Source - LSE Regulatory
RNS Number : 2463D
Celtic PLC
26 October 2020
 

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 2020

 

SUMMARY OF THE RESULTS

 

Operational Highlights

 

·    Winner of our 9th consecutive SPFL Premiership title and our 11th consecutive domestic trophy success

·    Winner of the Scottish League Cup for the 4th season in a row

 

·    Finished top of our Europa League group, qualifying for the Round of 32 for the third year in a row

 

·    261 home matches played at Celtic Park (2019: 30 games)

 

 

Financial Highlights

 

·    Group revenue decreased by 15.8% to £70.2m (2019: £83.4m)

 

·    Operating expenses including labour decreased by 7.3% to £80.5m (2019: £86.9m)

 

·    Gain on sale of player registrations of £24.2m (2019: £17.7m)

·    Acquisition of player registrations of £20.7m (2019: £6.2m)

                                                                                                                                                                            

·    Profit before taxation of £0.1m (2019: £11.3m)

·    Year-end cash net of bank borrowings of £18.2m (2019: £28.6m)

 

 

1due to the early curtailment of the Scottish domestic season, 4 home SPFL Premiership matches were unfulfilled.

 

 

 

For further information contact:

 

Celtic plc




Ian Bankier, Celtic plc

Tel: 0141 551 4235



Peter Lawwell, Celtic plc




Iain Jamieson, Celtic plc




 

Canaccord Genuity Limited, Nominated Adviser



Simon Bridges

Tel: 0207 523 8000



 

CHAIRMAN'S STATEMENT

The overwhelming event in the year under review was the emergence of Covid-19 and the attendant restrictions on social movement and trade.  This has had an adverse impact on our operations and our balance sheet.  At the time of writing we, like many football clubs and indeed many businesses, are still grappling with the challenges the pandemic presents including the near term uncertainty. However, the Board continues to monitor the situation closely, taking proactive measures to ensure the Club and our colleagues remain safe and is in the best position to allow football to continue.

 

The SFA and the SPFL suspended football at all levels on 13th March 2020.  By this time, we had retained the Betfred Cup for the fourth successive season and had reached the semi-final of the Scottish Cup.  In addition, we enjoyed a 13-point lead in the Scottish Premiership.

 

As a club we were involved in discussions with the SFA and SPFL concerning the plans for Scottish Football.  Like many of our peers, our strongest desire was to finish season 2019/20.  As it became increasingly obvious that a compromise would have to be made in order to protect the seasonal calendar for 2020/21 and remove the financial burden on many Scottish Clubs of an extensive and uncertain delay, we accepted, reluctantly, that the current season's football would have to be curtailed. This view was widely shared across Scottish Football and we supported an SPFL resolution which afforded the SPFL Board the power to call an end to the season.  The resolution also gave the SPFL Board the power to award the league title based on an average points basis.  On 18th May 2020 the SPFL formally ended the season and Celtic were declared Champions for the ninth consecutive season. We warmly congratulate Neil and the team for this record equalling achievement.

 

Unsurprisingly, Covid-19 has had a material detrimental effect on the financial results and the year ended 30 June 2020 saw revenue fall to £70.2m (2019: £83.4m) and profit before tax fall to £0.1m (2019: £11.3m). As discussed in more detail in the Strategic Report, this was largely attributable to the value destructive impact of the pandemic across many aspects of our business. Nevertheless, these results are satisfactory in the circumstances at hand. Our year end cash net of bank borrowings was £18.2m (2019: £28.6m). Post year end we also took the opportunity to increase our existing revolving credit facility from £2m to £13m to provide a further buffer should it ever be required

 

Following the suspension of football, the Club's executive worked successfully on developing protocols and engaging with both the football authorities and Government authorities to have our players return to training and to then commence season 2020/21 on time.  Additionally, they focussed on protecting our key revenue streams and retaining our people infrastructure.  I am pleased to report that all of our commercial sponsorship arrangements are intact and season 2020/21 saw us welcome Adidas as our new kit supplier. The response to the launch of the Adidas products in August was outstanding and exceeded our expectations.

