Saints' transfer spending has contributed to a pre-tax loss of £2.5m for the six months ended December 31.

The Southampton Leisure Holdings PLC interim report, released to the Stock Exchange today, shows the club spent £6.6m on new players over the summer.

That outlay has led to a significant improvement in results on the field with the Club now well placed to challenge for promotion to the Premiership.

PLC chairman Ken Dulieu said: "At the time of writing, our team has accumulated 60 points after 39 games and is in 8th position in the Coca Cola Championship league table, with reasonable prospects of reaching the play-off competition for promotion to the Premier League.

"This is of course a very substantial improvement on the situation 12 months ago, at which time, after the same number of games, the team lay in 20th position with only 42 points and was in very serious danger of being relegated from the Coca Cola Championship.

"George Burley and his team eventually won the battle against relegation last season, and it is hoped that this augurs well for the success of the team during the remainder of the current season, when we are hoping for barnstorming performances that will enable the Club to reach the play-offs and the prospect of playing in the Premier League next season."

The figures show a £1.4m increase in turnover to £12.8m while matchday income rose from £4.6m to £5.8m due to more games being played this half year than the prior one following a change to the financial year which now ends in June rather than May.

Broadcasting and commercial income remain comparable with the previous half year's figures (up to November 2005) and operating costs show a minimal rise. However the operating loss has been trimmed to £2.8m from £5.1 in the comparable period.