The market was unimpressed by Birmingham City's preliminary results, which showed a £1.5 million loss, writes Roxanna Mohseni.

Spiralling wage costs hit the soccer club's bottom line, even though the impact of a £1.5 million salary bill increase was cushioned by a £2.2 million profit from the disposal of players. Pre-tax losses came in at £1.5 million, on turnover ahead 11 per cent to £9.4 million.

On the pitch, Birmingham's performance has been much stronger. As well as reaching the semi-finals in the Worthington Cup, Birmingham now sits in third place in the First Division - within tantalising reach of promotion to the Premier League, and the increased media revenues this promises.

Aim-listed Birmingham City also continues to develop its non-football services to its supporter base. 'Blues' gas, electricity and water will be the new year's addition to a stable of services which already offers Blues telecom, Blues mortgages, Blues health insurance and Blues funeral services.

The shares closed down 2 per cent to 23p, valuing the group at £18.4 million.