Final Results

RNS Number : 2339K

Celtic PLC

19 September 2016

 

Celtic PLC

Announcement of Results for the year ended 30 June 2016

SUMMARY OF THE RESULTS

Operational Highlights

·       Winner of the SPFL Premiership - 5 in a row

·       Participated in the UEFA Europa League playing 6 home European matches (2015: 6)

·       28 home matches played at Celtic Park (2015: 29)

·       New shirt sponsorship with Dafabet and Magners

·       Unveiling of Billy McNeill statue

Financial Highlights

·    Group revenue increased by 1.8% to £52.0m

·    Operating expenses increased by 7.3% to £57.1m

·    Exceptional costs of £1.7m (2015: £0.7m)

·    Gain on sale of player registrations of £12.6m (2015: £6.8m)

·    Profit before taxation of £0.5m (2015: loss of £3.9m)

·    Year-end net cash at bank of £3.6m (2015: £4.7m)

·    Investment in football personnel of £8.8m (2015: £9.4m)

For further information contact:

Company

Ian Bankier, Celtic plc                        Tel: [phone]

Peter Lawwell, Celtic plc                   Tel: [phone]

Iain Jamieson, Celtic plc                    Tel: [phone]

Canaccord Genuity Limited, Nominated Adviser

Bruce Garrow                                       Tel: [phone]

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 show a profit before taxation of £0.5m compared to loss before tax of £3.9m last year, in comparable trading conditions, reflect in large part the increased contribution during the year from the sale of player registrations.  Following two seasons in which the Club did not qualify for the Group Stages of the UEFA Champions League, the increased contribution from player trading enabled the Company to maintain investment in football operations and to continue to build for the future.

The Board continues to believe that the Company's self sustaining financial model provides the necessary stability to preserve the long term future of the Club and player trading remains an important element of that model.  Allied to player trading is the creation of the next generation of Celtic stars in our Youth Academy and I am glad to say that season 2015/16 saw a great example of that Celtic tradition, with Kieran Tierney establishing himself in the first team, being rewarded with his first full international call up for Scotland and being named PFA Scotland Young Player of the Year.

During the year, Ronny Deila decided to leave the Club at the end of season 2015/16.  Ronny signed off with success, as Celtic were crowned champions of Scotland at the end of the season, making it five in a row.  On behalf of the Board, I would like to thank Ronny for his contribution to the Club during his time here and to wish him the best for the future.  

Following an exhaustive recruitment process, the Club was delighted to announce the appointment of Brendan Rodgers as manager in May.  The scenes at Celtic Park as Brendan was unveiled were fantastic and created a real sense of optimism for the season ahead.  I am delighted to say that, so far, that optimism has been realised this season, as the team has qualified for the Group Stages of the UEFA Champions League and currently sits top of the SPFL Premiership table playing attractive, attacking football.  We welcome Brendan and his staff to Celtic Park and congratulate them and the team on the success to date.  We will continue to support them to deliver football success.

The Club remains committed to improving the football environment in which Celtic plays.  At a time of change, it is important that we continue to be at the forefront of the development of the game.   Peter Lawwell, our Chief Executive, sits on the board of the SPFL, the European Club Association and the Club Competition Committee of UEFA.  The Club continues to work with clubs and all those involved in football governance to identify means in which to improve the game in Europe.

During the year, Eric Riley resigned as Financial Director of the Company with effect from 31 December 2015.  On behalf of the Board, I would like to thank Eric for his huge commitment to the Company, his distinguished service over 20 years and his vital role in the development of the Company and the promotion of the game in Scotland.  Eric remained as a non-executive director until 30 June 2016 to assist with the handover to his replacement, Chris McKay, and remains a member of the board of The Celtic Football and Athletic Company.   The Board welcomes Chris, who joined from global consultancy firm, Deloitte. 

In closing, I am pleased to say that the year to June 2016 also saw continued success for Celtic FC Foundation.  I thank all those involved in the operation of the Foundation and in donating time and money to it, as it is such an important part of what our Club is all about. 

As we look forward with confidence to the year ahead, on behalf of the Board I thank our supporters, shareholders, sponsors, partners and colleagues.  We all share the same desire - the best for Celtic.  We will continue to strive to deliver that. 

