TIDMCCP
RNS Number : 5792R
Celtic PLC
12 September 2014
Celtic PLC
Announcement of Results for the year ended 30 June 2014
SUMMARY OF THE RESULTS
Operational Highlights
-- Winners of the SPFL.
-- Participated in the UEFA Champions League, having played 6
home European matches (2013: 6).
-- 28 home matches played at Celtic Park (2013: 30).
-- Scottish Cup Final and SPFL League Cup Final held at Celtic Park.
-- The Celtic Way officially opened in May 2014.
-- Successful hosting of the Commonwealth Games opening ceremony
Financial Highlights
-- Group revenue decreased by 14.6% to GBP64.74m (2013:
GBP75.82m), in part due to the GBP100 reward on season tickets.
-- Operating expenses (excluding exceptional operating expenses)
decreased by 4.5% to GBP59.89m (2013: GBP62.71m).
-- Investment in football personnel of GBP8.07m (2013: GBP9.67m).
-- Year end net cash at bank GBP3.83m (2013: GBP3.76m).
-- Exceptional costs of GBP4.66m (2013: GBP1.83m).
-- Profit before tax GBP11.17m (2013: GBP9.74m).
-- New long term bank facility agreement.
For further information contact:
Company
Ian Bankier, Celtic plc Tel: 0141 551 4235
Peter Lawwell, Celtic plc Tel: 0141 551 4235
Iain Jamieson, Celtic plc Tel: 0141 551 4235
Canaccord Genuity Limited, Nominated Adviser
Bruce Garrow Tel: 020 7523 8350
CHAIRMAN'S STATEMENT
This pleasing set of annual results arise principally because we
have enjoyed a second consecutive season winning our home league
and participating in UEFA Champions League football, together with
an increased contribution from the disposal of player registrations
during the year. The momentum accumulated from two such seasons has
placed us in a strong financial position going forward. I pay
tribute to Neil Lennon and his management team, who left the Club
in May, and thank them for their contribution and the success
achieved during their time with the Club.
Whilst the short term objectives of the Company are dominated by
our day to day success as a Club on the park, the chief role of the
Board is to ensure that the long term future of the Club, and the
Company, is secured. Ensuring the long term security of this Club
is a process of maximising the potential of the present and
managing the risks of the future. The Board is highly conscious of
the financial environment in which we play football here in
Scotland. The harsh reality is that the total income from
broadcasting rights available to the Scottish game is a tiny
fraction of what is available to our neighbours in England.
Within this context and in the face of these hard facts, the
Board has evolved the strategy that the Club, financially, has to
adopt a self-sustaining model. In plain words, we have to live
within our means. We cannot spend money that we don't have. This is
the only way to discharge our fundamental duty to protect the
future of this great Club for our fans and for future generations
of Celtic fans. Despite all of this, we share the fans'
disappointment over the failure to qualify for the group stages of
the UEFA Champions League this year.
Obviously, we work very hard to employ the funds we have to
allow the manager and the team to produce the best football results
they can. We do our utmost to acquire the best players we can
within our financial constraints and the manager and the football
operation use their best efforts to develop these players along
with the talented players produced by our Youth Academy. We fully
support our Chief Executive and his team as they manage this
delicate and often difficult balance. There is no other way to
manage a sustainable football club in Scotland.
As a result of these constraints, we are committed to improving
the football environment in which we play. We are represented at
the highest levels of Scottish and European football by our Chief
Executive, who is a board member of the European Club Association
and the Scottish Football Association as well as being a member of
the Professional Game Board of the Scottish FA, and by our
Financial Director, who is a board member of the Scottish
Professional Football League and a member of the European Club
Association's Finance Committee.
This year also saw the creation of Celtic FC Foundation, the
merger of Celtic Charity Fund and the Company's Community
Foundation Department to become a new, stronger charity with a
wider role and greater reach. In keeping with the charitable
principles and heritage of the Company, we are delighted to support
Celtic FC Foundation as it delivers change and purpose to the
Celtic Family and beyond.
