Interim Results
Tottenham Hotspur PLC
31 March 2005
Date: 31 March 2005
Enquiries:
Daniel Levy, Chairman
Matthew Collecott, Finance Director Tel: 020 8365 5322
Tottenham Hotspur plc www.spurs.co.uk
John Bick/Trevor Phillips Tel: 020 7929 5599
Holborn
TOTTENHAM HOTSPUR PLC
Interim Results for the Six Months Ended 31 December 2004
Summary of Results
Six months Six months
ended ended
31 December 2004 31 December 2003
£m £m
Turnover 32.9 33.2
Operating profit before amortisation, impairment and 5.0 3.3
profit / (loss) on sale of player registrations
Net interest payable (0.4) (0.4)
Profit / (loss) on sale of player registrations 2.2 (0.3)
Amortisation and impairment of player registrations (5.9) (5.5)
Profit / (loss) before tax 1.0 (3.0)
Profit / (loss) per share 0.6p (2.9)p
Daniel Levy, Chairman of Tottenham Hotspur plc, said:
'The results show an improved operating profit, which reflects the Club's
ability to generate cash. This, coupled with the new funds raised last year,
enabled us to invest in the squad and work towards attaining the right mix of
players for the first team squad, the reserves and the academy. I believe that
we have continued to make solid progress so far this year, improving the
efficiency of the business and striving to improve what we do for our supporters
both on and off the pitch wherever possible.'
Chairman's Statement
Financial Results
The results for the first six months of the financial year show a slight
decrease in turnover from £33.2m to £32.9m compared to the same period last
year. Operating profit before player trading was £5.0m compared to £3.3m in the
same period last year, an increase of more than 50%. With the addition of a
£2.2m profit on disposal of players the club made a profit before tax of £1.0m,
compared to a loss before tax of £3.0m in the corresponding period last year.
These results are explained in more detail below.
Total gate receipts were £0.7m lower than in the same period last year. The team
played only one home Carling Cup match in the run up to the quarter finals this
year, compared to three home matches in the same period last year when it also
reached the quarter finals of that competition. Premier league gate receipts
were 6.5% higher than in the prior year with the stadium running at almost full
capacity for all games, and with the number of home games being consistent with
the comparative period.
Media and broadcasting turnover has decreased by £0.5m against the prior year.
This reflects the lower value of the first year of the new Premier League TV
rights deal in place until 2007. Whilst the total value of the current TV
rights deal is similar to the previous deal, it should be noted that the
structure of the previous three-year deal meant revenue available to Premiership
clubs increased with each year of the deal, whereas income from the current deal
is spread evenly over the length of the deal.
Merchandising turnover has increased by 21% with trading benefiting from a
number of factors including the launch of the new home kit in July 2004 and a
revamped range of product in store and improved performance on the pitch. In
addition, our retail operation saw a strong Christmas trading period and
benefited from the opening of a new store on Tottenham High Road.
Operating expenses before amortisation fell by £2.0m in the period, to £27.9m.
This was in part due to the reduced number of home cup games in the period and
their associated running costs and does not reflect the full year salary costs
relating to the significant number of new signings. We continue to maintain
close control over our cost base and move variable costs to reflect performance
and results. It is essential that our business model has the flexibility to
respond to the significant variables in the football industry.
Amortisation for the six months increased by £0.4m to £5.9m reflecting the
player acquisitions made during Summer 2004. The profit on disposal of players
of £2.2m compares favourably with a £0.3m loss on disposal in the same period
last year and includes the sale, most notably, of Stephen Carr, who was a
product of our youth academy.
Looking at the balance sheet at 31 December 2004, the largest movement year on
year relates to intangible assets which reflects the continued investment in the
playing squad made during 2004 and does not reflect the further investment made
during the January 2005 trading window. In addition, the net debt position of
the club at 31 December 2004 was £9.3m against £17.1m at the same point in the
prior year. The significant improvement resulting from the £15m raised by the
Club's shareholders through the Convertible Redeemable Preference Share issue.
