Source - LSE Regulatory
RNS Number : 0259P
Celtic PLC
15 February 2021
 

 

Celtic plc (the "Company")

 

INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2020

                 

Operational Highlights

 

·    Currently second in the SPFL Premiership.

 

·    Winners of the Scottish FA Cup (season 19/20) for the fourth season in a row, securing an unprecedented fourth consecutive domestic treble.

 

·    17 home fixtures (2019: 21).

 

·    Conclusion of the most successful decade in the history of the club with 20 trophies won.

 

Financial Highlights

 

·    Revenue decreased by 23.7% to £40.7m (2019: £53.3m)

 

·    Loss from trading was £0.3m (2019: profit of £7.1m)

 

·    Profit from transfer of player registrations (shown as profit on disposal of intangible assets)         £1.0m (2019: £23.0m)

 

·    Loss before taxation of £5.9m (2019: profit of £24.4m)

 

·    Acquisition of player registrations of £12.7m (2019: £15.0m)

 

·    Period end net cash at bank of £19.7m (2019: £32.9m)

 

CHAIRMAN'S STATEMENT

 

The results for the six months ended 31 December 2020 show revenues of £40.7m (2019: £53.3m) and a loss before taxation of £5.9m (2019: profit of £24.4m). The loss from trading, representing the loss excluding player related gains and charges, amounted to £0.3m (2019: profit of £7.1m). Period end net cash at bank was £19.7m (2019: £32.9m). The introductory page to these interim results summarises the main highlights.

 

Season 2020/21 started with further significant investment into our playing squad as we prepared for the season ahead, commencing with the Champions League qualification fixtures, featuring challenging single leg knock out ties as a result of the restricted football environment. We acquired the registrations of Albian Ajeti, Vasilis Barkas and David Turbull, retained Mohamed Elyounoussi on loan and brought in experienced internationals Shane Duffy and Diego Laxalt on loan.  We also retained key players who had contributed so much to the team in previous seasons.

 

At the time of writing we currently sit second in the league 18 points behind the leaders having played one game less and with 10 games remaining. The prolonged summer transfer window, the impact of Covid-19 and, crucially, the loss of our passionate support at matches have undoubtedly had a damaging effect on our performance levels in domestic and European competitions, but we recognise that our performance has not been good enough.  Amidst this challenging environment, however, we secured victory in the postponed 2019/20 Scottish Cup Final to deliver an incredible fourth consecutive treble, following on from securing our ninth consecutive league title. The scale of this achievement cannot be underplayed and should be a cause for pride and celebration for years to come.

 

The two key factors that adversely affected our financial results for the period under review were: firstly, reduced gains from player trading as we sought to keep intact our squad this season; and, secondly, the unforeseen and prolonged value destructive impact of Covid-19. Our strategy for season 2020/21 was to invest in the team and to retain our best players, with the objective of delivering the league championship. As a result, gains from player trading were minimal. The effects of Covid-19 have persisted longer than many could have envisaged and, as a result, our crucial match day and other income streams derived from our stadium have been reduced to negligible proportions. These two factors largely explain the reduction in our profit before tax. No football club is immune from the effects of Covid-19.

 

Looking forward, the football and financial environment is still volatile and very uncertain because of the ongoing effects of Covid-19. At the time of writing, it is unclear when the 2020/21 Scottish Cup will re-commence following its suspension. Neither are we able to say at this stage when we will be able to welcome our supporters back to Celtic Park but we continue to work with the football authorities and the Scottish Government with a view to ensuring that fans are able to return to football safely as soon as possible. All of this will continue to affect our financial results meaning we are unable to offer any outlook guidance on revenue or earnings. Trading seasonality means that financial performance in the second half of the financial year will be lower than the first half owing to lower UEFA income along with less matches played.

 

I would like to thank our outgoing Chief Executive Peter Lawwell for his contribution to Celtic over the last 17 years. His role in transforming Celtic into a modern, highly respected European football club cannot be underestimated and has been nothing short of outstanding. It has been a pleasure to serve alongside him and we look forward to welcoming Dominic McKay as our new Chief Executive to continue to grow the Club.

