REG - Celtic PLC - Half-year Report <Origin Href="QuoteRef">CCP.L</Origin>

CelticAnnouncement

08/02/2018 16:10

RNS Number : 3664E
Celtic PLC
08 February 2018
Celtic plc (the "Company")
INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2017
 
Operational Highlights 
 Currently top of the SPFL Premiership
 Winners of the Scottish League Cup for the second season in a row
 19 home fixtures (2016: 18) 
 Successfully qualified for the Group Stages of UEFA Champions League
 Secured European football after Christmas by qualifying for the round of 32 of the Europa League
Financial Highlights
 Revenue increased by 16.8% to 71.5m (2016: 61.2m)
 Profit from trading was 23.7m (2016: 21.4m)
 Profit from transfer of player registrations (shown as profit on disposal of intangible assets) 0.5m (2016: 2.0m)
 Profit before taxation of 19.5m (2016: 18.6m)
 Profit after taxation of 17.4m (2016: 18.6m)
 Period end net cash at bank of 30.9m (2016: 18.6m)
Celtic plc
CHAIRMAN'S STATEMENT
I am pleased to report on our interim results for the period ended 31 December 2017. These show revenue of 71.5m (2016: 61.2m) and a profit from trading of 23.7m (2016: 21.4m). Overall this resulted in a profit before taxation of 19.5m (2016: 18.6m) and a period end net cash at bank of 30.9m (2016: 18.6m). The introductory page to these interim results summarises the main highlights.
We are delighted with the sustained period of success on the pitch, as Brendan Rodgers, his backroom team and the players have built on their achievements of last season. They are to be congratulated on qualification for the group stages of the UEFA Champions League for a second successive season, for retaining the League Cup and for the record breaking 69 game domestic unbeaten run. At the time of writing, we sit 8 points clear at the top of the Scottish Premiership and, as we continue to progress in the Scottish Cup, we retain the prospect of winning an historic back to back domestic treble.
During the period we secured the permanent registrations of Olivier Ntcham and Kundai Benyu, and the temporary registration of Patrick Roberts. Our profit on disposal of intangible assets of 0.5m (2016: 2.0m) largely reflects the transfer of the registrations of Gary Mackay Steven and Saidy Janko. Subsequently, during the January 2018 transfer window, we have invested further by acquiring the permanent registrations of experienced German Bundesliga defender Marvin Compper, exciting young Scottish talents Lewis Morgan and Jack Hendry and the temporary registrations of sought after midfielder Charly Musonda and goalkeeper Scott Bain.
The Board is committed to a course of investment in the playing squad so as to be as competitive as we can be within the structure of Scottish football and on the European stage. With our full support and encouragement, Brendan seeks to enhance the squad by the careful acquisition of quality players and the development of existing players and young talent coming up from our Youth Academy. Youth Academy graduates James Forrest, Kieran Tierney, Michael Johnston, Callum McGregor, Calvin Miller and Anthony Ralston have all contributed to the first team this year. Furthermore, we were delighted to agree an extended contract with Kieran Tierney, who has captained Celtic and his country during the season.
The Board is also pursuing initiatives to enhance the Club's assets at Celtic Park, so as to aid our playing competitiveness, as in the case of the recent pitch improvements, and to develop and commercialise the space we occupy, as in the case of our recent planning application for a hotel, retail store and museum. The Board's investment policy, nonetheless, recognises the uncertainty inherent in football, and our long held strategy of operating a self-sustaining financial model. 
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 the year. In this period we will play fewer home fixtures and revenue from European competition will be lower. Our key objectives for the remainder of the year are to win the SPFL Premiership, secure the Scottish Cup and build towards the European qualifiers in the summer. The Club will also continue to look at ways in which to develop Celtic Park and the surrounding area to create a destination and match day experience that all Celtic fans can be proud of.
Celtic plc
CHAIRMAN'S STATEMENT
Celtic FC Foundation, which sits outwith the Group, continues to develop its reach and to assist more people in our communities, in line with the Club's founding principles. Most recently, the 2017 Christmas Appeal raised in excess of 230,000, which was split between local families with children, local old age pensioners, children's charities, women's aid charities and homeless, refugee and other vulnerable groups. Following the success of the Foundation's Lions Legacy campaign, these fantastic achievements are testament to the hard work and generosity of the Celtic family.
On behalf of the Board, I thank our fans, shareholders and partners, whose support is vital as we continue to build for the future.
Ian P Bankier 
8 February 2018
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 condensed set of financial statements in the interim report for the six months ended 31 December 2017 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 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 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 Financial Reporting Council 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 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 interim report for the six months ended 31 December 2017 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 8 February 2018
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Celtic plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTHS TO 31 DECEMBER 2017


