There was good news and bad news for Brechin City fans at the clubs Annual General Meeting last night.

The bad news is that last year, on a turnover of £338,000, the club made a loss of £71,508 for the year ending May 31, 2007.

It follows a £43,000 loss the previous year and treasurer Martin Smith said that while the committee was neither happy nor complacent about this, there was the expectation of another major loss as the club completed the transition between managers.

Contributing to the loss was a £7,000 drop in income as the rescheduling of matches had hit attendances and, although not budgeted for, there had been little benefit from the ultimately disappointing run in the Scottish Cup and play-offs.

"Income from the Development Association which runs the Glebe Gamble was down £5,000 because there were more wins than we thought imaginable but a pleasing aspect was the increase in fund raising and sponsorship by £10,000." reported Mr Smith.

"Payments from the Scottish Football League were 10% down, despite assurances that they would be the same as last year."

The club has been tightening the purse strings and expenditure was down by £34,000 to £407,000.

Manager Michael O'Neill had managed to cut wages and travelling expenses by £46,000 and a further reduction is expected in the coming year. Most of the rest of the expenditure was on a par with last year, except for the meals budget which was up £7,500 due to increased sponsorship.

Kit costs were up by £2,500 and extra expenditure included profession fees because of the ongoing court action involving former manager Ian Campbell and evaluation of the ground. There were exceptional additional costs for wages to Ian Campbell and players Gerry Brittain and Gary Bollan, plus operations and scans on players.

"We are the victims of our success and trying to stay in the first division," said Mr Smith. "It is our intention to produce a break even budget for next year."

The Annual General Meeting marked the retiral of Chairman David Birse, who has been succeeded by Ken Ferguson. Mr Birse paid tribute to the work of O'Neill who took the club to the play-offs and kept the excitement going right until the end of the season.

"If the truth be told, we were just not good enough for the step up to the first division football," said Mr Birse.

"In the close season e have added a few really exciting prospects to the squad and I am certain we will be a force to reckon with again this year."

Mr Birse acknowledged that, off the pitch, the picture was not so rosy with the balance sheet showing the biggest loss in the clubs history.

"Much of this can be explained with the mismanagement of the last regime coming back to haunt us, but we the committee must shoulder much of the blame and ensure that this never happens again."

He said the team wages were on a much better structure and the committee would cut expenditure at every opportunity and hold more fund-raising events to balance the books.