TIDMCCP
RNS Number : 8226P
Celtic PLC
12 February 2019
Celtic plc (the "Company")
INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2018
Operational Highlights
-- Currently top of the SPFL Premiership
-- Winners of the Scottish League Cup for the third season in a row
-- 17 home fixtures (2017: 19)
-- Secured European football after Christmas by qualifying for
the round of 32 of the UEFA Europa League for the second year in a
row
Financial Highlights
-- Revenue decreased by 30.1% to GBP50.0m (2017: GBP71.5m)
-- Profit from trading was GBP6.2m (2017: GBP23.7m)
-- Profit from transfer of player registrations (shown as profit
on disposal of intangible assets) GBP17.6m (2017: GBP0.5m)
-- Profit before taxation of GBP18.8m (2017: GBP19.5m)
-- Profit after taxation of GBP15.2m (2017: GBP17.4m)
-- Period end net cash at bank of GBP38.6m (2017: GBP30.9m)
-- Period end net cash, net of debt and debt like items, of GBP37.7m (2017: GBP17.0m)(1)
(1) net cash, net of debt like items, is represented by cash net
of bank borrowings of GBP38.6m (2017: GBP30.9m) further adjusted
for other debt like items, namely the net player trading balance,
other loans and remuneration balances payable to certain personnel
at the balance sheet date.
Celtic plc
CHAIRMAN'S STATEMENT
I am pleased to report on our interim results for the period
ended 31 December 2018. These show revenue of GBP50.0m (2017:
GBP71.5m) and a profit from trading of GBP6.2m (2017: GBP23.7m).
Overall, this resulted in a profit before taxation of GBP18.8m
(2017: GBP19.5m) and a period end net cash at bank of GBP38.6m
(2017: GBP30.9m). The introductory page to these interim results
summarises the main highlights.
The Club has continued to build on its historic "Double Treble"
achieved last year by adding the League Cup trophy in December
2018, the seventh consecutive trophy lifted since Brendan Rodgers
joined us, continuing our domestic clean sweep of trophies. At the
time of writing, we remain unbeaten at home in domestic
competitions this season and sit 6 points clear at the top of the
Scottish Premiership. We have also made it to the quarter finals of
the Scottish Cup. We were very disappointed not to qualify for the
group stages of the UEFA Champions League (a task that continues to
be challenging) but qualification from a very difficult group in
the UEFA Europa League was a great achievement.
These results reflect the absence of substantial UEFA Champions
League revenues in comparison to the same period last year. But
they are counter-balanced by the benefit of player trading,
significantly by the permanent transfer of the registration of
Moussa Dembele to Olympique Lyonnais. The profit on disposals of
intangible assets of GBP17.6m (2017: GBP0.5m) largely represents
this sale. Our period end net cash at bank, as indicated above, was
highly satisfactory. We also enjoyed exceptionally strong trading
across all of our commercial bases, including match day sales,
hospitality and merchandise.
Our financial commitment to the playing squad, including
transfer fees and first team salaries, and the coaching, technical
and performance departments is at an all-time high. During the
period we secured the permanent registrations of Emilio Izaguirre
and Youssouf Mulumbu and the temporary registrations of Daniel
Arzani and Philip Benkovic. Subsequently, during the January
transfer window, we have acquired the permanent registrations of
talented young international players Vakoun Bayo, Andrew Gutman,
Emanuel Perez and Marian Shved and the temporary registrations of
exciting talents Oliver Burke, Jeremy Toljan and Timothy Weah.
Furthermore, the contracts of Kristoffer Ajer, Scott Brown, Ryan
Christie, James Forrest, Leigh Griffiths, Michael Johnston, Callum
McGregor, Olivier Ntcham and Tom Rogic have been extended. We
believe that we have secured the core of a powerful squad for the
Club. In addition, we are delighted to see the continued emergence
of young graduates from our Youth Academy, with Ewan Henderson
making his first team debut and Karamoko Dembele signing his first
professional contract with the Club.
My fellow directors and I continue to be highly alert to the
uncertainties inherent in football and our long held strategy of
operating a self-sustaining financial model has delivered stability
and success. The Board and Brendan Rodgers are committed to
maintaining that crucial balance between competitive performance
for our immediate targets this season and developing the Club for
the longer term. Our key objectives for the remainder of the season
are to win the SPFL Premiership, secure The Scottish Cup and build
towards the European qualifiers in the summer.
