Julian Winter claims Hornets will be able to balance books (From Watford Observer)

Julian Winter claims Hornets will be able to balance books

7:00pm Thursday 18th March 2010 in

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Watford chief executive Julian Winter believes the Hornets' recruitment policy and Academy will produce enough players for the club to sell in the future as they attempt to balance the books.

Winter was speaking after the Hornets' parent company Watford Leisure Plc released its unaudited interim results, which showed how heavily the club relied on selling players in the six months leading up to December 31.

The results cover the first six months after Watford's Premier League parachute payments finished.

The club's revenue for the year ending June 30 2009 was around £22m but that is expected to drop to around £10.5m this calendar year.

The accounts released on Monday show Watford's revenue was £5.16m for the first six months, ending December 31, compared with £10.99m during the same period in 2008.

However, cost base reductions of around 25 per cent across the various club departments and the £4.2m profit made from player sales, resulted in Watford Leisure only announcing a pre-tax loss of £172,000, compared with £2.28m for the same period in 2008.

The sales of Tommy Smith, Mike Williamson, Tamas Priskin, Jobi McAnuff and Theo Robinson helped cushion the blow of losing the Premier League parachute payments, but the club once again confirmed it will have to sell players in the future as they continue to cut costs.

A number of first-team squad members, including Jay DeMerit and Will Hoskins, could leave on free transfers in the summer, but Winter is confident the club will continue to have players they can sell to balance the books if needed.

Winter said: "The interim results show the amount of progress which has been made to date. They also highlight the significant challenge which faces the club as it continues to realign its cost base.

"The results are positive because they show that costs have been significantly reduced across the business and that we have generated revenue from the sale of players, both of which have helped to reduce the impact of the loss of Premier League parachute revenue.

"However, the results also show that we will need to continue to manage our cost base and increase commercial revenues.

"Further, key to the business plan moving forward is the continued generation of revenue from player sales. We believe that through our excellent recruitment processes and Academy structure we will develop and trade players to enable our business to remain sustainable, always balancing this with the ambition of being a competitive Championship club."

Watford's revenue was down in a number of areas. Matchday income had reduced by more than £600,000 at £2.04m, media revenue fell by almost £2.7m and Premier League distributions were only £577,000 in 2009, compared with £6.18m in 2008. Commercial revenue was also £871,000 compared with £1.15m the previous year.

Current and non-current loans stood at £4.37m in December 2008 but that had risen to £9.8m in 2009, mainly due to Fordwat's loan, which repaid the money borrowed from Valley Grown Salads on December 21.

There were a number of positives though, as cost of sales reduced by £3.11m, almost £2.6m of which were football-related cost savings.

Administrative expenses also fell by £1.47m – some of which relates to the pay-off to former chief executive Mark Ashton which did not have to be paid in the end.

In his chairman's statement, Graham Taylor concluded: "The board feel that we can realistically move forward more positively, but it will require a constant emphasis on managing the balance between developing the football side of the club and ensuring a sustainable level of costs. We will be doing our utmost to do the very best for the club."