REG - Celtic PLC - Half-year Report
10/02/2023 17:15
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RNS Number : 6351P Celtic PLC 10 February 2023
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 (the "Company")
INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2022
Key Operational Items
· Currently first in the SPFL Premiership.
· 14 home fixtures (2021: 19).
· Participation in the UEFA Champions League group stages.
Key Financial Items
· Revenue increased by 44.8% to £76.5m (2021: £52.9m).
· Profit from trading was £28.1m (2021: £7.0m).
· Profit from transfer of player registrations (shown as profit on
disposal of intangible assets) £1.8m (2021: £25.8m).
· Profit before taxation of £33.9m (2021: £27.6m).
· Acquisition of player registrations of £5.7m (2021: £16.8m).
· Period end cash net of bank borrowings of £59.2m (2021: £25.6m).
For further information contact:
Celtic plc
Peter Lawwell, Celtic plc Tel: 0141 551 4235
Iain Jamieson, Celtic plc
Canaccord Genuity Limited, Nominated Adviser
Simon Bridges Tel: 0207 523 8000
CHAIRMAN'S STATEMENT
I am honoured to present my first Chairman's statement on behalf of Celtic
Football Club. Being back to chair the club that I have always supported and
served for almost 18 years as CEO, is a privilege. I look forward to
fulfilling the role, and playing my part in our Club going forward.
The results for the six months ended 31 December 2022 show revenues of £76.5m
(2021: £52.9m) and a profit before taxation of £33.9m (2021: profit before
tax of £27.6m). The profit from trading, representing the profit excluding
player related gains and charges, amounted to £28.1m (2021: profit of
£7.0m).
The key factors driving the improvement in the underlying trading performance
in the six months to 31 December 2022 compared to the same period last year,
was the direct qualification to the UEFA Champions League Group stages. This
was the key driver in our revenue increase over the same period last year
which reflected UEFA Europa League Group stage participation. Gains from
player trading this year of £1.8m (2021: £25.8m) were notably lower,
reflecting our strategy of assembling a new football playing squad under our
Football Manager, Ange Postecoglou. Period end net cash at bank was £59.2m
(2021: £25.6m). After adjusting for a net trading balance on prior inbound
and outbound transfers, this sum reduces to £50.2m at December 2022 (2021:
£39.7m). The introductory page to these interim results summarises the key
events in the period.
This year is the second season under Ange and the success delivered in season
2021/22 in securing the SPFL title ensured we qualified directly for the UEFA
Champions League Group stages for season 2022/23. This allowed us to plan and
execute our transfer business early. Following from the permanent signings of
Daizen Maeda, Cameron Carter-Vickers and Joao Pedro Neves Filipe (Jota), we
went on to sign Alexandro Bernabei, Sead Haksabanovic, Aaron Mooy, Benjamin
Siegrist and brought in loan signings Oliver Abildgaard and Moritz Jenz.
As the season got underway in August, we were presented with a tough Champions
League Group stage draw, alongside 14 times Champions League winners Real
Madrid, RB Leipzig and Shakhtar Donetsk. Despite a number of strong
footballing performances we all shared Ange's disappointment in not
progressing further, but took heart from the competitive performances and
experience gained by our young team which will serve them well in future
European competition.
On domestic footballing matters, we currently sit 9 points ahead at the top of
the SPFL Premiership, have reached the Viaplay Cup Final and have reached the
fifth round of the Scottish Cup. We sit in a satisfactory position
domestically, but strive to keep improving as a club and during the January
transfer window we further added to the squad by signing Alistair Johnston,
Yuki Kobayashi, Tomoki Iwata (loan with obligation to buy) and Hyeongyu Oh.
Josip Juranovic, Oliver Abildgaard, Moritz Jenz, Scott Robertson and Giorgos
Giakoumakis moved on to continue their careers elsewhere and we wish them all
the best for the future.
Our B Team continues to develop in the Lowland League under Darren O'Dea and
Stephen McManus. A key objective of our B Team and Academy is to develop first
team players and already this season B Team players Bosun Lawal and Rocco Vata
have made their first team debuts. This is a major milestone and achievement
for our young players and reflects our strategy of developing Academy players
through our system. Our Women's team also continues to progress under Fran
Alonso and at the time of writing we sit second in the league and are in the
fifth round of the Scottish Cup.
As we look ahead, our immediate priority is to secure domestic success for
season 2022/23, with a view to progressing into the Champions League Group
stages for a second consecutive year. We also wish to build upon the progress
made in our Academy and the Women's team, and are currently exploring
development opportunities at our Barrowfield training ground with a view to
enhancing the facilities for these squads.
We will also continue to contribute to the development of UEFA European Club
Competition through participation in the European Club Association. The
forthcoming changes to European Club Competition from 2024 onwards bring a
number of exciting changes that we will embrace and look to take advantage of.
