RNS No 2788f
CELTIC PLC
5th August 1998
CHAIRMAN'S STATEMENT
I am pleased to report that the year just ended was one of solid progress for
Celtic, both in football success and the growth of our business activities.
The Scottish League Championship was secured for the 36th time and the League
Cup returned to Celtic Park after a 15-year absence although our European
campaign was halted by Liverpool on the away goals rule.
There was other evidence of progress, quality and strength within our football
operation. All the previous year's retained earnings of the Company,
together with the gains from sales of players, a total of #12.2 million, were
reinvested in transfer fees for nine new players. Five of them joined five
others already on our staff in representing their countries at the recent
World Cup Finals - for a total exceeded by only two other football clubs
world-wide. And the value of our youth development programme was shown recently
when seven Celtic players were involved at Under-16 international level for
Scotland and Ireland. In addition, Gerry Crossley, at 18 years of age made
his full Irish international debut and Mark Burchill, 17 years old, also made
his debut for Scotland, joining Barry Elliot, 19 years old, already in the
Under-21 squad. In-house coaching and supervision of player development at
the Club now extends down to 12-year olds, and the start of an Under-21
Scottish Division to replace the Scottish Premier Reserve League is a welcome
change.
The decision a year ago to move forward from the traditional 'Football
Manager' system of British clubs and to separate management from coaching was,
I am now convinced, the right one. With Jozef Venglos as our new Head Coach
a further dimension of knowledge, maturity and ability to teach and develop
our system has now been added.
Last season's full squad of 22 first-team players still are with us and on
continuing contracts so Jozef has an excellent pool to work with.
Nevertheless, I expect his assessment and strategy to reach our objectives
will lead to some changes in personnel as the new season gets under way.
Turnover of the Celtic group rose by 25% over 1997 to #27.8 million.
With only minor changes to admission prices and stadium capacity remaining
unchanged over the previous season, ticket sales revenue and match attendances
rose by only 9.4%. The average home League attendance of 48,532 occupied 97%
of available seats. Revenue from all other areas of Celtic's operations grew
by 41% and the strong growth in our various commercial activities was also
helped by sales generated by the new Celtic Superstore opened in November,
from mail order business, and strong rises in broadcasting and publishing,
hospitality operations and other marketing applications of the Celtic brand.
Operating costs rose faster than turnover, principally driven by football
employment costs, the largest item, which rose by 57%.
Accordingly, profits from operations declined by 14%. However, prudent
management of player contracts and a conservative accounting policy of writing
down transfer costs over the player's contract term brought overall net profit
up to #7.1 million, a rise of 38% over 1997.
On 21 July 1998 we completed construction of the West Stand, to be named in
honour of Jock Stein increasing the spectator capacity of Celtic Park for
football matches to 60,294. The new Celtic Park is now able to accommodate
the current total of 52,543 season ticket holders and this valuable asset
continues to be developed as a venue for further hospitality and leisure
services. Completion of Britain's largest and best football stadium, with no
mortgage or government funding in contrast to other less needed stadium
projects, is a Celtic milestone and an achievement of which all our supporters
and shareholders can be proud.
Revenues in the year just begun are expected to increase through use of the
full stadium capacity, a full year operation of the Superstore and Visitor
Centre, a new major Banqueting and Matchday Suite in the West Stand, a better
League television agreement with British Sky Broadcasting, and further
expansion of our retail and mail order division.
In common with other major clubs, our cost of salaries for top players is
forecast to continue to rise this year, but more slowly in view of the high
number of new contracts begun or renewed last season.
Supporters and shareholders alike will note with satisfaction that whilst the
Club was founded to help the poor and hungry of Glasgow's east end parishes,
it is now the largest employer in this area, and our staff has risen in number
over the last four years from 292 to 375 people.
I am also pleased to tell you that our efforts as a leading institution in
Scottish life both as promoters of socially responsible, hate-free behaviour
and attitudes and as a supporter of deserving causes through the Celtic
Charity fund are having a real impact.
In view of my intended departure in the spring of next year, your Board is now
engaged in recruiting a Chairman Designate to replace me in this position.
We are also working to appoint a new, full-time, Chief Executive of the
Company and assure an orderly transition. Meantime the Company intends to
seek a listing on the London Stock Exchange main market, and your approval is
being sought to split the nominal value of your shares in the ratio of 100 for
1.
Both these moves will benefit all shareholders, present and future, while
assisting in the change of ownership of my shareholding after I leave Celtic.
I intend that existing shareholders and season ticket holders will have an
opportunity to participate in that transaction.
