Under Bees United's option agreement with Altonwood, Altonwood have agreed to support the existing overdraft limit of £4.5m, but obviously we cannot exceed this figure. The overdraft has recently been renewed by the bank.
Despite the season ticket receipts, the 3 month close season has seen a significant net cash outflow for the Club. Season ticket sales produce approximately £300,000 net of VAT, roughly equivalent to the £100,000 a month we will average from league gates. However certain costs are higher in the summer: routine pitch and safety maintenance work has to be carried out, and this year there has been extensive renovation of the lounges, much of the cost of which will be reimbursed by Lifeline when completed. Additionally the June and July payrolls still include players released by the Club in the summer (a Football League requirement), and are therefore higher than those for the rest of the year.
Coupled with higher expenditure in the close season, certain income streams (programme sales, catering etc) are clearly lower in the summer. Additionally, whilst the Club is due to receive £322,000 in funding from the Football League this season, only £8,000 has been received to date, and the next instalment of £129,000 is not due until 10th October. We are therefore able to anticipate cash flow being very tight at the end of September, as it was at the end of July. Incidentally the St George money was received in August: this is £40,000 for the Club and another £10,000 for Football in the Community.
As we have previously stated, we have budgeted for the club to make a small profit at operating profit level, but incur a loss after interest of approximately £200,000. Other long-term cash flow timing differences (relating to the ITV Digital contract) mean that the potential cash outflow for the season is £340,000, and barring unbudgeted upsides to the cash flow (eg player sales, cup runs), we anticipate £240,000 will have to be funded by Bees United. This will come from the £35,000 already committed this year, the £80,000 loan note fund (subject to loan note holders' approval), and Bees United general fundraising activities which generate some £10,000 to £12,000 per month, including £6,500 of standing order income. These funds will have to be injected at regular intervals throughout the year, and to the extent they are already in hand, the interest saving by the Club from the cash transferred greatly exceeds the interest that would otherwise have been earned by Bees United.