RNS Number:2715A
Charlton Athletic PLC
23 March 2006
CHARLTON ATHLETIC PLC ("Charlton" or the "Company")
INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2005
CHAIRMAN'S INTERIM STATEMENT
On behalf of the board of Charlton Athletic plc I present the Company's Interim
Statement for the six months to 31 December 2005.
Turnover for the period was #19.5m, unchanged from the comparable period to 31
December 2004, however the Company has recorded a net loss for the period of
#5.1m.
The Company completed its placing of ordinary shares to a number of directors
and other shareholders associated with the board raising #5.5m, with this sum
being used primarily to support the further development of the first team squad.
Derek Chappell, who participated in this share issue, subsequently accepted an
invitation to join the board of the Company.
During the summer transfer window the football club strengthened its first team
squad through the acquisition of Darren Ambrose, Darren Bent, and Jay Bothroyd.
Alexei Smertin, Gonzalo Sorondo and Jonathan Spector joined us on loan for the
season from Chelsea, Inter Milan and Manchester United respectively. In
addition, as a response to an injury to Dean Kiely during the pre-season build
up, Thomas Myhre also joined us.
This expanded squad gave the football club an excellent start to the season,
with some strong performances away from The Valley in particular. However, a
poor run during November and December saw the team lose its position in the top
half of the Premiership and the team is currently in 13th position, having
played 29 matches and gaining 39 points.
During this period the Company was presented with a difficult challenge when the
main football club sponsor, all:sports, was placed in administration in
September. This affected our sponsorship revenues and there is little prospect
of receiving any significant payments against the fees outstanding.
Financial Highlights
Six months to Six months to
31 December 31 December
2005 2004
#000s #000s
Turnover 19,456 19,483
Operating overheads (23,140) (19,974)
Operating loss before amortisation and player trading (3,684) (491)
Amortisation of player costs (2,961) (2,085)
Operating loss (6,645) (2,576)
Net interest (31) (169)
Profit on player disposals 1,553 1,063
Net loss (5,123) (1,682)
Issue of ordinary shares 5,525 0
Net assets 32,156 26,163
The Company's turnover was predominately earned from FA Premier League broadcast
revenues and central sponsorship agreements, representing 53% of the total
revenues for the period. Match day income was generated from 10 home matches
(2004: 10 matches) with additional revenues from the three Carling Cup matches
played, against Hartlepool United, Chelsea and Blackburn Rovers. Despite the
problems we experienced with all:sports, turnover remained at #19.5m for the six
months to 31 December 2005 (2004: 19.5m).
Earnings for the full year will be significantly affected by the finishing
position at the season end that determines the level of the merit award due to
the Company and the number of live BSkyB matches featuring the club in the
second half of the season. In particular, the recent FA Cup successes in the
second period have been a welcome addition to our turnover as the team has
reached the quarter final stage with a realistic opportunity to reach the
semi-final stage for the first time since 1947.
In December the football club negotiated a new long-term club sponsorship
agreement with the Spanish property company, Llanera, effective from January
2006 until June 2010. This sponsorship will provide the Company with combined
revenues in excess of #6.6m through the period and is the largest sponsorship
agreement that the Company has negotiated to date. There is a strong synergy
between the two businesses through our respective community focus and activities
and Llanera has now established a base in the south east of England to market
its community developments through out the United Kingdom. We feel that this
will be a relationship that will develop through the term of the agreement and
offers opportunities to both parties. I will record my thanks to both Emilio
Teresa and Bruce Bell of the Llanera Group for their drive and energy in
concluding this agreement. Our connections with Spain were developed further
when our kit supplier, Joma, agreed an extension to the existing agreement until
2010.
I have already reported that our season ticket sales were reduced in number for
this 2005/6 season and while we are not unique in this respect, we are still
concerned that the growth of earlier years has not been maintained. There are a
number of factors behind this reduction, most notably the fear factor associated
with a loss of League status which permeates through the Premiership and leads
to negative play. Additionally, there is resistance among supporters to the
varied days and kick-off times for matches. The number of season ticket holders
has now reduced to 18,700. We feel that a full stadium at The Valley creates a
supportive atmosphere for the team and so we have continued to invest in our
Valley Express initiative that provides both organised coach travel and match
tickets to our supporters across the south east region. We have now reached a
record of 2,700 supporters that used the service for the recent home match with
Aston Villa and to demonstrate that this service supports our match day
attendance figures, an average of 96% of the seats have been filled for the home
games played to date.
