Gx Cloudcomp Regulatory News (CLO)

23 Mar 2006 12:00

Charlton Athletic PLC23 March 2006 CHARLTON ATHLETIC PLC ("Charlton" or the "Company") INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2005 CHAIRMAN'S INTERIM STATEMENT On behalf of the board of Charlton Athletic plc I present the Company's InterimStatement for the six months to 31 December 2005. Turnover for the period was £19.5m, unchanged from the comparable period to 31December 2004, however the Company has recorded a net loss for the period of£5.1m. The Company completed its placing of ordinary shares to a number of directorsand other shareholders associated with the board raising £5.5m, with this sumbeing used primarily to support the further development of the first team squad.Derek Chappell, who participated in this share issue, subsequently accepted aninvitation to join the board of the Company. During the summer transfer window the football club strengthened its first teamsquad through the acquisition of Darren Ambrose, Darren Bent, and Jay Bothroyd.Alexei Smertin, Gonzalo Sorondo and Jonathan Spector joined us on loan for theseason from Chelsea, Inter Milan and Manchester United respectively. Inaddition, as a response to an injury to Dean Kiely during the pre-season buildup, Thomas Myhre also joined us. This expanded squad gave the football club an excellent start to the season,with some strong performances away from The Valley in particular. However, apoor run during November and December saw the team lose its position in the tophalf of the Premiership and the team is currently in 13th position, havingplayed 29 matches and gaining 39 points. During this period the Company was presented with a difficult challenge when themain football club sponsor, all:sports, was placed in administration inSeptember. This affected our sponsorship revenues and there is little prospectof receiving any significant payments against the fees outstanding. Financial Highlights Six months to Six months to 31 December 31 December 2005 2004 £000s £000s Turnover 19,456 19,483Operating overheads (23,140) (19,974)Operating loss before amortisation and player trading (3,684) (491)Amortisation of player costs (2,961) (2,085) Operating loss (6,645) (2,576)Net interest (31) (169)Profit on player disposals 1,553 1,063Net loss (5,123) (1,682) Issue of ordinary shares 5,525 0Net assets 32,156 26,163 The Company's turnover was predominately earned from FA Premier League broadcastrevenues and central sponsorship agreements, representing 53% of the totalrevenues for the period. Match day income was generated from 10 home matches(2004: 10 matches) with additional revenues from the three Carling Cup matchesplayed, against Hartlepool United, Chelsea and Blackburn Rovers. Despite theproblems we experienced with all:sports, turnover remained at £19.5m for the sixmonths to 31 December 2005 (2004: 19.5m). Earnings for the full year will be significantly affected by the finishingposition at the season end that determines the level of the merit award due tothe Company and the number of live BSkyB matches featuring the club in thesecond half of the season. In particular, the recent FA Cup successes in thesecond period have been a welcome addition to our turnover as the team hasreached the quarter final stage with a realistic opportunity to reach thesemi-final stage for the first time since 1947. In December the football club negotiated a new long-term club sponsorshipagreement with the Spanish property company, Llanera, effective from January2006 until June 2010. This sponsorship will provide the Company with combinedrevenues in excess of £6.6m through the period and is the largest sponsorshipagreement that the Company has negotiated to date. There is a strong synergybetween the two businesses through our respective community focus and activitiesand Llanera has now established a base in the south east of England to marketits community developments through out the United Kingdom. We feel that thiswill be a relationship that will develop through the term of the agreement andoffers opportunities to both parties. I will record my thanks to both EmilioTeresa and Bruce Bell of the Llanera Group for their drive and energy inconcluding this agreement. Our connections with Spain were developed furtherwhen our kit supplier, Joma, agreed an extension to the existing agreement until2010. I have already reported that our season ticket sales were reduced in number forthis 2005/6 season and while we are not unique in this respect, we are stillconcerned that the growth of earlier years has not been maintained. There are anumber of factors behind this reduction, most notably the fear factor associatedwith a loss of League status which permeates through the Premiership and leadsto negative play. Additionally, there is resistance among supporters to thevaried days and kick-off times for matches. The number of season ticket holdershas now reduced to 18,700. We feel that a full stadium at The Valley creates asupportive atmosphere for the team and so we have continued to invest in ourValley Express initiative that provides both organised coach travel and matchtickets to our supporters across the south east region. We have now reached arecord of 2,700 