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Reduced debt still too high
With the expectation that the CVA will shortly be a thing of the past, some supporters are asking for more expenditure on players. However the club will still have massive debts and should Formsole ever change their current policy not to charge interest on their loans the club could still find paying its way difficult.
Using figures revealed in the last accounts published (to May 31st 2003), the club owed more than £1.8 million. Against this figure were assets of just over £390,000.
Although during the past twelve months the club has made a profit, there will still be a large debt hanging over Edgar Street for some years to come.
The profit for the current year is unlikely to be announced for some months, but with the increased gate receipts and the sale of Paul Parry coming into the figures, the profit could be around £250,000.
If this is the case then, assuming costs have remained much as the previous year, the overall deficit of the club could be cut to about £1.150,000. Much of that deficit will be the loans to Formsole.
If interest was charged on those loans then the cost at current interest rates could be around £80,000 per year. That figure equates to about 400 season tickets.
The club will be hoping that the CVA is ended but financial prudence will still be required. Hereford United needs several profitable years like this one before the accounts show assets close to liabilities.