In line with the seasonality inherent in our earnings profile, the second half
of the financial year will see losses incurred, as our earnings are biased
toward the first half of the financial year. These losses however will be in
part mitigated by gains on player trading realised from the January 2023
transfer window along with greater revenue from operating activities than was
previously anticipated. The bias in earnings towards the first half of the
financial year reflects the fact that UEFA distributions and UEFA match ticket
income are largely recognised in the first half of the financial year and as
in previous years, the second half of the financial year typically sees lower
retail sales. Our outturn earnings can also be materially impacted by football
success and the year end assessment of player registration carrying values.
Taking all of this into consideration, we would expect our total outturn
profit before tax for the year ending 30 June 2023 to be significantly lower
than the result posted for the first six months of the financial year.
On behalf of the Board, I wish to thank our supporters for their unwavering
dedication and support of our Club. I wish to also thank our shareholders and
commercial partners for continuing to back the Club as they have done over
many years.
Peter
Lawwell
Chairman
10 February 2023
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 2022 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 2022 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 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.
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: 10 February 2023
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 2022
2022 2021
Unaudited Unaudited
Note £000 £000
Revenue 2 76,542 52,858
Operating expenses (before intangible asset transactions) (48,398) (45,810)
Profit from trading before intangible asset transactions 28,144 7,048
Exceptional operating (expense) / income 3 (53) 1,063
Amortisation of intangible assets 7 (6,018) (6,251)
Profit on disposal of intangible assets 1,757 25,752
Other income 3 10,000 -
Operating profit 33,830 27,612
-
Finance income 4 636 456
Finance expense 4 (611) (512)
Profit before tax 33,855 27,556
Income tax expense 5 (5,767) (3,210)
-
Profit and total comprehensive income for the period 28,088 24,346
Basic earnings per Ordinary Share 6 29.72p 25.78p
Diluted earnings per Share 6 20.74p 18.01p
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2022
2022 2021
Unaudited Unaudited
Notes £000 £000
NON-CURRENT ASSETS
Property plant and equipment 55,920 57,087
Intangible assets 7 34,324 27,522
Trade and other receivables 8 4,515 14,664
94,759 99,273
CURRENT ASSETS
Inventories 2,534 2,940
Trade and other receivables 8 30,095 32,180
Cash and cash equivalents 10 60,142 27,798
92,771 62,918
TOTAL ASSETS 187,530 162,191
EQUITY
Issued share capital 9 27,166 27,168
Share premium 14,990 14,951
Other reserve 21,222 21,222
Accumulated profits 39,566 29,975
TOTAL EQUITY 102,944 93,316
NON-CURRENT LIABILITIES
Interest bearing liabilities/ bank loans - 932
Debt element of Convertible Cumulative Preference Shares 4,174 4,174
Trade and other payables 9,018 7,883
Lease Liabilities 163 352
Deferred tax 5 3,189 2,904
Provisions 77 99
16,621 16,344
CURRENT LIABILITIES
Trade and other payables 38,390 26,124
Current borrowings 1,048 1,336
Lease Liabilities 394 562
Provisions 7,271 6,686
Deferred income 20,862 17,823
67,965 52,531
TOTAL LIABILITIES 84,586 68,875
TOTAL EQUITY AND LIABILITIES 187,530 162,191
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 31 DECEMBER 2022
Share Share premium Other reserve Accumulated Total
capital Profits
£000 £000 £000 £000 £000
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2021 (Audited) 27,168 14,912 21,222 5,629 68,931
Share capital issued - 39 - - 39
- - - 24,346 24,346
Profit and total comprehensive income for the period
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2021 (Unaudited)
27,168 14,951 21,222 29,975 93,316
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2022 (Audited) 27,166 14,951 21,222 11,478 74,817
Share capital issued - 39 - - 39
Profit and total comprehensive income for the period - - - 28,088 28,088
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2022 (Unaudited) 27,166 14,990 21,222 39,566 102,944
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 31 DECEMBER 2022
Note 2022 2021
Unaudited Unaudited
£000 £000
Cash flows from operating activities
Profit for the period after tax 28,088 24,346
Income tax expense 5,767 3,210
Depreciation 1,292 1,320
Amortisation 6,018 6,251
Reversal of prior period impairment charge - (1,095)
Profit on disposal of intangible assets (1,757) (25,752)
Finance costs 611 512
Finance income (636) (456)
39,383 8,336
Decrease in inventories 453 921
Decrease in receivables 4,137 1,190
Decrease in payables and deferred income (15,522) (6,644)
Cash generated from operations 28,451 3,803
Interest paid (31) (42)
Interest received 327 19
Net cash flow from operating activities 28,747 3,780
Cash flows from investing activities
Purchase of property, plant and equipment (892) (801)
Purchase of intangible assets (14,341) (13,801)
Proceeds from sale of intangible assets 16,197 20,660
Net cash generated from investing activities 964 6,058
Cash flows from financing activities
Repayment of debt (640) (640)
Payments on leasing activities (343) (378)
Dividend on Convertible Cumulative Preference Shares (455) (481)
Net cash used in financing activities (1,438) (1,499)
Net increase in cash equivalents 28,273 8,339
Cash and cash equivalents at 1 July 31,869 19,459
Cash and cash equivalents at 31 December 10 60,142 27,798
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 2023 will be in accordance with UK adopted international accounting
standards.
