CELTIC have warned the club’s finances are only going to get worse after posting a pre-tax loss of £5.9m over the last six months of last year.
The club’s interim report for the six months to December 31, 2020 reveals a turnabout in fortunes as a result of the Covid-19 pandemic having managed a £24.4m profit over the same period in 2019 – mainly due to the sale of Kieran Tierney.
The coronavirus lockdowns have left the club counting the cost of lost matchday ticket sales, with revenue slumping by 23.7% to £40.7m.
The club board acknowledged that the non-attendance of football fans in stadia continues to be “the most significant factor in planning for the future”.
Chairman Iain Bankier said: “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.
Celtic announce pre-tax profit drop of more than £10million amid ‘destructive’ coronavirus pandemic
“Looking forward, the football and financial environment is still volatile and very uncertain because of the ongoing effects of Covid-19.”
And warned that the club’s finances are going to further deteriorate as the club heads into the second-half of the 2020/21 campaign with no European football and fewer domestic matches left to play.
“At the time of writing, 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 but we continue to work with the football authorities and the Scottish Government with a view to ensuring that fans are able to return to football safely as soon as possible,” he said.
“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 owing to lower UEFA income along with less matches played.”
Meanwhile the net cash in the bank of £19.7m is down £13.2m on last year.
But the board say that despite the “challenges” there “remains strong liquidity in the business” and, although trading conditions in some areas “remains uncertain”, the progress being made around vaccinations and controlling the spread of the Covid-19 virus, “provides optimism that normalised trading can resume in the short to medium term”.
The board said that while planning for the future it is assumptions taking into account the non-attendance of fans are considered to be “appropriately prudent and do not consider there to be a significant risk in the medium term”.
The directors said it believed the Celtic plc is “well placed to manage its business risks successfully despite the continuing uncertain economic outlook”.
The board added: In consideration of all of the above, the directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim report”.