RNS Number : 8129U
Birmingham City PLC
20 May 2008
Birmingham City plc
Chairman's Statement
The six month period under review was very difficult for the Club and has subsequently resulted in our relegation. Following a
satisfactory start to the season Steve Bruce left the Club and Alex McLeish and his management team were recruited. We suffered a terribly
disappointing end to the season, with other clubs overhauling us in the fight to avoid dropping into the second tier of English football. I
am confident that our managerial appointments can enable us to progress our aims of regaining and then consolidating the Club in the Premier
League.
This has been a tremendously challenging year and I would like to thank our entire staff for their efforts and our fan base for its
continuing loyal support.
David Sullivan
Chairman
Managing Director's Review
* Turnover for the 6 months, £32.6m (up from £14.3m in 2007 H1)
* Operating profit £7.8m (up from £3m in 2007 H1)
A terribly disappointing season has seen the Club relegated from the FA Premier League to the Championship.
The figures being reported on in the six months cover the first half of the season (entirely in the Premier League) and show turnover
considerably higher at £32.6m (2007 H1: £14.3m). The 2007 figures cover the same period in the Championship. Operating profit before
interest and taxation was £7.8m, compared to a profit in 2007 of £3.0m. Wage costs increased by £5.18m and there was a gain on the sale
of player registrations, £1.65m compared to £5.6m in the previous year. The full year results will include the remainder of the season in
the Premier League and the first month of the new Championship season.
Relegation to the Championship will have a significant financial effect with broadcast and media income likely to be £12m lower.
Revenues generated from ticket sales, sponsorship and commercial streams are also expected to fall as a direct result of relegation. The
Club will receive Premier League parachute payments of approximately £12m next year. There will be a fundamental review of all aspects of
the Club to ensure that we put in place an organisation capable of regaining and maintaining membership of the Premier League.
The Club has a nucleus of young players, Semih Aydilek, Shaun Timmins, Shane Williams, Jordan Mutch, Krystian Pearce, Artur Krysiak,
David Joyce, Jamie Sheldon, Dean Lyness and Mitchell McPike who have all represented their countries during the current season. These young
prospects will enhance the future of the Club.
We have managed the business to enable us, despite relegation, to be in a position to ensure that the quality of the playing squad is
maintained.
The Club's relegation will have a very negative effect on the business but we believe we have the right management team in place to
regain membership of the Premier League at the first attempt.
Karren Brady
Managing Director
Consolidated Income Statement
Notes Six months ended year ended
29 28 February 31
February 2007 August
2008 £'000 2007
£'000 £'000
Continuing operations
Revenue 2 32,581 14,267 25,039
Operating expenses (18,678) (13,351) (30,541)
Profit/ (loss) from operations 13,903 916 (5,502)
before player amortisation and
trading
Player amortisation and (7,770) (3,521) (8,213)
trading
Profit on sale of players 1,650 5,614 7,769
registrations
Operating profit/ (loss) 7,783 3,009 (5,946)
Finance income 16 24 62
Finance cost (553) 101 (671)
Profit/ (loss) before taxation 7,246 3,134 (6,555)
Taxation (2,115) (953) 1,853
Profit/ (loss) attributable to
equity shareholders 5,131 2,181 (4,702)
Earnings per ordinary share 3
- Basic (pence) 6.30p 2.70p (5.82p)
- Diluted (pence) 6.30p 2.67p (5.82p)
Statement of Recognised income and expense
There were no recognised gains or losses other than those reported above.
