Celtic Regulatory News (CCP)

15 Feb 2008 11:00

Celtic PLC15 February 2008 15 February 2008 CELTIC plc INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2007 SUMMARY OF THE RESULTS Operational Highlights • Opening of the training centre at Lennoxtown • Currently second in the Clydesdale Bank Premier League • Qualification for the last 16 of the UEFA Champions League for the second successive year • Continued participation in the Scottish Cup • 16 home matches played at Celtic Park in the period (2006: 18) Financial Highlights • Group turnover decreased by 9.3% to £42.43m. • Operating expenses increased by 1.5% to £32.52m. • Profit from operations of £9.92m (2006: £14.76m). • Profit before taxation of £10.07m (2006: £17.94m). • Period end total net debt of £6.81m (2006: £15.02m). For further information contact: John Reid, Celtic plc Tel: 0141 551 4235Peter Lawwell, Celtic plc Tel: 0141 551 4235Iain Jamieson, Celtic plc Tel: 0141 551 4235 Celtic plc CHAIRMAN'S STATEMENTI am pleased to report to you on Celtic plc's results for the six month periodto 31 December 2007. Last year's Annual Report outlined a highly successful year for Celtic both onand off the park with the twin achievement of a Scottish Premier LeagueChampionship and exceptional financial results. The challenge that sets the Clubin terms of maintaining standards is a significant one. Even more so since thebusiness environment for football clubs remains very challenging indeed. Thetwin pressures of producing immediate success and maintaining long-termsustainability are unremitting. There is ultimately no use buying the minutes atthe expense of the hours. Planning success in both short and long-term isessential. Sustaining Celtic's strength in the longer term requires a judicious mix offinancial stability, scouting, coaching and youth development, sports scienceand sensible player trading. I believe that we are continuing to makesatisfactory progress in all of these areas. Turnover in the six months was £42.43m, down 9.3% on the same period's recordhigh last year, principally due to 2 fewer home matches being played and notbeing Scotland's sole participant in the Champions League. Our merchandisingrevenues dipped, having had only 1 new strip launch, as opposed to 2 at acomparable stage last year , and reflecting the competitive marketplace in whichwe trade. However, our supporters have continued to demonstrate their commitmentto the Club, with season ticket sales up year - on - year. Operating costs increased by £476,000 (1.5%) to £32.52m attributable mainly toincreases in football labour costs. The increase in our football costsdemonstrates our continuing commitment to invest in the first team squad,scouting, sports science and in developing our youth players through theAcademy. Following the end of last season we have invested more than £11m,before allowing for any proceeds from player trading, in the acquisition offootball players to strengthen the first team squad, which has assisted inproviding success at both domestic and European levels. It has also beenparticularly pleasing to see the new Lennoxtown Training Centre become fullyoperational, which has led to increased integration of our football operations. Our retained profit for the period of £10.07m compares with £17.94m last year,again mainly due to the two fewer home games, a reduction in gains from playertrading and not being Scotland's sole participant in the UCL. Strong cashgeneration places our total net debt at £6.81m against £15.02m at the same timelast year. Looking forward, as with previous years trading performance in theremaining months of the financial year, with fewer home matches scheduled, willnot be at the same level as that in the first 6 months. Once again this year, our performance has been heavily influenced byparticipation in the UEFA Champions League. The Company continues to benefitfinancially and in football terms, having reached the last 16 for the secondyear in succession. Credit must go to Gordon Strachan and his team for keepingCeltic at the highest level in European football. As we go to print we lookforward to our next European ties against Barcelona, another giant in terms ofEuropean football history. For the fans as much as the finances it is nightslike this that make