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Watford Leisure PLC

Final Results for the year ended 30 June 2008

Highlights 

	2008	2007	2006
Revenue	£22.4m	£29.9m	£8.5m
Profit / (loss) before tax	£0.4m	£8.0m	£(5.6)m
Earnings / (loss) per share	1.0p	17.4p	(29.9)p

Stadium

Successful completion of improvements to the Rous and Rookery Stands and significant progress on building 164 key worker housing units behind the Rookery Stand. Further development and ground improvements planned.

Football

Team finished 6th in the Championship, losing in the semi-final of the play-offs.

Community

Awarded the Community Club of the Year by the Football League.

Management    

Football management and business management remain focused on delivering success on and off the pitch.

Enquiries:

Watford Leisure PLC

Graham Simpson, Chairman

Mark Ashton, Chief Executive Officer

Tel: 01923 496 221

Strand Partners Limited

Rory Murphy, Director 

Tel: 020 7409 3494

Chairman's statement

On behalf of the Board of Directors I am pleased to present the Final Results of Watford Leisure PLC for the year ended 30 June 2008.

Much was expected of the team last season as it competed once again in the Championship. As explained in last year's annual report, we had decided in the summer of 2007 following relegation from the Premiership, to maintain the level of expenditure on football from the previous season in an effort to give the manager and his team the best possible chance of being re-promoted. For much of the season it looked like the strategy was going to work but following a series of disappointing results in the last quarter of the season, we finished in 6th position and lost in the semi-final of the play-offs. It is worth mentioning that 6th in the Championship represents one of the best ever finishes of Watford Football Club ('the Club'). However, given the early season promise, it is fair to say that not achieving one of the two automatic promotion spots was a big disappointment.

Financial Results

This financial year recorded a fall in revenue of £7.5m to £22.4 million due principally to the reduction in the Premier League distributions following relegation, lower matchday revenues and a reduction in cup revenues when compared to the previous year. The operating loss before interest, player trading and the premium received on the grant of a long lease of £5.1m (2007: profit of £3.1m) reflects not only the fall in revenue but also the fact that expenses, excluding amortisation, were running slightly higher than last year - £28.1m against £27.3m in 2007. The profit on ordinary activities was £0.4 million (2007: £8.0 million).

Football Team

The 2007/08 season was one of high expectations for the Club, players and supporters alike. Last season might be summed up as a 'game of two halves'. The departure of Hameur Bouazza was made good by the arrival of Nathan Ellington towards the end of August 2007. The team started the season in sparkling form with both Marlon King and Darius Henderson scoring freely and led the Championship for the best part of five months. In January 2008 Marlon King moved on to Wigan. To many observers this may have seemed to be a strange decision given Marlon's undoubted scoring and all-round football abilities. Nevertheless, Marlon had decided that the time was right for him to move to another club and we decided, with regret, not to stand in his way. The transfer cash received enabled us to strengthen our squad with the purchase of John Eustace, Leigh Bromby and Mat Sadler, all of whom quickly settled into the 1st team. However, from February onwards the goals were hard to come by and following a string of seven consecutive draws, the team's form and results dipped towards the end of the season. However, the good foundation laid in the first half of the season meant that the team were still able to cling on to 6th place and claim a play-off semi-final with Hull City.