The February 2005 Deloittes Football Money League of Europe's wealthiest clubs
saw us move up from 16th place to 14th place. When statistics for the last few
years are analysed the size of this achievement becomes apparent. We are the
only team in the top 20 not to have played some form of European football in the
last three seasons, and the only team in the top 15 not to have played in the
Champions League either this season or last. Clearly it shows the potential for
the club, the brand and the business model when we achieve significant success
on the pitch.
On the pitch
A positive start to the season was interrupted by the sudden departure of
Jacques Santini and however unfortunate, I am pleased that as a result of many
of the changes made throughout the club's infrastructure during the 2004 closed
season, we were able to deal promptly with the situation at the time. It is the
continuity, teamwork and depth of planning that ensure we now have the ability
to deal with the most challenging of situations. We were delighted to appoint
Martin Jol as First Team Coach in November 2004.
Aligned with the changes in the way we operate at the training ground we have
continued to pursue our commitment to ensure the club moves towards attaining
the correct mix of players from the first team squad through to the reserves and
the academy. The players that have left since we last reported to shareholders
in our Annual report 2004 are; Mauricio Taricco, Mbulelo Mabizela, Kasey Keller,
Edson Silva Sousa, and our former club captain Jamie Redknapp. In addition, the
club were sad to announce the enforced retirement from football, on medical
grounds, of Dean Richards. We thank all of these players for their service, and
wish them well for the future.
In the same period we have welcomed Emil Hallfredsson, Mounir el Hamdaoui, Andy
Reid and Michael Dawson on permanent transfers, as well as Radek Cerny and
Hossam Ahmed Mido on 18 month loan deals and David Limbersky who joins us on
loan for six months. In addition we have concluded deals to bring Teemu Tainio
and Tom Huddlestone to the club in the Summer, and look forward to welcoming
them then.
In October last year we reported a total player spend of £37.5m since 1 July
2003. This has now increased to £46.5m for the period from 1 July 2003 to date,
with £10m being receivable from player sales in the same period. This
additional commitment has been possible because of the stable financial position
of the club and has enabled a significant investment in young talent as we
strive for continuity and to continually improve the club at all levels now and
for the future.
Off the pitch
The Club's reputation for offering excellent corporate hospitality at the
stadium received official status after being awarded the title of Best Overall
Corporate Hospitality in both the Premiership and the Football League in 2004.
This award, judged by the National Association of Caterers saw the Club beat
strong opposition from Manchester United, Newcastle United, Norwich City and
Southampton in the final.
Non-match day events continue to be a focus and included the return of the
production team for 'Footballers Wives' who hire the stadium for filming the
popular television drama series and extend our events horizons. The Club has
also launched a series of regular sell-out dinners at which former players of
the Club are inducted into the newly created Hall of Fame. We continue to offer
business's and fans more events to ensure we fully utilise the extensive
facilities and award winning hospitality.
The Club continues to expand its community activity, having run courses in 27
new venues since September 2004. A key priority for the next six months is
strengthening relationships with our public partners such as the London Boroughs
of Haringey and Enfield and the Lee Valley Regional Park Authority. Tottenham
Hotspur Community announced a title sponsorship with Thomson during the period,
which will provide them with branding and promotional rights through all the
Club's Community activity. In addition Thomson have doubled the number of
European resorts in which Tottenham Hotspur Community Coaching will be available
during summer 2005.
Internationally, the Club continues to explore ways of raising its profile and
expanding its supporter base. We were pleased to announce details of two
overseas tours that will take place during the close season - to Mauritius in
May, and to South Korea in July.
There is currently nothing new to report on the various options we are
considering relating to the development of a new Academy and First Team training
facility, and the possible redevelopment of the White Hart Lane stadium. The
Club's website will be the first to break any news of these two projects.
Our Fans
We are now working to ensure the remainder of this season is a success both on
and off the pitch and also, at this stage in the year, we begin to focus on
planning for next season as well. We constantly look for ways to improve all our
offerings to our fans and have been pleased with the response to our improved
season ticket package this year. We continue our extensive dialogue with fans,
supporter groups and most noticeably Tottenham Hotspur Supporters Trust.
