TIDMCCP
RNS Number : 8183M
Celtic PLC
18 September 2023
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
Announcement of Results for the year ended 30 June 2023
SUMMARY OF THE RESULTS
Key Operational Items
-- Winners of the Domestic Treble in season 2022/23 for a world record 8(th) time.
-- Qualification for the group stages of the UEFA Champions League for season 2023/24.
-- Participation in the group stages of the UEFA Champions League in season 2022/23.
-- 26 home matches played at Celtic Park (2022: 31 games).
Key Financial Items
-- Group revenue increased by 35.8% to GBP119.9m (2022: GBP88.2m).
-- Operating expenses including labour increased by 4.0% to GBP95.4m (2022: GBP91.7m).
-- Gain on sale of player registrations of GBP14.4m (2022: GBP29.0m).
-- Acquisition of player registrations of GBP13.0m (2022: GBP38.4m).
-- Profit before taxation of GBP40.7m (2022: GBP6.1m).
-- Year-end cash net of bank borrowings of GBP72.3m (2022: GBP30.2m).
For further information contact:
Celtic plc
Peter Lawwell, Celtic Tel: 0141 551
plc 4235
Iain Jamieson, Celtic
plc
Canaccord Genuity Limited, Nominated
Adviser
Simon Bridges Tel: 0207 523
8000
CHAIRMAN'S STATEMENT
I open by welcoming back Brendan Rodgers to the Club following
his successful spell as First Team Manager between May 2016 and
February 2019. Following the departure of Ange Postecoglou, we
assessed the market and concluded that Brendan was both the natural
choice and the overwhelmingly best candidate to succeed Ange and
take Celtic forward. We thank Ange for all he achieved at the Club
and wish him all the best for the future and look forward to
working with Brendan once again to deliver success for Celtic. My
own appointment took effect from January 1(st) following the
retirement of Ian Bankier. I take this opportunity to reiterate the
Club's appreciation to Ian for his distinguished service in the
role.
The results for the year ended 30 June 2023 show an increase in
revenue to GBP119.9m (2022: GBP88.2m) with a corresponding profit
before tax of GBP40.7m (2022: GBP6.1m profit before tax). This
represents a record set of financial results for the Club due to a
combination of factors as detailed below, including some material
items of a one off nature.
The GBP31.7m increase in revenue reflects the participation in
the UEFA Champions League in season 2022/23, when compared to the
UEFA Europa League in the previous season, resulting in greater
ticket and media rights income. In addition to this, our tour of
Australia and a record year for our retail business were also
significant contributors to the increase. The GBP34.6m increase in
profit before tax resulted from the significant revenue increase
outlined above along with a GBP14.4m gain on sale of player
registrations, predominantly from the sales of Jota, Juranovic and
Giakoumakis. In addition, we recorded GBP13.5m of other income that
came from a combination of compensation received following the
departure of Ange Postecoglou and a business interruption insurance
recovery in relation to Covid-19, with the two items mentioned
being one off in nature and typically non-recurring.
In terms of funding and liquidity, o ur year end cash, net of
bank borrowings, was GBP72.3m (2022: GBP30.2m). The increase this
year was principally due to the translation into cash of the strong
trading environment and the typically non-recurring items mentioned
previously. These reserves were used to fund the summer 2023
transfer window and will be used for settling outstanding sums due
from transfers over the last two seasons, which are typically paid
in instalments. This sum also contains the cash required to fund
the significant investment that the Club is planning to make in
developing our Barrowfield training facility. It is important to
highlight that, given the increasing gap between the sums able to
be earned between the Champions League and the Europa League, it is
vital that we retain a cash buffer in reserve. History tells us
that we will not always qualify for the Champions League and the
benefit of holding cash reserves affords us the optionality of
managing through seasons where we participate in the Europa League
with the ability to retain our squad as opposed to selling key
players to bridge the income shortfall between both competitions.
The Financial sustainability rules are also a key feature of UEFA
licencing and we need to be cognisant of running our club
accordingly.
Building on the investment in player registrations of GBP38.4m
in the previous financial year ended 30 June 2022, the Club made
further significant investment in the year by committing an
additional GBP13.0m, taking our total spend to GBP51.4m over the
two financial years to 30 June 2023. Since the year end and up to
1(st) September 2023 we have invested a further GBP15.0m into
player registrations taking our total spend over this period to
GBP66.4m. The assembly of a strong squad was a key factor in
retaining the SPFL title for the second consecutive year and
ultimately securing a domestic Treble. The investment will serve us
well for the season ahead. Last year's trophies brought our total
Trebles to eight in our history and this landmark represented a new
world record and one that all connected with our Club should be
rightly proud of.
