Hereford United (1939) Limited held it's AGM last night at the Starlite Rooms. Around 35 shareholders were present in addition to the top table which comprised of chairman David Keyte, Nick Nenadich,Dave Preedy, Bob Pritchard along with Kevin Tong from accountants Thorne Widgery.
Two directors were unable to attend. Grenville Smith and Colin Addison. Consultant Stuart Blake did not attend.
David Keyte took the meeting and after agreeing last year's minutes spoke about the accounts to May 31st 2013.
Here are some of the main points from the accounts:
A loss of £498,994 for the year.
A loss of £498,994 for the year.
Turnover down from £1,873,696 to £1,629,982
Shareholders funds are now minus £733,388.
Total owed to creditors within one year is £640,608, total owed after more than one year is £769,723
Total owed to creditors within one year is £640,608, total owed after more than one year is £769,723
Overall income down by 30% and costs down by 30%
Supporters Club income up from £90,539 to £387,962 but margin over costs remains too high.
Donations has been halved
Donations has been halved
Transfer embargo remains in force. Players have received their money for January but only a proportion of what they are owed for February.
In the accounts is a section headed Going Concern.
The currrent economic environment is difficult and the company has reported an operating loss for the year of £498,994. The balance sheet shows that as at May 31st 2013, current liabilities exceeded current assets by £422,843. The directors consider that the outlook presents a sigificent challenge that can not be met without outside investment. The directors have in recent months instituted measures to preserve cash and secure additional finance, these measures have not produced sufficient funding to guarantee the future of the football club.
The directors have successfully achieved revised leases for the ground that will improve the financial position of the club on any future development, but again nothing material to date.
Included within other creditors are amounts owed to the directors totalling £534,637 (2012 - £298,144) The company is reliant on the continuing support of the directors. Post balance sheet, £285,000 of these directors loans have been converted into shares, but further sums have also been invested.
The directors have concluded that the combination of these circumstances represents a material uncertainy that casts sigificant doubt upon the company's ability to continue as a going concern and that, therefore, the company may be unable to realise its assets and discharge its liabilities.
In the accounts is a section headed Going Concern.
The currrent economic environment is difficult and the company has reported an operating loss for the year of £498,994. The balance sheet shows that as at May 31st 2013, current liabilities exceeded current assets by £422,843. The directors consider that the outlook presents a sigificent challenge that can not be met without outside investment. The directors have in recent months instituted measures to preserve cash and secure additional finance, these measures have not produced sufficient funding to guarantee the future of the football club.
The directors have successfully achieved revised leases for the ground that will improve the financial position of the club on any future development, but again nothing material to date.
Included within other creditors are amounts owed to the directors totalling £534,637 (2012 - £298,144) The company is reliant on the continuing support of the directors. Post balance sheet, £285,000 of these directors loans have been converted into shares, but further sums have also been invested.
The directors have concluded that the combination of these circumstances represents a material uncertainy that casts sigificant doubt upon the company's ability to continue as a going concern and that, therefore, the company may be unable to realise its assets and discharge its liabilities.
"No Conference Club can break even on football alone," said Keyte.
"Broken model.
"Broken model.
"Board can't continue to cover losses."
Savills have been paid £11K for consultancy work about the two ends of the ground.
Savills have been paid £11K for consultancy work about the two ends of the ground.
Players budget £650K in year to May 2013, £400K this season, could be £200K to £250k next season, probably part-time.
Perimeter board income halved from £75K to £38K mainly because of drop to Conference. Currently twelve board spaces available. Website income down from £42K to £14K.
This season's losses will be circa £400K as no cup run, no transfers, no TV.
Debenture Scheme - 'little take up'
Share Scheme - Some interest including directors loans converted.
Football League funding down from £715K to £47K this season.
Football League funding down from £715K to £47K this season.
Keyte then talked about the 'Cash Crisis'
Taxman not paid, winding up order shortly, money owed for loanees ( Sam Smith?)