2017
Unaudited

2016
Unaudited


Note
000

000






Revenue

2
71,505

61,229
Operating expenses (before intangible asset transactions and exceptional items)

3
(47,815)

(39,821)
Profit from trading before intangible asset transactions and exceptional items


23,690

21,408
Exceptional operating expenses

4
-

(646)
Amortisation of intangible assets

(4,227)

(3,849)
Profit on disposal of intangible assets


482

1,959






Operating profit


19,945

18,872












Finance income

5
47

119
Finance expense

5
(482)

(391)
Profit before tax


19,510

18,600
Income tax expense

6
(2,130)

-






Profit and total comprehensive income for the period

17,380

18,600
Basic earnings per Ordinary Share

7
18.57p 

19.92p
Diluted earnings per share

7
12.94p

13.84p







Celtic plc
Registered number SC3487
CONSOLIDATED BALANCE SHEET 

31 December
2017

31 December
2016



Unaudited

Unaudited


Notes
000

000

NON-CURRENT ASSETS





Property plant and equipment

56,637

54,998

Intangible assets
8
15,996

13,224

Deferred tax asset

891

-



73,524

68,222

CURRENT ASSETS











Inventories

2,039

1,615

Trade and other receivables
9
15,608

15,972

Cash and cash equivalents

37,410

25,392



55,057

42,979

TOTAL ASSETS

128,581

111,201







EQUITY





Issued share capital 
10
27,123

24,318

Share premium

14,720

14,657

Other reserve

21,222

21,222

Capital reserve

-

2,781

Accumulated profits

11,817

6,140

TOTAL EQUITY

74,882

69,118

LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing loans
6,350

6,550

Debt element of Convertible Cumulative Preference Shares

4,216

4,241

Trade and other payables

10,293

-

Provisions

1,082

1,285

Deferred income

86

143



22,027

12,219

CURRENT LIABILITIES





Trade and other payables

17,035

15,930

Current borrowings
304

304

Provisions

709

106

Deferred income

13,624

13,524



31,672

29,864

TOTAL LIABILITIES

53,699

42,083

TOTAL EQUITY AND LIABILITIES

128,581

111,201

Approved by the Board on 8 February 2018


Celtic plc
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 2016 (Audited)
24,316
14,611
21,222
2,781
(12,460)
50,470
Share capital issued
1
46
-
-
-
47
Reduction in debt element of
convertible cumulative
preference shares
1
-
-
-
-
1
Profit and total comprehensive income for the period
-
-
-
-
18,600
18,600







EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2016 (Unaudited)
24,318
14,657
21,222
2,781
6,140
69,118







EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2017 (Audited)
27,107
14,657
21,222
-
(5,563)
57,423
Share capital issued
1
63
-
-
-
64
Reduction in debt element of convertible cumulative preference shares
15
-
-
-
-
15







Profit and total comprehensive income for the period
-
-
-
-
17,380
17,380







EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2017 (Unaudited)
27,123
14,720
21,222
-
11,817
74,882





































Celtic plc
CONSOLIDATED CASH FLOW STATEMENT 


6 months to
31 December
2017

6 months to
31 December
2016


 Note
Unaudited

Unaudited 


000

000
Cash flows from operating activities



Profit before tax

19,510

18,600
Depreciation

881

820
Amortisation

4,227

3,849
Impairment of intangible assets

-

358
Profit on disposal of intangible assets

(482)

(1,959)
Net finance costs

435

272


24,571

21,940





Decrease in inventories

375

274
(Increase) in receivables

(7,028)