The Club has also continued to invest in its primary communication channels and
the popularity of the official Club website has grown year on year and now
receives in the region of 500,000 unique visitors per month. We are committed to
providing fans with timely and comprehensive Club news.
Most of all, we thank our fans for their continued support, without which, we
would not have the ability to put this club in a position where it can meet its
potential. Finally, I am pleased to note that our pre-season fixture schedule
has been enhanced by the news that the reigning European champions FC Porto will
be visiting White Hart Lane on 6 August.
Outlook
We have invested extensively in the playing squad and now have a group of young
professionals who need time to work together under the new structure at the
training ground so that we can compete at a higher level. Our resolve remains
to improve in every way both on and of the pitch and to meet our aspirations
where ever possible.
Finally, as always, I would like to thank our supporters, shareholders and
employees for their continued support and efforts.
Daniel Levy
Chairman
30 March 2005
Consolidated Profit and Loss Account
For the six months ended 31 December 2004
Six months ended 31 December 2004
Operations Player Total Six months Year ended
excluding trading* ended 31 30 June 2004
player (Note 2) December
trading* 2003
Note £'000 £'000 £'000 £'000 £'000
Turnover:
Gate receipts - premier league 8,862 8,862 8,325 16,307
- cup 998 998 2,218 3,446
competitions
Media and broadcasting 10,289 10,289 10,824 23,891
Sponsorship and corporate 7,101 7,101 6,840 14,459
hospitality
Merchandising 3,271 3,271 2,703 3,840
Other 2,428 2,428 2,330 4,381
32,949 32,949 33,240 66,324
Operating expenses (27,926) (5,853) (33,779) (35,459) (67,513)
Operating profit/(loss) 5,023 (5,853) (830) (2,219) (1,189)
Profit/(loss) on disposal of - 2,155 2,155 (343) (381)
registrations
Profit/(loss) before interest and 5,023 (3,698) 1,325 (2,562) (1,570)
taxation
Net interest payable (370) (441) (894)
Profit/(loss) on ordinary 955 (3,003) (2,464)
activities before taxation
Tax charge on profit/(loss) on 3 (344) - (178)
ordinary activities
Profit/(loss) on ordinary 611 (3,003) (2,642)
activities after taxation
Other finance costs in respect of (49) - (50)
non equity shares
Retained profit/(loss) for the 562 (3,003) (2,692)
period
Profit/(loss) per share - basic 5 0.6p (2.9)p (2.6)p
Profit/(loss) per share - diluted 5 0.6p (2.9)p (2.6)p
*Player trading represents the amortisation, impairment, and the profit or loss
on disposal, of registrations.
The above results all derive from continuing operations.
There were no gains or losses in either year other than the loss for the year,
and accordingly no statement of total recognised gains and losses is presented.
Consolidated Balance Sheet
as at 31 December 2004
31 December 31 December 30 June 2004
2004 2003
Note £'000 £'000 £'000
Fixed assets
Intangible 30,983 22,150 25,053
Tangible 47,908 46,784 48,219
78,891 68,934 73,272
Current assets
Stocks 949 762 355
Debtors 10,279 9,601 8,171
Cash at bank 2,086 - 11,497
13,314 10,363 20,023
Creditors: amounts falling due within one year (34,794) (36,313) (32,753)
Net current liabilities (21,480) (25,950) (12,730)
Total assets less current liabilities 57,411 42,984 60,542
Creditors: amounts falling due after more than one
year (13,350) (13,698) (17,049)
44,061 29,286 43,493
Provisions for liabilities and charges
Deferred taxation (1,229) (1,051) (1,229)
Net assets 42,832 28,235 42,264
Capital and reserves
Called-up share capital 9,616 5,102 9,624
Share premium account 21,389 11,358 21,340
Revaluation reserve 2,456 2,504 2,480
Capital redemption reserve 172 - 164
Profit and loss account 9,199 9,271 8,656
Shareholders' funds 42,832 28,235 42,264
Shareholders' funds may be analysed as:
Equity interests 28,115 28,235 27,596
Non-equity interests 6 14,717 - 14,668
42,832 28,235 42,264
Consolidated Cash Flow Statement
For the six months ended 31 December 2004
6 months ended 6 months ended
31 December 31 December Year ended
2004 2003 30 June
Note 2004
£'000 £'000 £'000
Net cash inflow from operating activities 7 3,930 4,460 14,892
