BURNLEY chairman Barry Kilby today scotched rumours of a massive cash injection after announcing a major £10million shares issue.

And as the Clarets continue to recover from the brink of financial meltdown, Kilby revealed the club is still losing money - and would need average home gates of around 16,000 to break even.

The news comes a week ahead of next Monday's Annual General Meeting, when existing shareholders will vote on a proposal to double the shares available in the club.

A further £50,000 shares, currently trading at £200, could generate up to £10m and pave the way for financial stability just two years after a £600,000 'black hole' almost resulted in the club being placed in administration.

However Kilby insists the doubling of shares is being done through over-subscription and not as a result of anyone waiting in the wings to make a huge investment.

"I wouldn't put too much emphasis on the £10m because there is no mystery investor, unless somebody drags one into my office pretty quickly," said the Clarets chairman and major shareholder.

"Basically, the share issue we had when I came into the club took up 40,000 shares and since then we have been selling and selling and now we've basically sold the initial 50,000.

"We are fully subscribed, with only a few hundred left, so what we are putting before the AGM is a proposal for another set for anyone who wants to come along and invest."

Should the proposal get the green light, any new shares bought would dilute the value of existing shares.

But Kilby insisted: "The person with most to lose if that happens is myself. I have control (of the club), but at the end of the day it is all about getting funds back into the club because we would need gates of 16,000 to break even. You don't have to be a genius to work that out."

Burnley's turnover increased by almost £800,000 in the 12-month period ending May of this year, largely thanks to lucrative runs in both cup competitions and an increase in money received from Sky TV.

That helped the Clarets to a handsome pre-tax profit of £1.86million - a tenfold increase on the previous year.

However, with gate receipts dropping by around £100,000 on the previous season, most of that profit was generated via the seven-figure sales of Robbie Blake and Richard Chaplow, along with a necessary reduction in various costs and overheads.

Kilby added: "We are in a far healthier state than the similar time last year. Turning in a £1.8m, pre-tax profit sounds good and that is on pure trading, but there is always a proviso in Burnley.

"We are always punching above our weight and basically, the money we have made in the last year is incurring losses that are on our current wage bill, which is around £3.5million and has now slipped to around 18th or 19th in the Championship.

"It doesn't get any easier and the smaller clubs are now getting squeezed out. There are clubs taking £1/4 million more than us every home game so it is a real achievement to compete and be where we are."