TIDMCCP
RNS Number : 3111B
Celtic PLC
19 September 2018
Celtic PLC
Results for the year ended 30 June 2018
SUMMARY OF THE RESULTS
Operational Highlights
-- Winner of the Scottish Domestic "Double Treble" and our
seventh consecutive SPFL Premiership title
-- Qualified for the UEFA Champions League group stages for the second consecutive season
-- Finished third in the UEFA Champions League group stage,
qualifying for the round of 32 of the Europa League
-- 32 home matches (including the Scott Brown Testimonial) played at Celtic Park (2017: 31)
Financial Highlights
-- Group revenue increased by 12.1% to GBP101.6m (2017: GBP90.6m)
-- Operating expenses including labour increased by 14.1% to GBP87.1m (2017: GBP76.3m)
-- Gain on sale of player registrations of GBP16.5m (2017: GBP2.3m)
-- Acquisition of player registrations of GBP16.6m (2017: GBP13.8m)
-- Profit before taxation of GBP17.3m (2017: GBP6.9m)
-- Year-end cash net of bank borrowings of GBP36.1m (2017: GBP17.9m)
-- Year-end net cash, net of debt and debt like items, of GBP27.0m (2017: GBP13.4m)(1)
(1) net cash, net of debt like items, is represented by cash net
of bank borrowings of GBP36.1m (2017: GBP17.9m) further adjusted
for other debt like items, namely the net player trading balance,
other loans and remuneration balances owed to certain personnel at
the balance sheet date.
For further information contact:
Celtic plc
Ian Bankier, Celtic Tel: 0141 551 4235
plc
Peter Lawwell,
Celtic plc
Iain Jamieson,
Celtic plc
Canaccord Genuity Limited, Nominated
Adviser
Simon Bridges Tel: 0207 523 8000
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
CHAIRMAN'S STATEMENT
These results, which declare record sales revenue of GBP101.6m
(2017: GBP90.6m) and a profit before taxation of GBP17.3m (2017:
GBP6.9m), reflect a financial year in which everything went
well.
On behalf of the Board I congratulate Brendan Rodgers, his staff
and the players on making history for a second successive year,
achieving a historic "Double Treble", a seventh consecutive League
Championship and consecutive qualifications for the group stages of
the UEFA Champions League. Everything that happens on the pitch is
supported across the Club and I also congratulate the executive
management team and all the staff at the Club.
The Board considers that the Group's proven strategy of
investment in football operations, whilst maintaining a
self-sustaining financial model, has provided a stable platform for
the success enjoyed in the year under review. This approach remains
entirely appropriate for us, as we seek to continue to deliver
football success and, in turn, shareholder value.
The year-end cash net of bank borrowings was GBP36.1m (2017:
GBP17.9m), which equates to a net funding position of GBP27.0m
(2017: GBP13.4m) when adjusted for debt and debt like items (as
defined in the Summary of the Results). This allows the Board to
plan for the unexpected and manage the immediate disappointment of
failing to qualify for the Group Stages of the Champions
League.
In my last annual report I referred to our vulnerability to the
growing financial power of a number of key constituencies within
the European Game. These circumstances are unchanged and we remain
watchful of events that unfold. Through Peter Lawwell's continued
involvement in the Board of the European Club Association, the Club
Competitions Committee at UEFA and the Professional Football
Strategy Council of UEFA, the Club and the game in Scotland are
well represented in this very important arena.
During the year, we made prudent and considered investments in
our infrastructure at Celtic Park, including the completion of a
new playing surface to suit the manager's desired style of play,
new LED floodlighting to comply with the UEFA elite requirements
and an updated sound system. Celtic Park's reputation as one of the
foremost football arenas in the world, with our supporters
recognised as the best in the world by FIFA, is something we can
all be proud of.
The Club continues to support the important work of Celtic FC
Foundation and we all share the same sense of pride in the
generosity of Celtic supporters, which the Foundation harnesses to
help so many people at home and abroad. It is often said that
Celtic is a club like no other and the efforts of Celtic supporters
and the Foundation is the best example of that.
