REG - Celtic PLC - Interim Report - 31 December 2023
23/02/2024 15:00
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RNS Number : 3251E Celtic PLC 23 February 2024
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Celtic plc (the "Company")
INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2023
Key Operational Items
· 14 home fixtures (2022: 14).
· Participation in the UEFA Champions League group stages, securing 4
points.
· Commencement of the major development at Barrowfield Training
Facility.
Key Financial Items
· Revenue increased by 11% to £85.2m (2022: £76.5m).
· Profit from trading was £32.0m (2022: £28.1m).
· Profit from transfer of player registrations (shown as profit on
disposal of intangible assets) £2.6m (2022: £1.8m).
· Profit before taxation of £30.3m (2022: £33.9m).
· Acquisition of player registrations of £12.9m (2022: £5.7m).
· Period end cash net of bank borrowings of £67.3m (2022: £59.2m).
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
The results for the six months ended 31 December 2023 show revenues of £85.2m
(2022: £76.5m) and a profit from trading, representing the profit excluding
other income and player related gains and charges, amounting to £32.0m (2022:
profit of £28.1m). The profit before finance income & expense and
taxation amounted to £28.5m (2022: £33.8m).
We benefited from Champions League qualification in both 2022 and 2023 and
increased underlying revenue by £8.7m to £85.2m in the first half of 2023
relative to the same period last year. The key factors in this were higher
UEFA distributions this year alongside a general incremental upturn in trading
across almost all revenue streams. A significant portion of this revenue
increase was re-invested into football wages and salaries resulting in the
profit from trading of £32.0m noted above. Amortisation charges were broadly
in line with the same period last year and gains from player trading amounted
to £2.6m for the six months to 31 December 2023 (2022: £1.8m). These
principally related to the disposal of Carl Starfelt and several contingent
fees that crystalised in the period.
Profit before finance income & expense and taxation fell to £28.5m, down
from £33.8m in the prior year, despite the significant revenue increase. This
is attributable to the increase in the football related investment alongside
the absence of a significant non-recurring insurance receipt recognised in the
prior period.
From a funding perspective, the cash and cash equivalents balance reduced from
£72.3m to £67.3m in the period under review. A significant proportion of
this cash is committed to the creation of a new training centre at the
Barrowfield site, the finalisation of the Lennoxtown developments and future
stadium expenditure. The Board recognises the inherent inefficiencies of
holding excess cash, and, in conjunction with other cash commitments, the
importance of investing in strengthening the team to deliver football success.
The Board shares the frustrations of the supporters regarding the less than
anticipated activity in the recent transfer window.
Since the opening of the transfer window in June 2023, and up to the end of
the winter transfer window which closed on 1(st) February 2024, we have
committed £23.9m in player investment. Within this we renewed and extended
the contracts of Cameron Carter-Vickers, Liel Abada, Matt O'Riley, Anthony
Ralston and Reo Hatate. The Board's commitment is to strengthen and improve
the playing squad in every transfer window and although resources were
available, we were unable to further add to the squad due to the
unavailability of identified targets. This was disappointing to us all, and
never the intention. The January transfer window is notoriously difficult as
clubs are very reluctant to let their best players go at such a crucial time
of the season just as we are. Indeed, we resisted strong interest in our
players from other clubs.
It is notable that transfer activity in England was the lowest it has been for
over ten years, excluding the impact of Covid-19. A number of reasons have
been cited for this including the absence of suitable players and new UEFA
regulations which impose spending caps.
Although disappointed by the second-round exit of the League Cup away to
Kilmarnock, we looked forward to our Champions League draw against Feyenoord,
Atletico Madrid and Lazio. We achieved four points in the group stages and,
whilst representing an improvement over last season's two points, we finished
fourth in the group stage. We took consolation from a number of good
performances which will serve our squad well, but our objective is to keep
improving and competing in Europe. Looking towards the year ahead, winning the
SPFL and the Scottish Cup is our immediate focus and priority. With 12 matches
remaining in the league and having reached the quarter final of the Scottish
Cup, there remains a long way to go and all to play for. We will all unite
behind the team for these purposes.
We also look forward to the creation of our new Barrowfield facility which is
scheduled for the end of 2024 and will bring high quality facilities for our
women's and academy squads. We are also nearing the completion of a
significant investment in Lennoxtown delivering new First Team and B Team
changing areas and a newly
enhanced medical and sports science facility. Investment in infrastructure is
a key component of success in modern football.
December 2023 saw the departure of our women's team manager, Fran Alonso, to a
new opportunity in one of the top women's football leagues in the world. Fran
leaves us with our best wishes after almost four years with Celtic having
overseen the transition of the women's team to professional status and having
won the League Cup, two back-to-back Scottish Cups and narrowly missing out on
the SWPL league title last season. Fran leaves us in a strong position and was
recently replaced by Elena Sadiku. We wish to welcome Elena, at what is an
exciting time for the women's game at Celtic and in Scotland.
