Hibernian celebrated another success yesterday when they announced a record profit of £7.4 million and underlined the financial health at the Edinburgh club by using much of the revenue to radically reduce their debt. The injection of capital at Easter Road came from the sale of Scott Brown and Kevin Thomson, but also a successful campaign last season that culminated in winning the CIS Insurance Cup.

The transfers of Brown and Thomson, to Celtic and Rangers for £4.5 million and £2 million respectively, impacted greatly on the balance sheet for the last financial year. That was augmented by the money generated by the CIS Cup run, reaching the semi-finals of the Tennent’s Scottish Cup, increased attendances at Easter Road and a rise in season-ticket sales, all of which contributed to Hibernian’s turnover soaring by 13 per cent to £9.8 million, another record.

Even without the transfer revenue – the accounts do not include the £2 million sale of Steven Whittaker to Rangers in August – Hibernian still made an operating profit of £1.4 million which pleased Rod Petrie, the chairman, and vindicated his stance of keeping salaries in check at the club. Some of the profit went towards Hibernian’s new East Mains training complex and, more crucially, brought the debt down from £6.8 million to just £2.8 million.

“The board needs to take a long-term view and ensure that the club lives within its means,” Petrie said yesterday. “It is important that capital windfalls, such as transfer fees received for players, can be used to secure the long-term future of the club rather than subsidise unsustainable levels of expenditure.”

It is the third year in succession that Hibernian have posted a profit. This picture is in stark contrast to the start of the decade when debts soared beyond £14 million and the club had to sell of land at the stadium to a housing developer. “To trade at a bottom-line profit, excluding transfers, for the third straight year is a major achievement and one of the most pleasing aspects of the accounts,” Petrie said. “It means that the club’s costs are in line with revenues which is a sustainable and stable base for the club’s continued prosperity and growth.” John Collins has spent modestly on new recruits for this season. It was the Hibernian manager’s insistence on keeping hold of Thomson and Brown until the market price rose, after refusing an initial offer of £3.2 million for the pair, instead of the £6.5 million ultimately prised from the Old Firm for the highly-rated midfield players.

The extra cash has been directed towards the East Mains project, near Tranent, of a youth academy and training complex. The financial statements show that £2.1 million had been spent on East Mains at financial year-end, July 31, with a further £2.1 million committed to complete the facility.

Despite a 10 per cent increase in the amount spent on wages, the important wages-to-turnover ratio actually fell from 42 per cent to 41 per cent thanks to the 13 per cent increase in turnover.

“The player budget has been increased four times in the last two years,” Petrie said. “However, because the wages-to-turnover ratio was little changed, these increased levels have been sustained and carried into the current year. The club’s costs are in line with revenues, which is a sustainable and stable base for continued prosperity and growth.”

The base element of all club finances, season ticket sales, illustrated that Hibernian are attracting fans to Easter Road. The club sold a record number of 10,500 season books for 2006-07, an increase of 11 per cent.

The healthy financial picture at Easter Road is in stark contrast to that across Edinburgh at Heart of Midlothian. Turnover and ticket sales also hit record levels at Tynecastle, underliniing the value of the supporters, but debt soared to almost £29 million with the spiralling wage costs.