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Massive losses threaten Hereford United's future
HEREFORD United’s loss of £528,994 is the worst by far in the club’s history and there are further losses to come, says chairman David Keyte.
Keyte said the board were investigating the possibility of putting the financially-stricken club into administration and warned that a £300,000 cash injection was needed before the end of May.
And Keyte said the case for part-time players for next season was 'very strong'.
The Bulls supremo told United’s annual shareholders meeting that the figure for the current year is also likely to exceed £400,000 despite ongoing cost cutting.
The fall of £541,000 in football-related income – sponsorship and Football League income had dropped from more than £804,000 to just under £358,000 – accounted for a large amount of the drop in turnover.
And, with no parachute payment to be included within this year’s accounts, just £47,000 in Conference funding will be forthcoming.
Keyte acknowledged that the board had been talking to two potential investors but time was now pressing and the club had closely been examining the rules regarding administration.
The two potential investors would come in as major shareholders in the club should they decide to continue with any investment which would take the form of a purchase of shares.
The investors had been made fully aware of all the facts and figures as well as all the deadlines, said Keyte.
He said that he had told investors that the cash-strapped club needed £300,000 by the end of May and a further £300,000 for next season.
The club has two choices in respect of administration, the chairman explained.
The deadline for a points deduction for this season is the fourth Thursday in March.
After that time, any points deduction would be made at the beginning of next season.
Should, however, there be any debts outstanding to ‘football creditors’ – and United still owe other clubs for this season’s loanees – by the time of the Conference annual meeting in June, then the Conference has the right to relegate an offending club by another tier.
A 10-point deduction, should the club take the option before Thursday week, would place the Bulls in the Conference relegation zone. Before then, however, the club are facing the potential prospect of another winding-up order – one was settled at the end of January – as they have a tax bill of £78,000 outstanding.
The salary bill for January has now been met but ‘little headway’ had been made on the February salaries, Keyte acknowledged. “We are not generating enough income,” said Keyte.
“We had one home match in February, which was a Tuesday night against Macclesfield and we banked around £2,000 from that.
“We have people costs of around £10,000 per week on the playing side as well as the management side and office staff.”
Keyte said that the case for part-time players for next season was a very strong one.
“There are some good players out there with ‘professional’ jobs such as teachers and accountants but the question is would they come across here for training and matches on two or three nights a week,” he said.
“It could be that we would need to alter things like training venues – for example Barrow train just outside Manchester and go to Barrow only on match-days.
“It is a changing world and we have got to through it. “In five years’ time, I expect this to be a part-time level of football and that may even push up into League Two.”
Keyte has lost one of his key allies on the board of directors with the decision of Nick Nenadich to stand down.
Nenadich will become chairman of the Bulls’ Community Trust, of which non-executive director Bob Pritchard is to be a trustee. Dave Preedy, however, was re-elected to the board by the meeting.
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