Increased wages and salaries hit profits at Premier League football club Aston Villa, but player sales enabled the Birmingham-based 'sleeping giant' to finish last year £138,000 in the black. James Crux reports.

Birmingham's chairman, 'deadly' Doug Ellis, admits that 'salaries continue to rise at a rate generally unheard of outside the football industry', as the club reported preliminary figures for the year to May, showing a turnaround from losses of £4.85 million to a £138,000 profit. Fully listed Villa's (ASV) wage bill spiralled by 16 per cent to £3.1 million and total overheads, including salaries, rose by £4.7 million.

This caused operating profits before player amortisation and trading to fall £1.1 million to £4.3 million. The board admits these profits would have been insufficient to meet the £11 million charge for amortisation of the playing squad had it not been for player sale profits of £6.5 million, boosted from £1.2 million the previous year.

As a result, the club posted a pre-tax profit for the year to 31 May of £138,000 compared to losses of £4.85 million last time. Sales rose from £35.8 million to £39.4 million despite the fact that the club was unable to repeat the previous season's cup exploits when it reached the final of the FA Cup and the semi-final of the Worthington Cup.

This meant fewer games were played at Villa Park. Turnover was also affected by the loss of income from the Trinity Road Stand, which was closed for redevelopment work for part of the season.

Ellis claims 'our sights are still firmly set on Champions League qualification', despite the fact that team finished in eighth place last season, its lowest position in six seasons. He adds that the board is 'extremely disappointed at the level of the share price' – a problem that 'is not exclusive to Aston Villa' but rather 'a football industry phenomenon'.

The share price slipped by 3p to 170.5p on the news. Villa's 52 week high is 395p and the low 150p.