Strategic Review

Following the defeat by Hull City in the play-off semi-final, the Board immediately embarked on a strategic review of the Club's operations, both football and commercial. In anticipation of the cessation of parachute payments at the end of the 2008/09 season, it was clear that the cost base had to be reduced significantly in order for the Club to achieve cash neutrality within a 24 month timeframe. To this end we have seen a number of player departures - Darius Henderson to Sheffield Utd, Danny Shittu to Bolton Wanderers, Nathan Ellington on a season-long loan to Derby County, Jordan Stewart (contract expiry) and Matt Jackson, Douglas Rinaldi and Santiago Aloi (contract terminations). The effect of the player departures has been offset in part by the arrival of John Harley to strengthen the left side of defence and midfield and Grzegorz Rasiak (on loan from Southampton) to strengthen the attack and also by the promising early season form shown by younger members of the squad. However the results have continued to be disappointing and currently we are in 22nd position in the Championship, and in the relegation zone. Indeed we have only won twelve of the last 48 league games since November last year. Following the Blackpool match on 1 November 2008 I sat down with Aidy Boothroyd and we agreed that the time was right for a new manager to take the Club forward. This was a mutual decision and one which I feel was in the best interests of both the Club and Aidy himself. Aidy has been a great manager for the Hornets having guided us into the Premiership in April 2006 and an FA Cup semi-final last year and he leaves with best wishes from everyone at Watford Football Club. 

Malky Mackay, the reserve team coach, has been appointed caretaker manager. He will be assisted by Martin Hunter, the current first team coach, Sean Dyche the former Hornets defender and Alec Chamberlain as goalkeeping coach.  

Whilst Mark and I will continue to manage the Club through this difficult transition period, as part of the wider strategic review the Board is committed to try and find investors who can help take the Club forward and provide a cash injection. However we cannot 'budget' for new investment and must remain focused on defining and executing a stable trading and financial plan for the Club. We will endeavour to achieve the financial objectives without compromising the values of the Club and in particular its strong community links and investment in its academy and in the youth of Watford and surrounding areas generally. 

Vision 2010+

The management and staff continue to work towards the Club's Vision for 2010 and beyond which is designed to enhance the Club's reputation in the community and provide further sustainability for the business. We are very proud to have been awarded Football League Community Club of the Year 2007/08. It is very pleasing that the work undertaken week in, week out, by the Club's dedicated staff in running many and varied projects in Watford and surrounding districts is officially recognised by our peer group. Youth development is an integral part of the Vision and we are very excited by the promise shown by the current Academy teams at all age groups.  

The collaboration with The Harefield Academy provides a unique opportunity for the Club to develop not only its youngsters' footballing skills but also their educational and life skills. We believe that the arrangement is a ground-breaking one at least as far as the UK is concerned and look forward to the current crop of students becoming professional footballers with Watford. We are very proud of the work being undertaken in the Academy and I would like to take this opportunity to thank David Dodds (who left the Club in August 2008) for his contribution and for the on-going work of Mark Warburton and Nick Cox and all their staff for their sterling efforts.

Stadium Redevelopment

Work continued throughout the season to redevelop Vicarage Road Stadium and we were pleased to see the progress being made to both the south face of the Rookery Stand and the south-west corner of the stadium. A notoriously difficult site to manage and develop, work on the key-worker housing to the south of the stadium has been subject to several challenges during this period, which has meant for some delays to the original schedule. Whilst the key-worker housing itself will not be completed until March 2010 the foundation to the south-west corner should be completed by the end of January 2009. 

The Club has been granted planning permission for a new East Stand on the basis of 5,000 seats and the provision of 3,500 square metres of concourse, lobby and usable non-matchday office space. However given the current financial constraints, we are reviewing the options for the East Stand and considering an alternative structure which would be cheaper to build. 

Options are also currently being assessed for the ongoing use of the Red Lion public house, which was vacated by its previous tenants at the end of April 2008.

People

The Club is going through a difficult transitional period and I must thank the fans and all those involved in the running of the Club for their continuing support. Following another testing and rigorous season in 2007/08 I am pleased to report that all of the Club's staff again contributed greatly to the many successes we enjoyed during this period - both on and off the pitch. Much work is undertaken behind the scenes and for this we are indebted to Mark Ashton, Chief Executive and his team.

And finally, I would like to thank sponsors, customers and supporters without whom we would not have a football club.

Graham Simpson

Chairman

Chief Executive's report

Overview of the Season

The 2007/08 season was an exciting one for the Club as the football team competed once again in the Championship. Operationally we focused on completing the investment projects initiated during our year in the Premiership.

