Celtic suffer crash in revenue and profits as importance of Kieran Tierney sale laid bare
Celtic have announced a drop in revenue after revealing their financial results for the year ending June 2020.
The club only made a £100,000 profit before taxation, with their group takings decreasing by 15% to £70.2million, down £13.2m in total.
In a statement on the club’s website, Celtic pointed to the Covid-19 pandemic that hit the world in March 2020 and brought “restrictions on social movement and trade”.
The current Premiership champions had to rely on the sale of Kieran Tierney to Arsenal as a major source of income, offsetting in part the purchases of Christopher Jullien, Ismaila Soro, Patryk Klimala, Greg Taylor and Boli Bolingoli.
Celtic also pointed to the loss of income from four homes games that were cancelled when Scottish football’s 2019/20 season was curtailed.
The club reiterated its desire to have fans back at Celtic Park as soon as it safe to do so, while stating that the “overriding objective” is to clinch a tenth successive league crown.
Chairman Ian Bankier said: “The overwhelming event in the year under review was the emergence of Covid-19 and the attendant restrictions on social movement and trade. This has had an adverse impact on our operations and our balance sheet. At the time of writing we, like many football clubs and indeed many businesses, are still grappling with the challenges the pandemic presents including the near term uncertainty. However, the Board continues to monitor the situation closely, taking proactive measures to ensure the Club and our colleagues remain safe and is in the best position to allow football to continue.
“The SFA and the SPFL suspended football at all levels on 13th March 2020. By this time, we had retained the Betfred Cup for the fourth successive season and had reached the semi-final of the Scottish Cup. In addition, we enjoyed a 13-point lead in the Scottish Premiership.
“As a club we were involved in discussions with the SFA and SPFL concerning the plans for Scottish Football. Like many of our peers, our strongest desire was to finish season 2019/20. As it became increasingly obvious that a compromise would have to be made in order to protect the seasonal calendar for 2020/21 and remove the financial burden on many Scottish Clubs of an extensive and uncertain delay, we accepted, reluctantly, that the current season’s football would have to be curtailed. This view was widely shared across Scottish Football and we supported an SPFL resolution which afforded the SPFL Board the power to call an end to the season. The resolution also gave the SPFL Board the power to award the league title based on an average points basis. On 18th May 2020 the SPFL formally ended the season and Celtic were declared Champions for the ninth consecutive season. We warmly congratulate Neil and the team for this record equalling achievement.
“Unsurprisingly, Covid-19 has had a material detrimental effect on the financial results and the year ended 30 June 2020 saw revenue fall to £70.2m (2019: £83.4m) and profit before tax fall to £0.1m (2019: £11.3m). As discussed in more detail in the Strategic Report, this was largely attributable to the value destructive impact of the pandemic across many aspects of our business. Nevertheless, these results are satisfactory in the circumstances at hand. Our year end cash net of bank borrowings was £18.2m (2019: £28.6m). Post year end we also took the opportunity to increase our existing revolving credit facility from £2m to £13m to provide a further buffer should it ever be required.
“Following the suspension of football, the Club’s executive worked successfully on developing protocols and engaging with both the football authorities and Government authorities to have our players return to training and to then commence season 2020/21 on time. Additionally, they focused on protecting our key revenue streams and retaining our people infrastructure. I am pleased to report that all of our commercial sponsorship arrangements are intact and season 2020/21 saw us welcome adidas as our new kit supplier. The response to the launch of the adidas products in August was outstanding and exceeded our expectations.
“The governmental restrictions imposed to protect public health continue to have a negative financial impact on the football industry. Our hard work and measured approach to investment in recent years has provided a degree of protection, but given the inherent uncertainty of the current environment, we must proceed and invest with a degree of caution. Nevertheless, we remain confident in the fundamentals of our football model and since the Balance Sheet date we have strengthened our player squad. Following the year end, we invested in the registrations of Vasilis Barkas, Albian Ajeti, David Turnbull and brought in loan signings Shane Duffy and Diego Laxalt. We also extended the loan of Mohamed Elyounoussi. Moreover, we have retained all of our key players from last season.
“As we look ahead, our immediate priorities are to work with the football authorities and Government to have fans return to watching football in our stadium in a safe manner. Having qualified for the 2020/21 UEFA Europa League against a challenging backdrop of single leg qualification ties, we are matched against AC Milan, Lille and Sparta Prague in what is sure to be both a testing and exciting, group stage. Domestically, the overriding objective is to win our tenth consecutive league title.
“In closing, I sincerely thank our supporters for their commitment to buying season tickets and also our sponsors, partners and all of the colleagues at Celtic Football Club for their steadfast support in these most difficult of times. Please be assured that the Board recognises the challenges and sacrifices made and is determined to balance the objective of success with the strategy of long term sustainability.”