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Celtic PLC   -  CCP   

Results for the year ended 30 June 2018

Released 16:15 19-Sep-2018

RNS Number : 3111B
Celtic PLC
19 September 2018
 

Celtic PLC

 

Results for the year ended 30 June 2018

 

SUMMARY OF THE RESULTS

 

Operational Highlights

 

·    Winner of the Scottish Domestic "Double Treble" and our seventh consecutive SPFL Premiership title

 

·    Qualified for the UEFA Champions League group stages for the second consecutive season

 

·    Finished third in the UEFA Champions League group stage, qualifying for the round of 32 of the Europa League

 

·    32 home matches (including the Scott Brown Testimonial) played at Celtic Park (2017: 31)

 

 

 

Financial Highlights

 

·    Group revenue increased by 12.1% to £101.6m (2017: £90.6m)

 

·    Operating expenses including labour increased by 14.1% to £87.1m (2017: £76.3m)

 

·    Gain on sale of player registrations of £16.5m (2017: £2.3m)

 

·    Acquisition of player registrations of £16.6m (2017: £13.8m)

 

·    Profit before taxation of £17.3m (2017: £6.9m)

 

·    Year-end cash net of bank borrowings of £36.1m (2017: £17.9m)

 

·    Year-end net cash, net of debt and debt like items, of £27.0m (2017: £13.4m)1

 

 

1net cash, net of debt like items, is represented by cash net of bank borrowings of £36.1m (2017: £17.9m) further adjusted for other debt like items, namely the net player trading balance, other loans and remuneration balances owed to certain personnel at the balance sheet date.

 

For further information contact:

 

Celtic plc

 

 

 

Ian Bankier, Celtic plc

Tel: 0141 551 4235

 

 

Peter Lawwell, Celtic plc

 

 

 

Iain Jamieson, Celtic plc

 

 

 

 

Canaccord Genuity Limited, Nominated Adviser

 

 

Simon Bridges

Tel: 0207 523 8000

 

 

       

 

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

CHAIRMAN'S STATEMENT

 

These results, which declare record sales revenue of £101.6m (2017: £90.6m) and a profit before taxation of £17.3m (2017: £6.9m), reflect a financial year in which everything went well. 

 

On behalf of the Board I congratulate Brendan Rodgers, his staff and the players on making history for a second successive year, achieving a historic "Double Treble", a seventh consecutive League Championship and consecutive qualifications for the group stages of the UEFA Champions League.   Everything that happens on the pitch is supported across the Club and I also congratulate the executive management team and all the staff at the Club. 

 

The Board considers that the Group's proven strategy of investment in football operations, whilst maintaining a self-sustaining financial model, has provided a stable platform for the success enjoyed in the year under review.  This approach remains entirely appropriate for us, as we seek to continue to deliver football success and, in turn, shareholder value. 

 

The year-end cash net of bank borrowings was £36.1m (2017: £17.9m), which equates to a net funding position of £27.0m (2017: £13.4m) when adjusted for debt and debt like items (as defined in the Summary of the Results). This allows the Board to plan for the unexpected and manage the immediate disappointment of failing to qualify for the Group Stages of the Champions League. 

 

In my last annual report I referred to our vulnerability to the growing financial power of a number of key constituencies within the European Game.  These circumstances are unchanged and we remain watchful of events that unfold. Through Peter Lawwell's continued involvement in the Board of the European Club Association, the Club Competitions Committee at UEFA and the Professional Football Strategy Council of UEFA, the Club and the game in Scotland are well represented in this very important arena. 

 

During the year, we made prudent and considered investments in our infrastructure at Celtic Park, including the completion of a new playing surface to suit the manager's desired style of play, new LED floodlighting to comply with the UEFA elite requirements and an updated sound system. Celtic Park's reputation as one of the foremost football arenas in the world, with our supporters recognised as the best in the world by FIFA, is something we can all be proud of. 

 

The Club continues to support the important work of Celtic FC Foundation and we all share the same sense of pride in the generosity of Celtic supporters, which the Foundation harnesses to help so many people at home and abroad.  It is often said that Celtic is a club like no other and the efforts of Celtic supporters and the Foundation is the best example of that.

 

I thank all of our supporters, shareholders, sponsors, partners and colleagues for their contribution to another successful year for the Club.  We will continue to work together to develop our club for the long term.

