Hearts make a profit for first time since 1999

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HEARTS will today announce financial results which show the club has made a profit for the first time since 1999.

The size of the profit is understood to be modest, certainly in comparison with the club's multi-million-pound debt, but staff are confident the results for the year ended 31 July 2010 represent a step in the right direction.

Employment costs were down 13 per cent from the previous year, despite the fact that several high-earning players, who have since departed Tynecastle, remained on the books for all, or nearly all, of the period in question. Those who have since moved on include former club captain Michael Stewart, striker Christian Nade, defender Jose Goncalves and midfielder Laryea Kingston.

The removal of those four from the wage bill has contributed to another substantial net reduction in employment costs for the current financial year and, having secured a third-place finish in the SPL, Hearts can now anticipate some extra revenue from involvement in the Europa League next season. Even so, the club remains a long way short of being able to trade its way out of its debt which, at its peak, was over 35 million.

Majority shareholder Vladimir Romanov has previously used two mechanisms to reduce that debt - a debt-for-equity conversion in which his Ukio Bankas company buys newly-created shares, and a so-called forgiveness of debt in which Romanov or Ukio simply writes off some of the money Hearts owe them. Romanov and his colleagues are understood to be considering making a similar move shortly, although no information has yet been forthcoming about the size of the amount they plan to knock off the bottom line.

Even if no such venture is agreed during the current financial year, however, Hearts' next set of figures will benefit from the last 10m debt-for-equity conversion carried out by Romanov last September.

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