Celtic Football Club felt the chill this winter as their bank debt rose from £3 million to just over £9 million as turnover fell by 21 per cent.
This reduction, revealed in the club's interim results for the six months to 31 December 2010, was attributed partly to the severe winter weather experienced in Scotland. John Reid, in his chairman's statement, also emphasised the impact of failure to maintain involvement in European football. Celtic have been left out in the cold since being eliminated from the Europa League by Utrecht at the qualifying stage. Neil Lennon's side were also knocked out of the Champions League at the first hurdle by Braga.
"The cold wind of economic recession, combined with the effects of the even colder Scottish winter and our early exit from Europe are reflected in disappointing underlying trading results for the six months to 31 December 2010," summed up Reid, with turnover down 21.4 per cent to 28.39m.
This was off-set by news that profit before taxation had risen to 7.1m from 1.3m due largely to player sales. Aiden McGeady joined Spartak Moscow for 9.5m in the summer but with the fee due to be paid in installments this entire sum was not included in the latest results. Reid noted that since 31 December 2010 substantial transfer payments have been received, which includes a further payment from Spartak Moscow. It is anticipated this will help to "significantly lower" the year-end bank debt.
However, Reid also stressed that the second half is expected to be "more challenging" in terms of financial performance.
Reid revealed a reduction in European home games from five to two had been a key factor in revenue falling by almost 8m to 28.4m, with profit from trading down from 4.7m to less than 1m. Celtic cut their operating expenses by almost 4m but Reid admitted that "player trading" had become increasingly important to the balance sheet. Stephen McManus, Artur Boruc, Marc-Antoine Fortun, Cillian Sheridan and Koki Mizuno also left the club during the period. However, chief executive Peter Lawwell yesterday denied that Celtic had become a selling club. It was revealed that Lennon has spent 9m on new players.
• Peter Lawwell says Celtic on right road despite surge in debt
"You can argue about the definition of that phrase," Lawwell told The Scotsman. "You can see over the last few years that we have actually bought more than have gone out. We are a buying club as much as a selling club.
"It's not only Rangers and Celtic, there's Liverpool, for example, selling (Fernando] Torres. The majority of clubs have found that trading players is maybe a more significant part of the financial model than it has been been before. But what you are doing is creating an expertise, hopefully, where you can identify players.
"Are Liverpool a selling club? Well, no. Because they bought (Andy] Carroll and (Luis] Suarez. We are in the same category."
Lawwell singled out the recruitment of Emilio Izaguirre from Montague in the Honduran league and Beram Kayal, purchased from Maccabi Haifa. Izaguirre has already been linked with Manchester United.
"At the end of the day it is the manager's choice, and he has chosen very well," said Lawwell, with reference to the process of player identification at Celtic. The chief executive was not so forthcoming on the subject of Lennon's long-term future at Parkhead. The manager has signed only a one-year contract which is due to expire this summer.
"Neil and ourselves are very happy with where we are, and there is a great unity at the club at the moment between the board, management, players and supporters," said Lawwell.
"That's what we want to emphasise. There is a great unity. Neil's pretty happy where we are, and so are we. We will deal with it when it is right for him and right for us."