| Finance – Reports I Annual Report 2000 I Annual Report 2002 I Years 1999 I 2000 I 2001 I 2002 |
Celtic Finances – 2001
Final Results
RNS Number:0173I
Celtic PLC 3 August 2001 3 August 2001
CELTIC plc Preliminary Results for the year ended 30 June 2001
Summary of the Results
- Winners of the Scottish Premier League, Scottish Cup and League Cup; Celtic's first Treble since 1969.
- Turnover increased by 9% to £42.01m (2000: £38.58m) with increases in all major revenue streams.
- Significant (36.6%) increase in revenues from merchandising.
- Profit from operations of £0.87m (2000: £3.05m).
- Loss on ordinary activities after taxation of £8.12m (2000: £3.96m).
- Exceptional costs of £4.89m in respect of impairment of intangible fixed assets.
- Substantial investment in the development of the football operation resulting in operating expenses of £41.14m (up by 21.3%) predominantly due to increases in wage costs.
- A gross investment of £21.9m was made in signing 7 new players and new extended contracts awarded to key players.
- Year end debt of £29.62m (2000: £14.50m).
- Since the year-end £22.52m has been raised for the Company from the issue of 18,012,448 Convertible Preferred Ordinary Shares, pursuant to Celtic's recent share offer.
Commenting on the results Brian Quinn, Chairman, said:
"This year's results reflect two main factors: the outstanding success that the first team enjoyed under Martin O'Neill's leadership; and the significant costs associated with our decision to invest in the football division in the last two years.
Turnover rose by 9% during the year. This contributed to a profit from operations of almost £1 million, despite the substantial costs arising from the strengthening of the football squad. In the year just ended Celtic made a gross investment of over £21 million in players. Players' remuneration largely explains the increase of £5.7 million in total personnel costs, with some signs that there has been an acceleration in the sector as the year went on. Nevertheless, our football costs, at 53% of turnover, compare favourably with the sector as a whole; and we believe that we have the financial controls in place which will enable us to maintain these costs at a manageable level.
We have also taken what we feel is the prudent step of writing down the value of some players who may not play a continuing part in the future of the team.
The growth of turnover, particularly in merchandise sales, in the year ending June 30th was pleasing. We recognise that we must grow and diversify our revenue base. While sustained success will drive football revenues, management will focus on the development of additional income streams that are less directly dependent on achievements on the pitch; in particular, we will work to exploit our media rights which we believe have considerable value. Probably most important for the medium and long term, we are convinced that the football industry is bound to change both at home and abroad. We intend to be part of the process that leads to change and to play our full role in whatever emerges.
We start our new year with a solid financial base and a strengthened football squad. The Board is confident that Celtic will maintain its success in Scotland and will seek to make real progress in European competition."
For further information contact:
Eric Riley, Celtic plc Tel: 0141 551 4276
Kate Cunningham, Celtic plc
Lindsey Harrison, Gavin Anderson & Co Tel: 020 7457 2345
Keith Brookbank, Gavin Anderson & Co
Financial Review
Turnover increased by 9% to £42.01m continuing the upward trend of previous years and following a successful year in terms of football performance.Operating expenses rose by 21.3% to £41.14m, predominantly due to increased labour costs. Total labour costs rose by 28.4% to £25.90m. This reflects the significant planned investment made to develop the core professional football operation. Following the appointment of Martin O'Neill the football operations management team was strengthened with the recruitment of John Robertson, Steve Walford and Tommy Burns. A substantial investment in the first team playing squad was made with seven new players being acquired which increased the base salary costs. Whilst acknowledging the requirement to invest in the football operation Celtic recognises the need to maintain strict control over football wage inflation which is an issue that continues to cause concern throughout the industry.
Profit from operations was £0.87m compared to £3.05m last year. Exceptional amortisation costs of £4.89m were incurred following an impairment review of intangible fixed assets. This charge represents a provision for a write down in net book value in respect of certain players following a review of the first team squad. A net gain of £4.26m on the sale of intangible fixed assets was made which includes the disposal of Mark Viduka, Vidar Riseth and the crystallisation of contingent transfer fees in respect of certain players from previous years. The adoption of FRS19 relating to deferred tax has resulted in the recognition of a deferred tax asset as a consequence of the tax losses available to the Group in both 2001 and 2000. This asset amounts to £5.68m (2000: #2.61m). A preference dividend of £599,400 falls to be paid, which results in a retained loss for the year of £8.72m.
At 30 June 2001, the Company's net debt was £29.62m. On 31 July 2001, the Company raised £22.52m from the issue of 18,012,448 Convertible Preferred Ordinary Shares pursuant to Celtic's 2001 Offer for Subscription.
