Celtic blames €8.4m loss on failure in Europe

Celtic Football Club has blamed its failure to qualify for the UEFA Champions' League for a return to losses in the first half of its financial year.

The club, in which Irish financier, Mr Dermot Desmond, has a shareholding, reported a pre-tax loss of £5.6 million (€8.4 million) in the six months to the end of December 2002. This compares with a profit of £3 million in the same period last year.

Announcing the outturn yesterday, Celtic chairman, Mr Brian Quinn, said there were encouraging signs that the club would enjoy better success in the second half. "The company's performance during the first half of this financial year, both on and off the field, has been heavily influenced by European competition. In addition, we have been operating in a more challenging business environment, from which Celtic has not been immune," he said.

Since the end of last year it has announced a three-year shirt sponsorship deal with Carling. Mr Quinn stressed that Celtic was still involved in four competitions, including the UEFA Cup and highlighted the fact that its manager, Mr Martin O'Neill, had agreed to a new contract as factors that should help to underpin a stronger performance in the months ahead.

The club's turnover slumped to £30 million, down from £36.4 million in the same period in 2001. Most of this downturn was due to a fall in revenues generated from multimedia and communications and a drop in monies earned from merchandising and ticket sales.

Celtic claims that income from ticket sales would have been lower but for the 10 per cent increase in standard season ticket prices.

Operating expenses were broadly unchanged. Player costs represented 53.8 per cent of turnover during that period.

"Clubs are beginning to tackle their cost base and are no longer spending substantial sums in anticipation of buying success or avoiding failure. Celtic's position is no different and we will have to make a sustained effort to bring our costs down. Like every other club, the pace at which we can generate savings in the immediate future may be constrained but the trend is clear," Mr Quinn said.

Its financial performance in the second half of this financial year will primarily depend on the progress in the four competitions that Celtic is still involved with.