The financial information in this interim report for the six months to 31
December 2022 and to 31 December 2021 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 2022
The following amended standards have been adopted as of 1 July 2022
· Amendments to IFRS 3, IAS 16 and IAS 37 - Property Plant and
Equipment Proceeds before Intended Use
· Amendments to IFRS 1, IFRS 9, IAS 41 and Illustrative examples
accompanying IFRS 16 - Annual Improvements to IFRSs (2019-2020 Cycle)
Going concern
The Company has sufficient 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.
2. REVENUE
6 months 6 months
to 31
to 31
Dec 2022
Dec 2021
Unaudited Unaudited
£000
£000
Football and stadium operations 28,250 23,558
Multimedia and other commercial activities 30,866 13,973
Merchandising 17,426 15,327
76,542 52,858
Number of home games 14 19
3. EXCEPTIONAL OPERATING ITEMS AND OTHER INCOME
The exceptional operating expense of £0.05m represents settlement payments.
In the previous period an exceptional operating credit resulted from an
impairment reversal in relation to intangible assets offset by settlement
payments. These items are deemed to be unusual in relation to what
management consider to be normal operating conditions.
Other income represents incoming cash or receivables to the business which is
not deemed to be generated from the normal course of business and does not
meet the definition of revenue under IFRS15. In the current financial year,
this is represented by the receipt of insurance proceeds in relation to
business interruption. The amount of income is only recognised when the
likelihood and value of any receipt is virtually certain i.e. the cash or
confirmation of payment have been received.
4. FINANCE INCOME AND EXPENSE
6 months to 6 months to
31 December 31 December
2022 2021
Unaudited Unaudited
£000 £000
Finance income:
Interest receivable on bank deposits 310 19
Notional interest income 326 437
636 456
6 months to 6 months to
31 December 31 December
2022 2021
Unaudited Unaudited
£000 £000
Finance expense:
Interest payable on bank and other loans (31) (40)
Notional interest expense (296) (188)
Dividend on Convertible Cumulative Preference Shares (284) (284)
(611) (512)
5.
TAXATION
Tax has been charged at 19% for the six months ended 31
December 2022 (2021: 19%) representing the best estimate of the average annual
effective tax rate expected to apply for the full year, applied to the pre-tax
profit of the six month period. After accounting for deferred tax, this has
resulted in tax expense in the statement of comprehensive income of £5.8m
(2021: £3.2m).
6. EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the
profit for the period of £28.1m (2021: £24.3m) by the weighted average
number of Ordinary Shares in issue of 94,515,655 (2021: 94,446,660). 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 2022 31 December 2021
Unaudited Unaudited
Cost £000 £000
At 1 July 67,511 49,559
Additions 5,650 16,760
Disposals (13,683) (19,186)
At period end 59,478 47,133
Amortisation
At 1 July 32,022 31,256
Charge for the period 6,018 6,251
Reversal of prior period impairment - 1,094
Disposals (12,886) (18,990)
At period end 25,154 19,611
Net Book Value at period end 34,324 27,522
8. TRADE AND OTHER RECEIVABLES
31 December 2022 31 December 2021
Unaudited Unaudited
£000 £000
Trade receivables 21,232 34,381
Prepayments and accrued income 7,053 7,436
Other receivables 6,325 5,027
34,610 46,844
Amounts falling due after more than one year included above are:
31 December 31 December 2021
2022 Unaudited
Unaudited
£000 £000
Trade receivables 4,515 14,664
9. SHARE CAPITAL
Authorised Allotted, called up and fully paid
31 December 31 December
2022 2021 2022 2022 2021 2021
Unaudited Unaudited Unaudited
No 000 No 000 No 000 £000 No 000 £000
Equity
Ordinary Shares of 1p each 223,681 223,681 94,526 945 94,457 945
Deferred Shares of 1p each 677,885 676,275 677,885 6,778 676,275 6,763
Convertible Preferred Ordinary Shares of £1 each
14,721 14,722 12,718 12,718 12,734 12,734
Non-equity
Convertible Cumulative Preference Shares of 60p each
18,298 18,297 15,797 9,478 15,797 9,479
Less reallocated to debt:
Initial debt - - - (2,753) - (2,753)
934,585 932,975 800,926 27,166 799,263 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
2022 2021
Unaudited Unaudited
£000 £000
Bank Loans due after more than one year - (932)
Bank Loans due within one year (948) (1,236)
Cash and cash equivalents:
Cash at bank and on hand 60,142 27,798
Net cash at bank at period end 59,194 25,630
11. POST BALANCE SHEET EVENTS
Since the balance sheet date, we have acquired the permanent registration of
Hyeongyu Oh from Suwon Samsung Bluewings.
We have also permanently transferred the registrations of Josip Juranovic to
Union Berlin, Scott Robertson to Fleetwood Town and Giorgos Giakoumakis to
Atlanta United. In addition, the temporary registrations of Moritz Jenz and
Oliver Abildgaard were cancelled and the registration of Yosuke Ideguchi was
temporarily transferred to Avispa Fukuoka.
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