REG - Celtic PLC - Results for the year ended 30 June 2023
18/09/2023 17:30
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RNS Number : 8183M Celtic PLC 18 September 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
Announcement of Results for the year ended 30 June 2023
SUMMARY OF THE RESULTS
Key Operational Items
· Winners of the Domestic Treble in season 2022/23 for a world record
8(th) time.
· Qualification for the group stages of the UEFA Champions League for
season 2023/24.
· Participation in the group stages of the UEFA Champions League in
season 2022/23.
· 26 home matches played at Celtic Park (2022: 31 games).
Key Financial Items
· Group revenue increased by 35.8% to £119.9m (2022: £88.2m).
· Operating expenses including labour increased by 4.0% to £95.4m
(2022: £91.7m).
· Gain on sale of player registrations of £14.4m (2022: £29.0m).
· Acquisition of player registrations of £13.0m (2022: £38.4m).
· Profit before taxation of £40.7m (2022: £6.1m).
· Year-end cash net of bank borrowings of £72.3m (2022: £30.2m).
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
I open by welcoming back Brendan Rodgers to the Club following his successful
spell as First Team Manager between May 2016 and February 2019. Following the
departure of Ange Postecoglou, we assessed the market and concluded that
Brendan was both the natural choice and the overwhelmingly best candidate to
succeed Ange and take Celtic forward. We thank Ange for all he achieved at the
Club and wish him all the best for the future and look forward to working with
Brendan once again to deliver success for Celtic. My own appointment took
effect from January 1(st) following the retirement of Ian Bankier. I take this
opportunity to reiterate the Club's appreciation to Ian for his distinguished
service in the role.
The results for the year ended 30 June 2023 show an increase in revenue to
£119.9m (2022: £88.2m) with a corresponding profit before tax of £40.7m
(2022: £6.1m profit before tax). This represents a record set of financial
results for the Club due to a combination of factors as detailed below,
including some material items of a one off nature.
The £31.7m increase in revenue reflects the participation in the UEFA
Champions League in season 2022/23, when compared to the UEFA Europa League in
the previous season, resulting in greater ticket and media rights income. In
addition to this, our tour of Australia and a record year for our retail
business were also significant contributors to the increase. The £34.6m
increase in profit before tax resulted from the significant revenue increase
outlined above along with a £14.4m gain on sale of player registrations,
predominantly from the sales of Jota, Juranovic and Giakoumakis. In addition,
we recorded £13.5m of other income that came from a combination of
compensation received following the departure of Ange Postecoglou and a
business interruption insurance recovery in relation to Covid-19, with the two
items mentioned being one off in nature and typically non-recurring.
In terms of funding and liquidity, our year end cash, net of bank borrowings,
was £72.3m (2022: £30.2m). The increase this year was principally due to the
translation into cash of the strong trading environment and the typically
non-recurring items mentioned previously. These reserves were used to fund the
summer 2023 transfer window and will be used for settling outstanding sums due
from transfers over the last two seasons, which are typically paid in
instalments. This sum also contains the cash required to fund the significant
investment that the Club is planning to make in developing our Barrowfield
training facility. It is important to highlight that, given the increasing gap
between the sums able to be earned between the Champions League and the Europa
League, it is vital that we retain a cash buffer in reserve. History tells us
that we will not always qualify for the Champions League and the benefit of
holding cash reserves affords us the optionality of managing through seasons
where we participate in the Europa League with the ability to retain our squad
as opposed to selling key players to bridge the income shortfall between both
competitions. The Financial sustainability rules are also a key feature of
UEFA licencing and we need to be cognisant of running our club accordingly.
Building on the investment in player registrations of £38.4m in the previous
financial year ended 30 June 2022, the Club made further significant
investment in the year by committing an additional £13.0m, taking our total
spend to £51.4m over the two financial years to 30 June 2023. Since the year
end and up to 1(st) September 2023 we have invested a further £15.0m into
player registrations taking our total spend over this period to £66.4m. The
assembly of a strong squad was a key factor in retaining the SPFL title for
the second consecutive year and ultimately securing a domestic Treble. The
investment will serve us well for the season ahead. Last year's trophies
brought our total Trebles to eight in our history and this landmark
represented a new world record and one that all connected with our Club should
be rightly proud of.