 

The governmental restrictions imposed to protect public health continue to have a negative financial impact on the football industry.  Our hard work and measured approach to investment in recent years has provided a degree of protection, but given the inherent uncertainty of the current environment, we must proceed and invest with a degree of caution.  Nevertheless, we remain confident in the fundamentals of our football model and since the Balance Sheet date we have strengthened our player squad.  Following the year end we invested in the registrations of Vasilis Barkas, Albian Ajeti, David Turnbull and brought in loan signings Shane Duffy and Diego Laxalt. We also extended the loan of Mohamed Elyounoussi.  Moreover, we have retained all of our key players from last season.

 

As we look ahead, our immediate priorities are to work with the football authorities and Government to have fans return to watching football in our stadium in a safe manner. Having qualified for the 2020/21 UEFA Europa League against a challenging backdrop of single leg qualification ties, we are matched against AC Milan, Lille and Sparta Prague in what is sure to be both a testing and exciting, group stage.  Domestically, the overriding objective is to win our tenth consecutive league title.

 

In closing, I sincerely thank our supporters for their commitment to buying season tickets and also our sponsors, partners and all of the colleagues at Celtic Football Club for their steadfast support in these most difficult of times.  Please be assured that the Board recognises the challenges and sacrifices made and is determined to balance the objective of success with the strategy of long term sustainability.

 

Ian P Bankier, Chairman                                                                                                                                                       

26 October 2020


 

CHIEF EXECUTIVE'S REVIEW

 

The last six months have been an extremely challenging time for the global economy, the global health environment, the football industry and the Club. The adverse effect of Covid-19 has been both deep and prolonged and the outlook is still uncertain on many levels. Your Board has always managed the Club by balancing the objective of delivering football success and retaining sufficient reserves to manage downturns. Whilst the scale and impact of the current Covid-19 crisis could never conceivably have been predicted, our prudent strategy puts us in a better position than many as we seek to navigate an exit from the current crisis with the Club intact.

Being crowned champions for the ninth season in a row, winning the Betfred Cup and reaching the semi-final of the Scottish Cup had put us on a trajectory for yet another record breaking season through the potential to secure a quadruple treble. We also reached the last 32 of the Europa League for the third consecutive season. My thanks go to Neil, his backroom team and all of the players for their tremendous achievements. We also recognise the efforts made by the players and coaching staff following the curtailment of football in March in maintaining high professional standards during "lockdown", thus putting themselves and the Club in the best possible position when football resumed. 

The last 18 months saw the Club invest record sums into the playing squad with the key objective of maintaining our domestic dominance and making an impact in European competition and this strategy has been successful to date. At the beginning of last season, we also welcomed our new head of football operations, Nick Hammond. Nick brings a wealth of experience and has developed and enhanced our recruitment processes yet further. The Club is now seeing the benefits and we expect more to come. We continue to invest into our academy to bring through the best talent in Scotland and the transfer of Kieran Tierney to Arsenal F.C. demonstrates the quality that our academy can produce. As football evolves, we also strive to be at the forefront in investing into world class technology to support football analysis, sports science and medical care. We will continue to invest into key areas where we believe it enhances our ability to compete at a high level. This strategy has served us well and has resulted in us having significant value in our playing squad that will serve us this season and beyond. We believe that we have built a modern, internationally recognised football club that operates to the highest standards and one that our fans can be proud of.

The commencement of season 2020/21 has presented many challenges; from demonstrating to the football and Government authorities our ability to safely play matches behind closed doors, to developing and implementing a rigorous Covid-19 player testing regime, to negotiating single leg European qualification matches all without the crucial backing of our fans in our stadium. Our immediate objective was Champions League qualification, and whilst we were disappointed not to progress to the group stages this year, we secured Europa League football and find ourselves in a group alongside quality opposition. We also look forward to completing season 2019/20's Scottish Cup tournament. This involves playing a semi-final against Aberdeen and, should we overcome this, a final against either Heart of Midlothian F.C. or Hibernian F.C. We do not underestimate the scale of the task at hand but if we are successful then the history books will show an historic quadruple treble.

