RNS Number : 5173I
Millwall Holdings PLC
19 November 2008
For immediate release 19 November 2008
Millwall Holdings PLC
Final Results
Board Statement
Business Review
The 2007-8 season was a turbulent one. After a disappointing start Willie Donachie was replaced as manager, with Kenny Jackett taking on
the role on 6 November 2007.
There were consequential managerial changes across the backroom staff and the new team struggled to deal with exceptional levels of
injury. During the course of the season it was necessary to make extensive use of loan players to deal with this problem. This increased the
player wage cost to the club and resulted in a total of 41 different players representing Millwall during that period.
The team finished the 2007-8 league campaign with 52 points and in 17th position, having battled against relegation to League 2
throughout the second half of the season. Early exits in both the Johnston Paint Trophy and the Carling Cup competitions were a cause for
disappointment. However, Millwall reached the 4th round of the FA Cup, losing an away tie to a Championship team, Coventry City. The signs
of improvement in team performance were there and could be seen, particularly, in a good away victory at Swansea City (eventual Champions)
and a 3-0 home win against promotion hopefuls Carlisle United .
The average home league attendance was 8,668 (2007: 9,231), which placed the Club in the top five of the Divisional attendance league.
During the period further on-going working capital was raised from Chestnut Hill Ventures and Directors of Millwall Holdings. This was
provided by the Company entering into a further sterling term loan facility of �3,000,000 with Chestnut Hill Ventures (the Lender) and a
further loan from Directors of �300,000. These loans were approved by the Board on 30th June 2008 and are non-convertible.
Results
The consolidated income statement for the period is set out below.
Revenue for the period remained broadly stable but gate and associated match-day revenues were down 3% due to a disappointing team
performance, the Club having ended the league season in 17th position. Additional revenues were secured in non-matchday conferencing and
events, and retail sales, which compensated for these losses.
Total staff costs were higher than anticipated due to the player related costs in respect of loan players required to cover for injured
players and amounted to �6.3m for the thirteen month period. They were broadly in line, on a pro rata basis, with the same cost for the
previous year (2007: �5.9m - 12 months). The total wages to turnover ratio rose to 118% (2007 : 109%) This increase is mainly due to the
thirteen month period having included June 2008, a month with no football fixtures and therefore the lowest income generating month of the
calendar year.
Administration costs (excluding Depreciation and Amortisation) increased to �5.202m (2007: �4.492m). This increase is attributable to
expenses in connection with the regeneration programme of �1.345m (2007: �0.455m) and costs associated with raising financing and the
convening of an EGM. Cost efficiencies have been made in the Football Club resulting in savings in administration costs in this area of the
business.
Player sales amounted to �913,000 (2007: �413,758) and included the transfer of Tony Craig , Marvin Elliott and Ben May as well as three
young players from the club's youth system to Liverpool , Chelsea and Portsmouth.
The Directors do not recommend payment of a dividend (2007: no dividend).
Principal risks and uncertainties
In common with many football clubs outside the Premiership the main business risk is the maintenance of a positive cash flow, bearing in
mind the uncertainty of turnover and the high cost of maintaining a playing squad on which the success of the Group's business is largely
dependent. In order to achieve a positive cash flow there is the constant requirement to raise new finance and refinance existing facilities
which, in turn, requires the continuing support of existing providers of those facilities. As part of its normal activities, the Club deals
in the trading of player registrations and there is always a risk of significant and lasting injuries to players that may impair player
values. Players aged 24 years or older are free to move between clubs once their contract has come to an end and the Board monitors expiry
dates carefully with a view to renewing contracts or realising value.
Prospects
Football
The team has started the new season in good form and after 16 games of 2008 -2009 season are in 3rd place in League 1 having already won
10 games. The improvement in on-field performance has led to optimism amongst the supporters and the average home attendance for the first
seven league games being 8,975 and corporate matchday sales increasing.
The player wage costs remain challenging with 3 of the highest paid contracted players not part of the manager's plans for the team.
These players, along with 11 others, have contracts that expire in June 2009 and the board is constantly reviewing the position in regard to
the balance between protecting player asset values and offering extended player contracts.
The Den
The policy of utilising the stadium on non-matchdays to increase revenues has proved successful over the past 13 months and further
marketing initiatives will be put in place to strengthen this key area of business.
The Community
The Club continues to recognise the importance of the relationship with the broader community and more work has been undertaken with the
Millwall Community Scheme. We now employ a shared liaison officer funded via The Football League, whose focus is to promote the work and
activities of both Football Club and Community Scheme across this sector of London.
Communication
Communication lies at the heart of the activities, with the Fan on the Board providing a crucial link between Board and supporters.
Regular meetings and forums take place with all levels of the Club's supporters and partners.
Finance
The Company is principally financed by CHV by way of loans. At the AGM in December 2007 the Company failed to secure Section 89
authority to issue share capital. This was due to a significant shareholder voting against this recommendation. Therefore, the Company is
constrained and can raise money only by way of debt. The Company will seek to secure the Section 89 authority at the next AGM.
