TIDMBMC
Birmingham City plc
(the 'Company')
Preliminary Statement of Final Results
for the Year Ended 31 August 2008
Chairman's Statement
Following just one season in the Premier League we were relegated to
the Championship at the end of the 2007/2008 season. This was
particularly disappointing in light of the considerable investment
made in the playing squad during the previous two transfer windows.
However, the Board and management of the Club have taken up the
challenge and I hope that the progress made to date will see us back
in the top tier of English football at the end of the current season.
I would like to thank our employees for their hard work during the
year and as ever our shareholders for their continued support.
D. SULLIVAN
Chairman
Managing Director's Review
It was extremely disappointing for the football club to lose its
Premier League status after just one year in the top flight of
English football particularly after the significant investment made
in the first team squad in the previous close season and in the
January 2008 transfer window. The team eventually finished in 19th
place in the Premier League, having spent much of the second half of
the season fighting to avoid relegation. In the domestic cup
competitions defeat in the 3rd round of the Carling Cup away to
Blackburn was followed by defeat to Huddersfield in the FA Cup. In
November 2007 Steve Bruce, who had served as manager for six years,
left to join Wigan Athletic and was replaced by Alex McLeish and his
management team. I would like to take this opportunity, on behalf of
Shareholders, to thank Steve and his staff for all they did for
Birmingham City whilst at the Club. In the opinion of the Board we
have the right man in place to bring further success to the Club.
Turnover for the year to 31 August 2008 was GBP49.8m, up 99% on the
2007 figure (GBP25m) with the profit before taxation at GBP4.3m (2007:
loss GBP6.6m). The significant increase in turnover and profitability
reflects the Club's promotion to the Premier League for the season
2007/08 allied to profits earned on the disposal of players.
The increase in overheads of GBP6.5m was a result of two main factors,
an increase in staff costs, up 27% on the previous year, and a
provision for the refurbishment of the main stand. This increase in
staff costs reflects higher player remuneration.
Player amortisation rose from GBP8.2m in 2007 to GBP14m in the year to 31
August 2008, reflecting the write-off of additional costs incurred in
signing players in the 2007/08 pre-season and the January 2008
transfer window. In total during the period under review 14 senior
players were sold or left the Club including Mikael Forssell, Fabrice
Muamba and Olivier Kapo. Significant profits were made on the sale of
Muamba to Bolton, Kapo to Wigan and Matthew Sadler to Watford while
additional gains were made on performance targets achieved by players
sold in previous years.
Senior players joining the Club during this time include James
McFadden, David Murphy, Lee Carsley and Marcus Bent. In addition,
Kemy Agustien and Quincy Owusu-Abeyie had loan spells with the Club,
costing in excess of GBP1.5m.
The current season has started positively with the Club recording its
best ever start to a League Campaign. The Club is currently in 3rd
position in the Championship table. Games, particularly those at
home, have been very hard fought with many teams considering a visit
to St Andrews as their biggest game of the season. The Club has
already been selected for 8 appearances on Sky this season, the
highest number of any Championship team, showing the strength and
size of our brand.
Relegation to the Championship along with the unprecedented economic
situation presents a significant challenge to the Club in the current
year with revenues being significantly reduced. The Board is mindful
that the Club must remain as competitive as possible particularly
whilst in receipt of parachute payments while being aware of the
inherent risks involved in chasing promotion to the Premier League at
all costs. The objective of the Board is to manage costs,
particularly payroll costs of the playing squad. The Board has taken
measures to prepare for the reduction in revenue levels. Sensible
financial governance and management of the business will stand the
Club in good stead during these turbulent times, but the Club's
financial performance in the current year will obviously be impacted
by our loss of Premiership status.
The Club is undertaking scheduled major work on the Main Stand during
2008/2009 costing in the region of GBP1.3m; this will involve a
complete restructuring of the Stand and refurbishment of the Wiseman,
Captains Club and Trevor Francis areas. In continuing with its
strategy of improving facilities within the stadium, the Board has
sanctioned the installation of under soil heating to the pitch at the
end of the current season.
