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'City are heading in right direction'

By Essex Chronicle  |  Posted: May 24, 2012

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MANSELL Wallace staunchly defended the club's financial position at a highly-charged supporters' meeting on Thursday night.

In recent weeks the Chronicle has written stories about a cash flow problem at Chelmsford City FC that led to several first-team players being paid late in March.

It followed an article last year about the club owing a total of £1.2 million pounds to creditors.

Wallace, the Clarets' chairman, has re-iterated that the club is moving in the right direction under his stewardship and he doesn't think the financial problems had any bearing on the players, who missed out on the Blue Square Bet South play-offs.

"The club is in no different a situation this year than it has been in previous years," he told a jam-packed clubhouse at Melbourne Park.

"If you look through the leagues there are many, many teams that are paying their players weeks and months in arrears and in fact some none at all.

"I spoke to the players in the dressing room and they all accepted the situation."

Financial director Trevor Smith said players being paid late at the club had 'happened about 17 times in the last 18 years'.

Wallace, who inherited a difficult financial position when he took the reins in February 2009, says the club made a operating profit of £33,000 last year and are looking to better that figure in this current year.

There are still large debts to be paid though which, he says, are being reduced year on year.

He explained that the cash flow issue which led to some players being paid a fortnight late had come about due to a change in league rules that requires tax and national insurance to be paid ahead of staff.

It was that, combined with a drop off in attendances and the use of the club's conferencing facilities that led to the financial shortfall.

It also means the £120,000 earned from last season's run to the second round of the FA Cup has been absorbed by those falling revenues and paying off debts.

Wallace said: "During the year our commercial revenue was down 70k on the previous two years and the attendance was down 40k, which made 110K.

"We paid 40k off our creditors list which was outstanding as we were running behind so that basically makes it up. We paid 21k in other loans, so all in all that was where the 120k was used."

It was also confirmed on the night that forward Jamie Slabber, believed to have cost £7,500 from Eastleigh, was paid for separately by the club's directors and therefore didn't directly cost the club anything.

"His wages were paid because we released two squad players who were sitting on the bench," said Wallace.

Meanwhile, plans to turn Chelmsford City in to a Community Interest Company have been temporarily shelved.

"We got hit because a friendly loan got called in and ceased to be friendly debt," said Wallace.

"That threw a spanner in the works but it's something we are still working on."

A CIC is a limited company but with special additional features created for the use of people who want to conduct a business for the benefit of the community and not purely for private advantage.

Effectively it turns all debts in to shares and locks in the club's major asset, the clubhouse.

This week the club's directors will sit down to plan the playing budget for next season.

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