Hearts reduce debt by £12m

Hearts have reduced their debt by �12m
Hearts have reduced their debt by �12m
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HEARTS’ debt has reduced by a third from £36 million to £24m with the Tynecastle club also in profit for the second successive year.

They gained more than £500,000 in profit according to financial results for the 11-month period to June 30, 2011.

The reduction in net debt is the most encouraging news from the results and sees the amount owed by Hearts down 33 per cent. Recording a profit is also significant, although turnover for the period was down £1m to £6.9m.

Hearts believe the results show they are heading in the right direction towards long-term self-sufficiency as they look to survive without financial support from their parent company, Ukio Bankas Investment Group.

The club have reduced operating costs by almost £1m, employment costs are down more than £1m and finance charges dropped by 11 per cent. The figures don’t account for revenue generated after last July, since when Hearts have competed in European competition and received transfer fees for Lee Wallace, Eggert Jonsson and Ryan Stevenson. Those will show in next year’s results. A statement released by Hearts read: “Heart of Midlothian PLC continued to make significant progress in its ultimate aim to achieve self-sustainability. Financial results are reported for 11 months for the period ended June 30, 2011, as opposed to the previous 12-month figures for the year ended July 31, 2010. The change of reporting period brings the club in line with standard UEFA member club financial reporting dates and therefore better reflects the business.

“The most notable improvement in the company’s financial position is in relation to net debt which reduced by 33 per cent to £24m (2010: £36.1m) as the result of the implementation of a debt restructuring plan.

“The company reported a profit of £511,000 – the second consecutive year of profits – with financial improvement, for the reporting period, achieved across three key areas of the business. Operating costs reduced by 19 per cent to £3.63m (2010: £4.48m); employment costs dropped by 12 per cent to £8.03m (2010: £9.11m) and finance charges were cut by 11 per cent to £1.44m (2010: £1.62m).”

The statement added that Hearts will continue their policy of developing young players through their youth academy, whilst the club are still examining stadium redevelopment.

Adrian Mrowiec is to be released. An option to re-sign the Polish player for next season had to be invoked by May 15, but Hearts have informed him he is surplus to requirements.

“These things happen in football,” said Mrowiec, currently sidelined with a knee injury. “I have had a really good time here, as have my family. As for the future, I don’t know what will happen but going back to Poland is something I will think about. Maybe my last game could be the Scottish Cup final. What a way to finish that would be.”