Securing the SPFL title once again in 2022/23 led to automatic
Champions League qualification. Following the draw, we have been
matched against Feyenoord, Lazio and Atletico Madrid in what is
sure to be an exciting Champions League Group Stage. Automatic
qualification allowed us to make further football investment with a
focus on building greater strength into the playing squad. In the
summer 2023 transfer window, we have acquired Hyeok-kyu Kwon, Marco
Tilio, Hyun-jun Yang, Odin Holm, Maik Nawrocki, Gustaf Lagerbielke,
Luis Palma and brought in Paulo Bernardo and Nathaniel Phillips on
loan. The present squad also gives real potential for development
with the average age being 24. We parted company with Aaron Mooy,
Carl Starfelt, Albian Ajeti, Ismaila Soro, Osaze Urhoghide,
Vasilios Barkas, Conor Hazard and Jota. We wish all our former
players the best for the future.
Our successfully proven strategy has delivered stability and
footballing success over many years and remains the same. We must
balance the signing of players that can be developed and sold when
conditions are optimal alongside the need to sign players who are
able to make an immediate impact and deliver footballing success.
The execution of this strategy is increasingly challenging owing to
wage and transfer inflation, but this formula has underpinned both
our footballing success and financial stability over a number of
years now and it is vital that we adhere to it.
Following on from the League and Scottish Cup double in the
prior season, our Women's team had another strong performance in
season 2022/23. Following the disappointment of losing the SWPL
title by just two points to a last-minute winner on the season's
final day resulting in a second place finish, we went on to retain
the Scottish Cup with a victory against Rangers Women at Hampden.
Whilst finishing second in the league was a disappointment this
facilitated access to the Women's Champions League qualifiers.
After defeating Brondby in the first qualifying match, our Women's
team then faced a match against Valerenga for progression to the
final play-off round prior to the group stages. The match ended 2-2
after extra time and was ultimately lost in penalties. Whilst this
was hugely disappointing, we take pride in the fact that this is
the furthest our Women's team have progressed in the tournament and
they will take much from the experience.
As we look forward, European club competition continues to
develop and further integrate. Relationships between the European
Club Association ('ECA') along with UEFA and FIFA have never been
stronger and ECA membership continues to expand. This is a positive
development for European football clubs and will strengthen
governance and ultimately add value to the European Football
landscape. Celtic are committed to the ECA and fully endorse its
objectives as we move towards the new European Club Competition
format from 2024 onwards. In my role as Vice Chairman of the ECA,
member of the executive committee and Board Member, I will continue
to promote the interests of Celtic, Scottish football and European
football as a whole.
Finally, I wish to extend my thanks to all our Celtic colleagues
for their contribution to delivering another Treble and of course
to all our supporters who continue to support the Club year after
year in enormous numbers.
Peter T Lawwell, Chairman
18 September 2023
CHIEF EXECUTIVE'S REVIEW
The year to 30 June 2023 will go down as a landmark year in the
history of Celtic, when the Club achieved a world record breaking
8(th) Treble. I thank and congratulate all of our colleagues, our
players, our former manager Ange Postecoglou, and of course our
supporters for this remarkable achievement.
The objective for the season was to build upon the previous
year's success, when we had secured the SPFL Premiership title and
the League Cup. Having invested in the first team squad, we entered
the Champions League Group Stages for the first time in five years.
The challenging draw set us against RB Leipzig, Shakhtar Donetsk
and 14 times Champions League winners Real Madrid. Despite
achieving only two points, the performance levels and valuable
experience gained by our young squad were promising and will
provide a base on which to build again into this season and the
forthcoming Champions League Group Stages campaign.
Our domestic campaign got off to a strong start and by the
halfway mark on 31 December 2022, we had lost just one game;
winning 18 games of the 19 played. The 2022 World Cup gave us an
opportunity to take part in a hugely successful international tour
of Australia, where we played Everton F.C. and Sydney F.C. This
gave the opportunity to bring Celtic to our supporters in Australia
and the southern hemisphere, and demonstrated the scale of the Club
on the international stage. In February 2023, we retained the
Scottish League Cup with a victory over Rangers setting the tone
for the title run in. We went on to secure the SPFL Premiership
title in early May 2023, before defeating Inverness Caledonian
Thistle F.C. to win the Scottish Cup and our eighth domestic
Treble. Following the Scottish Cup Final, Ange Postecoglou left the
Club to become the manager of Tottenham Hotspur F.C. Ange leaves
with the Club's best wishes, and with our appreciation for his
contribution to our Club.