PROFIT & LOSS STATEMENT
FOR THE YEAR ENDED 30 JUNE
| Notes |
2001 £000 |
2000 £000 |
|
| Turnover | 2 | 42,007 |
38,579 |
| Operating Expenses | (41,136) |
(33,903) |
|
| Profit from Operations | 871 |
4,676 |
|
| Exceptional Operating Expenses | 3 | – |
(1,629) |
| Profit from Operations after Exceptional Operating Expenses | 871 |
3,047 |
|
| Amortisation of Intangible Fixed Assets | (9,604) |
(7,203) |
|
| Impairment of Intangible Fixed Assets | (4,892) |
– |
|
| Net Gain / Loss on Sale of Intangible Fixed Assets | 4,260 |
(981) |
|
| Operating Loss | (9,365) |
(5,137) |
|
| Interest Payable and similar charges | (1,825) |
(848) |
|
| Loss on Ordinary Activities before taxation | (11,190) |
(5,985) |
|
| Tax on Ordinary Activities | 4 | 3,067 |
2,029 |
| Loss for the Year | (8,123) |
(3,956) |
|
| Preference Dividend | 5 | (599) |
(599) |
| Loss for the Year transferred to Reserves | (8,722) |
(4,555) |
|
| Loss per Ordinary Share | 6 | (29.82p) |
(15.64p) |
| Diluted Loss per Share (All amounts relate to continuing operations. |
(17.04p) |
(8.34p) |
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
| 2001 £000 |
2000 £000 (as restated) |
||
| Loss for the Financial Year | (8,722) |
(4,555) |
|
| Prior Year Adjustment | 8 | 2,613 |
|
| Total Losses recognised since last Annual Report | (6,109) |
BALANCE SHEETAS AT 30 JUNE
| 2001 |
2000 (as restated) |
|||
| FIXED ASSETS | £000 |
£000 |
£000 |
£000 |
| Tangible Assets | 46,664 |
46,753 |
||
| Intangible Assets | 24,106 |
19,039 |
||
| 70,770 |
65,792 |
|||
| CURRENT ASSETS | ||||
| Stocks | 1,228 |
956 |
||
| Deferred Tax Asset | 5,680 |
2,613 |
||
| Debtors | 4,579 |
4,065 |
||
| Cash at Bank and in hand | 87 |
1,175 |
||
| 11,574 |
8,809 |
|||
| CREDITORS | ||||
| Amounts falling due within one year | (20,066) |
(12,135) |
||
| Income deferred less than one year | (10,447) |
(8,333) |
||
| (30,513) |
(20,648) |
|||
| NET CURRENT LIABILITIES | (18,939) |
(11,839) |
||
| TOTAL ASSETS LESS CURRENT LAIABILITIES | 51,831 |
53,953 |
||
| CREDITORS | ||||
| Amounts falling due after more than one year | (21,772) |
(15,172) |
||
| NET ASSETS | 30,059 |
38,781 |
||
| CAPITAL AND RESERVES | ||||
| Called Up Share Capital (includes non-equity) |
11,392 |
11,392 |
||
| Share Premium | 17,519 |
17,519 |
||
| Profit and Loss Account | 1,148 |
9,870 |
||
| SHAREHOLDERS FUNDS (see Note 9) |
30,059 |
38,781 |
||
Approved by the Board on 2 August 2001
CASH FLOW STATEMENTFOR THE YEAR ENDED 30 JUNE
| 2001 £000 |
2000 £000 |
|
| RECONCILIATON OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES | ||
| Operating Loss | (9,365) |
(5,137) |
| Depreciation | 1,128 |
1,128 |
| Amortisation of Intangible Fixed Assets | 9,604 |
7,203 |
| Impairment of Intangible Fixed Assets | 4,892 |
– |
| Net (gain) / loss on sale of Intangible Fixed Assets | (4,260) |
981 |
| Grants release | (1) |
(1) |
| Increase in stocks | (272) |
(424) |
| (Increase) / decrease in debtors | (809) |
102 |
| Increase in Creditors | 1,385 |
1,270 |
| Net Cash inflow from operating activities | 2,302 |
5,122 |
CASH FLOW STATEMENT
| Net Cash inflow from operating activities | 2,302 |
5,122 |
| Returns on investment and servicing of finance | (2,424) |
(1,381) |
| Capital expenditure and financial investment | (14,998) |
(12,961) |
| Cash outflow before financing | (15,120) |
(9,220) |
| Financing | 6,709 |
8,750 |
| Decrease in cash | (8,411) |
(470) |
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (see note 7)
| Decrease in cash in the period | (8,411) |
(470) |
| Cash inflow from increase in debt | (6,709) |
(8,590) |
| Change in Net Debt resulting from cash flows | (15,120) |
(9060) |
| Non-Cash movement – new hire purchase agreement | – |
(1,768) |
| Movement in Net Debt in the period | (15,120) |
(10,828) |
| Net Debt at 1 July | (14,505) |
(3,677) |
| Net Debt at 30 June | (29,625) |
(14,505) |
NOTES TO THE ACCOUNTS
1. ACCOUNTING POLICIES
Details of the main accounting policies adopted by the Group are consistent with last year save that, as encouraged by the Accounting Standards Board, Financial Reporting Standard Number 19 – Deferred Tax has been adopted in the current year and deferred tax is now provided on all timing differences at the balance sheet date which have yet to reverse. As a consequence of adopting FRS 19 the previous year's financial statements have been restated leading to an increase in debtors of #5.68m in 2001 and #2.61m in 2000.
