Celtic Regulatory News (CCP)

20 Feb 2009 13:30



20 February 2009

CELTIC plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2008

SUMMARY OF THE RESULTS

Operational Highlights

Currently lead the Clydesdale Bank Premier League.

Scotland's sole participant in the UEFA Champions League Group Stage.

Co-operative Insurance Cup finalists.

Continued participation in the Homecoming Scottish Cup.

15 home matches played in the period (2007: 16).

Financial Highlights

Turnover increased by 10.3% to £46.78m.

Operating expenses increased by 4.9% to £34.10m.

Profit from operations of £12.68m (2007: £9.92m).

Profit before taxation of £8.36m (2007: £10.07m).

Period end net bank debt of £0.97m (2007: £3.63m).

Investment in players of £7.01m (2007: £1.04m).

For further information contact:

Dr John Reid, Celtic plc	Tel: 0141 551 4235
Peter Lawwell, Celtic plc	Tel: 0141 551 4235
Iain Jamieson, Celtic plc	Tel: 0141 551 4235

Celtic plc

CHAIRMAN'S STATEMENT

The challenge facing us in the last 6 months has been to build upon the success of last year amidst the most difficult economic environment that many of us have ever experienced. Far larger organisations than ours have fallen spectacularly from world-leading positions to oblivion or reliance on public funding. 

Despite this backdrop, I am pleased to be able to report positively to you on our results for the 6 month period to 31 December 2008. This is a testimony to the hard work and committed support of everyone associated with Celtic; from the Board to the backroom, through management and players, from shareholders to supporters. I want to start by recording my thanks to all of you. 

As Scotland's sole representative in the group stages of the UEFA Champions League this season, our revenues for the first six months of this financial year increased by £4.35m, 10.3%, over the same period last year, to £46.78m. Increased pre-season match fees and merchandising sales also contributed to the uplift in revenue, even although we played 15 home games in the period rather than the 16 of last season. The importance of European football has never been more obvious. 

Because of your support, our merchandising revenues rose by 6.4% to £10.89m despite the very challenging environment. 

The number of season tickets holders is this year at an all time high, with more concessionary tickets sold than ever before, a remarkable achievement in difficult times. Though our numbers are up, the income generated is down as a result of our intentional decision to freeze season ticket prices last year and to introduce new, further concession tickets to encourage a new generation of younger fans and to give something back to our fans to reflect our strong financial results in the previous year. Despite the resultant loss of potential revenue in the short-term, we believe that by doing so we have taken the right decision for our supporters and Celtic's longer-term future.

Our operating expenses also rose over last year by £1.59m to £34.10m, a rise mainly driven by additional wage costs following the changes made to the first team during the summer of 2008. Samaras, Maloney, Loovens, McCourt and Crosas all joined us on permanent contracts, with our investment in the first team squad in the period reaching just over £7m compared with £1.04m the previous year.

At £8.36m our retained profit for the 6 months is £1.70m down on last year's interim figure reflecting exceptional operating expenses not incurred last time, an increase in amortisation following the increased investment in the playing squad and reduced proceeds from player trading. Our net bank debt of £0.97m at the end of the half year compares favourably against last year's £3.63m reflecting the strong trading performance. 

Although the coming, second half of the year with fewer home games to play and no further European football will generate less revenue than the first - the normal pattern has been for full year profits to be less than the interims - our midway position nevertheless allowed resources to be made available during the recent transfer window as they have been in past years. However general market conditions and particular circumstances curtailed the product of those endeavours this year.

In the past we have been criticised, and indeed on occasions pilloried, for adopting a careful and business-like approach. We know well that we are much more than just a business, and for many of us supporting Celtic is a way of life. The intense and perfectly understandable hunger for immediate football success that this fuels must always be balanced with the need to ensure that the underlying financial model - and the football success dependent upon it - can be sustained, not just in one year, but year after year. Others in football and elsewhere are finding out just how difficult achieving and maintaining that balance can be. 

We know from experience that sound finances are necessary for football success, and vice-versa. While nothing can ever be guaranteed, we have managed to achieve this balance in recent times. Success has been delivered consistently on the football field in the last few years, and our financial model is proving to be reasonably resilient.

