Further financial improvements reported

Heart of Midlothian plc (Hearts) today reported further improvement in its financial performance for the year ended 30 June 2012.

The club achieved an improved turnover of £8.68m (11 months ended June 2011: £6.92m).

The improvement in performance was underpinned by a revenue boost due in the main to the club's participation in the qualifying and play-off rounds of the 2011/12 UEFA Europa League. Additionally, the club also benefited from its successful William Hill Scottish Cup campaign culminating in a historic 5-1 victory against city rivals Hibernian at Hampden Park on the 19th May 2012.

The importance of the Heart of Midlothian Youth Academy was once again visible as the club benefited financially from another positive year in player trading, with a net gain of £1.96m accounted for in the main by the transfer of two of the club's Academy graduates - Scotland international defender Lee Wallace moved to Rangers and Icelandic international midfielder Eggert Jonsson joined English Premiership side Wolverhampton Wanderers.

The club also delivered a solid operating performance with reductions in operating expenses and staff costs when based on annualised figures for the previous period to year ended 30 June 2011. Finance charges also reduced on an annualised basis,with only a modest increase in net debt to £24.7m.

Post year end, the company also successfully resolved a contingent liability relating to an HMRC investigation from a previous reporting period. The result of this is that the company will report the full £1.58m settlement figure in this reporting period leading to a loss for the year of £1.65m.

The company's continued financial progress gives the club confidence that its financial position now provides the foundation stone for it to achieve the Financial Fair Play requirements of UEFA in time for its full introduction in season 2013/14.

The company continues to be resolute in its belief that the future of the business is dependent on three key factors - developing the best young footballers in the country, building a stadium that is befitting of one of the biggest clubs in the United Kingdom and expanding the supporter base of the club.

Our youth development policy aims to ensure that investment returns are delivered through managed player development, promotion and trading while also providing supporters with entertaining and successful football in domestic and European competitions.

Our stadium development plans continue to be an aim which will benefit the club, the city and the game of football in Scotland. And the requirement for a new stadium development whether that be at Tynecastle or elsewhere in the city has never been more evident than the recent European matches against English Premiership clubs Tottenham Hotspur and Liverpool when the club could have sold thousands more tickets and attracted thousands more visitors to the city if it had a suitable stadium facility.

We continue, however, to work with the City of Edinburgh Council and business partners in order to deliver a stadium befitting of a top European football team playing in one of the world's finest capital cities.

We are confident that future financial results will demonstrate further progress and with the continued support of the club's tens of thousands of supporters, Heart of Midlothian will be in a good position to benefit from changes in the game both domestically and in Europe.

During the period there has been mention of Heart of Midlothian being for sale. The Board can assure supporters that the club will only be sold on the basis of a constructive and realistic offer for the company and secondly, and as importantly, can prove that they have the resource, determination, and business acumen to allow Heart of Midlothian to prosper in future years.

The Board has, post year end, offered supporters the opportunity to take an increased share of the club which could lead to an outright purchase of the club in the future. The club is delighted with the positive response received and this gives it confidence that supporter ownership can be a viable proposition for the club. The Board can assure supporters that any structured and realistic offer presented to the Board by an organised and professionally constituted supporter organisation will be treated seriously.

We remain resolute and due to the commitment of all those associated with the club we are cautiously optimistic about the future of the business. This resolve and commitment will be particularly essential as we move forward given that the club can no longer depend on the support that it has received in previous years from UAB Ukio Banko Investicine Grupe ("UBIG").

It is crucial that everyone with the interests of the club at heart continues to back the team and we hope that this year's season ticket sales and match day ticket sales will show that the club can have a positive outlook going into the new season.

Finally, the Board would like to express its thanks to the employees, players, supporters, shareholders and other associates such as sponsors, commercial and community partners who continue to support the business.

Notes:

Full sets of the 2012 Annual Accounts will be arriving with shareholders from this morning (Saturday 4th May 2013).

The club AGM is scheduled for Thursday 23rd May 2013. This is only open to existing shareholders.

New shareholders, including those from the October to December 2012 share issue, will receive their shareholders' packs a few weeks after the AGM and will be entitled to attend future AGMs.

Hearts World