Hearts announce robust financial results
Heart of Midlothian Football Club (Hearts) today issued a robust set of financial figures for the year ended 31st July 2008.
The club reported positive progress in its aim of returning to profitability, over the mid to long term. The improved figures were aided by a 10% reduction in employment costs to £11.3m (2007: £12.49m). Increased operational efficiencies led to a 19% saving on the previous year of over £1.45 million. Pre-tax losses reduced by more than 70% to £3.53m (2007: £12.45m).
The successful conclusion of a £12m debt-for-equity agreement contributed substantially to the club's total debt figure reducing to £30.48m (2007: £36.25m). The debt reduction removes the burden of an estimated £600,000 of interest per annum - the full effect of which will not be reflected until the financial results for season 2008/09.
The results of the club's investment in a successful and progressive youth academy system, to promote the best 'home developed' players, was also ably demonstrated through this financial period. Hearts achieved a club record fee for the transfer of Scotland international goalkeeper Craig Gordon to Premier League side Sunderland, providing the majority of the £9.96m gain on player sales. Roman Bednar was also sold to Premier League side West Bromich Albion for a fee in excess of £2m.
The Board of Hearts also restated its intention to develop Tynecastle into a 20,000+ capacity stadium. The club is working on revised proposals - within the existing planning application submitted to City of Edinburgh Council - to redevelop Tynecastle. The plans, which are subject to suitable funding arrangements, provide for redevelopment work to commence in the latter part of 2010 providing a new main stand to be constructed and fully operational in season 2011/12.
Turnover for the period reduced from £10.32m to £9.16m due, in the main, to the eighth place domestic league finish and the associated negative effects on income streams from the Clydesdale Bank Premier League for final league placing. The club's early exit from the Tennent's Scottish Cup in season 07/08 also had a knock-on effect on retail and ticket sales.
Despite the current challenging economic climate, the club views the outlook with cautious optimism based on a continued focus on increasing efficiency by lowering costs, improving results on the field and attracting further commercial partnerships.
In each of these areas Hearts has made solid progress in the new financial year. Key 'post year end' events have included the appointment of Csaba Laszlo as team manager. Mr Laszlo has delivered a marked improvement in the club's on-field progress.
Other key items of note are the transfer of Christophe Berra to Championship side Wolverhampton Wanderers. The transaction was the highest value transfer for any player from a Scottish club in the January '09 transfer window and once again demonstrates the value of Hearts' player development system.
Off-field agreements are also in place to extend two major existing commercial partnerships. A three year extension to the club's highly successful partnership with shirt manufacturer Umbro will complement a further one year extension to the club's shirt sponsorship agreement with Ukio Bankas.
Finally the redevelopment of Tynecastle Stadium remains high on the Board's agenda. Vitalijus Vasiliauskas has been appointed as a Board Director and will be responsible as project manager for infrastructure and Development for the Tynecastle redevelopment project.
Note to Editors:
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The company was incorporated in Lithuania in 1998 by AB Ukio Bankas to execute investment activity. UBIG is a company independent of Ukio Bankas.
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