During the 2023/24 close season, the immediate focus was the
recruitment of a First Team Manager to replace Ange. Following a
thorough assessment, we were delighted to bring Brendan Rodgers
back to Celtic. Brendan was the standout candidate for the job.
Bringing back a manager of Brendan's quality is crucial to our
strategic objectives to dominate domestic football and to compete
regularly in the Champions League. During the summer transfer
window, we worked with Brendan to continue to strengthen our squad,
and we look to the season ahead with optimism and a determination
to continue to build our Club for the short, medium and long term.
Our immediate priority is to retain the SPFL Premiership title and
the Scottish Cup, and to build on our performances in the Champions
League.
Celtic F.C. Women enjoyed another successful season, winning the
Women's Scottish Cup against Rangers. Manager, Fran Alonso, our
players, led by Captain Kelly Clark, and all of our colleagues are
to be congratulated for the continued development and improvement
of our Women's team, with a terrific league campaign ending by
narrowly finishing second in the last game of the season in
dramatic circumstances. We also saw a record attendance for a
Celtic F.C. Women's game at Celtic Park, where the support given to
the team was outstanding. We will continue to invest in the
development of Celtic F.C. Women and our Girls Academy.
Celtic F.C. B Team completed their second full season in the
Lowland League, finishing third for the second consecutive season.
We look forward to our third season in the Lowland League, with
further opportunities for player development this season in the
UEFA Youth League and the Premier League International Cup. Player
development remains at the core of the Club's strategy and it is
vitally important that we continue to invest in developing our own
Academy players. We will work with the Scottish football
authorities to maximise the opportunities for the development of
young players in Scotland.
Continuous improvement remains a key objective. During the year
we invested in our facilities at Celtic Park and Lennoxtown, to
take our Club forward. At Celtic Park, we opened a new sports bar
and a new viewing platform for disabled supporters. At Lennoxtown,
we completed work on a new performance gym for the First Team and B
Team, together with a new First Team canteen and lounge facility.
In the year ahead, we will complete a significant investment in new
First Team and B Team changing facilities, along with enhanced
medical and sports science facilities, to seek to ensure that our
technical functions are aligned to meet the needs of a modern
football club and players.
Last week we were delighted to announce a major investment in
the re-development of our Barrowfield training facility. This is a
very exciting project. Our objective is to create a first class
training and development environment for the Academy and Women's
football team at an iconic venue that has played such an important
part in the history of our Club.
This year saw the redevelopment of some facilities at Celtic
Park for the use of Celtic F.C. Foundation. Charity continues to be
a fundamental part of our Club, with Celtic F.C. Foundation at the
very heart of everything we do, as highlighted by the current
banners on the main stand at Celtic Park, ensuring that the Club's
commitment to our charitable ethos is front and centre for all to
see. Everyone at the Club is extremely proud of the important work
delivered by Celtic F.C. Foundation, including, for example,
Paradise Pit Stop, where twice a week we open our doors at Celtic
Park and Celtic F.C. Foundation provides hot food for those in need
in our community, in a safe and welcoming environment. Thank you to
all who support Celtic F.C. Foundation including our colleagues who
volunteer every week to help at the Paradise Pit Stop.
As we continue to develop our Club for the future, we are aware
of the ongoing turbulence and uncertainty in the economy and the
challenges presented for our business, our partners and our
supporters. Our model seeks to balance our commitment to football
success with the crucial importance of financial sustainability. We
thank our partners and sponsors, including adidas, Dafabet and
Magners for your continued support. We are also very fortunate to
have fantastic colleagues at Celtic, who work tirelessly to support
all of the Club's operations and to support the teams on the pitch
throughout the season. I would also like to thank Ian Bankier, who
retired during the financial year, for his contribution to the Club
and his support and advice to the Board as Chairman.
Finally, our thanks go to our supporters for your commitment and
invaluable contribution to the Club. Your continued support is
vital in delivering the success that we all strive for each
year.