Consolidated Balance Sheet
Six months ended year ended
29 February 28 February 31 August
2008 2007 2007
£'000 £'000 £'000
Assets
Non-current assets
- Intangible fixed assets 23,860 12,941 25,292
- Property, plant and 13,099 13,099 13,138
equipment
- Deferred tax assets - - 841
36,959 26,040 39,271
Current assets
- Inventories 421 364 555
- Trade and other receivables 13,916 14,112 13,825
- cash and cash equivalents - - 3,905
14,337 14,476 18,285
Total assets 51,296 40,516 57,556
Liabilities
Non-current liabilities
Preference shares 18 18 18
Interest bearing loans and 851 991 981
borrowings
Deferred income 889 1,440 1,233
Capital grants (deferred 2,051 2,108 2,079
income)
Deferred and current tax 1,266 1,965 -
liabilities
Trade and other payables 4,200 2,887 -
9,275 9,409 4,311
Current liabilities
Interest bearing loans, 2,485 985 105
overdrafts and borrowings
Trade and other payables 16,084 9,090 22,744
Deferred income 9,081 4,992 21,156
Capital Grant (deferred 57 57 57
income)
27,707 15,124 44,062
Total liabilities 36,982 24,533 48,373
Net assets 14,314 15,983 9,183
Capital and reserves
Issued capital 8,150 8,075 8,150
Share premium 10,081 10,073 10,081
Revaluation reserve 313 313 313
Other reserve (2,539) (2,539) (2,539)
Retained earnings (1,691) 61 (6,822)
Equity shareholders' funds 14,314 15,983 9,183
Consolidated Cash Flow Statement
Notes Six months ended year ended
29 February 28 February 31 August
2008 2007 2007
£'000 £'000 £'000
Net cash flow from operations 4 6,748 (5,685) 8,167
Cashflow from investing
activities
Acquisition of property, plant (243) (851) (1,162)
and equipment
Proceeds from sale of - 5 12
property, plant and equipment
Acquisition of player's (12,238) (1,537) (16,997)
registrations
Proceeds from sale of players 4,311 2,519 8,739
registration
Net cashflow from investing (8,170) 136 (9,408)
activities
Cashflows from financing
activities
Proceeds from issue of capital - - 83
Capital repayments of (53) (20) (81)
borrowings
New loans - 836 836
Net cashflow from financing (53) 816 838
activities
Net (decrease)/increase in (1,475) (4,733) (403)
cash and cash equivalents
Cash and cash equivalents at (828) 3,905 4,308
start or period
Cash and cash equivalents at (2,303) (828) 3,905
end of period
Represented by:
Cash and cash equivalents - - 3,905
Bank overdraft (2,303) (828) -
(2,303) (828) 3,905
Notes to the Interim Financial Statements
1. Principal Accounting Policies
The Group Interim financial statements consolidate those of the Company and its subsidiary (together referred to as "the Group").
The Group Interim financial statements, which are unaudited, have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards ("IFRSs") as adopted by the European Union ("Adopted IFRSs") and IFRIC Interpretations and with
those parts of the Companies Act 1985 applicable to companies adopting IFRS for the first time.
The financial information set out in this interim report does not constitute full statutory accounts within the meaning of section 240
of the Companies Act 1985. The auditors report on the accounts for the year ended 31 August 2007 was unqualified. Copies of these financial
statements are available from the offices of Birmingham City Football club, St Andrew's Stadium, Birmingham, B9 4NH.
The accounting policies set out below have, unless otherwise stated, been applied consistently for the Group to all periods presented in
these consolidated financial statements and in preparing an opening IFRSs balance sheet at transition date, being 1 September 2006.
a) Transition to Adopted IFRSs
The Group has prepared their financial statements in accordance with Adopted IFRSs for the first time and consequently have applied
IFRS 1. An explanation of how the transition to Adopted IFRSs has affected the previously reported financial position, financial performance
and cash flows of the Group is provided in note 6.
IFRS 1 grants certain exemptions form the full reporting requirements of IFRSs in the transitional period. The following exemptions have
been applied in these Interim financial statements:
* Business combinations: The Group has applied the business combinations exemption in IFRS 1. It has not restated business
combinations that took place prior to 1 September 2006 (being its transition date).
* Fair value as deemed cost: the Group has not taken the option to restate items of property, plant and equipment to their fair
value at 1 September 2006. Instead, the deemed cost under Adopted IFRSs will be the cost amount of each asset, previously shown under UK
GAAP.
* The Group has not taken advantage of the transitional provisions contained in IFRS 5 "Non-current Assets Held for Sale", and has
applied this standard with effect from 1 September 2006.
* Share based payments: the Group has elected to apply the share based payment exemption and only apply IFRS 2 to those share
options granted after 7 November 2002.
* Estimates: Estimates under IFRS at 1 September 2006 are consistent with estimates made for the same date under UK GAAP.
b) Measurement convention
The Interim financial statements are prepared on the historical cost basis. Non-current assets groups held for sale are stated at the
lower of previous carrying amount and fair value less costs to sell.
