CELTIC PLC — Interim / Quarterly Report 2016

Feb 12, 2016

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RNS Number : 9785O

Celtic PLC

12 February 2016

Celtic plc (the "Company")

INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2015

Operational Highlights

·    Currently top of the SPFL Premiership

·    Continued participation in the Scottish Cup

·    17 home fixtures (2014: 18)

·    Participated in Group Stages of UEFA Europa League

·    Unveiling of Billy McNeil Statue

Financial Highlights

·    Revenue increased by 0.3% to £31.4m (2014: £31.3m)

·    Profit from trading was £1.6m (2014: £3.2m)

·    Profit from transfer of player registrations (shown as profit on disposal of intangible assets) £12.6m (2014: £7.1m)

·    Profit before taxation of £11.7m (2014: £6.6m)

·    Period end net cash at bank of £7.7m (2014: £5.3m)

·    Investment in football personnel of £6.1m (2014: £5.7m)

CHAIRMAN'S STATEMENT

I am pleased to report on our financial results for the six months ended 31 December 2015.  These show a profit before taxation of £11.7m (2014: £6.6m) and period end net cash at bank of £7.7m (2014: £5.3m).  The introductory page to these interim results summarises the main highlights.

On the park, it has been a frustrating season.  We are top of the Scottish Premiership and in the Sixth Round of the Scottish Cup, but we fell short in the SPFL League Cup, being knocked out in the semi final. In the European competitions, we were unable to progress beyond the group stages of the UEFA Europa League, having not qualified for the group stages of the UEFA Champions League. 

Investment in, and management of, our playing squad remains a key component of the Club's strategy and financial performance. Our profit on disposal of intangible assets of £12.6m (2014: £7.1m) largely reflects the transfer of the registration of Virgil Van Dijk to Southampton.  Over the same period we re-invested in the playing squad, with £6.1m expended (2014: £5.7m) on the registrations of Scott Allan, Logan Bailly, Carlton Cole, Ryan Christie, Nadir Ciftci, Saidy Janko and Jozo Simunovic.  Subsequently, during the 2016 January transfer window, further investment has been made with the signing of Danish international Erik Sviatchenko and Turkish international Colin Kazim-Richards.

In addition to player acquisitions, we continue to fund our youth academy with the objective of developing our own first team players.  The fruits of this are seen this season with the regular match appearances of Kieran Tierney, Callum McGregor and James Forrest.

The strategy of the Board is unchanged.  Our overwhelming priority is to win the SPFL Premiership and to qualify for the group stages of the UEFA Champions League.  Our performance in Europe this season has been the cause of considerable frustration.  The challenge has been to maintain a settled and winning squad throughout the summer months when the crucial Champions League qualifying matches are played, to manage the player changes during the summer transfer window and then to kick on when the new season begins.  Each season we meet this challenge within the financial constraints of where we sit in Scottish football, for to do otherwise would be reckless.

The Board considers that our self-sustaining model allows the Club to look to the future with reasonable optimism.  We sit at the heart of developments in football, both at home and in Europe, being represented by Peter Lawwell on the board of the Scottish FA, the European Club Association and on the Club Competitions Committee at UEFA.  Eric Riley also serves as a Director of the Scottish Professional Football League.

Looking forward to the second half, as with previous years, trading performance in the remaining months of this financial year will not be at the same level as that in the first six months (or the comparable period in 2014), with fewer home matches scheduled, no participation in European competition and lower expected gain on player sales.

At the end of the period, Eric Riley stepped down as Financial Director, having served the Company in this capacity for over 20 years.  He has been a tremendous asset to the Club and the Board and I extend our sincere thanks to him for his unstinting support.  He is replaced by Chris McKay, who joins us from Deloitte LLP where he was involved in their Financial Advisory practice for over 15 years.  Eric continues to serve as a non-executive Director of the Company until 30 June 2016.

In December we were delighted to witness the unveiling of the magnificent statue of Billy McNeill, which commands the entrance to the Celtic Way.  It is a fitting monument to Billy's massive contribution to the Club as a player, a captain and a manager.  It stands as an inspiration to us all as we strive to achieve our goals.   I thank Ronny, his staff, the players and all of our colleagues for their hard work and dedication.  I especially thank our fans, shareholders and partners for their ongoing support.