But football is not immune to wider social changes and we cannot expect not to be affected at some point by the recessionary forces in the wider economy. Therefore we cannot afford to be the least bit complacent and we do not underestimate the challenges that will face us later in the year in both football and in financial terms. 

But at this stage of the year our finances are sound, we have everything to play for in the League and Cups, our supporters are strong and our commitment to deliver success remains undiminished.

Dr John Reid 20 February 2009

Chairman

Celtic plc

 INDEPENDENT REVIEW REPORT

INDEPENDENT REVIEW REPORT TO CELTIC PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2008 which comprises the Consolidated Income Statement, Group Statement of Changes in Equity, Group Balance Sheet, Group Cashflow Statement and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared using accounting policies consistent with those to be applied in the next annual financial statements.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2008 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.

PKF (UK) LLP

Glasgow

20 February 2009

  Celtic plc

CONSOLIDATED INCOME STATEMENT 

		6 months to 31 December 2008 Unaudited	6 months to 31 December 2008 Unaudited	6months to 31 December 2008 Unaudited		6months to 31 December 2007 Unaudited		12 months to 30 June 2008
CONTINUING OPERATIONS:		Operations excluding player trading	Player Trading	Total		Total		Total
	Note	£000	£000	£000		£000		£000
REVENUE	2	46,785	-	46,785		42,434		72,953
OPERATING EXPENSES		(34,103)	-	(34,103)		(32,515)		(64,095)
PROFIT FROM TRADING BEFORE ASSET TRANSACTIONS AND EXCEPTIONAL OPERATING EXPENSES		12,682	-	12,682		9,919		8,858
AMORTISATION OF INTANGIBLE ASSETS		-	(3,566)	(3,566)		(3,106)		(5,598)
EXCEPTIONAL OPERATING EXPENSES	3	(1,220)	-	(1,220)		-		(3,189)
PROFIT ON DISPOSAL OF  INTANGIBLE ASSETS		-	1,046	1,046		4,121		5,695
LOSS ON DISPOSAL OF PROPERTY PLANT AND EQUIPMENT		(121)	-	(121)		(168)		(268)
PROFIT BEFORE  FINANCIAL EXPENSES AND TAXATION		11,341	(2,520)	8,821		10,766		5,498
FINANCIAL EXPENSES: BANK LOANS AND OVERDRAFT CONVERTIBLE PREFERENCE SHARES	4			(196) (264)		(395) (305)		(519) (544)
PROFIT BEFORE TAX				8,361		10,066		4,435
TAXATION	5			-		-		-
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS				8,361		10,066		4,435
PROFIT FOR THE PERIOD ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT				8,361		10,066		4,435
BASIC EARNINGS PER ORDINARY SHARE	6			9.35p		11.74p		5.09p
DILUTED EARNINGS PER SHARE	6			6.16p		7.76p		3.70p

Celtic plc

GROUP BALANCE SHEET 

		31 December 2008		31 December 2007		30 June 2008
		Unaudited		Unaudited
	Notes	£000		£000		£000
NON-CURRENT ASSETS
Property plant and equipment		56,006		56,860		56,315
Intangible assets	7	15,292		10,847		11,862
		71,298		67,707		68,177
CURRENT ASSETS
Inventories		2,267		2,696		2,410
Receivables		7,386		7,527		6,063
Cash and cash equivalents		11,029		8,366		8,475
		20,682		18,589		16,948
TOTAL ASSETS		91,980		86,296		85,125
EQUITY
Issued share capital	8	24,204		24,112		24,122
Share premium		14,309		14,205		14,205
Other reserve		21,222		21,222		21,222
Capital redemption reserve		2,686		2,777		2,766
Retained earnings		(12,713)		(15,444)		(21,074)
TOTAL EQUITY		49,708		46,872		41,241
LIABILITIES NON-CURRENT LIABILITIES Interest bearing loans	9	12,000		12,000		12,000
Debt element of non-equity share capital		3,027		3,026		3,027
Deferred income		540		825		820
		15,567		15,851		15,847
CURRENT LIABILITIES
Trade and other payables		15,950		12,232		16,224
Current borrowings		150		154		154
Deferred income		10,605		11,187		11,659
		26,705		23,573		28,037
TOTAL LIABILITIES		42,272		39,424		43,884
TOTAL EQUITY AND LIABILITIES		91,980		86,296		85,125

