Bristol Rovers made a profit of almost £450,000 last season, the club's annual report reveals.

But the Pirates are heading for a loss this season and directors have already pumped in more than £1.2 million in loans and new share capital since last summer.

In his first report as club chairman, Nick Higgs acknowledges that last season's surplus was down to the club's historic FA Cup run, which saw them reach the quarter-finals for the first time in 50 years.

"Unfortunately the lack of a cup run this season will mean that the club will declare a loss for this financial year. These results will have been financed by directors in the form of both loans and share purchases," warns Higgs.

Rovers made more than £1 million from last season's FA Cup run, which helped push football receipts to more than £3.6 million from £2.9 million the previous year.

Yet despite the profit the club reported for the year ending June 2008, liabilities exceeded assets by more than £2.7 million and the group's overall debts rose to £3.25 million from £2.75 million.

Turnover was up from £4.9 million to £5.7 million but operating expenses rose by more than £1 million to over £5 million. Wages and salaries rose from £2.2 million to £2.9 million.

Higgs stresses that the club still hopes to start work on a major redevelopment of the Memorial Stadium this year. A £36 million scheme to transform the ground into an 18,500 capacity all-seater venue has been put on hold because of problems securing the finance.

"The withdrawal of Opal (student accommodation providers) at a late stage of our planning was not helpful to the development and the credit crunch has made the financing more difficult, but we have used the intervening period to refine the plans," he says.

"This has resulted in a scheme that allows the club to continue to play at the ground, which is a major bonus to the club and its fans.

"We are cautiously optimistic that our work to resolve the financing will be completed in the near future and we still hope to start work in 2009."

Looking back on last season, Higgs says the club's trading surplus "was achieved on the back of a very successful run in the FA Cup. I am sure we all appreciated the games against Fulham, Southampton and West Bromwich Albion, although that final result did not reflect fairly on our performance on the pitch.

"The remaining league games were disappointing after such a magnificent run."

The annual report – which will presented to shareholders at the club's annual meeting on Monday, April 27 – reveals Higgs as the biggest shareholder at the club in June last year with a holding of 952,632. Geoff Dunford had 855,473, Barry Bradshaw 790,487, Rodney King 260,000, Ron Craig 242,080 and Edward Ware 142,857.