The Foundation's priority is to provide assistance to those who
face daily challenges within its key priority areas: health;
equality; learning and poverty. In addition, support is offered in
the form of delivery and/or partnership to external charities and
other organisations who offer value in the community and whose
principles fit within these key priority areas.
As we look forward to the year to come, I am delighted to
welcome Ronny Deila to Celtic. The Board is fully supportive of the
philosophy and long term approach of the coaching team. We look
forward with anticipation to the development of a new team on the
pitch that will, no doubt, feed from the passion and dedication of
our supporters, and to the continued development of the Club to
maintain stability and success for the long term.
I thank each and every one of our fans, sponsors, partners and
shareholders for their continuing commitment to this great
institution.
Ian P Bankier
12 September 2014
Chairman
CHIEF EXECUTIVE'S REVIEW
The year ended 30 June 2014 saw success on and off the pitch and
the beginning of a transition for Celtic, which I am sure will
build on the good work of previous years, delivering stability,
growth and success for the future.
Our core business strategy is focussed on a football operation
with a self sustaining financial model and relies upon: the youth
academy; player development; player recruitment; management of the
player pool; and sports science and performance analysis; to
deliver long term, sustainable football success. The Board reviews
our strategy on an ongoing basis and we believe that it continues
to support the stability and growth of the club in the short and
long term. Our year end cash at bank position has increased
slightly to GBP3.83m (2013: GBP3.76m), however it should be noted
that, during the year, fluctuating cash requirements mean that we
are in a net debt position, which peaked at GBP6.50m during
2013/14.
The Club won the inaugural Scottish Professional Football League
Premiership, securing the league title on 26(th) March, the
earliest that the top division had been won in 85 years. Despite
disappointing results in the domestic cup competitions, our
qualification for the group stages of the UEFA Champions League
contributed to a successful season for the Club, one that would
come to be the last for Neil Lennon. Adding to the honours that he
won as a player, Neil's time as manager of Celtic was a great
success, supported by Johan Mjallby and Garry Parker. I thank them
for their commitment to Celtic and to the success that we have
enjoyed.
Our Youth Academy enjoyed another very impressive year, with
teams participating in the UEFA Youth League and experiencing
domestic success including the SPFL Under 20 league (for the fifth
time in a row), SPFL Under 19 League, the SPFL Under 19 League Cup
and the Glasgow Cup (Under 17s). During the year we were delighted
to see the continued emergence of first team players from the
Academy squads, which is so important to the culture of the Club.
The partnership between the Youth Academy and St. Ninian's High
School in Kirkintilloch continues to grow, with development of
talent on the pitch and in the classroom producing young players
ready to move on to full time football.
The continued commitment of our supporters, shareholders,
partners and colleagues is reflected in a successful year for
ticket sales, stadium operations, catering and hospitality,
merchandising, multimedia and commercial activities. This continued
support is appreciated and not taken for granted. We are committed
to the development of the Celtic brand, including the improvement
of the match day experience for our supporters at Celtic Park,
which is at the heart of our ongoing strategy.
The opening of the Celtic Way and the development works around
Celtic Park was a milestone for the Club and marked the end of a
long term project to assemble and develop the land around the
stadium for the benefit of the Club, our supporters and the local
community. These developments were completed in time for the Club
to host the SPFL League Cup Final, the Scottish Cup Final and,
after the year end, the Opening Ceremony of the Glasgow 2014
Commonwealth Games. Celtic Park and the Celtic brand were showcased
on the world stage. We will do all that we can to capitalise on
that, adding value for the future.
In June 2014 the appointment of Ronny Deila, a young manager
with progressive ideas, marked the beginning of a period of
transition for the Club. The Board will support Ronny and his
coaching team in the transfer market and in the development of the
football operation generally. The Board's commitment is clear. The
Board will re-invest every penny received back into the Club for
the longer term. We will continue to invest, not only in our own
academy but also to scour the world for talent to develop and to
make a difference at the Club. We cannot, however, put into
jeopardy the long term future of this Club or its supporters with
reckless spending. Costs must be managed, particularly given the
challenges presented in the Scottish football environment.
Improvement in the football environment in which the Club plays
remains an important element of our strategy.
