Directors appear happy with latest accounts
HU-FC.co.uk revealed the main details of how the last season turned out in two short articles last week ( March 9th and 10th). Now we are able to print a fuller review.
The year ended May 31st 2003 was slightly disappointing as a small loss was reported. Nevertheless, the Board of Directors appear happy with the present position.
Under the Business review and future developents section the report says: "The Board of Directors are pleased that losses have again fallen and are optimistic that next year will see us return to a small profit.
"The long term future of football at Edgar Street and of the club itself remains unclear. The loans from developers were scheduled for repayment in May 2003; the company was advised that the loan payment would be deferred. Negotiations regarding the future of the club are continuing."
None of the directors increased their holding of shares in the year. Graham Turner is credited with 8,295 shares, J G Fennessy with 1,620, H S A Brooks with 400, G L J Smith with 481 and T A McGivern with 400. Originally there were 40,000 shares issued in Hereford United.
The loss for the year was £14,840 down from £21,670 in the previous report. In essence Hereford United lost over £120,000 before other operating income of £113,399 is taken into account.
Other operating income is essential to keep Hereford United in business. It consists of three elements. Firstly, the VP (Vice Presidents) Club raised £21,000, Secondly, Rental franchise income which probably includes Legends and the Foodstalls brought in £24,000. Thirdly "Sundry" brought in £68,399 which was up by over £8,000 on the previous year.
HU-FC.co.uk asked a director of the club last year what was included in "Sundry" but the director would not elaborate. It is assumed that "Sundry" means other donations not including that received from the VP Club. As the amount is over 10% of the clubs income this is a very important item in the accounts.
In the year ended May 2000, sundry income came to just £22,438, so arise to £68,399 in just three years is most helpful.
The balance sheets are little changed from last year. They still show that the club is lucky to be still in business. In effect without the agreement of Formsole, the company which loaned Hereford United enough money to keep trading several years, it is unlikely that football could continue at Edgar Street.
Overall staff costs dropped last year. This was mainly because the directors paid themselves some £50,000 less than the previous year when they appeared to pay themselves higher salaries to compensate for the earlier lean years. The players and administration staff received virtually the same amount as in the 2002 year.
Transfer fees received fell from £27,500 to £6,000. This figure should rise in the next accounts as the fees received for selling Paul Parry will be included.
The Bank overdraft was down to £61,707 at year end but overall the creditors were owed slightly more. The main creditor is the loan from Formsole.
The report mentions the loan situation: "The loan was negotiated in May 1999, to be repayable on 19 May 2003 and now carries no interest charge provided there is no default. This loan payment date has now been further deferred and negotiations regarding eventual payment continue."
