Hearts have insisted that the financial future of the club is bright, despite debts having risen to about �37m.

The Scottish Premier League club's results for the year to July 2007 show a record turnover of �10.32m.

And Hearts stressed that: "Gains from the previously widely reported sale of Craig Gordon will be realised in the next set of annual results."

The club hope that improved attendances, sponsorship and retail income will see the club break even.

"The outlook for the present financial year is therefore encouraging and the board and management team of the club are actively engaged in targeting operational break-even for the business in the mid to long term," said the annual report, which came before a new deal with shirt manufacturer Umbro.

"The club's commercial agreement with Umbro represents the largest shirt partnership deal in the history of the club and the club is pleased with the way this relationship is developing."

Expenditure on the playing squad is unlikely to rise any further Hearts statement

Hearts, whose debts rose by �10m in a year, also hope that the planned redevelopment of Tynecastle Stadium - for which a planning application has been submitted - will help finances.

"If approved, this will allow Hearts to increase the stadium capacity to 23,000 while also providing a number of other revenue generating opportunities," Hearts stated.

"This is a cornerstone of Hearts' future revenue growth and will bring significant benefits to the locality around Tynecastle Stadium and indeed wider benefits to the City of Edinburgh as a whole."

Hearts highlighted their fourth consecutive year of turnover growth and a �1.12m profit on player sales, mainly due to the sale of midfielder Paul Hartley to Celtic.

Goalkeeper Gordon has also since been sold to Sunderland for �9m, most of which will go towards reducing the debt figure for the present financial year.

"Of particular note was the increased revenue streams due to improved retail sales, the ability of Hearts to attract top-quality sponsorship partners and the loyalty of the supporters attending the games during this period," the report said of the last financial year.

"Increased investment in, and support of, the playing squad led to employment costs of �12.49m.

MY SPORT: DEBATE Whilst I am no expert, the figures appear to be better than was feared SHELLDRAKE

"Parent company UAB Ukio Investicine Grupe (UBIG) provided funding by way of short-term debt facilities with the plan to convert it to shares at a later stage.

"The club does, however, remain focussed on increasing efficiency by lowering costs and improving results on the field and financial results off field.

"Expenditure on the playing squad is unlikely to rise any further and the board is working towards a more appropriate 'salary to turnover' ratio with the full effect of the departure of some of the club's top-earning players not being felt until the next set of financial results."