Approved by the Board on 20 February 2009

Celtic plc

GROUP STATEMENT OF CHANGES IN EQUITY

	Share Capital	Share Premium	Other Reserve	Capital redemption reserve	Retained earnings	Total
	£000	£000	£000	£000	£000	£000
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2007	23,452	14,129	21,222	2,440	(24,514)	36,729
Share capital issued	1	76	-	-	-	77
Transfer to Capital Redemption Reserve	652	-	-	337	(996)	-
Profit for the period	-	-	-	-	10,066	10,066
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2007	24,112	14,205	21,222	2,777	(15,444)	46,872
Share capital issued	-	-	-	-	-	-
Transfer from Capital Redemption Reserve	10	-	-	(10)		-
Loss for the period	-	-	-	-	(5,631)	(5,631)
EQUITY SHAREHOLDERS' FUNDS AS AT 30 JUNE 2008	24,122	14,205	21,222	2,766	(21,074)	41,241
Share capital issued	2	104	-	-	-	106
Transfer from Capital Redemption Reserve	80	-	-	(80)	-	-
Profit for the period	-	-	-	-	8,361	8,361
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2008	24,204	14,309	21,222	2,686	(12,713)	49,708

Celtic plc

GROUP CASH FLOW STATEMENT 

				6 months to 31 December 2008			6 months to 31 December 2007				12 months to 30 June 2008
	Note			Unaudited			Unaudited				Audited
				£000			£000				£000
Cash flows from operating activities
Profit before tax				8,361				10,066				4,435
Depreciation				1,045				979				1,925
Amortisation				3,566				3,106				5,598
Impairment of intangible fixed assets				-				-				353
Profit on disposal of intangible fixed assets				(1,046)				(4,121)				(5,695)
Loss on disposal of tangible fixed assets				121				168				268
Interest expense				460				700				1,063
Decrease / (increase) in inventories				143				687				973
(Increase) / decrease in receivables				(2,609)				(1,265)				(123)
Decrease in payables and deferred income				(3,089)				(1,203)				2,824
Cash generated from operations				6,952				9,117				11,621
Interest paid				(196)				(395)				(519)
Net cash flow from operating activities - A				6,756				8,722				11,102
Cash flows from investing activities
Purchase of tangible fixed assets				(1,587)				(2,994)				(3,605)
Purchase of intangible fixed assets				(4,519)				(8,480)				(12,254)
Proceeds from sale of intangible fixed assets				2,346				5,934				8,048
Net cash used in investing activities - B				(3,760)				(5,540)				(7,811)
Cash flows from financing activities
Repayment of debt				(4)				(887)				(887)
Dividends paid				(438)				(935)				(935)
Net cash (used) / generated in financing activities - C				(442)				(1,822)				(1,822)
Net increase / (decrease) in cash equivalents A+B+C				2,554				1,360				1,469
Cash and cash equivalents at 1 July				8,475				7,006				7,006
Cash and cash equivalents at period end		10		11,029				8,366				8,475

Celtic plc

NOTES TO THE FINANCIAL STATEMENTS

1. 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. These IFRS 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 meaning of section 435 of the Companies Act 2006. The financial information in this report for the six months to 31 December 2008 and to 31 December 2007 has not been audited. The comparative figures for the year ended 30 June 2008 are extracted from the Group's audited financial statements for that period as filed with the Registrar of Companies. It does not constitute the financial statements for that period. Those accounts received an unqualified audit report which did not contain any statement under sections 498(2) or 498 (3) of the Companies Act 2006 and did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report.

 The auditors have reviewed this Interim Report and their report is set out on page 3. 

 

 The accounts for the interim period have been prepared in accordance with the policies which the Group will adopt for its 2009 annual accounts.

2. REVENUE - SEGMENTAL INFORMATION 

		6 months to 31 December 2008		6 months to 31 December 2007		12 months to 30 June 2008
		Unaudited £000		Unaudited  £000		£000
Revenue comprised:
Football and stadium operations		22,022		21,845		38,580
Multimedia & other commercial activities		13,869		10,350		16,092
Merchandising		10,894		10,239		18,281
		46,785		42,434		72,953
Number of home games		15		16		28

3.  EXCEPTIONAL OPERATING EXPENSES

The exceptional operating expenses of £1.22m (2007: nil) reflect labour and ancillary costs largely arising as the result of onerous contracts. 

