£28.4M JAMBOS DEBT IS UP BY £7MILLION .. BUT VLAD'S NOT WORRIED

HEARTS will announce this morning their debt has risen to £28.4 million in Vladimir Romanov's first year in charge.

The Jambos have posted losses of £5.2m for the year to July 31, 2006, Record Sport can reveal.

Debt is up from £21.5m in 2005, when the club posted a loss of £2.7m, and salary costs have more than doubled from £4.5m to £10m.

The figures will be released to shareholders and supporters today ahead of the club's agm on February 27. They will make concerning reading for many Jambos, but Romanov is said to be relaxed about the figures.

The losses are understood to be in line with expectations costed in the club's long-term business plan.

Romanov insists the club are heading in the right direction and has been boosted by news on turnover, which has smashed the £10m barrier for the first time.

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Hearts took in over £10.2m, an increase of 22 per cent on the previous year's record of £8.4m, which included £2m of UEFA Cup revenue.

The turnover for 2005-2006 does not include revenue from any European fixtures as Hearts did not participate in UEFA competition during the year.

However, it does take into account revenue from the club's success in winning the Scottish Cup.

The financial figures to be released also include a gain on player sales for the period of £1m, thanks entirely to the exit of Rudi Skacel to Southampton for £1.2m.

Ubig, the financial company controlled by Romanov, also forgave Hearts £2m of debt.

The majority of losses are down to the rise in salary costs since Romanov took control but expenditure on the playing squad is not expected to rise significantly from its current levels.

It is unknown at this stage if the £10m a year incurred by Hearts includes the salaries of the players loaned to the club from Kaunas.

Romanov reckons the current debt levels are manageable and will be reduced as the club moves towards profitability.

He believes higher revenues will be generated through increased participation at European level, although the club flopped badly in the Champions League qualifiers and UEFA Cup this season.

Romanov also expects revenue streams to be boosted by an increase in capacity at a redeveloped Tynecastle and that sponsorship and retail incomes will continue to rise on the back of it.

However, Hearts have still to be given planning permission for their ambitious plans, which were outlined a fortnight ago, and even the cost of rebuilding the Main Stand alone will send debts climbing still further.

A spokesman for Romanov said: "The club has been backed by Ubig and will continue to be backed by Ubig.

"The increase in costs were required to improve the performance of the business.

"The board is confident of its management and confident of even higher revenues being realised in future, particularly with an increase in the capacity of Tynecastle."

Meanwhile, sources continue to play down reports of a takeover of the club by Edinburgh plumber Pat Munro.

Romanov has told Munro he is not interested in selling and has refused to even meet with him.

Munro did present to Romanov's associates not long after the Lithuanian banker took control of the club but it was as a courtesy and his plans were not taken seriously.

Indeed, one of Romanov's Lithuanian team told his boss the presentation read "as if it had been written on the back of a cigarette packet".

Taken from the Daily Record