We continue to work on our plans to develop Celtic Park and the
surrounding area for our supporters and the City as a whole. The
Fraser of Allander Institute's economic survey that was
commissioned and published in the period highlights the very
substantial economic contribution made by Celtic and its supporters
each year to the economy of Glasgow and Scotland as a whole. In
putting this important information into the public domain, we seek
to encourage the Scottish Government, Glasgow City Council and
other public agencies to recognise the contribution of football in
general and Celtic in particular.
Entirely in line with our trading seasonality, we do not expect
the same level of financial performance to be achieved during the
second half of the financial year. This is due to participating in
fewer home fixtures and receiving lower income from European
competition. However, due to the positive first half performance of
football, media and merchandise sales, the expectation is to
achieve a full year profit after tax marginally above previously
communicated market expectations, with year-end net cash at bank
expected to be lower than December, reflecting the increased
investment into football personnel. In line with previous years,
the ultimate financial performance remains subject to the outcome
of key events and fixtures, which typically are not known until the
end of the football season.
On behalf of the Board, I thank our fans, shareholders and
partners, for their outstanding support and contribution to the
ongoing success of Celtic Football Club.
Ian P Bankier
12 February 2019
Chairman
For further information contact:
Celtic plc Tel: 0141 551 4235
Ian Bankier
Peter Lawwell
Canaccord Genuity Limited, Nominated Adviser Tel: 020 7523 8350
and Broker
Simon Bridges
Richard Andrews
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.
Celtic plc
INDEPENT REVIEW REPORT TO CELTIC PLC
Introduction
We have been engaged by the Company to review the financial
information in the interim report for the six months ended 31
December 2018 which comprises the consolidated statement of
comprehensive income, the consolidated balance sheet, the
consolidated statement of changes in equity, the consolidated cash
flow statement and the related notes.
We have read the other information contained in the interim
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the interim report be presented and prepared in a form consistent
with that which will be adopted in the Company's annual financial
statements having regard to the accounting standards applicable to
such annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the financial information in the interim report based on our
review.
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the interim
report for the six months ended 31 December 2018 is not prepared,
in all material respects, in accordance with the rules of the
London Stock Exchange for companies trading securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
Glasgow
United Kingdom
Date 12 February 2019
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Celtic plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHS TO 31 DECEMBER 2018
2018 2017
Unaudited Unaudited
Note GBP000 GBP000
Revenue 2 50,015 71,505
Operating expenses (before intangible
asset transactions) (43,823) (47,815)
------------- -------------
Profit from trading before intangible
asset transactions 6,192 23,690
Amortisation of intangible assets (4,787) (4,227)
Profit on disposal of intangible
assets 17,563 482
Operating profit 18,968 19,945
Finance income 3 531 47
Finance expense 3 (700) (482)
Profit before tax 18,799 19,510
Income tax expense 4 (3,576) (2,130)
------------- -------------
Profit and total comprehensive
income for the period 15,223 17,380
------------- -------------
Basic earnings per Ordinary Share 5 16.22p 18.57p
============= =============
Diluted earnings per Share 5 11.36p 12.94p
============= =============
Celtic plc
Registered number SC3487
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2018
2018 2017
Unaudited Unaudited
Notes GBP000 GBP000
NON-CURRENT ASSETS
Property plant and equipment 58,905 56,637
Intangible assets 6 16,632 15,996
Trade and other receivables 7 7,795 -
Deferred tax asset - 891
83,332 73,524
CURRENT ASSETS
Inventories 1,991 2,039
Trade and other receivables 7 23,636 15,608
Cash and cash equivalents 9 44,676 37,410
------------- -------------
70,303 55,057
------------- -------------
TOTAL ASSETS 153,635 128,581
============= =============
EQUITY
Issued share capital 8 27,147 27,123
Share premium 14,783 14,720
Other reserve 21,222 21,222
Accumulated profits 25,083 11,817
------------- -------------
TOTAL EQUITY 88,235 74,882
============= =============
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing loans 4,800 6,350
Debt element of Convertible Cumulative
Preference Shares 4,193 4,216
Trade and other payables 6,788 10,293
