TIDMWFC
RNS Number : 5342I
Watford Leisure PLC
15 March 2010
15 March 2010
Watford Leisure PLC
("Watford Leisure" or the "Company")
Unaudited Interim Results for the six months ended 31 December 2009
Chairman's Statement
Introduction
I have pleasure in presenting the Interim Report to shareholders for the six
months ended 31 December 2009.
The Watford Association Football Club Limited ("the Club") has faced a
challenging first six months of the 2009/10 financial year both on and off the
pitch, culminating in an eventful Watford Leisure AGM on 15 December and my
appointment as Chairman on an interim basis. I have of course been involved as a
Non-Executive Director for more than a year now and formed part of a Board that
has been endeavouring to stabilise the financial position of the Company and
provide a platform for its future success.
Background
At the start of the financial year (1 July 2009) the Board were under no
illusion as to the size of the challenges that still lay ahead. The Board were
starkly aware that the Club, with the loss of its parachute payment from 2009/10
onwards, needed to make significant changes as the Club entered its new
financial year with revenues projected to drop from approximately GBP22m in
2008/09 to GBP10.5m in 2009/10. The Board of Watford Leisure (the "Board"),
commenced the development of the Club's new five year rolling strategy in
February 2009 as a response to the clear financial difficulties ahead. The
Board then set about finalising the finer details of the strategy for
implementation at the start of July 2009. Staffing levels across the whole Club
had been reviewed and restructured such that the Club entered the new financial
year with an appropriate staffing structure and a cost base reduction of 25% to
30% across its various departments. Despite all of this restructuring, it was
clear that the Club had rapidly to address the football side of its business to
bring about any form of financial stability.
The summer transfer window proved to be very successful for the Club in terms of
incoming transfer fees but, despite this, the Board still required the Company's
major shareholders to agree on the best method for raising the funds required to
fill the inherited gap in the Club's finances. With no agreement in place
between the two largest shareholders, Fordwat Limited ("Fordwat") and Valley
Grown Salads ("VGS"), VGS nevertheless supported the Club over the course of
2009 with a series of loans. As we entered the AGM on the 15 December 2009,
uncertainty over the Club's future financing remained. The subsequent
resignations of the three Board Directors representing VGS and the demand for
repayment of the outstanding VGS loans immediately prior to the AGM
commencing, regrettably left the Club very close to administration. The Board
was thankful to Fordwat for their support in stepping in to clear the VGS loans,
thereby ensuring that the Club avoided being forced into administration and
their further commitment to underwrite a GBP7.5m fund raising. It is currently
envisaged that successful completion of the proposed fundraising, hopefully in
April/May 2010, will see the Club firmly established as a viable and vibrant
enterprise with a more robust financial future and a sound platform for progress
both on and off the field.
A four man Board, independent of the two major shareholders, consisting of David
Fransen (Non-Executive Director), Stuart Timperley (Non-Executive Director),
Julian Winter (Director and CEO) and myself (Non-Executive Chairman) is now
charged with taking the Club forward. I stepped into the Chairman role at the
AGM to ensure that the Club continued with the business at hand and in order to
bring some normality to the night's proceedings. I subsequently accepted the
role of Interim Chairman and have now agreed to act as Chairman of the Club
going forward. The Board believes that, once the proposed fund raising has been
implemented, the Club can pursue its key business and community objectives with
confidence and restore harmony and stability for our fans, shareholders, staff,
players and partners alike.
