While Scottish Hearts of Midlothian may be breathing a small sigh of relief, it appears as though the club is not safe from dangerous waters just yet. Hearts recently announced a GBP 5.66 million drop in debt, bringing the total down to GBP 30.5 million, as noted by The Scotsman.
At the end of July 2008, the club’s debt load held steady at GBP 30.47 million, almost level to that of Hearts’ existing figures. Much of the reduction has been attributed a GBP 9.96 million boost from the sale of players, and a GBP 12 million investment from its parent company for an equity swap. In addition, pre-tax losses were down to GBP 3.53 million.
Although the club still has a way to go, a Hearts spokesman was quick to express optimism at their continued progress during times of economic crisis. The spokesman indicated that Hearts is looking toward the future with a focus on bringing costs down further, improving action on the field, and securing new partnerships.
It remains obvious that player wages and operating expenses are keeping Hearts from significantly moving ahead. With staff expenses of GBP 11.3 million and operating costs of GBP 6.2 million, it is estimated that Hearts spent in excess of GBP 20 million to keep the club functioning for the 2007-08 season. Hearts has also been criticised for hiring 23 additional staff members during a time when expenses need to come down.
Although turnover went down GBP 1.16 million, bringing the total to GBP 9.16 million, Hearts remains confident that there is room for improvement. Despite the extra staff members brought on board, the club has indicated that they hope to bring their staffing expenses down to GBP 5 million.