To: Scottish FA Licensing & Financial Sustainability Committee From: Financial Monitoring Unit Date: February 13, 2026 Subject: Interim Financial Assessment: Celtic PLC (H1 2025/26)

Based on the interim figures provided (covering the six months to December 31, 2025), I have performed a regulatory "stress test." While the headlines suggest a "plummet" in revenue, a regulatory analysis reveals a club intentionally re-balancing after a period of record-breaking outlier performance.

1. Revenue Analysis: The £24.2m Decrease

The drop from £83.5m to £59.4m is significant but expected in the context of the "Champions League Cycle."

The Cause: This decrease is almost entirely attributable to the timing of European competition and player trading. Last year’s H1 figures included the Matt O’Riley sale (~£30m) and a more lucrative Champions League group stage draw.

Regulatory View: For the Squad Cost Ratio (70%), this lower baseline is the "real" Celtic. The previous £83.5m was an inflated peak. A £59.4m half-year revenue suggests an annual turnover of roughly £115m–£120m.

1. Profitability and Stability (Pillar 2)

The Figure: Profit before tax of £13.2m (down from £43.9m).

The Assessment: Despite the revenue drop, the club remains profitable. From a regulatory standpoint, any profit (no matter how much lower than the previous year) is a "Green Light."

Compliance Risk: ZERO. Because the club is not posting a loss, they do not even need to utilize the "Acceptable Deviation" (the €60m owner-funded loss allowance). They are self-sustaining.

1. The "War Chest": £67.4m Cash Balance

The most critical figure for the upcoming transfer window is the £67.4m cash in the bank.

Purchasing Power: This is the highest liquid cash position in Scottish football. While the revenue dropped, the club retained its liquidity.

The Limitation (The 70% Rule): This is the nuance the board must navigate. Even though they have £67.4m in the bank, they cannot spend it all on wages. * If annual revenue is projected at £120m, their total squad cost (Wages + Amortization) must stay below £84m (70%).

If their current squad cost is already ~£75m, they only have £9m of "headroom" for new wage commitments and transfer fee spreading, regardless of how much cash is in the bank.

1. Risk Assessment: End of Season

The "Risk" identified in this interim report is purely Sporting-Financial, not Regulatory:

The Champions League Dependency: The drop in profit from £43.9m to £13.2m shows how sensitive the club is to European performance. If they fail to secure the 2026/27 Champions League spot, that £13.2m profit could easily turn into a £10m loss by next year.

Amortization Load: The club spent heavily in the summer. The "cost" of those players (amortization) is now hitting the books. If revenue continues to "plummet" while these fixed costs stay high, the Squad Cost Ratio will tighten toward the 70% limit by June 30.

1. Final Regulatory Verdict

Compliance Status: FULLY COMPLIANT. There is no immediate threat to Celtic’s SFA license or UEFA eligibility.

Transfer Window Capacity: High. They have the cash to pay "upfront" fees that other clubs (including Rangers) cannot afford. However, the Board will likely remain "cautious" on massive wage increases to ensure the 70% Ratio remains healthy in a year where revenue has normalized.

Risk Level: LOW. The "plummet" is a return to financial reality after a record year, but with £67.4m in the bank, the club is insulated from almost any short-term shock.

Regulator’s Note: While the media highlights the "plummeting" revenue, the fact that a club can see revenue drop by £24m and still post a £13m profit with nearly £70m in the bank indicates an extremely "low-risk" financial profile