Hibs have plunged into the red for the first time in seven years, today revealing a loss of almost £1 million.
But while the current difficult economic downturn was partially to blame, Easter Road chairman Rod Petrie admitted the lack of success on the pitch had also had a direct bearing on the reversal in the club’s financial fortunes.
Last season was the worst in a decade for Hibs, a tenth place finish in the Scottish Premier League and an exit at the first time of asking in both the League and Scottish Cups while their much-anticipated Europa League adventure also didn’t get beyond the first hurdle.
As a result, Hibs clocked up a loss of £900,000 following six successive years in the black although profits had been slowing from a peak of £7.4m in 2007 – a combination of their CIS Insurance Cup success under John Collins and the sale of a string of players for seven-figure sums.
Announcing the financial results for the year ended July 31, Petrie said a combination of factors were behind the loss, the recessionary pressures on supporters and corporate partners, the lack of sporting success, a drop in “player trading,” which brought in £1 m, and a change in manager – Colin Calderwood taking over from John Hughes exactly 12 months ago today – adding up to a “very challenging year” for the club.
Petrie said: “In the current difficult economic conditions, every household faces pressure on its domestic budget and on discretionary expenditure. This, in turn, has an adverse effect on the club’s finances. “Of course, we are very mindful of the obvious fact that lack of success on the field has a direct bearing on the level of turnover. The sporting outcomes for the season were not what any of would have wished.
“The team exited two competitions before the change in management and suffered the disappointment of an exit from the third competition in early January before Colin Calderwood was able to refresh the squad.”
Petrie revealed costs had been cut within Easter Road to “address the imbalance between income and expenditure,” from board level down which had result in redundancies and a policy of not filling posts vacated through natural wastage, while staff were in the third year of a pay freeze.
But, he insisted, that despite the disappointing figures, contained in a financial statement dropping through shareholders’ letter boxes today, the financial position of Hibs remained secure.