(5,178)
(Decrease) in payables and deferred income

(364)

(5,540)
Cash generated from operations
17,554

11,496
Net interest paid

(25)

(42)
Net cash flow from operating activities

17,529

11,454
Cash flows from investing activities




Purchase of property, plant and equipment

(946)

(540)
Purchase of intangible assets

(8,874)

(5,218)
Proceeds from sale of intangible assets

5,769

9,833
Net cash (used in) / generated from investing activities

(4,051)

4,075
Cash flows from financing activities




Repayment of debt

(100)

(100)
Dividend on Convertible Cumulative Preference Shares

(473)

(487)
Net cash used in financing activities

(573)

(587)
Net increase in cash equivalents

12,905

14,942
Cash and cash equivalents at 1 July

24,505

10,450
Cash and cash equivalents at period end
11
37,410

25,392
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 2018 and are unchanged from those used in the Company's annual report for the year ended 30 June 2017. 
The financial information in this interim report for the six months to 31 December 2017 and to 31 December 2016 has not been audited, but it has been reviewed by the Company's auditor, whose report is set out on page 4. Any comparative figures for the year ended 30 June 2017 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 2017 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 2017 have been filed with the Registrar of Companies. The auditor's report on those statutory financial statements was unqualified.
Assessment on adoption of standards not yet effective
At the date of authorisation of this interim report the following standards were not effective however will be adopted in accordance with their effective dates. An update as to the Group's assessment of the impact of each standard is provided below.
IFRS 9: Financial Instruments - A detailed review of the impact of this standard is in progress and will be completed by the end of the current financial year, the conclusion of which will be disclosed in the annual report.
IFRS 15: Revenue from Contracts with Customers - we have performed a review of the Group's revenue recognition policy for each activity type and our initial assessment is that on full year basis any impact on revenue will be immaterial. With regards to interim reporting, the impact of applying this standard has yet to be concluded however the assessment will be completed by the end of the current financial year and disclosure will be made in the annual report.
IFRS 16: Leases - Based on our assessment, the net impact to the Group's financial statements is not considered to be material, but we will recognise the asset value of the operating leases within assets and a liability reflecting the associated future obligations. There will also be a reallocation in the Statement of Comprehensive Income from rental costs to depreciation within Operating Expenses and to the unwinding of discount charge within Finance Expense. As this stage the value associated with the above adjustments has yet to be quantified.
Going concern
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.
 
Celtic plc
NOTES TO THE FINANCIAL INFORMATION
 
2. REVENUE


6 months to
31 December
2017

6 months to
31 December
2016


Unaudited
000

Unaudited
000

Football and stadium operations

26,802

22,583

Multimedia & other commercial activities

34,011

29,917

Merchandising

10,692

8,729



71,505

61,229

Number of home games

19

18

 
3. TOTAL OPERATING EXPENSES


6 months to
31 December
2017

6 months to
31 December
2016

Unaudited
000

Unaudited
000
Football and stadium operations (excluding exceptional items and asset transactions)

40,677

33,682
Merchandising

5,923

4,968
Multimedia & other commercial activities

1,215

1,171


47,815

39,821
4. EXCEPTIONAL OPERATING EXPENSES 

6 months to
31 December
2017

6 months to
31 December
2016


Unaudited
000

Unaudited
000

Impairment of intangible assets

-

358

Compromise payments on contract termination

-

288



-

646

5. FINANCE INCOME AND EXPENSE

6 months to
31 December
2017

6 months to
31 December
2016

Finance income:

Unaudited
000

Unaudited
000

Interest receivable on bank deposits

35

19

Notional interest income on deferred consideration

12

100



47

119







Celtic plc
NOTES TO THE FINANCIAL INFORMATION
5 FINANCE INCOME AND EXPENSE (CONTINUED)

6 months to
31 December
2017

6 months to
31 December
2016


Unaudited
000

Unaudited
000

Finance expense:





Interest payable on bank and other loans

(61)

(62)

Notional interest expense on deferred consideration

(134)

(40)

Dividend on Convertible Cumulative Preference Shares

(287)

(289)



(482)

(391)

