TIDMCCP
RNS Number : 0279O
Celtic PLC
27 September 2019
Celtic PLC
Announcement of Results for the year ended 30 June 2019
SUMMARY OF THE RESULTS
Operational Highlights
-- Winner of the Scottish Domestic Treble for an unprecedented
third consecutive year (the "Treble Treble")
-- Winner of our eighth consecutive SPFL Premiership title
-- Finished second in the Europa League group stage, qualifying
for the Round of 32 for the second year in a row
-- 30 home matches played at Celtic Park (2018: 32 including the Scott Brown Testimonial)
-- Continuation of significant stadium investment programme
Financial Highlights
-- Group revenue decreased by 17.9% to GBP83.4m (2018: GBP101.6m)
-- Operating expenses including labour decreased by 0.2% to GBP86.9m (2018: GBP87.1m)
-- Gain on sale of player registrations of GBP17.7m (2018: GBP16.5m)
-- Acquisition of player registrations of GBP6.2m (2018: GBP16.6m)
-- Profit before taxation of GBP11.3m (2018: GBP17.3m)
-- Year-end cash net of bank borrowings of GBP28.6m (2018: GBP36.1m)
-- Year-end net cash, net of debt and debt like items, of GBP38.9m (2018: GBP27.0m)(1)
(1) net cash, net of debt like items, is represented by cash net
of bank borrowings of GBP28.6m (2018: GBP36.1m) 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 revenue of GBP83.4m (2018:
GBP101.6m) and a profit before taxation of GBP11.3m (2018:
GBP17.3m), reflect a satisfactory performance in a financial year
in which the Club did not qualify for the Group Stages of the UEFA
Champions League, as it had done in the prior year.
On behalf of the Board I congratulate Neil Lennon, his
management team, the players and all staff at the Club on achieving
the "Treble Treble". At short notice, Neil took charge of the
squad, delivered an eighth consecutive League Championship and
triumphed in the Scottish Cup, making it the Club's ninth
successive domestic trophy.
Of course, we were disappointed to lose Brendan Rodgers during
the season, when he left to pursue an opportunity in the English
Premier League. Brendan and his staff delivered record breaking
success and they leave a phenomenal legacy for which the Board and
everyone at Celtic is truly grateful. We thank them for their
outstanding contribution.
The Board was delighted to welcome Neil back to the Club in
February and to confirm his appointment as manager following our
success at Hampden in May. Having been the manager when the Club
embarked on the present run of domestic success, Neil understands
what it takes to be the manager of Celtic. He has the full support
of the Board, executive management team and all the staff at the
Club. At the time of writing, having qualified for the Group Stages
of the UEFA Europa League, the Club retains a 100% record in
domestic competitions and we look forward with optimism to the
season ahead.
The financial results for the year demonstrate the robustness of
the Group's strategy of investment in football operations, whilst
maintaining a self-sustaining financial model. This continues to
provide a stable platform for football success and shareholder
value. The gains on sales of player registrations, primarily
reflected by the gains achieved on the sales of Moussa Dembele to
Olympique Lyonnais and Erik Sviatchenko to FC Midtjylland, as well
as contingent fees crystallising on previous player transfers, were
key to the performance of the Group.
Post year end, the Club completed the sale of academy graduate
Kieran Tierney to Arsenal FC for a Club record fee. This was a
great milestone achievement for "one of our own" and recognition
for the Club's high standards of player development. Also, post
year end, in the summer transfer window we bolstered the playing
squad with the additions of the permanent registrations of
Christopher Jullien, Luca Connell, Hatem Abd Elhamed, Boli
Bolingoli-Mbombo, Greg Taylor, Jonathan Afolabi, Jeremie Frimpong
and Lee O'Connor.
Our year end cash net of bank borrowings was GBP28.6m (2018:
GBP36.1m) which equates to a net funding position of GBP38.9m
(2018: GBP27.0m) when adjusted for debt and debt like items (as
defined in the Summary of Results on page 2). This allows the Board
to continue to plan for the long term, whilst managing the reduced
revenues derived from playing in UEFA Europa League in two
successive seasons. The Club continued its significant stadium
investment programme to maintain and improve Celtic Park's
reputation as one of the best football arenas in the world.
