Conor McAlister

Celtic has released the full 2024-25 Annual Report. I will try to stick to reporting on the report and refrain from too many editorial comments on Celtic’s current situation. Please excuse me if this post sounds cheery. Note that the Chairman’s Report by Lawwell is the same as the one in the preliminary release of 19 September. Revenue Revenue exploded to a record £143.6m (2024 - £124.6m, then a record). The increase was driven by Football & Stadium Operations at £61.2m (2024 - £50m) and Multimedia/Commercial at £52.3m (2024 - £44.5m) The F&SO increase was due to 29 home matches vs 24 in 23-24. The MM/C increase was due to additional UEFA revenue from improved UCL results. Operating Expenses OpEx falls into 2 broad categories: Labor and Other OpEx. Together, they made a significant jump in 24-25 to £117.1m (2024 - £105.6m). Labor cost increase to £74.8m (2024 – 65.6m) was attributed to “…investment in the Men’s First Team, an increase in performance related bonuses and general wage cost inflation across the business.” Other OpEx increase to £42.3m (2024 – £39.8m) was attributed to “…the higher number of home matches noted previously as well as increases in utility costs, travel costs for European matches and general overhead inflation.” This level of OpEx in 25-26 would lead to a dramatic decrease in profit given the failure to reach the UCL League Phase & smaller UEL crowds. The bonus portion should be lower after failing to reach the UCL League Phase Profit Pre-tax profit was £45.7m (2024 - £17.8m). After tax profit was £33.9m (2024 - £13.4m). The biggest drivers in the increase were improved UCL performance and a huge jump in profit from player sales to £31.5m (2024 - £6.6m). For some perspective, the other Prem club to report a profit on their latest (23/24) report was Livingston at £115k. The other 11 Prem clubs collectively had after tax losses of £35.5m on their latest report. Only Dundee United and Hearts have reported 24/25 so far. Celtic has reported £80m in after-tax profit over the past 3 years, and £105m in the past 10 years. Celtic sent about £12m to HMRC last season. Many will think that it could’ve been better spent elsewhere. Cash Celtic reported £77.3m cash (2024 - £77.2m) on the balance sheet. That is 77% of all the Prem cash. Hearts are now 2nd at £10.26m; Hibs are 3rd at £2.9m. A common question is: Why did cash not increase with such a massive profit? The simple answer is not all cash flow is treated equally on the income statement. For example, Celtic spent £11.7m in cash on infrastructure. That only appears on the income statement as a small amount of depreciation. They also spent £7m more on buying players than they received by selling them. This is not reflected in the income statement. Celtic has a revolving credit facility (RCF) with Co-op Bank. It was originally £13m during the COVID season. It has since been reduced to £3.5m. It expires in December. It has never been used. Due to this, Co-op still holds security over Celtic Park, land adjoining the stadium and at Westhorn and Lennoxtown. Seems bizarre to me. Equity Equity is simply assets minus liabilities. Accountants will also highlight the “current” ratio, that is, assets with life of less than 1 year (cash, receivables due in less than 1 year) minus current liabilities (e.g., payables and loans due in less than 1 year). A simple way to determine if resources are available to meet near-term liabilities. If not, borrowing or share issues are usually required to meet expenses. Celtic has total equity of £155.6m and current equity of £41.4m. The other 11 Prem clubs have combined equity of £106m (Hibs 2nd at £28.7m) and current equity of MINUS £54m (Motherwell 2ndat £1.7m). A side note: Deferred income is considered a current liability. Deferred income is money already received for services not yet rendered. The simplest example is season ticket money. Say you take in £20m before the season starts for 20 home matches. That £20m all goes into deferred income. With the completion of each home match, £1m goes to revenue and DI decreases by £1m. It’s considered a liability until the match is played as it is assumed that the money will be refunded upon cancellation. Celtic’s Deferred Income on the AR is £35.5m. For perspective, Rangers have equity of £23.8m and current LIABILITY of £49m Wages Wages jumped to a record £74.8m (2024 - £65.6m). Celtic does not break out the 1stteam wages. It is safe to assume that Celtic are well within UEFA PSR limits. The ratio will rise as Celtic’s revenue declines in 25/26, but they should still be well within limits. Director pay is a sore point for some supporters. In total, they received £1.68m in total compensation in 24/25, including pension costs (23/24 - £1.70m). Nicholson (£822k) and McKay (£533k) got most of that. Other notes of interest Celtic earned £3.07m in bank interest (2024 - £3.35m). That is more than the year-end cash balance of any other club in Scotland other than Hearts. Contingent receivables and payables, commonly called add-ons to transfer fees. Celtic has a large positive balance in this. If all conditions (appearances, achievement, etc.) are met, Celtic has potential payables of £9.8m on 40 players transferred in over the years). They have £24.6m in potential receivables on 22 players transferred out. Celtic has capital commitments of £3.2m, down considerably from £8.7m in 2024 due to Lennoxtown/Barrowfield work being completed. Summary Financially, it was a historic year for Celtic, with record revenue and profits. Sadly, it may be the high-water mark for a while. Scotland’s poor UEFA coefficient now looks to force Scotland’s champion (hopefully, Celtic) into 3 rounds of CL qualifiers starting in 27-28. With any luck, a hard lesson was learned by the board this summer and Celtic will be better prepared for that challenge. If Kairat and Pafos can negotiate 4 and 3 qualifying rounds, Celtic should be able to figure out how to also.