1. Principal Accounting Policies (continued)
c) Basis of consolidation
Control exists where the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as
to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are
taken into account. The financial statements of the subsidiary are included in the consolidated financial statements from the date that
control commences until the date that control ceases.
Intra group balances and any unrealised gains and losses or income and expenses arising from intra group transactions are eliminated in
preparing the consolidated financial statements.
d) Revenue recognition
Revenue represents income arising from sales to third parties, and excludes transfer fees receivable and value added tax.
i) Season ticket and corporate hospitality revenue is recognised over the period of the football season as home matches are played.
ii) Fixed elements of FA Premier League central broadcasting contracts are recognised over the period of the football season as
league matches (home and away) are played. Appearance fees are accounted for as earned. The merit based payment is recognised at the end of
the league season, when the final league position is known.
iii) Sponsorship contracts are recognised over the duration of the contract, either on a straight-line basis, or over the period of
the football season, as appropriate based on the terms of the contract. Catering revenues are recognised on an earned basis. Revenue from
the sale of branded products is recognised at the point of despatch when significant risks and rewards of ownership is deemed to have been
transferred to the buyer.
e) Expenses
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease
incentives are recognised in the income statement as an integral part of the total lease expense.
Net financing costs
Net financing costs comprise interest payable on borrowings, calculated using the effective interest rate method and interest receivable
on funds invested.
The discounting of the deferred payments for the purchase of players' registrations produces a notional interest payable amount and this
is charged to finance costs.
f) Taxation
Tax on the result for each period comprises current and deferred tax. Tax is recognised in the income statement except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantially enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amounts of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
the asset can be utilised.
g) Intangible assets
i) Acquired players' registrations
The costs associated with the acquisition of players' registrations are initially recorded at their fair value at the date of
acquisition as intangible fixed assets. These costs are fully amortised over the period of the respective players' contracts, being between
1 and 5 years.
For the purposes of impairment reviews, acquired players' registrations are classified as a single cash-generating unit until the point
at which it is made clear that the player no longer remains an active member of the playing squad. In these circumstances the carrying value
of the players' registration is reviewed against a measurable net realisable value.
Acquired players' registrations are classified as 'Assets held for sale' on the balance sheet if, at any time it is considered that the
carrying amount of a registration will be recovered principally through a sale the measurement of the registration is lower of (a) fair
value (less costs to sell) and (b) carrying value. Amortisation of the asset is suspended at the time of reclassification, although
impairment charges still need to be made if applicable.
ii) amortisation
Amortisation is charge to profit or loss on a straight-line basis over the estimated useful lives of intangible fixed assets unless such
lives are indefinite. Intangible assets with an indefinite life are systematically tested for impairment at each balance sheet date.
h) Property, plant and equipment
i) Owned assets
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
ii) Depreciation
Depreciation is charged to the income statement, to write off the cost of property, plant and equipment less estimated residual value,
on a straight-line basis, over their estimated useful lives as follows:
Freehold land - Not depreciated
Freehold property - 50 years
Long leasehold property - 50 years
Fixtures and equipment - Between 3 and 5 years
Motor vehicles - 5 years
1. Principal Accounting Policies (continued)
i) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the expenditure incurred in acquiring the
inventories and bringing them to their existing location and condition. Net realisable value is based on the estimated selling price in the
ordinary course of business. Provision is made for obsolete, slow-moving or defective items where appropriate.
j) Cash and cash equivalents
Cash and cash equivalents comprises cash balance and call deposits.
k) Signing on fees
Signing on fees are charged, on a straight-line basis, to the income statement over the period of the player's contract.
Prepayments/accruals arising at each period end are included within prepayments and accrued income or accruals within current assets or
current liabilities, as appropriate. Where a player's registration is transferred, any signing on fees payable in respect of future periods
are charge against the profit/(loss) on disposal of players' registrations in the period in which the disposal is recognised.
l) Deferred income
Deferred income comprises amounts received from capital grants, sponsorship and season ticket income. Capital grants are released to the
income statement on a straight-line basis over the estimated useful lives of the assets to which they relate. Other deferred income is
released to the income statement on a straight-line basis over the period to which it relates.
m) Derivative financial instruments and hedging
The Group does not use derivative financial instruments to hedge its exposure to risks arising from its operational, financing and
investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading
purposes.
n) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption being recognised in
profit or loss over the period of the borrowings on an effective interest basis.