 

 

Finally, on behalf of the Board I would like to reiterate to our supporters, shareholders and partners that their support has been crucial over the last 12 months, in what has been one of the most challenging times for the Club. We recognise their support and we thank them for the loyalty they have shown.

 

 

 

 

 

Ian P Bankier                                                                                                                                                                    

15 February 2021

Chairman

 

 

 

 

For further information contact:

Celtic plc

Ian Bankier

Peter Lawwell

 

Tel: 0141 551 4235

Canaccord Genuity Limited, Nominated Adviser and Broker

Simon Bridges

Richard Andrews

Tel: 020 7523 8350

Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

 

INDEPENDENT REVIEW REPORT TO CELTIC PLC

 

Introduction

We have been engaged by the Company to review the financial information in the interim report for the six months ended 31 December 2020 which comprises the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and the related notes.

We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors.  The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on AIM which require that the interim report be presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements having regard to the accounting standards applicable to such annual financial statements.

Our responsibility

Our responsibility is to express to the Company a conclusion on the financial information in the interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Financial Reporting Council for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the interim report for the six months ended 31 December 2019 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on AIM.

Use of our report

 

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on AIM and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly

authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

 

 

BDO LLP

Chartered Accountants

Manchester, United Kingdom

Date: 15 February 2021

 

 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 6 MONTHS TO 31 DECEMBER 2020

 

 

 

 



 

 

 

2020

Unaudited


 

 

 

2019

Unaudited



Note

£000


£000







Revenue


2

40,688


53,335

Operating expenses (before intangible asset transactions)



  (40,966)


  (46,274)

 

(Loss)/profit from trading before intangible asset transactions



 

     (278)


 

7,061

 

Amortisation of intangible assets



(6,583)


(5,874)

 

Profit on disposal of intangible assets



      993


23,021







 

Operating (loss)/profit



 

(5,868)


 

24,208




-









Finance income


3

    515


743

Finance expense


3

  (516)


(532)

 

(Loss)/profit before tax



 

(5,869)


 

24,419

Income tax credit/(expense)


4

   730


(5,091)




-



 

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

 


 

 

 

 

(5,139)


 

19,328

 

Basic (loss)/earnings per Ordinary Share


 

5

 

(5.45p)


 

20.51p                                                                                      

 

Diluted (loss)/earnings per Share


 

5

 

(5.45p)


 

14.36p







CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2020

 

 


 

2020

Unaudited



 

2019

Unaudited



Notes

£000



£000


NON-CURRENT ASSETS







Property plant and equipment


57,781



59,550


Intangible assets

6

25,912



23,180


Trade and other receivables

7

9,082



13,175




92,775



95,905


CURRENT ASSETS







Inventories


3,000



1,772


Trade and other receivables

7

21,064



25,388


Cash and cash equivalents

9

23,183



37,604




47,247



64,764


TOTAL  ASSETS


140,022



160,669









EQUITY







Issued share capital

8

27,168



27,167


Share premium


14,912



14,848


Other reserve


21,222



21,222


Accumulated profits


13,091



37,926


TOTAL EQUITY


76,393



101,163









NON-CURRENT LIABILITIES







Interest bearing liabilities/ bank loans


2,212



3,476


Debt element of Convertible Cumulative Preference Shares


4,174



4,174


Trade and other payables


4,068



3,443


Lease Liabilities


   431



778


Deferred tax

4

     906



1,754


Provisions


                128



37


Deferred income


    14



42




11,933



13,704


CURRENT LIABILITIES







Trade and other payables


24,997



25,572


Current borrowings

  1,364



1,364


Lease Liabilities


     568



   722


Provisions


 6,402



3,531


Deferred income


18,365



14,613




51,696



45,802


TOTAL LIABILITIES


63,629



59,506


TOTAL EQUITY AND LIABILITIES


140,022



160,669


 

Approved by the Board on 15 February 2021.