Ian P Bankier                                                                                                                                                 

19 September 2016

Chairman

CHIEF EXECUTIVE'S REVIEW

On the pitch, the year to 30 June 2016 did not meet with our expectations.  Whilst the SPFL Premiership title was retained, our performances in the domestic cup competitions and in European competition were poor, as the Club failed to reach either domestic cup final and failed to qualify for the Group Stages of the UEFA Champions League for the second successive season. Off the pitch the Company returned to profit, mainly as a result of the transfer of certain player registrations during the period leading to a gain on sale of player registrations of £12.6m (2015: £6.8m). This enables us to continue to deliver long term sustainable football success in a very challenging environment.

After a more successful first season, Ronny Deila decided to leave the Club at the end of last season and goes with our best wishes.  His second league title, and the Club's fifth title in a row, provided a good base for Brendan Rodgers to build on, which he did by qualifying for the Group Stages of the UEFA Champions League.  In welcoming Brendan and his staff, I must congratulate them and the team on that achievement, so soon after Brendan's arrival at the Club.  I know that Brendan is committed to bringing success to the Club and the Board will support him in that effort.  Our objectives during this season remain success in all three domestic competitions and in the UEFA Champions League.

For a club like Celtic, operating in a market where television values have fallen significantly behind our neighbours across Europe, qualification for the Group Stages of the UEFA Champions League is of paramount importance. The financial rewards allow for investment in the playing squad and physical assets, but moreover, the prestige of participating in the premier club competition in the world reinforces the reach and importance of the Club to so many people around the world.

Fundamentally, Celtic is a Champions League club; our infrastructure and continued investment reflect that.  At a time when the direction of travel in European football is towards elite level clubs, we must remain at the forefront of developments in the game domestically and across Europe.  Celtic should be at the top of the game in Europe and the Board and I have that objective as a priority.  We continue to work tirelessly on seeking to improve the football environment in which the Club operates.  

We remain of the opinion that our core strategy should remain focussed on a football operation with a self sustaining financial model, relying upon: the youth academy; player development with world class coaching; player recruitment; management of the player pool; and sports science and performance analysis. The Youth Academy continues to form an important part of our strategy.  This year the investment made in the Academy and the partnership with St Ninian's High School continued to deliver positive outcomes, as Kieran Tierney became a regular in the first team and Aiden Nesbitt, Joe Thompson, Anthony Ralston and Jack Aitchison all made competitive first team debuts, with Jack becoming the youngest ever first team debutant and the youngest player to score in his first game for Celtic.  The ultimate objective, for the players and the Club, is to create Champions League players, playing the Celtic Way and this year Kieran made his debut in the competition.

During the year, I was immensely proud to join Billy McNeill and his family on the Celtic Way to unveil the magnificent statue of Billy lifting the European Cup.  Billy will always embody the Celtic Way and the statue stands as a fitting tribute to a true Celtic legend and as inspiration to the next generations of young players who learn to love the game at Celtic Park.

Celtic supporters continue to support the Celtic FC Foundation as it develops into one of the most successful club charitable organisations in the world.  That support is not surprising, but it is not taken for granted. I thank everyone involved in the continued success of the Foundation.

Nor is the continued success of Celtic to be taken for granted.  It requires hard work and commitment, both on and off the field.  I thank all of my colleagues, our supporters, shareholders and club partners for all of their efforts in support of such an important cause.