The recent result in the qualifiers for the group stages for the
Champions League and some results in the SPFL have been
disappointing. Football success is crucial to the Club, but the
experience of the appointments of Martin O'Neill, Gordon Strachan
and Neil Lennon shows us that time is needed to develop through
periods of transition. Each of those managers developed into great
managers of the Club. One of Ronny Deila's main strengths is
developing players and he is excited by the young talent that we
have at the Club, including graduates from our Youth Academy, for
example Callum McGregor, Liam Henderson and Eoghan O'Connell, and
seven new players joining this summer. Although Fraser Forster,
Georgios Samaras and Tony Watt left the squad that completed last
season, we feel that our squad has grown in strength and depth. We
are sure that, with the support of the Club and its supporters,
Ronny will deliver a team that we can all be proud of.
The main objectives for the forthcoming season are success in
all three domestic competitions and the UEFA Europa League, playing
creative and exciting football, and to build a team for the
qualifiers of the UEFA Champions League next year. I am confident
that, with the strong base that the Club has developed over
previous years, and with the continued support of our supporters,
partners and colleagues, these objectives will be achieved.
Peter Lawwell
12 September 2014
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2014 2013
Operations Operations
excluding excluding
intangible Intangible intangible Intangible
asset asset asset asset
trading trading Total trading trading Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Continuing operations:
Revenue 2 64,736 - 64,736 75,816 - 75,816
Operating expenses (excluding
exceptional operating expenses) 2 (59,885) - (59,885) (62,714) - (62,714)
------------ ----------- --------- ------------ ----------- ---------
Profit from trading before
asset transactions and
exceptional
items 4,851 - 4,851 13,102 - 13,102
Exceptional operating expenses 3 (575) (4,089) (4,664) (1,331) (501) (1,832)
Amortisation of intangible
assets 2 - (5,300) (5,300) - (5,930) (5,930)
Profit on disposal of intangible
assets - 17,052 17,052 - 5,195 5,195
Loss on disposal of property,
plant and equipment (101) - (101) (96) - (96)
------------ ----------- --------- ------------ ----------- ---------
Operating profit / (loss) 4,175 7,663 11,838 11,675 (1,236) 10,439
============ =========== ============ ===========
Finance income 53 21
Finance expense (721) (721)
--------- ---------
Profit before tax 11,170 9,739
Income tax expense 5 - -
--------- ---------
Profit and total comprehensive
income for the year 11,170 9,739
========= =========
Profit attributable to equity
holders of the parent 11,170 9,739
========= =========
Total comprehensive income
attributable to equity holders
of the parent 11,170 9,739
========= =========
Basic earnings per Ordinary
Share from continuing operations
and for the year 6 12.21p 10.73p
Diluted earnings per share
from continuing operations
and for the year 6 8.60p 7.56p
CONSOLIDATED BALANCE SHEET
2014 2013
Notes GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 55,594 52,456
Intangible assets 7,197 9,798
---------
62,791 62,254
========= ==========
Current assets
Inventories 1,696 1,734
Trade and other receivables 17,258 3,934
Cash and cash equivalents 14,739 14,348
---------
33,693 20,016
========= ==========
Total assets 96,484 82,270
========= ==========
Equity
Issued share capital 24,357 24,341
Share premium 14,529 14,486
Other reserve 21,222 21,222
Capital reserve 2,695 2,650
Accumulated losses (8,972) (20,142)
---------
Total equity 53,831 42,557
========= ==========
Non-current liabilities
Interest-bearing liabilities/bank loans 9,844 10,219
Debt element of Convertible Cumulative
Preference Shares 4,284 4,345
Provisions 1,047 -
Deferred income 59 119
--------- ----------
15,234 14,683
========= ==========
Current liabilities
Trade and other payables 16,937 14,048
Current borrowings 485 489
Provisions 265 1,240
Deferred income 9,732 9,253
27,419 25,030
========= ==========
Total liabilities 42,653 39,713
========= ==========
Total equity and liabilities 96,484 82,270
========= ==========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Capital Retained
Group capital premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Equity shareholders'
funds
as at 1 July 2012 24,264 14,443 21,222 2,630 (29,881) 32,678
Share capital issued 1 43 - - - 44
Transfer to capital
reserve (20) - - 20 - -
Reduction in debt
element of convertible
cumulative preference
shares 96 - - - - 96
Profit and total comprehensive