We expect to be pushing hard to regain our position in the Premier
League and can assure Shareholders that the Board and all members of
staff are totally committed to the long term future of the Club.
K. BRADY
Managing Director
Enquiries:
Birmingham City plc
Roger Bannister 0121 202 5230
Shore Capital and Corporate Limited (Nominated Adviser)
Graham Shore 020 7408 4090
BIRMINGHAM CITY PLC
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31ST AUGUST 2008
Note Restated
2008 2007
GBP'000 GBP'000
Continuing operations
Revenue 49,836 25,039
Operating expenses (37,007) (30,534)
Profit/(loss) from operations
before player amortisation and 12,829 (5,495)
profit on sale of players
Player amortisation (13,975) (8,170)
Profit on sale of player 5,530 7,769
registrations
Profit/(loss) from operations 4,384 (5,896)
Finance income - bank interest 30 62
receivable
Finance costs (118) (800)
Profit/(loss) before taxation 4,296 (6,634)
Taxation (1,700) 1,889
Profit/(loss) attributable to 2,596 (4,745)
equity shareholders
Earnings per share:
- Basic and diluted (pence per 3.19p (5.87p)
share)
Consolidated Statement of Recognised Income and Expense
There were no recognised gains or losses other than those reported in
the results above and the impact of the prior year adjustment of
GBP631,000. See note 3 below.
BIRMINGHAM CITY PLC
BALANCE SHEETS AS AT 31ST AUGUST 2008
Group Company
Restated (note 2008 2007
ASSETS 3) GBP'000 GBP'000
2008 2007
GBP'000 GBP'000
Non-current
assets
Intangible 17,470 25,206 - -
assets
Property, plant 12,891 13,138 - -
and equipment
Deferred tax 203 789 - -
asset
Investments - - 3,518 3,518
Trade and other 500 1,750 14,731 14,731
receivables
31,064 40,883 18,249 18,249
Current assets
Inventories 612 555 - -
Trade and other 11,687 12,075 - -
receivables
Cash and cash 4,235 3,905 - -
equivalents
16,534 16,535 - -
Total assets 47,598 57,418 18,249 18,249
Liabilities
Non-current
liabilities
Preference 18 18 18 18
shares
Interest bearing 861 981 - -
loans and
borrowings
Deferred income 541 1,233 - -
Capital grants 2,022 2,079 - -
(deferred
income)
Trade payables 3,056 2,678 - -
6,498 6,989 18 18
Current
liabilities
Interest bearing
loans, 942 113 - -
overdrafts and
borrowings
Trade and other 13,357 20,059 - -
payables
Corporation tax 1,114 - - -
payable
Deferred income 11,836 21,156 - -
Capital grants 57 57 - -
(deferred
income)
Provisions 2,154 - - -
29,460 41,385 - -
Total 35,958 48,374 18 18
liabilities
Net assets 11,640 9,044 18,231 18,231
Capital and
reserves
Issued share 8,150 8,150 8,150 8,150
capital
Other reserves 7,855 7,855 10,081 10,081
Retained (4,365) (6,961) - -
earnings
Total Equity 11,640 9,044 18,231 18,231
BIRMINGHAM CITY PLC
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31ST AUGUST 2008
Group Company
31 August 31 August
2008 2007 2008 2007
GBP'000 GBP'000 GBP'000 GBP'000
Net cash 1,218 8,167 - -
inflow from
operations
Cashflow from
investing
activities
Acquisition
of property, (341) (1,162) - -
plant and
equipment
Proceeds from
sale of 20 12 - -
property,
plant and
equipment
Acquisition (13,013) (16,997) - -
of player's
registrations
Proceeds from
sale of 11,737 8,739 - -
players
registrations
Net cash (1,597) (9,408) - -
outflow from
investing
activities
Cashflows
from
financing
activities
Proceeds from - 83 - -
issue of
capital
Capital (110) (81) - -
repayments of
borrowings
New loans - 836 - -
Net cashflow (110) 838 - -
from
financing
activities
Net decrease
in cash and (489) (403) - -
cash
equivalents
Cash and cash
equivalents 3,905 4,308 - -
at start or
period
Cash and cash
equivalents 3,416 3,905 - -