supporters that used the service for the recent home match withAston Villa and to demonstrate that this service supports our match dayattendance figures, an average of 96% of the seats have been filled for the homegames played to date. The Company took a deliberate decision to substantially increase the level ofinvestment in the playing squad for this season and this is reflected in theincreased overheads recorded. These additional costs are being mainly fundedthrough the £5.5m equity investment completed in July 2005, but clearly theCompany cannot sustain this level of operating loss in future years. Capital projects We have plans to redevelop our training ground complex in New Eltham, inconjunction with our Community Trust, and planning consent has now been grantedfor this. This development will provide high quality sports and learningfacilities for community groups and schools in the area in addition to improvingthe facilities used by the football club. Development work is expected tocommence this spring. The process of finalising planning consent for the redevelopment of the eaststand at The Valley is now nearly completed and this will allow us to expand thecapacity of the stadium in the future when we judge there is sufficientfinancial justification to do so. Football I am pleased to be able to report on some successes in the two domestic cupcompetitions. The team performed well in the Carling Cup and became the firstteam to win at Stamford Bridge this season following the 3rd round victory. Ourinterest in this competition ended when the team lost at home to BlackburnRovers. We have now reached the quarter-final stage of the FA Cup competitionand there is the very real prospect of us progressing further for the first timein recent years. The January 2006 transfer window allowed us to increase our attacking optionswith the signing of Marcus Bent for an initial fee of £2 million and he scoredwhat proved to be the equaliser on his debut against Chelsea at Stamford Bridge.His namesake, Darren Bent, has become one of the Premiership success stories ofthe season since his arrival from Ipswich Town in the summer and he looks ontarget to score more than twenty goals this season. Dean Kiely had been unable to regain his first team spot from Thomas Myhre andmoved to Portsmouth and also Danny Murphy moved to Tottenham Hotspur during thiswindow. The manner in which Danny Murphy and more latterly Alexei Smertin leftthe club together with the timing of their departures was very disappointing. The football industry It is my opinion that the FA Premier League is at a very important stage in itsevolution. It remains the most popular and the most watched League globally andit continues to attract some of the world's best players but to retain thisprominence the competition must be competitive and exciting. It is apparentthat there are only a few teams in the Premiership that have the resources tomount a challenge for the title. For most of the remaining clubs, survival inthe League becomes the principal objective, creating a negativity which can leadto low entertainment value in many matches. We also need to improve the image of the game at all levels. For the game toflourish there must be respect for the authority of the referees by allinvolved, including players, spectators and those managing teams and clubs.There needs also to be respect for one another from those involved withinfootball. We must never lose sight of the importance of supporters to thehealth of our game. Over-exposure on television and disparity of kick-off timesare important issues that concern them and me. As a League we have much to be proud of, but there are actions that I feel wemust take now to secure the future prosperity of the League for the long term. Conclusion I am confident that Charlton Athletic has now secured its Premiership status andhas a realistic chance of finishing in the top half of the Premier League. Your board also remains confident about the future of the football club and ourpolicy of responsible progression will continue. Richard Murray 20 March 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 31 December 2005 6 months to 12 months to 31 December 30 June Unaudited results 2004 2005 Operations Amortisation and Total excluding player trading amortisation and player trading £000s £000s £000s £000s £000s TURNOVER 19,456 0 19,456 19,483 40,714 Operating expenses (23,140) (2,961) (26,101) (22,059) (42,906) Exceptional items 0 0 0 0 2,763 OPERATING (LOSS)/PROFIT (3,684) (2,961) (6,645) (2,576) 571 Profit on disposal of 0 1,553 1,553 1,063 1,137players (LOSS)/PROFIT BEFOREINTEREST AND TAXATION (3,684) (1,408) (5,092) (1,513) 1,708 Net interest payable (31) (169) (348) (LOSS)/PROFIT ONORDINARY ACTIVITIESBEFORE INTEREST AND (5,123) (1,682) 1,360TAXATION Taxation 0 0 0 (LOSS)/PROFIT for theperiod (5,123) (1,682) 1,360 (LOSSES)/EARNINGS PERSHARE (pence) (8.0)p (3.1)p 2.5p CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS 6 months to 12 months to 31 December 30 JuneFor the six months ended 31 December 2005 2004 2005 Unaudited Unaudited Audited £000s £000s £000s (Loss)/profit for the period (5,123) (1,682) 1,360Unrealised surplus on revaluation of freehold property 0 0 2,571 