CELTIC’S interim results were far better than had been anticipated amid the ongoing Covid-19 crisis despite the Parkhead club yesterday announcing they have made a loss of almost £6m up until December, a football finance expert last night insisted.

However, the second half of the season promises to be “grim” for the quadruple treble winners, who have failed to qualify for the knockout rounds of the Europa League, due to the absence of any income from UEFA.

And only the sale of Dutch right back Jeremie Frimpong to German giants Bayern Leverkusen for £11.5m during the January transfer window will prevent them from posting “ugly” figures at the end of the current financial year.

The Herald:

Kieran Maguire, a lecturer in football finance at the University of Liverpool and the host of the popular Price of Football podcast, admitted he had expected Celtic’s interim report to make for far more alarming reading for supporters.

“I honestly feel they could have been a lot, lot worse,” he said. “Look at what’s happening south of the border. Clubs have been losing huge sums of money, far bigger than those that Celtic have reported.”

Still, the differences between the results that Celtic released 12 months ago and those published yesterday are considerable; they made a loss from trading of £300,000 (compared to a profit of £7.1m in 2019), a profit from player transfers of just £1m (compared to a profit of £23m), a loss before taxation of £5.9 (compared to a profit of £24.4m) and have £19.7m net cash in the bank (compared to £32.9m).

Ian Bankier, the Celtic chairman, partially attributed the disparities to the significant sums which were spent on strengthening Neil Lennon’s squad last summer, coupled with the fact that no prized assets were sold.    

The Herald:

Albian Ajeti (£4.5m from West Ham), Vasilis Barkas (£4.5m from AEK) and David Turnbull (£3.25m from Motherwell) were all signed to boost their bid to complete 10-In-A-Row. Elsewhere, Shane Duffy, Mohamed Elyounoussi and Diego Laxalt all joined on loan from Brighton, Southampton and AC Milan respectively.

Yet, the absence of fans from stadium due to the coronavirus pandemic has, as Bankier outlined in his report to shareholders, proved detrimental too.

“The two key factors that adversely affected our financial results for the period under review were, firstly, reduced gains from player trading as we sought to keep intact our squad this season,” he wrote. “And, secondly, the unforeseen and prolonged value destructive impact of Covid-19.

“Our strategy for season 2020/21 was to invest in the team and to retain our best players, with the objective of delivering the league championship. As a result, gains from player trading were minimal.

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“The effects of Covid-19 have persisted longer than many could have envisaged and, as a result, our crucial match day and other income streams derived from our stadium have been reduced to negligible proportions. These two factors largely explain the reduction in our profit before tax. No football club is immune from the effects of Covid-19.”

The prospect of supporters continuing to be prevented from attending matches and not being involved in the knockout rounds of the Europa League will mean the second half of the financial year is difficult for Celtic too.  

Bankier added: “Looking forward, the football and financial environment is still volatile and very uncertain because of the ongoing effects of Covid-19.

“It is unclear when the 2020/21 Scottish Cup will recommence following its suspension. Neither are we able to say at this stage when we will be able to welcome our supporters back to Celtic Park.

“All of this will continue to affect our financial results meaning we are unable to offer any outlook guidance on revenue or earnings. Trading seasonality means that financial performance in the second half of the financial year will be lower than the first half.”

The Herald:

Maguire said: “The second half of the year is going to be pretty grim because although they made £40m in the first six months that includes all of the UEFA money. Dropping out of Europe, and therefore no UEFA money coming in for the second half of the season, makes things worse.

“If we take a look at their 2019 accounts, three quarters of Celtic’s income came from the first six months. Put that into the equation, I would expect those day-to-day losses will be up.

“I expect the sale of Frimpong will help to counterbalance those, but if it hadn’t been for that sale they would be pretty ugly. There will be a sell-on for Frimpong’s previous club. So how much net will Manchester City be taking from that? You’re never sure. But Frimpong was a decent bit of business.”

The Herald:

He added: “Celtic certainly backed the manager. They spent £12.5m on new players and didn’t sell. The revenue stayed up and they managed to cut the wage bill a wee bit. I suspect that’s linked to fewer win bonuses and things of that nature.

“Clearly, 10-In-A-Row has been everybody’s focus and now they will be looking to reset a bit. Scottish football has a great reliance on match day ticket sales than practically any other league in Europe. Because of Celtic and Rangers both having magnificent supports at home, that generates a lot of money. But the TV deals are pretty modest. So that is the worst of both worlds.

“What Celtic have got in their favour if they do have a very strong balance sheet and they have plenty of cash in the bank. When you are having to batten down the hatches then cash is all important. They still have plenty at the end of December.”