at end of
period
Represented
by:
Cash in hand 4,235 3,905 - -
and at bank
Bank (819) - - -
overdraft
3,416 3,905 - -
BIRMINGHAM CITY PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST AUGUST 2008
Notes to the cash flow statement
Group Company
2008 2007 2008 2007
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from
operating
Profit/(loss) after 2,596 (4,745) - -
taxation
Amortisation of 13,975 8,170 - -
intangible assets
Profit on sale of (5,530) (7,769)
players
registrations
Profit on disposal
of property, plant - (2) - -
and equipment
Depreciation on
property, plant and 568 543 - -
equipment
Finance cost 118 800 - -
Finance income (30) (62) - -
Taxation 1,700 (1,889) - -
Amortisation of (57) (57) - -
deferred grant
Increase in (57) (195) - -
inventories
Decrease/(increase) 1,645 (2,362) - -
in receivables
(Decrease)/increase
in trade and other (13,467) 15,869 - -
payables and
deferred income
Cash flow from 1,461 8,301 - -
operations
Interest paid (266) (196) - -
Interest received 30 62 - -
Tax paid (7) - - -
Net cash flow from 1,218 8,167 - -
operations
-
Notes:
1 The preliminary results to 31 August 2008 are extracted from
the unaudited annual accounts for that year and have been prepared in
accordance with the accounting policies adopted in those accounts.
The financial information set out in this statement does not
constitute full statutory accounts within the meaning of section 240
of the Companies Act 1985. The statutory accounts for 31 August 2007
received an audit report which was unqualified and did not contain
any statements under s237(2) or (3) of Companies Act 1985.
2 Earnings per share has been calculated as follows:
31 August 31 August
2008 2007
GBP'000 GBP'000
The earnings per ordinary
share have been calculated as
follows:
Profit/(loss) on ordinary 2,596 (4,745)
activities after taxation
Basic and diluted
No No
Weighted average number of
ordinary shares in issue 81,505,000 80,849,520
during the year
Earnings/(deficit) per 3.19p (5.87p)
ordinary share
The weighted average numbers of shares in issue is the same for both
the basic and diluted earnings per share.
3 Prior year adjustment
Signing on fees were originally charged to the Income Statement on a
cash paid basis. A change in accounting policy results in signing on
fees being accounted for 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 GBP2,629,000 (1 September 2006: GBP1,056,000) and accruals
of GBP1,729,000 (1 September 2006: GBP443,000). A tax liability has been
provided in respect of the signing on fees of GBP269,000 at 31 August
2007 (1 September 2006 : GBP183,000.
The impact on the Income Statement for the year ended 31 August 2007
is an increase in profit after tax of GBP201,000 (GBP287,000 in operating
expenses less GBP86,000 taxation). The impact on the Retained earnings
for the year ended 31 August 2006 is an increase in profit after tax
of GBP430,000 after tax of GBP183,000.
2007 2006
GBP'000 GBP'000
Prepayments 2,629 1,056
Accruals (1,729) (443)
Net impact 901 613
Less taxation (269) (183)
Cumulative prior year adjustment 631 430
4 The statutory accounts for the year ended 31 August 2007,
will be finalised on the basis of the financial information presented
by the directors in this preliminary announcement. Copies of the
accounts will be posted to shareholders in due course. Copies of
this announcement are available from the Company at St Andrew's
Stadium, Birmingham B9 4NH and at www.bcfc.com.
=--END OF MESSAGE---
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.
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