Returns on investments and servicing of finance
Interest received 82 43 67
Interest paid (805) (699) (824)
Non-equity share issue costs - - (382)
Net cash outflow from returns on investments and (723) (656) (1,139)
servicing of finance
UK corporation tax paid (57) - -
Capital expenditure and financial investment
Payments to acquire intangible fixed assets (14,895) (10,888) (16,696)
Payments to acquire tangible fixed assets (577) (728) (2,197)
Receipts from sales of intangible fixed assets 3,220 1,410 1,640
Receipts from sales of tangible fixed assets - - 16
Net cash outflow from capital expenditure and financial (12,252) (10,206) (17,237)
investment
Cash outflow before use of liquid resources and financing (9,102) (6,402) (3,484)
Financing
Issue of non-equity share capital - - 15,000
Redemption of ordinary shares (43) - (950)
Bank loan repayments (6) (588) (1,470)
Repayment of loan notes (260) - -
Net cash (outflow)/inflow from financing (309) (588) 12,580
(Decrease)/increase in cash (9,411) (6,990) 9,096
Notes to the Consolidated Interim Statements
For the six months ended 31 December 2004
1. Accounting policies
The financial information given above does not constitute statutory
accounts within the meaning of Section 240(5) of the Companies Act 1985. The
figures for the year ended 30 June 2004 have been extracted from the statutory
accounts, which have been delivered to the Registrar of Companies. The audit
report on these accounts was unqualified and did not contain a statement under
Section 237(2) or (3) of the Companies Act 1985.
Basis of preparation
The interim financial statements have been prepared on the basis of the
accounting policies set out in the statutory accounts for the year ended 30 June
2004.
Turnover
All turnover derives from the Group's principal activity in the United Kingdom
and is exclusive of VAT.
In the 30 June 2004 accounts, certain types of income were analysed in a
different category of turnover following an exercise to redefine each category
to more accurately reflect the operations of the Group. Gate receipts have been
more tightly defined, resulting in a reallocation of turnover from these
categories to the corporate hospitality and other categories. The comparative
figures for 31 December 2003 have been restated accordingly.
Income recognition
Ticket income is recognised when the matches take place. Fixed elements of
broadcasting contracts are taken over the football season, with facility fees
taken when earned. One unit of the merit award is taken over the course of the
season, with the remainder of the award recognised when known at the end of the
season.
Operating expenses
The Group has adopted format 2 of the Companies Act when preparing its Profit
and Loss account. Expenses previously classified as cost of sales or
administrative expenses are now classified in one single category - operating
expenses. This more accurately reflects the operations of the Group and enables
easier comparison of the costs of the business for the user of the financial
statements.
Signing on fees
Signing on fees are charged to operating expenses in the Profit and Loss Account
in the accounting period in which they are payable.
Intangible fixed assets
The costs associated with the acquisition of players' registrations and coaching
staff are capitalised as intangible fixed assets. These costs are fully
amortised over their useful economic lives, generally in equal annual
instalments over the period of the respective contracts. Players' registrations
are written down for impairment when the carrying value exceeds the amount
recoverable through use or sale, and the reduction in value is considered
permanent.
Profits or losses on the sale of registrations represent the transfer fee
receivable, net of any transaction costs, less the unamortised cost of the
original registration.
These statements were approved by the Board of Directors on 30 March 2005 and
are neither audited nor reviewed.
These results were announced to the Stock Exchange on 31 March 2005 and are
being posted to all shareholders. Copies will be available to personal callers
at the registered office,
Bill Nicholson Way, 748 High Road, Tottenham, London, N17 0AP.
