Hearts slash £12m off debt as club posts profit

Published on Friday 4 May 2012 00:00

HEARTS have been boosted by a £12million drop in the club’s debt, aided by a £511,000 profit for the year ending June 2011.

Yesterday’s positive figures were posted in spite of yearly turnover dropping by £1m to £6.9mn.

The substantial plummet in debt from £36.1m to £24m – the lowest level in six years – is largely attributable to a £10m debt-for-equity conversion that was passed by shareholders in November 2010.

Hearts have also benefited from making reductions throughout the business, with employment costs down 12 per cent to £8.03m and operating overheads falling to £3.63m, a 19 per cent drop.

Further improvements were made with regards to finance charges, that figure dropping 11 per cent to £1.44m.

The downturn in turnover for the period has been blamed on the failure to sell prize assets for profit and the absence of European football.

Hearts, however, expect the figures for the year ending June 2012 to show a more handsome income. Those results will include the sale of Lee Wallace for £1.5m to Rangers last summer, and Eggert Jonsson’s January switch to Wolves.

And Hearts’ balance sheet will have been boosted by a Europa League run, that included a lucrative tie against Tottenham Hotspur, and their success in reaching this month’s Scottish Cup final.

This season’s profit sets a pivotal precedent regarding Uefa’s Financial Fair Play plans, which require any club to break even over a three-year period to compete in continental competition.

Those rules come into force from the 2012 financial results onwards, and Hearts are keen to adhere to the measures.

A statement confirmed: “We continue to progress towards Uefa Financial Fair Play readiness, and the directors expect the club will be able to participate in future European competitions.”

The Gorgie club have hailed yesterday’s results as “significant progress in its ultimate aim to achieve self-sustainability”.

The club continued: “We believe that we are well positioned to continue improving our financial performance for the year ending 30 June 2012, based on increased revenues through European competition and positive transfer dealings, as well as our ongoing focus of reducing operating and employment costs.”

With Hearts’ majority shareholder Vladimir Romanov reluctant to personally subsidise the club any longer, there have been four incidences of late salary payments this season.

Many of the first-team squad sought advice from the players’ union PFA Scotland, while a complaint to the SPL was submitted in December.

“The company remains very clear in its aim of developing the best young players in the country to provide the foundation for our future on- and off-field prosperity,” Hearts confirmed as further cost-cutting measures ahead of next season kick in.

To that end, senior players David Obua, Adrian Mrowiec and Ian Black have already been told they will not be kept on at the end of the season.

Hearts also moved on several first-team players in January, including Ryan Stevenson, Eggert Jonsson and Calum Elliot, while John Sutton moved on loan to Central Coast Mariners.

Goalkeeper Marian Kello left last month, having been frozen out of the first-team for refusing to accept a move to Austria Vienna in January, with his contract due to expire in the summer.

Meanwhile, despite a testing financial climate, Hearts have taken the opportunity to re- affirm their commitment to either redeveloping Tynecastle or finding a new home for the club.

The process has stalled severely since initial plans for an ambitious 50,000 all-seater stadium were submitted in 2008.

But Hearts confirmed: “We are pleased to report that the company remains focused on developing a stadium that matches the club’s ambition of remaining one of Scotland’s top teams competing regularly in European competition. Detailed consultation has been undertaken amongst all key stakeholders and a more detailed business analysis is now underway.”

Meanwhile, midfielder Black is targeting a move to the English Premiership, but his priority is to lift the Scottish Cup.

The 27-year-old, who has played 101 times for Hearts since joining from Inverness in 2009, admits he is disappointed to be leaving his boyhood heroes. But he said: “Every player’s ambition is to play in England at the highest level so, hopefully, I will get a few opportunities as long as I keep on playing well and attracting interest.

“I just want to make sure I go out on a high. To the Scottish Cup and be so near to lifting it is brilliant. I just hope we can finish on a high and win the trophy.”

Taken from the Scotsman