Securing the SPFL title once again in 2022/23 led to automatic Champions
League qualification. Following the draw, we have been matched against
Feyenoord, Lazio and Atletico Madrid in what is sure to be an exciting
Champions League Group Stage. Automatic qualification allowed us to make
further football investment with a focus on building greater strength into the
playing squad. In the summer 2023 transfer window, we have acquired
Hyeok-kyu Kwon, Marco Tilio, Hyun-jun Yang, Odin Holm, Maik Nawrocki, Gustaf
Lagerbielke, Luis Palma and brought in Paulo Bernardo and Nathaniel Phillips
on loan. The present squad also gives real potential for development with the
average age being 24. We parted company with Aaron Mooy, Carl Starfelt, Albian
Ajeti, Ismaila Soro, Osaze Urhoghide, Vasilios Barkas, Conor Hazard and Jota.
We wish all our former players the best for the future.
Our successfully proven strategy has delivered stability and footballing
success over many years and remains the same. We must balance the signing of
players that can be developed and sold when conditions are optimal alongside
the need to sign players who are able to make an immediate impact and deliver
footballing success. The execution of this strategy is increasingly
challenging owing to wage and transfer inflation, but this formula has
underpinned both our footballing success and financial stability over a number
of years now and it is vital that we adhere to it.
Following on from the League and Scottish Cup double in the prior season, our
Women's team had another strong performance in season 2022/23. Following the
disappointment of losing the SWPL title by just two points to a last-minute
winner on the season's final day resulting in a second place finish, we went
on to retain the Scottish Cup with a victory against Rangers Women at Hampden.
Whilst finishing second in the league was a disappointment this facilitated
access to the Women's Champions League qualifiers. After defeating Brondby in
the first qualifying match, our Women's team then faced a match against
Valerenga for progression to the final play-off round prior to the group
stages. The match ended 2-2 after extra time and was ultimately lost in
penalties. Whilst this was hugely disappointing, we take pride in the fact
that this is the furthest our Women's team have progressed in the tournament
and they will take much from the experience.
As we look forward, European club competition continues to develop and further
integrate. Relationships between the European Club Association ('ECA') along
with UEFA and FIFA have never been stronger and ECA membership continues to
expand. This is a positive development for European football clubs and will
strengthen governance and ultimately add value to the European Football
landscape. Celtic are committed to the ECA and fully endorse its objectives as
we move towards the new European Club Competition format from 2024 onwards. In
my role as Vice Chairman of the ECA, member of the executive committee and
Board Member, I will continue to promote the interests of Celtic, Scottish
football and European football as a whole.
Finally, I wish to extend my thanks to all our Celtic colleagues for their
contribution to delivering another Treble and of course to all our supporters
who continue to support the Club year after year in enormous numbers.
Peter T Lawwell, Chairman
18 September 2023
CHIEF EXECUTIVE'S REVIEW
The year to 30 June 2023 will go down as a landmark year in the history of
Celtic, when the Club achieved a world record breaking 8(th) Treble. I thank
and congratulate all of our colleagues, our players, our former manager Ange
Postecoglou, and of course our supporters for this remarkable achievement.
The objective for the season was to build upon the previous year's success,
when we had secured the SPFL Premiership title and the League Cup. Having
invested in the first team squad, we entered the Champions League Group Stages
for the first time in five years. The challenging draw set us against RB
Leipzig, Shakhtar Donetsk and 14 times Champions League winners Real Madrid.
Despite achieving only two points, the performance levels and valuable
experience gained by our young squad were promising and will provide a base on
which to build again into this season and the forthcoming Champions League
Group Stages campaign.
Our domestic campaign got off to a strong start and by the halfway mark on 31
December 2022, we had lost just one game; winning 18 games of the 19 played.
The 2022 World Cup gave us an opportunity to take part in a hugely successful
international tour of Australia, where we played Everton F.C. and Sydney F.C.
This gave the opportunity to bring Celtic to our supporters in Australia and
the southern hemisphere, and demonstrated the scale of the Club on the
international stage. In February 2023, we retained the Scottish League Cup
with a victory over Rangers setting the tone for the title run in. We went on
to secure the SPFL Premiership title in early May 2023, before defeating
Inverness Caledonian Thistle F.C. to win the Scottish Cup and our eighth
domestic Treble. Following the Scottish Cup Final, Ange Postecoglou left the
Club to become the manager of Tottenham Hotspur F.C. Ange leaves with the
Club's best wishes, and with our appreciation for his contribution to our
Club.