Notes to the Consolidated Interim Statements
For the six months ended 31 December 2004 continued
2. Player Trading
6 months ended 6 months ended Year ended
31 December 31 December 2003 30 June
2004 2004
£'000 £'000 £'000
Proceeds 7,499 930 3,117
Net book value of disposals (5,344) (1,273) (3,498)
Profit/(loss) on disposal of registrations 2,155 (343) (381)
The amortisation charges on registrations included in operating
expenses for the comparative periods
were £5,511,000 for the six months ended 31 December 2003 and £10,924,000 for
the year ended 30 June 2004.
3. Taxation
A corporation tax charge of £57,000 (included in the total charge of £344,000)
is a result of corporation tax paid relating to the year ended 30 June 2002. The
tax computations relating to this financial year are now closed.
An additional £287,000 corporation tax charge has been accrued as at
31December 2004 on the profit before tax of £955,000 - an effective tax rate of
30%.
4. Dividends
The Directors do not recommend an interim dividend.
5. Profit/(loss) per share
The profit/(loss) per share has been calculated using the weighted average
number of shares in issue in each period.
6 months ended 6 months
31 December ended Year ended
2004 31 December 30 June
2003 2004
£'000 £'000 £'000
Profit/(loss) after taxation 562 (3,003) (2,692)
Number Number Number
Weighted average number of shares in issue 98,689,997 102,041,520 101,909,150
Effect of dilutive potential ordinary shares:
Options - 9,870 -
98,689,997 102,051,390 101,909,150
Basic EPS
Loss per share 0.6p (2.9)p (2.6)p
Diluted EPS
Loss per share 0.6p (2.9)p (2.6)p
6. Non-equity interests
Non-equity interests of £14,717,000 relate to the issue of 60,000 Convertible
Redeemable Preference Shares, with a nominal value of £78.10, at £250 each in
January 2004.
£4,686,000 is included in total called-up share capital of £9,616,000, and
£10,031,000 is included in the total share premium account balance of
£21,389,000.
Notes to the Consolidated Interim Statements
For the six months ended 31 December 2004 continued
7. Reconciliation of operating loss to net cash inflow from
operating activities
6 months ended 6 months ended
31 December 31 December Year ended
2004 2003 30 June
2004
£'000 £'000 £'000
Operating loss (830) (2,219) (1,189)
Depreciation charge 887 789 1,718
Amortisation of registrations 5,853 5,511 10,924
Profit on disposal of tangible fixed assets - - (11)
(Increase)/decrease in stock (594) (110) 297
Decrease/(increase) in debtors 162 (2,125) (27)
(Decrease)/increase in creditors (1,561) 2,614 3,180
Currency translation differences 13 - -
Net cash inflow from operating activities 3,930 4,460 14,892
8. Reconciliation of net cash flow to movement in net debt
6 months ended 6 months ended
31 December 31 December Year ended
2004 2003 30 June
2004
£'000 £'000 £'000
(Decrease)/increase in cash in the period (9,411) (6,990) 9,096
Cash outflow from decrease in debt and lease financing 266 588 1,470
Cash related (increase)/decrease in net debt in the period (9,145) (6,402) 10,566
Non cash increase in net debt in the period (18) (11) (35)
(Increase)/decrease in net debt in the period (9,163) (6,413) 10,531
Opening net debt (110) (10,641) (10,641)
Closing net debt (9,273) (17,054) (110)
Officers and advisers
Executive Chairman
D. P. Levy
Executive Directors
M. J. Collecott
P. Z. Kemsley
Non -Executive Directors
D. J. Buchler (Vice Chairman)*
E. M. Davies**
Company Secretary
M. J. Collecott
Registered office
Bill Nicholson Way
748 High Road
Tottenham
London N17 OAP
Registered number
1706358
Auditors
Deloitte & Touche LLP
Chartered Accountants
London
Bankers
HSBC Bank plc
70 Pall Mall
London SW1Y 5EZ
AIM nominated broker and adviser
Seymour Pierce Limited
Bucklersbury House
3 Queen Victoria Street
London EC4N 8EL
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
* Chairman of the Remuneration Committee and member of the Audit Committee
** Chairman of the Audit Committee and member of the Remuneration Committee
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