REG - Celtic PLC - Half-year Report

CelticAnnouncement

15/02/2021 07:00

RNS Number : 0259P
  
Celtic PLC
  
15 February 2021
  
 

 
Celtic plc (the "Company")
 
INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2020
                  
Operational Highlights 
 
·    Currently second in the SPFL Premiership.
 
·    Winners of the Scottish FA Cup (season 19/20) for the fourth season in a row, securing an unprecedented fourth consecutive domestic treble.
 
·    17 home fixtures (2019: 21). 
 
·    Conclusion of the most successful decade in the history of the club with 20 trophies won.
 
Financial Highlights
 
·    Revenue decreased by 23.7% to £40.7m (2019: £53.3m)
 
·    Loss from trading was £0.3m (2019: profit of £7.1m)
 
·    Profit from transfer of player registrations (shown as profit on disposal of intangible assets)         £1.0m (2019: £23.0m)
 
·    Loss before taxation of £5.9m (2019: profit of £24.4m)
 
·    Acquisition of player registrations of £12.7m (2019: £15.0m)
 
·    Period end net cash at bank of £19.7m (2019: £32.9m)
 
CHAIRMAN'S STATEMENT
 
The results for the six months ended 31 December 2020 show revenues of £40.7m (2019: £53.3m) and a loss before taxation of £5.9m (2019: profit of £24.4m). The loss from trading, representing the loss excluding player related gains and charges, amounted to £0.3m (2019: profit of £7.1m). Period end net cash at bank was £19.7m (2019: £32.9m). The introductory page to these interim results summarises the main highlights.
 
Season 2020/21 started with further significant investment into our playing squad as we prepared for the season ahead, commencing with the Champions League qualification fixtures, featuring challenging single leg knock out ties as a result of the restricted football environment. We acquired the registrations of Albian Ajeti, Vasilis Barkas and David Turbull, retained Mohamed Elyounoussi on loan and brought in experienced internationals Shane Duffy and Diego Laxalt on loan.  We also retained key players who had contributed so much to the team in previous seasons. 
 
At the time of writing we currently sit second in the league 18 points behind the leaders having played one game less and with 10 games remaining. The prolonged summer transfer window, the impact of Covid-19 and, crucially, the loss of our passionate support at matches have undoubtedly had a damaging effect on our performance levels in domestic and European competitions, but we recognise that our performance has not been good enough.  Amidst this challenging environment, however, we secured victory in the postponed 2019/20 Scottish Cup Final to deliver an incredible fourth consecutive treble, following on from securing our ninth consecutive league title. The scale of this achievement cannot be underplayed and should be a cause for pride and celebration for years to come.
 
The two key factors that adversely affected our financial results for the period under review were: firstly, reduced gains from player trading as we sought to keep intact our squad this season; and, secondly, the unforeseen and prolonged value destructive impact of Covid-19. Our strategy for season 2020/21 was to invest in the team and to retain our best players, with the objective of delivering the league championship. As a result, gains from player trading were minimal. The effects of Covid-19 have persisted longer than many could have envisaged and, as a result, our crucial match day and other income streams derived from our stadium have been reduced to negligible proportions. These two factors largely explain the reduction in our profit before tax. No football club is immune from the effects of Covid-19.
 
Looking forward, the football and financial environment is still volatile and very uncertain because of the ongoing effects of Covid-19. At the time of writing, it is unclear when the 2020/21 Scottish Cup will re-commence following its suspension. Neither are we able to say at this stage when we will be able to welcome our supporters back to Celtic Park but we continue to work with the football authorities and the Scottish Government with a view to ensuring that fans are able to return to football safely as soon as possible. All of this will continue to affect our financial results meaning we are unable to offer any outlook guidance on revenue or earnings. Trading seasonality means that financial performance in the second half of the financial year will be lower than the first half owing to lower UEFA income along with less matches played. 
 
I would like to thank our outgoing Chief Executive Peter Lawwell for his contribution to Celtic over the last 17 years. His role in transforming Celtic into a modern, highly respected European football club cannot be underestimated and has been nothing short of outstanding. It has been a pleasure to serve alongside him and we look forward to welcoming Dominic McKay as our new Chief Executive to continue to grow the Club.
 
