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Positive financial result for Scottish clubs

Six of the twelve Scottish Premier League (SPL) clubs reported a profit in the 2005/06 season, according to the 18th Annual Review of Scottish Football Finance by PricewaterhouseCoopers LLP. The results are a significant turnaround from the days when substantial losses were reported across all the clubs.

Despite collectively producing a loss for the year of £9 million, it is clear that the premier league clubs are continuing to make strides towards financial stability. Falkirk, Hibernian, Inverness, Kilmarnock, Motherwell and Rangers all reported a profit this year.

The total wage bill has remained stable at £93m although nine of the clubs are now showing a wage to turnover ratio of less than 60% and of them, six are less than 50%. Only Hearts go significantly against the trend with their wage bill more than doubling to £10m, representing a ratio of 97%.

David Glen, partner, PricewaterhouseCoopers LLP, commented: "While comfort can be taken from these results, the financial situation in Scottish football remains fragile and we are unlikely to see a return to the free spending days that marked the early part of this decade.

"Success (or lack of it) on the pitch has a direct impact on a club's financial situation. Given the uncertainty of success, a financial balancing act has to be achieved of establishing a cost base for the club that is low enough to sustain failure but also high enough to attain success."

Key findings of the PricewaterhouseCoopers annual review of the Scottish Premier League include:

Turnover increased by 3% to £172m (2005: £168m). The Old Firm had mixed results with Celtic's turnover falling by 8%, while Rangers broke through the £60m turnover barrier.

Total wages decreased by 1% to £93m (2005: £94m). Falkirk, Hibernian, Inverness, Kilmarnock, Livingston and Rangers all recorded a wage/turnover ratio of 50% or less.

Net debt fell from £117m to £94m. Both Falkirk and Inverness ended the year with net cash, whilst Livingston and Motherwell operated with no bank debt.

Debt of £2m was written off at Hearts, however it now has the largest net debt in the SPL at £28m, due principally to Ukio Bankas.

Total net interest costs reduced by £2m to £7m, which is largely attributed to the fall in debt levels at Rangers.

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