Regeneration
On regeneration and development, the planning process has been delayed due to changes in the overall planning regime and the election of
a new Mayor of London, all outside the control of the company. Significant work has been undertaken to contribute to the overall masterplan
of the area, which will be the subject of detailed consultation in the New Year (2009).
H Rabbatts
Executive Deputy Chairman
19 November 2008
Millwall Holdings PLC
Consolidated Income Statement
for the thirteen months ended 30 June 2008
Thirteen
months Year
Ended Ended
30 June 31 May
2008 2007
Total Total
Notes �000 �000
Revenue 5,367 5,388
Other income - profit on
disposal of player's 913 414
registrations
Staff costs (6,313 ) (5,865 )
Amortisation of players' (126 ) (63 )
registrations
Depreciation of property,
plant and equipment (309 ) (382 )
Total Depreciation and
amortisation expense (435 ) (445 )
Other expenses (5,202 ) (4,492 )
______ ______
Loss from operations (5,670 ) (5,000 )
Finance income 31 17
Finance expense (476 ) (208 )
______ ______
Loss before taxation (6,115 ) (5,191 )
Tax expense - -
______ ______
Loss for the period
attributable to:
Equity shareholders (6,115 ) (5,191 )
______ ______
Loss per share - basic and 2 (0.022 )p (0.024 )p
diluted
______ ______
Millwall Holdings PLC
Consolidated Statement of Changes in Equity
For the thirteen months ended 30 June 2008
Group Ordinary Shares Deferred Shares Equity component
Share
of 0.01p of 0.09p premium of Convertible Capital PIK note Profit
and Total
each each account Loan Notes reserves reserve loss
account Equity
�000 �000 �000 �000 �000 �000
�000 �000
1 June 2006 1,838 2,333 11,087 - 21,474 -
(26,697 ) 10,035
Share issues 669 - 1,707 - - -
- 2,376
Share issues - costs - - (160 ) - - -
- (160 )
Equity proportion of
Convertible Loan Notes Issued - - - 252 - -
- 252
Allocated Convertible Loan
Note transaction costs - - - (33 ) - -
- (33 )
Share based compensation - - - - - -
4 4
Loss for the year - - - - - -
(5,191 ) (5,191 )
________ _______ __________ _____ _______ _____
_________ ________
31 May 2007 2,507 2,333 12,634 219 21,474 -
(31,884 ) 7,283
________ _______ __________ _____ _______ _____
_________ ________
1 June 2007 2,507 2,333 12,634 219 21,474 -
(31,884 ) 7,283
Share issues 1,156 - 2,311 - - -
- 3,467
Equity proportion of
Convertible Loan Notes Issued - - - 224 - -
- 224
Conversion to share capital of
equity proportion of
Convertible loan Notes
87 - 175 (262 ) - -
- -
Share based Compensation - - - - - -
164 164
PIK notes issued - - - - - 333
- 333
Loss for the period - - - - - -
(6,115 ) (6,115 )
_________ ________ ___________ _____ ________ _____
________ __________
30 June 2008 3,750 2,333 15,120 181 21,474 333
(37,835 ) 5,356
________ _______ __________ _____ _______ _____
________ ________
Millwall Holdings PLC
Consolidated Balance Sheet
30 June 31 May
2008 2007
�000 �000
Non-current assets
Intangible assets 291 36
Property, plant and equipment 15,127 15,691
_______ _______
15,418 15,727
_______ _______
Current assets
Inventories 66 93
Trade and other receivables 1,104 801
Cash and cash equivalents 204 749
_______ _______
1,374 1,643
_______ _______
Total assets 16,792 17,370
Non-current liabilities
Trade and other payables - (107 )
Financial liabilities (4,357 ) (2,178 )
Deferred income (3,770 ) (4,591 )
_______ _______
Total Non-current liabilities (8,127 ) (6,876 )
_______ _______
Current liabilities
Trade and other payables (2,239 ) (2,259 )
Deferred income (1,070 ) (952 )
_______ _______
Total Current liabilities (3,309 ) (3,211 )
_______ _______
Total liabilities (11,436 ) (10,087 )
_______ _______
Net assets 5,356 7,283
_______ _______
Equity
Called up share capital 6,083 4,840
Share premium 15,120 12,634
Equity proportion of Convertible Loan Notes 181 219
Capital reserve 21,474 21,474
PIK note reserve 333 -
Retained deficit (37,835 ) (31,884 )
_______ _______
Total Equity 5,356 7,283
_______ _______
Millwall Holdings PLC
Consolidated Cash Flow Statement
for the thirteen months ended 30 June 2008
30 June 31 May
2008 2007
�'000 �'000
Operating activities
Net loss before tax Net loss (6,115) (5,191 )
before taxation
Share based payments 497 4
Depreciation on property 309 382
plant and equipment
Amortisation of intangible 126 63
assets
Amortisation of grants (98) (104 )
Profit on disposal of players' (913) (414 )
registrations
Profit on disposal of (300) -
property, plant and equipment
Finance income (31) (17 )
Finance expenses 476 208
_____________ _______
Cash flow from operations before (6,049) (5,069 )
changes in working capital
Decrease/(increase) in 27 (1 )
inventory
(Increase)/decrease in trade (303) 893
and other receivables
(Decrease)/increase in trade and
other payables and accruals and (110) ) 132
deferred income
_______________ _______
Cash generated from operations (6,435) (4,045 )
Investing activities
Purchase of property, plant (36) (122 )
and equipment
Proceeds on disposal of 695 416
players' registrations
Purchase of players' (381) (60 )
