Given that Hereford FC have lost over £200,000 in the year to May 31st 2022, BN looks back to the results from the year to May 31 2011 when a record profit was made. But it was all down to one exceptional item and the future didn't look promising.
These articles were all posted on December 14th 2011.
Report from Hereford United AGM
Hereford
United held their Annual General Meeting in the VP club earlier this
evening starting at 7pm. Chairman David Keyte took the meeting.
Vice-chairman Tim Russon, director Grenville Smith and Kevin Tong from
accountants Thorne Widgery were also present along with around 30
shareholders.
After the formalities of apologies and approving last year's accounts,
the Chairman presented the latest accounts (for more details see BN's
earlier articles).
For the first time for many years, there was a positive figure on the
balance sheet, but the Chairman noted that the club was 'too heavily
reliant' on gate receipts. He gave the meeting some figures which
illustrated the problem. Of the amount taken at the gate last Saturday,
virtually all went out on player's wages on Monday and there were all
the other staff to pay.
He spoke about the 55% wage cap. The 'terms' of the cap had slightly
changed and he was confident the club would come through the next review
and so no transfer embargo would be placed on the club in the New Year.
But it wasn't easy at present which is why the club needs more income
from off-pitch activities.
Some costs from last season hopefully won't occur again. The Chairman
mentioned what the sacking of Simon Davey had cost. In essence the club
had to stand 21 months of management costs in the twelve month period.
Asked by a shareholder how the club had found Gary Peters, the Chairman
said his name had initially come from a search on the internet. Later
they spoke to the chairman of Shrewsbury Town who said they would have
had Peters back, had Graham Turner not taken over.
The club is owed some money from Bournemouth for the transfer of Mark
Pugh. A clause in the deal related to appearances and Pugh is now over
the required starts. Janos Kovacs will soon be off the books. But there
was no other news about any loan deals out of Edgar Street. And the club
was still hoping that Mathieu Manset could become a regular starter for
Reading as he has to make 25 starts to release another £25,000. To date
he's only started nine games.
The chairman admitted that should any reasonable offer came for a player
either to go out on loan or for sale, the club would agree. However
when asked specifically about Harry Pell, the chairman said that there
had been 'no offers to date'.
The Accrington game which was to be on Saturday December 31st had been
brought forward to the Friday evening after a request from Accrington.
The chairman said that Jamie Pitman felt this would give his players an
extra day before the Burton game on January 2nd.
Two other items of note. Firstly the club now hopes that the Sportsman
Club, which will be called the Starlite Rooms, will be partly open on
Boxing Day for the Port Vale match. The chairman revealed that the cost
of the renovations was around £300,000 and all of this money had come
from four supporters who had made loans to cover this amount. Radfords
would continue to operate as it was hoped with two facilites more
supporters could be persuaded to have a pre-match pint which would bring
in more income for the club.
Secondly the club had hired Savills to try and find a developer for the
Blackfriars End with the possible aim of building a business class hotel
in conjunction with the stand. An amount of up to £750,000 was still
available from the Football Foundation to help with the cost of the
stand. The club had agreed details with the Council about a sub-lease
for the project which could be 250 years long.
Grenville Smith was re-elected as a director.
The meeting closed at 8.45pm.
Please note this report doesn't cover anywhere near everything that was
said at the meeting. Some facts and figures were given to the
shareholders which it would not be appropiate to publish. However, to
his credit, the Chairman was very open about the finances at the club
and he did not flinch from answering any question from the floor.
Currently the club was going through a difficult position with gates
lower than budgeted, no Cup income and some players wages higher than
the club can probably afford. Unless gate and other income suddenly
increases, and/or players are sold, the club will lose money this
season. However there is some light at the end of the tunnel with costs
expected to be somewhat lower next season and a steady income from the
Starlite Rooms.
Hereford has to be a selling club says Keyte
Hereford United chairman David Keyte has said that during most seasons the club needs to sell players to balance the books.
His comments come as the club struggles with the current trading
position and the need to keep turnover as high as possible so that the
55% wage cap is not exceeded.
During last season players were sold to the value of £297,730 but
there's little sign of reaching anywhere near that figure this season.
To date only one player has been sold - Stuart Fleetwood moved to Luton
for, reportedly, £50,000.
"There appears to be a case to say that, based on limited gate money and
little additional income, the Club needs to sell players to have a
chance of reaching a break-even/or profit situation," said Keyte.
"Looking ahead to the current 2011/12 financial year, the prize money
will be zero and with transfer fees budgeted to be £50,000 we face a
potential reduction in turnover of £300,000 before ever we discuss
falling gate revenue."
Keyte has also given an insight into the true cost of players wages at Edgar Street.
"It is clear that a new player is not just an agreed weekly wage, nor
just the traditional on-costs for PAYE and Pension but, significently
for us in Hereford, carries quite costly travel and accomodation costs
also.
"An exercise Gary Peters and I are currently working on suggests the true player cost is approx 150% of the agreed weekly wage."
All in all the immediate future, off the pitch, isn't very rosy at Edgar Street.
"Sadly, falling gates across the country, no FA Cup run and lack of
movement in expenditure constrained by contractual agreements will
result in a significant loss in the 2011/12 financial year."
One-off Profit for Hereford United
Hereford
United have reported a profit of £431,601 for the year ended May 31st
2011. However an exceptional item is wholly responsible for that profit.
Last year a loss of £54,974 was recorded.
The exceptional item was the profit made from settling the long-term
debt of £1,069,000 with the developers Richardsons. The club paid out
£452,000 plus some legal costs but also gained from having the leases on
Edgar Street returned. Without the exceptional item a loss of £173,537
would have been made.
Turnover for the year was £2,055,026 up 13.5%. Gate receipts were up by
13.55% to £484,581 but season ticket income dropped by 8.55% to
£146,051. Other match-day income (shop, programme sales, perimeter
boards) fell by 8.4%.
For the first time income derived from the club website was recorded.
This came in at £28,650 which, presumably, includes income from Bulls
Player.
Other income increases came from Football League grants up by £108,000,
and the excellent FA Cup run which came to £112,500. Transfer fees, at
£297,730, were slightly higher with the sale of Mark Pugh and Mathieu
Manset.
Expenditure increased by over 20%. It would have been nearer 15% but for
the sacking of Simon Davey and his assistant which cost the club
£105,000.
Finally the balance sheet shows shareholders funds at £218,078. It's
probably the first year for a very long time that the club has had a
positive balance. It's unlikely to be as high in twelve months time.