a season. We continue to make good progress in the Scottish Cup, but, disappointingly,exited from the CIS Cup earlier than we would have liked. Winning the ClydesdaleBank Scottish Premier League remains our primary and immediate objective. Thisis no small task since it would entail winning a third championship victory in arow, a feat last accomplished under Jock Stein. With Celtic sitting in secondplace by a margin of only 4 points, there is all to play for. Your continuedsupport will be vital in driving towards the end of the season and achieving thesuccess that this Club and its fans deserve. We also hope that the strengthening of the squad that has taken place during theJanuary transfer window will enhance our prospects both on and off the field.Our strategy continues to be the strengthening of the first team squad withinour financial constraints, and to invest in the long term in the coaching,scouting and Academy facilities of the Club. In addition, we endeavour tomaximise all revenue streams open to us and manage our cost base appropriately. In closing, I wish to pay tribute once again to my predecessor as Chairman,Brian Quinn, who retired at the AGM in November 2007. The contribution he hasmade to the success of the Club has been enormous. I wish Brian, his family andall Celtic supporters a prosperous and successful year. John Reid 14 February 2008Chairman Celtic plc INDEPENDENT REVIEW REPORT INDEPENDENT REVIEW REPORT TO CELTIC PLC We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31December 2007 which comprises the Consolidated Income Statement, Group Statementof Changes in Equity, Group Balance Sheet, Group Cashflow Statement and therelated notes. We have read the other information contained in the half-yearlyfinancial report and considered whether it contains any apparent misstatementsor material inconsistencies with the information in the condensed set offinancial statements. This report is made solely to the company in accordance with the terms of ourengagement. Our review has been undertaken so that we might state to the companythose matters we are required to state to it in this report and for no otherpurpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company for our review work, for thisreport, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the AIM Rules of the London Stock Exchange. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared using accounting policies consistent with those to beapplied in the next annual financial statements. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 December 2007 is not prepared, in allmaterial respects, in accordance with the AIM Rules of the London StockExchange. PKF (UK) LLPGlasgow14 February 2008 Celtic plc CONSOLIDATED INCOME STATEMENT 6 months to 6 months to 6months to 6months to 12 months 31 December 31 December 31 December 31 December to 30 June 2007 2007 2007 2006 2007 Unaudited Unaudited Unaudited Unaudited Restated Operations Player Total Total Total excluding Trading player trading Note £000 £000 £000 £000 £000GROUP 2 42,434 - 42,434 46,796 75,237REVENUEOPERATINGEXPENSES (32,515) - (32,515) (32,039) (59,283) -------- -------- -------- -------- --------PROFIT FROMOPERATIONS 9,919 - 9,919 14,757 15,954AMORTISATIONOF INTANGIBLEFIXED ASSETS (3,106) (3,106) (2,891) (5,865)COSTS OF FIRSTTEAM SQUADRATIONALISATION ANDIMPAIRMENT - - - - (2,879) -------- -------- -------- -------- --------OPERATINGPROFIT /(LOSS) 9,919 (3,106) 6,813 11,866 7,210PROFIT ONDISPOSAL OF - 4,121 4,121 7,120 9,397INTANGIBLEFIXED ASSETSLOSS ONDISPOSAL OFTANGIBLE FIXEDASSETS (168) - (168) (258) (339) -------- -------- -------- -------- --------PROFIT BEFORE 9,751 1,015 10,766 18,728 16,268FINANCIALEXPENSES AND -------- --------TAXATION -------- -------- -------- -------- --------FINANCIALEXPENSES: 3 BANK LOANS ANDOVERDRAFT (395) (416) (484) NON EQUITYDIVIDENDS (305) (372) (744)PROFIT ONORDINARYACTIVITIESBEFORETAXATION 10,066 17,940 15,040TAX CHARGE ONORDINARYACTIVITIES 4 - - - -------- -------- --------PROFITATTRIBUTABLETO EQUITYSHAREHOLDERSOF THE PARENT 10,066 17,940 15,040 -------- -------- -------- RETAINEDPROFIT FOR THEPERIOD 10,066 17,940 15,040 ======== ======== ========BASIC EARNINGSPER ORDINARYSHARE 5 11.74p 22.11p 18.53p ======== ======== ========DILUTEDEARNINGS