Peter Lawwell                                                                                                                                                             

19 September 2016

Chief Executive

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

			2016			2015
	Note	Operations excluding intangible asset trading £000	Intangible asset trading £000	Total £000	Operations excluding intangible asset trading £000	Intangible asset trading £000	Total £000
CONTINUING OPERATIONS:
Revenue	2	52,009	-	52,009	51,080	-	51,080
Operating expenses (excluding exceptional operating expenses)	2	(57,143)	-	(57,143)	(53,268)	-	(53,268)
		_________	_________	_________	_________	_________	_________
Loss from trading before asset transactions and exceptional items		(5,134)	-	(5,134)	(2,188)	-	(2,188)
Exceptional operating (expenses) / credit	3	(715)	(1,006)	(1,721)	(1,001)	261	(740)
Amortisation of intangible assets		-	(4,953)	(4,953)	-	(7,313)	(7,313)
Profit on disposal of intangible assets		-	12,644	12,644	-	6,773	6,773
Loss on disposal of property, plant and equipment		(106)	-	(106)	(102)	-	(102)
		_________	_________	_________	_________	_________	_________
Operating (loss) / profit		(5,955)	6,685	730	(3,291)	(279)	(3,570)
		________	________	_______	________	________	________
Finance income				350			185
Finance expense				(621)			(562)
				_________			_________
Profit / (loss) before tax				459			(3,947)
Income tax expense	5			-			-
				_________			_________
Profit / (loss) and total comprehensive income / (loss) for the year				459			(3,947)
				_________			_________
Profit / (loss) attributable to equity holders of the parent				459			(3,947)
				________			________
Total comprehensive income / (loss) attributable to equity holders of the parent				459			(3,947)
				________			________
Basic earnings per Ordinary Share from continuing operations and for the year	6			0.49p			(4.25p)
				________			________
Diluted earnings per share from continuing operations and for the year	6			0.49p			(4.25p)
				________			________

CONSOLIDATED BALANCE SHEET

		2016		2015
		£000		£000
Assets
Non-current assets
Property, plant and equipment		55,276		55,452
Intangible assets		9,798		8,356
Trade Receivables		3,966		2,291
		69,040		66,099
Current assets
Inventories		1,889		2,098
Trade and other receivables		14,682		12,449
Cash and cash equivalents		10,450		11,770
		27,021		26,317
Total assets		96,061		92,416
Equity
Issued share capital		24,316		24,294
Share premium		14,611		14,573
Other reserve		21,222		21,222
Capital reserve		2,781		2,781
Accumulated losses		(12,460)		(12,919)
Total equity		50,470		49,951
Non-current liabilities
Interest bearing liabilities/bank loans		6,650		6,850
Debt element of Convertible Cumulative Preference Shares		4,242		4,262
Provisions		1,105		907
Deferred income		1,343		2,600
		13,340		14,619
Current liabilities
Trade and other payables		11,879		14,579
Current borrowings		304		308
Provisions		196		251
Deferred income		19,872		12,708
		32,251		27,846
Total liabilities		45,591		42,465
Total equity and liabilities		96,061		92,416

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Group	Share capital	Share premium	Other reserve	Capital reserve	Retained earnings	Total
	£000	£000	£000	£000	£000	£000
Equity shareholders' funds as at 1 July 2014	24,357	14,529	21,222	2,695	(8,972)	53,831
Share capital issued	1	44	-	-	-	45
Transfer to capital reserve	(86)	-	-	86	-	-
Reduction in debt element of convertible cumulative preference shares	22	-	-	-	-	22
Loss and total comprehensive loss for the year	-	-	-	-	(3,947)	(3,947)
Equity shareholders' funds as at 30 June 2015	24,294	14,573	21,222	2,781	(12,919)	49,951
Share capital issued	1	38	-	-	-	39
Transfer to capital reserve	-	-	-	-	-	-
Reduction in debt element of convertible cumulative preference shares	21	-	-	-	-	21
Profit and total comprehensive income for the year	-	-	-	-	459	459
Equity shareholders' funds as at 30 June 2016	24,316	14,611	21,222	2,781	(12,460)	50,470

CONSOLIDATED CASH FLOW STATEMENT

		2016		2015
		£000		£000
Cash flows from operating activities
Profit / (loss) for the year		459		(3,947)
Depreciation		1,689		1,577
Amortisation of intangible assets		4,953		7,313
Impairment of intangible assets		1,294		378
Reversal of prior period impairment charge		(288)		(639)
Profit on disposal of intangible assets		(12,644)		(6,773)
Loss on disposal of property, plant and equipment		106		102
Net finance costs		271		377
		(4,160)		(1,612)
Decrease / (increase) in inventories		209		(402)
Decrease in receivables		212		540
Increase in payables and deferred income		4,695		1,553
Cash generated from operations		956		79
Net interest paid		(91)		(75)
Net cash flow from operating activities - A		865		4
Cash flows from investing activities
Purchase of property, plant and equipment		(1,455)		(2,656)
Purchase of intangible assets		(10,933)		(11,239)
Proceeds from sale of intangible assets		13,261		12,861
Net cash used in investing activities - B		873		(1,034)
Cash flows from financing activities
Repayment of debt		(200)		(3,169)
Dividends paid		(458)		(481)
Net cash used in financing activities - C		(658)		(3,650)
Net increase / (decrease) in cash equivalents A+B+C		1,080		(4,680)
Cash and cash equivalents at 1 July 2015		9,370		14,050
Cash and cash equivalents at 30 June 2016		10,450		9,370

