Karen Hebden hopes the theatre will have another good Christmas

Derby Playhouse made 36 staff redundant as it battled to cut mounting financial losses.

The theatre said other cost-cutting measures and a rise in sales over Christmas were behind the surplus.

Its latest figures show that it has cut its deficit from �272,000 to �77,000, although officials insisted there was still much work to do.

Artistic director Stephen Edwards said: "When chief executive Karen Hebden and I arrived in July 2002, the Playhouse faced the very real threat of closure.

'Painful' redundancies

"We have had to make some very difficult choices over the past five years but they were made to safeguard the future of theatre in Derby."

He said the restructuring had involved a "painful redundancy programme".

But the "effectiveness of that process is reflected in these positive figures," he added.

The Playhouse, located in the city's main shopping centre, hopes to benefit when the Westfield complex expands later this year.

Karen Hebden added: "Although we believe we will benefit from a revitalised city centre, we have had to contend with access issues arising from the major roadworks and redevelopment scheme over many months.

"The pressure is still on. We've still got to work really hard and hopefully, if we have another really good Christmas, that might wipe off the �77,000 and we'll be back to zero, which would be great."