REG - Celtic PLC - Replacement: Half-year Report
11/02/2022 17:50
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RNS Number : 4992B Celtic PLC 11 February 2022
Celtic plc (the "Company")
INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2021
Key Operational Items
· Currently first in the SPFL Premiership.
· Winners of the Premier Sports League Cup 21/22.
· 19 home fixtures (2020: 17).
· Participation in the UEFA Europa League group stages and
qualification to the knock-out playoff round of the UEFA Europa Conference
League.
Key Financial Items
· Revenue increased by 29.9% to £52.9m (2020: £40.7m).
· Profit from trading was £7.0m (2020: loss of £0.3m).
· Profit from transfer of player registrations (shown as profit on
disposal of intangible assets) £25.8m (2020: £1.0m).
· Profit before taxation of £27.6m (2020: loss of £5.9m).
· Acquisition of player registrations of £16.8m (2020: £12.7m).
· Period end net cash at bank of £25.6m (2020: £19.7m).
For further information contact:
Celtic plc Tel: 0141 551 4235
Ian Bankier
Peter Lawwell
Canaccord Genuity Limited, Nominated Adviser and Broker Tel: 020 7523 8350
Simon Bridges
Thomas Diehl
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication
of this announcement, this inside information is now considered to be in the
public domain.
CHAIRMAN'S STATEMENT
The results for the six months ended 31 December 2021 show revenues of £52.9m
(2020: £40.7m) and a profit before taxation of £27.6m (2020: loss before tax
of £5.9m). The profit from trading, representing the profit excluding player
related gains and charges, amounted to £7.0m (2020: loss of £0.3m). Period
end net cash at bank was £25.6m (2020: £19.7m). The introductory page to
these interim results summarises the key events in the period.
The major factors driving the much improved financial performance for the
period under review were: - first, the return of fans to the stadium driving
crucial match day income; second, our qualification for another season in the
Europa League with the accompanying ticket sales that were absent last year;
and third, the revenues received from successful player trading, notably the
sales of Odsonne Edouard and Kristoffer Ajer. In the same period we made
substantial investments back into the player squad in order to target the
football success that drives our financial success.
Whereas the Covid-19 environment has improved markedly, the sudden emergence
of the Omicron variant and resultant reintroduction of temporary societal
restrictions in Scotland adversely affected the football sector. This
demonstrates our continued sensitivity to the threat of the pandemic. Mindful
of the risks posed to the Club's finances from further restrictions, we
continue to manage the business on a prudent basis, balanced against the
benefits of investing in the football department. The forecast outturn for the
second half of this financial year is expected to be more modest owing to the
trading seasonality inherent in the business. As we know, most of our earnings
are typically derived in the first six months of the financial year. In line
with prior years, we expect to incur losses in the second six months of the
financial year owing to the expectation of having less player trading gains,
lower UEFA media right distributions and associated UEFA match ticket income,
higher amortisation emanating from player acquisitions in January and
seasonally lower retail income. In addition, our outturn earnings may be
materially impacted by success in footballing competition. On the basis that
the impact of Covid-19 appears to be receding at present, we anticipate to
finish the financial year with revenues ahead of our previous expectations.
It has been a period of transition for both the executive and the football
department. Michael Nicholson's appointment as Chief Executive was confirmed
on 23(rd) December along with Chris McKay's promotion to Chief Financial
Officer. And our Football Manager, Ange Postecoglou, joined us at the start
of the season. Ange has been able to assemble a first team player squad to
fit his proven methodology of attacking football. We have achieved the
permanent transfers of Osaze Urhoghide, Liam Shaw, Liel Abada, Kyogo
Furuhashi, Carl Starfelt, Joe Hart, Liam Scales, Josip Juranovic, James
McCarthy and Georgios Giakoumakis. In addition, we welcomed to the Club two
quality loan signings in Cameron Carter-Vickers and Joao Pedro Neves Filipe
(Jota). Further to this we added Daizen Maeda, Yosuke Ideguchi, Johnny Kenny,
Reo Hatate and Matt O'Riley over December 2021 and January 2022.
As we progress through the season we are delighted to return to winning ways,
securing the first silverware of the season, the Premier Sports Cup in
December. This is the 20(th) time Celtic has won this trophy. December also
saw us finish 3(rd) in the Europa League Group with a creditable 9 points in
what was a difficult group. We now enter the newly constituted Europa
Conference League where we will play FK Bodo/Glimt. At the time of writing we
sit at the top of the Premiership with 12 games remaining and we have reached
the fifth round of the Scottish Cup. We also note the progress which continues
to be made by our women's first team and in particular the magnificent
achievement of winning the SWPL Cup in December 2021, the women's team's first
trophy in over 10 years. We congratulate the players, Fran Alonso and his
management team on this success and hopefully can look forward to further
success in the near future.