Financial Overview
+--+------------------+----+------+----------+-----------+------------+
| The key financial and performance indicators are as follows: |
| |
+---------------------------------------------------------------------+
| | | | | | Unaudited | Unaudited |
| | | | | | | |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | half year | half year |
| | | | | | ended | ended |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | 31 | 31 |
| | | | | | December | December |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | 2009 | 2008 |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | GBP'000 | GBP'000 |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | | |
+--+------------------+----+------+----------+-----------+------------+
| Revenue | | | 5,163 | 10,990 |
+--------------------------+------+----------+-----------+------------+
| Cost of sales | | | (7,444) | (10,552) |
+--------------------------+------+----------+-----------+------------+
| Administrative expenses | | | (1,860) | (3,330) |
+--------------------------+------+----------+-----------+------------+
| Other operating income | | | 265 | 261 |
+--------------------------+------+----------+-----------+------------+
| | | | | | | |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | | |
+--+------------------+----+------+----------+-----------+------------+
| Operating loss before interest, | | | |
| player trading, | | | |
+---------------------------------+----------+-----------+------------+
| amortisation and | | | (3,876) | (2,631) |
| exceptional items | | | | |
+--------------------------+------+----------+-----------+------------+
| | | | | | | |
+--+------------------+----+------+----------+-----------+------------+
| | | | | | | |
+--+------------------+----+------+----------+-----------+------------+
| Loss before taxation | | (172) | (2,279) |
+--+------------------+----+------+----------+-----------+------------+
Financial Review
The interim results reflect the Club's first period without parachute payments
from the Premier League and the consequent significant reduction in revenue
levels. Revenue for the first six months of the year was GBP5,163,000 (2008:
GBP10,990,000) and the loss on ordinary activities after taxation was GBP172,000
(2008: GBP2,279,000), reflecting the reduction in our cost base and increased
profits from player trading.
Matchday revenue to 31 December 2009 is GBP2,043,000 compared with GBP2,647,000
to the same date in 2008. Season Ticket income is GBP350,000 down to date which
is a reflection of the price reductions offered for the 2009/10 campaign
combined with a reduced number of Season Ticket holders of circa 700. Matchday
revenue to 31 December 2008 included net Carling Cup income of approximately
GBP270,000; the net position to 31 December 2009 is much lower at GBP61,000 due
to an earlier exit from this cup competition and the fact that during the 2008
campaign the Club had four home cup fixtures, two against Premiership
opposition. The remainder of the shortfall is in catering and this is due to
five fewer home games in the same period this year compared to last, one league
and four Carling Cup games.
Media revenue has fallen by GBP4,941,000 to GBP2,249,000. Total Football and
Premier League distributions to the Club fell by GBP4,960,000. Premier League
distributions were GBP6,179,000 during the equivalent six month period in
2008but only GBP577,000 in 2009 and this includes 50% of the new solidarity
payment, as well as residual parachute payments. The League Award income from
the Football League is GBP645,000 higher than during the same period last year
as its full year distributions are significantly improved on the previous year.
TV income is slightly up with two home games having been televised generating
GBP200,000. In 2008, one home league match and one Carling Cup match had been
televised generating income of GBP160,000. Programme income has reduced by
GBP20,000 - a new contract was entered into this season at a reduced level
versus the previous year's deal.
Commercial revenues are significantly reduced against the same period last year
with income of GBP871,000 against GBP1,153,000. Revenue generated from Saracens'
catering is GBP68,000 down to date, with conference and banqueting and other
sundry revenue reduced by GBP19,000. Sponsorship and advertising income makes up
the remainder of the shortfall.
Cost of sales has reduced by GBP3,108,000, the majority of this being football
related cost savings of GBP2,598,000. This is evidence of the work being
undertaken to restructure football costs to reduce them to a more manageable and
affordable level. The cost of sales figure to 31 December 2008 included
provisions for termination settlements and the forecast full year reduction is
estimated to be approximately GBP4,500,000. The balance relates to cost savings
across the remainder of the business.
Administrative expenses have also fallen by GBP1,470,000. This reduction
includes GBP904,000 on salaries costs. However the period to 31 December 2008
contained a provision relating to a claim by Mark Ashton (the Club's former
CEO) which was subsequently not utilised. Other administrative costs declined by
GBP566,000 including a reduction in the depreciation charge of GBP201,000.
The profit realised on player disposals in the period is GBP4,484,000. This
primarily relates to profits arising from the sales of M Williamson, T Smith, T
Priskin, T Robinson and J McAnuff (totaling approximately GBP4.2m). The balance
relates to appearance fees paid in relation to players transferred in previous
seasons. Amortisation is significantly reduced, due to the reduced value of
capitalised player registrations.
Financing costs fell by GBP123,000. The prior year included amounts relating to
the financing of bought forward player transfer monies.
The cost reduction measures undertaken to compensate for the loss of the
parachute income have gone someway to managing its adverse impact on the Club.
However, with an operating loss before interest, player trading and amortisation
of GBP3,876,000 for the six month period, there is still further ongoing work
required to ameliorate this loss making position. The profit on player disposals
has offset the loss for the period and reduced it to GBP172,000. It is most
likely that the Club will continue to trade players going forwards in order to
reduce its potential operating losses before interest, player trading and
amortisation.
