Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.
Celtic also highlight the challenges posed by the fact that “domestic media rights have not managed to keep up with the media rights environment…competitive markets and the inflation of the football industry in general over recent years”. This is by no means a new phenomenon – it has been a major problem for the big clubs in Scotland for decades and has been talked about a lot going back to the 1990s – but this does not make it any less of a challenge.
Despite an increase in revenue to £124.58m in the year to 30 June, from £119.851m in the previous 12 months, Celtic’s pre-tax profit fell sharply to £17.825m £40.697m.
Nevertheless, this represents a very solid and most resilient performance amidst the various challenges and pressures highlighted by Celtic, which highlighted the fruits of its financial strategy.
The biggest single factor in the drop in profits is the absence of £13.5m of non-recurring “other income” received in the year to 30 June, 2023.
Celtic’s annual report for the 12 months to June 2023 shows that this “other income” came from “a combination of compensation received following departure [former manager] Ange Postecoglou and the recovery of business interruption insurance in relation to Covid-19, with the two items mentioned being one-off and typically non-recurring”.
There was also a significantly lower profit from player transfers in the year to June 2024 than in the previous 12 months.
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The latest accounts show that the “profit on disposal of intangible assets”, the line in the accounts detailing the overall financial impact of such transfers, was £6.637m in the year to 30 June, 2024. In the In the previous 12 months, the profit on disposal of tangible assets was £14.441m.
This represented a reduction of £7.804m in such profits between the two financial years, feeding directly to the bottom line.
And Celtic’s operating costs jumped to £105.394m in the 12 months to 30 June, from £95.432m in the previous financial year. The £9.962m increase in this cost line is the second largest single factor in the decline in Celtic’s pre-tax profit in the year to 30 June, driven only by the absence of “other income” as a driver and which have a greater impact. than the drop in profits from player transfers.
Detailing the increase in expenses, chairman Peter Lawwell says in his statement on the accounts: “We also invested higher amounts in the men’s team compared to the previous year in the form of salaries. In addition, we have seen an increase in overhead costs which is driven by the high inflation environment in which the business has operated over the past year.”
It is important to remember when looking at the drop in Celtic’s profits for the year to June 30, as outlined by the club in a statement to the London Stock Exchange on August 6, that the club’s earnings “were significantly higher than previous expectations ”, partly on the back of winning the domestic double.
The club said on August 6: “Celtic have enjoyed a strong performance on the pitch in the 2023/24 football season, having won the domestic double. In addition, he has enjoyed a successful year generating returns from trading players. As a result of such gains and a strong end to the season from a footballing perspective, Celtic now expects earnings for the year ending 30 June 2024 to be significantly higher than previous expectations, formed before the end of the season and before that. disposals of players.”
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The increase in revenue at Celtic reflects “several factors”, Mr Lawwell notes in his statement on the accounts, “including higher participation fees in the UEFA Champions League in the 2023/24 season, compared to the previous season , alongside a stronger retail performance in the year”.
Celtic progressed to the group stages of the UEFA Champions League in the 2023/24 season, earning four points.
The increase in the club’s overall revenue was achieved despite the number of home games played at Celtic Park in the year to 30 June being 24, down from 26 in the previous 12 months.
The club booked £269,000, under “extraordinary operating income”, in the form of “compensation for players’ wages”, with this item identified as “recovery of labor costs as a result of players being injured while on international duty”. .
This income is relatively small, however, in the context of the general movement in profits.
Celtic highlights how much it has spent on players over the three years up to June 30, and up to the end of this summer’s transfer window.
Mr Lawwell states that “as a result of this period of continued investment”, “Celtic’s current squad carries the highest value…in the club’s history, by a considerable margin”.
It states that in addition to the investment in player registrations of £13m in the previous financial year ending June 30, 2023, the club “made a significant investment by committing an additional £16.6m in the year in question “.
Mr Lawwell notes that this has taken Celtic’s total expenditure to £68m over the three financial years to June 30, 2024.
He added: “Since the end of the year, and until the transfer window closes on 30 August 2024, we have invested a further £31.2m in player registrations, including transaction costs.”
And Mr Lawwell observes in this context that, over the summer transfer window, Celtic “broke the club’s previous transfer record twice”.
The chairman highlights his belief in the accounts, “despite the domestic success we have enjoyed and the establishment of Celtic as a regular participant in European football, it is important that we do not deviate from our strategy, which has be successful over many years, based on maintaining a self-sustaining financial model”.
He observes that this means targeting Champions League qualification every year along with introducing young players to the team, either from the academy or through recruitment, “with the intention of developing them and helping them to develop their careers”.
However, in this context, he highlights the challenges arising from the media rights environment in Scotland, stating: “This is not without its challenges as domestic media rights have not been able keeping pace with the media rights environment of our competitive markets and the football industry. inflation in general over recent years. This means securing the best players is more challenging and we must work harder than ever to bring success. Our strategy has been vital to domestic success in recent years, and it is one that your board intends to maintain.”
Noting a flurry of activity in the 2024 summer transfer window, Mr Lawwell said: “We have secured the permanent registrations of Kasper Schmeichel, Viljami Sinisalo, Paulo Bernardo, Adam Idah, Arne Engels, Auston Trusty and Luke McCowan and the temporary registration of Alex. Glen. We permanently ported out the registrations of Hyeon-gyu Oh, Sead Haksabanovic, Matt O’Riley, Michael Johnston, Yuki Kobayashi, Ben Siegrist and Tomoki Iwata. We also temporarily transferred the registrations of Gustaf Lagerbielke and Hyeokkyu Kwon.”
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Chief executive Michael Nicholson, for his part, states in the accounts: “Player trading is a key aspect of our strategy for performance and financial sustainability.”
He declares that the year that ended on June 30 was “successful on and off the field of play”.
Celtic’s revenue from “football and stadium operations” fell to £49.971m in the year to June 30, from £51.483m in the previous 12 months.
Its revenue from trading rose to £30.089m in the 12 months to June, from £29.072m in the previous year.
And its revenue from multimedia activities and “other commercial activities” rose from £39.296m to £44.52m.
Celtic had cash of £77.2m at the end of its financial year on June 30, up from £72.3m 12 months earlier.
(Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.)
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