On behalf of the Board I express my assured confidence in the football
management team and the executive management team who collectively share many
years' experience in Celtic Football Club and who have worked tirelessly to
restore our current position at the top of Scottish Football. We are
optimistic about the future.
Finally, I wish to express my sincere gratitude to our supporters, our
shareholders and our commercial partners. The support they offered over the
last six months and beyond as we emerge from Covid-19 has been immeasurable as
we have navigated the Club through this transitional period.
Ian P
Bankier
11 February 2022
Chairman
INDEPENDENT REVIEW REPORT TO CELTIC PLC
Conclusion
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 2021 which comprises the Consolidated Statement of Comprehensive
Income, Consolidated Balance Sheet, Consolidated Statement of Changes in
Equity, Consolidated Cash Flow Statement and related explanatory notes.
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 2021 is not prepared, in
all material respects, in accordance with UK adopted International Accounting
Standard 34 and the London Stock Exchange AIM Rules for Companies.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ("ISRE (UK) 2410"). 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
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.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the group to
cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the London Stock Exchange AIM Rules for Companies.
In preparing the half-yearly financial report, the Directors are responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Transparency (Directive
2004/109/EC) Regulations 2007 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.
BDO LLP
Chartered Accountants
Glasgow, UK
Date
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHS TO 31 DECEMBER 2021
2021 2020
Unaudited Unaudited
Note £000 £000
Revenue 2 52,858 40,688
Operating expenses (before intangible asset transactions) (45,810) (40,966)
Profit/(loss) from trading before intangible asset transactions 7,048 (278)
Exceptional operating credit 3 1,063 -
(6,251) (6,583)
Amortisation of intangible assets
25,752 993
Profit on disposal of intangible assets
Operating profit/(loss) 27,612 (5,868)
-
Finance income 4 456 515
Finance expense 4 (512) (516)
Profit/(loss) before tax 27,556 (5,869)
Income tax (expense)/credit 5 (3,210) 730
-
Profit/(loss) and total comprehensive income/(expense) for the period 24,346 (5,139)
Basic earnings/(loss) per Ordinary Share 6 25.78p (5.45p)
Diluted earnings/(loss) per Share 6 18.01p (5.45p)
The notes on pages 10 to 13 form part of these financial statements.
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2021
2021 2020
Unaudited Unaudited
Notes £000 £000
NON-CURRENT ASSETS
Property plant and equipment 57,087 57,781
Intangible assets 7 27,522 25,912
Trade and other receivables 8 14,664 9,082
99,273 92,775
CURRENT ASSETS
Inventories 2,940 3,000
Trade and other receivables 8 32,180 21,064
Cash and cash equivalents 10 27,798 23,183
62,918 47,247
TOTAL ASSETS 162,191 140,022
EQUITY
Issued share capital 9 27,168 27,168
Share premium 14,951 14,912
Other reserve 21,222 21,222
Accumulated profits 29,975 13,091
TOTAL EQUITY 93,316 76,393
NON-CURRENT LIABILITIES
Interest bearing liabilities/ bank loans 932 2,212
Debt element of Convertible Cumulative Preference Shares 4,174 4,174
Trade and other payables 7,883 4,068
Lease Liabilities 352 431
Deferred tax 5 2,904 906
Provisions 99 128
Deferred income - 14
16,344 11,933
CURRENT LIABILITIES
Trade and other payables 26,124 24,997
Current borrowings 1,336 1,364
Lease Liabilities 562 568
Provisions 6,686 6,402
Deferred income 17,823 18,365
52,531 51,696
TOTAL LIABILITIES 68,875 63,629
TOTAL EQUITY AND LIABILITIES 162,191 140,022
Approved by the Board on 11 February 2022.