Cash absorbed by operations was GBP3,829,000 and cash generated by player sales
in the period totalled GBP1,767,000. Cash absorbed by player purchases was
GBP1,507,000; this includes amounts payable on players purchased in previous
years, most notably the final instalment relating to the purchase of N
Ellington. New loans resulted in a cash inflow of GBP3,466,000 - VGS advanced
further monies during the period, increasing its aggregate loan position from
GBP1,468,000 at 30 June 2009 to GBP4,883,000. This loan was repaid by Fordwat on
21 December 2009. The Fordwat loan as at 31 December 2009 totalled GBP4,941,000
including accrued interest and fees due on VGS's loan at repayment. Overall,
there was a net cash outflow of GBP480,000 against an outflow of GBP2,223,000
for the equivalent period last year.
As evidenced from the above financial review, the Club has been operating as a
going concern thanks largely to the valuable financial support received from its
major shareholders (and Directors) and such support will most likely continue to
be required until costs can be further brought in line with revenues.
The Team and Football Management
The Board would like to thank Malky Mackay (Team Manager) and his staff and
players for their tremendous efforts in the season to date. Despite the major
transitioning of the squad the performances on the pitch have been a credit to
all concerned. The Club has set out to be a competitive Championship Club and
Malky Mackay has lead the squad in a positive and professional manner and
established a real sense of togetherness amongst the players and staff as the
Club seeks to reinsert its strong identity and footballing credentials. The
Board has supported the manager through the acquisition of players to develop
the squad and the introduction of key loan players to supplement the playing
staff further as the Club rectifies its off-pitch financial position. The Club
now has in place rigorous processes to support the acquisition of players and
the efforts of John Stephenson (Head of Football Business and Development),
Malky Mackay (Manager) and Julian Winter (CEO) are vital to ensuring that the
Club secures the right kind of players in line with the financial model
established in the Club's business strategy. As a Board, we should never lose
sight of the fact that we are a competitive and proud football club and will do
all we can to support the development of a successful football team on the
pitch. We have now set out a clear path for the Club to follow and the shape of
the football squad required and we feel that the Club is making progress week on
week in this critical area.
Looking ahead
Despite the pressures we have experienced and the scale of the Club, there are
many elements of our activities that differentiate us as a Club and of which we
should be proud. The Club has a unique Academy in partnership with the Harefield
Academy in Hillingdon and the Board has ensured that the Academy will be at the
heart of its football development programme moving forwards. It is vital that
the Club is excellent at developing its own talent and builds on its already
impressive reputation and track record to date. In addition, we have an award
winning Community Sports and Education Trust that facilitates the Club's well
established traditions as a family and community Club and this is also central
to our future plans. As Chairman, I will be doing my utmost to ensure that we
really embed that sense of community spirit across all aspects of the Club's
work and out into the communities we serve. It is a really important for the
Board to ensure that local people feel part of our football Club.
The Club's key worker housing development is progressing well with completion
due in April 2010. The Club will then vacate its Wolsey Park Offices and return
to Vicarage Road in the South Stand. The Board will also be assessing every
opportunity to complete the South West Corner changing rooms, media and match
day operations facilities so that the East Stand can eventually be demolished.
Such capital intensive projects will need to be financed independently and in
partnership with both public and private sector organisations - but we as a
Board should not take our eye off how important these development projects are
to the long term sustainability and infrastructure of the Club.
In conclusion, the Board would like to express its sincerest thanks to all
members of staff for their hard work, dedication, expertise and vigilance in the
face of real challenge. The Board is proud of the Club, its sense of direction
and the people responsible for taking us there day to day. We also thank all
shareholders and supporters for your unswerving loyalty - a support that is
essential going forward as we seek to progress both on and off the pitch.
The Board feel that we can realistically move forward more positively, but it
will require a constant emphasis on managing the balance between developing the
football side of the Club and ensuring a sustainable level of costs. We will be
doing our utmost to do the very best for the Club and hope you all join us on
the journey.