  

Ian P Bankier                                                                                                                                                 

19 September 2018

Chairman

CHIEF EXECUTIVE'S REVIEW

 

Each year, our key football objective is success in all three domestic competitions and in the UEFA Champions League.  Building on the remarkable Invincible season last year, the Club made history again this year by winning the "Double Treble" for the first time in Scottish football history.  Added to that, the team qualified for and performed well in the group stages of the UEFA Champions League, competing with two of the strongest teams in the world and qualifying for the last 32 of the UEFA Europa League.  I congratulate Brendan, his staff, the players and everyone at the Club for these remarkable achievements. 

The Club recognises that success on the pitch leads to success off the pitch, which is why the Board is committed to investing in our football operations.  Our ambition remains to create a world class football club.   Our success on the pitch this year has allowed us to commit, not only to fees for the transfer of player registrations (£16.6m, rising from £13.8m in 2017), but also to player, football management, coaching, recruitment, medical, performance, sports science and the youth academy costs.  Total labour costs in 2018 increased by £7.1m, from £52.2m in 2017 to £59.3m (14%), largely due to increases in the football department.  This has allowed the Club to retain key football personnel including Kristoffer Ajer, Kieran Tierney, Calum McGregor, Tom Rogic and Leigh Griffiths on long term contracts.

We continue to search the world for talented players to play the Celtic way, such as Odsonne Edouard who joined the Club for a Club record transfer fee.  Player recruitment and development continues to be fundamental to the Club.  Our objective is always to bring players to the Club who will improve the squad.  Given the quality of our existing squad that is a challenging task, made more difficult by hyper-inflation in transfer fees and player salaries in the market.  Nevertheless, our objective is to invest everything that we can into the football operation without putting the Club at risk.

For season 2018/19, everyone at the Club was disappointed not to qualify for the Group Stages of the Champions League.  As we shared the successes of the last two seasons, we share in that disappointment, but given the Club's strategy over many years we have financial reserves to rely upon as we continue to look to the future with ambition and optimism.

Our long term strategy enables us to continue to invest in player retention, player recruitment, stadium infrastructure and everything that is needed to develop the Club for future generations and to continue to deliver success.  We have an excellent first team squad and in the Youth Academy we have the next generation of exciting young players such as Mikey Johnston, Karamoko Dembele and many others, all of whom are eager to follow in the footsteps of Kieran Tierney, James Forrest and Calum McGregor in becoming Champions League players for Celtic Football Club. 

In closing I would like to record my continued appreciation for our Club captain, Scott Brown, who celebrated his Testimonial Season during the year.  Scott has served Celtic brilliantly over the past decade. He has been a fantastic Celtic captain, doing so much for the Club on and off the pitch in this role. Scott's dedication and commitment is an inspiration to everyone at the Club as we work to deliver success for the Celtic support.

 

Peter Lawwell                                                                                                                                                             

19 September 2018

Chief Executive   

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

Note

2018

£000

 

2017

£000

CONTINUING OPERATIONS:

 

 

 

 

 

 

 

 

 

Revenue

2

101,573

 

90,639

 

 

 

 

 

Operating expenses (before intangible asset transactions and exceptional items)

2

(87,083)

 

(76,329)

 

 

 

 

 

Profit from trading before intangible asset transactions and exceptional items

 

14,490

 

14,310

 

 

 

 

 

Exceptional operating expenses

3

(4,141)

 

(1,526)

 

 

 

 

 

Amortisation of intangible assets

 

(8,768)

 

(7,546)

 

 

 

 

 

Profit on disposal of intangible assets

 

16,454

 

2,279

 

 

 

 

 

Operating profit

 

18,035

 

7,517

 

 

 

 

 

Finance income

 

216

 

204

 

 

 

 

 

Finance expense

 

(980)

 

(824)

 

 

 

 

 

 

 

 

 

 

Profit before tax

 

17,271

 

6,897

 

 

 

 

 

Income tax expense

5

(1,848)

 

-

 

 

 

 

 

Profit and total comprehensive income for the year

 

15,423

 

6,897

 

 

        

 

 

Basic earnings per Ordinary Share for the year

 

6

16.47p

 

7.38p

 

 

 

 

 

 

 

 

 

 

Diluted earnings per Share for the year

6

11.72p

 

5.46p

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEET

 

 

 

2018

 

2017

 

 

£000

 

£000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

58,265

 

56,332

Intangible assets

 

20,963

 