UEFA and the European Club Association are close to agreeing the final aspects
of the revised European Club Competition model. This will bring an exciting
new format to European football and the opportunity to participate in more
matches and give access to more teams across Europe. Pending completion of
these discussions, this should provide stability and certainty for several
years for the European football landscape.
As is often the case with the Club's earnings profile, we naturally expect a
seasonal downturn in earnings in the second half of the year. In general
terms, earnings are biased towards the first half of the year aligned to the
receipts from European competition, whereas the second half is characterised
by significant accounting losses. This is entirely within expectations and our
planning assumptions. 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 financial performance for the year ending 30 June 2024 to be
significantly lower than the result posted for the first six months of the
financial year.
On behalf of the Board and everyone at Celtic Football Club, I wish to extend
our gratitude and appreciation to our supporters for the backing of our Club.
Thanks also must go to our shareholders and commercial partners for their
continued support.
Peter T
Lawwell
Chairman
23 February 2024
INDEPENDENT REVIEW REPORT TO CELTIC PLC
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 half-yearly
financial report for the six months ended 31 December 2023 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.
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 2023 which comprises Consolidated Statement of Comprehensive Income,
Consolidated Balance Sheet, Consolidated Statement of Changes in Equity,
Consolidated Cash Flow Statement and related explanatory notes.
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 rules of the London
Stock Exchange AIM Rules for Companies 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: 23 February 2024
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 2023
2023 2022
Unaudited Unaudited
Note £000 £000
Revenue 2 85,222 76,542
Operating expenses (before intangible asset transactions) (53,217) (48,398)
Profit from trading before intangible asset transactions 32,005 28,144
Exceptional operating expense 3 (50) (53)
Amortisation of intangible assets 7 (6,099) (6,018)
Profit on disposal of intangible assets 2,591 1,757
Other income 3 50 10,000
Operating profit 28,497 33,830
-
Finance income 4 2,540 636
Finance expense 4 (735) (611)
Profit before tax 30,302 33,855
Income tax expense 5 (7,622) (5,767)
-
Profit and total comprehensive income for the period 22,680 28,088
Basic earnings per Ordinary Share 6 23.98p 29.72p
Diluted earnings per Share 6 16.79p 20.74p
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2023
2023 2022
Unaudited Unaudited
Notes £000 £000
NON-CURRENT ASSETS
Property plant and equipment 56,328 55,920
Intangible assets 7 32,679 34,324
Trade and other receivables 8 8,624 4,515
97,631 94,759
CURRENT ASSETS
Inventories 3,802 2,534
Trade and other receivables 8 42,963 30,095
Cash and cash equivalents 10 67,327 60,142
114,092 92,771
TOTAL ASSETS 211,723 187,530
EQUITY
Issued share capital 9 27,169 27,166
Share premium 15,028 14,990
Other reserve 21,222 21,222
Accumulated profits 67,490 39,566
TOTAL EQUITY 130,909 102,944
NON-CURRENT LIABILITIES
Debt element of Convertible Cumulative Preference Shares 4,173 4,174
Trade and other payables 6,280 9,018
Lease Liabilities 469 163
Deferred tax 5 3,482 3,189
Provisions 91 77
14,495 16,621
CURRENT LIABILITIES
Trade and other payables 40,338 38,390
Current borrowings 96 1,048
Lease Liabilities 447 394
Provisions 6,278 7,271
Deferred income 19,160 20,862
66,319 67,965
TOTAL LIABILITIES 80,814 84,586
TOTAL EQUITY AND LIABILITIES 211,723 187,530
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 31 DECEMBER 2023
Share Share premium Other reserve Accumulated Total
capital Profits
£000 £000 £000 £000 £000
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2022 (Audited) 27,166 14,951 21,222 11,478 74,817
Share capital issued - 39 - - 39
- - - 28,088 28,088
Profit and total comprehensive income for the period
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2022 (Unaudited)
27,166 14,990 21,222 39,566 102,944
EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2023 (Audited) 27,168 14,990 21,222 44,810 108,190
Share capital issued 1 38 - - 39
Profit and total comprehensive income for the period - - - 22,680 22,680
EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2023 (Unaudited) 27,169 15,028 21,222 67,490 130,909
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 31 DECEMBER 2023
Note 2023 2022
Unaudited Unaudited
£000 £000
Cash flows from operating activities
Profit for the period after tax 22,680 28,088
Income tax expense 7,622 5,767
Depreciation 1,261 1,292
Amortisation 6,099 6,018
Profit on disposal of intangible assets (2,591) (1,757)
Finance costs 735 611
Finance income (2,540) (636)
33,266 39,383
(Increase)/Decrease in inventories (376) 453
Decrease in receivables 5,142 4,137
Decrease in payables and deferred income (28,643) (15,522)
Cash generated from operations 9,389 28,451
Tax paid (2,780) -
Interest paid - (31)
Interest received 1,594 327
Net cash flow from operating activities 8,203 28,747
Cash flows from investing activities
Purchase of property, plant and equipment (1,575) (892)
Purchase of intangible assets (23,274) (14,341)
Proceeds from sale of intangible assets 12,473 16,197
Net cash (used in)/generated from investing activities (12,376) 964
Cash flows from financing activities
Repayment of debt - (640)
Payments on leasing activities (300) (343)
Dividend on Convertible Cumulative Preference Shares (485) (455)
Net cash used in financing activities (785) (1,438)
Net (decrease)/increase in cash and cash equivalents (4,958) 28,273
Cash and cash equivalents at 1 July 72,285 31,869
Cash and cash equivalents at 31 December 10 67,327 60,142
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 2023 and to 31 December 2022 has not been audited, but it has been
reviewed by the Company's auditor.