 

4.  FINANCIAL EXPENSES

Payable as follows on:		6 months to 31 December 2008		6 months to 31 December 2007		12 months to 30 June 2008
		Unaudited £000		Unaudited  £000		£000
Bank Loans and Overdraft		196		395		519
Non-Equity Shares		264		305		544
Total		460		700		1,063

5. TAXATION

After taking account of unutilised tax losses brought forward, together with the projected performance for the next six months, no provision for taxation is required.

6. EARNINGS PER SHARE

Basic earnings per share has been calculated by dividing the earnings for the period by the weighted average number of Ordinary Shares in issue 89,441,921 (2007: 85,726,487). Diluted earnings per share as at 31 December 2008 has been calculated by dividing the earnings for the period by the weighted average number of Ordinary Shares, Preference Shares and Convertible Preferred Ordinary Shares in issue, assuming conversion at the balance sheet date, and the full exercise of outstanding share purchase options, if dilutive. As at December 2008, December 2007 and June 2008 no account was taken of potential conversion of share purchase options, as these potential Ordinary Shares were not considered to be dilutive under the definitions of the applicable accounting standards.

7. INTANGIBLE ASSETS 

		6 months to 31 December 2008		6 months to 31 December 2007		12 months to 30 June 2008
		Unaudited		Unaudited
Cost		£000		£000		£000
At 1 July		26,526		28,982		28,982
Additions		7,011		1,039		5,116
Disposals		(3,985)		(4,067)		(7,572)
At period end		29,552		25,954		26,526
Amortisation
At 1 July		14,664		15,992		15,992
Charge for the period		3,566		3,106		5,598
Provision for impairment		-		-		353
Disposals		(3,970)		(3,991)		(7,279)
At period end		14,260		15,107		14,664
Net Book Value at period end		15,292		10,847		11,862

SHARE CAPITAL

	Authorised 31 December				Allotted, called up and fully paid 31 December
	2008			2007			2008	2008		2007	2007
	No 000			No 000			No 000	£000		No 000	£000
Equity
Ordinary Shares of 1p each	219,878			211,701			89,702	897		88,495	885
Deferred Shares of 1p each	485,343			438,603			485,343	4,853		438,603	4,386
Non-equity
Convertible Preferred Ordinary Shares of £1 each	16,071			20,000			14,084	14,084		14,558	14,558
Convertible Cumulative Preference Shares of 60p each	19,294			19,299			16,794	10,077		16,799	10,079
Less reallocated to debt under IAS 32	-			-			-	(5,707)		-	(5,796)
	740,586			689,603			605,923	24,204		558,455	24,112

9. NON - CURRENT LIABILITIES

Non-current liabilities reflect long-term bank loans of £12.0m (2007: £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-equity share capital from equity to debt following the introduction of IAS 32 and £0.54m (2007: £0.82m) of deferred income.

10. ANALYSIS OF NET DEBT 

The reconciliation of the movement in cash and cash equivalents per the cash flow statement to net bank debt is as follows:

		31 December 2008		31 December 2007		30 June 2008
		£000		£000		£000
Bank Loans		12,000		12,000		12,000
Cash and cash equivalents		(11,029)		(8,366)		(8,475)
Net bank debt at period end		971		3,634		3,525

Total debt, including other loans of £0.15m (2007: £0.15m) and that arising from the reallocation from equity to debt under IFRS 7 of £3.03m (2007: £3.03m) amounted to £4.15m (2007: £6.81m).

11. TRANSFER FEES PAYABLE / RECEIVABLE 

Under the terms of certain contracts in respect of the transfer of player registrations, additional amounts will be payable/receivable by the Company if specific future conditions are met. As at 31 December 2008 amounts in respect of such contracts could result in an amount payable of £3.64m of which £2.01m could arise within one year, and amounts receivable of £1.12m all of which could arise within one year.

12. POST BALANCE SHEET EVENTS 

Following 31 December 2008, Celtic acquired the registrations of Niall McGinn, Willo Flood and Milan Misun and that of Lukasz Zaluska on a pre-contract agreement while the registration of Rocco Quinn was transferred to Hamilton Academicals FC.

 

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