TIDMCCP
RNS Number : 3766M
Celtic PLC
21 September 2021
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 2021
SUMMARY OF THE RESULTS
Operational Highlights
-- Runners up in the SPFL Premiership
-- Winner of the delayed 19/20 Scottish Cup for the 4(th) season
in a row and completing an unprecedented 'Quadruple Treble'
-- Qualification for the group stages of the UEFA Europa League
-- 28 home matches played at Celtic Park (2020: 26 (1) games)
Financial Highlights
-- Group revenue decreased by 13.4% to GBP60.8m (2020: GBP70.2m)
-- Operating expenses including labour decreased by 7.6% to GBP74.4m (2020: GBP80.5m)
-- Gain on sale of player registrations of GBP9.4m (2020: GBP24.2m)
-- Acquisition of player registrations of GBP13.5m (2020: GBP20.7m)
-- Loss before taxation of GBP11.5m (2020: Profit GBP0.1m)
-- Year-end cash net of bank borrowings of GBP16.6m (2020: GBP18.2m)
(1) due to the early curtailment of the 2019/20 Scottish
domestic season, 4 home SPFL Premiership matches were
unfulfilled.
For further information contact:
Celtic plc
Ian Bankier, Celtic Tel: 0141 551
plc 4235
Iain Jamieson, Celtic
plc
Canaccord Genuity Limited, Nominated
Adviser
Simon Bridges Tel: 0207 523
8000
CHAIRMAN'S STATEMENT
These results for the year ended 30 June 2021 show that revenue
fell to GBP60.8m (2020: GBP70.2m) and we recorded a loss before tax
of GBP11.5m (2020: GBP0.1m profit before tax). This was driven by
revenue attrition and significantly lower gains on player trading,
compared to the prior financial year. In the face of this adverse
swing in financial performance, we are satisfied that we took
sufficient and appropriate steps to mitigate the losses and control
costs in the business. Our year end cash, net of bank borrowings,
was GBP16.6m (2020: GBP18.2m). This gave us a base to invest in the
summer transfer window as discussed further below.
The persisting trading restrictions from Covid-19 translated
into lost earnings and, taking account of the seasonality in our
trading, this was the key factor in the widening of our losses in
the second half of the financial year. Conditions have improved
markedly since the year end and we were delighted to welcome our
fans back in July 2021. Although our stadium has been operating at
near full capacity, recently announced Scottish Government
restrictions on large venues will be a further challenge. Whilst we
look forward with optimism to a more normal operating environment,
we are mindful of the inherent risk of the pandemic continuing to
affect public health.
The Board was delighted to welcome new manager Ange Postecoglou
to the Club in June 2021. Ange is a modern, progressive coach with
exciting, attacking football as his philosophy. He has received a
host of prestigious coaching accolades, including being named as
Australia's PFA Manager of the decade in 2015. He has been well
received by the media and our supporters.
Over the transfer window, post year end, we successfully
accomplished a major overhaul of our playing squad. At the season
end, we returned a number of loan players that had amplified our
squad. Then we invested significant sums in the registrations of
Liam Shaw, Osaze Urhoghide, Liel Abada, Carl Starflet, Kyogo
Furuhashi, James McCarthy, Joe Hart, Josip Juranovic, Liam Scales,
Georgios Giakoumakis plus the loan signings of Filipe Jota and
Cameron Carter-Vickers. And we achieved good value from the
transfer out of a number of players, notably, Kristoffer Ajer,
Odsonne Eduard and Ryan Christie, who have moved on to other
opportunities.
Our strategy of balancing player development and player trading
is fundamental to our self-sustaining business model. In
particular, the disposal of the registrations of Odsonne Edouard
and Kristopher Ajer demonstrates our core strength of being able to
transform young talented players into seasoned professional
footballers. In turn, we invest the proceeds of these transactions
back into the first team squad to enable us to continue to develop
our squad and to challenge for future honours.