Deferred tax 4 93 -
Provisions 1,300 1,082
Deferred income 71 86
------------- -------------
17,245 22,027
------------- -------------
CURRENT LIABILITIES
Trade and other payables 28,343 17,035
Current borrowings 1,380 304
Provisions 2,100 709
Deferred income 16,332 13,624
------------- -------------
48,155 31,672
------------- -------------
TOTAL LIABILITIES 65,400 53,699
============= =============
TOTAL EQUITY AND LIABILITIES 153,635 128,581
============= =============
Approved by the Board on 12 February 2019
Celtic plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Accumulated Total
capital premium reserve profits
GBP000 GBP000 GBP000 GBP000 GBP000
EQUITY SHAREHOLDERS' FUNDS
AS AT 1 JULY 2017 (Audited) 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 15 - - - 15
Profit and total comprehensive
income for the period - - - 17,380 17,380
EQUITY SHAREHOLDERS' FUNDS
AS AT 31 DECEMBER 2017 (Unaudited) 27,123 14,720 21,222 11,817 74,882
EQUITY SHAREHOLDERS' FUNDS
AS AT 1 JULY 2018 (Audited) 27,132 14,720 21,222 9,860 72,934
Share capital issued 1 63 - - 64
Reduction in debt element
of convertible cumulative
preference shares 14 - - - 14
Profit and total comprehensive
income for the period - - - 15,223 15,223
EQUITY SHAREHOLDERS' FUNDS
AS AT 31 DECEMBER 2018 (Unaudited) 27,147 14,783 21,222 25,083 88,235
========== =========== =========== =============== ==========
Celtic plc
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHSED 31 DECEMBER 2018
Note 2018 2017
Unaudited Unaudited
GBP000 GBP000
Cash flows from operating activities
Profit for the period after tax 15,223 17,380
Taxation charge 3,576 2,130
Depreciation 967 881
Amortisation 4,787 4,227
Profit on disposal of intangible assets (17,563) (482)
Net finance costs 169 435
------------ ------------
7,159 24,571
Decrease in inventories 416 375
(Increase) in receivables (898) (7,028)
(Decrease) in payables and deferred
income (8,857) (364)
------------ ------------
Cash generated from operations (2,180) 11,496
Tax paid (1,200) -
Net interest received/(paid) 33 (25)
------------ ------------
Net cash flow from operating activities (3,347) 17,529
------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (1,389) (946)
Purchase of intangible assets (6,032) (8,874)
Proceeds from sale of intangible assets 13,714 5,769
------------ ------------
Net cash generated / (used in) from
investing activities 6,293 (4,051)
------------ ------------
Cash flows from financing activities
Repayment of debt (370) (100)
Dividend on Convertible Cumulative
Preference Shares (463) (473)
------------ ------------
Net cash used in financing activities (833) (573)
------------ ------------
Net increase in cash equivalents 2,113 12,905
Cash and cash equivalents at 1 July 42,563 24,505
------------ ------------
Cash and cash equivalents at period
end 9 44,676 37,410
============ ============
Celtic plc
NOTES TO THE FINANCIAL INFORMATION
1. BASIS OF PREPARATION
The financial information in this interim report comprises the
Consolidated Statement of Comprehensive Income, Consolidated
Balance Sheet, Consolidated Statement of Changes in Equity,
Consolidated Cash Flow Statement and accompanying notes. The
financial information in this interim report has been prepared
under the recognition and measurement requirements of IFRSs as
adopted for use in the European Union but does not include all of
the disclosures that would be required under those accounting
standards. The accounting policies adopted in the financial
information are consistent with those expected to be adopted in the
Company's financial statements for the year ended 30 June 2019 and
are unchanged from those used in the Company's annual report for
the year ended 30 June 2018.
The financial information in this interim report for the six
months to 31 December 2018 and to 31 December 2017 has not been
audited, but it has been reviewed by the Company's auditor, whose
report is set out on page 4.
Adoption of standards effective in 2018
The following standards have been adopted as of 1 July 2018 and
have no material impact on the financial information for the period
under review:
IFRS 9 Financial Instruments
The Group has applied IFRS 9 from 1 July 2018. The Group has
elected not to restate comparatives on initial application of IFRS
9. The principal effect of IFRS 9 is the introduction of the
expected credit loss model. However, due to the Group's history of
low credit losses and no expectation that this trend will change in
the foreseeable future, there is no likely material change in the
provision.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a single comprehensive model for entities to
use in accounting for revenue arising from contracts with
customers. IFRS 15 supersedes previous revenue recognition guidance
including IAS 18 Revenue, IAS 11 Construction Contracts and the
related Interpretations. The Group has applied IFRS 15 from 1 July
2018.
