The club raked in £4.82m raked in by player sales, due largely to the sale of star striker David Nugent to Premier League side Portsmouth, over the first six months of the financial year.

That saw operating profits rise to £1.82m compared to the £1.34m loss it reported last year.

However, operating costs leapt from £5.58m in 2006 to £6.27m, due largely to hikes in player costs and a pay-off for sacked manager Paul Simpson.

Chairman Derek Shaw described the first half of the financial year as "very challenging" and said the club remained confident of retaining its place in the Championship this season.

He said: "Ironically, despite the challenging situation on the pitch, we have recorded our best financial results in recent years, mainly due to the profit on sale of players' registrations, which principally related to the transfer of David Nugent to Portsmouth.

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"Turnover was also up 7% in the six months to December 2007 when compared to the same period last year, due to an increase in amounts received from the Football League after negotiations to secure additional funding for its member clubs from the Premier League.

"Despite the generation of profit in respect of player sales, the business needs a significant supply of external finance to meet its ongoing obligations and we are grateful for the further support of our major shareholders."

The figures relate to business between June 2007 and December 2007.
The chairman added that the cash raked in by this season's FA Cup run, which saw it reach the sixth round, would not be accounted for until the second half of the financial year.

He said that the £4.5m brought in by player sales followed the deductions of amounts due to third parties, including the striker's former club, Bury.

Of Nugent, he said: "I believe the time was right for David to further his football career in the Premiership and for Preston North End to maximise its financial return.

"As a club, we have to continue to generate profits on player sales to offset the trading losses we generate on our operations."

Mr Shaw said the sacking of Simpson in November was a decision "never easy, nor taken lightly", but said he was pleased with the progress the club had made under current boss Alan Irvine.

He cited the signing of a two-year extension with local support services firm, Enterprise plc, as the club's main sponsor and the progress in construction of the 3,700 seat Invicibles' Pavilion stand, complete with plush executive boxes, would bring financial benefits in future announcements.