Graham Taylor
Chairman
15 March 2010
+----------------------------+-----------+----------+------------+----------+------------+
| WATFORD LEISURE PLC | | | | | |
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Consolidated income statement for the half year ended 31 December 2009 |
| |
+----------------------------------------------------------------------------------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | Unaudited | | Unaudited | | Audited |
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | half | | half | | year |
| | year | | year | | ended |
| | ended | | ended | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | 31 | | 31 | | 30 June |
| | December | | December | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | 2009 | | 2008 | | 2009 |
+----------------------------+-----------+----------+------------+----------+------------+
| | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Revenue | 5,163 | | 10,990 | | 23,079 |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Cost of sales | (7,444) | | (10,552) | | (19,792) |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Gross (loss) / profit | (2,281) | | 438 | | 3,287 |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Administrative expenses | (1,860) | | (3,330) | | (5,348) |
+----------------------------+-----------+----------+------------+----------+------------+
| Other operating income | 265 | | 261 | | 1,115 |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | (3,876) | | (2,631) | | (946) |
+----------------------------+-----------+----------+------------+----------+------------+
| Amortisation and | | | | | |
| impairment of costs | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| of players' registrations | (597) | | (2,317) | | (4,293) |
+----------------------------+-----------+----------+------------+----------+------------+
| Profit on disposal of | 4,484 | | 2,952 | | 3,774 |
| players' registrations | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Operating profit / (loss) | 11 | | (1,996) | | (1,465) |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Financing income | - | | 23 | | 44 |
+----------------------------+-----------+----------+------------+----------+------------+
| Financing costs | (183) | | (306) | | (566) |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Loss before taxation | (172) | | (2,279) | | (1,987) |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Taxation | - | | - | | - |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Loss for the period | GBP(172) | | GBP(2,279) | | GBP(1,987) |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Attributable to: | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Equity holders of the | GBP(172) | | GBP(2,279) | | GBP(1,987) |
| parent | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| Loss per ordinary 1p share | (0.4p) | | (5.2p) | | (4.5p) |
| (basic and diluted) | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
| | | | | | |
+----------------------------+-----------+----------+------------+----------+------------+
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | |
| WATFORD LEISURE PLC | | |
| Consolidated balance sheet as at 31 December 2009 | | |
| | | |
+---------------------------------------------------------------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | Unaudited | | Unaudited | | Audited |
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | 31 | | 31 | | 30 June |
| | | December | | December | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | 2009 | | 2008 | | 2009 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Non-current assets | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Property, plant and | | 12,662 | | 13,830 | | 12,880 |
| equipment | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Intangible assets | | 970 | | 4,468 | | 2,218 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | 13,632 | | 18,298 | | 15,098 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Current assets | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Inventories | | 176 | | 306 | | 120 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Trade and other | | 5,714 | | 2,159 | | 2,480 |
| receivables | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Cash and cash | | 22 | | 78 | | 59 |
| equivalents | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | 5,912 | | 2,543 | | 2,659 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Total assets | | 19,544 | | 20,841 | | 17,757 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Current liabilities | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Interest bearing loans | | 6,233 | | 718 | | 3,587 |
| and other borrowings | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Trade and other | | 2,736 | | 5,353 | | 4,880 |
| payables | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Deferred revenue | | 2,772 | | 5,751 | | 2,234 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | 11,741 | | 11,822 | | 10,701 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Non-current | | | | | | |
| liabilities | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Interest bearing loans | | 3,563 | | 3,647 | | 2,385 |
| and other borrowings | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Trade and other | | 330 | | 1,580 | | 589 |
| payables | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Deferred revenue | | 29 | | 31 | | 29 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | 3,922 | | 5,258 | | 3,003 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Total liabilities | | 15,663 | | 17,080 | | 13,704 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Net assets | | GBP3,881 | | GBP3,761 | | GBP4,053 |
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Equity | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Capital and reserves | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Called up share | | 439 | | 439 | | 439 |
| capital | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Special reserve | | 10,409 | | 10,651 | | 10,409 |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Retained deficit | | (6,967) | | (7,329) | | (6,795) |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| Total equity | GBP3,881 | | GBP3,761 | | GBP4,053 |
| | | | | | |
+----------------------------+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------+---+-----------+----------+-----------+----------+----------+
+------------------------------+----------+------------+----------+-----------+----------+----------+
| WATFORD LEISURE PLC | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Consolidated cash flow statement for the half year ended 31 December 2009 |