Dominic McKay, who was appointed CEO on 1(st) July 2021 chose to
step down on 10(th) September for personal reasons. I thank Dom for
his contribution over the summer and everyone at Celtic wishes him
well for the future. Michael Nicholson, Director of Legal and
Football Affairs, has been appointed to the Board as acting Chief
Executive Officer. Michael carries the confidence of the Board, he
is experienced in Celtic, highly regarded in football circles and
is a most effective leader of our executive team.
The entire season captured in the year ended 30 June 2021 was
characterised by the absence of supporters in football stadiums and
the huge disruption to our operations. On behalf of the Board and
everyone at the Club, I thank the Celtic support for their backing
and understanding last season whilst also sharing their frustration
and disappointment. I must also express my gratitude to our
sponsors and partners, who were also challenged by the unique
circumstances. As we progress through the current season, our
objective is to work with the authorities to ensure that we can
continue to operate in a safe manner and in a way that facilitates
our players being able to give their best and our supporters being
able to attend matches at full capacity.
We look forward to the season ahead with measured confidence in
both our footballing prospects and the robustness of our business
model. Celtic PLC is directed by a Board of individuals with
demonstrable experience both of Celtic and wider business, its
operations are managed by an executive team of talented specialists
led by our Chief Executive and the executive is supported by a
dedicated cast of colleagues who have worked tirelessly for the
Club over this most difficult financial year. I thank them all for
everything that has been achieved. Celtic is in good hands.
Ian P Bankier, Chairman
20 September 2021
CHIEF EXECUTIVE'S REVIEW
The year ended 30 June 2021 was one of the most challenging
periods the Club has faced in recent history. The impact of
Covid-19 and consequential events disrupted our winning rhythm and,
crucially, prevented our supporters from attending Celtic Park.
Despite securing a historic quadruple treble in December 2020,
following the delayed completion of season 2019/20, we were
extremely disappointed to relinquish all three domestic trophies in
season 2020/21. Similarly, we did not progress beyond the group
stages of the Europa League as we had done in the previous
season.
With the domestic game, European football and the transfer
market in a state of profound uncertainty, we decided at the outset
of the 2020/21 season to retain our key players and augment the
squad with new acquisitions and loan players. We acquired the
registrations of Albian Ajeti, Vasilis Barkas and David Turnbull,
retained Mohamed Elyounoussi on loan and brought in experienced
internationals Shane Duffy and Diego Laxalt on loan. For a
combination of reasons it did not work out for us.
In February, Neil Lennon decided to step down as football
manager and assistant manager John Kennedy stepped up to take the
team to the end of the season. Our Chief Executive, Peter Lawwell,
who had decided to retire during the season under review, stood
down on 30(th) June 2021 after 17 successful years at the Club. I
would like to thank both Neil and Peter sincerely for their
leadership, commitment and unflinching support they have given the
Club, through thick and thin.
Having endured the season described above, we have drawn a line
under this and look to move the Club forward, as always.
The Club was delighted to recruit Ange Postecoglou as football
manager. Ange is a highly experienced international coach who
started his career in Australia, following much domestic success by
leading his country at international level at the World Cup finals
and winning a continental championship, before more recently
joining Yokohama in Japan, winning the J League Title. Ange is a
winner and has a clear vision of the football he wants us to play,
which reflects the Club's values and style of play.
In the year under review, we sold the registrations of Jeremie
Frimpong, Jack Hendry and Patryk Klimala. And then over the summer
transfer window, post year end, we have refreshed the squad, adding
12 new signings, whilst some players have moved on. In addition,
academy graduates Stephen Welsh, Tony Ralston and Adam Montgomery
have made a strong contribution to the first team in recent months,
with other academy graduates also gaining vital experience.
Although we will always have work to do, our playing squad is in
good shape for the season ahead.
We thank and pay tribute to the players who have left us, and we
wish them well, as they progress their individual football careers.
