BY DARREN JOHNSTONE @CCP_Sport
Hibernian have announced that they made an operating loss of £840,000 for the financial year to July 2015, but still managed to reduce their overall debt by £2.6 million.
Chairman Rod Petrie released details of the club’s accounts yesterday ahead of their Annual General Meeting on December 15.
In a season that saw the team compete in the Scottish Championship following their relegation from the Premiership, Hibs’ cash balance also rose by over £1 million to £2.7 million.
Those figures were enhanced by the share issue launched in January that gives supporters the chance to become the club’s majority shareholders by raising £2.5 million through Hibernian Supporters Limited.
By July, £500,000 had been raised, equating to a shareholding of nearly 20 per cent.
When announcing the share issue, Hibs also revealed details of a major restructuring of their debt, which included securing an interest-free £5 million loan from current owner Sir Tom Farmer.
Despite spending the campaign in the second tier, turnover was only down £200,000 to £5.6 million, although this was also aided by a £500,000 parachute payment.
Staffs costs were down from £3.7 million to £3.4 million and the club said that their net debt had fallen from £5 million in 2014 to £2.4 million.
The Easter Road outfit insist that the size of their operating loss was because the ‘board chose to maintain the club as a ‘Premiership club’ despite being relegated’.
Chairman Petrie said: “The fact that we lost a substantial sum of money last year in the Championship will not be a surprise to anyone with an understanding of Club finances.
“The big reduction in trading income occurred when turnover fell from £8m in 2012-13 to £5.8m in 2013-14 in the Premiership.
“In fact, turnover in 2014-15 was a credible £5.6m in comparison to that, including a £500,000 parachute payment.
“The loss for the year was actually an improvement from the much larger loss incurred in the previous year (£1.2 million).”
Petrie also warned of the importance of the club achieving promotion back to the top-flight after the team were beaten by Rangers at the play-off semi-final stage at the end of last term.
He added: “Without the exceptional level of income that comes from reaching a cup final or through significant transfer fee income, it is not possible for Hibernian to break even as a Premiership club outside the Premiership.”
Hibernian Supporters Limited
Commenting on the club’s share issue, Petrie added: “In just seven months, supporter ownership has increased from just under two per cent to more than 19 per cent of the club.
“Included in that is the shares owned by Hibernian Supporters Limited.
“And the increase in supporter ownership has also seen the resurrection of the Association of Hibernian Shareholders.
“All new shareholders and legitimate shareholder representatives are welcomed.
“Relegation galvanised those who care passionately about Hibernian to do what they can to help sustain and support the Club.
“That commitment started with the Board and the owner and has flowed all through the club including coaches, players, staff and supporters who increasingly are the new owners.”
The report also shows that Hibs have fixed assets of £25.4 million and net assets of £19.1 million.