READING FC have reported yearly losses before tax of £21 million in their latest financial update.

The club’s annual accounts submitted to Companies House this morning show Royals made a huge deficit in the year ending June 30, 2018 – compared with a £4.7m profit for the previous 12 months.

It means overall debt has risen to £34.7m under the ownership of Chinese siblings Dai Yongee and Dai Xiu Li.

Reading’s total turnover decreased by £18.8m over the period from £36.7 to £17.9m.

At the same time, salary costs went up £6.6m from £27.9m in 2017 to £35.3m in 2018 with the highest paid director, thought to be former chief executive Ron Gourlay, earning £693,000, up from £374,000 the previous year.

It means Reading’s wage cost to turnover ratio is now an alarming 197 per cent compared to 76 per cent the previous year when the club made a profit.

The figures reflect Reading’s struggles on and off the field during the 2017/18 Championship campaign when they avoided relegation on the last day of the season.

The club came to a financial settlement with former boss Jaap Stam towards the end of that season before installing Paul Clement as his replacement.

Media revenue for the year ending June 30 also fell dramatically by £13.4m from £20.9m to £7.5m, though Royals did see an increase of £800,000 in commercial revenue to £5.6m.

However, matchday revenue for the year fell by £5.5m as the average attendance dropped from 17,505 to 15,181 for the 2016/17 campaign when Royals reached the Championship play-off final under Stam.

The Companies House report shows ‘other’ operating expenses increased by £4.2m to £21.4m over the year, while ‘Amortisation and impairment’ costs – or the process of paying off debt – rose from £3.7m in 2017 to £8.3m in 2018.

In the year up until June 30, 2017 Royals spent £19m on players including around £7m for club-record signing Sone Aluko from Fulham.

Meanwhile, just £1.4m was raised from players sales and sell-on clauses in relation to Alex McCarthy, Andrija Novakovich, Tariqu Fosu, Jake Cooper, Oliver Norwood, Roy Beerens, Dominic Samuel and Ali Al Habsi.

They also made a £592,000 profit from their Madejski Stadium groundshare agreement with London Irish RFC.

Reading’s owners helped fund the annual losses with £16m of shares and £3m in loans.

The club currently lists its directors as chief executive Nigel Howe, Narin Niruttinanon and Mr and Mrs Dai, with Bryan Stabler as secretary.

A total of 491 staff were employed by the club, including on matchdays, compared with 457 in 2017.