Mike Langford attended last Monday's Hereford United supporters meeting. In an exclusive article for BN, he sets out his view that liquidation is the only way forward.
I was the front row supporter on Monday evening in the
Starlite Rooms shocked at the financial state of our Club and I have been
invited by Bulls News to give my views. By way of
background I was a Corporate Manager for a Bank until my retirement, looking
after businesses in the £2m to £50m turnover category and I now work locally
for one of my ex-customers. I have lived in Hereford for the
past 26 years preferring to travel to work rather than leave this beautiful
County. I have watched Hereford United since 1988, the days of Phil Stant and
like fellow supporters experienced more lows than highs but keep coming back
for more! I am a member of the V P Club.
In an ideal world a white knight with a pocketful of cash
will come along to rescue us and we will avoid relegation and live to fight
another campaign in the Skrill Premier. Despite continual talk of investors I
now cannot see this happening. I still hope that I will be proved wrong. The
audited accounts were not available so it was difficult to fully understand the
financial position and more importantly the cashflow problems. However it was
revealed in the Facts and Figures section of the Agenda that the latest
accounts to the 31st May 2013 show total debts
of £950,000 even after £285,000 of loans had been converted to shares. Add
this season’s losses of some £400,000 and the debts are in the region of
£1,350,000 and growing at a rate of £30,000 per month. Unpaid wages are
£100,000, Messrs Foyle and Porter have not been paid in 2014, numerous local
suppliers are waiting patiently, the Council have not been paid rent or rates
for several months and we owe other clubs in the division £22,000 for loan
players. Cash is king and pays the bills and our cashflow is non existent with
the HMRC commencing winding-up proceedings within 2 weeks if their £78,000 debt
is not paid in full. We do have 4 home matches left but attendances are poor
as the team has struggled on the pitch recently. Then we have the close season
where season ticket sales will not be as forthcoming as last season given the ongoing
uncertainty.
Going into Administration is complicated and will bring
about a 10 point penalty which will undoubtedly relegate us. If we cannot
settle all Football Creditors by the Skrill Premier AGM in June
2014 then we would suffer a further relegation. The Club would have to agree
to pay 100% of its debts within 3 years, something that is impossible as the
Directors have already said that they are no longer able to cover losses. I am
being brief as I believe the Club does not have the cash or income stream to
work through Administration.
The only way forward in my view is to go into Liquidation
and out of the ashes form a new Club in a lower league 100% owned by the fans
and HUST. Fund raising therefore should immediately be focused on getting
monies into the Bank account of HUST. In the close season HUST would set the
wheels in motion to shape a new debt free team on the lines of what has been
achieved in Chester, Telford, Halifax and Wimbledon. It would
take a few years to climb the divisions but it would be done on the basis of
balancing the books or making a small profit each year. We would have a strong
supporters club with fan ownership and total transparency. When Rob Purdie
addressed the meeting and mentioned his links to the City, being probably the
only player to call Hereford his real home, I thought he would make a great
player/manager and show that the Club has the ambition to go forward again on a
strong financial footing.
This is a time for all supporters to unite. It was evident
by the turnout on Monday that there is a good nucleus of people who care about
our Club. We should not let the troubles off the field cause unrest and trouble
between supporters and members of HUISA and HUST. We are all like minded, have
the Club at heart and need to work and stand together. I believe that our
existing great Club is in terminal decline with spiralling debts, monthly
losses and minimal income. The meeting we attended on Monday should have been
held a year or two ago and then perhaps the fan base through HUISA could have
done something to help. We need to look to the future even if it is not the
future we really want. With a new share issue of say £100,000 fully subscribed
and the help of our M.P. Jesse Norman, I think we could show Herefordshire
Council that we mean business and enable a new fan based Club to take over the
leases to the ground. With this achieved, the only way is up!