Interim Results - Replacement
Celtic PLC
7 February 2002
7 February 2002
The issuer advises that the following replaces the interim results announcement
released today at 1442 under RNS number 1414R.
Under note 3 the figures in the table have been realigned.
All other details remain unchanged, the full amended text is below.
CELTIC PLC
INTERIM RESULTS FOR THE YEAR ENDED 31 DECEMBER 2001
HIGHLIGHTS OF THE RESULTS
• Turnover increased in the period by 59% to £36.36m (2000: £22.83m).
• Significant increase in professional football revenues of 37% to £17.44m
(2000: £12.72m).
• Revenues from multimedia and communications more than doubled to £10.49m
(2000:£4.64m).
• Merchandising revenue increased by over 70% to £6.95m (2000: £4.07).
• Operating expenses increased by over 43% to £29.50m (2000: £20.61m).
• Profit from operations increased to £6.86m (2000: £2.23m).
• An additional net investment of £7.2m in the first team squad.
• Enhanced extended contracts awarded to key players.
• The team is currently top of the Scottish Premier League and in contention
in the Scottish Cup competition.
For further information contact:
Ian McLeod, Celtic plc Tel: 0141 551 4276
Eric Riley, Celtic plc Tel: 0141 551 4276
Kate Cunningham, Celtic plc Tel: 0141 551 4276
Keith Brookbank, Gavin Anderson & Company Tel: 020 7457 2345
Lindsey Harrison, Gavin Anderson & Company Tel: 020 7457 2345
Celtic plc
CHAIRMAN'S STATEMENT
During the first half of this financial year both the football team and the
Company have made good progress. Participation in Europe and a strong
performance in domestic competitions have given revenues a significant boost,
with benefits reflected both in profitability and the balance sheet.
In the Scottish Premier League the team is well positioned to retain the title,
a feat last achieved by a Celtic team 20 years ago and we also remain in
contention in the Scottish Cup. In Europe this season, Celtic qualified for the
first stage of the UEFA Champions' League for the first time, and failed to move
on to the next stage by the narrowest of margins. Our draw for the third round
of the UEFA Cup, against Valencia, could not have been more difficult and we
went out of the competition on a penalty shoot-out.
The consistently high standard achieved by the team demonstrates the improvement
in quality of the football squad and the inspired leadership of Martin O'Neill
and his coaching team. The squad has been strengthened by an additional net
investment of £7.2 million in players. More important but less well publicised,
we have pursued a policy of giving priority in the use of financial resources to
remunerating players, particularly in respect of performance on the field.
Research indicates that success on the field is more closely related to players'
contracts than to transfer fees. That said, we have continued to control our
costs carefully.
Financial performance in the half-year has been strong. The Company's management
team and staff are to be congratulated for their contribution to our progress.
Turnover rose by 59%, with increases in all categories. Merchandising showed
growth of over 70%, reflecting partly the trade of two new stores and income
from multi-media and communications more than doubled with the TV revenues from
European matches.
Operating expenses have risen by over 43% against the same period last year. The
greatest contributory factor was labour costs (largely driven by football),
which were up by £5.8m, an increase of just over 46%. Despite this increase,
labour costs have still been held at approximately 50% of turnover, which is
well within levels considered to be industry best practice.
Profit from operations, at £6.9 million, has more than tripled compared to the
same period last year. Operating profit (i.e. after taking into account
amortisation and net gain on player transfers) amounted to £3.6 million,
compared to £1.3 million at this time last year; and profit before tax stood at
£3.1 million, as against £0.6 million a year ago.
Net assets, reinforced by the successful issue of Convertible Preferred Ordinary
Shares in the summer, rose from £30.1 million at 30 June 2001 to £54.9 million.
In the prospectus accompanying that issue we stated how we intended to apply the
proceeds of the issue. We undertook to give top priority to strengthening the
football squad. This has happened. More than half of the sums raised has been
incurred on and committed to buying and paying new players and securing the
extended commitment of high quality members of the squad through enhanced
contracts. Plans to improve the scouting, training and coaching of young players
are now being implemented. Although these activities do not attract the
attention they deserve, we believe they are crucial to our youth development
plans. Additions and improvements to the current training pitches are also
proceeding. The importance we attach to developing further a high-quality
training facility remains unchanged, although it will take longer than
originally envisaged to develop a suitable site. A new restaurant has also been
opened in the Jock Stein Stand, with every prospect of proving a profitable
investment.
