• Loss in year to June 2013 follows small profit in 2011-12
• Club confident over financial fair play compliance
Chelsea have insisted they remain on track to comply with Uefa's financial fair play rules, despite plunging to an annual loss of £49.4m according to their latest financial results.
The figures show that, for all the club's long-stated ambition to operate at break-even following a decade in which they have been subsidised by Roman Abramovich to the tune of more than £1bn, they remain loss making.
Last year, Chelsea posted their first profit of the Abramovich era and claimed it marked a milestone in their journey to self-sustainability, though it later emerged that the profit of £1.4m owed much to a one-off £18.4m share windfall. For the year ending June 2013, however, the results show a return to heavily loss‑making ways.
The £49.4m loss, partly due to new signings and a turbulent season during which the then Champions League holders exited the competition at the group stage, is closer to the £67.7m loss of two years ago than last season's paper profit. But the club argued that a 19% rise in annual commercial income to £79.6m and a record turnover figure of £255.8m showed they were moving in the right direction. Nor do the figures include a recently signed £300m, 10-year kit deal with Adidas.
"For Chelsea FC to achieve a record level of turnover despite our first group-stage elimination from the Champions League shows we have structured our business and are growing in the correct way for long-term stability," said the chief executive, Ron Gourlay. "Our philosophy is we build upon success on the pitch and although in these financial results we haven't repeated the sizeable profits made the previous year from player transfers, we believe the age profile of the existing squad means we will benefit from that investment for many years to come.
"A successful team builds awareness around the world and our increased commercial revenues in 2012-13 and new or extended partnership deals demonstrate we are working hard to capitalise on that."
Despite winning the Europa League under their interim manager, Rafael BenÃtez, Chelsea's early exit from the Champions League severely hit revenues. The full impact of signings during the period from July 2012 to June 2013 on the club's wage bill will not be apparent until the full accounts are lodged at Companies House next month. Like some other clubs, Chelsea attempt to control the way their results are presented by initially releasing only a limited summary.
Uefa's first monitoring period for its financial fair play break-even rules cover the 2011-12 and 2012-13 seasons and will be calculated next year. The new rules, designed to cool European football's overheated finances, have proved controversial because some argue they will lock in the established order and others that deals such as Paris Saint-Germain's with the Qatar Tourism Authority make a mockery of them.
Chelsea are confident that despite tumbling into the red again, they will comply with the acceptable €45m (currently £37.5m) "deviation" permitted during the first two-year accounting period once allowable expenditure on youth development, infrastructure and charitable giving is excluded from the total.
The chairman, Bruce Buck, said: "From the very beginning of the current ownership of Chelsea Football Club, a long-term objective was financial sustainability, and the subsequent implementation of financial fair play by Uefa and by the Premier League has brought that to the top of the agenda for football clubs.
"We are pleased therefore that we will meet the stipulations set down by Uefa in their first assessment period, and by our own analysis we are progressing from a commercial viewpoint as well as continuing to add trophies to our collection, which we never lose sight of as our most important goal."
The level of acceptable losses, which must be covered by a club's owner, then falls to €45m over three years for the next monitoring period and then €30m over the following three years.
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