Wolves recorded a loss of more than £4m over last season as the club made use of new owner Steve Morgan’s “transfer kitty”.

The club dipped into the £30m ring-fenced for team development in the deal which saw the multi-millionaire from Liverpool take ownership from Sir Jack Hayward.

The fund helped build the squad which is currently leading the race for the Premier League.

Morgan took control in August 2007 but his money was set aside for squad development and to avoid selling players out of necessity.

As a consequence, the club recorded a loss for the year, after player trading and net interest, of just under £4.1m.

This compared to a profit of £0.8m in the previous year, but even so, the accounts show a club on the ‘up’ with a turnover of £18.2m compared to £15.9m in the previous year.

A solidarity payment of £1.4m from the Premier League and an increase of £0.7m in season ticket sales contributed to the increase.

The average attendance rose to 23,500 from 21,000 in the previous season Morgan’s money was also used for working capital and to repay bank loans of £3m. But the balance was placed in a high interest account which recouped £1m.

Wolves net assets total £66.3m and Chief Executive Jez Moxey said: “Steve’s investment underpinned the club’s progress both on and off the pitch during this financial year.”

He hailed the strides the club had taken both on and off the pitch over the last 12 months.

“Mick McCarthy’s young squad has been enhanced with a number of additions, including our now top goal scorer Sylvan Ebanks-Blake, who picked up the Football League Golden Boot award in his first season with the club.

“Our young players, many of whom have come from the lower dvisions, have benefitted from Championship games and the team has been given valuable time to develop,” he added.

“This has only been possible because of the fantastic backing of our supporters.

“We sit top of the Championships, but there is still a long way to go and the club will continue to take one game at a time.”

l Wolves striker Sylvan Ebanks-Blake today pulled out of the England under-21 squad to face Norway and France due to a calf strain.