Loss attributed to retaining players and strengthening squad
Celtic Football Club has reported a £7.3 million pre-tax loss for the year to June 30 2012. The Glasgow club posted a profit of £0.1 million the previous year.
Turnover dropped slightly on the previous year, from £52.5 million to £51.3 million, and operating expenses rose by £1.93 million to £54.4 million.
The rise in operating expenses came from a rise in “labour, cost of sales, travel and accommodation costs together with additional costs from the dispute with FC Sion and various SFA/SPL matters,” the club said.
Celtic said turnover was down largely as a result of a reduction in pre-season and match ticket revenues.
Merchandising revenues were also down nearly seven per cent on the previous year to £13.3 million which the club said was down to two kit launches in the year compared to three the previous year.
Celtic said over the course of last season alone, counterfeit goods to the value of £7.5 million were removed from the marketplace and a number of websites offering unofficial goods and services were closed down.
The club said like-for-like merchandising sales were up five per cent on the previous year.
However, corporate hospitality revenues “fell short of budget in a challenging economic environment”.
The club sold 42,500 season tickets last season, generating £13.8 million in revenues with a further 220,000 home match ticket sales generating income of more than £4.5 million, including Europa League play off and group stage matches.
Losses from trading before player sales and exceptional items were £3.09 million against a profit of £56,000 the previous year.
However, exceptional costs for the year were £0.54 million against £3.99 million a year earlier.
Celtic said the financial benefits of competing in the group stages of the Champions League are not reflected in the annual results.
Chairman Ian Bankier said the financial results reflect the board's strategy to retain players and strengthen the squad, with the club reporting £5.24 million in investment in the first team squad for the year.
Player sales for the year netted £3.54 million compared with sales of £13.23 million the previous year and total labour costs increased by £1.2 million to £33.8 million, largely from increased wage costs in football and youth development.
Celtic said labour costs accounted for 65.9 per cent of turnover last season, up from 62.1 per cent the previous season.
Bankier added the 200/12 football season had “brought unprecedented turmoil and pressure upon Scottish football, making an already difficult economic environment more difficult still”.
Celtic also warned the 2012/13 season may result in “reduced television and commercial revenues”.
The club's bank debt at the year end was £2.77 million against £0.53 million the previous year.
Celtic chief executive Peter Lawwell said: “Although, on its face, the financial outcome for the year ended June 2012 appears disappointing, this was the result of a deliberate policy of retaining key players in order to achieve significant strategic objectives that, if fulfilled, would have a substantial beneficial impact later in the year.
“The success gained on the pitch in meeting those objectives now provides us with greater flexibility than would otherwise have been the case.”