CELTIC PLC — Interim / Quarterly Report 2016

Feb 6, 2017

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RNS Number : 1533W

Celtic PLC

06 February 2017

Celtic plc (the "Company")

INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2016

Operational Highlights

·    Currently top of the SPFL Premiership, having broken the 26 game domestic unbeaten run set by the Lisbon Lions in 1966/67 season

·    Winners of the Scottish League Cup, the club's 100th trophy

·    18 home fixtures (2015: 17) (excluding the International Champions Cup Tournament)

·    Successfully qualified for the Group Stages of UEFA Champions League

·    Became the first stadium in the UK to accommodate 3,000 'safe standing' section

Financial Highlights

·    Revenue increased by 94.7% to £61.2m (2015: £31.4m)

·    Profit from trading was £21.4m (2015: £1.6m)

·    Profit from transfer of player registrations (shown as profit on disposal of intangible assets) £2.0m (2015: £12.6m)

·    Profit before taxation of £18.6m (2015: £11.7m)

·    Period end net cash at bank of £18.6m (2015: £7.7m)

·    Investment in football personnel of £9.5m (2015: £6.1m)

Celtic plc

CHAIRMAN'S STATEMENT

I am pleased to report on our interim results for the period ended 31 December 2016. These show revenue of £61.2m (2015: £31.4m) and a profit from trading of £21.4m (2015: £1.6m). Overall this resulted in a profit before taxation of £18.6m (2015: £11.7m) and a period end net cash at bank of £18.6m (2015: £7.7m). The introductory page to these interim results summarises the main highlights.

We welcomed Brendan Rodgers and his backroom team to the Club in May 2016 to lead us into season 2016/17 amid remarkable scenes at Celtic Park. Within the period reported, we have achieved our key objective of qualification for the group stages of the UEFA Champions League and we have won the League Cup.  We also currently sit 27 points clear at the top of the Scottish Premiership, whilst we continue to progress in the Scottish Cup with the prospect of winning our first domestic treble since 2001. The team also reached two major landmarks during the first half of this season. First, by securing our 100th trophy with our League Cup victory; and, second, by surpassing the 26 game domestic unbeaten record set by the Lisbon Lions in the 1966/67 season.  We are clearly delighted with the progress to date and look forward to building on it.

From a financially stable base at the year end, during the summer transfer window we invested £9.5m (2015: £6.1m) in the playing squad with the acquisition of the registrations of Scott Sinclair, Moussa Dembele, Kolo Touré, Christian Gamboa and Dorus de Vries.  Our profit on disposals of intangible assets of £2.0m (2015: £12.6m) largely reflects the transfer of the registration of Stefan Johansen to Fulham.  Subsequently, during the January 2017 transfer window, we have invested further by acquiring the registration of Eboue Kouassi.

We continue to pursue our strategy of investing in the Youth Academy.  Kieran Tierney, Callum McGregor and James Forrest are all established first team players and were important contributors in the group stages of the Champions League. Another prospect, Calvin Miller, made his debut for the first team in December 2016 following his progression through the Youth Academy and Development Squad. The Football Manager's stated objective is to develop all players into Champions League players.

In December 2016 we were also delighted to announce the appointment of Sharon Brown as a non-executive director to the Company.  Sharon brings a wealth of expertise and business acumen, especially from the retail sector, which will further enhance the skill-set of the Board.

The Board is optimistic about our immediate future and firmly supports the self-sustaining financial model that has served us well.  We continue to seek to influence developments in domestic and European football through representation on the board of the Scottish Professional Football League, the European Club Association Executive Board and the UEFA Club Competitions Committee.

Looking forward, and entirely in line with our trading seasonality, we do not expect the same level of financial performance in the second half of 2017.  In this period we will play fewer home fixtures and no European games.  Our objective for the remainder of the year is to win the SPFL Premiership, secure the Scottish Cup and build towards the European qualifiers in the summer.

Off the park, we were proud to become the first club in the UK to offer 3,000 of our fans the option of viewing domestic matches in a 'safer standing' environment, with the installation of rail seating at Celtic Park. This has been very popular with fans and has attracted much interest from clubs in Scotland and England.

