing the funding will be forthcoming. It is also worth highlighting future funding requirements will, at least partially, be fulfilled through further player sales, as well as forward funding arrangements (£5.4m) and share placements (£7m).

Forward funding arrangements have been questioned in previous Trust statements, and there remains a lack of clarity as to what these arrangements entail. The accounts denote a liability totalling £5.263m secured against future income streams, thus it remains to be seen against what future income the current Board are seeking to secure further funding of £5.4m.

Based on plans to generate £12m of additional investment into the Club, it is not only disappointing but worrying that this figure does not eliminate the possibility of further player sales. It is also worth noting that these forecasts are based on the assumption the Club will remain in the Championship for the 2014/15 season.

In light of these published accounts, we question:

1. Why the Club continues to use property owned by Asia Rays Ltd, costing £60k per annum. The Club should consider using ample St. Andrew’s office space to conduct Club related business. Further, it may do the Directors some good to spend time in Birmingham.

2. The Club is currently paying 5% interest on a loan from Club President Carson Yeung. As there is no documentation in place for this, there remains no logical explanation as to why we are paying this level of interest. Removing this interest alone would save the Club a total of 640k.

3. There remains one un-named Director who has received a salary £390k, significantly less than the previous year which stated the figure to be £688k. However, this still feels out of kilter given the current state of the Club’s finances.

Match day receipts have dropped from £9.3m to £4.2m, which is not likely to bode well for this season’s accounts again based on the assumption that gate receipts will be significantly reduced and broadcasting revenue has also taken a hit.

It appears that the Club’s biggest issue is cost base, which do not appear to be reducing in line with current revenue reductions. We would therefore assume there is a finite level to which these costs can be reduced, while still maintaining a competitive playing squad.

It goes without saying that supporters are appreciative of the efforts of the current regime, having given supporters one of the best days in the Club’s history. However, without significant investment, the current regime is presiding over the slow and painful deterioration of both our squad and, most importantly, our Club.

At the Trust’s recent AGM, a proposal to investigate the issue of share ownership was put forward by a Trust member. We wish to inform members that we are presently exploring this idea in greater depth in terms of its feasibility. Working with Supporters’ Direct, we are specifically focusing on the criteria and mechanics behind the process before communicating our intentions, whilst remaining mindful of any premature expectations. We are also conscious that as not all members were able to attend the AGM, such a proposal may not be representative of the views of the majority. Therefore, a full consultation will take place before any decisions are made.

Further updates will be forthcoming in the near future.