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Hearts know they have a long road to financial recovery

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04 Dec 2012 16:47:01

Hearts know they have a long road to financial recovery

Hearts anticipate 'further battles ahead' after a resolution was agreed with Her Majesty's Revenue and Customs in a dispute over tax and national insurance contributions.

The £1.75million dispute was revealed in the share issue brochure as Hearts launched a scheme to raise £1.79m at the end of October. Now Hearts have come to an agreement to pay £1.5m - £1.2m in tax and NIC, plus £300,000 in interest - over a three-year period.

The deal is separate to the settlement of a £450,000 bill on Monday which staved off the threat of a winding-up order. In attempting to galvanise further support for the share issue scheme, which runs until December 19, director Sergejus Fedotovas warned of additional troubles at Hearts. "The share issue is designed to create stability and it is important to achieve the targets we have set," Fedotovas said on the club's official website.

"Unless these targets are hit, going forward we forecast that there will be further battles ahead when it comes to timely payment of bills. In this scenario, we will be forced again to look at what we can do with our cost base as all revenue streams are sweating at the moment and there is no reasonable expectation that we can bring significantly more revenue to the club at this moment."

The most recent announcement last week indicated more than £600,000 had been raised by the scheme, but that is only a third of the target and Fedotovas - right-hand man to majority shareholder Vladimir Romanov - has repeatedly called for additional support.

The Edinburgh club, whose defence of the William Hill Scottish Cup ended with a fourth-round loss at city rivals Hibernian on Sunday, face a £2m shortfall in revenue this season.

Prior to last month's match with St Mirren, Fedotovas had warned it could be Hearts' last in the club's 138-year history. Fans showed their support and Hearts hope the agreement in the tax cases has allayed immediate fears and will prompt hesitant parties to support the club.

"We would urge those supporters, and particularly those in the corporate sector, to act now if they have not done so already," Fedotovas added. "Much work lies ahead and the window of opportunity for supporters to play their part is closing quickly.

"The resolution of this dispute gives us a positive nod to expect that those supporters who were wary of the immediate effect on the club of the tax case can now step forward in confidence. We are keeping our promise to keep this club alive and we have the results - the petition was agreed and paid, the tax case is resolved.

"It is good to know that we are not alone in our ambitions but we need more involvement as we are in far from good shape and the recent Scottish Cup result is the best evidence of this. Now, more than ever before, is the time for our fans everywhere to stand up and be counted."


PA

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