Newcastle United will focus on "quality" signings this summer rather than "quantity" on the back of positive financial results, says managing director Lee Charnley.
The Magpies made a £18.6m profit after tax in 2017-18 following their first season back in the Premier League.
Manager Rafael Benitez guided the club to a 10th place finish last term, and has all but secured safety this season.
"We all want to see the club improve," Charnley said.
"[We want to] be competitive at every level, and in every competition. We are convinced that the best route to achieving this is to do so sustainably, spending on young development players and adding high quality to the first team squad each season.
"Players that can really make a difference and improve the team - without risking the financial health and stability of the club."
The figures confirm that Benitez was given a budget of £70m across the past two campaigns to spend on players, with £52m of player sales added to that sum.
This season's activity saw permanent deals for players such as Miguel Almiron, Fabian Schar, Yoshinori Muto and Martin Dubravka. Salomon Rondon was also brought to Tyneside on loan.
Accounts show Newcastle have spent £109.9m on signings - more than 90% of the budget.
No comment on Benitez future
In spite of the financial health of the club, Newcastle are yet to agree a new contract with Benitez.
The Spaniard, 58, is coming to the end of his existing three-year deal, and earlier this month described 'the ball being in Newcastle's court' with regards to negotiations.
"We don't want to comment on speculation about the manager's future," Charnley said.
"We would prefer for conversations between Rafa and the club to remain between us. We will communicate with supporters as soon as there is a formal update."
Financial stability on returning to the top flight
The increase in television revenues on returning to the Premier League were one factor in Newcastle's improved finances, having posted a £41.3m loss in their sole season in the Championship in 2016-17.
The accounts also showed:
- Newcastle were able to repay £33m of short-term loans to owner Mike Ashley - the existing £111m is considered a 'long-term loan' which is repayable on sale of the club
- There was a rise in media income of £79m to £119.6m
- The turnover increased by 108% - nearly £93m - to £178.5m
- Commercial income rose to £26.7m, an addition of £14.6m in extra revenue
- Operating expenses fell by £21.2m to £119.6m
- Wages to turnover ratio was is now 52.4%.
"A tenth-placed finish in our first season back in the Premier League was a fantastic achievement," Charnley added. "I would like to thank everyone connected to the club - staff, players and fans - for their collective efforts.
"The significant increase in revenue, together with prudent financial management, resulted in the club showing a profit and that is reassuring, given the substantial loss in the previous year.
"There is much more work to be done but these positive financial results give the club a strong platform on which to build."
Matthew Raisbeck, Newcastle United commentator at BBC Newcastle
If their first season back in the Premier League was about stabilising on and off the pitch, The Magpies feel they are now in a better position to invest in their squad.
But, they will do so without abandoning their prudent principles. And after repaying owner Mike Ashley £33m of his short-term loans, it is still very much about the club living within its means.
Managing director Lee Charnley has expressed a desire for "quality over quantity" in the transfer market and the club would prefer to sign players who are in their early to mid-20s.
That could have implications for 29-year-old striker Salomon Rondon, who has scored ten goals during his season-long loan from West Brom, and who would like to stay at St James' Park.
But the first thing that needs to be sorted out is the future of manager Rafa Benitez. The Spaniard, who is hugely popular on Tyneside, is out of contract this summer. He remains in discussions with the club about signing a new deal.