Outlook
Revenue generated from our run in Europe has assisted in reducing our debt from
£29.6 million at June 30th 2001 to £11.5million as at 31 December 2001. However,
as a result of significant instalment payments in respect of player acquisitions
and reduced trading activity we do not believe this position will be maintained
for the rest of the financial year.
As in previous years, the majority of our home games have been played in the
first half of the season and in addition, we will not have the benefits of
European matches to sustain revenue growth through the remainder of the year.
Trading performance in the second six months will therefore be well down on the
first. Overall, our ability to generate any profit for the year as a whole will
be heavily dependent on the level of progress domestically and the impact of any
player trading, should it arise.
An internal re-organisation is being concluded to assist us in ensuring that the
commitments entered into in pursuance of the strategy and policies communicated
in the prospectus last summer can continue to be met, with the additional
benefit of achieving effective use of the Company's assets.
We continue to believe that change in the structure of European professional
football will come and welcome the indications from the football authorities of
possible changes to the UEFA Cup format. In the meantime, discussions are under
way in Scotland to replace the SPL television contract that expires at the end
of this season. Celtic is playing an active and positive part in these
discussions.
On behalf of the Board, I thank you for your continued support.
Brian Quinn CBE 7 February 2002
Chairman
INDEPENDENT REVIEW REPORT TO CELTIC plc
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 31 December 2001, which comprises the Group Profit and Loss
Account, Group Balance Sheet, Group Cash Flow Statement and the related notes.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2001.
PKF
Registered Auditors
Glasgow, UK
7 February 2002
Celtic plc
GROUP PROFIT AND LOSS ACCOUNT
6 months to 12 months
31 December to 30 June
Notes 2001 2000 2001
Unaudited Unaudited Audited
£'000 £'000 £'000
TURNOVER 3 36,360 22,833 42,007
OPERATING EXPENSES (29,498) (20,605) (41,136)
PROFIT FROM OPERATIONS 6,862 2,228 871
AMORTISATION OF INTANGIBLE FIXED ASSETS (4,251) (4,466) (9,604)
IMPAIRMENT OF INTANGIBLE FIXED ASSETS - - (4,892)
NET GAIN ON SALE OF INTANGIBLE
FIXED ASSETS 4 943 3,584 4,260
OPERATING PROFIT/(LOSS) 3,554 1,346 (9,365)
INTEREST PAYABLE AND SIMILAR CHARGES (464) (746) (1,825)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
BEFORE TAXATION 3,090 600 (11,190)
TAX ON ORDINARY ACTIVITIES 5 - - 3,067
PROFIT/(LOSS) FOR THE PERIOD 3,090 600 (8,123)
PREFERENCE DIVIDEND 6 - - (599)
RETAINED PROFIT/(LOSS) FOR THE PERIOD 3,090 600 (8,722)
EARNINGS/(LOSS) PER ORDINARY SHARE 7 8.03p 1.03p (29.82p)
DILUTED EARNINGS/(LOSS) PER SHARE 7 4.95p 1.26p (17.04p)
All amounts relate to continuing operations.
There were no gains or losses recognised in any of the above results other than
the profit/(loss) for the period.