The Club believes that children and young people have the right
to protection from all forms of harm and abuse. We are
unequivocally committed to ensuring this. Celtic Football Club was
the first club in Scotland to appoint a safeguarding officer,
responsible for developing our policies for the protection of young
people, and monitoring and reviewing our procedures to ensure they
continue to reflect best practice. During the year, a number of
individuals were found guilty of historic offences committed
against young people. The Club expressed its sincere sympathy,
regret and sorrow for those affected and stands by its
responsibilities, respecting the due process of law.
As we look ahead, the future of UEFA competitions beyond 2024
remains uncertain. While recognising the risks, the Club considers
that the developments being discussed by UEFA, the European Club
Association and other stakeholders, present an opportunity to clubs
such as Celtic. Through Peter Lawwell's continued involvement on
the Board of the European Club Association and the Professional
Football Strategy Council of UEFA, the Club and the game in
Scotland continue to be well represented in this very important
arena.
In closing, I thank all of our supporters, shareholders,
sponsors, partners and colleagues for their contribution to another
successful year for Celtic Football Club. We all share a common
passion for Celtic and everything it does. The Board is committed
to building on our current success for the long term future of the
Club.
Ian P Bankier
27 September 2019
Chairman
CHIEF EXECUTIVE'S REVIEW
Looking back on the year under review, like all Celtic
supporters I am proud to reflect on the Club's continued domination
of Scottish football as the Club made history for the second
successive year by winning the "Treble Treble". Football success is
crucial to the Club and our supporters and to win nine consecutive
domestic trophies is an amazing achievement for which I
congratulate Brendan Rodgers, Neil Lennon, their staff, the players
and everyone at the Club.
Stability is important in football, but change is inevitable.
Although we were very disappointed to see Brendan leave Celtic for
an opportunity he wished to pursue, I respect his decision and
thank him and his staff for all that they have given to the Club
and the historic achievements, which have created many wonderful
memories. Following Brendan's departure, I was delighted that Neil
Lennon re-joined the Club to clinch the eighth successive League
championship and to complete the Treble Treble in challenging
circumstances. Neil is a true Celtic great, as a player, captain
and manager and returns to the Club with a wealth of experience as
a top quality coach, identifier and developer of players and with
the strength of character to take the Club forward. I wish Neil,
assistant manager John Kennedy, first team coach Damien Duff and
goalkeeper coach Stephen Woods all the very best as we work
together to continue bringing success to the Club. I also take this
opportunity to thank my colleagues, our supporters, shareholders
and club partners for their commitment to the continued success of
the Club.
Each year, our key football objective is success in all three
domestic competitions and progress in the UEFA Champions League.
Although we can be satisfied with our success in domestic football,
we are very disappointed that the Club failed to qualify for the
Group Stages of the UEFA Champions League in season 2018/19 and
2019/20, although the team did well to qualify in second place in a
demanding UEFA Europa League group last season. For season 2019/20,
we have secured qualification for the Group Stages of the UEFA
Europa League to ensure European football this season and our
domestic performances have been promising. We look forward to the
season ahead.
The level of competition in European football continues to
intensify, increasing the uncertainty connected with qualification
and progression within UEFA competitions. The Club's long term
strategy enables the Board 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, notwithstanding the
failure to qualify for the Group Stages of the UEFA Champions
League.
The Board continues to be committed to investing in our football
operations and the creation of a world class football club, not
only in transfer fees and player wages (which continue to be
subject to hyper inflation), but also on football management,
coaching, recruitment, medical, performance, sports science and the
youth academy. During the period, despite the 17.9% reduction in
revenues we maintained a very high level of investment in total
labour costs of GBP56.1m.