The year ahead is unpredictable and Celtic are not immune to the extent of the challenges that we could face at many levels. Whilst we will continue to invest and not deviate from our strategy, we are also cognisant that we may have to endure the Covid-19 restrictions for longer than we would all hope and therefore must balance our desire to progress the Club against long-term sustainability. The transfer market is likely to be unpredictable as clubs around Europe struggle to adapt and many of the key stakeholders in European football are expected to be inward facing and adopting defensive strategies. It is important that Celtic's interests and that of Scotland's are represented within European football and through my role at the European Club Association, I will continue to promote these interests.

In closing, I sincerely thank our fans for backing us in the summer of 2020 with a remarkable response to our season ticket campaign and the outstanding generosity shown in backing Celtic FC Foundation's Football For Good initiative, all against a backdrop of being unable to attend matches and an uncertain economic environment. Your support has arguably never been more important than the present. The dedication and sacrifices made by the support are fully understood by both your Board and myself and are not underestimated or taken for granted. Finally, I would like to thank our employees for whom this has been a deeply unsettling and uncertain time. Their commitment and dedication in the face of the numerous challenges has been an outstanding reflection of their character and the values of our Club.

Peter Lawwell, Chief Executive                                                                                                                                                      

26 October 2020

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 


 

Notes

2020

£000


2019

£000











Revenue

2

70,233


83,410






Operating expenses (before intangible asset transactions and exceptional items)


(80,549)


(86,904)






Loss from trading before intangible asset transactions and exceptional items


(10,316)


(3,494)






Exceptional operating expenses

3

(1,957)


(1,789)






Amortisation of intangible assets


(12,244)


(9,709)






Profit on disposal of intangible assets


24,188


17,717






Other income


-


8,795






Operating (loss) / profit


(329)


11,520






Finance income


1,479


1,059






Finance expense


(1,049)


(1,267)











Profit before tax


101


11,312






Tax expense

5

(469)


(2,574)






(Loss) / profit and total comprehensive (loss) / income for the year


(368)


8,738





        

Basic (loss) / earnings per Ordinary Share for the year

 

6

(0.39)p


9.30p











Diluted (loss) / earnings per Share for the year

6

(0.39)p


6.78p






 

CONSOLIDATED BALANCE SHEET

 

 



2020


2019



£000


£000

Assets





Non-current assets





Property, plant and equipment


58,752


58,690

Intangible assets


19,828


14,156

Trade receivables


13,527


8,089

 


92,107


80,935

Current assets

 

 

 


Inventories


1,269


2,643

Trade and other receivables


28,478


25,426

Cash and cash equivalents


22,406


34,057



52,153


62,126






Total assets


144,260


143,061






Equity





Issued share capital


27,166


27,157

Share premium


14,849


14,785

Other reserve


21,222


21,222

Accumulated profits


18,230


18,598

Total equity


81,467


81,762






Non-current liabilities





Borrowings


2,844


4,108

Debt element of Convertible Cumulative Preference Shares


4,174


4,183

Trade and other payables


3,542


6,943

Lease liabilities


637


-

Provisions


272


455

Deferred tax liabilities


1,366


1,139

Deferred income


29


57



12,864


16,885






Current liabilities





Trade and other payables


20,744


13,957

Lease liabilities


604


-

Borrowings


1,364


1,364

Provisions


5,942


3,479

Deferred income


21,275


25,614



49,929


44,414






Total liabilities


62,793


61,299






Total equity and liabilities


144,260


143,061


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 


Share
capital

Share
premium

Other
reserve

Accumulated (losses)/ profit

Total


£000

£000

£000

£000

£000

Equity shareholders' funds
as at 1 July 2018

27,132

14,720

21,222

9,860

72,934

Share capital issued

1

65

-

-

66

Reduction in debt element of convertible cumulative preference shares following conversion

