Celtic Regulatory News (CCP)

31 Mar 2005 11:15

Celtic PLC31 March 2005 31 March 2005 Celtic plc INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2004 HIGHLIGHTS OF THE RESULTS • Group turnover increased by 8.3% to £38.98m. • Operating expenses reduced by 5.7% to £30.84m. • Profit from operations of £8.15m (2003: £3.30m). • Profit before taxation of £2.04m (2003: Loss of £2.86m). • Period end debt of £17.38m (2003: £18.17m). • Lead the Bank of Scotland Premierleague and continued participation in the Tennents Scottish Cup. For further information contact: Brian Quinn, Celtic plc Tel: 0141 551 4235Peter Lawwell, Celtic plc Tel: 0141 551 4235Alex Barr, Big Partnership Tel: 0141 333 9585 Celtic plc CHAIRMAN'S STATEMENT Celtic plc recorded an excellent financial performance in the half-year ending31 December 2004. However, elimination from European competition in December andthe fact that we will play fewer domestic home games in the second half of theyear, will lead to football revenues in the second half being lower than in thefirst half. Group turnover for the half-year rose by 8%, compared to the same period lastyear. All areas of activity showed improvement except for the merchandise andstadium divisions. In merchandising the general weakness in retail sales andcompressed margins in sales of football apparel significantly affectedperformance. There was also a slow down in sales of replica kit ahead of theswitch to NIKE as Kit Sponsor in July 2005 - a contract which we expect to bringsubstantial benefits to the Company over the next five years. The reduction instadium division turnover reflected the outsourcing of concourse catering at thestart of the season but did not result in a reduction in contribution to profit. Ticket sales and multi media revenues rose by 14% and 30% respectively, largelyas a result of participation in the UEFA Champions' League and the increase inseason ticket pricing implemented earlier in the year. There was also anadditional domestic league game compared to the corresponding period a year ago.Multimedia income benefitted by approximately £2.4m from Celtic being Scotland'sonly representative in the UEFA Champions' League Group Stage. Operating expenses were well controlled, falling by around 6%. The reduction inthe costs of merchandise sales, and lower player bonuses in respect of the UEFAChampions' League competition, were the main contributors to the reduction inoperating expenses. As a result of these favourable developments in both revenues and costs, aprofit from operations of £8.1m was recorded in the six months to 31 December2004, compared with £3.3m a year ago; and a pre-tax profit of £2.0m was made,compared with a loss of £2.9m last year. Outstanding debt of £17.4m at 31December 2004 showed a modest improvement over the £18.2m recorded at the end of2003. Celtic's participation in the UEFA Champions' League was, in the vernacular, astory of two halves. The games against Barcelona, AC Milan and Shakhtar Donetskfrom Ukraine proved to be a severe challenge during the first half of the GroupStage. However, draws against AC Milan and Barcelona, and a victory overShakhtar Donetsk, kept the prospect of continued participation in Europeancompetition going to the final game of the section; and we failed to go forwardby only one point. As the year ended Celtic led the Bank of Scotland Premierleague by three points.We remain in first place and have progressed to the semi-final of the TennentsScottish Cup. Our level of success in both competitions will have an importantimpact on financial performance in the second half of the Company's year,particularly since direct football revenues will be lower than those recordedlast year as a result of there being two fewer domestic competitive home gamesthan last year and no further benefit from European football. The playing squadhas expanded slightly following the acquisition of two experiencedinternationals and the departure of one player. The contracts of two other keyplayers have been extended. As a result of this activity, the ratio of ourlabour costs to turnover is bound to deteriorate in the second half of the yearand may exceed 60% for the year as a whole. However, we aim to show someimprovement in this ratio after the current year as the Club seeks to bringcosts back towards a level commensurate with sustainable revenues. Trading of players and the development of younger players are integral parts ofour longer-term measures to control costs. We plan to upgrade our scoutingactivities, expanding their geographic coverage. Appraisal of sites to enhanceour training facilities, which currently fall short of what we need and what isappropriate for a club of Celtic's standing, is well advanced. We expect to beable to announce our preferred choice of location before the end of the season,as promised in last year's Annual Report. At the Annual General Meeting in October 2004 the Board confirmed that themerits of a dividend reinvestment scheme would be examined. That has been doneand we intend to circulate proposals to shareholders later in the financialyear. 