The fall from £8 million to £5.6m for the year to 31 July 2014, revealed in the financial statement released by the club, was in part a consequence of the “outsourcing” of the club store. But the poor on-field performances that resulted in Hibs’ relegation from the Premiership also played a major part, as attendances fell and the SPFL’s annual payout declined. Staff costs fell marginally, from £3.9m to £3.7m. But the wages-to-turnover ratio, a key indicator of the health of a football club, increased from 49 per cent to 64 per cent. The loss for the year was £800,000, compared to a profit of £300,000 for the previous 12-month period. CONNECT WITH THE SCOTSMAN • Subscribe to our daily newsletter (requires registration) and get the latest news, sport and business headlines delivered to your inbox every morning • You can also follow us on Facebook, Twitter and Google + As things stood at the end of July, Hibs owed £6.3m to the Bank of Scotland and another £3m to their holding company, owned by majority shareholder Sir Tom Farmer. At the end of last month, however, they agreed a deal that wiped out the bank debt. As a result, the club’s estimated net assets have increased considerably – though their net debt stands at £5m. “The net assets of the club at 31 July 2014, after taking account of all liabilities, amounted to £14.9m, equivalent to 25 pence per share,” the statement said. “On 29 December 2014 the club announced that it was free of bank debt, having reached a settlement with Bank of Scotland, and that the holding company had agreed to capitalise £4.5m of the club’s debts. The club’s indebtedness to the bank at 31 July 2014 was £6.3m and the amount due to the holding company as at that date was £3m. If the transactions announced on 29 December 2014 had taken place as at 31 July 2014, the impact would have been to increase the club’s net assets to £19.4m.” Having freed themselves of bank debt, Hibs’ next step, as they announced at the end of December, is to bring in new money with a share issue. If fully subscribed, the issue – available to existing shareholders and supporters but not to the general public – will transfer a majority of the club to the fans. In explaining their plans yesterday, Hibs were at pains to point out neither the holding company nor any existing shareholder would receive any money from the share issue. “An information memorandum providing details of the board’s plans to widen ownership of the club has been sent to shareholders ahead of the [annual general meeting] on 28 January,” the statement continued. “The club will be writing to supporters later in the week to let them know how they can participate in the share issue. “The board of Hibernian announced on 29 December 2014 that it intended to widen the ownership of the club by making new shares available to supporters. Enough new shares are being made available which, if fully subscribed, would see supporters own 51 per cent of Hibernian FC, which would receive all of the £2.5m proceeds of the issue. None of the money subscribed is going to the holding company or to any of the existing shareholders. “The mailing to shareholders contains the written resolutions changing the club articles to make the new shares available and giving the board of directors the necessary powers to issue the shares. Applications for new shares open on 2 February 2015 once the share issue has been discussed at the shareholder meeting. “The club confirmed this is not an open offer to the general public. Accordingly, details of the share offer set out in the information memorandum can only be made available to shareholders and supporters of Hibernian FC. Disclosure of the contents of the document as a financial promotion to any other person may be a criminal offence under financial services legislation and regulations.” The club might be entering a legal minefield should they try to impose a strict definition of who is and is not a Hibs supporter, but the intention of their statement is clear. While eager to attract new income, Sir Tom and his right-hand man, chairman Rod Petrie, want control of the club to stay in the Hibs community. They know, too, there would be a negative impact on the share issue if there were any suggestion that they would profit personally. BuyHibs, the campaign to take the club into supporters’ ownership, broadly welcomed the share issue plans when they were announced. But last night a separate pressure group, Hands On Hibs, called into question the reliance the club now has on its holding company and insisted fans “should not be asked to hand over money without complete transparency”. SCOTSMAN TABLET AND IPHONE APPS • Download your free 30-day trial for our iPad, Android and Kindle apps • Keep up to date with all aspects of Scottish life with The Scotsman iPhone app, completely free to download and use