24

-

-

-

24

Profit and total comprehensive income for

the year

-

-

-

8,738

8,738







Equity shareholders' funds
as at 30 June 2019

27,157

14,785

21,222

18,598

81,762







Share capital issued

-

64

-

-

64

Reduction in debt element of convertible cumulative preference shares following conversion

9

-

-

-

9

Loss and total comprehensive income for the year

-

-

-

(368)

(368)







Equity shareholders' funds
as at 30 June 2020

27,166

14,849

21,222

18,230

81,467


CONSOLIDATED CASH FLOW STATEMENT

 



2020


2019


Notes

£000


£000






Cash flows from operating activities





(Loss) / profit for the year


(368)


8,738

Taxation charge


469


2,574

Depreciation


2,640


2,064

Amortisation of intangible assets


12,244


9,709

Impairment of intangible assets


2,217


1,837

Reversal of prior period impairment charge


(413)


-

Profit on disposal of intangible assets


(24,188)


(17,717)

Net finance (income)/costs


(430)


208



(7,829)


7,413

 

 





Decrease / (increase) in inventories


1,374


(236)

Increase in receivables


(1,656)


(3,225)

Increase / (decrease) in payables and deferred income


4,486


(6,654)

Cash used in operations


(3,625)


(2,702)

Tax paid

5

(405)


(2,435)

Net Interest received


14


7

Net cash flow used in operating activities


(4,016)


(5,130)

 

 





Cash flows from investing activities





Purchase of property, plant and equipment


(1,175)


(2,257)

Purchase of intangible assets


(23,508)


(13,671)

Proceeds from sale of intangible assets


19,603


14,040

Net cash used in investing activities


(5,080)


(1,888)

 

 





Cash flows from financing activities





Repayment of debt


(1,280)


(1,010)

Payments on leasing activities


(798)


-

Dividend on Convertible Cumulative Preference Shares


(477)


(478)

Net cash used in financing activities


(2,555)


(1,488)






Net decrease in cash equivalents


(11,651)


(8,506)

Cash and cash equivalents at 1 July 2019


34,057


42,563

Cash and cash equivalents at 30 June 2020


22,406


34,057

 

 

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.  With the exception of the change in accounting treatment for leases following the implementation of IFRS16 (see below), these policies have been consistently applied to financial years 2020 and 2019, presented, for both the Group and the Company.

 

IFRS 16 Leases

 

IFRS 16 become effective for accounting periods beginning on or after 1 January 2019. The Group has therefore applied the standard for the first time for the year ended 30 June 2020 using the modified retrospective transitional approach, whereby comparative numbers are not restated. The reclassifications and the adjustments arising from the new leasing rules are recognised in the opening balance sheet on 1 July 2019.

 

On adoption of IFRS 16, the Group has recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 'Leases'. These liabilities were measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate as at 1 July 2019. The weighted average incremental borrowing rate applied to the lease liabilities at 1 July 2019 was 3.82%.

 

The Group had no finance leases in place as at 1 July 2019 and 30 June 2020.

 

The Group has taken advantage of the following practical expedients upon transition:

 

·      A single discount rate to be applied to a portfolio of leases with reasonably similar characteristics, being 3.82%;

·      Reliance on its assessment of whether a lease is onerous by applying IAS 37 immediately before the date of initial application;

·      Exclusion of leases whose term ends within 12 months of the date of initial application; and

·      Exclude initial direct costs from the right of use assets at the date of initial application.

 

 

Accounting approach

From 1 July 2019, leases have been recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. The lease payments are discounted using the Group's incremental borrowing rate as noted above.

 

Right-of-use assets are measured at cost comprising the following:

 

·      the committed lease payments due from date of recognition to the end of the lease term;

·      any other committed payments in relation to the leases including service charges and dilapidation commitments; and

·      an applied discount factor on the above commitments equal to the Group's cost of borrowing as noted above;

 

1.         BASIS OF PREPARATION (CONTINUED)

On the adoption of IFRS 16 the Group recognised the right-of-use assets and lease liabilities. This table shows the measurement methods adopted on transition:

 

Classification under IAS 17

Right-of-use assets

Lease liabilities

Operating leases that do not meet the definition of investment property in IAS 40

Right-of-use assets are measured at an

amount      equal   to    the    lease     liability

adjusted by the amount of any prepaid or

accrued lease payments.

