Lennon praised as Celtic edge back to black during tough times

The Celtic chairman, John Reid, has praised manager Neil Lennon for restoring "pride and passion" as the club reported a return to profit and a reduction in bank debt of more than £5m.

Celtic's preliminary financial results showed a profit of £102,000 for the year ending 30 June, which followed a loss of more than £2m in the previous 12 months. The club reduced their net bank debt to £530,000, well down on the previous year's total of £5.85m and the half-year figure of £9.1m that Celtic subsequently reported.

Reid explained that the higher debt totals had been planned to fund Lennon's squad rebuilding last year, while the reduction was designed to maintain financial stability and independence.

The profit came despite a fall in group revenue of more than £9m to £52.6m, with Reid pointing to a number of factors including the unsuccessful reign of Tony Mowbray in the previous season, when Celtic failed to win a trophy.

Celtic also had just two European home games, against Braga and Utrecht, but their finances were helped by a near 10 per cent reduction in operating expenses to £52.5m.

Reid described the results as "outstanding" in the circumstances, particularly after what he had termed a "disappointing" half-yearly performance in February. Although Celtic recorded a £7.1m profit in those six months, that was largely down to the £9.5m sale of Aiden McGeady to Spartak Moscow, with the club warning then that the second part of the season would be "more challenging".

Celtic invested more than £10m on transfers in the period, more than £3m less than during Mowbray's reign, and Reid was delighted that the club had balanced the books in the process.

In his final annual statement as chairman, Reid said: "Football was not any more immune from the recession than any other activity. Our participation in Europe was shortlived, playing only two home games rather than the five of the preceding year.

"Those challenging economic conditions and the poor football performance in season 2009-10 undoubtedly had a detrimental effect on our revenues. Turnover decreased by 14.8 per cent to £52.56m, affected by the reduction in European matches and the ticket and broadcasting revenues that they generate, and a decline in merchandising sales in a difficult retail market."

Reid added: "Against this background the achievements of everyone at the club – management, staff and our faithful supporters – appear even more outstanding. To achieve and maintain financial stability, and attain a very manageable debt position, while continuing to invest significantly in strengthening the football squad and generate profit in the football sector in Scotland in these conditions is highly commendable.

"And yet as our annual report shows, as a result of these efforts and our activity in the transfer market we managed to turn last year's loss into break-even, to reduce our debt considerably and still invest a substantial amount in new players."

Reid referred to threats made against Lennon when he praised the manager for the "remarkable strength and character" shown in his first full season in charge, which yielded a Scottish Cup success, with Celtic runners-up in the other two domestic trophies.

"At Celtic our expectations of a manager are so high that it is easy to overlook just how challenging that job is," the former Home Secretary said. "In his first full season as a manager Neil has succeeded in restoring a pride and passion to our play, showcasing emerging talent and uniting our supporters."

Reid argued that would be a major achievement in any normal environment but in a context of death threats and explosive devices, among other challenges, it was "nothing short of extraordinary".

The Labour peer added: "The commitment Neil and his family have shown this season, and that accorded to him by fans, is what makes this club truly special."

As well as McGeady, Celtic, who have won their opening three league games of the new season, also sold the likes of Stephen McManus, Artur Boruc and Marc-Antoine Fortuné last summer and have been far quieter in the transfer market this year. Kelvin Wilson and Adam Matthews both arrived on free transfers while defender Victor Wanyama was signed for about £900,000. PA