Debt is initially stated at the amount of the net proceeds after deducting any issue costs which are amortised over the life of the
debt. The carrying amount is increased by the finance cost in respect of the accounting period and reduced by payments made in the period.
o) Employee benefits
i) Pensions
Eligible employees of the company are members of the Football League Limited Pensions and Life Assurance Scheme. The company does not
make contributions to the scheme. The assets and liabilities of the scheme are managed independently of the group and therefore do not form
part of these financial statements.
ii) Share based payments
Share based incentive arrangements are provided to employees under the Group's share option schemes. Share based arrangements put in
place since 7 November 2002 and invested at transaction date are valued at date of grant and charged to operating profit over the vesting
period of the scheme. Share options are valued using an appropriate pricing model. There were no share options outstanding at 28 February
2008.
p) Impairment
The carrying value of the Group's assets, other than inventories, are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement.
q) Trade and other payables and receivables
Trade and other payables and receivables on normal terms are stated at their nominal value, less, in the case of receivables, any
impairment losses that may be required.
Other payables on deferred terms, in particular the purchase of players' registrations, are recorded at their fair value on the date of
the transaction and subsequently at amortised cost.
Other receivables on deferred terms, in particular the proceeds from sales of players' registrations are recorded at their fair value at
the date of sale and subsequently at amortised cost less allowances for impairment.
r) Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment) or in
providing products or services within a particular economic environment (geographical segment) which is subject to risks and rewards that
are different from those of the other segments.
s) Investments
Interest in subsidiary undertakings is valued at cost less impairment.
2. Segment analysis
The Group has one main business segment, that of professional football operations. As a result, no additional business segment
information is required to be provided. It operates in one geographical segment, in the United Kingdom, and accordingly no additional
geographical segmental information is required to be provided.
A voluntary analysis of the revenue streams is given below to assist with an understanding of the business.
Six months ended year ended
29 February 28 February 31 August
2008 2007 2007
£'000 £'000 £'000
Matchday 13,111 6,928 11,379
Media 12,718 3,652 6,701
Commercial 6,752 3,687 6,959
32,581 14,267 25,039
Revenue streams comprise:
Matchday - season and matchday tickets and corporate hospitality income.
Media - television and broadcasting income, including distributions form the FA Premier League broadcasting agreements, cup competitions
and local radio.
Commercial - sponsorship income, merchandising, conference and banqueting and other sundry revenue.
3. Earnings per share
Six months ended year ended
29 February 28 February 31 August
2008 2007 2007
£'000 £'000 £'000
The earning per ordinary share
has been calculated as
follows:
(Loss)/profit on ordinary 5,131 2,181 (4,702)
activities after taxation
Basic
Weighted average number of 81,505,000 80,755,000 80,849.520
ordinary shares in issue
during the year
Earnings per ordinary share 6.30p 2.70p (5.82)p
Diluted
Weighted average number of 81,505,000 81,625,000 80,849,520
ordinary shares in issue
during the year
Earnings per ordinary share 6.30p 2.67p (5.82)p
4. Notes to the consolidated cash flow statement
Six months ended year ended
29 February 28 February 31 August
2008 2007 2007
£'000 £'000 £'000
Cashflows from operating
Operating profit/(loss) 7,783 3,009 (5,946)
Amortisation of intangible 7,770 3,521 8,213
assets
Profit on sale of players (1,650) (5,614) (7,769)
registrations
Loss on disposal of property, - - (2)
plant and equipment
Depreciation on property, 282 271 543
plant and equipment
Amortisation of deferred grant (28) (28) (57)
Decrease/(increase) in 134 (4) (195)
inventories
(Increase)/decrease in (91) (2,649) (2,362)
receivables
(Decrease)/increase in trade (7,282) (4,187) 15,876
and other payables
Cash flow from operations 6,918 (5,681) 8,301
Interest paid (178) (28) (196)
Interest received 16 24 62
Tax paid (8) - -
Net cash flow from operations 6,748 (5,685) 8,167
5. Statement of movement in Equity
Profit and loss Total equity
Share Share Premium Revaluation reserve Other reserve account £'000
capital £'000 £'000 £'000 £'000
£000
Group
At 1 September 2006 8,075 10,073 313 (2,539) (2,120) 13,802
Retained loss - - - - (4,702) (4,702)
Issue of shares 75 8 83
At 31 August 2007 8,150 10,081 313 (2,539) (6,822) 9,183
Retained profit - - - - 5,131 5,131
At 29 February 2008 8,150 10,081 313 (2,539) (1,691) 14,314
6. EXPLANATION OF TRANSITION TO IFRS
As stated in the accounting policies, these are the Group's first consolidated financial statements prepared in accordance with IFRS.