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY



£000

£000

£000

£000

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

27,157

14,785

21,222

18,598

81,762

 

Share capital issued

 

1

 

63

 

-

 

-

 

64

 

Reduction in debt element of

convertible cumulative

preference shares

9

-

-

-

9

 

Profit and total comprehensive income for the period

-

-

-

19,328

19,328







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

 

27,167

 

14,848

 

21,222

 

37,926

 

101,163







EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2020 (Audited)

27,167

14,849

21,222

18,230

81,468

 

Share capital issued

 

1

 

-

 

64

Reduction in debt element of convertible cumulative preference shares

-

-

-

-

-







Loss and total comprehensive loss for the period

-

-

-

(5,139)

(5,139)







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

27,168

14,912

21,222

13,091

76,393































CONSOLIDATED CASH FLOW STATEMENT

FOR THE 6 MONTHS ENDED 31 DECEMBER 2020

 

 


           

2020

Unaudited



£000

Cash flows from operating activities




(Loss)/profit for the period after tax


       (5,139)


19,328

Taxation (credit)/charge


(730)


5,091

Depreciation


1,241


1,300

Amortisation


6,583


5,874

Profit on disposal of intangible assets


(993)


(23,021)

Finance costs*


516


532

Finance income*


(515)


(743)



963


8,361






(Increase)/decrease in inventories


(1,730)


871

(Increase) in receivables


  (737)


(400)

(Decrease) in payables and deferred income


(4,029)


(8,097)

Cash (used in)/generated from operations

(5,533)


735

Tax paid

-


-

Interest paid*

(67)


(101)

Interest received*


29


120

Net cash flow from operating activities


(5,571)


754

Cash flows from investing activities





Purchase of property, plant and equipment


(214)


(792)

Purchase of intangible assets


(6,306)


(13,824)

Proceeds from sale of intangible assets


14,346


18,512

Net cash generated from investing activities


7,826


3,896

Cash flows from financing activities





Repayment of debt


(640)


(640)

Payments on leasing activities


(379)


-

Dividend on Convertible Cumulative Preference Shares


(459)


(462)

Net cash used in financing activities


(1,478)


(1,102)






Net increase in cash equivalents


    777


3,547

Cash and cash equivalents at 1 July


22,406


34,057

Cash and cash equivalents at 31 December

9

23,183


37,604

 

*The cash flow statement for 2019 has been restated to correctly present finance income and finance costs as well as interest paid and interest received on a gross rather than the previously net basis. There is no change to the overall reported cash flows from operating activities.

 

NOTES TO THE FINANCIAL INFORMATION

 

 

 

The financial information in this interim report for the six months to 31 December 2020 and to 31 December 2019 has not been audited, but it has been reviewed by the Company's auditor, whose report is set out on page 4.

 

Adoption of standards effective for periods beginning 1 July 2020

 

The following standards have been adopted as of 1 July 2020:

 

·     

·     

·     

           

 

Going concern

 

As part of the Directors' consideration of the going concern assumption used in preparing the Interim Report, different scenarios have been analysed for a minimum period of 12 months from the date of approval of the report with outlook assumptions used beyond this time frame. The main factors considered were:

 

•     Current financial stability of the Group and on-going access to funds;

•     Continuing restrictions on trading conditions as a result of Covid-19, primarily the attendance of fans in football stadia;

•     Security of revenue streams;

•     First team football performance and success; and

•     Player transfer market conditions.

 

The Directors have adopted a prudent approach in the assumptions used in relation to the above, in order to provide additional comfort around the viability of the Group going forward.

 

At 31 December 2020 the cash at bank was £23.2m. In addition, the Group had a net receivables position with respect to player trading payables/receivables. Despite the challenges of the 6 months under review, there remains strong liquidity in the business and, although trading conditions in some areas remains uncertain, the progress being made around vaccinations and controlling the spread of the Covid-19 virus, provides optimism that normalised trading can resume in the short to medium term. 

 

The Group has retained established contracts with a number of our commercial partners and suppliers providing assurance over future revenues and costs and we have clear visibility over committed labour costs and transfer payables. In addition, the Group has in recent years, achieved significant gains in relation to player trading and manages the movement of players in and out of the team strategically to ensure maximisation of value where required while maintaining a squad of appropriate quality to ensure, as far as possible, continued on field success. This has been illustrated by the sale of Jeremie Frimpong during the January 2021 transfer window.

 

The non-attendance of football fans in stadia continues to be the most significant factor in planning for the future, however as noted above our assumptions on this matter are considered to be appropriately prudent and do not consider there to be a significant risk in the medium term.

