York City 0 Havant and Waterlooville 1

York City were dealt a massive financial blow when they crashed out of the FA Cup in the first round, beaten by Blue Square South team Havant and Waterlooville.

Cash-strapped York, who will take a long time to recover from having to borrow 2m (which attracts annual interest of 100,000), to buy their ground back, were in desperate need of a good cup run, but were never at their best against a side which managed only two shots on target in the match.

With 16,000 going to the winners of this tie, a sizeable sum in York's present economic climate, it was clearly important for York to progress, but after sloppy defending had seen the Hawks go ahead after 24 minutes through Mo Harkin, they were denied an equaliser through a combination of sound defending and a touch of good fortune for the visitors.

York, whose goalkeeper Tom Evans had an armchair afternoon, had four efforts cleared off the line, Mark Robinson, Onome Sodje (twice) and Darren Kelly being the sufferers, but they looked disjointed and never moved with much conviction, particularly after Paul Brayson had been brought off in favour of Richard Brodie. This was a puzzling substitution for, among others, the match sponsors, who showed their feelings by voting Brayson man of the match for his 31 minutes.

Manager Billy McEwan explained that he wanted more height up front and more penetration down the right flank, but that wasn't forthcoming as too many hit and hope high balls were gobbled up by the tall Havant defenders.

York had won six and drawn one of their previous nine matches, but their poor home form – seven defeats in 11 league and cup matches – continues to be a major problem.

Havant manager Sean Gale described it as "an unbelievable performance" against York who know all about FA Cup giant-killing as Tottenham and Arsenal will testify.

York City: Evans; Craddock, McGurk, Kelly (Rhodes 84), Robinson; Brayson, (Brodie 31), Panther, Elliott (Wroe 75), Woolford; Sodje, Farrell. Unused substitutes: Mimms, Parslow.

Havant and Waterlooville: Scriven; Smith, Jordan, Sharp, Poate; Harkin, Collins, Oatway, (Wilkinson 75), Taggart, (Gregory 59); Slabber (Pacquette 36), Baptiste. Unused substitutes: Potter, Taylor.

Referee: R Fletcher (Melbourne, Derbyshire)

York man of the match: Martyn Woolford.