 
Finally, on behalf of the Board I would like to reiterate to our supporters, shareholders and partners that their support has been crucial over the last 12 months, in what has been one of the most challenging times for the Club. We recognise their support and we thank them for the loyalty they have shown. 
 
 
 
 
 
Ian P Bankier                                                                                                                                                                     
15 February 2021
Chairman
 
 
 
 
For further information contact:



Celtic plc
Ian Bankier
Peter Lawwell
 


Tel: 0141 551 4235




Canaccord Genuity Limited, Nominated Adviser and Broker
Simon Bridges
Richard Andrews


Tel: 020 7523 8350



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.
 
 
 
INDEPENDENT REVIEW REPORT TO CELTIC PLC
 
Introduction
We have been engaged by the Company to review the financial information in the interim report for the six months ended 31 December 2020 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 interim report be presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements having regard to the accounting standards applicable to such annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the interim 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 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 financial information in the interim report for the six months ended 31 December 2019 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.
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 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.
 
 
BDO LLP 
Chartered Accountants
Manchester, United Kingdom
Date: 15 February 2021
 
 
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 2020
 



 
 
 










 
 
 
2020
Unaudited






 
 
 
2019
Unaudited












Note


£000






£000






























Revenue






2


40,688






53,335




Operating expenses (before intangible asset transactions)










  (40,966)






  (46,274)




 
(Loss)/profit from trading before intangible asset transactions










 
     (278)






 
7,061




 
Amortisation of intangible assets










(6,583)






(5,874)




 
Profit on disposal of intangible assets










      993






23,021






























 
Operating (loss)/profit










 
(5,868)






 
24,208
















-






































Finance income






3


    515






743




Finance expense






3


  (516)






(532)




 
(Loss)/profit before tax










 
(5,869)






 
24,419




Income tax credit/(expense)






4


   730






(5,091)
















-












 
(Loss)/profit and total comprehensive loss for the period
 






 
 
 


 
(5,139)






 
19,328




 
Basic (loss)/earnings per Ordinary Share






 
5


 
(5.45p)






 
20.51p                                                                                       




 
Diluted (loss)/earnings per Share






 
5


 
(5.45p)






 
14.36p






































 
 
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2020



 
 






 
2020 
Unaudited










 
2019
Unaudited












Notes


£000










£000








NON-CURRENT ASSETS




























Property plant and equipment






57,781










59,550








Intangible assets


6


25,912










23,180








Trade and other receivables


7


9,082










13,175
















92,775










95,905








CURRENT ASSETS




























Inventories






3,000










1,772








Trade and other receivables


7


21,064










25,388








Cash and cash equivalents


9


23,183










37,604
















47,247










64,764








TOTAL  ASSETS






140,022










160,669






































EQUITY




























Issued share capital 


8


27,168










27,167








Share premium






14,912










14,848








Other reserve






21,222










21,222








Accumulated profits






13,091










37,926








TOTAL EQUITY






76,393










101,163






































NON-CURRENT LIABILITIES




























Interest bearing liabilities/ bank loans






2,212










3,476








Debt element of Convertible Cumulative Preference Shares






4,174










4,174








Trade and other payables






4,068










3,443








Lease Liabilities






   431










778








Deferred tax


4


     906










1,754








Provisions






                128










37








Deferred income






    14










42
















11,933










13,704








CURRENT LIABILITIES




























Trade and other payables






24,997










25,572








Current borrowings


  1,364










1,364








Lease Liabilities






     568










   722








Provisions






 6,402










3,531








Deferred income






18,365










14,613
















51,696










45,802








TOTAL LIABILITIES






63,629










59,506








TOTAL EQUITY AND LIABILITIES






140,022










160,669







 
Approved by the Board on 15 February 2021.
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
 







 
        Share
        capital


 
Share premium


 
Other reserve


 
Accumulated
profits


 
Total
 








£000


£000


£000


£000


£000




EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2019 (Audited)