During the 2023/24 close season, the immediate focus was the recruitment of a
First Team Manager to replace Ange. Following a thorough assessment, we were
delighted to bring Brendan Rodgers back to Celtic. Brendan was the standout
candidate for the job. Bringing back a manager of Brendan's quality is crucial
to our strategic objectives to dominate domestic football and to compete
regularly in the Champions League. During the summer transfer window, we
worked with Brendan to continue to strengthen our squad, and we look to the
season ahead with optimism and a determination to continue to build our Club
for the short, medium and long term. Our immediate priority is to retain the
SPFL Premiership title and the Scottish Cup, and to build on our performances
in the Champions League.
Celtic F.C. Women enjoyed another successful season, winning the Women's
Scottish Cup against Rangers. Manager, Fran Alonso, our players, led by
Captain Kelly Clark, and all of our colleagues are to be congratulated for the
continued development and improvement of our Women's team, with a terrific
league campaign ending by narrowly finishing second in the last game of the
season in dramatic circumstances. We also saw a record attendance for a Celtic
F.C. Women's game at Celtic Park, where the support given to the team was
outstanding. We will continue to invest in the development of Celtic F.C.
Women and our Girls Academy.
Celtic F.C. B Team completed their second full season in the Lowland League,
finishing third for the second consecutive season. We look forward to our
third season in the Lowland League, with further opportunities for player
development this season in the UEFA Youth League and the Premier League
International Cup. Player development remains at the core of the Club's
strategy and it is vitally important that we continue to invest in developing
our own Academy players. We will work with the Scottish football authorities
to maximise the opportunities for the development of young players in
Scotland.
Continuous improvement remains a key objective. During the year we invested in
our facilities at Celtic Park and Lennoxtown, to take our Club forward. At
Celtic Park, we opened a new sports bar and a new viewing platform for
disabled supporters. At Lennoxtown, we completed work on a new performance
gym for the First Team and B Team, together with a new First Team canteen and
lounge facility. In the year ahead, we will complete a significant investment
in new First Team and B Team changing facilities, along with enhanced medical
and sports science facilities, to seek to ensure that our technical functions
are aligned to meet the needs of a modern football club and players.
Last week we were delighted to announce a major investment in the
re-development of our Barrowfield training facility. This is a very exciting
project. Our objective is to create a first class training and development
environment for the Academy and Women's football team at an iconic venue that
has played such an important part in the history of our Club.
This year saw the redevelopment of some facilities at Celtic Park for the use
of Celtic F.C. Foundation. Charity continues to be a fundamental part of our
Club, with Celtic F.C. Foundation at the very heart of everything we do, as
highlighted by the current banners on the main stand at Celtic Park, ensuring
that the Club's commitment to our charitable ethos is front and centre for all
to see. Everyone at the Club is extremely proud of the important work
delivered by Celtic F.C. Foundation, including, for example, Paradise Pit
Stop, where twice a week we open our doors at Celtic Park and Celtic F.C.
Foundation provides hot food for those in need in our community, in a safe and
welcoming environment. Thank you to all who support Celtic F.C. Foundation
including our colleagues who volunteer every week to help at the Paradise Pit
Stop.
As we continue to develop our Club for the future, we are aware of the ongoing
turbulence and uncertainty in the economy and the challenges presented for our
business, our partners and our supporters. Our model seeks to balance our
commitment to football success with the crucial importance of financial
sustainability. We thank our partners and sponsors, including adidas,
Dafabet and Magners for your continued support. We are also very fortunate
to have fantastic colleagues at Celtic, who work tirelessly to support all of
the Club's operations and to support the teams on the pitch throughout the
season. I would also like to thank Ian Bankier, who retired during the
financial year, for his contribution to the Club and his support and advice to
the Board as Chairman.
Finally, our thanks go to our supporters for your commitment and invaluable
contribution to the Club. Your continued support is vital in delivering the
success that we all strive for each year.