I make special mention of our outgoing captain, Scott Brown, who
spent 16 years at Celtic amassing ten Scottish championships, five
Scottish Cups, and six Scottish League Cups. I thank Scott for his
immense contribution to Celtic and I wish our new captain, Calum
McGregor, and all of our new players success in their roles going
forward under our new manager.
Over the recent years we have invested heavily in our football
department so that it can perform at the highest levels in
supporting our playing squads and our player identification and
development strategy. That investment fed in to one of the most
successful periods on the pitch in the Club's history, and we will
continue to devote substantial investment to these key areas, our
objective being to remain at the forefront of the modern game. A
number of evolutionary initiatives are currently under way, to
build on that success and to continue to take the Club forward.
Building on the growth and investment in previous years, season
2020/21 saw for the first time a full time professional Celtic FC
Women's team take the field, competing in the Scottish Women's
Premier League. This was both a significant and a proud moment for
the Club. Led by our manager Fran Alonso, our team finished second
in the Scottish Women's Premier League, which was a notable
achievement. We will continue to invest for future success in this
important area of the Club.
I am also pleased to report that a Celtic B team has entered the
Scottish Lowland League for the first time in season 2021/22, led
by manager Tommy McIntyre. This provides a competitive environment
for player development and represents an important step in our
player pathway strategy to progress our best young talent from the
academy into the first team.
In the last year we have enjoyed working alongside Adidas, our
new technical kit partner. The response of the Club's supporters to
the new merchandise has been outstanding, with record sales through
our stores and online. This reflects both the combined global
strength of the Club and Adidas brand as well as the quality of the
products on offer and we look forward to successful years ahead
with Adidas as a key partner. We also thank Dafabet, Magners and
all of our partners for their ongoing support and for working
collaboratively and constructively with the Club through the impact
of Covid-19.
After the disappointments of last season, our supporters have
stuck by the Club and I sincerely thank them for that. In very
difficult circumstances, our supporters have backed Ange and the
team with remarkable season ticket sales over the summer period.
Celtic Park is finally back as it should be; full of the best
supporters in world football. Everyone at the Club wants to reward
our supporters' commitment and loyalty with entertaining and
winning football and I look forward to this current season with
optimism.
In closing, I would like to recognise the personal efforts and
sacrifices of all colleagues at the Club over this challenging
period. Their selfless dedication and steadfast commitment to
Celtic has played a vital role in the Club emerging from the impact
of Covid-19 and gives us a solid foundation to restore the success
that our supporters and everyone at the Club desire.
Michael Nicholson, Acting Chief Executive
20 September 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2021 2020
Notes GBP000 GBP000
Revenue 2 60,781 70,233
Operating expenses (before intangible asset
transactions and exceptional items) (74,353) (80,549)
Loss from trading before intangible asset transactions
and exceptional items (13,572) (10,316)
Exceptional operating expenses 3 (333) (1,957)
Amortisation of intangible assets (11,821) (12,244)
Profit on disposal of intangible assets 9,435 24,188
Other income 5,000 -
Operating loss (11,291) (329)
Finance income 855 1,479
Finance expense (1,056) (1,049)
(Loss) / profit before tax (11,492) 101
Tax expense 5 (1,109) (469)
--------- ---------
Loss and total comprehensive loss for the year (12,601) (368)
Basic loss per Ordinary Share for the year 6 (13.35)p (0.39)p
Diluted loss per Share for the year 6 (13.35)p (0.39)p
CONSOLIDATED BALANCE SHEET
2021 2020
GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 57,939 58,752
Intangible assets 18,303 19,828
Trade receivables 11,312 13,527
87,554 92,107
======== ========
Current assets
Inventories 3,860 1,269
Trade and other receivables 23,764 28,478
Cash and cash equivalents 19,459 22,406
--------
47,083 52,153
======== ========
Total assets 134,637 144,260
======== ========
Equity
Issued share capital 27,166 27,166