Celtic plc
GROUP BALANCE SHEET
31 December
2001 2000 30 June
Unaudited Unaudited 2001
£'000 £'000 Audited
(As restated) £'000
Notes
FIXED ASSETS
Tangible assets 47,055 46,735 46,664
Intangible assets 8 28,197 33,605 24,106
75,252 80,340 70,770
CURRENT ASSETS
Stocks 1,160 955 1,228
Deferred tax asset 5,680 2,613 5,680
Debtors 6,273 6,628 4,579
Cash at bank and in hand 1,691 197 87
14,804 10,393 11,574
CREDITORS - Amounts falling due within one year 9 (13,794) (22,701) (20,066)
Income deferred less than one year (8,755) (6,600) (10,447)
NET CURRENT LIABILITIES (7,745) (18,908) (18,939)
TOTAL ASSETS LESS CURRENT LIABILITIES 67,507 61,432 51,831
CREDITORS - Amounts falling due after more than one year 10 (12,642) (22,051) (21,772)
NET ASSETS 54,865 39,381 30,059
CAPITAL AND RESERVES
Called up share capital (includes non-equity) 11 29,405 11,392 11,392
Share premium 21,222 17,519 17,519
Profit and loss account 4,238 10,470 1,148
SHAREHOLDERS' FUNDS 54,865 39,381 30,059
Approved by the Board on 7 February 2002
Celtic plc
GROUP CASH FLOW STATEMENT
6 months to 12 months to
31 December 30 June
2001 2000 2001
Unaudited Unaudited Audited
£'000 £'000 £'000
RECONCILIATION OF OPERATING PROFIT TO
NET CASH INFLOW FROM OPERATING ACTIVITIES
Operating profit/(loss) 3,554 1,346 (9,365)
Depreciation 515 551 1,128
Amortisation 4,251 4,466 9,604
Impairment of intangible fixed assets - - 4,892
Net gain on sale of intangible fixed assets (943) (3,584) (4,260)
Grants release - - (1)
Decrease/(increase) in stocks 68 1 (272)
Increase in debtors (145) (520) (809)
Increase/(decrease) in creditors 1,054 (1,062) 1,385
Net cash inflow from operating activities 8,354 1,198 2,302
CASH FLOW STATEMENT
Net cash inflow from operating activities 8,354 1,198 2,302
Returns on investments and servicing of finance (1,063) (1,345) (2,424)
Capital expenditure and financial investment (10,889) (11,844) (14,998)
Cash outflow before use of liquid resources
and financing (3,598) (11,991) (15,120)
Financing 12,526 6,896 6,709
Increase/(decrease) in cash 8,928 (5,095) (8,411)
RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET FUNDS
Increase/(decrease) in cash in the period 8,928 (5,095) (8,411)
Cash inflow/(outflow) from movement in debt 9,190 (6,896) (6,709)
Movement in net debt in the period 18,118 (11,991) (15,120)
Net debt at 1 July (29,625) (14,505) (14,505)
Net debt at period end (11,507) (26,496) (29,625)
All amounts relate to continuing operations.
There were no gains or losses recognised in any of the above results other than
the profit/(loss) for the period.
Celtic plc
NOTES TO THE FINANCIAL STATEMENTS
1. The results for the year ended 30 June 2001 are extracted from the accounts
filed with the Registrar of Companies, which contained an unqualified audit
report.
2. The interim results for the 6 months to 31 December 2001, which comprise the
Group Profit and Loss Account, Group Balance Sheet, Group Cash Flow
Statement and the related notes, have been prepared on the same basis and
using the same accounting policies as those used in the preparation of the
last full year's accounts to 30 June 2001. Following the adoption of FRS19 -
Deferred Tax in the year to 30 June 2001, the balance sheet for the period
to 31 December 2000 has been restated to incorporate this accounting policy
change.
3. TURNOVER
6 months to 12 months
31 December to 30 June
2001 2000 2001
Turnover comprised £'000 £'000 £'000
Professional football 17,436 12,718 21,681
Multimedia & communications 10,488 4,640 9,904
Merchandising 6,946 4,070 7,718
Stadium enterprises 846 780 1,478
Youth development 644 625 1,226
36,360 22,833 42,007
Number of home games 18 17 27
4. NET GAIN ON SALE OF INTANGIBLE FIXED ASSETS
In the current period the net gain on sale was represented principally by
the disposal of Mark Burchill and Stewart Kerr (2000: Mark Viduka).
5. After taking account of unutilised tax losses brought forward, together with
the projected performance for the next six months, no provision for taxation
is required.
6. As in previous years no provision has been made in respect of the 6% dividend
that is payable on the Preference Shares on 31 August 2002 nor for the 4%
dividend that is payable on the Convertible Preferred Ordinary Shares on 31
August 2004 in respect of the year ending 30 June 2002.
7. Earnings per share has been calculated by dividing the profit for the period
by the weighted average number of Ordinary Shares in issue 30,324,188 (2000:
29,250,000), after taking account of one half of the net dividends in note 6
above. Diluted earnings per share has been calculated by dividing the profit
for the period by the weighted average number of Ordinary, Convertible
Preferred Ordinary and Preference Shares in issue in the period to 31
December 2001, and the exercise of outstanding share purchase options in
accordance with FRS14. Certain options have been excluded from the
calculation, as the conditions attached to these had not been achieved in
the period under review.