Michael Nicholson, Chief Executive
18 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
2023 2022
Notes £000 £000
Revenue 2 119,851 88,235
Operating expenses (before intangible asset transactions and exceptional (95,432) (91,728)
items)
Profit/(loss) from trading before intangible asset transactions and 24,419 (3,493)
exceptional items
Exceptional operating expenses 3 (131) (6,262)
Amortisation of intangible assets (12,088) (13,045)
Profit on disposal of intangible assets 14,441 29,029
Other income 13,500 -
Operating profit 40,141 6,229
Finance income 2,041 876
Finance expense (1,485) (969)
Profit before tax 40,697 6,136
Tax expense 5 (7,365) (287)
Profit and total comprehensive profit for the year 33,332 5,849
6 35.26p 6.19p
Basic profit per Ordinary Share for the year
Diluted profit per Share for the year 6 24.79p 4.69p
CONSOLIDATED BALANCE SHEET
As at 30 June 2023
2023 2022
£000 £000
Assets
Non-current assets
Property, plant and equipment 55,725 56,265
Intangible assets 28,039 35,489
Trade receivables 15,113 13,000
98,877 104,754
Current assets
Inventories 3,426 2,987
Trade and other receivables 45,700 38,367
Cash and cash equivalents 72,285 31,869
121,411 73,223
Total assets 220,288 177,977
Equity
Issued share capital 27,168 27,166
Share premium 14,990 14,951
Other reserve 21,222 21,222
Accumulated profits 44,810 11,478
Total equity 108,190 74,817
Non-current liabilities
Borrowings - 314
Debt element of Convertible Cumulative Preference Shares 4,174 4,174
Trade and other payables 12,320 16,806
Lease liabilities 432 318
Provisions 96 114
Deferred tax liabilities 3,215 2,982
20,237 24,708
Current liabilities
Trade and other payables 50,764 36,758
Lease liabilities 330 539
Borrowings 96 1,336
Provisions 6,898 8,350
Deferred income 33,773 31,469
91,861 78,452
Total liabilities 112,098 103,160
Total equity and liabilities 220,288 177,977
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Group Share Share Other Accumulated Total
capital premium reserve profit
£000 £000 £000 £000 £000
Equity shareholders' funds 27,166 14,914 21,222 5,629 68,931
as at 1 July 2021
Share capital issued - 37 - - 37
Profit and total comprehensive profit - - - 5,849 5,849
for the year
Equity shareholders' funds 27,166 14,951 21,222 11,478 74,817
as at 30 June 2022
Share capital issued 2 39 - - 41
Profit and total comprehensive profit - - - 33,332 33,332
for the year
Equity shareholders' funds 27,168 14,990 21,222 44,810 108,190
as at 30 June 2023
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2023
2023 2022
£000 £000
Cash flows from operating activities Notes
Profit for the year 33,332 5,849
Taxation charge 7,365 287
Depreciation 2,883 2,736
Amortisation of intangible assets 12,088 13,045
Impairment of intangible assets and other prepaid costs - 7,235
Reversal of prior period impairment charge - (1,094)
Profit on disposal of intangible assets (14,441) (29,029)
Finance income (2,041) (876)
Finance costs 1,485 969
40,671 (878)
(Increase) / decrease in inventories (439) 873
Increase in receivables (2,649) (1,856)
Increase in payables and deferred income 9,092 12,302
Cash from operations 46,675 10,441
Tax paid 5 (4,297) -
Interest received 1,175 64
Interest paid (48) (77)
Net cash flow from operating activities 43,505 10,428
Cash flows from investing activities
Purchase of property, plant and equipment (1,775) (1,034)
Purchase of intangible assets (24,349) (20,566)
Proceeds from sale of intangible assets 25,781 26,044
Net cash (used in) / from investing activities (343) 4,444
Cash flows used in financing activities
Repayment of debt (1,604) (1,280)
Payments on leasing activities (669) (693)
Dividend on Convertible Cumulative Preference Shares (473) (489)
Net cash used in financing activities (2,746) (2,462)
Net increase in cash equivalents 40,416 12,410
Cash and cash equivalents at 1 July 2022 31,869 19,459
Cash and cash equivalents at 30 June 2023 72,285 31,869
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The principal accounting policies applied in the preparation of these
Financial Statements are set out below. These policies have been
consistently applied to financial years 2023 and 2022, presented, for both the
Group and the Company.
Going Concern
The Group has adequate financial resources available to it, including
currently undrawn bank facilities, together with established contracts with a
number of customers and suppliers.
Additionally, the Group continues to perform a detailed budgeting process each
year which is reviewed and approved by the Board. The Group also performs
regular re-forecasts and these projections, which include profit/loss and cash
flow forecasts, are distributed to the Board. As a consequence, the Directors
believe that the Group is well placed to manage its business risks
successfully over the medium term.
In consideration 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 annual Financial Statements and
have not identified a material uncertainty in this regard.
