Hibernian have announced that they made an operating loss of £840,000 for the financial year to July 2015, but still managed to reduce their over debt by £2.6 million.

Chairman Rod Petrie released details of the club's report yesterday ahead of their AGM on December 15.

In a season that saw the team compete in the Scottish Championship following their relegation from the Premiership, Hibs' cash balance also rose by over £1m to £2.7m.

Those figures were enhanced by the share issue launched in January that gives supporters the chance to become the club's majority shareholders by raising £2.5m through Hibernian Supporters Limited.

By last July, £500,000 had been raised, equating to a shareholding of nearly 20 per cent.

When announcing the share issue, the Hibs also revealed details of a major restructuring of their debt, which included securing an interest-free £5m loan from from current owner Sir Tom Farmer.

Staffs costs were down from £3.7 million to £3.4 million and the club said that their net debt had fallen from £5 million in 2014 to £2.4 million.

The Easter Road outfit insist that the size of their operating loss was because the 'board chose to maintain the club as a 'Premiership club' despite being relegated'.

Chairman Petrie said: "The fact that we lost a substantial sum of money last year in the Championship will not be a surprise to anyone with an understanding of club finances.

"The big reduction in trading income occurred when turnover fell from £8m in 2012-13 to £5.8m in 2013-14 in the Premiership.

"In fact, turnover in 2014-15 was a credible £5.6m in comparison to that, including a £500,000 parachute payment.

"The loss for the year was actually an improvement from the much larger loss incurred in the previous year (£1.2 million)."

Petrie also warned of the importance of the club achieving promotion back to the top-flight after the team were beaten by Rangers at the play-off semi-final stage at the end of last term.

He added: "Without the exceptional level of income that comes from reaching a cup final or through significant transfer fee income, it is not possible for Hibernian to break even as a Premiership club outside the Premiership."