All comparative information presented in these financial statements have been restated to IFRS. In preparing the opening balance sheet at 1
September 2006, an explanation of the IFRS adjustments is given in the tables below:
6. EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
6 (a) Consolidated Income Statement for the year ended 31 August 2007
Notes UK GAAP Adjustments IFRS
£'000 £'000 £'000
Continuing operations
Revenue 25,039 - 25,039
Operating expenses b (30,821) 280 (30,541)
Profit from operations before (5,782) 280 (5,502)
player amortisation and
trading
Player amortisation and a (8,371) 158 (8,213)
trading
Profit on sale of players
registrations 7,769 - 7,769
Operating loss (6,384) 438 (5,946)
Finance income 62 - 62
Finance cost a (196) (475) (671)
Loss before taxation (6,518) (37) (6,555)
Taxation d 1,794 59 1,853
Loss attributable to equity
shareholders (4,724) 22 (4,702)
6. EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
6 (a) Consolidated Income Statement for period ended 28 February 2007
Notes UK GAAP Adjustments IFRS
£'000 £'000 £'000
Continuing operations
Revenue 14,267 - 14,267
Operating expenses b (12,969) (382) (13,351)
Profit from operations before 1,298 (382) 916
player amortisation and
trading
Player amortisation and a (3,478) (43) (3,521)
trading
Profit on sale of players
registrations 5,614 - 5,614
Operating profit 3,434 (425) 3,009
Finance income 24 - 24
Finance cost a (28) 129 101
Profit before taxation 3,430 (296) 3,134
Taxation d (1,029) 76 (953)
Profit attributable to equity
shareholders 2,401 (220) 2,181
6. EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
6 (c). Consolidated Opening Balance Sheet at 1 September 2006 (transition date)
Notes UKGAAP£'000 Adjustments£'000 IFRS£'000
ASSETS
Non-current assets
- Intangible fixed assets a 14,185 (208) 13,977
- Property, plant and 12,529 - 12,529
equipment
26,714 (208) 26,506
Current assets
- Inventories 360 - 360
- Trade and other receivables b 10,407 1,056 11,463
- Cash and cash equivalents 4,308 - 4,308
15,075 1,056 16,131
Total assets 41,789 848 42,637
Liabilities
Non-current liabilities
Preference shares 18 - 18
Interest bearing loans and 282 - 282
borrowings
Deferred income 2,514 - 2,514
Capital grants (deferred 2,136 - 2,136
income)
Deferred tax d 10 91 101
4,960 91 5,051
Current liabilities
Interest bearing loans, 90 - 90
overdrafts and borrowings
Trade and other payables b, c 12,423 443 12,866
Deferred income 10,771 - 10,771
Capital Grant (deferred 57 57
income)
23,341 443 23,784
Total liabilities 28,301 534 28,835
Net assets 13,488 314 13,802
Capital and reserves
Issued capital and reserves 15,922 - 15,922
Retained earnings (2,434) 314 (2,120)
Equity Shareholders' funds 13,488 314 13,802
6. EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
6 (d) Consolidated Balance Sheet at 28 February 2007
Notes UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
- Intangible fixed assets a 13,063 (122) 12,941
- Property, plant and 13,099 - 13,099
equipment
26,162 (122) 26,040
Current assets
- Inventories 364 - 364
- Trade and other receivables b 13,357 755 14,112
13,721 755 14,476
Total assets 39,883 633 40,516
Liabilities
Non-current liabilities
Preference shares 18 - 18
Interest bearing loans and
borrowings 991 - 991
Deferred income 1,440 - 1,440
Capital grants (deferred 2,108 - 2,108
income)
Deferred tax 921 - 921
Trade and other payables 2,887 - 2,887
8,365 - 8,365
Current liabilities
Interest bearing loans,
overdrafts and borrowings 985 - 985
Trade and other payables b, c 8,566 524 9,090
Deferred income 4,992 - 4,992
Capital Grant (deferred 57 - 57
income)
Corporation tax d 1,029 15 1,044
15,629 539 16,168
Total liabilities 23,994 539 24,533
Net assets 15,889 94 15,983
Capital and reserves
Issued capital and reserves 15,922 - 15,922
Retained earnings (33) 94 61
Equity Shareholders' funds 15,889 94 15,983
6. EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
