Why Hearts are confident profits will return despite £1.2m loss as details of £7m loan revealed
Hearts are confident they can return to profit this season despite posting a loss of £1.2million in their latest annual accounts.
The figures for the year to June 30, 2024 show the Tynecastle club achieved a turnover in excess of £20m for the second successive year, following a significant upturn in commercial, sponsorship and advertising revenues.
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Hide AdOperating costs increased by £1.6m, with a further investment in the playing squad taking the club's wage bill up to £16.4m, while a reduction in net assets, down from £24m down to £20m, contributed to overall losses of £4.4m.
The absence of European football was cited as a major factor in the £1.2m deficit for last season - something the club expects to address in the current campaign as they compete in the newly revamped UEFA Conference League.
There were also costs associated with the completion of the Main Stand and the opening of club's own 25-room Tynecastle Park Hotel, which launched in February.
A statement in Hearts' accounts read: “The absence of group stage European football limited our revenue growth, as we knew it would. This, coupled with our commitment to continue to invest for future success in players, staff and infrastructure, means that for the first time in many years, our financial results show a loss.
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Hide Ad“However, with group stage European football secured for 2024/25 we are confident of continued revenue growth in the coming year. Similarly, with no large-scale infrastructure projects on the immediate horizon, we are confident that we will reap the benefits of our years of investment over the coming seasons.
"This continued investment, with a marginal drop in revenue, has meant that for the first time in many years, we are reporting a loss of £1.2m. With group stage European football secured for season 24/25 we are confident of continued revenue growth in the coming year. Similarly with no large-scale infrastructure projects on the immediate horizon, we are confident that we will reap the benefits of our years of investment over the coming season.”
Loans and overdrafts totalled more than £3.4m. The accounts also revealed details of a £7m loan from a director which was acquired subsequent to the accounting period to pay off most of the £3.4m debt and which will be repaid over 10 years at commercial rates of interest.
Hearts continue to benefit from major donations with benefactors pumping in £4m, while an extra £1,478,000 came from supporters via cash pledges to club owners, Foundation of Hearts.
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Hide Ad"From a financial standpoint, season 23/24 was challenging," the statement added. "We reported turnover of £20.25m and whilst this is a marginal decrease from the prior year, it does demonstrate significant year-on-year growth given the absence of European group stage football. Growth was prevalent in our sponsorship, broadcasting and commercial areas, with a marginal reduction in our gate receipts, and a reduction in our football prize monies, due to our non-participation in the European group stages.
"We are reporting an EBITDA loss of £1.2m this year, the first time for many years, and whilst this is disappointing, we are confident that we can return to profitability given our European group stage participation in season 24/25. Financially, this was a challenging year for the Club, however we continued to invest in our playing squad and our staff teams, and we completed the new Main Stand, thus continuing to enhance Tynecastle Park and the club for the future."
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