30 March 2005Brian Quinn CBE INDEPENDENT REVIEW REPORT INDEPENDENT REVIEW REPORT TO CELTIC plc IntroductionWe have been instructed by the Company to review the financial information forthe six months ended 31 December 2004, which comprises the Group Profit and LossAccount, Group Balance Sheet, Group Cash Flow Statement and the related notes.We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' ResponsibilitiesThe interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review Work PerformedWe conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of Group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly we do not expressan audit opinion on the financial information. Review ConclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2004. PKFRegistered AuditorsGlasgow, UK30 March 2005 Celtic plc GROUP PROFIT AND LOSS ACCOUNT 6 months to 6 months to 6months 6months 12 31 December 31 December to to months 2004 2004 31 December 31 to 30 2004 December June 2004 2003 Unaudited Unaudited Unaudited Unaudited Audited Operations Player Total Total Total excluding Trading player trading £000 £000 £000 £000 £000 NotesTURNOVER -GROUP ANDSHARE OFJOINT 39,226 - 39,226 36,008 69,020VENTURELESS SHAREOF (245) - (245) - -JOINT -------- -------- --------- -------- --------VENTUREGROUP 3 38,981 - 38,981 36,008 69,020TURNOVEROPERATINGEXPENSES (30,835) - (30,835) (32,706) (64,150) -------- -------- --------- -------- --------PROFIT FROMOPERATIONS 8,146 - 8,146 3,302 4,870AMORTISATIONOF - (5,229) (5,229) (5,434) (10,770)INTANGIBLEFIXED -------- -------- --------- -------- --------ASSETSEXCEPTIONALOPERATING - - - - (390)EXPENSES -------- -------- --------- -------- --------OPERATINGPROFIT /(LOSS) 8,146 (5,229) 2,917 (2,132) (6,290)SHARE OFOPERATINGLOSSIN JOINT (262) - (262) - -VENTURE -------- -------- --------- -------- --------TOTALOPERATINGPROFIT /(LOSS) 7,884 (5,229) 2,655 (2,132) (6,290)(LOSS) /PROFIT ONDISPOSAL OF 4 - (47) (47) (119) 306INTANGIBLEFIXEDASSESTSLOSS ONDISPOSAL OFTANGIBLEFIXED - - - (150)ASSETS -------- -------- --------- -------- --------PROFIT /(LOSS) 7,884 (5,276) 2,608 (6,134)BEFOREINTEREST ANDTAXATION (2,251) -------- -------- -------- --------NET INTERESTPAYABLE (570) (604) (1,337) --------- -------- --------PROFIT /(LOSS) ONORDINARYACTIVITIESBEFORETAXATION 2,038 (2,855) (7,471)TAX CHARGEONORDINARY 5 - - -ACTIVITIES --------- -------- --------PROFIT /(LOSS) FORTHE 2,038 (2,855) (7,471)PERIODDIVIDENDS -Non Equity 6 - - (1,455) --------- -------- -------- RETAINEDPROFIT /(LOSS) FORTHE 2,038 (2,855) (8,926)PERIOD ========= ======== ========EARNINGS /(LOSS) PERORDINARY 7 4.27p (11.70p) (29.15p)SHARE ========= ======== ========DILUTEDEARNINGS /(LOSS) PERSHARE 7 2.28p (11.70p) (29.15p) ========= ======== ========All amounts relate to continuing operations. There were no gains or losses recognised in any of the above results other thanthe loss for the period. Celtic plc GROUP BALANCE SHEET 31 31 30 June December December 2004 2003 2004 Unaudited Unaudited Audited Notes £000 £000 £000FIXED ASSETSTangible assets 49,251 48,542 48,428Intangible assets 8 8,757 15,869 12,032 ----------- ----------- ----------- 58,008 64,411 60,460CURRENT ASSETSStocks 2,404 2,242 1,763Debtors 8,146 6,048 5,317Cash at bank and in hand 797 6,270 371 ----------- ----------- ----------- 11,347 14,560 7,451 CREDITORS (13,858) (13,058) (15,610)Amounts falling due within oneyearIncome deferred less than one year (9,804) (10,449) (10,908) ----------- ----------- ----------- NET CURRENT LIABILITIES (12,315) (8,947) (19,067) ----------- ----------- ----------- TOTAL ASSETS LESS CURRENT 45,693 55,464 41,393LIABILITIES CREDITORS 9 (18,000) (24,000) (16,000)Amounts falling due after more thanone yearProvisions for liabilities andcharges 10 (262) - - ----------- ----------- -----------NET ASSETS 27,431 31,464 25,393 =========== =========== =========== CAPITAL AND RESERVESCalled up share capital (includesnon-equity) 11 29,405 29,405 29,405Other reserve 21,222 21,222 21,222Profit and loss account (23,196) (19,163) (25,234) ----------- ----------- -----------SHAREHOLDERS' FUNDS 27,431 31,464 25,393 =========== =========== =========== Approved by the Board on 30 March 2005 Celtic plc GROUP CASH FLOW STATEMENT 6 months 6 months 12 months to to to 31 31 30 June December December 2004 2003 2004 Unaudited Unaudited Audited £000 £000 £000RECONCILIATION OF OPERATINGPROFIT / (LOSS) TO NET CASHINFLOW / (OUTFLOW) FROMOPERATING ACTIVITIESOperating profit / (loss) 2,655 (2,132) (6,290)Depreciation 788 702 1,371Amortisation 5,229 5,434 10,770(Increase) / decrease instocks (641) (183) 296Increase in debtors (2,927) (1,371) (333)Increase in creditors 240 1,571 2,921 ------------- ----------- ----------- --------------- ----------- -----------Net cash inflow fromoperating activities 5,344 4,021 8,735 =============== =========== =========== ============= =========== =========== CASH FLOW STATEMENTNet cash inflow fromoperating activities 5,344 4,021 8,735Returns on investments andservicing of finance (3,668) (1,160) (1,893)Capital expenditure andfinancial investment (3,248) (3,252) (4,865) ------------- ----------- ----------- --------------- ----------- -----------Cash (outflow) / inflowbefore use of liquidresources and financing (1,572) (391) 1,977Financing 1,998 5,908 (2,359) ------------- ----------- -----------Increase / (decrease) incash 426 5,517 (382) ============= =========== =========== RECONCILIATION OF NET CASH FLOWTO MOVEMENT IN NET DEBTIncrease / (decrease) incash in the period 426 5,517 (382)Cash (inflow) / outflowfrom movement in debt (1,998) (5,908) 2,359 ------------- ----------- -----------Movement in net debt inthe period (1,572) (391) 1,977Net debt at 1 July (15,805) (17,782) (17,782) ------------- ----------- -----------Net debt at period end (17,377) (18,173) (15,805) ============= =========== =========== Celtic plc NOTES TO THE FINANCIAL STATEMENTS 1. The results for the year ended 30 June 2004 are extracted from theaccounts filed with the Registrar of Companies, which contained an unqualifiedaudit report. 2. The interim results for the 6 months to 31 December 2004, whichcomprise the Group Profit and Loss Account, Group Balance Sheet, Group Cash FlowStatement and the related notes, have been prepared on the same basis and usingthe same accounting policies as those used in the preparation of the last fullyear's accounts to 30 June 2004. 3. TURNOVER 6 months to 6 months to 12 months 31 December 31 December to 30 June 2004 2003 2004 Unaudited Unaudited Audited £000 £000 £000Turnover comprised: Professional football 19,147 16,782 34,728Multimedia & communications 11,303 8,691 16,062Merchandising 6,499 8,283 13,425Stadium enterprises 1,274 1,586 3,449Youth development 758 666 1,356 ----------- ----------- ----------- 38,981 36,008 69,020 =========== =========== ===========Number of home games 16 15 32 =========== =========== =========== 4. NET LOSS ON SALE OF INTANGIBLE FIXED ASSETSA loss on sale of £47,000 is reported in the current period following thetermination of Bobby Petta's registration with Celtic. The loss for the sameperiod last year reflected the transfer of Mark Fotheringham's registration toDundee Football Club and that of Steve Guppy to Leicester City Football Club (16January 2004). 5. After taking account of unutilised tax losses brought forward, togetherwith the projected performance for the next six months, no provision fortaxation is required. 6. As in previous years no provision has been made in respect of the 6%dividend of £544,000 that is payable on the Preference Shares on 31 August 2005nor for the 4% dividend of £901,000 that is payable on the Convertible PreferredOrdinary Shares on 31 August 2005 in respect of the year ending 30 June 2005. 