Coventry rugby football club will move to a new £3.5 million stadium, two years after going into receivership.

The new regime is trading profitably after just three months and with the aid of increased sponsorship from Peugeot is on course to break even at the end of the playing season.

Coventry intend to move to a new stadium at The Butts for the start of the 2000-2001 season. They will continue to play their home matches at Coundon Road to the end of next season.

After the club crashed with debts of £2.4 million in the Summer, former player Keith Fairbrother headed a consortium which bought it from the official receiver. He revealed that the club was trading in the black after four months and was showing a small profit of £15,700.

Peugeot have agreed to increase their sponsorship by 50% to help the club through next Summer when there are no matches and therefore no income through the turnstiles. Brian Llewellyn, Peugeot’s director of public affairs, admitted the company had reservations about sponsoring the new company but added:

"They have kept to the letter of their word and we have seen their figures right through the first six months. To find that they have beaten their budget forecast is remarkable."

Ted Stocker, a director of the rugby club, outlined the scheme to construct a new stadium on the site of the Butts Stadium.

He said he was confident that the club could raise £2 million towards the cost and they would apply for Lottery funding for the remainder. He said he hoped the £1.5 million would be granted to build an indoor training area for the rugby club and an indoor academy for the Crusaders basketball team.

"Initial funding is not a problem and I have detailed plans of how to raise the £2 million. The Lottery funding is more of a problem. But with eighteen months to go the new stadium really does look feasible and in my view it will be achieved," said Stocker.