Ian P Bankier                                                                                                                                                                    

12 February 2016

Chairman

INDEPENDENT REVIEW REPORT TO CELTIC PLC

Introduction

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 2015 which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity, the Consolidated 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.

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 rules of the London Stock Exchange for companies trading securities on AIM which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

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.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

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 2015 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

BDO LLP

Chartered Accountants and Registered Auditors

Glasgow

United Kingdom

Date 12 February 2016

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		6 months to 31 December 2015 Unaudited					6 months to 31 December 2014 Unaudited
			Operations excluding intangible asset trading	Intangible asset trading	Total		Operations excluding intangible asset trading	Intangible asset trading	Total
	Note		£000	£000	£000		£000	£000	£000
Continuing operations:
Revenue	2		31,443	-	31,443		31,293	-	31,293
Operating expenses (excluding exceptional operating expenses)			(29,879)	-	(29,879)		(28,077)	-	(28,077)
Profit from trading before asset transactions and exceptional items			1,564	-	1,564		3,216	-	3,216
Amortisation of intangible assets			-	(2,266)	(2,266)		-	(3,449)	(3,449)
Profit on disposal of intangible assets			-	12,557	12,557		-	7,121	7,121
Operating profit			1,564	10,291	11,855		3,216	3,672	6,888
Finance income	3				151				55
Finance expense	3				(321)				(342)
Profit before tax					11,685				6,601
Income tax expense	4				-				-
Profit and total comprehensive income for the period					11,685				6,601
Profit and total comprehensive income attributable to equity holders of the parent					11,685				6,601
Basic earnings per Ordinary Share	5				12.56p				7.12p
Diluted earnings per share	5				8.76p				5.20p

Registered number SC3487

CONSOLIDATED BALANCE SHEET

		31 December 2015		31 December 2014		30 June 2015
		Unaudited		Unaudited		Audited
	Notes	£000		£000		£000
NON-CURRENT ASSETS
Property plant and equipment		55,403		55,058		55,452
Intangible assets	6	10,855		8,340		8,356
		66,258		63,398		63,808
##### CURRENT ASSETS
Inventories		1,527		1,137		2,098
Trade and other receivables	7	16,260		15,491		14,740
Cash and cash equivalents		14,688		12,433		11,770
		32,475		29,061		28,608
TOTAL  ASSETS		98,733		92,459		92,416
EQUITY
Issued share capital	8	24,284		24,291		24,294
Share premium		14,611		14,574		14,573
Other reserve		21,222		21,222		21,222
Capital reserve		2,802		2,780		2,781
Retained earnings		(1,234)		(2,371)		(12,919)
TOTAL EQUITY		61,685		60,496		49,951
LIABILITIES NON-CURRENT LIABILITIES Interest bearing loans		6,750		6,775		6,850
Debt element of Convertible Cumulative Preference Shares		4,256		4,266		4,262
Provisions		895		977		907
Deferred income		1,400		29		2,600
	9	13,301		12,047		14,619
CURRENT LIABILITIES
Trade and other payables		12,598		12,541		14,579
Current borrowings		308		375		308
Provisions		169		172		251
Deferred income		10,672		6,828		12,708
		23,747		19,916		27,846
TOTAL LIABILITIES		37,048		31,963		42,465
TOTAL EQUITY AND LIABILITIES		98,733		92,459		92,416

Approved by the Board on 12 February 2016

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 2014 (audited)		24,357	14,529	21,222	2,695	(8,972)	53,831
Share capital issued		-	45	-	-	-	45
Transfer to capital reserve		(85)	-	-	85	-	-
Reduction in debt element of convertible cumulative preference shares		19	-	-	-	-	19
Profit and total comprehensive income for the period		-	-	-	-	6,601	6,601
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2014 (Unaudited)		24,291	14,574	21,222	2,780	(2,371)	60,496
Share capital issued		1	(1)	-	-	-	-
Transfer to capital reserve		(1)	-	-	1	-	-
Reduction in debt element of convertible cumulative preference shares		3	-	-	-	-	3
Loss and total comprehensive loss for the period		-	-	-	-	(10,548)	(10,548)
EQUITY SHAREHOLDERS' FUNDS AS AT 30 JUNE 2015 (Audited)		24,294	14,573	21,222	2,781	(12,919)	49,951
Share capital issued		3	38	-	-	-	41
Transfer to capital reserve		(21)	-	-	21	-	-
Reduction in debt element of convertible cumulative preference shares		8	-	-	-	-	8
Profit and total comprehensive income for the period		-	-	-	-	11,685	11,685
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2015 (Unaudited)		24,284	14,611	21,222	2,802	(1,234)	61,685