 

During the 6 months to 31 December 2020, the Group agreed an amended and restated £13m RCF with the Co-operative Bank which remains undrawn. This provides additional access to funds should these be required. The current cash flow forecasts over the period of the going concern review do not show a requirement to utilise this facility.

 

The Group continues to perform a detailed budgeting process each year which looks ahead four years from the current financial year, and is reviewed and approved by the Board. The Group also re-forecasts each month and this is distributed to the Board. As a consequence, and in conjunction with the additional forecasting and sensitivity analysis which has taken place, the Directors believe that the Company is well placed to manage its business risks successfully despite the continuing uncertain economic outlook.

 

In consideration of all of the above, the Directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the Interim Report.

 

2.   



6 months
to 31
Dec 2020


6 months
to 31
Dec 2019



Unaudited
£000


Unaudited
£000

Football and stadium operations


12,570


26,987

Multimedia and other commercial activities


13,049


15,108

Merchandising


15,069


11,240



40,688


53,335






Number of home games


17


21

 

 

3.      FINANCE INCOME AND EXPENSE

 

 

 

 


6 months to

31 December

2020

 

 


Unaudited

£000

Finance income:



Interest receivable on bank deposits


  29

120

Notional interest income on deferred consideration


486

623



515

743





 

 

 

 

 

 


6 months to

31 December

2020

 

 


Unaudited

£000

 

Finance expense:




Interest payable on bank and other loans


  (60)

(115)

Notional interest expense on deferred consideration


(172)

(133)

Dividend on Convertible Cumulative Preference Shares


(284)

(284)



(516)

(532)

 

 

4.    TAXATION                                                                                            

Tax has been charged at 19% for the six months ended 31 December 2020 (2019: 19%) representing the best estimate of the average annual effective tax rate expected to apply for the full year, applied to the pre-tax income of the six month period. After accounting for prior period adjustments and deferred tax, this has resulted in tax credit in the statement of comprehensive income of £0.7m (2019: charge of £5.1m).

 

         Loss per share and diluted loss per share of 5.45p (2019: earnings per share of 20.51p, diluted earnings per share of 14.36p) has been calculated by dividing the loss for the period of £5.1m (2019: profit of £19.3m) by the weighted average number of Ordinary Shares in issue 94,315,059 (2019: 94,262,133) in issue during the year. 

 

 

6.     



 

31 December 2020


 

31 December 2019



Unaudited


Unaudited


Cost

£000

 


£000

 


At 1 July

49,846


44,652


Additions

12,667


15,008


Disposals

(1,581)


(3,324)


At period end

60,932


56,336


 

Amortisation





At 1 July

30,018


30,496


Charge for the period

6,583


5,874


Disposals

(1,581)


(3,214)


At period end

35,020


33,156


 

Net Book Value at period end

 

25,912


 

23,180


 

 

 

 

7.      TRADE AND OTHER RECEIVABLES

     


31 December 2020

Unaudited


31 December 2019

Unaudited

£000

£000





          Trade receivables

19,024


28,554

          Prepayments and accrued income


          Other receivables


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









2020


 

 

£000

 

 


          Trade receivables

9,082


13,175


 

 

 

 

9.      ANALYSIS OF NET CASH AT BANK

 

 


31 December

2020



Unaudited

Unaudited



£000

£000





Bank Loans due after more than one year


(2,212)

(3,476)

Bank Loans due within one year


(1,264)

(1,264)





Cash and cash equivalents:




Cash at bank and on hand


23,183

37,604





Net  cash at bank at period end


19,707

32,864

 

10.   POST BALANCE SHEET EVENTS

Since the balance sheet date, we have secured the temporary registration of Jonjoe Kenny from Everton. We have also permanently transferred the registration of Jeremie Frimpong to Bayer Leverkusen and temporarily transferred the registration Olivier Ntcham to Marseille.

 

In addition we have temporarily transferred the registrations of development squad players Leo Hjelde to Ross County, Ben Wylie to Ballymena United, Barry Coffey to Cliftonville and Scott Robertson to Doncaster Rovers.

 

 

 

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