PERSHARE 5 7.76p 10.95p 11.48p ======== ======== ======== Celtic plc GROUP BALANCE SHEET 31 December 31 December 30 June 2007 2006 2007 Unaudited Unaudited and Restated Restated Notes £000 £000 £000NON-CURRENT ASSETSProperty plant andequipment 56,860 51,799 55,861Intangible assets 6 10,847 10,651 12,990 ----------- ----------- ----------- 67,707 62,450 68,851CURRENT ASSETS Inventories 2,696 2,184 3,383Receivables 7 7,527 11,150 7,997Cash at bank and in hand 8,366 1,056 7,006 ----------- ----------- ----------- 18,589 14,390 18,386 ----------- ----------- -----------TOTAL ASSETS 86,296 76,840 87,237 =========== =========== =========== LIABILITIES 8 NON-CURRENTLIABILITIESInterest bearing loans (12,000) (12,000) (12,000)Debt element ofnon-equity share capital (3,026) (3,026) (3,112)Deferred income (825) (1,156) (1,230) ----------- ----------- ----------- (15,851) (16,182) (16,342) ----------- ----------- -----------CURRENT LIABILITIESOther Loans (154) (158) (158)Trade and other payables (3,264) (3,273) (10,999)Accruals (6,160) (5,153) (6,447)Deferred income (11,187) (8,502) (13,244)Other financial (2,808) (3,944) (3,318)liabilities ----------- ----------- ----------- (23,573) (21,030) (34,166) ----------- ----------- -----------TOTAL LIABILITIES (39,424) (37,212) (50,508) ----------- ----------- -----------NET ASSETS 46,872 39,628 36,729 =========== =========== =========== EQUITYIssued capital 9 24,112 23,451 23,452Other reserve 21,222 21,222 21,222Share premium 14,205 14,129 14,129Capital redemption 2,777 2,540 2,440reserveRetained earnings (15,437) (21,714) (24,514) ----------- ----------- -----------TOTAL EQUITYSHAREHOLDERS' 46,872 39,628 36,729FUNDS =========== =========== =========== Approved by the Board on 14 February 2008 Celtic plc GROUP STATEMENT OF CHANGES IN EQUITY Share Other Share Capital Retained Total Capital Reserve Premium redemption earnings reserve £000 £000 £000 £000 £000 £000EQUITYSHAREHOLDERS'FUNDS AS AT 1JULY 2006 23,450 21,222 14,089 1,739 (38,403) 22,097Share capitalissued 1 - 40 - - 41ConvertiblePreferredOrdinaryShareParticipating Dividend - - - - (450) (450)Transfer toCapitalRedemptionReserve - - - 801 (801) - Profit forthe - - - - 17,940 17,940period ---------- -------- -------- --------- -------- ------- EQUITYSHAREHOLDERS'FUNDS AS AT31 23,451 21,222 14,129 2,540 (21,714) 39,628DECEMBER 2006 ========== ======== ======== ========= ======== ======= Share capitalissued 1 - - - 1Transfer fromCapitalRedemptionReserve - - - (100) 100 -Loss for theperiod - - - - (2,900) (2,900) ---------- -------- -------- --------- -------- ------- EQUITYSHAREHOLDERS'FUNDS AS AT30 23,452 21,222 14,129 2,440 (24,514) 36,729JUNE 2007 ========== ======== ======== ========= ======== ======= Share capitalissued 1 - 76 - - 77Transfer toCapitalRedemptionReserve 659 - - 337 (996) - Profit forthe - - - - 10,066 10,066period ---------- -------- -------- --------- -------- ------- EQUITYSHAREHOLDERS'FUNDS AS AT31 24,112 21,222 14,205 2,777 (15,444) 46,872DECEMBER 2007 ========== ======== ======== ========= ======== ======= Celtic plc GROUP CASH FLOW STATEMENT 6 months to 6 months to 12 months to 31 December 31 December 30 June 2007 2006 2007 Note Unaudited Unaudited Restated and Restated £000 £000 £000Cash flows from operating activitiesProfit before tax 10,066 17,940 15,040Depreciation 979 972 1,708Amortisation 3,106 2,891 5,865Impairment ofintangible fixedassets - - 2,663Profit ondisposal ofintangible fixedassets (4,121) (7,120) (9,397)Loss on disposalof tangible fixedassets 168 258 339Interest expense 700 788 1,228Decrease /(increase) ininventories 687 (283) (1,482)(Increase) /decrease inreceivables (1,265) (2,545) 987Decrease inpayables anddeferred income (1,203) (4,605) 1,089Cash generatedfrom operations 9,117 8,296 18,040Interest paid (395) (416) (484)Net cash flowfrom operatingactivities - A 8,722 7,880 17,556Cash flows from investingactivitiesPurchase oftangible fixedassets (2,994) (3,459) (7,069)Purchase ofintangible fixedassets (8,480) (8,784) (10,959)Proceeds fromsale ofintangible fixedassets 5,934 3,915 5,974Net cash used ininvestingactivities - B (5,540) (8,328) (12,054)Cash flows from financingactivitiesRepayment of debt (887) (889) (889)Dividends paid (935) (521) (521)Net cash (used) /generated infinancingactivities - C (1,822) (1,410) (1,410)Net increase /(decrease) incash equivalentsA+B+C 1,360 (1,858) 4,092Cash and cashequivalents at 1July 7,006 2,914 2,914Cash and cashequivalents atperiod end 10 8,366 1,056 7,006 Celtic plc NOTES TO THE FINANCIAL STATEMENTS 1. The annual financial statements of the Group to 30 June 2008 will require to be prepared in accordance with International Financial Reporting Standards as adopted for use in the EU ("IFRS "). This Interim Report, comprising the Consolidated Income Statement, Group Balance Sheet, Group Statement of Changes in Equity, Group Cash Flow Statement and accompanying notes, has been prepared in accordance with the recognition and measurement criteria of IFRS and the AIM rules save that the Group has elected not to adopt IAS34, Interim Reports. TheseIFRS interim financial statements do not include all the information required for full IFRS annual financial statements. The interim results do not constitute the statutory accounts within the meaningof s240 of the Companies Act 1985. The financial information in this report forthe six months to 31 December 2007 and to 31 December 2006 has not been audited.The comparative figures for the year ended 30 June 2007 are extracted from theGroup's audited financial statements for that period as filed with the Registrarof Companies and restated for IFRS. It does not constitute the financialstatements for that period. Those accounts received an unqualified audit reportwhich did not contain any statement under sections 237 (2) or (3) of theCompanies Act 1988. The auditors have reviewed this Interim Report and their report is set out onpage 3. The accounts for the interim period have been prepared in accordance with thepolicies which the Group will adopt for its 2008 annual accounts. 2. Revenue - Segmental Information 6 months to 6 months to 12 months 31 December 31 December to 30 June 2007 2006 2007 Unaudited Unaudited Restated and Restated £000 £000 £000Revenue comprised: Professional football 19,593 21,560 34,345Multimedia & sponsorship 12,850 14,138 23,199Merchandising 7,739 8,692 13,367Stadium enterprises 1,253 1,414 2,679Youth development 999 992 1,647 ----------- ----------- ----------- 42,434 46,796 75,237 =========== =========== ===========Number of home games 16 18 28 =========== =========== =========== The above segmental information reflects the primary segments, which are thebusiness segments of the group. There are no secondary, geographical segments. 3. Financial ExpensesPayable as follows on: 6 months to 6 months to 12 months 31 December 31 December to 30 June 2007 2006 2007 Unaudited Unaudited Restated and Restated £000 £000 £000Bank Loans and Overdraft 395 416 484Non-Equity Shares 305 372 744 ---------- ---------- ---------- Total 700 788 1,228 ========== ========== ========== 4. TaxationAfter taking account of unutilised tax losses brought forward, together with theprojected performance for the next six months, no provision for taxation isrequired. 5. Earnings per ShareBasic earnings per share has been calculated by dividing the earnings for theperiod by the weighted average number of Ordinary Shares in issue 85,726,487(2006: 81,126,084). Diluted earnings per share as at 31 December 2007 has beencalculated by dividing the earnings for the period by the weighted averagenumber of Ordinary Shares, Preference Shares and Convertible Preferred OrdinaryShares in issue, assuming conversion at the balance sheet date, and the fullexercise of outstanding share purchase options, if dilutive. As at December2007, December 2006 and June 2007 no account was taken of potential conversionof share purchase options, as these potential Ordinary Shares were notconsidered to be dilutive under the definitions of the applicable accountingstandards. 6. Intangible Assets 6 months to 6 months to 12 months 31 December 31 December to 30 June 2007 2006 2007 Unaudited Unaudited and Restated RestatedCost £000 £000 £000At 1 July 28,982 23,530 23,530Additions 1,039 6,318 14,439Disposals (4,067) (2,195) (8,987) ----------- ----------- -----------At period end 25,954 27,653 28,982 =========== =========== ===========AmortisationAt 1 July 15,992 15,937 15,937Charge for the period 3,106 2,891 5,865Provision for - - 2,663impairmentDisposals (3,991) (1,826) (8,473) ----------- ----------- -----------At period end 15,107 17,002 15,992 =========== =========== ===========Net Book Value atperiod 10,847 10,651 12,990end =========== =========== =========== 7. Receivables The decrease in the level of receivables from 31 December 2006 of £3.62m to£7.53m is primarily a result of a reduction in amounts receivable in respect ofplayer transfers and TV and other trading revenues largely as a result of Celticnot being Scotland's sole participant in Champions League European football thisseason. 