Reid stresses how Celtic's health depends on Europe

Celtic chairman John Reid reiterated the importance of European football yesterday after interim financial results for the final six months of last year showed a decrease in turnover of 21.4 per cent to £28.4?million while bank debt almost trebled to £9.1m.

The Parkhead club suffered a severe financial blow by being knocked out of the Champions League and then Europa League at the first hurdle this season. And although profit before tax rose to 7.1m from 1.3m, that was largely down to the sale of Aiden McGeady to Spartak Moscow for 9.5m, with the club warning the second part of the season would be "more challenging".

It was also revealed that manager Neil Lennon has spent 9m on players.

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.

"In previous years, and again last summer, I stressed the importance to our club of financial stability and participation in Europe, and that commercial and football success cannot be separated," said Reid. "At this time last year we knew we were facing a very difficult season, and so it proved.

"In turn, that left a legacy of setback at the beginning of the current season, in dropping out of European competition entirely at an early stage.

"But while some of the economic and financial issues that we would face as a result could be predicted, we had little inkling of other events which will undoubtedly play a large part in shaping the future of football in Scotland. 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."

Celtic cut their operating expenses by almost 4m but Reid admitted that "player trading" had become increasingly important to the balance sheet.

"The contribution generated from player trading more than offset the outcome on our other trading activities and enable us to report an overall profit before taxation in the period of 7.06m. However, in common with previous years, the second half is expected to be more challenging in terms of financial performance."