6 (e) Consolidated Balance Sheet at 31 August 2007
Notes UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
- Intangible fixed assets a 25,817 (525) 25,292
- Property, plant and 13,138 - 13,138
equipment
Deferred tax asset d 873 (32) 841
39,828 (557) 39,271
Current assets
- Inventories 555 - 555
- Trade and other receivables b 11,196 2,629 13,825
- Cash and cash equivalents 3,905 - 3,905
15,656 2,629 18,285
Total assets 55,484 2,072 57,556
Liabilities
Non-current liabilities
Preference shares 18 - 18
Interest bearing loans and
borrowings 981 - 981
Deferred income 1,233 - 1,233
Capital grants (deferred 2,079 - 2,079
income)
4,311 - 4,311
Current liabilities
Interest bearing loans,
overdrafts and borrowings 105 - 105
Trade and other payables b, c 21,008 1,736 22,744
Deferred income 21,156 - 21,156
Capital Grant (deferred 57 57
income)
42,326 1,736 44,062
Total liabilities 46,637 1,736 48,373
Net assets 8,847 336 9,183
Capital and reserves
Issued capital and reserves 16,005 - 16,005
Retained earnings (7,158) 336 (6,822)
Equity Shareholders' funds 8,847 336 9,183
6 EXPLANATION OF TRANSITION TO IFRS
a) Intangible fixed assets
Under IAS 38 "Intangible Assets", Players acquired on deferred terms are recorded at their fair value at the date of acquisition. The
related creditor is then increased to the settlement value on an effective interest rate over the period of the deferral, with this value
being charged as notional interest within interest payable in the Income Statement. The interest charged for the year ended 31 August 2007
was £475,000 (28 February 2007 : a credit of £129,000). The corresponding player registration value in intangible fixed assets is also
reduced by the notional interest amount.
An adjustment has also been made to reflect the respective adjustment to the amount of amortisation charged on the intangible fixed
asset as a result of the above adjustment. This results in a reduction in amortisation charged in the year ended 31 August 2007 of £153,000
(28 February 2007 : £43,000).
b) Signing on fees
Signing on fees are charged to the Income Statement on a straight-line basis over the period of the players contracts and are now
recognised on an accruals basis. At 31 August 2007, signing on fees results in the recognition of a prepayment of £2,629,000 (28 February
2007 : £755,000, 1 September 2006 : £1,056,000) and accruals of £1,736,000 (28 February 2007 : £516,000, 1 September 2006 : £443,000).
The impact on the Income Statement for the year ended 31 August 2007 is an increase in profit before tax of £662,000 (28 February 2007 :
decrease in profit of £374,000).
c) Holiday pay
In accordance with IAS 19, an accrual has been recognised for holiday pay. This results in a charge to the income statement of £8,000
for the period ended 28 February 2007. There is no holiday pay accrual for the year ended 31 August 2007.
d) Taxation
Taxation has been adjusted in respect of tax on the signing on fees, holiday pay accrual and the notional interest cost.
e) Non current assets held for sale
Under IFRS 5 "Non current assets held for sale" if at any time, it is considered that the carrying amount of an asset (including players
registrations) will be recovered principally through sale rather than continuing use, then the value of the asset is classified as an asset
held for sale. The asset will be disclosed as current assets at its lower of cost or net realisable value. At such time of the
reclassification, no further amortisation will be charged to the Income Statement, unless there is an indication of impairment. At each date
of the balance sheet, the directors do not consider any assets were held for sale and therefore no reclassification has been made to current
assets.
7. AVAILABILITY OF INTERIM REPORT
A full copy of these results are available from the Company's website, www.bcfc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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