All revenue streams were reviewed to determine how the previous
approach to revenue recognition would comply with the 5 step model
under IFRS 15. It should be noted that as almost all revenue
streams are aligned to the football season, which in turn forms the
basis for the financial year, the main factor for consideration was
whether the implementation of IFRS 15 would impact materially on
the half year results which are reported for the 6 months to 31
December. The review concluded that there was no material
impact.
Assessment on adoption of standards not yet effective
At the date of authorisation of this interim report the
following standard was not effective however will be adopted in
accordance with its effective date. An update as to the Group's
assessment of the impact this standard is provided below.
IFRS 16 Leases
IFRS 16 introduces a comprehensive model for the identification
of lease arrangements and accounting treatments for both lessors
and lessees. IFRS 16 will supersede the current lease guidance
including IAS 17 Leases and the related interpretations when it
becomes effective for accounting periods beginning on or after 1
January 2019. The Group will adopt IFRS 16 for the year ending 30
June 2020. No decision has yet been made about whether to use any
of the transitional options in IFRS 16.
IFRS 16 distinguishes leases and service contracts based on
whether an identified asset is controlled by a customer.
Distinctions of operating leases (off balance sheet) and finance
leases (on balance sheet) are removed for lessee accounting, and
are replaced by a model where a right-of-use asset and a
corresponding liability have to be recognised for all leases by
lessees (i.e. all on balance sheet) except for short-term leases
and leases of low value assets.
Celtic plc
NOTES TO THE FINANCIAL INFORMATION
1. BASIS OF PREPARATION (CONTINUED)
The right-of-use asset is initially measured at cost and
subsequently measured at cost (subject to certain exceptions) less
accumulated depreciation and impairment losses, adjusted for any
re-measurement of the lease liability. The lease liability is
initially measured at the present value of the lease payments that
are not paid at that date. Subsequently, the lease liability is
adjusted for interest and lease payments, as well as the impact of
lease modifications, amongst others.
Furthermore, the classification of cash flows will also be
affected because operating lease payments under IAS 17 are
presented as operating cash flows; whereas, under the IFRS 16
model, the lease payments will be split into a principal and an
interest portion, which will be presented as financing and
operating cash flows respectively.
In contrast to lessee accounting, IFRS 16 substantially carries
forward the lessor accounting requirements in IAS 17, and continues
to require a lessor to classify a lease either as an operating
lease or a finance lease.
Based on our assessment, the net impact to the Group's financial
statements is not considered to have a material net effect;
however, this includes what would be a material grossing out on the
Balance Sheet with a corresponding increase to both assets and
liabilities. We will recognise the carrying value of the operating
leases within assets with an offsetting liability and there will be
a reallocation in the Statement of Comprehensive Income from rental
costs to depreciation within Operating Expenses and to the
unwinding discount within Finance Expense.
Going concern
The Company has considerable financial resources available to
it, together with established contracts with a number of customers
and suppliers. As a consequence, the Directors believe that the
Company is well placed to continue managing its business risks
successfully and they have a reasonable expectation that the
Company has adequate resources to continue in operational existence
for the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing the financial information
in this interim report.
2. REVENUE
6 months 6 months
to 31 to 31
Dec 2018 Dec 2017
Unaudited Unaudited
GBP000 GBP000
Football and stadium operations 23,873 26,802
Multimedia and other commercial
activities 15,529 34,011
Merchandising 10,613 10,692
50,015 71,505
=========== ===========
Number of home games 17 19
=========== ===========
3. FINANCE INCOME AND EXPENSE
6 months 6 months
to to
31 December 31 December
2018 2017
Unaudited Unaudited
GBP000 GBP000
Finance income:
Interest receivable on bank deposits 128 35
Notional interest income on deferred
consideration 403 12
-------------- --------------
531 47
============== ==============
6 months 6 months
to to
31 December 31 December
2018 2017
Unaudited Unaudited
GBP000 GBP000
Finance expense:
Interest payable on bank and other
loans (110) (61)
Notional interest expense on deferred
consideration (304) (134)
Dividend on Convertible Cumulative
Preference Shares (286) (287)
-------------- --------------
(700) (482)
============== ==============
4. TAXATION
Tax has been charged at 19% for the six months ended 31 December
2018 (2017: 19%) representing the best estimate of the average
annual effective tax rate expected to apply for the full year,
applied to the pre-tax income of the six month period. A deferred
tax liability of GBP0.1m has been recognised in respect of short
term timing differences.
5. EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the
profit for the period of GBP15.2m (2017: GBP17.4m) by the weighted
average number of Ordinary Shares in issue 93,865,887 (2017:
93,591,020). Diluted earnings per share as at 31 December 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.
6. INTANGIBLE ASSETS
31 December 31 December
2018 2017
Unaudited Unaudited
Cost GBP000 GBP000
At 1 July 44,962 34,335
Additions 1,854 6,634
Transfer to prepayments - (605)
Disposals (5,850) (1,986)
--------------- ---------------
At period end 40,966 38,378
=============== ===============
Amortisation
At 1 July 23,999 20,408
Charge for the period 4,787 4,227
Transfer to prepayments - (371)
Disposals (4,452) (1,882)
--------------- ---------------
At period end 24,334 22,382
=============== ===============
Net Book Value at period end 16,632 15,996
=============== ===============
7. TRADE AND OTHER RECEIVABLES
31 December 31 December
2018 2017
Unaudited Unaudited
GBP000 GBP000
Trade receivables 23,430 4,421
Prepayments and accrued income 7,292 10,224
Other receivables 709 963
------------- -------------
31,431 15,608
============= =============
Amounts falling due after more than one year
included above are:
2018 2017
GBP000 GBP000
Trade receivables 7,795 -
============= =============
8. SHARE CAPITAL
Authorised Allotted, called up and
fully paid
31 December 31 December
2018 2017 2018 2018 2017 2017
Unaudited Unaudited Unaudited
No 000 No 000 No 000 GBP000 No 000 GBP000
Equity
Ordinary Shares of 1p each 223,271 223,101 93,916 939 93,696 937
Deferred Shares of 1p each 656,090 647,036 656,090 6,561 647,036 6,470
Convertible Preferred Ordinary
Shares of GBP1 each 14,883 14,923 12,896 12,896 12,936 12,936
Non-equity
Convertible Cumulative Preference
Shares of 60p each 18,371 18,459 15,871 9,523 15,959 9,576
Less reallocated to debt:
Initial debt - - - (2,772) - (2,796)
Capital reserve - - - - - -
---------- ----------
912,615 903,519 778,773 27,147 769,627 27,123
========== ========== ========== =========== ========== ===========
9. ANALYSIS OF NET CASH AT BANK
The reconciliation of the movement in cash and cash equivalents
per the cash flow statement to net cash is as follows:
31 December 31 December
2018 2017
Unaudited Unaudited
GBP000 GBP000
Bank Loans due after more than
one year (4,800) (6,350)
Bank Loans due within one year (1,280) (200)
Cash and cash equivalents:
Cash at bank and on hand 44,676 37,410
------------- -------------
Net cash at bank at period end 38,596 30,860
============= =============
Total net cash, deducting other loans of GBP0.1m (2017: GBP0.1m)
and that arising from the reclassification of equity to debt of
GBP4.2m (2017: GBP4.2m) amounted to GBP34.3m (2017: GBP26.5m).
Period-end net cash, net of debt and debt like items, of
GBP37.7m (2017: GBP17.0m). This figure is represented by cash net
of bank borrowings of GBP38.6m (2017: GBP30.9m) further adjusted
for other debt like items, namely the net player trading balance,
other loans and remuneration balances payable to certain personnel
at the balance sheet date.
The change in the aging profile of the bank loans follows the
re-negotiation of the Group banking facilities in August 2018.
10. POST BALANCE SHEET EVENTS
Since the balance sheet date, we have secured the permanent
registrations of Marian Shved, Vakoun Bayo, Emanuel Perez and
Andrew Gutman, and the temporary registrations of Timothy Weah from
Paris St Germain, Oliver Burke from West Bromwich Albion and Jeremy
Toljan from Borussia Dortmund. We have also temporarily transferred
the registrations of Youssouf Mulumbu to Kilmarnock, Lewis Morgan
to Sunderland, Calvin Miller to Ayr United, Conor Hazard to Partick
Thistle and Marian Shved to FC Karpaty. Emanuel Perez and Andrew
Gutman have also been placed on loan to clubs in the United Soccer
League in the USA.
In addition, we have temporarily transferred the registration of
development squad player Jack Aitchison to Alloa Athletic and have
cancelled the registration of Lewis Bell.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BRGDDISBBGCD
(END) Dow Jones Newswires
February 12, 2019 13:00 ET (18:00 GMT)
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