As you study Celtic's record of the last few years, shown below, I encourage
you to share my confidence in a successful future for this great Club. Its
continued rapid growth as a leisure company built around football and a world-
wide brand will finance the on-field performance and achievements that both
shareholders and supporters desire.
I commend and thank those whose collective talents and commitment have brought
us to where we are now - players, fellow directors, management, staff and
especially supporters. With this level of dedication and ability and from so
many we can only succeed.
4th August 1998 Fergus McCann
FIVE YEAR RECORD
YEARS ENDED 30 JUNE
1994 1995 1996 1997 1998
#000 #000 #000 #000 #000
FINANCIAL
Turnover 8,736 10,376 16,005 22,189 27,821
Profit
from 282 669 2,735 5,899 5,094
Operations
(Loss)/
Profit
After (1,404) (401) (1,013) 5,152 7,101
Taxation
Dividends - - - 533 533
Shares in
Issue 226 453 475 475 475
('000)
(Loss)/
Earnings
per
Ordinary (35.03) (1.73) (3.49) 15.93 22.65
Share
(#)
Fully
Diluted
(Loss)/
Earnings (32.58) (1.29) (2.24) 10.83 14.90
per Share
(#)
Net Assets 16,316 29,095 31,388 36,007 42,575
Number of
Employees 292 237 288 320 375
FOOTBALL
League
Position Fourth Fourth Second Second Champions
League 65 51 83 75 74
Points
Scottish Third Rd Winners Semi Final Semi Final Semi Final
Cup
League Cup Semi Final Final Fourth Rd Fourth Rd Winners
European
Ties 2 0 2 2 3
Played
CELTIC
PARK
Stadium
Investment
to Date 8,694 23,335 34,690 37,011 46,764
(#000)
Stadium
Capacity 49,856 34,082 37,944 50,552 50,552
Seating
Capacity 13,200 34,082 37,944 50,552 50,552
Average
Home 22,888 25,347 33,225 46,317 46,415
Attendance
Season
Ticket 7,162 18,029 29,370 40,529 42,322
Sales
The attendance and capacity figures for 1995 are for Hampden Park.
GROUP PROFIT AND LOSS ACCOUNT
YEAR ENDED 30 JUNE 1998
1998 1997
#000 #000
TURNOVER 27,821 22,189
OPERATING EXPENSES (22,727) (16,290)
_______ _______
PROFIT FROM OPERATIONS 5,094 5,899
AMORTISATION OF INTANGIBLE FIXED (5,348) (3,302)
ASSETS
NET GAIN ON SALE OF INTANGIBLE 7,410 2,606
FIXED ASSETS ______ ______
OPERATING PROFIT 7,156 5,203
INTEREST RECEIVABLE AND SIMILAR 97 27
INCOME
INTEREST PAYABLE AND SIMILAR (121) (78)
CHARGES ______ ______
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 7,132 5,152
TAX ON ORDINARY ACTIVITIES (31) -
_____ _____
PROFIT FOR THE YEAR 7,101 5,152
PREFERENCE DIVIDEND (533) (533)
______ ______
RETAINED PROFIT FOR THE YEAR 6,568 4,619
----- -----
EARNINGS PER ORDINARY SHARE #22.65 #15.93
FULLY DILUTED EARNINGS PER SHARE #14.90 #10.83
All amounts relate to continuing operations.
There were no gains or losses recognised in 1998 other than the profit for the
year.
GROUP BALANCE SHEET
30 JUNE 1998
1998 1997
#000 #000 #000 #000
FIXED ASSETS
Tangible assets 41,724 32,606
Intangible assets 14,441 8,958
_______ _______
56,165 41,564
CURRENT ASSETS
Stocks 495 126
Debtors 2,642 3,367
Cash at bank and in 21 3,478
hand ______ ______
3,158 6,971
------ ------
CREDITORS - Amounts
falling due within (8,621) (6,223)
one year
Income deferred less
than one year (7,918) (6,000)
_______ _______
(16,539) (12,223)
------- -------
NET CURRENT (13,381) (5,252)
LIABILITIES ________ ________
TOTAL ASSETS LESS
CURRENT LIABILITIES 42,784 36,312
CREDITORS - Amounts
falling due after (209) (305)
more than one year _____ _____
NET ASSETS 42,575 36,007
------ ------
CAPITAL AND RESERVES
Called up share
capital (includes non- 11,390 11,390
equity)
Share premium 17,361 17,361
Profit and loss 13,824 7,256
account _______ _______
SHAREHOLDERS' FUNDS 42,575 36,007
------- -------
Copies of the Preliminary Results can be obtained from the Company's
Registered office at
95, Kerrydale Street, Glasgow, G40 3RE.
Telephone Number 0141 556 2611
END
FR SSASUIUAUFEA
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