Hearts' debt reaches £28m

HEARTS announced their annual financial report today which details club revenue breaking the £10million barrier for the first time, however a loss of £5m last year has taken the debt at Tynecastle to £28.4m.

For the year August 1, 2005, to July 31, 2006, Hearts earned £10,277,000, an increase of 22 per cent on the previous year's income of £8,428,000. This figure does not include income from the club's European matches in the qualifying stages of the Champions League or the first round of the UEFA Cup.

This was balanced against an increase in pre-tax losses to £5,282,000, almost double the previous year's total of £2,728,000. The rise in outlay is largely attributed to a heightened salary bill with Hearts carrying an expansive first-team squad of around 35 players. The wage bill at Tynecastle was £10m for season 2005/06 compared to £4.5m in 2004/05.

Despite this and the club's overall debt rising from £21.5m to £28.4m in the last year, majority shareholder Vladimir Romanov and the board of directors at Tynecastle maintain that the figures are manageable with Hearts benefiting from the financial resources of their parent company, Ukio Bankas Investment Group [UBIG].

The club's £10m income was aided by a gain on player sales of £1.04m during the year [2004/05 saw a loss of £42,000]. This was accumulated primarily from the transfer of Czech midfielder Rudi Skacel to Southampton for £1.2m. He had cost £346,000 from Marseille.

Hearts also benefited from a £2m "debt-forgiveness" gesture by UBIG late in 2005.

The Hearts board believe that greater revenue is to be generated in the future through the redevelopment of Tynecastle Stadium, which took a step closer to realisation last month when City of Edinburgh Council approved the club's plans to rebuild their main stand and eventually increase capacity to 40,000.

The board also claim that expenditure on the playing squad is unlikely to rise any further.

Derek Watson of the Hearts Supporters Trust insisted that the figures were to be expected and believes that the next set of results will see the club heading in a more positive financial direction.

He said: "These results were more or less what we expected to see at this stage.

"Football accountants always look at the figure of 70 per cent of revenue being taken up by salaries and at the minute Hearts are spending more than that, but the main aim has always been to increase turnover and the club have done that.

"The trouble with accounts is that they are always a year out of date so I think we can expect things to be starting to move in the right direction when the next set of figures are released."

Despite Watson's confidence though, supporters on jamboskickback.co.uk were less than happy with the figures, particularly salary costs which have risen by an amazing 122 per cent on the previous year.

One angry fan said: "Grim reading, although the increased turnover is a plus, it looks like it all goes on increasing debt repayments and the over-inflated wages of an over-inflated squad.

"Vlad's bank seems to be making a tidy profit from Hearts, will he (can he?) plough this profit back into the club. How will any new stadium be financed?"

Another supporter added: "The worst thing to come out of those figures is the fact that club turnover barely covers staff costs. Clearly, this is a recipe for disaster, sooner or later."

Taken from the Scotsman