13,927

Trade receivables

 

4,397

 

-

 

 

83,625

 

70,259

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

2,407

 

2,414

Trade and other receivables

 

21,261

 

12,284

Cash and cash equivalents

 

42,563

 

24,505

 

 

66,231

 

39,203

 

 

 

 

 

Total assets

 

149,856

 

109,462

 

 

 

 

 

Equity

 

 

 

 

Issued share capital

 

27,132

 

27,107

Share premium

 

14,720

 

14,657

Other reserve

 

21,222

 

21,222

Accumulated profits/ (losses)

 

9,860

 

(5,563)

Total equity

 

72,934

 

57,423

 

 

 

 

 

Non-current liabilities

 

 

 

 

Borrowings

 

6,250

 

6,450

Debt element of Convertible Cumulative Preference Shares

 

4,208

 

4,232

Trade and other payables

 

10,302

 

5,940

Provisions

 

2,309

 

1,543

Deferred income

 

86

 

115

 

 

23,155

 

18,280

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

27,005

 

10,435

Current borrowings

 

300

 

304

Provisions

 

2,442

 

658

Deferred income

 

24,020

 

22,362

 

 

53,767

 

33,759

 

 

 

 

 

Total liabilities

 

76,922

 

52,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

149,856

 

109,462

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

Share
capital

Share
premium

Other
reserve

Capital
reserve

Retained
earnings

Total

 

£000

£000

£000

£000

£000

£000

Equity shareholders' funds
as at 1 July 2016

24,316

14,611

21,222

2,781

(12,460)

50,470

Share capital issued

1

46

-

-

-

47

Reduction in debt element of convertible cumulative preference shares following conversion

9

-

-

-

-

9

Transfer from capital reserve

2,781

-

-

(2,781)

-

-

Profit and total comprehensive income for

the year

-

-

-

-

6,897

6,897

 

 

 

 

 

 

 

Equity shareholders' funds
as at 30 June 2017

27,107

14,657

21,222

-

(5,563)

57,423

 

 

 

 

 

 

 

Share capital issued

1

63

-

-

-

64

Reduction in debt element of convertible cumulative preference shares following conversion

24

-

-

-

-

24

Profit and total comprehensive income for  the year

-

-

-

-

15,423

15,423

 

 

 

 

 

 

 

Equity shareholders' funds
as at 30 June 2018

27,132

14,720

21,222

-

9,860

72,934

CONSOLIDATED CASH FLOW STATEMENT

 

 

 

2018

 

2017

 

Note

£000

 

£000

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

Profit for the year

 

15,423

 

6,897

Income tax expense

5

1,848

 

-

Depreciation

 

1,977

 

1,664

Amortisation of intangible assets

 

8,768

 

7,546

Impairment of intangible assets

 

214

 

287

Reversal of prior period impairment charge

 

-

 

(64)

Profit on disposal of intangible assets

 

(16,454)

 

(2,279)

Loss on disposal of property, plant and equipment

 

-

 

198

Net Finance costs

 

764

 

620

 

 

12,540

 

14,869

 

 

 

 

 

 

(Increase) / decrease in inventories

 

7

 

(525)

(Increase) in receivables

 

(6,142)

 

(687)

Increase in payables and deferred income

 

17,378

 

2,435

Cash generated from operations

 

23,783

 

16,092

Tax paid

 

(707)

 

-

Net Interest paid

 

(47)

 

(95)

Net cash flow from operating activities

 

23,029

 

15,997

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(3,461)

 

(2,737)

Purchase of intangible assets

 

(10,645)

 

(9,889)

Proceeds from sale of intangible assets

 

9,821

 

11,382

Net cash used in investing activities

 

(4,285)

 

(1,244)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Repayment of debt

 

(200)

 

(200)

Dividend on Convertible Cumulative Preference Shares

 

(486)

 

(498)

Net cash used in financing activities

 

(686)

 

(698)

 

 

 

 

 

Net increase in cash equivalents

 

18,058

 

14,055

Cash and cash equivalents at 1 July 2017

 

24,505

 

10,450

Cash and cash equivalents at 30 June 2018

 

42,563

 

24,505

NOTES TO THE FINANCIAL STATEMENTS

 

1.         BASIS OF PREPARATION

 

The financial information in this preliminary announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs) but does not include all of the disclosures that would be required under IFRSs. The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 30 June 2017 and are those which will form the basis of the 2018 financial statements.