The notes on pages 10 to 13 form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 31 DECEMBER 2021
Share Share premium Other reserve Accumulated Total
capital Profits
£000 £000 £000 £000 £000
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2020 (Audited) 27,167 14,849 21,222 18,230 81,468
Share capital issued 1 63 - - 64
- - - - -
Reduction in debt element of
convertible cumulative
preference shares
- - - (5,139) (5,139)
Loss and total comprehensive expense for the period
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2020 (Unaudited)
27,168 14,912 21,222 13,091 76,393
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2021 (Audited) 27,168 14,912 21,222 5,629 68,931
Share capital issued - 39 - - 39
Reduction in debt element of convertible cumulative preference shares - - - - -
Profit and total comprehensive income for the period - - - 24,346 24,346
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2021 (Unaudited) 27,168 14,951 21,222 29,975 93,316
The notes on pages 10 to 13 form part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 31 DECEMBER 2021
Note 2021 2020
Unaudited Unaudited
£000 £000
Cash flows from operating activities
Profit/(loss) for the period after tax 24,346 (5,139)
Income tax expense/ (credit) 3,210 (730)
Depreciation 1,320 1,241
Amortisation 6,251 6,583
Reversal of prior period impairment charge (1,095) -
Profit on disposal of intangible assets (25,752) (993)
Finance costs 512 516
Finance income (456) (515)
8,336 963
Decrease/ (increase) in inventories 921 (1,730)
Decrease/(Increase) in receivables 1,190 (737)
Decrease in payables and deferred income (6,644) (4,029)
Cash generated from/(used in) operations 3,803 (5,533)
Tax paid - -
Interest paid (42) (67)
Interest received 19 29
Net cash flow from/(used in) operating activities 3,780 (5,571)
Cash flows from investing activities
Purchase of property, plant and equipment (801) (214)
Purchase of intangible assets (13,801) (6,306)
Proceeds from sale of intangible assets 20,660 14,346
Net cash generated from investing activities 6,058 7,826
Cash flows from financing activities
Repayment of debt (640) (640)
Payments on leasing activities (378) (379)
Dividend on Convertible Cumulative Preference Shares (481) (459)
Net cash used in financing activities (1,499) (1,478)
Net increase in cash equivalents 8,339 777
Cash and cash equivalents at 1 July 19,459 22,406
Cash and cash equivalents at 31 December 10 27,798 23,183
The notes on pages 10 to 13 form part of these financial statements.
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 in accordance
with UK adopted international accounting standards, but does not include all
of the disclosures that would be required under those accounting standards.
The accounting policies adopted in the financial statements for the year ended
30 June 2022 will be in accordance with UK adopted international accounting
standards.
The financial information in this interim report for the six months to 31
December 2021 and to 31 December 2020 has not been audited, but it has been
reviewed by the Company's auditor, whose report is set out on pages 4 and 5.
Adoption of standards effective for periods beginning 1 July 2021
There have been no new standards effective from 1 July 2021, however there
have been some amendments to existing standards as follows:
· Amendment to IFRS 4 Insurance contracts - deferral of IFRS 9.
· Amendment to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest
rate benchmark reform - Phase 2.
· Amendment to IFRS 16 for Covid-19 rent concessions beyond 30 June
2021, effective from 1 April 2021.
Going concern
As part of the Directors' consideration of the going concern assumption used
in preparing the Interim Report, different scenarios have been analysed for a
minimum period of 12 months from the date of approval of the report with
outlook assumptions used beyond this time frame. The main factors considered
were:
• current financial stability of the Group and on-going access to
funds;
• current trading environment and potential future restrictions on
trading as a result of Covid-19, primarily any impact on the attendance of
fans in football stadia;
• security of revenue streams;
• first team football performance and success; and
• player transfer market conditions.
The Directors have adopted a prudent approach in the assumptions used in
relation to the above, in order to provide additional comfort around the
viability of the Group going forward.
At 31 December 2021, the cash at bank was £27.8m. In addition, the Group had
a net receivables position with respect to player trading
payables/receivables. The 6 months of trading to 31 December 2021 have been
more favourable than in the comparative period for 2020 and as a result there
remains strong liquidity in the business. At the time writing, there are no
indications that trading conditions, and in particular the attendance of fans
at football matches, are likely to be negatively impacted in the near future.
This situation will however remain under review.
The Group has retained established contracts with a number of our commercial
partners and suppliers providing assurance over future revenues and costs and
we have clear visibility over committed labour costs and transfer payables. In
addition, the Group has in recent years, achieved significant gains in
relation to player trading and manages the movement of players in and out of
the team strategically to ensure maximisation of value where required while
maintaining a squad of appropriate quality to ensure, as far as possible,
continued on field success. This has been illustrated by the sales of Kris
Ajer and Odsonne Edouard during the summer 2021 transfer window.
The Group continues to have access to a £13m RCF with the Co-operative Bank
which was amended and restated in Sept 2020. This provides additional access
to funds should these be required. The facility has never been drawn down and
the current cash flow forecasts over the period of the going concern review do
not show a requirement to utilise it.
The Group continues to perform a detailed budgeting process each year which
looks ahead four years from the current financial year, and is reviewed and
approved by the Board. The Group also re-forecasts each month and this is
distributed to the Board. As a consequence, and in conjunction with the
additional forecasting and sensitivity analysis which has taken place and
taking into account reasonably forecasted worst case scenarios, the Directors
believe that the Company is well placed to manage its business risks
successfully despite the continuing uncertain economic outlook.