Adoption of standards effective for periods beginning 1 July 2023
The following amended standards have been adopted as of 1 July 2023
· Amendments to IAS 8, IAS 1, IAS 12, IFRS 17, IFRS 9 and IAS 12
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 2023
Dec 2022
Unaudited Unaudited
£000
£000
Football and stadium operations 29,778 28,250
Multimedia and other commercial activities 37,153 30,866
Merchandising 18,291 17,426
85,222 76,542
Number of home games 14 14
3. EXCEPTIONAL OPERATING ITEMS AND OTHER INCOME
The exceptional operating expense of £0.05m represents settlement payments.
These items are deemed to be unusual in relation to what management consider
to be normal operating conditions.
Other income in the prior period 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 period this is represented by a compensation sum receivable
relating to the release of contractual obligations. In the prior period this
related to an amount received in respect of a Business Interruption insurance
claim. 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
2023 2022
Unaudited Unaudited
£000 £000
Finance income:
Interest receivable on bank deposits 1,789 326
Notional interest income 751 310
2,540 636
6 months to 6 months to
31 December 31 December
2023 2022
Unaudited Unaudited
£000 £000
Finance expense:
Interest payable on bank and other loans - (31)
Notional interest expense (451) (296)
Dividend on Convertible Cumulative Preference Shares (284) (284)
(735) (611)
5.
TAXATION
Tax has been charged at 25% for the six months ended 31
December 2023 (2022: 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 £7.6m
(2022: £5.8m).
6. EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the
profit for the period of £22.7m (2022: £28.1m) by the weighted average
number of Ordinary Shares in issue of 94,596,518 (2022: 94,515,655). 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 date if dilutive.
7. INTANGIBLE ASSETS
31 December 2023 31 December 2022
Unaudited Unaudited
Cost £000 £000
At 1 July 55,747 67,511
Additions 12,866 5,650
Disposals (15,448) (13,683)
At period end 53,165 59,478
Amortisation
At 1 July 27,708 32,022
Charge for the period 6,099 6,018
Disposals (13,321) (12,886)
At period end 20,486 25,154
Net Book Value at period end 32,679 34,324
8. TRADE AND OTHER RECEIVABLES
31 December 2023 31 December 2022
Unaudited Unaudited
£000 £000
Trade receivables 34,365 21,232
Prepayments and accrued income 11,068 7,053
Other receivables 6,154 6,325
51,587 34,610
Amounts falling due after more than one year included above are:
31 December 31 December 2022
2023 Unaudited
Unaudited
£000 £000
Trade receivables 8,624 4,515
9. SHARE CAPITAL
Authorised Allotted, called up and fully paid
31 December 31 December
2023 2022 2023 2023 2022 2022
Unaudited Unaudited Unaudited
No 000 No 000 No 000 £000 No 000 £000
Equity
Ordinary Shares of 1p each 223,775 223,681 94,615 946 94,526 945
Deferred Shares of 1p each 680,722 677,885 680,722 6,807 677,885 6,778
Convertible Preferred Ordinary Shares of £1 each
14,678 14,721 12,692 12,692 12,718 12,718
Non-equity
Convertible Cumulative Preference Shares of 60p each
18,295 18,298 15,795 9,477 15,797 9,478
Less reallocated to debt:
Initial debt - - - (2,753) - (2,753)
937,470 934,585 803,824 27,169 800,926 27,166
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
2023 2022
Unaudited Unaudited
£000 £000
Bank Loans due within one year - (948)
Cash and cash equivalents:
Cash at bank and on hand 67,327 60,142
Net cash at bank at period end 67,327 59,194
11. POST BALANCE SHEET EVENTS
Since the Balance Sheet date, we have acquired the permanent registration of
Nicolas Kuhn from SK Rapid Vienna and the temporary registration of Adam Idah
from Norwich City.
We have permanently transferred the registrations of David Turnbull and Yosuke
Ideguchi, and temporarily transferred the registrations of Adam Montgomery,
Hyeokkyu Kwon, Michael Johnston and Marco Tilio to other clubs.
Directors
Peter T Lawwell (Chairman)
Michael Nicholson (Chief Executive Officer)
Christopher McKay (Chief Financial Officer)
Thomas E Allison
Dermot F Desmond
Brian D H Wilson
Sharon Brown
Brian Rose
Company Secretary
Christopher Duffy
Registered Office
Celtic Park
Glasgow
G40 3RE
Registered Number
SC003487
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