+---------------------------------------------------------------------------------------------------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | Unaudited | | Unaudited | | Audited |
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | half | | half | | year |
| | | year | | year | | ended |
| | | ended | | ended | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | 31 | | 31 | | 30 June |
| | | December | | December | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | 2009 | | 2008 | | 2009 |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Operating activities | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Loss before taxation | | (172) | | (2,279) | | (1,987) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Amortisation of intangible | | 597 | | 2,317 | | 4,293 |
| fixed assets | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Depreciation of property, | | 376 | | 514 | | 1,340 |
| plant and equipment | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Net profit on disposal of | | - | | - | | 1 |
| sundry fixed assets | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Profit on disposal of | | (4,484) | | (2,952) | | (3,774) |
| players' registrations | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Financing income | | - | | (23) | | (44) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Financing costs | | 183 | | 306 | | 566 |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| (Increase) / decrease in | | (56) | | (169) | | 17 |
| inventories | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Decrease in receivables | | 519 | | 755 | | 77 |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| (Decrease) / increase in | | (792) | | 1,241 | | (2,483) |
| payables and deferred income | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Cash absorbed by operations | | (3,829) | | (290) | | (1,994) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Purchase of intangible fixed | | (1,507) | | (1,816) | | (3,424) |
| assets | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Purchase of property, plant | | (158) | | (478) | | (424) |
| and equipment | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Proceeds from sale of | | 1,767 | | 6,641 | | 8,538 |
| intangible fixed assets | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Proceeds from sale of | | - | | - | | 1 |
| property, plant and | | | | | | |
| equipment | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Net cash generated by | | 102 | | 4,347 | | 4,691 |
| investing activities | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Advances of debt | | 3,466 | | 2,604 | | 4,373 |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Repayments of debt | | (85) | | (8,618) | | (9,133) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Interest received | | - | | 23 | | 44 |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Interest paid | | (134) | | (289) | | (576) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Net cash generated by / | | 3,247 | | (6,280) | | (5,292) |
| (used in) financing | | | | | | |
| activities | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Net decrease in cash | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| and cash equivalents | | (480) | | (2,223) | | (2,595) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Cash and cash equivalents at | | (556) | | 2,039 | | 2,039 |
| start of period | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Cash and cash equivalents at | | GBP(1,036) | | GBP(184) | | GBP(556) |
| end of period | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Cash and cash equivalents | | 22 | | 78 | | 59 |
| comprise: | | | | | | |
| | | | | | | |
| Cash and cash equivalents | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Bank overdraft | | (1,058) | | (262) | | (615) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| Total | | GBP(1,036) | | GBP(184) | | GBP(556) |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
| | | | | | | |
+------------------------------+----------+------------+----------+-----------+----------+----------+
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| WATFORD LEISURE | | | | | | | | |
| PLC | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Consolidated statement of changes in equity for the half year ended 31 December 2009 |
+-------------------------------------------------------------------------------------------------------+
| | | |
+------------------+----------+-------------------------------------------------------------------------+
| | | Share | | Special | | Retained | | |
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | capital | | reserve | | earnings | | Total |
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Equity | | 439 | | 10,651 | | (5,050) | | 6,040 |
| shareholders | | | | | | | | |
| funds at 1 July | | | | | | | | |
| 2008 | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Loss for the | | - | | - | | (2,279) | | (2,279) |
| period | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Equity | | 439 | | 10,651 | | (7,329) | | 3,761 |
| shareholders | | | | | | | | |
| funds at 31 | | | | | | | | |
| December 2008 | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Profit for the | | - | | - | | 292 | | 292 |
| period | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Losses | | - | | (242) | | 242 | | - |
| extinguished | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Equity | | 439 | | 10,409 | | (6,795) | | 4,053 |
| shareholders | | | | | | | | |
| funds at 30 June | | | | | | | | |
| 2009 | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Loss for the | | - | | - | | (172) | | (172) |
| period | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| Equity | | 439 | | 10,409 | | (6,967) | | 3,881 |
| shareholders | | | | | | | | |
| funds at 31 | | | | | | | | |
| December 2009 | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
| | | | | | | | | |
+------------------+----------+---------+----------+---------+----------+----------+----------+---------+
Notes to the unaudited interim financial information
for the six month period ended 31 December 2009
1. Basis of preparation
These interim financial statements for the six month period ended 31 December
2009, comprising the Consolidated Income Statement, Consolidated Balance Sheet,
Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity
and accompanying notes, have been prepared using the historical cost convention
and in accordance with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRS") as adopted by the European Union and the
AIM Rules for Companies, save that the Group has elected not to adopt IAS34
'Interim Financial Reporting'. These IFRS interim financial statements do not
include all the information required for full IFRS annual financial statements.