Share premium 14,914 14,849
Other reserve 21,222 21,222
Accumulated profits 5,629 18,230
--------
Total equity 68,931 81,467
======== ========
Non-current liabilities
Borrowings 1,549 2,844
Debt element of Convertible Cumulative
Preference Shares 4,174 4,174
Trade and other payables 4,043 3,542
Lease liabilities 540 637
Provisions 99 272
Deferred tax liabilities 2,793 1,366
Deferred income - 29
--------
13,198 12,864
======== ========
Current liabilities
Trade and other payables 20,223 20,744
Lease liabilities 645 604
Borrowings 1,336 1,364
Provisions 6,213 5,942
Deferred income 24,091 21,275
--------
52,508 49,929
======== ========
Total liabilities 65,706 62,793
======== ========
Total equity and liabilities 134,637 144,260
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other Accumulated
Group capital premium reserve (losses)/profit Total
GBP000 GBP000 GBP000 GBP000 GBP000
Equity shareholders'
funds
as at 1 July 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 9 - - - 9
Loss and total comprehensive
loss
for the year - - - (368) (368)
Equity shareholders'
funds
-------- -------- -------- ---------------- ---------
as at 30 June 2020 27,166 14,849 21,222 18,230 81,467
-------- -------- -------- ---------------- ---------
Share capital issued - 65 - - 65
Reduction in debt element
of convertible cumulative
preference shares - - - - -
Loss and total comprehensive
loss
for the year - - - (12,601) (12,601)
Equity shareholders'
funds
-------- -------- -------- ---------------- ---------
as at 30 June 2021 27,166 14,914 21,222 5,629 68,931
-------- -------- -------- ---------------- ---------
CONSOLIDATED CASH FLOW STATEMENT
2021 2020
Notes GBP000 GBP000
Cash flows from operating activities
Loss for the year (12,601) (368)
Taxation charge 1,109 469
Depreciation 2,494 2,640
Amortisation of intangible assets 11,821 12,244
Impairment of intangible assets - 2,217
Reversal of prior period impairment charge (297) (413)
Profit on disposal of intangible assets (9,435) (24,188)
Loss on disposal of tangible fixed assets 110 -
Finance income* (855) (1,479)
Finance costs* 1,056 1,049
--------- ---------
(6,598) (7,829)
(Increase) / decrease in inventories (2,591) 1,374
Increase in receivables (1,627) (1,656)
(Decrease) / increase in payables and
deferred income (698) 4,486
--------- ---------
Cash used in operations (11,514) (3,625)
Tax paid 5 (268) (405)
Interest received* 34 202
Interest paid* (118) (188)
--------- ---------
Net cash flow used in operating activities (11,866) (4,016)
--------- ---------
Cash flows from / (used in) investing
activities
Purchase of property, plant and equipment (482) (1,175)
Purchase of intangible assets (13,630) (23,508)
Proceeds from sale of intangible assets 25,522 19,603
--------- ---------
Net cash from / (used in) investing activities 11,410 (5,080)
--------- ---------
Cash flows used in financing activities
Repayment of debt (1,280) (1,280)
Payments on leasing activities (739) (798)
Dividend on Convertible Cumulative Preference
Shares (472) (477)
--------- ---------
Net cash used in financing activities (2,491) (2,555)
--------- ---------
Net decrease in cash equivalents (2,947) (11,651)
Cash and cash equivalents at 1 July 2020 22,406 34,057
--------- ---------
Cash and cash equivalents at 30 June
2021 19,459 22,406
========= =========
*The cash flow statement for 2020 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 STATEMENTS
1. BASIS OF PREPARATION
The principal accounting policies applied in the preparation of
these Financial Statements are set out below. These policies hav e
been consistently applied to financial years 2021 and 2020,
presented, for both the Group and the Company.
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;
-- Current and forecasted trading conditions and any potential
adverse impact 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 2021 the cash net of bank borrowings was GBP16.6m. 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. Trading for the year
to 30 June 2022 has begun well. The Group has sold over 50,000
season tickets for season 21/22; retail outlets are fully
operational and performing strongly on the back of new kit and
training kit launches; the first team have secured participation in
the Europa League group stages; and we have clear visibility over
committed labour costs and our player transfer cash flows. In
addition to this, the Club has been able to welcome supporters back
into football matches again which has a substantial positive impact
on ticketing revenues generated for individual match tickets and
packages.