NOTES TO THE FINANCIAL STATEMENTS

1.         BASIS OF PREPARATION

These Financial Statements have been prepared in accordance with the recognition and measurement principles of IFRS as adopted by the European Union.  The accounting policies have been consistently applied to both years presented.

2.         REVENUE AND TOTAL OPERATING EXPENSES

REVENUE		2016 £000		2015 £000
The Group's revenue comprised:
Football and Stadium Operations		25,149		27,969
Merchandising		12,577		11,679
Multimedia and Other Commercial Activities		14,283		11,432
		52,009		51,080
TOTAL OPERATING EXPENSES		2016 £000		2015 £000
The Group's operating expenses comprised:
Football and Stadium Operations (excluding exceptional items and asset transactions)		47,173		43,951
Merchandising		7,836		6,995
Multimedia and Other Commercial Activities		2,134		2,322
		57,143		53,268

3.         EXCEPTIONAL OPERATING EXPENSES

The exceptional operating expenses of £1.72m (2015: £0.74m) can be analysed as follows:

Exceptional operating expenses comprised	2016 £000		2015 £000
Impairment of intangible assets	1,294		378
Reversal of prior period impairment charges	(288)		(639)
Onerous employment contracts	-		650
Compromise payments on contract termination	715		351
	1,721		740

4.         DIVIDENDS PAYABLE

A 6% (before tax credit deduction) non-equity dividend of £0.52m (2015: £0.52m) was paid on 1 September 2016 to those holders of Convertible Cumulative Preference Shares on the share register at 29 July 2016. A number of shareholders elected to participate in the Company's scrip dividend reinvestment scheme for the financial year to 30 June 2016.  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 £0.02m (2015: £0.09m) in respect of statute barred preference dividends in accordance with the Company's Articles of Association.

5.         TAX ON ORDINARY ACTIVITIES

No provision for corporation tax or deferred tax is required in respect of the year ended 30 June 2016.  Estimated tax losses available for set-off against future trading profits amount to approximately £16.08m (2015: £16.40m) and, in addition, the available capital allowances pool is approximately £10.25m (2015: £11.25m).  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

	2016		2015
	£000		£000
Reconciliation of earnings to basic earnings:
Net earnings / (loss) attributable to equity holders of the parent	459		(3,947)
Basic earnings / (loss)	459		(3,947)
Reconciliation of basic earnings / (loss) to diluted  earnings:
Basic earnings / (loss)	459		(3,947)
Non-equity share dividend	521		523
Reclaim of statute barred non-equity share dividends	(19)		(91)
Diluted earnings / (loss)	961		(3,515)
	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	93,120		92,774
Dilutive effect of convertible shares	43,179		43,554
Diluted weighted average number of ordinary shares	136,299		136,328

Earnings per share has been calculated by dividing the profit for the period of £0.46m (2015: loss of £3.95m) by the weighted average number of Ordinary Shares of 93.1m (2015:  92.8m) in issue during the year.  Diluted earnings per share as at 30 June 2016 has been calculated by dividing the profit for the period by the weighted average number of Ordinary Shares, Preference Shares and Convertible Preferred Ordinary Shares in issue, assuming conversion at the balance sheet date, if dilutive, in accordance with IAS33 Earnings Per Share.

7.         ANNUAL REPORT & ACCOUNTS

Copies of the Annual Report & Accounts together with the Notice and Notes of the 2016 AGM will be issued to all shareholders in due course.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 June 2016 or 30 June 2015. The Independent Auditors' Reports on the statutory accounts for 2016 and 2015 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 accounts for 2015 have been filed with the Registrar of Companies and those for 2016 will be delivered to the Registrar of Companies in due course.

 

END

 

 

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