These interim results do not constitute statutory accounts within the meaning of
s435 of the Companies Act 2006. The financial information in this report for the
six months to 31 December 2009 and 31 December 2008 has not been audited. The
comparative figures for the year ended 30 June 2009 are extracted from the
Group's audited financial statements for that period as delivered to the
Registrar of Companies and filed at Companies House and prepared in accordance
with the Companies Act 2006. They do not constitute the financial statements for
that period.
Those financial statements received an unqualified audit report which did not
contain any statement under sections 498 (2) or (3) of the Companies Act 2006
but did include an emphasis of matter paragraph in the auditor's report relating
to going concern. In this context the Group has prepared cash flow forecasts for
the period to 30 June 2014. These show that additional shareholder funding will
be required in the period to 30 June 2010. The Directors remain confident that
shareholder funding will be forthcoming in the period required and therefore,
also consider it appropriate to prepare the interim results on a going concern
basis. The interim results do not include any adjustments that would result
should this not be the case.
The interim financial statements have also been prepared on a basis consistent
with the accounting policies expected to be applied for the year ending 30 June
2010, and which are also consistent with the accounting policies applied for the
year ended 30 June 2009 except for the adoption of new standards and
interpretations.
The comparative information for the period to 31 December 2008 previously
disclosed losses attributable to minority interests as separate items. These
losses are now treated as wholly attributable to the parent company.
2. Revenue analysis
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | Unaudited | | Unaudited | | Audited |
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | half year | | half year | | year ended |
| | | ended | | ended | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | 31 December | | 31 | | 30 June |
| | | | | December | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | 2009 | | 2008 | | 2009 |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| Matchday | | 2,043 | | 2,647 | | 4,986 |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| Media | | 2,249 | | 7,190 | | 14,504 |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| Commercial | | 871 | | 1,153 | | 2,039 |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| Other | | - | | - | | 1,550 |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | GBP5,163 | | GBP10,990 | | GBP23,079 |
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | |
+----------------+----------+-------------+----------+-----------+----------+-------------+
Revenue streams comprise:
Matchday - season and matchday tickets and corporate hospitality income
Media - television and broadcasting income, including distributions from the FA
Premier League broadcasting agreements, Football League funding, cup
competitions and local radio
Commercial - sponsorship income, merchandising, conference and banqueting and
other sundry income
Other - player loan fees receivable
3. Taxation
After taking into account the projected performance for the next six months and
unutilised tax losses, no provision for taxation is required.
4. (Loss)/earnings per share
Loss per ordinary share has been calculated as follows:
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | Unaudited | | Unaudited | | Audited |
| | | | | | | |
+---------------+----+-------------+----------+-------------+----------+-------------+
| | | | half year | | half year | | year |
| | | | ended | | ended | | ended |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | 31 | | 31 | | 30 June |
| | | | December | | December | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | 2009 | | 2008 | | 2009 |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| Loss for the | | GBP(172) | | GBP(2,279) | | GBP(1,987) |
| period | | | | | | |
+---------------+----+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| Weighted average | 43,885,693 | | 43,885,693 | | 43,885,693 |
| number of shares | | | | | |
| in issue | | | | | |
+--------------------+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| Loss per | | (0.4p) | | (5.2p) | | (4.5p) |
| ordinary | | | | | | |
| share | | | | | | |
+---------------+----+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
| | | | | | | | |
+-------------+-+----+-------------+----------+-------------+----------+-------------+
5. Availability of Interim Report
A copy of these interim results will be made available for inspection at the
Company's registered office during normal business hours on any weekday. The
registered office is at Vicarage Road Stadium, Watford, Hertfordshire WD18 0ER.
A copy can also be downloaded from the Company's website at
www.watfordleisureplc.com. Watford Leisure PLC is registered in England and
Wales with registered number 03335610.
Enquiries:
Watford Leisure PLC
Tel: 01923 496 000
Graham Taylor, Chairman
Julian Winter, Chief Executive Officer
Strand Hanson Limited
Tel: 020 7409 3494
Rory Murphy
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GMGMFVZZGGZM
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