Telecom deal - still talking to one company. The two deals that were being discussed last Autumn didn't go ahead because the leases were not agreed. One company may still agree a deal but at a much reduced price.
Land can be sold at each end of the stadium, any money received can be used for further improvements, talking to potential investors.
Starlite Rooms 'won't save the day'.
Looking at rules for Administration. Last Thursday in March cut off point for ten point deduction this season.
Part-time possible next season said Keyte.
He was reminded that players like Rob Elmes and John Snape were part time and appeared to have more enthusiasm than some of the full time players currently at the club.
However Keyte felt to bring part-time players to Hereford might be difficult because of its location. Perhaps some training nights could be held elsewhere, possibly Worcester.
"There are some good players with professional jobs such as teachers but would they come to Hereford for training two nights each week."
He was reminded that players like Rob Elmes and John Snape were part time and appeared to have more enthusiasm than some of the full time players currently at the club.
However Keyte felt to bring part-time players to Hereford might be difficult because of its location. Perhaps some training nights could be held elsewhere, possibly Worcester.
"There are some good players with professional jobs such as teachers but would they come to Hereford for training two nights each week."
Discussion about youth funding, no FL funds next season so changes have to be made.
Some shareholders wished to see Dan Lloyd-Weston signed up for next season. Others hoped more players from the youth team could be given contracts. To date Cory Williams is signed to the end of next season and Billy Murphy is on a two year deal.
Some shareholders wished to see Dan Lloyd-Weston signed up for next season. Others hoped more players from the youth team could be given contracts. To date Cory Williams is signed to the end of next season and Billy Murphy is on a two year deal.
Contracts for Martin Foyle and Andy Porter are to end of next season.
Discussion about administration rules. Board aware of Conference rules. Directors need to do the right thing as they recognise club can't trade much further. Football creditors have to be paid by Conference AGM which is in June or face further relegation.
If an administrator is appointed his task is to try and turn the club into something that is saleable.
If an administrator is appointed his task is to try and turn the club into something that is saleable.
Club needs £300K to get to end of season and another £300K for next season.
Director Nic Nenadich is leaving the board but will become chairman of the Community Trust. Bob Pritchard will join Community Trust.
"The club is the perfect vehicle to do things in the community," said Nenadich.
"I want to try and help keep the youth set-up."
"The club is the perfect vehicle to do things in the community," said Nenadich.
"I want to try and help keep the youth set-up."
Dave Preedy re-elected to board. Accountants also re-elected.
In any other business more details about the 100K bond lodged with Herefordshire Council emerged. The board had hoped that the bond might have helped with the reconstruction of the Starlite Rooms, however a search by the Council has found that two payments were made out of the bond which until recently were not known about by the present board.
Former chairman Graham Turner presented two invoices to the Council. The first was for help with upgrading the floodlights in 2005 and the second for 'work carried out at Edgar Street' in 2007. In theory neither payment should have been authorised by the Council. Just 12K remains with the Council.
Cargill remain the chief sponsor of the club, although as reported at last year's AGM, they do not sponsor the Len Weston stand any longer. The sponsorship is worth £45K per season. The chairman was hopeful they would renew for another season.
The chairman then raised the subject of HUST, the supporters trust. He questioned those present on behalf of the trust whether they could take over the club should the club be unable to continue.
Keyte then confirmed that the Transfer Embargo continued in force and that currently the club owed about 78K to HMRC.
Former chairman Graham Turner presented two invoices to the Council. The first was for help with upgrading the floodlights in 2005 and the second for 'work carried out at Edgar Street' in 2007. In theory neither payment should have been authorised by the Council. Just 12K remains with the Council.
Cargill remain the chief sponsor of the club, although as reported at last year's AGM, they do not sponsor the Len Weston stand any longer. The sponsorship is worth £45K per season. The chairman was hopeful they would renew for another season.
The chairman then raised the subject of HUST, the supporters trust. He questioned those present on behalf of the trust whether they could take over the club should the club be unable to continue.
Keyte then confirmed that the Transfer Embargo continued in force and that currently the club owed about 78K to HMRC.