 

 

2.         REVENUE

 

 

 

 

 

 

 

2018
£000

 

2017
£000

The Group's revenue comprised:

 

 

 

 

Football and Stadium Operations

 

43,587

 

37,571

Merchandising

 

17,717

 

16,479

Multimedia and Other Commercial Activities

 

40,269

 

36,589

 

 

101,573

 

90,639

 

 

 

 

 

 

 

3.         EXCEPTIONAL OPERATING EXPENSES

 

The exceptional operating expenses of £4.14m (2017: £1.53m) can be analysed as follows:

 

 

Exceptional operating expenses comprised

2018
£000

 

2017
£000

 

Impairment of intangible assets and other prepaid costs

511

 

287

Reversal of prior period impairment charges

-

 

(64)

Onerous employment contracts

3,549

 

1,004

Compromise payments on contract termination

81

 

299

 

4,141

 

1,526

 

The impairment of intangible assets, and the reversal of impairment charges, relate to adjustments required as a result of management's assessment of the carrying value of certain player registrations relative to their current market value.

 

Onerous employment contact costs result from a situation where the committed costs under that contract are assessed as exceeding the economic benefits expected to be received by the Group over the term of the contract.

 

Settlement agreements on contract termination are costs in relation to exiting certain employment contracts.


 

4.         DIVIDEND ON CONVERTIBLE CUMULATIVE PREFERENCE SHARES

 

A 6% non-equity dividend of £0.51m (2017: £0.51m), was paid on 31 August 2018 to those holders of Convertible Cumulative Preference Shares on the share register at 28 July 2018. A number of shareholders elected to participate in the Company's scrip dividend reinvestment scheme for the financial year to 30 June 2018.  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 £nil (2017: £0.02m) in respect of statute barred preference dividends in accordance with the Company's Articles of Association.

 

 

5.         TAX ON ORDINARY ACTIVITIES

 

The provision for corporation tax as at 30 June 2018 is £1.14m (2017: nil) which reflects a tax charge of £1.85m with payments of £0.70m made in the year. There are no tax losses carried forward (2017: £7.64m) and the available capital allowances pool is approximately £10.50m (2017: £9.52m). These estimates are subject to the agreement of the current and prior years' corporation tax computations with H M Revenue and Customs. 

 

 

6.         EARNINGS PER SHARE

 

 

2018

 

2017

 

£000

 

£000

Reconciliation of earnings to basic earnings:

 

 

 

 

 

 

 

Net earnings attributable to equity holders of the parent

15,423

 

6,897

 

 

 

 

Basic earnings

15,423

 

6,897

 

 

 

 

Reconciliation of basic earnings to diluted  earnings:

 

 

 

 

 

 

 

Basic earnings

15,423

 

6,897

Non-equity share dividend

573

 

577

Reclaim of statute barred non-equity share dividends

-

 

(19)

 

 

 

 

Diluted earnings

15,996

 

7,455

 

 

 

 

 

 

No.'000

 

No.'000

Reconciliation of basic weighted average number of ordinary shares to

diluted weighted average number of ordinary shares:

 

 

 

 

 

 

 

Basic weighted average number of ordinary shares

93,663

 

93,403

 

 

 

 

Dilutive effect of convertible shares

42,803

 

43,041

 

 

 

 

Diluted weighted average number of ordinary shares

136,466

 

136,444

 

Earnings per share of 16.47p (2017: 7.38p) has been calculated by dividing the profit for the period of £15.4m (2017: £6.90m) by the weighted average number of Ordinary Shares of 93.7m (2017: 93.4m) in issue during the year.  Diluted earnings per share of 11.72p (2017: 5.46p) as at 30 June 2018 has been calculated by dividing the profit for the period by the weighted average number of Ordinary Shares, Convertible Cumulative Preference Shares and Convertible Preferred Ordinary Shares in issue, assuming conversion at the balance sheet date, if dilutive.

 

 

7.         ANNUAL REPORT & FINANCIAL STATEMENTS

 

Copies of the Annual Report & Financial Statements together with the Notice and Notes of the 2018 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 2018 or 30 June 2017. The Independent Auditor's Reports on the statutory financial statements for 2018 and 2017 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 2017 have been filed with the Registrar of Companies and those for 2018 will be delivered to the Registrar of Companies in due course.


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Results for the year ended 30 June 2018 - RNS