Chairman’s Statement: In the first six months of this financial year we have made good progress in implementing the strategy outlined at the AGM. First, on the football field, the team sits on top of the Scottish Premier League, remains in contention in both domestic cup competitions and continues to perform consistently at a high standard.
Secondly, our efforts to bring about changes in the structure of European club football have been accepted in principle by the authorities and we believe change is on the way. Celtic will continue to be actively involved in all discussions to bring about the necessary changes. Finally, our plans to develop our multimedia activities and youth development programme are moving forward.
Under Martin O’Neill’s direction, the team has had the most successful start to a league campaign in the history of the SPL and has a good opportunity to go on and win the Championship. Disappointingly, a narrow defeat against Bordeaux meant that we did not sustain our challenge in Europe.
Significant investment has been made in the team this year with net expenditure of £15.5m. Martin continues to work closely with the Board in assembling a playing squad that we believe will allow Celtic to compete in Europe while maintaining the Club’s financial stability.
From a business perspective performance has been mixed. Revenue growth is disappointing, given that more games have been played in comparison to the same period last year. The increase in costs reflects the decision to embark on a player investment strategy which we believe will lead to Celtic becoming a force in Europe once more. Nevertheless, a profit has been recorded in the period and the Company believes that continued football success should compensate to some extent for the customary reduction in revenue growth in the second half of the year.
Turnover has increased in the period by just over 3%. Merchandising has shown significant growth with strong sales of our popular away kit helping record an increase of over 13% in the period. However, this has been more than offset by the failure to secure TV money for the UEFA Cup at similar levels to last year. As with all other clubs, wage inflation remains the key concern and Celtic will continue to control this area closely. With total costs increasing by almost £2.77m, operating profits have decreased by £2.08m to £2.23m. Retained profit for the period is £0.60m, a reduction of £0.15m from last year.
Last year season ticket prices were frozen. As indicated at the Annual General Meeting, it will be necessary to increase them for next season. This is a sensitive subject for all concerned. However, I believe that our supporters recognise that our competitors are charging higher ticket prices and generating higher revenues from smaller stadiums, allowing greater investment in player squads. We hope that by adopting a policy that balances the need to finance our football operations with the needs of our supporters, we can look forward to a period in which trophies are regularly won and European nights are being enjoyed well into March, April and May each year.
Discussions continue to secure suitable land to build the training and playing facilities for our youth development programme and we have identified the preferred site needed for this project. In the meantime, the youth teams are using the excellent training and playing facilities at Livingston and Glasgow Green, under the guidance of our newly appointed Youth Development Manager.
The process of appointing a new Chief Executive is nearing its conclusion and there will be an announcement on this in early course. The benefits of a careful approach in appointing our Football Manager are plain to see. The same attention is being applied to the filling of the Chief Executive’s role as this person will be responsible for driving Celtic towards its ultimate goals.
HIGHLIGHTS OF THE RESULTS
1. Turnover increased in the period by 3% to £22.83m (1999: £22.14m).
2. Merchandising revenues show significant increase of 13% to £4.07m.
3. £15.5m was invested in strengthening the first team squad with a number of signings and new extended contracts awarded to key players.
4. Profit from operations before exceptional operating expenses of £2.23m (1999: £4.31m).
5. The team is currently top of the Scottish Premier League and in strong contention in both domestic cup competitions.
6. Significant progress made in discussions regarding changes in the structure of European club football.
Commenting on the results Chairman, Brian Quinn, said:
‘Your board is pleased to announce continued progress towards achieving our main objectives: the team sits at the top of the SPL, our merchandising sales have increased during the period and our plans to develop our multimedia activities and youth development programme are moving forward.
‘Martin O’Neill has successfully built up a strong squad and a successful team which is well positioned to win the championship and has the opportunity to qualify for a place in next season’s Champions League. Your Board will continue to support him in the building of the squad.
‘Going forward, we are close to announcing the appointment of a new Chief Executive and we are in on-going discussions with potential media partners on how to best exploit our media rights at a price that recognises the full value of the Celtic Brand.’
For further information contact:
Eric Riley, Celtic plc Tel: 0141 551 4276
Kate Cunningham, Celtic plc Tel: 0141 551 4276
Lindsey Harrison, Gavin Anderson & Co
Tel: 020 7496 1488