income for the year - - - - 9,739 9,739
Equity shareholders'
funds
as at 30 June 2013 24,341 14,486 21,222 2,650 (20,142) 42,557
Share capital issued 1 43 - - - 44
Transfer to capital
reserve (45) - - 45 - -
Reduction in debt
element of convertible
cumulative preference
shares 60 - - - - 60
Profit and total comprehensive
income for the year - - - - 11,170 11,170
Equity shareholders'
funds
as at 30 June 2014 24,357 14,529 21,222 2,695 (8,972) 53,831
======== ======== ======== ======== ========= ======
CONSOLIDATED CASH FLOW STATEMENT
2014 2013
Note GBP000 GBP000
Cash flows from operating activities
Profit for the year 11,170 9,739
Depreciation 1,747 1,823
Amortisation of intangible assets 5,300 5,930
Impairment of property, plant and equipment - 37
Impairment of intangible assets 4,089 501
Profit on disposal of intangible assets (17,052) (5,195)
Loss on disposal of property, plant and
equipment 101 96
Net finance costs 668 700
--------- --------------
6,023 13,631
Decrease in inventories 38 426
Increase in receivables (819) (510)
Increase / (decrease) in payables and
deferred income 2,734 (3,012)
--------- --------------
Cash generated from operations 7,976 10,535
Net interest paid (153) (173)
--------- --------------
Net cash flow from operating activities
- A 7,823 10,362
--------- --------------
Cash flows from investing activities
Purchase of property, plant and equipment (3,000) (1,352)
Purchase of intangible assets (9,880) (9,503)
Proceeds from sale of intangible assets 5,620 7,521
--------- --------------
Net cash used in investing activities
- B (7,260) (3,334)
--------- --------------
Cash flows from financing activities
Repayment of debt (379) (379)
Dividends paid (482) (499)
--------- --------------
Net cash used in financing activities
- C (861) (878)
--------- --------------
Net (decrease) / increase in cash equivalents
A+B+C (298) 6,150
Cash and cash equivalents at 1 July 2013 14,348 8,198
--------- --------------
Cash and cash equivalents including overdraft
at 30 June 2014 14,050 14,348
========= ==============
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These Financial Statements have been prepared in accordance with
the recognition and measurement principles of IFRS as adopted by
the European Union. The accounting policies have been consistently
applied to both years presented.
2. REVENUE AND OPERATING EXPENSES
REVENUE 2014 2013
GBP000 GBP000
The Group's revenue comprised:
Football and Stadium Operations 28,273 32,687
Merchandising 13,520 14,976
Multimedia and Other Commercial Activities 22,943 28,153
--------- --------
64,736 75,816
========= ========
OPERATING EXPENSES 2014 2013
GBP000 GBP000
The Group's operating expenses comprised:
Football and Stadium Operations (excluding
exceptional items and asset transactions) 48,938 51,385
Exceptional items excluding impairment
of intangible assets 575 1,331
Impairment of intangible assets 4,089 501
Amortisation of intangible assets 5,300 5,930
Profit on disposal of intangible assets (17,052) (5,195)
Loss on disposal of property, plant
and equipment 101 96
--------- --------
Total Football and Stadium Operations 41,951 54,048
Merchandising 8,667 9,008
Multimedia and Other Commercial Activities 2,280 2,321
52,898 65,377
========= ========
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses of GBP4.66m (2013: GBP1.83m)
can be analysed as follows:
Exceptional operating expenses comprised 2014 2013
GBP000 GBP000
Impairment of property, plant and equipment - 37
Impairment of intangible assets 4,089 501
Compromise payments on contract termination 575 54
Onerous lease provision - 1,240
-------- --------
4,664 1,832
======== ========
4. DIVIDENDS PAYABLE
A 6% (before tax credit deduction) non-equity dividend of
GBP0.53m (2013: GBP0.53m) was paid on 1 September 2014 to those
holders of Convertible Cumulative Preference Shares on the share
register at 29 July 2014. On 31 August 2007 the entitlement to a
dividend on the Convertible Preferred Ordinary Shares ceased. A
number of shareholders elected to participate in the Company's
scrip dividend reinvestment scheme for the financial year to 30
June 2014. Those shareholders have received new Ordinary Shares in
lieu of cash. Theimplementation of the presentational aspects of
IAS32 ("Financial Instruments: disclosure") in the preparation of
the annual results, requires that the Group's Preference Shares and
Convertible Preferred Ordinary Shares, as compound financial
instruments, are classified as a combination of debt and equity and
the attributable non-equity dividends are classified as finance
costs. No dividends were payable or proposed to be payable on the
Company's Ordinary Shares.
