Budge loans another £1m as Covid hits club finances
Ann Bud ge has given Hearts a fresh loan of more than £1 million to help with operating costs.
Through her comp any, Bidco (1874) Limited, the Edinburgh businesswoman loaned the club £1,225,000 interest-free. The amount is detailed in Hearts’ accounts for the year to 30 June, 2020.
It means the club now owe their owner more than £2 min re payable loans. None of that money will be reclaimed between now and next June as part of an agreement between all parties.
Bid co loaned Hearts £700,000 last year and, to help offset problems caused by the Covid crisis, Budge has acted again to provide funds for running costs.
Notes to the financial statements in Hearts’ accounts explain that the loans are secured by a standard security over Tynecastle Park.
Foundation of Hearts have repaid Budge almost all of the £2.5m she provided to gain control of Hearts in 2014. She is due to hand her 75.1 p er cent majority shareholding to the fan group next year.
In her statement on behalf of the board yesterday, Budge admitted that the Covid-19 pandemic has put a strain on the club’s finances.
Hearts’ annual accounts show a £473,000 profit after benefactors donated another £3 million to the Edinburgh club.
Turnover was £12,270,000 for the year ending 30 June, 2020 – down more than £2.5m from the previous year because of the Covid 19 pandemic and legal fees of £646,000.
Hearts began litigation against the Scottish Professional Football League in June after being relegated when clubs voted to end the season early.
Benefactors including James and Morag Anderson contributed £3 mover the 12 months. That takes Hearts’ total benefactor donations in the last four years to £11.75m.
The club’ s total wage bill reached £8,776,000, up from £8,220,000 the previous year. Wages at Tynecastle Park are now just over 71 p er cent of total turnover.
Income from player sales was £340,000, largely a result of Jake Mulraney’s February transfer to Atlanta United.
Foundation of Hearts contributed £603,000 after their final repayment to Hearts owner Ann Budge.
She has now received almost all of the £2.5m she put up to gain control of the Edinburgh club in 2014 and will soon hand her majority shareholding to the fans’ group.
In her financial statement on behalf of the board, Budge admitted Covid’s impact will continue in the months ahead with fans locked out of football.
She thanked benefactors for their help and said the backing of fans and sponsors is all vital to keeping the club on a sound financial footing.
She said: “The unprecedented challenges facing businesses across all sectors during 2020, in the wake of the Coronavirus pandemic taking hold, unsurprisingly, impacted our 2019/20 financial results and will, unquestionably, continue to impact financial performance for the foreseeable future."
Hearts had budgeted to earn around £15m of income for the year but coronavirus put paid to those projections in March.
“Our turnover is down against last year by approximately £2.5m, coming in at just over £12m,” added Budge, who again reiterated that legal action against the SPFL was correct despite the costs involved.