Michael Nicholson, Chief Executive
18 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
2023 2022
Notes GBP000 GBP000
Revenue 2 119,851 88,235
Operating expenses (before intangible asset transactions and exceptional items) (95,432) (91,728)
Profit/(loss) from trading before intangible asset transactions and exceptional
items 24,419 (3,493)
Exceptional operating expenses 3 (131) (6,262)
Amortisation of intangible assets (12,088) (13,045)
Profit on disposal of intangible assets 14,441 29,029
Other income 13,500 -
Operating profit 40,141 6,229
Finance income 2,041 876
Finance expense (1,485) (969)
Profit before tax 40,697 6,136
Tax expense 5 (7,365) (287)
--------- ---------
Profit and total comprehensive profit for the year 33,332 5,849
Basic profit per Ordinary Share for the year 6 35.26p 6.19p
Diluted profit per Share for the year 6 24.79p 4.69p
CONSOLIDATED BALANCE SHEET
As at 30 June 2023
2023 2022
GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 55,725 56,265
Intangible assets 28,039 35,489
Trade receivables 15,113 13,000
98,877 104,754
======== ========
Current assets
Inventories 3,426 2,987
Trade and other receivables 45,700 38,367
Cash and cash equivalents 72,285 31,869
--------
121,411 73,223
======== ========
Total assets 220,288 177,977
======== ========
Equity
Issued share capital 27,168 27,166
Share premium 14,990 14,951
Other reserve 21,222 21,222
Accumulated profits 44,810 11,478
--------
Total equity 108,190 74,817
======== ========
Non-current liabilities
Borrowings - 314
Debt element of Convertible Cumulative Preference Shares 4,174 4,174
Trade and other payables 12,320 16,806
Lease liabilities 432 318
Provisions 96 114
Deferred tax liabilities 3,215 2,982
20,237 24,708
======== ========
Current liabilities
Trade and other payables 50,764 36,758
Lease liabilities 330 539
Borrowings 96 1,336
Provisions 6,898 8,350
Deferred income 33,773 31,469
--------
91,861 78,452
======== ========
Total liabilities 112,098 103,160
======== ========
Total equity and liabilities 220,288 177,977
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Share Share Other Accumulated
Group capital premium reserve profit Total
GBP000 GBP000 GBP000 GBP000 GBP000
Equity shareholders'
funds
as at 1 July 2021 27,166 14,914 21,222 5,629 68,931
Share capital issued - 37 - - 37
Profit and total comprehensive
profit
for the year - - - 5,849 5,849
Equity shareholders'
funds
-------- -------- -------- ------------ --------
as at 30 June 2022 27,166 14,951 21,222 11,478 74,817
-------- -------- -------- ------------ --------
Share capital issued 2 39 - - 41
Profit and total comprehensive
profit
for the year - - - 33,332 33,332
Equity shareholders'
funds
-------- -------- -------- ------------ --------
as at 30 June 2023 27,168 14,990 21,222 44,810 108,190
-------- -------- -------- ------------ --------
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2023
2023 2022
GBP000 GBP000
Cash flows from operating activities Notes
Profit for the year 33,332 5,849
Taxation charge 7,365 287
Depreciation 2,883 2,736
Amortisation of intangible assets 12,088 13,045
Impairment of intangible assets and other
prepaid costs - 7,235
Reversal of prior period impairment charge - (1,094)
Profit on disposal of intangible assets (14,441) (29,029)
Finance income (2,041) (876)
Finance costs 1,485 969
--------- ---------
40,671 (878)
(Increase) / decrease in inventories (439) 873
Increase in receivables (2,649) (1,856)
Increase in payables and deferred income 9,092 12,302
--------- ---------
Cash from operations 46,675 10,441
Tax paid 5 (4,297) -
Interest received 1,175 64
Interest paid (48) (77)
--------- ---------
Net cash flow from operating activities 43,505 10,428
--------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (1,775) (1,034)
Purchase of intangible assets (24,349) (20,566)
Proceeds from sale of intangible assets 25,781 26,044
--------- ---------
Net cash (used in) / from investing
activities (343) 4,444
--------- ---------
Cash flows used in financing activities
Repayment of debt (1,604) (1,280)
Payments on leasing activities (669) (693)
Dividend on Convertible Cumulative Preference
Shares (473) (489)
--------- ---------
Net cash used in financing activities (2,746) (2,462)
--------- ---------
Net increase in cash equivalents 40,416 12,410
Cash and cash equivalents at 1 July 2022 31,869 19,459
--------- ---------
Cash and cash equivalents at 30 June
2023 72,285 31,869
========= =========
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The principal accounting policies applied in the preparation of
these Financial Statements are set out below. These policies hav e
been consistently applied to financial years 2023 and 2022,
presented, for both the Group and the Company.
Going Concern
The Group has adequate financial resources available to it,
including currently undrawn bank facilities, together with
established contracts with a number of customers and suppliers.
