Half Yearly Report

RNS Number : 1436H

Celtic PLC

15 February 2010

 

15 February 2010

CELTIC plc

INTERIM RESULTS FOR THE SIX MONTHS TO 31 DECEMBER 2009

SUMMARY OF THE RESULTS

Operational Highlights

·    Currently second in the Clydesdale Bank Premier League.

·    Participation in the UEFA Europa League Group Stage.

·    Continued participation in the Active Nation Scottish Cup.

·    15 home matches played in the period (2008: 15).

·    Appointment of Tennent's as new shirt sponsor from July 2010.

Financial Highlights

·    Turnover decreased by 22.8% to £36.11m.

·    Operating expenses decreased by 7.9% to £31.39m.

·    Profit from operations of £4.71m (2008: £12.68m).

·    Profit before taxation of £1.27m (2008: £8.36m).

·    Period end bank debt of £3.13m (2008: £0.97m).

·    Investment in players of £7.84m (2008: £7.01m).

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Celtic plc

CHAIRMAN'S STATEMENT

A year ago I reported on a very positive set of interim results. This reflected good trading conditions, three recent Scottish Premier League Championships and participation in the Group Stage of the UEFA Champions League as Scotland's sole representative.  I said then that football and commercial success went hand-in- hand.

This year's report confirms that assertion. It certainly reflects different, more difficult trading conditions, and it is plain that like other commercial concerns we are affected by the recession.  But it also reflects disappointing performance on the park; we did not qualify for the UCL Group Stage this season as we had hoped, instead participating in the Europa League. The difference that this and the economic climate have made to our business is borne out in our financial results for the 6 months to 31 December 2009.

Turnover of £36.11m is well down (22.8%) on £46.8m at the same time last year; but while our revenues have reduced our financial performance remains highly creditable given all the circumstances.  Despite the absence of Champions League participation, over 50,000 season tickets have been sold and our merchandising business is holding up well, with this year's away kit the best selling for many years. Our sponsor programme also remains one of the most successful in British football.

Non-exceptional operating expenses have decreased by £2.71m to £31.39m, largely through labour cost savings, and we remain in profit, generating a profit from trading before asset transactions and exceptional items of £4.71m against last year's £12.68m and a profit before tax of £1.27m against £8.36m at the same time last year.

Maintaining a sustainable economic and business model has been one of our key objectives, and for good reason. It has always had only one ultimate purpose - the success of Celtic Football Club. It has provided financial stability when needed; it has delivered the continuing support of our kit manufacturer, NIKE, with whom a 5-year contract extension starts in July this year, and in an extraordinarily difficult sponsorship market, it has brought the commitment of Tennent's as our new shirt sponsor. 

This approach, together with the backing of our fans, shareholders and business partners has enabled us to continue to invest in our business, even at this time. It is a great credit to all those concerned, and on behalf of the Club, I express our thanks. I am also delighted to welcome Brian Duffy to our Board as a non-executive Director. His extensive experience in brand management, development and merchandising will be of great benefit to us.

It is our financial stability that now gives us the means to plan for the years ahead and to re-build a successful and winning team. As seen in these Interim Results it has already allowed us to have an eye to the future, as well as to the task of trying to win the Scottish Premier League title back this season. During last summer it enabled us to increase our investment in football personnel, committing just under £8m against just over £7m at the same time the year before. That has contributed to net bank debt at 31 December 2009 increasing from £0.97m to £3.13m, a level that is manageable and has therefore permitted further player trading in the January registration window.

This financial stability has also allowed us to continue to invest strategically in our facilities at Lennoxtown and the technical functions in the Academy, Scouting, Sports Science and Performance Analysis, with the objective of developing Champions League players of the future.

Perhaps above all, it is that careful management of our resources that has enabled us to progress the transition under our new manager Tony Mowbray and his team. Rebuilding is never easy. But our summer transfer activity and the significant further strengthening of the squad in January honour the pledge we made to support our manager and improve the team. Braafheid, Fortuné, Hooiveld, Kamara, Robbie Keane, Ki Sung Yueng, N'Guemo, Rasmussen, Rogne, Thomson, Zaluska and Zheng Zhi, together with several younger promising players, have joined us. Others have left - we thank them for their service to the Club, and wish them well.

We have an enormous task ahead in recovering the current league points deficit and cannot pretend otherwise, but we look forward to the SPL title challenge and a Scottish Cup run, with determination, commitment and, most importantly of all, your support.

Dr John Reid                                                                                                                                                                         12 February 2010

Chairman

Celtic plc

 INDEPENDENT REVIEW REPORT

INDEPENDENT REVIEW REPORT TO CELTIC PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2009 which comprises the Consolidated Statement of Comprehensive Income, Group Balance Sheet, Group Statement of Changes in Equity, Group Cash Flow Statement and the related notes.  We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement.  Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared using accounting policies consistent with those to be applied in the next annual financial statements.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2009 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.