In consideration of all of the above, the Directors have a reasonable
expectation that the Group and 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 Interim Report.
2. REVENUE
6 months 6 months
to 31
to 31
Dec 2021
Dec 2020
Unaudited Unaudited
£000
£000
Football and stadium operations 23,558 12,570
Multimedia and other commercial activities 13,973 13,049
Merchandising 15,327 15,069
52,858 40,688
Number of home games 19 17
3. EXCEPTIONAL OPERATING CREDIT
The exceptional operating credit of £1.06m (2020: nil) represent settlement
payments of £0.03m and an impairment reversal of £1.09m which
was a previously provided for in relation to intangible assets deemed to be
irrecoverable. These events are deemed to be unusual in relation to what
management consider to be normal operating conditions.
4. FINANCE INCOME AND EXPENSE
6 months to 6 months to
31 December 31 December
2021 2020
Unaudited Unaudited
£000 £000
Finance income:
Interest receivable on bank deposits 19 29
Notional interest income 437 486
456 515
6 months to 6 months to
31 December 31 December
2021 2020
Unaudited Unaudited
£000 £000
Finance expense:
Interest payable on bank and other loans (40) (60)
Notional interest expense (188) (172)
Dividend on Convertible Cumulative Preference Shares (284) (284)
(512) (516)
5.
TAXATION
Tax has been charged at 19% for the six months ended 31
December 2021 (2020: 19%) representing the best estimate of the average annual
effective tax rate expected to apply for the full year, applied to the pre-tax
income of the six month period. After accounting for deferred tax, this has
resulted in tax expense in the statement of comprehensive income of £3.2m
(2020: credit of £0.7m).
6. EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the
profit for the period of £24.3m (2020: loss of £5.1m) by the weighted
average number of Ordinary Shares in issue of 94,446,660 (2020: 94,315,059).
Diluted earnings per share has been calculated by dividing the profit for the
period by the weighted average number of Ordinary Share, Convertible
Cumulative Preference Shares and Convertible Preferred Ordinary Shares in
issue, assuming conversion at the balance sheet if dilutive.
7. INTANGIBLE ASSETS
31 December 2021 31 December 2020
Unaudited Unaudited
Cost £000 £000
At 1 July 49,559 49,846
Additions 16,760 12,667
Disposals (19,186) (1,581)
At period end 47,133 60,932
Amortisation
At 1 July 31,256 30,018
Charge for the period 6,251 6,583
Reversal of prior period impairment 1,094 -
Disposals (18,990) (1,581)
At period end 19,611 35,020
Net Book Value at period end 27,522 25,912
8. TRADE AND OTHER RECEIVABLES
31 December 2021 31 December 2020
Unaudited Unaudited
£000 £000
Trade receivables 34,381 19,024
Prepayments and accrued income 7,436 5,767
Other receivables 5,027 5,355
46,844 30,146
Amounts falling due after more than one year included above are:
2021 2020
£000 £000
Trade receivables 14,664 9,082
9. SHARE CAPITAL
Authorised Allotted, called up and fully paid
31 December 31 December
2021 2020 2021 2021 2020 2020
Unaudited Unaudited Unaudited
No 000 No 000 No 000 £000 No 000 £000
Equity
Ordinary Shares of 1p each 223,681 223,608 94,457 945 94,349 944
Deferred Shares of 1p each 676,275 672,852 676,275 6,763 672,852 6,729
Convertible Preferred Ordinary Shares of £1 each
14,722 14,756 12,734 12,734 12,769 12,769
Non-equity
Convertible Cumulative Preference Shares of 60p each
18,297 18,298 15,797 9,479 15,798 9,479
Less reallocated to debt:
Initial debt - - - (2,753) - (2,753)
932,975 929,514 799,263 27,168 795,768 27,168
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 31 December
2021 2020
Unaudited Unaudited
£000 £000
Bank Loans due after more than one year (932) (2,212)
Bank Loans due within one year (1,236) (1,264)
Cash and cash equivalents:
Cash at bank and on hand 27,798 23,183
Net cash at bank at period end 25,630 19,707
11. POST BALANCE SHEET EVENTS
Since the balance sheet date, we have secured the permanent registrations of
Daizen Maeda, Yosuke Ideguchi, Reo Hatate, Johnny Kenny, and Matthew O'Riley.
We have also temporarily transferred the registrations of Ewan Henderson to
Hibernian, Conor Hazard to HJK Helsinki, Liam Shaw to Motherwell, Osaze
Urhoghide to KV Oostende and Lee O'Connor has permanently transferred to
Tranmere Rovers.
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