Prior to the start of the 07/08 season, we completed the improvements to the concourse and facilities, including opening the new V-Bar, in the Rookery Stand. In addition we refurbished the Executive Boxes in the Rous Stand as well as the other corporate hospitality lounges. In September 2007 we entered into a long lease with St. Pancras & Humanist Housing Association for the space behind the Rookery Stand and south and north-west corners. The housing association is responsible for building and operating 164 key worker housing units which will provide much needed accommodation for nursing and other staff at the Watford General Hospital. The construction work is complicated by the fact that the stadium has to be fully operational on matchdays and we are indebted to the contractors, Kier, for working within these constraints and minimising the impact to the normal running of the stadium. As part of the project plan, the housing association undertook to build the foundation to the new southwest corner which will in time house the changing rooms, matchday control suite and other matchday facilities. We expect the contractors to hand over the south-west 'shell and core' by the end of January 2009. 

One of the knock-on effects of the housing project is that we had temporarily to relocate the Club's administrative offices. We moved into new premises in Tolpits Lane in July 2007 on a short term lease. Whilst the new office has added to our administration costs, it has enabled us to bring together under one roof most of the Club's operational departments including not only commercial staff but also the Trust, football recruitment and Academy.  

As the Chairman has explained in his statement, we face a significant challenge in managing down the Club's cost base should we not get promoted this season as the parachute payments come to an end in June 2009. Whilst a new and improved TV deal has been agreed by the Football League, there is a big difference in the allocation of TV revenues to a Championship versus a Premiership club. The ever increasing player wage inflation, fuelled by the fantastic sums being paid to top Premiership players, makes the challenge of 'balancing the books' in a Championship club that much more difficult. We realise that some of these things we have to do will meet with some criticism. However there are some decisions we just have to make in order to protect the Club going forward. On the plus side we are continuing to invest in our Academy and youth development. The Club prides itself on the number of its professional players who have come through the Club's Academy. We not only have the home grown established first team players such as Tommy Smith, Richard Lee, Adrian Mariappa, John-Joe O'Toole and Lloyd Doyley but we look forward to the future with optimism with Academy players coming through such as Jordan Parkes, Theo Robinson, Liam Henderson, Lewis Young, Billy Gibson, Ross Jenkins and Dale Bennett.

Business Review

The key financial and performance indicators are as follows:

	2008	2007
Revenue	£22.4m	£29.9m
Cost of sales	£(21.9)m	£(20.4)m
Administrative expenses	£(6.2)m	£(6.8)m
Other income	£0.6m	£0.4m
Operating (loss) / profit before interest, player trading, amortisation and exceptional items	£(5.1)m	£3.1m
Profit before taxation	£0.4m	£8.0m
Cash (absorbed by) / generated from operations	£(5.7)m	£5.1m
Wages to revenue ratio	79%	58%
League position (Championship/premiership)	6th	20th

Financial Review

Revenue for the year ended 30 June 2008 was £22.4 million (2007: £29.9 million) - a decrease of £7.5 million. This is due primarily to the drop in league funding following relegation from the Premier League. In addition the average match attendance was 16,870 against 18,882 last season in the Premiership. The drop in average attendances flows through into lower ticket sales and to a lesser extent lower matchday catering income (albeit the home supporters spent more per head in the kiosks on matchdays). Cost of sales (excluding amortisation of player registrations) increased year on year by £1.4 million which is driven primarily by higher costs of running the football team and Academy. The amortisation and impairment charge on capitalised players' registrations increased by £3.0 million to £5.8 million reflecting the new squad members brought on board in 2007. Administrative expenses decreased by £0.6 million to £6.2 million. The profit on disposal of players' registrations of £7.4 million is comprised primarily of the sale of Hameur Bouazza's registration to Fulham FC in August 2007 and Marlon King's registration to Wigan Athletic in January 2008 together with appearance and sell-on payments for players transferred in previous seasons. The exceptional income of £4.6m relates to the lease premium received in connection with the 125 year lease granted by the Club to the St. Pancras & Humanist Housing Association for the key worker housing units at the rear of the Rookery Stand. Given the length of the lease, the transaction is being treated as an outright disposal and recognised in full in the Income Statement in the year of receipt.  