The Celtic FC Foundation, which sits external to the group, continues to go from strength to strength with its most successful Christmas Appeal to date. A remarkable total of over £220,000 was raised for its 2016 Christmas Appeal in less than two months through the collective effort of so many people including supporters, the Club, the manager, players, directors, trustees, partners, sponsors and funders. The positive impact that this will have cannot be underestimated and this great achievement truly reflects the core principles of the Club.

Going into 2017 we are also organising a series of exciting celebrations to mark the 50th anniversary of the Club's greatest triumph, winning the European Cup in Lisbon in 1967. It is appropriate that we commemorate this unique achievement and the celebrations will be something for the Lisbon Lions and our fans to share and to be proud of.

Finally, I would like to once more to extend my thanks and gratitude to our fans, shareholders and partners. In particular, a special mention must go to our fans for their overwhelming backing of Brendan and the team, which I am sure, has played a huge part in the success enjoyed so far.

Ian P Bankier                                                                                                                                                                    

6 February 2017

Chairman

For further information contact:

Company

Ian Bankier, Celtic plc                        Tel: 0141 551 4235

Peter Lawwell, Celtic plc                   Tel: 0141 551 4235

Canaccord Genuity Limited, Nominated Adviser

Bruce Garrow                                       Tel: 020 7523 8350

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.

Celtic plc

INDEPENDENT REVIEW REPORT TO CELTIC PLC

Introduction

We have been engaged by the Company to review the consolidated financial information in the interim report for the six months ended 31 December 2016 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 interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the consolidated 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 rules of the London Stock Exchange for companies trading securities on AIM which require that the interim report be presented and prepared in a form consistent with that which will be adopted in the company's financial statements having regard to the accounting standards applicable to such financial statements.

Our responsibility

Our responsibility is to express to the Company a conclusion on the consolidated financial information in the interim 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 consolidated financial information in the interim report for the six months ended 31 December 2016 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 6 February 2017

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

Celtic plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		6 months to 31 December 2016 Unaudited					6 months to 31 December 2015 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
Revenue	2		61,229	-	61,229		31,443	-	31,443
Operating expenses (excluding exceptional operating expenses)	3		(39,821)	-	(39,821)		(29,879)	-	(29,879)
Profit from trading before asset transactions and exceptional items			21,408	-	21,408		1,564	-	1,564
Exceptional operating expenses	4		(288)	(358)	(646)		-	-	-
Amortisation of intangible assets	-	(3,849)	(3,849)		-	(2,266)	(2,266)
Profit on disposal of intangible assets			-	1,959	1,959		-	12,557	12,557
Operating profit/(loss)			21,120	(2,248)	18,872		1,564	10,291	11,855
Finance income	5				119				151
Finance expense	5				(391)				(321)
Profit before tax					18,600				11,685
Income tax expense	6				-				-
Profit and total comprehensive income for the period					18,600				11,685
Basic earnings per Ordinary Share	7				19.92p				12.56p
Diluted earnings per share	7				13.84p				8.76p

Celtic plc

Registered number SC3487

CONSOLIDATED BALANCE SHEET

		31 December 2016		31 December 2015
		Unaudited		Unaudited
	Notes	£000		£000
NON-CURRENT ASSETS
Property plant and equipment		54,998		55,403
Intangible assets	8	13,224		10,855
Trade receivables	9	-		3,966
		68,222		70,224
##### CURRENT ASSETS
Inventories		1,615		1,527
Trade and other receivables	9	15,972		12,294
Cash and cash equivalents		25,392		14,688
		42,979		28,509
TOTAL  ASSETS		111,201		98,733
EQUITY
Issued share capital	10	24,318		24,305
Share premium		14,657		14,611
Other reserve		21,222		21,222
Capital reserve		2,781		2,781
Retained earnings		6,140		(1,234)
TOTAL EQUITY		69,118		61,685
LIABILITIES NON-CURRENT LIABILITIES Interest bearing loans		6,550		6,750
Debt element of Convertible Cumulative Preference Shares		4,241		4,256
Provisions		1,285		895
Deferred income		143		1,400
		12,219		13,301
CURRENT LIABILITIES
Trade and other payables		15,930		12,598
Interest bearing loans and interest free Executive Club loans		304		308
Provisions		106		169
Deferred income		13,524		10,672
		29,864		23,747
TOTAL LIABILITIES		42,083		37,048
TOTAL EQUITY AND LIABILITIES		111,201		98,733

