Watford Leisure, the holding company of Watford Football Club, is counting the costs of relegation from the Premier League, with full year revenues £7 million lighter at £10 million and losses hitting £5.4 million (£3.8 million profit). Elliott Davis reports.

Chairman Sir Elton John directs blame for the disappointing figures squarely at the 'ever-increasing' gulf in financial advantages between the English football elite and those in the lower divisions. 'Turnover decreased from £16.8 million to £10 million as a result of reduced income from TV rights and lower gate receipts' he commented.

One positive achievement for the Aim-listed club, which narrowly missed making the first division promotion play-offs last season and was knocked out of the FA Cup in the third round by 1995 champion Everton, is the number of season tickets sold. In 1998/1999, the year Watford (WFC) gained promotion, there were around 5,000 season ticket holders.

This year the figure has increased to 9,000 on the back of the lure of Premiership football. Encouragingly, it seems that many of these fans have stayed faithful.

Despite recent setbacks, John is adamant that the club remains as ambitious as ever, pointing to signing of two former Spurs players, Allan Nielsen and Espen Baardsen, as a positive sign. He also believes that the appointment of former Chelsea boss Gianluca Vialli as manager speaks volumes for Watford's aspirations.

However, at present things are not going quite to plan. Watford is currently 17th in Division One, having won only three out of ten games this season.

Shares in Watford Leisure remained static at 1p today, valuing the club at £20.5 million.