CONSOLIDATED CASH FLOW STATEMENT

			6 months to 31 December 2015		6 months to 31 December 2014
	Note		Unaudited		Unaudited
			£000		£000
Cash flows from operating activities
Profit before tax			11,685		6,601
Depreciation			841		808
Amortisation			2,266		3,449
Impairment of intangible assets			-		150
Profit on disposal of intangible assets			(12,557)		(7,121)
Net finance costs			170		287
			2,405		4,174
Decrease in inventories			571		560
(Increase) / decrease in receivables			(1,520)		493
(Decrease) in payables and deferred income			(3,092)		(6,583)
Cash (utilised in) / generated from operations			(1,636)		(1,356)
Net interest paid			(39)		(23)
Net cash flow from operating activities - A			(1,675)		(1,379)
Cash flows from investing activities
Purchase of property, plant and equipment			(1,639)		(2,263)
Purchase of intangible assets			(4,813)		(5,671)
Proceeds from sale of intangible assets			11,590		11,246
Net cash generated from investing activities - B			5,138		3,312
Cash flows from financing activities
Repayment of debt			(100)		(3,069)
Dividends paid			(445)		(481)
Net cash used in financing activities - C			(545)		(3,550)
Net increase /(decrease) in cash equivalents A+B+C			2,918		(1,617)
Cash and cash equivalents (including overdraft) at 1 July			9,370		14,050
Cash and cash equivalents (including overdraft) at period end		10	12,288		12,433

NOTES TO THE FINANCIAL STATEMENTS

1.      BASIS OF PREPARATION

This Interim Report, comprising the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and accompanying Notes, has been prepared in accordance with the AIM rules of the London Stock Exchange.  The measurement and recognition accounting policies applied are consistent with those that will be applied in the 2016 annual financial statements which will be prepared in accordance with IFRS.

The interim results do not constitute the statutory financial statements within the meaning of s434 of the Companies Act 2006.  The financial information in this Report for the six months to 31 December 2015 and to 31 December 2014 has not been audited.   The comparative figures for the year ended 30 June 2015 are extracted from the Group's audited financial statements for that period as filed with the Registrar of Companies. They do not constitute the statutory financial statements within the meaning of s434 of the Companies Act 2006 for that period.  Those financial statements received an unqualified audit report which did not contain any statement under sections 498 (2) or (3) of the Companies Act 2006.

The Company has considerable financial resources available to it, together with established contracts with a number of customers and suppliers.  As a consequence, the Directors believe that the Company is well placed to continue managing its business risks successfully and they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.  Thus, they continue to adopt the going concern basis of accounting in preparing these interim financial results.

The auditor has reviewed this Interim Report and their report is set out on page 4.

2.      REVENUE - SEGMENTAL INFORMATION

		6 months to 31 December 2015		6 months to 31 December 2014
Revenue comprised:		Unaudited £000		Unaudited £000
Football and stadium operations		14,832		16,550
Multimedia & other commercial activities		9,154		7,973
Merchandising		7,457		6,770
		31,443		31,293
Number of home games		17		18

3.      FINANCE INCOME AND COSTS

		6 months to 31 December 2015		6 months to 31 December 2014
Finance income:		Unaudited £000		Unaudited £000
Interest receivable on bank deposits		21		55
Notional interest income on deferred consideration		130		-
		151		55
Finance costs:
Interest payable on bank and other loans		(60)		(78)
Dividend on Convertible Cumulative Preference Shares		(261)		(264)
		(321)		(342)

4.    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. 

5.    EARNINGS PER SHARE

Basic earnings per share has been calculated by dividing the profit for the period of £11.69m (2014: £6.60m) by the weighted average number of Ordinary Shares in issue 93,032,839 (2014: 92,723,831).  Diluted earnings per share as at 31 December 2015 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'. 