Approved by the Board on 6 February 2017

Celtic plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital		Share premium	Other reserve	Capital reserve	Retained earnings
		£000	£000	£000	£000	£000
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2015 (Audited)		24,294	14,573	21,222	2,781	(12,919)
Share capital issued		1	38	-	-	-
Reduction in debt element of convertible cumulative preference shares		10	-	-	-	-
Profit and total comprehensive income for the period		-	-	-	-	11,685
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2015 (Unaudited)		24,305	14,611	21,222	2,781	(1,234)
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2016 (Audited)		24,316	14,611	21,222	2,781	(12,460)
Share capital issued		1	46	-	-	-
Reduction in debt element of convertible cumulative preference shares		1	-	-	-	-
Profit and total comprehensive income for the period		-	-	-	-	18,600
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2016 (Unaudited)		24,318	14,657	21,222	2,781	6,140

Celtic plc

CONSOLIDATED CASH FLOW STATEMENT

			6 months to 31 December 2016		6 months to 31 December 2015
	Note		Unaudited		Unaudited
			£000		£000
Cash flows from operating activities
Profit before tax			18,600		11,685
Depreciation			820		841
Amortisation			3,849		2,266
Impairment of intangible assets			358		-
Profit on disposal of intangible assets			(1,959)		(12,557)
Net finance costs			272		170
			21,940		2,405
Decrease in inventories			274		571
(Increase) in receivables			(5,178)		(1,520)
(Decrease) in payables and deferred income			(5,540)		(3,092)
Cash generated from / (utilised in) operations			11,496		(1,636)
Net interest paid			(42)		(39)
Net cash flow from operating activities			11,454		(1,675)
Cash flows from investing activities
Purchase of property, plant and equipment			(540)		(1,639)
Purchase of intangible assets			(5,218)		(4,813)
Proceeds from sale of intangible assets			9,833		11,590
Net cash generated from investing activities			4,075		5,138
Cash flows from financing activities
Repayment of debt			(100)		(100)
Dividends paid			(487)		(445)
Net cash used in financing activities			(587)		(545)
Net increase in cash equivalents			14,942		2,918
Cash and cash equivalents (including overdraft) at 1 July			10,450		9,370
Cash and cash equivalents (including overdraft) at period end		11	25,392		12,288

Celtic plc

NOTES TO THE FINANCIAL INFORMATION

1.      BASIS OF PREPARATION

The financial information in this interim report comprises the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and accompanying Notes.  The financial information in this interim report has been prepared under the recognition and measurement requirements of IFRSs as adopted for use in the European Union but does not include all of the disclosures that would be required under those accounting standards.  The accounting policies adopted in the financial information are consistent with those expected to be adopted in the company's financial statements for the year ended 30 June 2017 and are unchanged from those used in the company's annual report for the year ended 30 June 2016.

The financial information in this interim report for the six months to 31 December 2016 and to 31 December 2015 has not been audited, but it has been reviewed by the company's auditors, whose report is set out on page 4.  The comparative figures for the year ended 30 June 2016 are extracted from the Group's audited financial statements for that period as filed with the Registrar of Companies.  The financial information for the year ended 30 June 2016 does not constitute the company's financial statements for that period but is derived from them.  The company's statutory financial statements for the year ended 30 June 2016 have been filed with the Registrar of Companies.  The auditor's report on those statutory financial statements was unqualified.

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 the financial information in this interim report.

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

2.      REVENUE

		6 months to 31 December 2016		6 months to 31 December 2015
		Unaudited £000		Unaudited £000
Football and stadium operations		22,583		14,832
Multimedia & other commercial activities		29,917		9,154
Merchandising		8,729		7,457
		61,229		31,443
Number of home games		18		17

3.      TOTAL OPERATING EXPENSES

		6 months to 31 December 2016		6 months to 31 December 2015
		Unaudited £000		Unaudited £000
Football and stadium operations (excluding exceptional items and asset transactions)		33,682		24,251
Merchandising		4,968		4,587
Multimedia & other commercial activities		1,171		1,041
		39,821		29,879

Celtic plc

NOTES TO THE FINANCIAL INFORMATION

4.      EXCEPTIONAL OPERATING EXPENSES                                            

		6 months to 31 December 2016		6 months to 31 December 2015
		Unaudited £000		Unaudited £000
Impairment of intangible assets		358		-
Compromise payments on contract termination		288		-
		646		-

