HEARTS INCREASES TURNOVER TO MORE THAN £10 MILLION

- Turnover increases 22% to break £10 million for first time.

- Gain on player sales of £1,041,000 for the year. 

- Forgiveness of £2 million debt.

- Stadium redevelopment and retail expansion planned.

Heart of Midlothian FC (Hearts) announced today that the club has broken through the £10 million revenue level for the first time following the release of its financial results for year ended 31 July 2006. The £10,277,000 income represents a 22% increase of over £1.8 million (2005: £8,428,000) on the previous year.

The full year figures were boosted across all areas of the business including matchday, broadcasting and commercial income. Of particular note was increased revenue streams due to capacity attendance at the majority of Hearts games with crowd figures up 34% at Tynecastle for domestic and Cup competitions when compared to the previous year. The team's success finishing second in the SPL and winning the Tennent's Scottish Cup also contributed to a 18% increase in commercial income including retail sales through the club's Tynecastle Superstore. The financial results are all the more impressive given the lack of European competition for Hearts in season 2005/06 and the club's early exit from the CIS Cup.

In the transfer market, Hearts recorded a gain on player sales for the period of £1,041,000 (2005: loss of £42,000) helped by the transfer of Rudi Skacel to Southampton for £1.2 million having cost the club £346,000 from Marseilles. A further financial highlight for Hearts was the forgiveness of £2 million of debt by UAB Ukio Banko Investicine Grupe's (UBIG), a company controlled by Vladimir Romanov.

Club losses before tax increased to £5,282,000 (2005: £2,728,000), the majority of which is accounted for by the higher salary costs of £10 million (2005: £4.5 million) for playing staff due to an investment in playing squad and extended contracts for existing players on improved terms. A direct effect of this was an increase in net debt to £28.4 million (2005: £21.5 million).

The loss is in line with the Board's expectation and is part of an approved long term business plan for the club where investment and increase of costs are required to improve the performance. Going forward the company has financial support from the main shareholder UBIG, helping the company to meet financial demands and manage debt.

The Hearts Board believes that current levels of debt are manageable and will be reduced as the club moves towards profitability. Higher revenues will be generated through increased participation in European competition, larger attendance in a redeveloped Tynecastle Stadium and greater sponsorship and retail income. Expenditure on the playing squad is unlikely to rise any further.