The Company took a deliberate decision to substantially increase the level of
investment in the playing squad for this season and this is reflected in the
increased overheads recorded. These additional costs are being mainly funded
through the #5.5m equity investment completed in July 2005, but clearly the
Company cannot sustain this level of operating loss in future years.
Capital projects
We have plans to redevelop our training ground complex in New Eltham, in
conjunction with our Community Trust, and planning consent has now been granted
for this. This development will provide high quality sports and learning
facilities for community groups and schools in the area in addition to improving
the facilities used by the football club. Development work is expected to
commence this spring.
The process of finalising planning consent for the redevelopment of the east
stand at The Valley is now nearly completed and this will allow us to expand the
capacity of the stadium in the future when we judge there is sufficient
financial justification to do so.
Football
I am pleased to be able to report on some successes in the two domestic cup
competitions. The team performed well in the Carling Cup and became the first
team to win at Stamford Bridge this season following the 3rd round victory. Our
interest in this competition ended when the team lost at home to Blackburn
Rovers. We have now reached the quarter-final stage of the FA Cup competition
and there is the very real prospect of us progressing further for the first time
in recent years.
The January 2006 transfer window allowed us to increase our attacking options
with the signing of Marcus Bent for an initial fee of #2 million and he scored
what proved to be the equaliser on his debut against Chelsea at Stamford Bridge.
His namesake, Darren Bent, has become one of the Premiership success stories of
the season since his arrival from Ipswich Town in the summer and he looks on
target to score more than twenty goals this season.
Dean Kiely had been unable to regain his first team spot from Thomas Myhre and
moved to Portsmouth and also Danny Murphy moved to Tottenham Hotspur during this
window. The manner in which Danny Murphy and more latterly Alexei Smertin left
the club together with the timing of their departures was very disappointing.
The football industry
It is my opinion that the FA Premier League is at a very important stage in its
evolution. It remains the most popular and the most watched League globally and
it continues to attract some of the world's best players but to retain this
prominence the competition must be competitive and exciting. It is apparent
that there are only a few teams in the Premiership that have the resources to
mount a challenge for the title. For most of the remaining clubs, survival in
the League becomes the principal objective, creating a negativity which can lead
to low entertainment value in many matches.
We also need to improve the image of the game at all levels. For the game to
flourish there must be respect for the authority of the referees by all
involved, including players, spectators and those managing teams and clubs.
There needs also to be respect for one another from those involved within
football. We must never lose sight of the importance of supporters to the
health of our game. Over-exposure on television and disparity of kick-off times
are important issues that concern them and me.
As a League we have much to be proud of, but there are actions that I feel we
must take now to secure the future prosperity of the League for the long term.
Conclusion
I am confident that Charlton Athletic has now secured its Premiership status and
has a realistic chance of finishing in the top half of the Premier League.
Your board also remains confident about the future of the football club and our
policy of responsible progression will continue.
Richard Murray
20 March 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 31 December 2005
6 months to 12 months to
31 December 30 June
Unaudited results 2004 2005
Operations Amortisation and Total
excluding player trading
amortisation
and player
trading
#000s #000s #000s #000s #000s
TURNOVER 19,456 0 19,456 19,483 40,714
Operating expenses (23,140) (2,961) (26,101) (22,059) (42,906)
Exceptional items 0 0 0 0 2,763
OPERATING (LOSS)/PROFIT (3,684) (2,961) (6,645) (2,576) 571
Profit on disposal of 0 1,553 1,553 1,063 1,137
players
(LOSS)/PROFIT BEFORE
INTEREST AND TAXATION (3,684) (1,408) (5,092) (1,513) 1,708
Net interest payable (31) (169) (348)
(LOSS)/PROFIT ON
ORDINARY ACTIVITIES
BEFORE INTEREST AND (5,123) (1,682) 1,360
TAXATION
Taxation 0 0 0
(LOSS)/PROFIT for the
period (5,123) (1,682) 1,360
(LOSSES)/EARNINGS PER
SHARE (pence) (8.0)p (3.1)p 2.5p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS 6 months to 12 months to
31 December 30 June
For the six months ended 31 December 2005 2004 2005
Unaudited Unaudited Audited
#000s #000s #000s
(Loss)/profit for the period (5,123) (1,682) 1,360
Unrealised surplus on revaluation of freehold property 0 0 2,571
Total recognised gains for the period (5,123) (1,682) 3,931
CONSOLIDATED BALANCE SHEET
At 31 December 2005
As at As at