27,157


14,785


21,222


18,598


81,762




 
Share capital issued


 
1


 
63


 
-


 
-


 
64




 
Reduction in debt element of
convertible cumulative
preference shares


9


-


-


-


9




 
Profit and total comprehensive income for the period


-


-


-


19,328


19,328






























EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2019 (Unaudited)


 
27,167


 
14,848


 
21,222


 
37,926


 
101,163






























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


-


-


-


-


-






























Loss and total comprehensive loss for the period


-


-


-


(5,139)


(5,139)






























EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2020 (Unaudited)


27,168


14,912


21,222


13,091


76,393
















































































































































CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 31 DECEMBER 2020
 
 







            


2020
Unaudited






2019
Unaudited  












£000






£000




Cash flows from operating activities
















(Loss)/profit for the period after tax






       (5,139)






19,328




Taxation (credit)/charge






(730)






5,091




Depreciation






1,241






1,300




Amortisation






6,583






5,874




Profit on disposal of intangible assets






(993)






(23,021)




Finance costs*






516






532




Finance income*






(515)






(743)












963






8,361


























(Increase)/decrease in inventories






(1,730)






871




(Increase) in receivables






  (737)






(400)




(Decrease) in payables and deferred income






(4,029)






(8,097)




Cash (used in)/generated from operations


(5,533)






735




Tax paid


-






-




Interest paid*


(67)






(101)




Interest received*






29






120




Net cash flow from operating activities






(5,571)






754




Cash flows from investing activities




















Purchase of property, plant and equipment






(214)






(792)




Purchase of intangible assets






(6,306)






(13,824)




Proceeds from sale of intangible assets






14,346






18,512




Net cash generated from investing activities






7,826






3,896




Cash flows from financing activities




















Repayment of debt






(640)






(640)




Payments on leasing activities






(379)






-




Dividend on Convertible Cumulative Preference Shares






(459)






(462)




Net cash used in financing activities






(1,478)






(1,102)


























Net increase in cash equivalents






    777






3,547




Cash and cash equivalents at 1 July






22,406






34,057




Cash and cash equivalents at 31 December


9


23,183






37,604











 
*The cash flow statement for 2019 has been restated to correctly present finance income and finance costs as well as interest paid and interest received on a gross rather than the previously net basis. There is no change to the overall reported cash flows from operating activities.
 
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 statements for the year ended 30 June 2021 will be in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.
 
The financial information in this interim report for the six months to 31 December 2020 and to 31 December 2019 has not been audited, but it has been reviewed by the Company's auditor, whose report is set out on page 4. 
 
Adoption of standards effective for periods beginning 1 July 2020
 
The following standards have been adopted as of 1 July 2020:
 
·      IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. (Amendment - Disclosure Initiative - Definition of Material)
·      Conceptual Framework for Financial Reporting (revised)
·      IBOR Reform and its Effects on Financial Reporting - Phase 1 
            
 
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;
•     Continuing restrictions on trading conditions as a result of Covid-19, primarily 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 2020 the cash at bank was £23.2m. In addition, the Group had a net receivables position with respect to player trading payables/receivables. Despite the challenges of the 6 months under review, there remains strong liquidity in the business and, although trading conditions in some areas remains uncertain, the progress being made around vaccinations and controlling the spread of the Covid-19 virus, provides optimism that normalised trading can resume in the short to medium term.  
 
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 sale of Jeremie Frimpong during the January 2021 transfer window.
 
The non-attendance of football fans in stadia continues to be the most significant factor in planning for the future, however as noted above our assumptions on this matter are considered to be appropriately prudent and do not consider there to be a significant risk in the medium term.
 
During the 6 months to 31 December 2020, the Group agreed an amended and restated £13m RCF with the Co-operative Bank which remains undrawn. This provides additional access to funds should these be required. The current cash flow forecasts over the period of the going concern review do not show a requirement to utilise this facility.
 