2. TURNOVER
Turnover in respect of the five business operations comprised:
| 2001 £000 |
2000 £000 |
|
| Professional Football | 21,681 |
19,809 |
| Multimedia and communications | 9,904 |
9,228 |
| Merchandising | 7,718 |
5,650 |
| Stadium Enterprises | 1,478 |
2,803 |
| Youth Development | 1,226 |
1,089 |
| 42,007 |
38,579 |
In the year to 30 June 2001 the catering operation included within Stadium enterprises was subcontracted to Sodexho, which resulted in a decline in turnover.
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses in the year to 30 June 2000 reflect amounts in respect of compensation and other costs associated with the termination of the employment contracts of former employees, principally within the football operation.
4. TAX ON ORDINARY ACTIVITIES
| 2001 £000 |
2000 £000 |
|
| Analysis of credit in period Current tax: | ||
| UK Corporation Tax | – |
– |
| Deferred Tax: | ||
| Origination and reversal of timing differences | (3,680) |
(2,086) |
| Movement in Discount | 613 |
57 |
| Tax Credit on ordinary activities | (3,067) |
(2,029) |
5. PREFERENCE DIVIDEND
The preference dividend of £599,400 (2000: £599,400) reflects the dividend of 6% (inclusive of tax credit) payable on 31 August 2001 to those holders of Preference Shares on the share register at 11 August 2001.
6. LOSS PER SHARE
The loss per share has been calculated by dividing the loss for the period by the weighted average number of Ordinary Shares (29.25 million, 2000: 29.14 million) in issue during the year. Diluted loss per share has been calculated by dividing the loss for the period by the total weighted average number of Ordinary and Preference Shares (total 47.75 million, 2000: 47.64 million) in issue during the year ended 30 June 2001 assuming the exercise of all outstanding share purchase options.
7. ANALYSIS OF NET DEBT
| At 1st July 2000 £000 |
Cash Flow
£000 |
Other Non Cash Movements £000 |
At 30th June 2001 £000 |
|
| Cash at Bank and in hand | 1,175 |
(1,088) |
– |
87 |
| Overdrafts | – |
(7,323) |
– |
(7,323) |
| 1,175 |
(8,411) |
– |
(7,236) |
|
| Debt due within 1 year | (211) |
27 |
(25) |
(209) |
| Debt due after 1 year | (14,054) |
(7,000) |
25 |
(21,029) |
| Hire Purchase Creditors | (1,415) |
264 |
– |
(1,151) |
| (15,680) |
(6,709) |
– |
(22,389) |
|
| Net Debt | (14,505) |
(15,120) |
– |
(29,625) |
8. PRIOR YEAR ADJUSTMENT
As a result of the adoption of Financial Reporting Standard Number 19 – Deferred Tax, a prior year adjustment has been made in respect of the recognition of a deferred tax asset. This adjustment has resulted in a reduction in the current year's loss of £3,067,000 (2000: £2,029,000). A deferred tax asset of £5,680,000 has increased net assets at 30 June 2001 by this amount (2000: £2,613,000).
The directors consider the adoption of this policy gives a fairer presentation of the results for the year and of the financial position of the Group. The comparative figures in the primary statements and notes have been restated to reflect the adoption of the policy.
9. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
| 2001 £000 |
2000 £000 |
|
| At 1st July as reported | 36,168 |
42,592 |
| Prior Year adjustment | 2,613 |
584 |
| At 1st July as restated | 38,781 |
43,176 |
| Movements in year: |
||
| Retained loss for the Financial Year | (8,722) |
(4,555) |
| Share Capital issued in the year | – |
2 |
| Share Premium arising in the year | – |
158 |
| (8,722) |
(4,395) |
|
| At 30th June | 30,059 |
38,781 |
At 30th June 2001 Shareholders' Funds included £11,100,000 (2000: #£11,100,000) which is attributable to non-equity shareholders. This relates entirely to Preference Shares.
10. ANNUAL REPORT & ACCOUNTS
Copies of the annual report & accounts will be sent to all shareholders in due course.The financial information set out above was approved by the directors on 2 August 2001 and does not constitute the Company's statutory accounts for the years ended 30 June 2001 or 30 June 2000. The auditors' opinion on the 2000 statutory accounts is unqualified and does not include a statement under Section 237 (2) or (3) of the Companies Act 1985. The statutory accounts for 2000 have been filed and those for 2001 will be delivered to the Registrar of Companies in due course.