31 December 30 June
2004 2005
Unaudited Unaudited Audited
#000s #000s #000s
FIXED ASSETS
Tangible fixed assets 37,085 35,317 37,545
Intangible assets 9,416 10,022 10,863
46,501 45,339 48,408
CURRENT ASSETS
Stocks 182 274 98
Debtors 2,316 3,499 5,588
Cash at bank and in hand 8,425 4,188 13,253
TOTAL ASSETS 57,424 53,300 67,347
Creditors falling due within one year and
deferred income
(12,329) (13,695) (23,324)
TOTAL ASSETS LESS CURRENT LIABILITIES 45,095 39,605 44,023
Creditors falling due after one year (8,228) (7,749) (6,777)
Grants and deferred income (4,711) (5,693) (5,470)
NET ASSETS 32,156 26,163 31,776
CAPITAL AND RESERVES
Called up share capital 33,010 27,485 27,485
Share premium account 1,997 2,019 2,019
Revaluation reserve 9,081 6,535 9,093
Profit and loss account (11,932) (9,876) (6,821)
EQUITY SHAREHOLDERS' FUNDS 32,156 26,163 31,776
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2005
6 months to 12 months to
31 December 30 June
2004 2005
Unaudited Unaudited Audited
#000s #000s #000s
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (4,944) 1,933 9,858
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 269 171 296
Interest paid (299) (338) (641)
Interest element of finance lease payments (1) (2) (3)
NET CASH (OUTFLOW) FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE (31) (169) (348)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTS
Payments to acquire players' registrations (1,514) (7,684) (10,632)
Proceeds from the sale of players' registrations 1,553 1,325 1,456
Payments to acquire tangible fixed assets (160) (662) (951)
Refund of long term season tickets 0 0 (2)
NET CASH (OUTFLOW) FROM CAPITAL EXPENDITURE (121) (7,021) (10,129)
NET CASH (OUTFLOW) BEFORE FINANCING (5,096) (5,257) (619)
FINANCING ACTIVITIES
Proceeds from issue of ordinary shares 0 0 5,525
Costs of share issue (22) 0 0
Loan repayments (8,946) (1,041) (2,116)
Capital elements of finance lease payments (14) (12) (25)
New bank loans and credit facilities 9,250 10 0
NET CASH INFLOW FROM FINANCING 268 (1,043) 3,384
(DECREASE)/INCREASE IN CASH (4,828) (6,300) 2,765
The proceeds from the issue of ordinary shares completed on 8 July 2005 were all
received during June 2005.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 31 December 2005
1. The financial statements combine the results of Charlton
Athletic plc and its two subsidiaries, Charlton Athletic Football Company
Limited and Charlton Athletic Holdings Limited. The financial statements have
been prepared in accordance with applicable accounting standards and under the
historical cost convention, as modified by the revaluation of freehold
properties.
2. Turnover represents income receivable from commercial
activities excluding transfer fees and value added tax.
3. Grants received in respect of safety work and ground
improvement are treated as deferred income and released to the profit and loss
account over the life of the assets to which they relate.
4. The net amount received by the Company through long term
season ticket schemes is treated as deferred income in the balance sheet and is
released to the profit and loss account over the period for which the investors
receive their season ticket.
5. Freehold properties are fully revalued every five years with
an interim valuation carried out three years into every five year period.
6. The costs of tangible fixed assets are written down over
their estimated useful lives.
7. The costs of obtaining players' registrations are capitalised
and amortised evenly over the period of the respective players' contracts.
Provision is made, where in the opinion of the directors, an impairment of the
carrying value of the player's registrations has occurred. These provisions are
shown as exceptional items.
8. Signing on fees are recognised in the profit and loss account
evenly through the period covered by the players' contracts.
9. There is no liability for corporation taxation arising in the
period.
10. The Company has no recognised gains or losses other than the
profit shown for the financial period.
11. The calculation of earnings per share is based on the loss of
#5,123,000 (2004: loss #1,682,000) for the six months and on the weighted
average of 63,827,309 shares in issue during this period (2004: 54,969,293).
12. The financial information for the six months ended 31 December
2004 and 31 December 2005 contained in this statement is unaudited and does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985 ("the Act"). The financial information for the year ended 30 June 2005 is
an abridged version of the group's published financial statements for that
period, which contained an unqualified audit report and which has been filed
with the Registrar of Companies. The audit report contained no statement under
Section 237 (2) or (3) of the Act.
Copies of this statement are being sent to shareholders and are available from
Charlton Athletic plc, The Valley, Floyd Road, London, SE7 8BL. These results
were announced to the London Stock Exchange on 23 March 2006 and distributed to
shareholders after that date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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