Measured at the present value of the

remaining lease payments, discounted

using the Group's incremental borrowing rate as at 1 July 2019. The Group's incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions.

The weighted-average rate applied was

3.82%.

 

 

The following table presents the impact of adopting IFRS 16 on the statement of financial position as at 1 July 2019:

 


Adjustments

As originally presented

IFRS16

1 July 2019



£000

£000

£000

Assets





Property, plant and equipment


58,690

-

58,690

Right of use assets (cost)

(a)

-

1,704

1,704

Impairment of right of use asset

(b)

-

(486)

(486)






Liabilities





Onerous lease provision

(b)

486

(486)

-

Lease liabilities

(c)

-

1,704

1,704






Equity





Retained earnings


-

-

-

 

 

(a)   The right of use assets adjustment reflect those items previously classified as operating leases.

(b)   An onerous lease provision existed at 30 June 2019 relating to 2 retail units. As at 1 July 2019 this was recorded as an impairment against the related assets in line with the practical expedient available under the modified retrospective approach. Note that during the year, a re-assessment of one of the properties resulted in this impairment being reversed and released to the statement of comprehensive income.

 

1.         BASIS OF PREPARATION (CONTINUED)

 

(c)   The following table reconciles the minimum lease commitments disclosed in the Group's financial statements for the year end 30 June 2019, to the amount of lease liabilities recognised on 1 July 2019:

 



£000




Minimum operating lease commitment at 30 June 2019


1,545

Less: short term leases not recognised under IFRS16


(45)

Use of practical expedient regarding lease extensions


380

Undiscounted lease payments


1,880

Less: effect of discounting using 3.82% as at the date of initial application


(176)

Lease liabilities for leases classified as operating type under IAS17


1,704

 

 

The net impact on retained earnings on 1 July 2019 was £nil.

 

The additions to the 'Land & Buildings' and 'Plant & Vehicles' categories within 'Property, plant & equipment' are shown separately on a separate line on Note 16. The depreciation on the right-of-use assets is included within the total for those categories in Note 16. 

 

As noted above the Group had no finance leases in place as at 1 July 2019 and therefore no reclassifications took place on transition.

 

Other considerations

(i) Variable lease payments

Estimation uncertainty arising from variable lease payments

 

One retail property lease contains variable payment terms that are linked to sales generated from the store. The initial measurement of the lease payment terms are based on the minimum guaranteed payments which are in-substance fixed payments. The variability in lease terms based on sales levels over a certain amount will be recognised in the profit or loss when such conditions are triggered. As such, any decrease in sales would not affect the lease liability. The variable element of this lease is not considered material to the financial statements.

 

(ii) Extension and termination options

Extension and termination options are included in a number of the property leases. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

 

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). In all leases recognised as at 31 December 2019, the lease end date has been taken as the first available termination date per the lease agreements.

 

(iii) Leases not recognised under IFRS16

Short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. There is therefore no change in the treatment of these within the consolidated statement of comprehensive income.

 

1.         BASIS OF PREPARATION (CONTINUED)

 

Going Concern

 

As part of the Directors' consideration of the going concern assumption used in preparing the Financial Statements, different scenarios have been analysed for a minimum period of 12 months from the date of approval of the Financial Statements 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 30 June 2020 the cash net of bank borrowings was £18.2m. In addition, the Group had a net receivables position with respect to player trading payables/receivables. This provides a strong financial base over the short to medium term. At the time of writing the Group has secured season ticket revenues for the financial year ended 30 June 2021, retail outlets are fully operational and performing strongly as a result of the new partnership with Adidas, participation in the Europa League group stages has been secured guaranteeing a minimum level of income, and we have clear visibility over committed labour costs and transfer outgoings.  The Group has established contracts with a number of commercial partners and suppliers providing assurance over future revenues and costs. 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 maximising of value where required while maintaining a squad of appropriate quality to ensure, as far as possible, continued on field success.