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, 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

to 31

Dec 2020






6 months

to 31

Dec 2019












Unaudited

£000






Unaudited

£000




Football and stadium operations






12,570






26,987




Multimedia and other commercial activities






13,049






15,108




Merchandising






15,069






11,240












40,688






53,335


























Number of home games






17






21



 
 
3.      FINANCE INCOME AND EXPENSE
 



 
 
 






6 months to
31 December
2020






6 months to
31 December
2019








 
 






Unaudited
£000






Unaudited
£000








Finance income:
























Interest receivable on bank deposits






  29






120








Notional interest income on deferred consideration






486






623
















515






743

































 
 
 



 
 
 






6 months to
31 December
2020






6 months to
31 December
2019








 
 






Unaudited
£000






Unaudited
£000








 
Finance expense:
























Interest payable on bank and other loans






  (60)






(115)








Notional interest expense on deferred consideration






(172)






(133)








Dividend on Convertible Cumulative Preference Shares






(284)






(284)
















(516)






(532)







 
 
4.    TAXATION                                                                                             
         
         Tax has been charged at 19% for the six months ended 31 December 2020 (2019: 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 prior period adjustments and deferred tax, this has resulted in tax credit in the statement of comprehensive income of £0.7m (2019: charge of £5.1m).
 
 
5.    EARNINGS PER SHARE 
         
         Loss per share and diluted loss per share of 5.45p (2019: earnings per share of 20.51p, diluted earnings per share of 14.36p) has been calculated by dividing the loss for the period of £5.1m (2019: profit of £19.3m) by the weighted average number of Ordinary Shares in issue 94,315,059 (2019: 94,262,133) in issue during the year.  
 
 
6.      INTANGIBLE ASSETS 











 
31 December 2020






 
31 December 2019
















Unaudited






Unaudited 








Cost






£000
 






£000
 








At 1 July 






49,846






44,652








Additions






12,667






15,008








Disposals






(1,581)






(3,324)








At period end






60,932






56,336








 
Amortisation
























At 1 July 






30,018






30,496








Charge for the period






6,583






5,874








Disposals






(1,581)






(3,214)








At period end






35,020






33,156








 
Net Book Value at period end






 
25,912






 
23,180







 
 
 
 
7.      TRADE AND OTHER RECEIVABLES
      







31 December 2020
Unaudited






31 December 2019
Unaudited




£000


£000






















          Trade receivables


19,024






28,554




          Prepayments and accrued income


5,767






7,510




          Other receivables


5,355






2,499








30,146






38,563






















Amounts falling due after more than one year included above are:






































2020






2019




 
 


£000


 
 


£000














          Trade receivables


9,082






13,175





















 
8.      SHARE CAPITAL
 







Authorised






Allotted, called up and fully paid








31 December






31 December








2020






2019






2020


2020


2019


2019




 


Unaudited






Unaudited


Unaudited




 


No 000






No 000






No 000


£000


No 000


£000




Equity




































Ordinary Shares of 1p each


223,608






223,605






94,349


944


94,290


943




Deferred Shares of 1p each


672,852






672,715






672,852


6,729


672,715


6,727




Convertible Preferred Ordinary Shares of £1 each


 
14,756






 
14,758






 
12,769


 
12,769


 
12,770


 
12,770




Non-equity




































Convertible Cumulative Preference Shares of 60p each


 
18,298






 
18,298






 
15,798


 
9,479


 
15,798


 
9,480




 
Less reallocated to debt:
Initial debt


 
 
-






 
 
-






 
 
-


 
 
(2,753)


 
 
-


 
 
(2,753)














































929,514






929,376






795,768


27,168


795,573


27,167



 
 
9.      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
2020






31 December
2019
















Unaudited






Unaudited
















£000






£000


































Bank Loans due after more than one year






(2,212)






(3,476)








Bank Loans due within one year






(1,264)






(1,264)


































Cash and cash equivalents:
























Cash at bank and on hand






23,183






37,604


































Net  cash at bank at period end






19,707






32,864







 
10.   POST BALANCE SHEET EVENTS
Since the balance sheet date, we have secured the temporary registration of Jonjoe Kenny from Everton. We have also permanently transferred the registration of Jeremie Frimpong to Bayer Leverkusen and temporarily transferred the registration Olivier Ntcham to Marseille.
 
In addition we have temporarily transferred the registrations of development squad players Leo Hjelde to Ross County, Ben Wylie to Ballymena United, Barry Coffey to Cliftonville and Scott Robertson to Doncaster Rovers.
 
 
 

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