I thank all of our supporters, shareholders, sponsors, partners
and colleagues for their contribution to another successful year
for the Club. We will continue to work together to develop our club
for the long term.
Ian P Bankier
19 September 2018
Chairman
CHIEF EXECUTIVE'S REVIEW
Each year, our key football objective is success in all three
domestic competitions and in the UEFA Champions League. Building on
the remarkable Invincible season last year, the Club made history
again this year by winning the "Double Treble" for the first time
in Scottish football history. Added to that, the team qualified for
and performed well in the group stages of the UEFA Champions
League, competing with two of the strongest teams in the world and
qualifying for the last 32 of the UEFA Europa League. I
congratulate Brendan, his staff, the players and everyone at the
Club for these remarkable achievements.
The Club recognises that success on the pitch leads to success
off the pitch, which is why the Board is committed to investing in
our football operations. Our ambition remains to create a world
class football club. Our success on the pitch this year has allowed
us to commit, not only to fees for the transfer of player
registrations (GBP16.6m, rising from GBP13.8m in 2017), but also to
player, football management, coaching, recruitment, medical,
performance, sports science and the youth academy costs. Total
labour costs in 2018 increased by GBP7.1m, from GBP52.2m in 2017 to
GBP59.3m (14%), largely due to increases in the football
department. This has allowed the Club to retain key football
personnel including Kristoffer Ajer, Kieran Tierney, Calum
McGregor, Tom Rogic and Leigh Griffiths on long term contracts.
We continue to search the world for talented players to play the
Celtic way, such as Odsonne Edouard who joined the Club for a Club
record transfer fee. Player recruitment and development continues
to be fundamental to the Club. Our objective is always to bring
players to the Club who will improve the squad. Given the quality
of our existing squad that is a challenging task, made more
difficult by hyper-inflation in transfer fees and player salaries
in the market. Nevertheless, our objective is to invest everything
that we can into the football operation without putting the Club at
risk.
For season 2018/19, everyone at the Club was disappointed not to
qualify for the Group Stages of the Champions League. As we shared
the successes of the last two seasons, we share in that
disappointment, but given the Club's strategy over many years we
have financial reserves to rely upon as we continue to look to the
future with ambition and optimism.
Our long term strategy enables us to continue to invest in
player retention, player recruitment, stadium infrastructure and
everything that is needed to develop the Club for future
generations and to continue to deliver success. We have an
excellent first team squad and in the Youth Academy we have the
next generation of exciting young players such as Mikey Johnston,
Karamoko Dembele and many others, all of whom are eager to follow
in the footsteps of Kieran Tierney, James Forrest and Calum
McGregor in becoming Champions League players for Celtic Football
Club.
In closing I would like to record my continued appreciation for
our Club captain, Scott Brown, who celebrated his Testimonial
Season during the year. Scott has served Celtic brilliantly over
the past decade. He has been a fantastic Celtic captain, doing so
much for the Club on and off the pitch in this role. Scott's
dedication and commitment is an inspiration to everyone at the Club
as we work to deliver success for the Celtic support.