 

The added complexity in forecasting which has been brought on by Covid-19 primarily relates to the attendance of football fans in stadia, 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.

 

Subsequent to the end of the financial year, the Group agreed an amended and restated £13m RCF with the Co-operative Bank which remains undrawn. This provides additional access to funds in the short to medium term 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 annual Financial Statements.

 

2.         REVENUE



2020
£000


2019

£000

The Group's revenue comprised:

Football and Stadium Operations


 

35,797


 

43,252

Merchandising


15,042


18,076

Multimedia and Other Commercial Activities


19,394


22,082



70,233


83,410

 

3.         EXCEPTIONAL OPERATING EXPENSES

 

The exceptional operating expenses of £1.96m (2019: £1.79m) can be analysed as follows:

 


2020
£000


2019
£000

Impairment of intangible assets and other prepaid costs

2,351


2,017

Reversal of prior period impairment charges

(423)


(52)

Onerous employment contracts

-


383

Onerous employment contract releases

(51)


(580)

Settlement agreements on contract termination

80


21


1,957


1,789

 

 

The impairment of intangible assets relate 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.

 

 

Onerous employment contract costs result from a situation where the committed costs under that contract are assessed as exceeding the economic benefits expected to be received by the Group over the term of the contract.

 

Settlement agreements on contract termination are costs in relation to exiting certain employment contracts.

 

4.         DIVIDEND ON CONVERTIBLE CUMULATIVE PREFERENCE SHARES

 

A 6% non-equity dividend of £0.51m (2019: £0.51m) was paid on 28 August 2020 to those holders of Convertible Cumulative Preference Shares on the share register at 31 July 2020. A number of shareholders elected to participate in the Company's scrip dividend reinvestment scheme for the financial year to 30 June 2020.  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 (2019: £0.07m) in respect of statute barred preference dividends in accordance with the Company's Articles of Association.

 

5.         TAX ON ORDINARY ACTIVITIES

 

The corporation tax receivable as at 30 June 2020 was £0.02m (2019: payable of £0.14m). The current year tax expense was £0.24m and total tax payments in the year were £0.40m, of which £0.38m related to the current financial year and the remainder relating to prior years. The balance potentially due from HMRC for the current year has been offset against prior periods. The available capital allowances pool is approximately £7.53m (2019: £9.00m). 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 19% (2019: 19%). 

 


2020
£000


2019
£000





Current tax expense




UK corporation tax

262


1,355

Adjustments in respect of prior periods

(20)


(80)

Total current tax expense

242


1,435





Deferred tax expense




Origination of temporary timing differences (Note 20)

254


1,196

Adjustments in respect of prior periods

(27)


(57)

Total deferred tax

227


1,139

Total tax expense

469


2,574

 

6.         EARNINGS PER SHARE

 

Reconciliation of basic earnings to diluted earnings:

2020


2019


£000


£000

Basic earnings

(368)


8,738

Non-equity share dividend

569


570

Reclaim of statute barred non-equity share dividends

-


(67)

Diluted earnings

201


9,241






 

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

94,276


93,977

Dilutive effect of convertible shares

42,358


42,410

Diluted weighted average number of ordinary shares

136,634


136,387

 

Loss per share and diluted loss per share of 0.39p (2019: earnings per share of 9.30p) has been calculated by dividing the loss for the period of £0.37m (2019: profit £8.74m) by the weighted average number of Ordinary Shares of 94.3m (2019: 94.0m) in issue during the year. 

 

7.         ANNUAL REPORT & FINANCIAL STATEMENTS

 

Copies of the Annual Report & Financial Statements together with the Notice and Notes of the 2020 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 2020 or 30 June 2019. The Independent Auditor's Reports on the statutory financial statements for 2020 and 2019 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 2019 have been filed with the Registrar of Companies and those for 2020 will be delivered to the Registrar of Companies in due course.

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