Interim Accounts to December 2006: Comment

Published on Wednesday 31st January, 2007 by Celtic Trust

Celtic plc Interim Results for 6 Months to 31 December 2006

 

Financial Highlights

· Turnover increased by 41.6% to £46.8M · Operating Expenses increased by 8.5% to £32.04M · Profit from Operations £14.76M, compared to £3.5M at December 2005 · Gain on Sale of Intangible Assets £7.12M (2005 nil) · Profit Before Tax £17.94M, compared to a loss of £0.96M in 2005 · Bank Debt £10.94M, compared to £8.57M in 2005 · Investment in Players £6.32M-£6.55M in 2005

 

Quick Summary

These excellent interim results again highlight the crucial importance of really competing in European competitions, a situation strengthened by the fact that Celtic was the only Scottish club competing in the Group stages of The Champions League. As Brian Quinn points out, meaningful competition in Europe is more than ever important now that The Premiership has secured such rich pickings from their new TV contracts. According to Press reports, even the bottom clubs in the Premiership will pick up around £30M next season, compared to say £2-3M for the SPL’s top teams! Thanks primarily to competing in the Group stages of The Champions League, turnover has increased by 41.6% to £46.8M. Within this total Group figure, there was a 42% increase in Match Ticket sales, to £21.6M and Multi Media rose by a staggering 144%, to £14.1M. Although Merchandising sales were down 10% this is due to the fact that there was one less new strip launches during the period. Operating expenses rose by 8.5% largely because of higher performance bonuses within the football operation. The recalibration of wages in this sector, with lower basic pay and higher performance payments does make sense. It is encouraging, also, to note that the ratio of labour costs (total and football) to turnover was 40.7% and 31.6% respectively, compared with 51.9% and 40.1% a year ago. Amortisation charges reduced by some 16%, which helps the Profit & Loss Account, if not the cash-flow. It’s also encouraging to see a good profit on sales of players-£7.1M-and, at the same time, enjoy Celtic’s current stranglehold on the SPL Championship and appearance in the last 16 of The Champions League. Despite the dramatic improvement in profitability (to £17.94M pre-tax), the Bank debt has increased from £8.57M in 2005 to £10.94M. The interim accounts do not give a lot of detailed breakdown but presumably profits have financed the Lennoxtown training facilities, so a good investment for the future. Further significant investment in the non-playing side of the football operations comes from the recruitment of John Park and a strengthening of the Sports Science and Fitness staff. All in all, a good time to be a Celtic fan and let’s look forward to continued success, although the domestic competition may be tougher next year!

 
 
 

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