Additionally, the Group continues to perform a detailed
budgeting process each year which is reviewed and approved by the
Board. The Group also performs regular re-forecasts and these
projections, which include profit/loss and cash flow forecasts, are
distributed to the Board. As a consequence, the Directors believe
that the Group is well placed to manage its business risks
successfully over the medium term.
In consideration of the above, the Directors have a reasonable
expectation that the Group and 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 annual Financial Statements and have not identified a
material uncertainty in this regard.
2. REVENUE
2023 2022
GBP000 GBP000
The Group's revenue comprised:
Football and Stadium Operations 51,483 42,782
Merchandising 29,072 24,925
Multimedia and Other Commercial Activities 39,296 20,528
--------- ---------
119,851 88,235
========= =========
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses of GBP0.1m (2022: GBP6.3m)
can be analysed as follows:
2023 2022
GBP000 GBP000
Impairment of intangible assets and other prepaid
costs - 7,235
Reversal of prior period impairment charges - (1,094)
Settlement agreements on unforeseen contract
termination 131 121
-------- --------
131 6,262
======== ========
The impairment of intangible assets in the prior year relates to
adjustments required as a result of management's assessment of the
carrying value of certain player registrations relative to their
current market value. The carrying value of intangible assets are
reviewed against criteria indicative of impairment and, where the
carrying value exceeds their current market value, impairment is
recognised. Where events subsequent to this initial assessment give
rise to a reversal of any impairments, such as a transfer or a
significant turnaround in performance, an impairment reversal is
recognised.
Settlement agreements on unforeseen contract termination are
costs in relation to exiting certain employment contracts.
These events are deemed to be unusual in relation to what
management consider to be normal operating conditions as the
occurrence of these events is sufficiently irregular enough to
warrant it as exceptional.
4. DIVIDEND ON CONVERTIBLE CUMULATIVE PREFERENCE SHARES
A 6% non-equity dividend of GBP0.53m (2022: GBP0.53m) was paid
on 31 August 2023 to those holders of Convertible Cumulative
Preference Shares on the share register at 28 July 2023. A number
of shareholders elected to participate in the Company's scrip
dividend reinvestment scheme for the financial year to 30 June
2023. 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 (2022: 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 2023 was GBP2.3m
(2022: receivable of GBP0.5m). The current year tax charge was
GBP7.4m (2022: GBP0.3m) and total tax payments in the year were
GBP4.3m (2022: GBPnil). The available capital allowances pool is
approximately GBP4.3m (2022: GBP5.1m). These estimates are subject
to the agreement of the current year's corporation tax computations
with H M Revenue and Customs.
The standard rate of corporation tax for the year in the United
Kingdom is currently 25% (2022: 19%). The tax rate of 25% came into
effect on 1(st) April 2023 and therefore the annualised rate for
the financial year end 30 June 2023 is 20.496%.
2023 2022
GBP000 GBP000
Current tax expense
UK corporation tax 7,132 99
Adjustments in respect of prior periods - -
-------- --------
Total current tax expense 7,132 99
======== ========
Deferred tax expense
Origination of temporary timing differences 191 143
Adjustments in respect of prior periods - -
Effects of changes in tax rates 42 45
-------- --------
Total deferred tax 233 188
-------- --------
Total tax expense 7,365 287
======== ========
6. EARNINGS PER SHARE
Reconciliation of basic earnings to diluted 2023 2022
earnings:
GBP000 GBP000
Basic earnings 33,332 5,849
Non-equity share dividend 569 569
Diluted earnings 33,901 6,418
========== ==========
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 94,531 94,457
Dilutive effect of convertible shares 42,226 42,252
---------- ----------
Diluted weighted average number of ordinary
shares 136,757 136,709
========== ==========
Earnings per share of 35.26p (2022: 6.19p) has been calculated
by dividing the total comprehensive profit for the period of
GBP33.3m (2022: GBP5.8m) by the weighted average number of Ordinary
Shares of 94.5m (2022: 94.5m) in issue during the year.
Diluted earnings per share of 24.79p (2022: 4.69p) has been
calculated by dividing the diluted earnings for the period of
GBP33.9m (2022: GBP6.4m) 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. When considering a loss per share
scenario, no adjustment is made for the preference share dividend
and therefore the diluted loss per share is equal to the basic loss
per share.
7. ANNUAL REPORT & FINANCIAL STATEMENTS
Copies of the Annual Report & Financial Statements together
with the Notice and Notes of the 2023 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 2023 or 30 June 2022. The Independent Auditor's Reports on the
statutory financial statements for 2023 and 2022 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 2022 have been filed
with the Registrar of Companies and those for 2023 will be
delivered to the Registrar of Companies in due course.
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