6. TAXATION 
 
 Tax has been charged at 19% for the six months ended 31 December 2017 (2016: 19.75%) 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. A deferred tax asset of 0.6m has been reversed due to the utilisation of tax losses. A deferred tax asset of 1.5m has been recognised in respect of short term timing differences and is offset by an existing deferred tax liability of 0.6m relating to accelerated capital allowances. 
7. EARNINGS PER SHARE 
 
 Basic earnings per share has been calculated by dividing the profit for the period of 17.4m (2016: 18.6m) by the weighted average number of Ordinary Shares in issue 93,591,020 (2016: 93,374,010). Diluted earnings per share as at 31 December 2017 has been calculated by dividing the profit for the period by the weighted average number of Ordinary Shares, Convertible Cumulative 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 2017

6 months to
31 December 2016



Unaudited

Unaudited 

Cost

000

000

At 1 July 

34,335

28,244

Additions

6,634

9,497

Disposals

(2,591)

(5,167)

At period end

38,378

32,574

Amortisation





At 1 July 

20,408

18,446

Charge for the period

4,227

3,849

Provision for impairment

-

358

Disposals

(2,253)

(3,303)

At period end

22,382

19,350

Net Book Value at period end

15,996

13,224

9.  TRADE AND OTHER RECEIVABLES
 The decrease of 0.4m in receivables from 31 December 2016 to 15.6m is primarily due to the receipt of player receivables offset
 by the value of UEFA receivables and increase in prepaid costs. 
10. SHARE CAPITAL

Authorised

Allotted, called up and fully paid

31 December

31 December

2017

2016

2017
2017
2016
2016
Unaudited

Unaudited
Unaudited
No 000

No 000

No 000
000
No 000
000
Equity








Ordinary Shares of 1p each
223,101

222,869

93,696
937
93,403
934
Deferred Shares of 1p each
647,036

635,145

647,036
6,470
635,145
6,351
Convertible Preferred Ordinary Shares of 1 each
14,923

14,994

12,936
12,936
13,007
13,007
Non-equity








Convertible Cumulative Preference Shares of 60p each
18,459

 18,543

15,959
9,576
16,043
9,626
Less reallocated to debt:
Initial debt
Capital reserve
-
-

-
-

-
-
(2,796)
-
- 
- 
(2,819)
(2,781)










903,519

891,551

769,627
27,123
757,598
24,318


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
2017

31 December
2016



Unaudited

Unaudited



000

000

Bank Loans due after more than one year

(6,350)

(6,550)

Bank Loans due within one year

(200)

(200)







Cash and cash equivalents:





 Cash at bank and on hand

37,410

25,392







Net cash at bank at period end

30,860

18,642

Total net cash, deducting other loans of 0.1m (2016: 0.1m) and that arising from the reclassification of equity to debt of 4.2m (2016: 4.2m) amounted to 26.5m (2016: 14.3m).
 
12.  POST BALANCE SHEET EVENTS
Since the balance sheet date, we have secured the permanent registrations of Marvin Compper from RB Leipzig, Lewis Morgan from St Mirren and Jack Hendry from Dundee, and the temporary registrations of Charly Musonda from Chelsea and Scott Bain from Dundee. We have also permanently transferred the registration of Liam Henderson to Bari and temporarily transferred the registrations of first team players Nadir Ciftci to Motherwell, Lewis Morgan to St Mirren, Kundai Benyu to Oldham Athletic, Erik Sviatchenko to FC Midtjylland, Scott Allan to Hibernian and Conor Hazard to Falkirk. 
We also temporarily transferred the registrations of development squad players, Regan Hendry to Raith Rovers, Jamie McCart to Alloa Athletic, Mark Hill to St Mirren and Joe Thomson to Queen of the South.


Celtic plc
Directors
Ian P Bankier (Chairman)
Peter T Lawwell (Chief Executive)
Chris McKay (Finance Director)
Thomas E Allison 
Dermot F Desmond
Brian D H Wilson
Sharon Brown 
Company Secretary
Michael Nicholson
Registered Office
Celtic Park
Glasgow 
G40 3RE
Registered Number
SC3487

This information is provided by RNS
The company news service from the London Stock Exchange
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