8. Non - Current LiabilitiesNon-current liabilities reflect long-term bank loans of £12.0m (2006: £12.0m)drawn down at the end of the period as part of the Company's bank facility of£36.0m and £3.03m (2006: £3.03m) as a result of the reallocation of non-equityshare capital from equity to debt following the introduction of IAS 32 and£0.82m (2006: £1.15m) of deferred income. 9. Share Capital Authorised Allotted, called up and fully paid 31 December 31 December 2007 2006 2007 2007 2006 2006 No 000 No 000 No 000 £000 No 000 £000EquityOrdinaryShares of 1peach 211,701 211,701 88,495 885 81,181 812DeferredShares of 1peach 438,603 100,362 438,603 4,386 100,362 1,004Non-equityConvertiblePreferredOrdinaryShares of £1each 20,000 20,000 14,558 14,558 18,012 18,012 ConvertibleCumulativePreferenceShares of 60peach 19,299 19,299 16,799 10,079 16,799 10,080Lessreallocated todebt under IAS 32 - - - (5,796) - (6,457) ------- -------- -------- -------- -------- -------- 689,603 351,362 558,455 24,112 216,354 23,451 ======= ======== ======== ======== ======== ======== 10. Analysis of Net DebtThe reconciliation of the movement in cash and cash equivalents per the CashFlow Statement to net debt is as follows: 31 December 31 December 30 June 2007 2006 2007 £000 £000 £000Bank Loan 12,000 12,000 12,000Other Loans 154 158 158Debt element of non -equity sharecapital 3,026 3,914 4,013Cash and cash equivalents (8,366) (1,056) (7,006) ---------- --------- -------- Net debt at period end 6,814 15,016 9,165 ========== ========= ======== 11. Transition to International Financial Reporting Standards ('IFRS') As stated in note 1, the annual financial statements for the year ending 30 June2008 will be prepared in accordance with IFRS. IFRS 1 'First time adoption ofIFRS' requires the presentation of the effect of adopting IFRS on figurespreviously reported under UK GAAP. The reconciliations required are at the levelof Equity Shareholders' Funds and Profit for the period. As an AIM-listed company in the UK, Celtic adopted the UK GAAP equivalent ofthose International Standards which had a financial effect on Celtic's publishedfinancial information in the year ended 30 June 2006. Therefore, at 1 July 2006,31 December 2006 and 30 June 2007, and for the financial periods ended on thosedates, there is no financial effect of adopting IFRS on the previously reportedUK GAAP figures. No reconciliations are therefore presented. 12. TRANSFER FEES PAYABLE / RECEIVABLEUnder the terms of certain contracts in respect of the transfer of playerregistrations, additional amounts will be payable/receivable by the Company ifspecific future conditions are met. As at 31 December 2007 amounts in respect ofsuch contracts could result in an amount payable of £2.35m of which £0.89m couldarise within one year, and amounts receivable of £2.25m of which £1.40m couldarise within one year. 13. POST BALANCE SHEET EVENTSFollowing 31 December 2007, Celtic acquired the registrations of Andreas Hinkel,Koki Mizuno, Barry Robson and Ben Hutchinson and released the registrations ofTeddy Bjarnason, Jiri Jarosik, and Maceij Zurawski. In addition, the contract ofArtur Boruc was extended until 31 May 2011 and the loan registration of GeorgiosSamaras was acquired until the end of the season. Directors Dr John Reid (Chairman)*Peter T Lawwell (Chief Executive)Eric J Riley (Financial)Tom E Allison *Dermot F Desmond*Ian Livingston*Brian J McBride*Brian D H Wilson * Secretary Robert M Howat Directors of the Celtic Football and AthleticCompany Limited Peter T LawwellEric J RileyKevin Sweeney*John S Keane*Michael A McDonald* * Independent Non-Executive Director Secretary Robert M Howat Football Manager Gordon Strachan This information is provided by RNS The company news service from the London Stock Exchange