Total recognised gains for the period (5,123) (1,682) 3,931 CONSOLIDATED BALANCE SHEET At 31 December 2005 As at As at 31 December 30 June 2004 2005 Unaudited Unaudited Audited £000s £000s £000sFIXED ASSETSTangible fixed assets 37,085 35,317 37,545Intangible assets 9,416 10,022 10,863 46,501 45,339 48,408CURRENT ASSETSStocks 182 274 98Debtors 2,316 3,499 5,588Cash at bank and in hand 8,425 4,188 13,253TOTAL ASSETS 57,424 53,300 67,347 Creditors falling due within one year anddeferred income (12,329) (13,695) (23,324) TOTAL ASSETS LESS CURRENT LIABILITIES 45,095 39,605 44,023 Creditors falling due after one year (8,228) (7,749) (6,777) Grants and deferred income (4,711) (5,693) (5,470) NET ASSETS 32,156 26,163 31,776 CAPITAL AND RESERVESCalled up share capital 33,010 27,485 27,485Share premium account 1,997 2,019 2,019Revaluation reserve 9,081 6,535 9,093Profit and loss account (11,932) (9,876) (6,821) EQUITY SHAREHOLDERS' FUNDS 32,156 26,163 31,776 CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 December 2005 6 months to 12 months to 31 December 30 June 2004 2005 Unaudited Unaudited Audited £000s £000s £000s NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (4,944) 1,933 9,858 RETURNS ON INVESTMENTS AND SERVICING OF FINANCEInterest received 269 171 296Interest paid (299) (338) (641)Interest element of finance lease payments (1) (2) (3)NET CASH (OUTFLOW) FROM RETURNS ON INVESTMENTS ANDSERVICING OF FINANCE (31) (169) (348) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTSPayments to acquire players' registrations (1,514) (7,684) (10,632)Proceeds from the sale of players' registrations 1,553 1,325 1,456Payments to acquire tangible fixed assets (160) (662) (951)Refund of long term season tickets 0 0 (2)NET CASH (OUTFLOW) FROM CAPITAL EXPENDITURE (121) (7,021) (10,129) NET CASH (OUTFLOW) BEFORE FINANCING (5,096) (5,257) (619) FINANCING ACTIVITIESProceeds from issue of ordinary shares 0 0 5,525Costs of share issue (22) 0 0Loan repayments (8,946) (1,041) (2,116)Capital elements of finance lease payments (14) (12) (25)New bank loans and credit facilities 9,250 10 0NET CASH INFLOW FROM FINANCING 268 (1,043) 3,384 (DECREASE)/INCREASE IN CASH (4,828) (6,300) 2,765 The proceeds from the issue of ordinary shares completed on 8 July 2005 were allreceived during June 2005. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 31 December 2005 1. The financial statements combine the results of CharltonAthletic plc and its two subsidiaries, Charlton Athletic Football CompanyLimited and Charlton Athletic Holdings Limited. The financial statements havebeen prepared in accordance with applicable accounting standards and under thehistorical cost convention, as modified by the revaluation of freeholdproperties. 2. Turnover represents income receivable from commercialactivities excluding transfer fees and value added tax. 3. Grants received in respect of safety work and groundimprovement are treated as deferred income and released to the profit and lossaccount over the life of the assets to which they relate. 4. The net amount received by the Company through long termseason ticket schemes is treated as deferred income in the balance sheet and isreleased to the profit and loss account over the period for which the investorsreceive their season ticket. 5. Freehold properties are fully revalued every five years withan interim valuation carried out three years into every five year period. 6. The costs of tangible fixed assets are written down overtheir estimated useful lives. 7. The costs of obtaining players' registrations are capitalisedand amortised evenly over the period of the respective players' contracts.Provision is made, where in the opinion of the directors, an impairment of thecarrying value of the player's registrations has occurred. These provisions areshown as exceptional items. 8. Signing on fees are recognised in the profit and loss accountevenly through the period covered by the players' contracts. 9. There is no liability for corporation taxation arising in theperiod. 10. The Company has no recognised gains or losses other than theprofit shown for the financial period. 11. The calculation of earnings per share is based on the loss of£5,123,000 (2004: loss £1,682,000) for the six months and on the weightedaverage of 63,827,309 shares in issue during this period (2004: 54,969,293). 12. The financial information for the six months ended 31 December2004 and 31 December 2005 contained in this statement is unaudited and does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985 ("the Act"). The financial information for the year ended 30 June 2005 isan abridged version of the group's published financial statements for thatperiod, which contained an unqualified audit report and which has been filedwith the Registrar of Companies. The audit report contained no statement underSection 237 (2) or (3) of the Act. Copies of this statement are being sent to shareholders and are available fromCharlton Athletic plc, The Valley, Floyd Road, London, SE7 8BL. These resultswere announced to the London Stock Exchange on 23 March 2006 and distributed toshareholders after that date. This information is provided by RNS The company news service from the London Stock Exchange