Player development and recruitment continue to be fundamental to
the Club to augment our first team squad and to add to the players
being developed in the Academy. Although we work to conclude
transfers as quickly as possible, the transfer market remains
challenging. We continue to invest in player recruitment, to create
value, but without putting the Club at risk. After the period end,
we signed eight players on permanent transfers, including players
for the first team as well as younger players to add to the
talented young players we have in our Academy, to which we added
loan transfers of three high quality players from the English
Premier League and English Championship. The challenges in the
transfer market demonstrate the importance of our Academy and we
continue to develop the Academy for the future. The objective
remains to identify and develop Champions League football players
for the Club.
In closing I would like to thank Celtic supporters for their
continued support of Celtic FC Foundation, which continues to
deliver projects to improve health, promote equality, encourage
learning and tackle poverty, upholding and promoting the charitable
principles of the Club
Peter Lawwell
27 September 2019
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2019 2018
Note GBP000 GBP000
Revenue 2 83,410 101,573
Operating expenses (before intangible asset
transactions and exceptional items) (86,904) (87,083)
(Loss) / profit from trading before intangible
asset transactions and exceptional items (3,494) 14,490
Exceptional operating expenses 3 (1,789) (4,141)
Amortisation of intangible assets (9,709) (8,768)
Profit on disposal of intangible assets 17,717 16,454
Other income 8,795 -
Operating profit 11,520 18,035
Finance income 1,059 216
Finance expense (1,267) (980)
Profit before tax 11,312 17,271
Income tax expense 5 (2,574) (1,848)
--------- ---------
Profit and total comprehensive income for the
year 8,738 15,423
Basic earnings per Ordinary Share for the year 6 9.30p 16.47p
Diluted earnings per Share for the year 6 6.78p 11.72p
CONSOLIDATED BALANCE SHEET
2019 2018
GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 58,690 58,265
Intangible assets 14,156 20,963
Trade receivables 8,089 4,397
80,935 83,625
======== ========
Current assets
Inventories 2,643 2,407
Trade and other receivables 25,426 21,261
Cash and cash equivalents 34,057 42,563
--------
62,126 66,231
======== ========
Total assets 143,061 149,856
======== ========
Equity
Issued share capital 27,157 27,132
Share premium 14,785 14,720
Other reserve 21,222 21,222
Accumulated profits 18,598 9,860
--------
Total equity 81,762 72,934
======== ========
Non-current liabilities
Borrowings 4,108 6,250
Debt element of Convertible Cumulative
Preference Shares 4,183 4,208
Trade and other payables 6,943 10,302
Provisions 455 2,309
Deferred tax liabilities 1,139 -
Deferred income 57 86
--------
16,885 23,155
======== ========
Current liabilities
Trade and other payables 13,957 27,005
Borrowings 1,364 300
Provisions 3,479 2,442
Deferred income 25,614 24,020
--------
44,414 53,767
======== ========
Total liabilities 61,299 76,922
======== ========
Total equity and liabilities 143,061 149,856
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Accumulated
Share Share Other (losses)/
capital premium reserve profit Total
GBP000 GBP000 GBP000 GBP000 GBP000
Equity shareholders'
funds
as at 1 July 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
Share capital issued 1 65 - - 66
Reduction in debt element
of convertible cumulative
preference shares following
conversion 24 - - - 24
Profit and total comprehensive
income for the year - - - 8,738 8,738
Equity shareholders'
funds
as at 30 June 2019 27,157 14,785 21,222 18,598 81,762
======== ======== ======== =========== ======
CONSOLIDATED CASH FLOW STATEMENT
2019 2018
Note GBP000 GBP000
Cash flows from operating activities
Profit for the year 8,738 15,423
Income tax expense 2,574 1,848
Depreciation 2,064 1,977
Amortisation of intangible assets 9,709 8,768
Impairment of intangible assets 1,837 214
Profit on disposal of intangible assets (17,717) (16,454)
Net finance costs 208 764
--------- ---------
7,413 12,540
(Increase) / decrease in inventories (236) 7
Increase in receivables (3,225) (6,142)
(Decrease) / increase in payables and
deferred income (6,654) 17,378
--------- ---------
Cash generated from operations (2,702) 23,783
Tax paid 5 (2,435) (707)
Net Interest received / (paid) 7 (47)
--------- ---------
Net cash flow from operating activities (5,130) 23,029
--------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (2,257) (3,461)
Purchase of intangible assets (13,671) (10,645)
Proceeds from sale of intangible assets 14,040 9,821
--------- ---------
Net cash used in investing activities (1,888) (4,285)
--------- ---------
Cash flows from financing activities
Repayment of debt (1,010) (200)
Dividend on Convertible Cumulative Preference
Shares (478) (486)
--------- ---------
Net cash used in financing activities (1,488) (686)
--------- ---------
Net (decrease) / increase in cash equivalents (8,506) 18,058
Cash and cash equivalents at 1 July 2018 42,563 24,505
--------- ---------
Cash and cash equivalents at 30 June
2019 34,057 42,563
========= =========
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 (IFRSs)
as adopted for use in the EU but does not include all of the
disclosures that would be required under IFRS. 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 2018 and are those which form the basis of
the 2019 financial statements as well as new and amended standards
adopted for the first time from 1 July 2018.