2. REVENUE
2023 2022
£000
£000
The Group's revenue comprised:
Football and Stadium Operations 51,483 42,782
Merchandising 29,072 24,925
Multimedia and Other Commercial Activities 39,296 20,528
119,851 88,235
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses of £0.1m (2022: £6.3m) can be analysed as
follows:
2023 2022
£000
£000
Impairment of intangible assets and other prepaid costs - 7,235
Reversal of prior period impairment charges - (1,094)
Settlement agreements on unforeseen contract termination 131 121
131 6,262
The impairment of intangible assets in the prior year relates to adjustments
required as a result of management's assessment of the carrying value of
certain player registrations relative to their current market value. The
carrying value of intangible assets are reviewed against criteria indicative
of impairment and, where the carrying value exceeds their current market
value, impairment is recognised. Where events subsequent to this initial
assessment give rise to a reversal of any impairments, such as a transfer or a
significant turnaround in performance, an impairment reversal is recognised.
Settlement agreements on unforeseen contract termination are costs in relation
to exiting certain employment contracts.
These events are deemed to be unusual in relation to what management consider
to be normal operating conditions as the occurrence of these events is
sufficiently irregular enough to warrant it as exceptional.
4. DIVIDEND ON CONVERTIBLE CUMULATIVE PREFERENCE SHARES
A 6% non-equity dividend of £0.53m (2022: £0.53m) was paid on 31 August 2023
to those holders of Convertible Cumulative Preference Shares on the share
register at 28 July 2023. A number of shareholders elected to participate in
the Company's scrip dividend reinvestment scheme for the financial year to 30
June 2023. Those shareholders have received new Ordinary Shares in lieu of
cash. No dividends were payable or proposed to be payable on the Company's
Ordinary Shares.
During the year, the Company reclaimed £nil (2022: £nil) in respect of
statute barred preference dividends in accordance with the Company's Articles
of Association.
5. TAX ON ORDINARY ACTIVITIES
The corporation tax payable as at 30 June 2023 was £2.3m (2022: receivable of
£0.5m). The current year tax charge was £7.4m (2022: £0.3m) and total tax
payments in the year were £4.3m (2022: £nil). The available capital
allowances pool is approximately £4.3m (2022: £5.1m). These estimates are
subject to the agreement of the current year's corporation tax computations
with H M Revenue and Customs.
The standard rate of corporation tax for the year in the United Kingdom is
currently 25% (2022: 19%). The tax rate of 25% came into effect on 1(st)
April 2023 and therefore the annualised rate for the financial year end 30
June 2023 is 20.496%.
2023 2022
£000
£000
Current tax expense
UK corporation tax 7,132 99
Adjustments in respect of prior periods - -
Total current tax expense 7,132 99
Deferred tax expense
Origination of temporary timing differences 191 143
Adjustments in respect of prior periods - -
Effects of changes in tax rates 42 45
Total deferred tax 233 188
Total tax expense 7,365 287
6. EARNINGS PER SHARE
Reconciliation of basic earnings to diluted earnings: 2023 2022
£000 £000
Basic earnings 33,332 5,849
Non-equity share dividend 569 569
Diluted earnings 33,901 6,418
No.'000 No.'000
Reconciliation of basic weighted average number of ordinary shares to
diluted weighted average number of ordinary shares:
Basic weighted average number of ordinary shares 94,531 94,457
Dilutive effect of convertible shares 42,226 42,252
Diluted weighted average number of ordinary shares 136,757 136,709
Earnings per share of 35.26p (2022: 6.19p) has been calculated by dividing the
total comprehensive profit for the period of £33.3m (2022: £5.8m) by the
weighted average number of Ordinary Shares of 94.5m (2022: 94.5m) in issue
during the year.
Diluted earnings per share of 24.79p (2022: 4.69p) has been calculated by
dividing the diluted earnings for the period of £33.9m (2022: £6.4m) 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. When considering a loss per share
scenario, no adjustment is made for the preference share dividend and
therefore the diluted loss per share is equal to the basic loss per share.
7. ANNUAL REPORT & FINANCIAL STATEMENTS
Copies of the Annual Report & Financial Statements together with the
Notice and Notes of the 2023 AGM will be issued to all shareholders in due
course.
The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 30 June 2023 or 30 June
2022. The Independent Auditor's Reports on the statutory financial statements
for 2023 and 2022 were unqualified, did not draw attention to any matters by
way of emphasis, and did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006. The statutory financial statements for 2022 have been
filed with the Registrar of Companies and those for 2023 will be delivered to
the Registrar of Companies in due course.
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