Peter Lawwell
19 September 2018
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2018 2017
Note GBP000 GBP000
CONTINUING OPERATIONS:
Revenue 2 101,573 90,639
Operating expenses (before intangible asset
transactions and exceptional items) 2 (87,083) (76,329)
Profit from trading before intangible asset
transactions and exceptional items 14,490 14,310
Exceptional operating expenses 3 (4,141) (1,526)
Amortisation of intangible assets (8,768) (7,546)
Profit on disposal of intangible assets 16,454 2,279
Operating profit 18,035 7,517
Finance income 216 204
Finance expense (980) (824)
Profit before tax 17,271 6,897
Income tax expense 5 (1,848) -
--------- ---------
Profit and total comprehensive income for the
year 15,423 6,897
Basic earnings per Ordinary Share for the year 6 16.47p 7.38p
Diluted earnings per Share for the year 6 11.72p 5.46p
CONSOLIDATED BALANCE SHEET
2018 2017
GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 58,265 56,332
Intangible assets 20,963 13,927
Trade receivables 4,397 -
83,625 70,259
======== ========
Current assets
Inventories 2,407 2,414
Trade and other receivables 21,261 12,284
Cash and cash equivalents 42,563 24,505
-------- --------
66,231 39,203
======== ========
Total assets 149,856 109,462
======== ========
Equity
Issued share capital 27,132 27,107
Share premium 14,720 14,657
Other reserve 21,222 21,222
Accumulated profits/ (losses) 9,860 (5,563)
-------- --------
Total equity 72,934 57,423
======== ========
Non-current liabilities
Borrowings 6,250 6,450
Debt element of Convertible Cumulative
Preference Shares 4,208 4,232
Trade and other payables 10,302 5,940
Provisions 2,309 1,543
Deferred income 86 115
-------- --------
23,155 18,280
======== ========
Current liabilities
Trade and other payables 27,005 10,435
Current borrowings 300 304
Provisions 2,442 658
Deferred income 24,020 22,362
-------- --------
53,767 33,759
======== ========
Total liabilities 76,922 52,039
======== ========
Total equity and liabilities 149,856 109,462
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Capital Retained
capital premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Equity shareholders'
funds
as at 1 July 2016 24,316 14,611 21,222 2,781 (12,460) 50,470
Share capital issued 1 46 - - - 47
Reduction in debt element
of convertible cumulative
preference shares following
conversion 9 - - - - 9
Transfer from capital
reserve 2,781 - - (2,781) - -
Profit and total comprehensive
income for
the year - - - - 6,897 6,897
Equity shareholders'
funds
as at 30 June 2017 27,107 14,657 21,222 - (5,563) 57,423
Share capital issued 1 63 - - - 64
Reduction in debt element
of convertible cumulative
preference shares following
conversion 24 - - - - 24
Profit and total comprehensive
income for the year - - - - 15,423 15,423
Equity shareholders'
funds
as at 30 June 2018 27,132 14,720 21,222 - 9,860 72,934
======== ======== ======== ======== ========= ======
CONSOLIDATED CASH FLOW STATEMENT
2018 2017
Note GBP000 GBP000
Cash flows from operating activities
Profit for the year 15,423 6,897
Income tax expense 5 1,848 -
Depreciation 1,977 1,664
Amortisation of intangible assets 8,768 7,546
Impairment of intangible assets 214 287
Reversal of prior period impairment charge - (64)
Profit on disposal of intangible assets (16,454) (2,279)
Loss on disposal of property, plant and
equipment - 198
Net Finance costs 764 620
--------- --------
12,540 14,869
(Increase) / decrease in inventories 7 (525)
(Increase) in receivables (6,142) (687)
Increase in payables and deferred income 17,378 2,435
--------- --------
Cash generated from operations 23,783 16,092
Tax paid (707) -
Net Interest paid (47) (95)
--------- --------
Net cash flow from operating activities 23,029 15,997
--------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (3,461) (2,737)
Purchase of intangible assets (10,645) (9,889)
Proceeds from sale of intangible assets 9,821 11,382
--------- --------
Net cash used in investing activities (4,285) (1,244)
--------- --------
Cash flows from financing activities
Repayment of debt (200) (200)
Dividend on Convertible Cumulative Preference
Shares (486) (498)
--------- --------
Net cash used in financing activities (686) (698)
--------- --------
Net increase in cash equivalents 18,058 14,055
Cash and cash equivalents at 1 July 2017 24,505 10,450
--------- --------
Cash and cash equivalents at 30 June
2018 42,563 24,505
========= ========
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The financial information in this preliminary announcement has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs) but does not include all of the
disclosures that would be required under IFRSs. The accounting
policies applied by the Group in this financial information are the
same as those applied by the Group in its financial statements for
the year ended 30 June 2017 and are those which will form the basis
of the 2018 financial statements.