5.      FINANCE INCOME AND COSTS

		6 months to 31 December 2016		6 months to 31 December 2015
Finance income:		Unaudited £000		Unaudited £000
Interest receivable on bank deposits		19		21
Notional interest income on deferred consideration		100		130
		119		151
Finance costs:
Interest payable on bank and other loans		(62)		(60)
Notional interest expense on deferred consideration		(40)		-
Dividend on Convertible Cumulative Preference Shares		(289)		(261)
		(391)		(321)

6.    TAXATION                                                                                             

As at 31 December 2016, the Company has not provided for tax due to available brought forward losses.  Any tax arising based on full year results to 30 June 2017 will be offset by available losses, based on the information which the directors have available to them at this time. A deferred tax asset arising from expected residual losses at that date is not recognised due to the variable nature of future financial results in the football sector making it unclear when those losses might be utilised.

7.    EARNINGS PER SHARE

Basic earnings per share has been calculated by dividing the profit for the period of £18.6m (2015: £11.7m) by the weighted average number of Ordinary Shares in issue 93,374,010 (2015: 93,032,839).  Diluted earnings per share as at 31 December 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.

Celtic plc

NOTES TO THE FINANCIAL INFORMATION

8.      INTANGIBLE ASSETS

		6 months to 31 December 2016		6 months to 31 December 2015
		Unaudited		Unaudited
Cost		£000		£000
At 1 July		28,244		30,200
Additions		9,497		6,067
Disposals		(5,167)		(8,742)
At period end		32,574		27,525
Amortisation
At 1 July		18,446		21,844
Charge for the period		3,849		2,266
Provision for impairment		358		-
Disposals		(3,303)		(7,440)
At period end		19,350		16,670
Net Book Value at period end		13,224		10,855

9.      TRADE AND OTHER RECEIVABLES

The decrease of £0.3m in combined total of non-current and current receivables from 31 December 2015 to £16.0m is primarily due to the timing of UEFA receipts offset by a reduction in player transfer receivables.  

10.    SHARE CAPITAL

	Authorised				Allotted, called up and fully paid
	31 December				31 December
	2016		2015		2016	2016	2015	2015
	No 000		No 000		No 000	£000	No 000	£000
Equity
Ordinary Shares of 1p each	222,869		222,666		93,403	934	93,135	932
Deferred Shares of 1p each	635,145		624,816		635,145	6,351	624,816	6,248
Convertible Preferred Ordinary Shares of £1 each	14,994		15,062		13,007	13,007	13,075	13,075
Non-equity
Convertible Cumulative Preference Shares of 60p each	18,543		18,605		16,043	9,626	16,105	9,663
Less reallocated to debt: Initial debt Capital reserve	- -		- -		- -	(2,819) (2,781)	-   -	(2,832) (2,781)
	891,551		881,149		757,598	24,318	747,131	24,305

Celtic plc

NOTES TO THE FINANCIAL INFORMATION

11.    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 2016		31 December 2015
		£000		£000
Bank Loans due after more than one year		(6,550)		(6,750)
Bank Loans due within one year		(200)		(200)
Cash and cash equivalents:
Cash at bank and on hand		25,392		14,688
Net  cash at bank at period end		18,642		7,738

Total net cash, deducting other loans of £0.1m (2015: £0.1m) and that arising from the reclassification of equity to debt of £4.2m (2015: £4.3m) amounted to £14.3m (2015: £3.3m).

Included in the cash balance of £25.4m is £nil (2015: £2.4m) 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 £25.4m (2015: £12.3m).

12.   POST BALANCE SHEET EVENTS

Since the balance sheet date, we have secured the registration of Eboue Kouassi from FC Krasnodar while permanently transferring the registration of Michael Duffy to Dundalk and temporarily transferring the registrations of first team players Ryan Christie to Aberdeen, Leo Fasan to Port Vale, Joseph Thomson to Queen of the South and Kristoffer Ajer to Kilmarnock. 

We also temporarily transferred the registrations of development squad players, Theo Archibald to Albion Rovers, Jamie McCart to Inverness Caledonian Thistle, Aidan McIlduff to Queens Park and Broque Watson to Cumbernauld Colts.

This information is provided by RNS

The company news service from the London Stock Exchange

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