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
maximisation of value where required while maintaining a squad of
appropriate quality to ensure, as far as possible, continued on
field success. This has again been reflected in our activity during
the summer 2021 transfer window.
The most significant effect on trading brought on by Covid-19
primarily relates to the attendance of football fans in stadia. As
noted above, we have had fans in attendance once again and at the
time of writing we are able to accommodate almost capacity crowds.
However, we recognise the potential risk of another 'wave' of
Covid-19 and our sensitivity analysis takes into account the impact
of such an event.
The Group continues to have access to a GBP13m RCF with the
Co-operative Bank which at the date of signing of this annual
report 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 these projections are 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
2021 2020
GBP000 GBP000
The Group's revenue comprised:
Football and Stadium Operations 20,825 35,797
Merchandising 22,609 15,042
Multimedia and Other Commercial Activities 17,347 19,394
--------- ---------
60,781 70,233
========= =========
3. EXCEPTIONAL OPERATING EXPENSES
The exceptional operating expenses of GBP0.3m (2020: GBP1.96m)
can be analysed as follows:
2021 2020
GBP000 GBP000
Impairment of intangible assets and other prepaid
costs - 2,351
Reversal of prior period impairment charges (297) (423)
Onerous employment contract releases - (51)
Settlement agreements on contract termination 630 80
-------- --------
333 1,957
======== ========
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.
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.
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 GBP0.53m (2020: GBP0.51m) was paid
on 31 August 2021 to those holders of Convertible Cumulative
Preference Shares on the share register at 30 July 2021. A number
of shareholders elected to participate in the Company's scrip
dividend reinvestment scheme for the financial year to 30 June
2021. 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 GBPnil (2020: GBPnil) 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 2021 was GBP0.61m
(2020: GBP0.02m). The current year tax credit was GBP0.32m and
total tax payments in the year were GBP0.27m, which related to
prior years. The available capital allowances pool is approximately
GBP6.23m (2020: GBP7.53m). 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% (2020: 19%).
2021 2020
GBP000 GBP000
Current tax expense
UK corporation tax (609) 262
Adjustments in respect of prior periods 290 (20)
-------- --------
Total current tax expense (319) 242
======== ========
Deferred tax expense
Origination of temporary timing differences 827 254
Adjustments in respect of prior periods (69) (27)
Effects of changes in tax rates 670 -
-------- --------
Total deferred tax 1,428 227
-------- --------
Total tax expense 1,109 469
======== ========
6. EARNINGS PER SHARE
Reconciliation of basic (loss) / earnings 2021 2020
to diluted earnings:
GBP000 GBP000
Basic loss (12,601) (368)
Non-equity share dividend 569 569
Diluted (loss) / earnings (12,032) 201
========== ==========
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 94,366 94,276
Dilutive effect of convertible shares 42,286 42,358
---------- ----------
Diluted weighted average number of ordinary
shares 136,652 136,634
========== ==========
Loss per share and diluted loss per share of 13.35p (2020: loss
per share of 0.39p) has been calculated by dividing the loss for
the period of GBP12.60m (2020: loss GBP0.37m) by the weighted
average number of Ordinary Shares of 94.4m (2020: 94.3m) in issue
during the year. 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.
This is the case in the year ended June 2021 and June 2020.
7. ANNUAL REPORT & FINANCIAL STATEMENTS
Copies of the Annual Report & Financial Statements together
with the Notice and Notes of the 2021 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 2021 or 30 June 2020. The Independent Auditor's Reports on the
statutory financial statements for 2021 and 2020 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 2020 have been filed
with the Registrar of Companies and those for 2021 will be
delivered to the Registrar of Companies in due course.
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(END) Dow Jones Newswires
September 21, 2021 02:00 ET (06:00 GMT)
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