Community 

During the 2007/08 season the Club was named as the Football League Community Club of the Year. This award is real recognition for Watford Football Club and its community partners and builds significantly on the Club's family and community traditions. For many years the Club has taken a leading role in the local community and has taken its Corporate Social Responsibility ('CSR') agenda very seriously. However, over the last two years the Club has taken a strategic decision to place community at the heart of the business and central to the Club's longer term vision to be a true community partner.  

The WFC Community Sports & Education Trust ('the Trust') now has a team of over 20 full time members of staff and a 50 plus strong coaching team that is active across West Hertfordshire, Harrow and Hillingdon. The Trust has developed a wide range of projects utilising sport and Watford Football Club as a vehicle for engagement in education, health and social inclusion initiatives reaching over 100,000 participants per annum. The Trust works with a wide range of partners from the private, public and voluntary sectors, with partnership development being vital to its recent progress, expansion and national recognition at the Football League Awards. The Club supports the Trust in its efforts to represent the Club in local communities, making a positive difference to the lives of children and young people. The Club and the Trust together can be proud of our community work and we look forward to further enhancing our growing reputation in the coming years.  

On behalf of the Board of Directors I would like to place on record our gratitude and congratulations to Julian Winter, Rob Smith and their staff on the award and the progress made in the last year.

Outlook

With our parachute payments coming to an end in June 2009, we have to walk a tightrope of balancing the ever increasing demands of fielding a competitive Championship football team with financial reality. I am confident that we will navigate through this difficult period and become stronger as we focus in on the Club's traditional strengths of loyalty, family and community.  

Mark Ashton

Chief Executive

Consolidated income statement 

for the year ended 30 June 2008

	NOTES	OPERATIONS EXCLUDING PLAYER TRADING	PLAYER TRADING	2008	2007
		£000's	£000's	£000's	£000's
Revenue	2	22,363	-	22,363	29,912
Cost of sales		21,908	5,830	27,738	23,303
Gross (loss) / profit		455	(5,830)	(5,375)	6,609
Administrative expenses		6,180	-	6,180	6,773
Loss from trading before asset transactions and exceptional items		(5,725)	(5,830)	(11,555)	(164)
Other operating income	3	578	-	578	426
Operating (loss) / profit		(5,147)	(5,830)	(10,977)	262
Profit on disposal of players' registrations		-	7,372	7,372	7,957
Premium received on grant of long lease	3	4,558	-	4,558	-
Financing income		99	-	99	93
Financing costs		(626)	-	(626)	(348)
Profit / (loss) before taxation	3	(1,116)	1,542	426	7,964
Taxation		-	-	-	-
Profit / (loss) for the year		(1,116)	1,542	426	7,964
Attributable to:
Equity holders of the parent				418	7,635
Minority interests				8	329
Profit for the year				426	7,964
Earnings per 1p share (basic and diluted)	4			1.0p	17.4p