2. REVENUE
2019 2018
GBP000 GBP000
The Group's revenue comprised:
Football and Stadium Operations 43,252 43,587
Merchandising 18,076 17,717
Multimedia and Other Commercial Activities 22,082 40,269
--------- ---------
83,410 101,573
========= =========
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses of GBP1.79m (2018: GBP4.14m)
can be analysed as follows:
2019 2018
GBP000 GBP000
Impairment of intangible assets and other
prepaid costs 2,017 511
Reversal of prior period impairment charges (52) -
Onerous employment contracts 383 3,549
Onerous employment contract releases (580) -
Settlement agreements on contract termination 21 81
-------- --------
1,789 4,141
======== ========
The impairment of intangible assets 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 contract 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 (2018: GBP0.51m) was paid
on 30 August 2019 to those holders of Convertible Cumulative
Preference Shares on the share register at 26 July 2019. A number
of shareholders elected to participate in the Company's scrip
dividend reinvestment scheme for the financial year to 30 June
2019. 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 GBP0.07m (2018: GBPnil)
in respect of statute barred preference dividends in accordance
with the Company's Articles of Association.
5. TAX ON ORDINARY ACTIVITIES
The corporation tax payable as at 30 June 2019 was GBP0.14m
(2018: GBP1.14m). The current year tax expense was GBP1.44m and
total tax payments in the year were GBP2.44m, of which GBP1.24m was
in relation to the current financial year with GBP1.20m in respect
of the year ended 30 June 2018. In addition, there are overpayments
with respect to prior periods of GBP0.06m. The available capital
allowances pool is approximately GBP9.00m (2018: GBP10.50m). These
estimates are subject to the agreement of the current year's
corporation tax computations with H M Revenue and Customs.
6. EARNINGS PER SHARE
Reconciliation of basic earnings to diluted 2019 2018
earnings: GBP000 GBP000
Basic earnings 8,738 15,423
Non-equity share dividend 570 573
Reclaim of statute barred non-equity share (67) -
dividends
Diluted earnings 9,241 15,996
========== ==========
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 93,977 93,663
Dilutive effect of convertible shares 42,410 42,803
---------- ----------
Diluted weighted average number of ordinary
shares 136,387 136,466
========== ==========
Earnings per share of 9.30p (2018: 16.47p) has been calculated
by dividing the profit for the period of GBP8.74m (2018: GBP15.42m)
by the weighted average number of Ordinary Shares of 94.0m (2018:
93.7m) in issue during the year. Diluted earnings per share of
6.78p (2018: 11.72p) as at 30 June 2019 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 2019 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 2019 or 30 June 2018. The Independent Auditor's Reports on the
statutory financial statements for 2019 and 2018 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 2018 have been filed
with the Registrar of Companies and those for 2019 will be
delivered to the Registrar of Companies in due course.
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END
IR EASNXASPNEFF
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