registrations
Interest received 31 17
_______________ _______
Net cash generated by investing 309 251
activities
Financing activities
Proceeds from issue of new 900 1,475
share capital
Costs of issue of new share - (41 )
capital
Proceeds from issue of 3,022 3,596
convertible loan notes
Proceeds from issue of loan 1,673 -
notes
Capital element of finance
leases and hire
purchase contracts repaid - (16 )
Interest paid (8) (208 )
_______________ _______
Net cash generated by financing 5,587 4,806
activities
Net (decrease)/increase in cash (539) 1,012
and cash equivalents
Cash and cash equivalents at 743 (269 )
start of period
_______________ _______
Cash and cash equivalents at end 204 743
of period
_______________ _______
During the period, �2,829,050 (2007: �900,000) of convertible loan notes issued were converted into ordinary shares of the Company.
Millwall Holdings PLC
Notes:
1. Basis of preparation
The financial statements form which this preliminary announcement has been extracted have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International
Accounting Standards Board (IASB) as adopted by the European Union (*adopted IFRSs*) and in accordance with those parts of the Companies Act
1985 that remain applicable to groups reporting under IFRS.
This is the first full accounting period for which the Company has prepared its financial statements in accordance with IFRS, having
previously prepared its financial statements in accordance with UK GAAP accounting standards. The transition date for the purposes of
applying IFRS for the Group was 1 June 2006.
The financial information contained herein are presented in sterling, rounded to the nearest thousand. They are prepared under the
historical cost basis.
2. Loss per ordinary share
The calculation of loss per ordinary share is based on the loss for the period of �6,115,000 (31 May 2007 loss: �5,191,000) and on
28,151,242,277 (31 May 2007: 21,849,707,590) ordinary shares, being the weighted average number of ordinary shares in issue and ranking for
dividend during the period. There is no potential dilution on the loss per ordinary share (2007: no potential dilution on loss per ordinary
share). There is no difference between basic and diluted earnings per share in 2008 and 2007. As at 30 June 2008 the number of options which
could potentially dilute basic earnings per share in the future was 1,166,666,666 (2007: 1,901,916,666). These have not been included in the
calculation of diluted earnings per share because they are anti-dilutive for the periods presented. In addition to share options, as at 30
June 2008, the Company had gross convertible debt of �2,999,000 (2007: �2,696,000) in issue, potentially convertible to 9,996,666,666 (2007:
8,986,666,666) ordinary shares and PIK notes issued of �333,000 (2007: �Nil) potentially convertible to 1,110,000,000 (2007: Nil) ordinary shares, which could dilute earnings per share in
the future.
3. Change of Accounting Reference Date
During the period the Company*s accounting reference date was changed from 31 May to 30 June. This brings the Group in line with most other
Football League Clubs and means that the accounting reference date is now in line with the standard expiry date of players* contracts. As a
consequence the Group is reporting on the thirteen months ended 30 June 2008 compared with the year ended 31 May 2007. The comparative
figures for the consolidated income statement and consolidated cash flow statement are therefore not entirely comparable.
4. The audited financial statements will be available to shareholders by 30 November 2008.
5. The financial information set out in this announcement does not constitute the Group's statutory accounts for the thirteen months
ended 30 June 2008 or the twelve months ended 31 May 2007 but is derived from the 2008 Annual Report.
Statutory accounts for 2007 have been delivered to the Registrar of Companies. The statutory accounts for the period ended 30 June 2008 will
be delivered to the Registrar of Companies following the Company*s annual general meeting.
The auditors have reported on those accounts; their reports were unqualified, and did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report, and the reports did not contain statements under section 237(2)
or (3) of the Companies Act 1985.
6. The directors do not recommend the payment of a dividend.
7. Post Balance Sheet Events
Since the period end the Company has negotiated a further loan facility of �3,500,000 from Chestnut Hill Ventures LLC. This facility carries
interest at 17% p.a. which may be payable in PIK Notes at the Company*s option. Heads of terms are signed as agreed by all parties for these
facilities and the board fully expects them to be available within the next two weeks. The facility is available for a period of 2 years
from date of signing.
8. The preliminary announcement covers the period ending 30 June 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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