Consolidated balance sheet 

as at 30 June 2008

	NOTES	2008		2007
		£000's		£000's
Non-current assets
Property, plant and equipment	1 e	13,981		11,854
Intangible assets	1 f	8,148		8,523
		22,129		20,377
Current assets
Inventories		137		157
Trade and other receiveables		5,051		5,720
Cash and cash equivalents		2,039		570
		7,227		6,447
Total assets		29,356		26,824
Current liabilities
Bank overdraft		-		2,461
Interest bearing loans and other borrowings	5	8,856		2,158
Trade and other payables		6,745		11,331
Defferred revenue		4,751		2,520
Current liabilites		20,352		18,470
Non-current liabilities
Interest bearing loans and other borrowings	5	1,261		1,540
Trade and other payables		1,670		1,163
Defferred revenue		33		37
Non-current liabilities		2,964		2,740
Total liabilities		23,316		21,210
Net Assets		6,040		5,614
Equity
Capital and reserves
Called up share capital		439		439
Special reserve		10,651		10,651
Profit and loss account		(4,820)		(5,238)
Equity attributable to equity holders of the parent		6,270		5,852
Minority interests		(230)		(238)
Total Equity		6,040		5,614

Approved by the Board of Directors and authorised for issue on 13 November 2008 and signed on its behalf.

GM SIMPSON - Director

Consolidated statement of changes in equity 

for the two years ended 30 June 2008

ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

	SHARE CAPITAL	SPECIAL RESERVE	RETAINED EARNINGS	TOTAL	MINORITY INTEREST	TOTAL
	£000's	£000's	£000's	£000's	£000's	£000's
Equity shareholders' funds at 1 July 2006	439	10,651	(12,873)	(1,783)	(567)	(2,350)
Profit for the year	-	-	7,635	7,635	329	7,964
Equity shareholders' funds at 30 June 2007	439	10,651	(5,238)	5,852	(238)	5,614
Profit for the year	-	-	418	418	8	426
Equity shareholders' funds at 30 June 2008	439	10,651	(4,820)	6,270	(230)	6,040

Consolidated statement of cash flows

for the year ended 30 June 2008

	2008	2007
	£000's	£000's
Operating activities
Profit before taxation	426	7,964
Amortisation of intangible assets	5,830	3,240
Depreciation of property, plant and equipment	893	268
Net profit on disposal of sundry non-current assets	2	9
Profit on disposal of players' registrations	(7,372)	(7,957)
Premium received on grant of long lease	(4,558)	-
Financing income	(99)	(93)
Financing costs	626	348
Decrease / (increase) in inventories	20	(26)
(Increase) / decrease in receivables	(1,193)	1,156
(Decrease) / increase in payables and deferred income	(276)	173
Cash (absorbed by) / generated from operating activities	(5,701)	5,082
Cash flows from investing activities
Purchase of intangible assets	(6,259)	(5,457)
Purchase of property, plant and equipment	(4,028)	(2,917)
Proceeds from sale of intangible assets	9,479	3,668
Proceeds from sale of property, plant and equipment	4,558	5
Net cash generated by / (used in) investing activities	3,750	(4,701)
Cash flows from financing activities
Advances of debt	8,500	-
Repayments of debt	(2,081)	(2,443)
Interest received	99	93
Interest paid	(637)	(373)
Net cash generated by / (used in) financing activities	5,881	(2,723)
Net increase / (decrease) in cash and cash equivalents	3,930	(2,342)
Cash and cash equivalents at start of year	(1,891)	451
Cash and cash equivalents at end of year	2,039	(1,891)
Cash and cash equivalents comprise
Cash and cash equivalents	2,039	570
Bank overdraft	-	(2,461)
Total	2,039	(1,891)

Notes to the financial statements

for the year ended 30 June 2008

1 Accounting policies

The principal accounting policies are as follows:

a)    Transition to Adopted IFRS's

Both the Group and the Company have prepared their financial statements in accordance with IFRS for the first time and consequently both have applied IFRS 1 'First time Adoption of IFRS'. This requires the disclosure of the effect of adopting IFRS on figures previously reported under UK GAAP. At 30 June 2006 and 30 June 2007 and for the financial periods ended on those dates, there is no significant financial effect of adopting IFRS on the previously reported UK GAAP figures. No reconciliation is therefore presented.

b)    Going concern

The group has prepared financial projections for the period to June 2010 which show that it can through a combination of its operational cashflows, borrowing facilities and capital raising abilities meet all of its financial obligations.