8. INTANGIBLE ASSETS
31 December 30 June
2001 2000 2001
£'000 £'000 £'000
Cost
At 1 July 50,082 34,053 34,053
Additions 9,456 20,848 21,890
Disposals (12,949) (4,475) (5,861)
At period end 46,589 50,426 50,082
Amortisation
At 1 July 25,976 15,014 15,014
Charge for the period 4,251 4,466 9,604
Provision for impairment - - 4,892
Disposals (11,835) (2,659) (3,534)
At period end 18,392 16,821 25,976
Net Book Value at period end 28,197 33,605 24,106
The £7.2m additional net investment in players in the period referred to in
the Chairman's Statement reflects additions of £9.4m less the proceeds of
£2.2m achieved in respect of player disposals which had a net book value of
£1.1m at the date of disposal as noted above.
In March 2001 FIFA reached agreement with the European Commission on the
main amendments to FIFA rules governing player transfers. These new
regulations came into force in September 2001 and it is likely that the
domestic arrangements will align themselves with these in due course.
Fundamentally, however the movement of players between clubs within a
regulated transfer system will continue. While this remains the case the
costs associated with the acquisition and ongoing retention of football
personnel will be amortised over the period of their contracts on the basis
of nil residual values.
9. CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR
The amounts payable in agreed instalments in respect of the transfer of
player registrations at 31 December 2001 and included in creditors amounted
to £3,430,000 (2000: £10,517,000).
10. CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
The reduction in creditors due after more than one year reflects the
reduction in loans drawn down at the end of the period. As at 31 December
2001 £12.0m of a £24.0m 20-year loan facility was drawn. This compares with
loans of £21m drawn at 30 June 2001 and 31 December 2000 respectively. The
Company's bank facility of £36.0m comprises an overdraft of £12.0m and term
loans of £24.0m of which £7.3m is repayable in equal quarterly instalments
from October 2009 until April 2019, and £16.7m is repayable in July 2019.
The Company has the option to repay the loans earlier than these dates
without penalty.
11. SHARE CAPITAL
Authorised Allotted, called up and fully paid
31 December 31 December
Group and Company 2001 2000 2001 2001 2000 2000
No.'000 No.'000 No.'000 £000 No.'000 £000
Equity
Ordinary shares of 1p each 36,289 35,000 30,539 305 29,250 292
Non-equity
Convertible Preferred Ordinary Shares of £1 each 20,000 - 18,012 18,012 - -
Convertible Cumulative Preference Shares of 60p 19,711 21,000 17,211 10,327 18,500 11,100
each
Deferred shares of 1p each 76,052 - 76,052 761 - -
152,052 56,000 141,814 29,405 47,750 11,392
During the six month period to 31 December 2001 1,289,024 Preference Shares
of 60p each were converted into 1,289,024 Ordinary Shares of 1p each and
76,052,416 Deferred Shares of 1p each in accordance with Article 4C(1) of
the Company's Articles of Association. The above split of share capital
between equity and non-equity is disclosed in accordance with FRS4.
12. TRANSFER FEES PAYABLE/RECEIVABLE
Under the terms of certain contracts in respect of the transfer of
player registrations, additional amounts will be payable/receivable by the
Company if specific future conditions are met. Amounts in respect of such
contracts could result in an amount payable of £2,055,000 of which
£1,935,000 could arise within one year, and amounts receivable of £400,000
of which all could arise within one year.
Directors
Brian Quinn CBE (Chairman)*
Ian J W McLeod (Chief Executive)
Eric J Riley (Financial)
Kevin Sweeney*
Dermot F Desmond*
Tom Allison *
Sir Patrick Sheehy (Senior Independent Director)*
Secretary
Robert M Howat
Directors of the Celtic Football and Athletic
Company Limited and Celtic Football Club
Ian J W McLeod (Chief Executive)
Eric J Riley (Financial)
Jim Hone (Business Operations and Resources)
Kevin Sweeney*
John S Keane*
Michael A McDonald*
* Independent Non-Executive Director
Secretary
Robert M Howat
Football Manager
Martin O'Neill
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