Norwich City manager Neil Adams will be given the financial firepower to buy new players in the January transfer window after the club was handed a clean bill of health in its annual accounts.

Chief executive David McNally said money saved from selling players in the summer would be used to support the manager in his quest to bring in new talent and mount a quick return to the Premier League.

But he said the club would have to be 'more nimble on its feet' when it came to new signings, as it looks to cope with an approximate £45m income drop sparked by relegation.

It came as the club revealed significant revenue and profit gains to June 30 2014, as revenues climbed £16.8m to £95.5m and profits after tax rose from 0.5m to £6.7m this year.

• Click here to view the full Norwich City Football Club Annual Report

Norwich City chairman Alan Bowkett said it was able to improve profits because both the players – and many management and backroom staff – did not receive success bonuses for staying in the Premier League.

However, the improved fiscal picture – which included no external debt going into the Championship this year – means it has paid a £2.5m corporation tax bill.

Mr McNally said that while much was made about the money lost by clubs when relegated to the Championship, Norwich City had a 'healthy' turnover which would remain one of the largest in the Championship.

'The reality is that in the Championship our forward sales will be down by £45m approximately, our turnover very roughly halves, which has a huge impact on our ability to carry out business,' he said. 'Clearly the fact that we ended the year positively from a financial point of view is a help. We would prefer to be in the Premier League and having to pay out the bonuses.

'What we then do is that we have got the cash and we sit down with the manager and decide how best we can equip him to try and get promoted at the first time of asking and that's the objective, and we develop the squad with that in mind.

He added: 'We've had to trade some players out. Thankfully all of the players we have sold have been sold at a profit, which frees up some cash to bring players in. Of course the ideal is to bring in better players than those leaving the club, albeit with less cash to trade.'

Last October, the club recorded an increase in revenues to £78.7 million and handed former manager Chris Hughton £24.2m to spend on players in the summer transfer window.

Speaking about this year's annual accounts, Mr Bowkett said: 'It's a rather unusual and difficult situation to report our profit before tax up £6m, which I was not expecting to be reporting because we were planning to roughly break even in the Premier League. And the reason that we are profitable is because we failed to stay in the Premier League and therefore player bonuses for staying in the Premier League were not due.

'Now, the only advantage of that is it helps us in our campaign for this year, but I would far rather be reporting a break even situation and us remaining in the Premier League.'

He added: 'Our total revenue was up over 20pc and the vast proportion of that is our Premier League TV income being £23m higher than the previous Premier League income.

'Down from that we received £4m less from the Premier League for merit awards because we finished 18th rather than 11th.'

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