The directors therefore consider it appropriate to prepare the financial statements on a going concern basis. The financial statements do not include any adjustments that would result should this not be the case.

c)    Basis of consolidation

Subsidiaries are entities controlled by the Group. Control exists where the Group has the power, directly or indirectly, to govern the financial and operating polices of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the Group financial statements from the date that control commences until the date that control ceases. Transactions between Group companies are eliminated on consolidation. 

d)    Revenue

Revenue represents income arising from sales to third parties and excludes transfer fees receivable, which are dealt with in the profit on disposal of players' registrations, and value added tax.

    

 i)     Season ticket and corporate hospitality revenue is recognised over the period of the football season as home matches are played.

ii)     Fixed elements of FA Premier League and Football League central broadcasting contracts are recognised over the period of the football season as league matches (home and away) are played and Football League appearance fees are accounted for as earned.

iii)     Sponsorship contracts are recognised over the duration of the contract, either on a straight-line basis, or over the period of the football season, as appropriate, based on the terms of contract. Catering revenues are recognised on an earned basis. Revenue from the sale of the branded products is recognised at the point of despatch when significant risks and rewards of ownership are deemed to have been transferred to the buyer.

  e)    Property, plant and equipment

i)    Owned assets

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

ii)     Depreciation

Depreciation is charged to the income statement, to write off the cost of property, plant and equipment less estimated residual value, over their estimated useful lives as follows:

 

Freehold buildings	-	over 25 years
Plant and equipment	-	25% on reducing balance
Motor Vehicles	-	25% on reducing balance
Stadium redevelopment	-	10% on reducing balance
Leasehold improvements	-	over the shorter of the unexpired term of the lease and 20 years

 

No depreciation is provided on freehold land or assets in the course of construction. The residual value is reassessed annually.

Interest incurred on borrowing to finance assets in the course of construction is capitalised. Once construction has been completed interest is charged to the income statement. 

f)    Intangible assets

i)     Acquired players' registrations

The costs associated with the acquisition of players' registrations are initially recorded at their fair value at the date of acquisition as intangible assets. These costs are fully amortised over the period of the respective player contracts. 

For the purposes of impairment reviews, acquired players' registrations are classified as a single cash-generating unit until the point at which it is made clear that the player is no longer an active member of the playing squad. In these circumstances the carrying value of the player's registration is reviewed against a measurable net realisable value and any impairment charged to cost of sales.

Acquired players' registrations are classified as 'Assets held for sale' on the balance sheet if, at any time, it is considered that the carrying amount of a registration will be recovered principally through a sale. The measurement of the registration is the lower of (a) fair value (less costs to sell) and (b) carrying value. Amortisation of the asset is suspended at the time of reclassification, although impairment charges still need to be made if applicable.    

ii)    Amortisation

Amortisation is charged to cost of sales in the income statement on a straight-line basis over the estimated useful lives unless such lives are indefinite. Intangible assets with an indefinite life are systematically tested for impairment at each balance sheet date.

g)    Signing on fees

Signing on fees are charged to the income statement on a straight-line basis over the period of the player's contract. Prepayments / accruals arising at each period end are included within prepayments and accrued income or accruals within current assets or current liabilities, as appropriate. Where a player's registration is transferred, any signing on fees payable in respect of future periods are charged against the profit / (loss) on disposal of players' registrations in the period in which the disposal is recognised.

2 Revenue

The Group has one main business segment, that of professional football operations. As a result, no additional business segment information is required to be provided. It operates in one geographical segment, the United Kingdom, and accordingly no additional geographical segment information is required to be provided.

Notwithstanding this, a voluntary analysis of the revenue streams is given below to assist with an understanding of the business.            

