Heart of Midlothian Football Club has reported an operating loss of more than £1million after what it described as a ‘financially challenging’ year.

The club said the loss of £1.2m for the year ended 30 June was down to a combination of missing out on European football last season and continued investment in playing staff and the commercial side of the business.

Turnover of £20.25m was slightly down on last year’s figure, while donations from benefactors was reported as £6m, £2m of which was deferred. £1,478,000 came from supporters pledging cash to club owners, Foundation of Hearts.

A statement from director Ann Budge which was attached to the financial results, said: “From a financial standpoint, season 23/24 was challenging. 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.

“This inherent revenue growth, along with the continuing support from our benefactors and the Foundation of Hearts, allowed us to continue to invest in our staff including our players, our backroom support teams and our commercial and administrative support teams.

“Our staff costs increased by £1.1m over the season, which once again demonstrates our continued investment in this area. Our operating costs increased by £1.6m, year on year, reflecting the impact of rising prices in almost all areas of our business along with increased costs associated with our revenue growth; the provision of additional facilities for our football department and the ongoing operational costs associated with our enlarged infrastructure.

“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.

“Our depreciation and amortisation costs have increased by £0.6m reflecting our increased infrastructure costs, given the completion of the Main Stand and our continuing investment in players.

“Our balance sheet at 30 June 2024 remains strong with net assets of £20m. Our net cash outflow during the year amounted to £3.6m, with cash generated from operations of £0.8m, net spend on player and infrastructure investment of £5m and net incoming loans of £0.7m.

“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.”