Celtic Football Club has reported a sharp fall in pre-tax profits.

The Scottish Premier League club posted profits of £4.4m for the 12 months to July 2008 – down from £15m during the same period in 2007.

In a statement, Celtic chair John Reid attributed the fall partly on increases in operating costs.

"Operating expenses increased by 8.1 per cent to £64.09m, mainly from increased labour costs and costs from new facilities, in particular the Lennoxtown Training Centre," he said.

Reid also said the fall in profit reflects the impact of the decrease in turnover and the investment in players, staff and facilities as part of the club's longer term strategy to ensure entry to European competitions, such as the UEFA Cup and Champions League.

"Our business model is starting to deliver profits each year and we have seen in the last two years the difference that participation in European competition makes," he added.