Hearts back in profit
. Hearts reports £39,000 profit as club returns to the black
. Significant progress achieved in underlying annual operating performance
. £7.9m investment by UBIG and related parties
. £1.56m saving achieved in employment costs and finance charges
. Club on course to meet UEFA Financial Fair Play requirements
. Hearts remains 3rd best supported club in SPL for fifth consecutive season
. Gain on player trading for fifth consecutive year
Heart of Midlothian Football Club (Hearts) has reported a return to profitability thanks to savings in staff costs and further investment from parent company Ukio Banko Investicine Grupe (UBIG) and related parties.
The figures were underpinned by a 13% reduction in employment costs to £9.12m (2009: £10.47m) and a 12% reduction in finance charges to £1.61m (2009: £1.82m), as detailed in the financial results for year end 31st July 2010.
A £7.9m investment by the club's main shareholder and related parties ensures that Hearts are also on course to meet future UEFA Financial Fair Play guidelines which are being phased in across Europe's clubs from season 2011/12 onwards.
Match day revenues increased to over £3.9m as Hearts consolidated its place as the third best supported team in the Clydesdale Bank Premier League - for the fifth consecutive season - with average home attendances well in excess of 14,000. Total revenue for the year dipped slightly however on the back of a disappointing sixth place league finish (2009: 3rd).
Operating costs increased marginally to £4.46m (2009: £4.3m) however these are expected to reduce significantly in the current financial year following a series of improvements to the effectiveness of the operating side of the business.
The profit of £39,000 (2009: loss of £8.63m) is the first profit reported by the club in 11 years. As well as expected operational cost reductions, the club also expects further improvements in underlying financial performance in the current financial year with the exit, at the end of last season, of some of the club's higher earners. Financial figures will also be boosted in the next financial year with the inclusion of the £10m debt-for-equity plan approved by shareholders in November 2010.
The quality of the squad has been improved with the signing of players such as Kevin Kyle, Stephen Elliott, Darren Barr, Marian Kello, Rudi Skacel and club captain Marius Zaliukas. Manager Jim Jefferies is also currently in his first full season in charge of team affairs following the departure of Csaba Laszlo in January 2010.
As importantly, the club retained the services of key players including Andrew Driver and Lee Wallace both of whom had attracted interest from larger clubs. The ability to retain players did not however stop Hearts registering a boost to revenues with a gain on player sales for the fifth consecutive year. This income was reinvested in the club as part of the Board's commitment to the strategy of attracting the best young players to its Football Academy.
The success of this strategy is currently being demonstrated with the appearance, in the first team, of young players including David Templeton (Scotland U21), Craig Thomson (Scotland U21), Scott Robinson (Scotland U19) and Arvydas Novikovas (Lithuania national team). These players have progressed to gain international honours at selected age groups following in the footsteps of Hearts' current senior internationalists such as Lee Wallace (Scotland) and Eggert Jonsson (Iceland) who also graduated from the Academy into the senior team.
Increasing operational efficiencies will remain a key focus of the Board. In tandem with this the Board continues to investigate the related revenue generating opportunities through a redeveloped Tynecastle Stadium. The new retail franchise agreement with SRM is also strengthening financial margins from off field operations.
Finally the Board would like to register its continuing gratitude to the support shown amongst all our stakeholders including shareholders, supporters, business associates and sponsors. We will continue to work in the interests of the club at all times and will endevour to bring success to the club both on and off field. We are also confident that the work we are currently involved in and the steps we are taking will deliver longer term benefits for Heart of Midlothian Football Club.
On Hearts.TV today - and the Official App - an exclusive interview with director Sergejus Fedotovas, plus all the post-match reaction to Celtic match.