2. REVENUE
2018 2017
GBP000 GBP000
The Group's revenue comprised:
Football and Stadium Operations 43,587 37,571
Merchandising 17,717 16,479
Multimedia and Other Commercial Activities 40,269 36,589
-------- --------
101,573 90,639
======== ========
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses of GBP4.14m (2017: GBP1.53m)
can be analysed as follows:
Exceptional operating expenses comprised 2018 2017
GBP000 GBP000
Impairment of intangible assets and other
prepaid costs 511 287
Reversal of prior period impairment charges - (64)
Onerous employment contracts 3,549 1,004
Compromise payments on contract termination 81 299
4,141 1,526
======== ========
The impairment of intangible assets, and the reversal of
impairment charges, relate to adjustments required as a result of
management's assessment of the carrying value of certain player
registrations relative to their current market value.
Onerous employment contact costs result from a situation where
the committed costs under that contract are assessed as exceeding
the economic benefits expected to be received by the Group over the
term of the contract.
Settlement agreements on contract termination are costs in
relation to exiting certain employment contracts.
4. DIVIDEND ON CONVERTIBLE CUMULATIVE PREFERENCE SHARES
A 6% non-equity dividend of GBP0.51m (2017: GBP0.51m), was paid
on 31 August 2018 to those holders of Convertible Cumulative
Preference Shares on the share register at 28 July 2018. A number
of shareholders elected to participate in the Company's scrip
dividend reinvestment scheme for the financial year to 30 June
2018. Those shareholders have received new Ordinary Shares in lieu
of cash. No dividends were payable or proposed to be payable on the
Company's Ordinary Shares.
During the year, the Company reclaimed GBPnil (2017: GBP0.02m)
in respect of statute barred preference dividends in accordance
with the Company's Articles of Association.
5. TAX ON ORDINARY ACTIVITIES
The provision for corporation tax as at 30 June 2018 is GBP1.14m
(2017: nil) which reflects a tax charge of GBP1.85m with payments
of GBP0.70m made in the year. There are no tax losses carried
forward (2017: GBP7.64m) and the available capital allowances pool
is approximately GBP10.50m (2017: GBP9.52m). 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
2018 2017
GBP000 GBP000
Reconciliation of earnings to basic earnings:
Net earnings attributable to equity holders
of the parent 15,423 6,897
Basic earnings 15,423 6,897
======== ========
Reconciliation of basic earnings to diluted
earnings:
Basic earnings 15,423 6,897
Non-equity share dividend 573 577
Reclaim of statute barred non-equity share
dividends - (19)
Diluted earnings 15,996 7,455
======== ========
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 93,663 93,403
Dilutive effect of convertible shares 42,803 43,041
-------- --------
Diluted weighted average number of ordinary
shares 136,466 136,444
======== ========
Earnings per share of 16.47p (2017: 7.38p) has been calculated
by dividing the profit for the period of GBP15.4m (2017: GBP6.90m)
by the weighted average number of Ordinary Shares of 93.7m (2017:
93.4m) in issue during the year. Diluted earnings per share of
11.72p (2017: 5.46p) as at 30 June 2018 has been calculated by
dividing the profit for the period by the weighted average number
of Ordinary Shares, Convertible Cumulative Preference Shares and
Convertible Preferred Ordinary Shares in issue, assuming conversion
at the balance sheet date, if dilutive.
7. ANNUAL REPORT & FINANCIAL STATEMENTS
Copies of the Annual Report & Financial Statements together
with the Notice and Notes of the 2018 AGM will be issued to all
shareholders in due course.
The financial information set out above does not constitute the
Company's statutory financial statements for the years ended 30
June 2018 or 30 June 2017. The Independent Auditor's Reports on the
statutory financial statements for 2018 and 2017 were unqualified,
did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act
2006. The statutory financial statements for 2017 have been filed
with the Registrar of Companies and those for 2018 will be
delivered to the Registrar of Companies in due course.
This information is provided by RNS, the news service of the
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contact rns@lseg.com or visit www.rns.com.
END
FR EASNNFFEPEFF
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September 19, 2018 11:15 ET (15:15 GMT)
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