The financial problems that have bedevilled Scottish Rugby for the past decade could soon be eased as the union starts to make a profit and sell land to cut the money it owes to its bank. In the short term, it has succeeded in stemming its losses for only the third time in 12 years and expects to start making money next season.

The figures were revealed at last night’s annual general meeting. The detailed accounts will not be ready until August, but Gordon McKie, the chief executive, revealed that the accounts, which have yet to be finalised and audited, show that union broke even in the financial year that has just finished and that average bank debt over the season was down by £1.6 million on the previous season to stand at £18.6 million. It peaked at £22 million compared to £23 million last year.

The key, McKie said, was getting money in earlier than had been the case in the past, and the benefit of lower interest payments had helped to stem the annual losses, which peaked at £8.4 million three years ago. However, he revealed, the cost of closing the professional team in the Borders remains an issue, and will be reflected in the accounts when they are published. The union potentially has to pay for ground rent, maintenance and improvements at the team’s former headquarters at Netherdale for another 15 years thanks to a deal signed by the former board in 2002.

McKie admitted it had been a difficult year for the union with the decision to close the Borders. “I feel great progress has been made over the past year, particularly in managing our debt,” he said, adding that the union was hoping to show a profit next year. He also held out hope of a significant cut in the overall financial problems in three or four years when a property deal for land on the north side of Murrayfield is likely to come on stream.

In a wide-ranging state of the union address, he also revealed that the union is close to agreeing a deal with a replacement main sponsor for the national team to replace Famous Grouse, which has backed the side for the past 16 years, and expects to bring in even more money if the proposed Edin-burgh airport tramline, which is due to run alongside Murrayfield, gets the go-ahead.

The generally upbeat message launched the meeting held at Murrayfield last night, with the club delegates facing a lengthy list of debates on subjects. On the contentious issues that divide the clubs, the delegates approved a move to scrap a limit on the number of non European players in any club side, and also approved a move to regionalise the national cup competition.