6.      INTANGIBLE ASSETS

		6 months to 31 December 2015		6 months to 31 December 2014		12 months to 30 June 2015
		Unaudited		Unaudited		Audited
Cost		£000		£000		£000
At 1 July		30,200		27,475		27,475
Additions		6,067		5,702		9,421
Disposals		(8,742)		(2,159)		(6,696)
At period end		27,525		31,018		30,200
Amortisation
At 1 July		21,844		20,278		20,278
Charge for the period		2,266		3,449		7,313
Provision for impairment		-		150		378
Reversal of prior period impairment		-		-		(639)
Disposals		(7,440)		(1,199)		(5,486)
At period end		16,670		22,678		21,844
Net Book Value at period end		10,855		8,340		8,356

7.      TRADE AND OTHER RECEIVABLES

The increase of £0.8m in the level of receivables from 31 December 2014 to £16.3m is primarily a result of an increase in amounts due from player sales.

8.      SHARE CAPITAL

	Authorised            31 December              30 June				Allotted, called up and fully paid                                  31 December                                      30 June
	2015		2014	2015		2015	2015	2014	2014	2015	2015
	No 000		No 000	No 000		No 000	£000	No 000	£000	No 000	£000
Equity
Ordinary Shares of 1p each	222,666		221,914	221,927		93,135	932	92,818	928	92,831	928
Deferred Shares of 1p each	624,816		611,787	612,541		624,816	6,248	611,787	6,118	612,541	6,125
#### Non-equity
Convertible Preferred Ordinary Shares of £1 each	15,062		15,171	15,171		13,075	13,075	13,184	13,184	13,184	13,184
Convertible Cumulative Preference Shares of 60p each	18,605		18,645	18,632		16,105	9,663	16,145	9,686	16,132	9,679
Less reallocated to debt under IAS 32: Initial debt Capital reserve	- -		- -	- -		- -	(2,834) (2,800)	-   -	(2,845) (2,780)	-   -	(2,841) (2,781)
	881,149		867,517	868,271		747,131	24,284	733,934	24,291	734,688	24,294

9.      NON - CURRENT LIABILITIES

Non-current liabilities reflect the non-current element of bank loans of £6.8m (December 2014: £6.8m, June 2015: £6.9m) drawn down at the end of the period as part of the Company's bank facility of £19.4m (December 2014: £20.3m, June 2015: £19.6m) and £4.3m (December 2014: £4.3m, June 2015: £4.3m) as a result of the reallocation of non-equity share capital from equity to debt following the introduction of IAS 32, £1.4m (December 2014: £0.03m, June 2015: £2.6m) of deferred income and provisions of £0.9m (December 2014: £1.0m, June 2015: £0.9m).

10.    ANALYSIS OF NET CASH AT BANK

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

		31 December 2015		31 December 2014		30 June 2015
		£000		£000		£000
Bank Loans due after more than one year		(6,750)		(6,775)		(6,850)
Bank Loans due within one year		(200)		(375)		(200)
Cash and cash equivalents:
Cash at bank		14,688		12,433		11,770
Net  cash at bank at period end		7,738		5,283		4,720

Total net cash, deducting other loans of £0.1m (December 2014: £0.1m, June 2015: £0.1m) and that arising from the reclassification of equity to debt following the adoption of IAS32 of £4.3m (December 2014: £4.3m, June 2015: £4.3m) amounted to £3.3m (December 2014: £0.9m, June 2015: £0.3m).

Included in the cash balance of £14.69m is £2.40m (December 2014: nil, June 2015 £2.40m) which is on deposit with a maturity date of greater than 3 months at the balance sheet date.  The cash and cash equivalents balance for the purposes of the cash flow statement under IAS 7 is therefore £12.29m (December 2014: £12.43m, June 2015: £9.37m).

11.   POST BALANCE SHEET EVENTS

Since the balance sheet date, we have completed the permanent signings of Erik Sviatchenko from FC Midtjylland and Colin Kazim-Richards from Feyenoord.  We have also completed the loan signing of Patrick Roberts from Manchester City while Anthony Stokes, Nadir Ciftci, Jamie Lindsay and Aidan Nesbitt have had their registrations loaned to other clubs.

This information is provided by RNS

The company news service from the London Stock Exchange

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