PKF (UK) LLP

Glasgow

12 February 2010

Celtic plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Celtic plc

GROUP BALANCE SHEET

Approved by the Board on 12 February 2010

Celtic plc

GROUP STATEMENT OF CHANGES IN EQUITY

 

Celtic plc

GROUP CASH FLOW STATEMENT

Celtic plc

NOTES TO THE FINANCIAL STATEMENTS

1.      This Interim Report, comprising the Consolidated Statement of Comprehensive Income, Group Balance Sheet, Group Statement of Changes in Equity, Group Cash Flow Statement and accompanying Notes, has been prepared in accordance with the recognition and measurement criteria of IFRS and the AIM rules save that the Group has elected not to adopt IAS34, Interim Reports.  These IFRS Interim Financial Statements do not include all the information required for full IFRS annual financial statements.

The interim results do not constitute the statutory accounts within the meaning of s434 of the Companies Act 2006.  The financial information in this report for the six months to 31 December 2009 and to 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 filed with the Registrar of Companies.  It does not constitute the financial statements for that period.  Those accounts received an unqualified audit report which did not contain any statement under sections 498 (2) or (3) of the Companies Act 2006.

         The auditors have reviewed this Interim Report and their report is set out above. 

The accounts for the interim period have been prepared in accordance with the policies which the Group will adopt for its 2010 annual accounts.

2.      REVENUE - SEGMENTAL INFORMATION

3.      OPERATING EXPENSES

 Total operating expenses for the period were £35.43m (2008: £38.89m). The exceptional operating expenses are £nil.  In 2008, exceptional operating costs of £1.22m reflected labour and ancillary charges largely arising as the result of onerous contracts.             

4.      FINANCE COSTS

5.      TAXATION                                                                                       

         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.      EARNINGS PER SHARE

         Basic earnings per share has been calculated by dividing the earnings for the period by the weighted average number of Ordinary Shares in issue 89,811,538 (2008: 89,441,921).  Diluted earnings per share as at 31 December 2009 has been calculated by dividing the earnings 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, and the full exercise of outstanding share purchase options, if dilutive.  As at December 2009, December 2008 and June 2009 no account was taken of potential conversion of share purchase options, as these potential Ordinary Shares were not considered to be dilutive under the definitions of the applicable accounting standards.

7.      INTANGIBLE ASSETS

8.      SHARE CAPITAL 

9.      NON - CURRENT LIABILITIES

Non-current liabilities reflect long-term bank loans of £11.91m (2008: £12.0m) drawn down at the end of the period as part of the Company's bank facility of £35.81m (2008: £36.00m) and £3.03m (2008: £3.03m) as a result of the reallocation of non-equity share capital from equity to debt following the introduction of IAS 32 and £0.16m (2008: £0.54m) of deferred income.

10.    ANALYSIS OF NET DEBT

The reconciliation of the movement in cash and cash equivalents per the cash flow statement to net bank debt is as follows:

Total debt, including other loans of £0.14m (2008: £0.15m) and that arising from the reallocation from equity to debt under IFRS 7 of £3.03m (2008: £3.03m) amounted to £6.30m (2008: £4.15m). 

11.    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.  As at 31 December 2009 amounts in respect of such contracts could result in an amount payable of £4.14m of which £2.61m could arise within one year, and amounts receivable of £0.47m all of which could arise within one year.

12.    POST BALANCE SHEET EVENTS

Following 31 December 2009, Celtic acquired the permanent registrations of Ki Sung Yueng, Jos Hooiveld, Thomas Rogne,  Morten Rasmussen and Paul Slane and the loan registrations of Edson Braafheid, Diomansy Kamara and Robbie Keane.  The registrations of Willo Flood, Chris Killen, Scott McDonald and Barry Robson were permanently transferred to Middlesbrough, while Stephen McManus joined Middlesbrough on loan until the end of June 2010.  The registrations of Gary Caldwell and Danny Fox were also transferred on a permanent basis to Wigan Athletic and Burnley respectively.

 Directors

Dr John Reid (Chairman)*

Peter T Lawwell (Chief Executive)

Eric J Riley (Financial)

Tom E Allison *

Dermot F Desmond*

Brian Duffy*

Ian P Livingston*

Brian D H Wilson *

Secretary

Robert M Howat

Directors of the Celtic Football and Athletic

Company Limited

Peter T Lawwell

Eric J Riley

Kevin Sweeney*

John S Keane*

Michael A McDonald*

* Independent Non-Executive Director

Secretary

Robert M Howat

Football Manager

Tony Mowbray

Preference Share Dividend Timetable 2010

Ex-dividend Date:                                                           28 July 2010

Record Date:                                                                  30 July 2010

Closing date for Scrip Scheme elections:                         11 August 2010 (5.00pm)

Payment Date:                                                                31 August 2010

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