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Wednesday, May 22, 2013

Plans To Make Bulls Financially Stable


Plans were revealed to try and make Hereford United financially stable at this evening's meeting of shareholders at the Starlite Rooms.

Below is a short summary of what was said.

David Keyte chaired the meeting and started off by telling shareholders that the club expected to make a loss of around £440K in the year ending May 31st 2013. Next season the club could loss £375K unless steps are taken to reduce the playing budget even more which Keyte was unwilling to do.

"There has to be a radical change of thinking," said Keyte. 

"The aim is promotion which on its own would increase income by £800k per season."

Keyte then introduced Stuart Blake who gave the directors, Martin Foyle, Andy Porter, several staff and the 27 shareholders present a presentation as to what was being proposed.

The aim, he said, was to look for investment to improve the leisure facilities, continue discussions with potential investors and expand the share base of the club.

A) Where We Are Today:

Short term cash issue,  opportunity to 'join' the ESG, £750K loans to the club by board members.

B) Future Development:

Hotel with Gym and Retail at the Blackfriars End of the ground, Residential at the Meadow End.

C) The Share Issue.

The aim is to raise upto £1.5M. If this could be done £300K would be spent on the Meadow End, £400K on the Blackfriars End and £400 on Aylestone Park for new training facilities.

Directors were considering converting some of their loans into shares.

It's hoped the new share scheme will be up and running by July 1st

D) Income/Sales

It was hoped that the 'sale' of the land  behind the Meadow End could bring in £500K and the land behind the Blackfriars End also £500K. Profit from the Starlite Rooms could reach £100K and the debenture scheme might bring in £350K.

The aim is to be much less reliant on gate money. 

E) Supporting the manager ( Martin Foyle)

The aim is to return to the Football League, maximise player sales, attract better players, benefit from a stronger youth policy, and increase the gates to 2,500.

F) The Debenture Sale

The aim is to set up a '1939 Executive Club' which would operate over and above the current Vice-Presidents Club.

Cost would be £4750 for five years.

Keyte then asked for questions.

The position with the leases of the ground was mentioned. Heads of terms have been agreed with the Council and a final meeting was due shortly.

Some more details about the new shares emerged. It was expected they would sell at £1 each with a minimum of 500 for a shareholder to have a vote. The issue would not be under-written.

Costs at the club are still being reduced, the playing budget is 18% down, last season one player was paid £72K.

Around 30 people were thought likely to buy a debenture when released with hopefully more later. Keyte would like Edgar Street to become the 'place to be seen'.

866 season tickets sold to date.

Director Bob Pritchard said that with the ESG development and the expansion at Rotherwas, new businesses were coming to the area and the club should aim to market itself to those businesses and the families who are moving into the area.

The £100K council bond was raised by a shareholder who produced paperwork to prove that the council should know about the bond.

The club will pay some more PAYE tomorrow, however the club is currently short of about £60k to cover its bills to the end of June. 

Discussions are on-going with Cargill to continue their sponsorship.