5. TAX ON ORDINARY ACTIVITIES
No provision for corporation tax or deferred tax is required in
respect of the year ended 30 June 2014. Estimated tax losses
available for set-off against future trading profits amount to
approximately GBP13.30m (2013: GBP23.44m) and, in addition, the
available capital allowances pool is approximately GBP10.74m (2013:
GBP12.82m). These estimates are subject to the agreement of the
current and prior years' corporation tax computations with H M
Revenue and Customs.
6. EARNINGS PER SHARE
2014 2013
GBP000 GBP000
Reconciliation of earnings to basic earnings:
Net earnings attributable to equity holders
of the parent 11,170 9,739
Basic earnings 11,170 9,739
======== ========
Reconciliation of basic earnings to diluted
earnings:
Basic earnings 11,170 9,739
Non-equity share dividend 526 527
Diluted earnings 11,696 10,266
======== ========
No.'000 No.'000
Reconciliation of basic weighted average
number of ordinary shares to
diluted weighted average number of ordinary
shares:
Basic weighted average number of ordinary
shares 91,485 90,730
Dilutive effect of convertible shares 44,573 45,098
-------- --------
Diluted weighted average number of ordinary
shares 136,058 135,828
======== ========
Earnings per share has been calculated by dividing the profit
for the period of GBP11.17m (2013: GBP9.74m) by the weighted
average number of Ordinary Shares of 91.5m (2013: 90.7m) in issue
during the year. Diluted earnings per share as at 30 June 2014 has
been calculated by dividing the profit 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, in accordance with IAS33
Earnings Per Share. As at June 2014 and June 2013 no account was
taken of potential share purchase options, as these potential
Ordinary Shares were not considered to be dilutive under the
definitions of the applicable accounting standards.
7. BANKING FACILITIES
Following a review of potential future banking facility
requirements, the Company entered into a new lending agreement with
the Co-operative Bank effective as of 30 August 2014. This new
agreement has a combined borrowing facility of GBP20.40m which
consists of a GBP6.00m revolving credit facility and GBP14.40m in
long term loans. The revolving credit facility will bear interest
at base rate plus 1.00% and will reduce by GBP0.50m after year one
and a further GBP0.50m after year two. The facility will be repaid
or reviewed after three years.
The long term loans will bear interest at London Inter-Bank
Offered Rate plus 1.125%. The loans are floating rate loans and
therefore expose the Group to cash flow risk. The loans are
repayable in equal quarterly instalments of GBP0.05m from the
commencement date until full repayment of GBP12.40m in July 2019.
The Group has the option to repay the loans earlier than these
dates without penalty.
The borrowing facility will continue to be secured over Celtic
Park, land adjoining the stadium and at Westhorn and
Lennoxtown.
8. ANNUAL REPORT & ACCOUNTS
Copies of the Annual Report & Accounts together with the
Notice and Notes of the 2014 AGM will be issued to all shareholders
in due course.
The financial information set out above was approved by the
directors on 12 September 2014 and does not constitute the
Company's statutory accounts for the years ended 30 June 2014 or 30
June 2013. The auditor's opinion on the 2014 statutory accounts is
unmodified and does not include a statement under Sections 498 (2)
or (3) of the Companies Act 2006. The statutory accounts for 2013
have been filed and those for 2014 will be delivered to the
Registrar of Companies in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
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