Hibs were today left counting the cost of relegation as the club revealed an operating loss of £800,000 in the last financial year.
But as copies of the long-awaited accounts began dropping through shareholders’ letter-boxes, greater detail as to how the move to widen fan ownership could pump up to £2.5million into the Capital outfit’s coffers began to emerge.
Plans to give supporters the opportunity to own up to 51 per cent of shares, the revelation Hibs were now free of bank debt and that the holding company had agreed to halve the club’s debt by converting £4.5m of loans into new shares, were unveiled at the end of last month.
Now, though, shareholders are being informed of the mechanics of that process which will be discussed at the annual general meeting at Easter Road on Wednesday, January 28, with the assurance that the entire proceeds of the new issue, which will see the number of shares in circulation soar to 125 million, will go direct to the football club and none of it to existing 1700 shareholders or the holding company.
The news that Hibs made a heavy loss in the year to July 31, a period which covered the bitterly disappointing 2013/14 season, will come as little surprise to fans, the club itself admitting the financial statements represented a low point in both sporting and monetary terms, the loss reported comparing to a £300,000 operating profit the previous year.
A campaign which began with high hopes was “book-ended” by that disastrous Europa League hammering by Malmo at Easter Road and a play-off defeat by Hamilton which consigned the club to Championship football, Hibs having suffered “an unprecedented run of results” under former boss Terry Butcher in the second half of the season.
A failure to make significant progress in either cup competitions having reached the Scottish Cup final the previous year was, according to finance director Jamie Marwick, behind a reduction in turnover from £8m to £5.8m while the effect of outsourcing Hibs’ retail operation also had an effect although, it was stated, the move had been a net benefit to the club.
Operating costs were reduced from £3.3m to £2.4m, partly as a result of that outsourcing but also through tight control of costs which saw staff costs fall by £200,000 to £3.7m. Even so the reduction in turnover resulted in an increase in the key “wages to turnover ratio” to 64 per cent compared to 49 per cent.
Although the financial results have been made public later than usual, the accounts were signed off by the club’s auditors less than a month after the year end, the delay being put down to the complex work which had gone on for much of 2014 to widen fan ownership, as many supporters had demanded.