	2008		2007
	£000's		£000's
Matchday	4,767		6,478
Media	15,081		21,143
Commercial	2,515		2,291
	22,363		29,912

Revenue streams comprise:

Matchday	-	season and matchday tickets and corporate hospitality income
Media	-	television and broadcasting income, including distributions from the FA Premier League broadcasting agreements, Football League funding, cup competitions and local radio
Commercial	-	sponsorship income, merchandising, conference and banqueting and other sundry revenue

3 Profit / (loss) before taxation

	2008	2007
	£000's	£000's
This is stated after charging:
Amortisation of intangible assets	4,395	3,240
Impairment of intangible assets (note 1 f)	1,435	-
Depreciation of property, plant and equipment	893	268
Profit on disposal of propertry, plant and equipment	2	9
Inventories consumed	1,213	1,263
Staff costs	17,743	17,636
Auditors' remuneration
audit	35	37
taxation	11	14
remuneration	-	10
non-audit fees	11	21
Operating leases - vehicles and equipment	32	51
Operating leases - other	247	326

On 20 September 2007 the Company granted the St. Pancras & Humanist Housing Association a 125 year lease for a premium of £4,558,000. The St.Pancras & Humanist Housing Association will build and operate 164 key-worker housing units at the rear of the south (Rookery) stand and north-west corner of the stadium.

4 Earnings per ordinary share

	2008	2007
	£000's	£000's
Earnings per ordinary share have been calculated as follows:
Profit for the financial year attributable to ordinary equity holders	418	7,635
Weighted average number of shares in issue	43,885,693	43,885,693
Earnings per ordinary share	1.0p	17.4p

5 Interest bearing loans and other borrowings

	GROUP
	2008		2007
	£000's		£000's
Current liabilities
Bank loans	7,118		110
Other loans	1,738		2,048
	8,856		2,158
Non-current liabilities
Convertible Loan Notes 2009	592		592
Bank loans	-		116
Other loans	669		832
	1,261		1,540
The maturity of total debt may be analysed as follows:
In one year or less	8,856		2,158
Between one and two years	1,261		708
Between two and five years	-		832
	10,117		3,698

The Convertible Loan Notes 2009 are issued to the Chairman, Mr G Simpson. The notes are unsecured and are convertible into Ordinary 1p shares at a price of 66.5p per share. The repayment date has been deferred until March 2010. Interest of £43,727 (2007 - £51,438) was payable during the year. 

A bank loan of £7,000,000 was repaid on 8 August 2008. This was secured on Premier League

Monies due in August 2008. Other current loans include a loan of £1,500,000 which was repaid

on 15 August 2008 following receipt of £1,500,000 due from the sale of a player's registration and

£237,821 repayable to former directors.

Other non-current loans include a loan to the Club by Watford FC's Community Sports &

Education Trust of £669,000 which is secured by a legal charge over the Club's stadium and is

guaranteed by Watford Leisure PLC. £46,683 (2007 - £43,768) interest was payable during the 

year.

6 Capital commitments

The company has contracted for, but not provided for in the financial statements, capital expenditure totalling £886,809, which includes the cost of the foundation to the south-west corner of Vicarage Road Stadium. 

7 Post balance sheet events

Subsequent to the year end various player registrations have been sold or terminated. In respect of those it is estimated that net income of £3,067,000 will be reflected in the financial statements for the next financial year.

8  Status of Financial Information

The above audited financial information does not constitute Watford Leisure's full financial statements within the meaning of section 240 of the Companies Act 1985. It is an extract from the Annual Report and Accounts for 2008, approved by the board of directors, but not yet delivered to the Registrar of Companies. Full audited financial statements for the year ended 30 June 2008 will be filed at Companies House in due course.

9  Copies of the Annual Report 2008

The Annual Report and Accounts for 2008 are expected to be posted to shareholders on 21 November 2008 and will also be available to download from the Company's website at www.watfordleisureplc.com.

10 Annual General Meeting

The Company's next Annual General Meeting will be held on 15 December 2008.

    

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