7. Earnings / (loss) per share has been calculated by dividing the earnings/ (loss) for the period by the weighted average number of Ordinary Shares inissue 30,797,810 (2003: 30,616,563), after taking account of one half of the netdividends in note 6 above. Diluted earnings / (loss) per share has beencalculated by dividing the earnings / (loss) for the period by the weightedaverage number of Ordinary Shares, Preference Shares and Convertible PreferredOrdinary Shares in issue, assuming conversion at the balance sheet date, and thefull exercise of outstanding share purchase options in accordance with FRS14. In2003 no account was taken of potential conversion or share purchase options, asthese potential ordinary shares were not considered to be dilutive under thedefinitions of the applicable accounting standards. Celtic plc NOTES TO THE FINANCIAL STATEMENTS 8. INTANGIBLE ASSETS 6 months to 6 months to 12 months 31 December 2004 31 December 2003 to 30 June 2004 Unaudited Unaudited AuditedCost £000 £000 £000At 1 July 48,561 52,250 52,250Additions 1,990 959 2,458Disposals (6,464) (6,136) (6,147) ------------- ----------- -----------At period end 44,087 47,073 48,561 ============= =========== ===========AmortisationAt 1 July 36,529 31,737 31,737Charge for the period 5,229 5,434 10,770Disposals (6,428) (5,967) (5,978) ------------- ----------- -----------At period end 35,330 31,204 36,529 ============= =========== ===========Net Book Value at periodend 8,757 15,869 12,032 ============= =========== =========== 9. CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEARCreditors due after more than one year reflect long-term bank loans of £18.0m(2003: £24.0m) drawn down at the end of the period as part of the Company's bankfacility. The Company's bank facility of £36.0m comprises an overdraft facilityof £12.0m, which remains unutilised at 31 December 2004, and term loans of£24.0m of which £7.3m is repayable in equal quarterly instalments from October2009 until April 2019, and £16.7m is repayable in July 2019. The Company has theoption to repay the loans earlier than these dates without penalty. Includingcash on deposit and the £12.0m of unutilised overdraft facility, the Company hadavailable liquid resources of £18.6m (2003: £17.8m) as at the balance sheetdate. 10. PROVISIONS FOR LIABILITIES AND CHARGES On 1 July 2004, Celtic F.C. Limited entered into a joint venture with SetantaSport (PPV) Limited creating a dedicated Celtic TV channel, Celtic TV. Under theterms of the joint venture, Celtic F.C. Limited is not required to fund any ofthe losses incurred by the joint venture company. However, despite there beingno legal requirement to fund losses, a provision has been incorporated in thebalance sheet representing Celtic F.C. Limited's 50% share of the netliabilities in the joint venture company as specified by FRS9. Celtic plc NOTES TO THE FINANCIAL STATEMENTS 11. SHARE CAPITAL Authorised Allotted, called up and fully paid 31 December 31 December 2004 2003 2004 2004 2003 2003Group andCompany No 000 No 000 No 000 £000 No 000 £000 EquityOrdinaryshares of 1peach 36,699 36,394 30,949 309 30,644 306Deferredshares of 1peach 100,244 82,220 100,244 1,002 82,220 822 Non-equityConvertiblepreferredordinaryshares of £1each 20,000 20,000 18,012 18,012 18,012 18,012Convertiblecumulativepreferenceshares of60p 19,301 19,606 16,801 10,082 17,106 10,265each -------- ------- ------- -------- -------- ------ 176,244 158,220 166,006 29,405 147,982 29,405 ======== ======= ======= ======== ======== ====== During the six month period to 31 December 2004 302,494 Convertible CumulativePreference Shares of 60p each were converted into 302,494 Ordinary Shares of 1peach and 17,847,146 Deferred Shares of 1p each in accordance with Article 4C(1)of the Company's Articles of Association. The above split of share capitalbetween equity and non-equity is disclosed in accordance with FRS4. 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 2004 amounts in respect ofsuch contracts could result in an amount payable of £621,000 of which £571,000could arise within one year, and amounts receivable of £800,000 of which£460,000 could arise within one year. 13 POST BALANCE SHEET EVENTSOn 7 January 2005 Celtic extended the contract of John Hartson until at leastMay 2007 and on 28 January 2005 Celtic acquired the registration of StephaneHenchoz from Liverpool FC until the end of the current football season. On 31January 2005 the loan registration of Craig Bellamy was obtained from NewcastleUnited FC until the end of the current football season and that of Henri Camarawas transferred to Southampton FC. On 1 February 2005 Dianbobo Balde extendedhis contract with Celtic until 31 May 2009 subject to certain conditions. Celtic plc Directors Brian Quinn CBE (Chairman)*Peter T Lawwell (Chief Executive)Eric J Riley (Financial)Tom E Allison *Dermot F Desmond*Eric Hagman CBE*Brian J McBride* 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 Martin O'Neill MBE OBE This information is provided by RNS The company news service from the London Stock Exchange