Celtic PLC - Final Results

RNS No 2788f CELTIC PLC 5th August 1998 CHAIRMAN'S STATEMENT. I am pleased to report that the year just ended was one of solid progress for Celtic, both in football success and the growth of our business activities. The Scottish League Championship was secured for the 36th time and the League Cup returned to Celtic Park after a 15-year absence although our European campaign was halted by Liverpool on the away goals rule. There was other evidence of progress, quality and strength within our football operation. All the previous year's retained earnings of the Company, together with the gains from sales of players, a total of £12.2 million, were reinvested in transfer fees for nine new players. Five of them joined five others already on our staff in representing their countries at the recent World Cup Finals - for a total exceeded by only two other football clubs world-wide. And the value of our youth development programme was shown recently when seven Celtic players were involved at Under-16 international level for Scotland and Ireland. In addition, Gerry Crossley, at 18 years of age made his full Irish international debut and Mark Burchill, 17 years old, also made his debut for Scotland, joining Barry Elliot, 19 years old, already in the Under-21 squad. In-house coaching and supervision of player development at the Club now extends down to 12-year olds, and the start of an Under-21 Scottish Division to replace the Scottish Premier Reserve League is a welcome change. The decision a year ago to move forward from the traditional 'Football Manager' system of British clubs and to separate management from coaching was, I am now convinced, the right one. With Jozef Venglos as our new Head Coach a further dimension of knowledge, maturity and ability to teach and develop our system has now been added. Last season's full squad of 22 first-team players still are with us and on continuing contracts so Jozef has an excellent pool to work with.Nevertheless, I expect his assessment and strategy to reach our objectives will lead to some changes in personnel as the new season gets under way. Turnover of the Celtic group rose by 25% over 1997 to £27.8 million. With only minor changes to admission prices and stadium capacity remaining unchanged over the previous season, ticket sales revenue and match attendances rose by only 9.4%. The average home League attendance of 48,532 occupied 97% of available seats. Revenue from all other areas of Celtic's operations grew by 41% and the strong growth in our various commercial activities was also helped by sales generated by the new Celtic Superstore opened in November, from mail order business, and strong rises in broadcasting and publishing, hospitality operations and other marketing applications of the Celtic brand. Operating costs rose faster than turnover, principally driven by football employment costs, the largest item, which rose by 57%. Accordingly, profits from operations declined by 14%. However, prudent management of player contracts and a conservative accounting policy of writing down transfer costs over the player's contract term brought overall net profit up to £7.1 million, a rise of 38% over 1997. On 21 July 1998 we completed construction of the West Stand, to be named in honour of Jock Stein increasing the spectator capacity of Celtic Park for football matches to 60,294. The new Celtic Park is now able to accommodate the current total of 52,543 season ticket holders and this valuable asset continues to be developed as a venue for further hospitality and leisure services. Completion of Britain's largest and best football stadium, with no mortgage or government funding in contrast to other less needed stadium projects, is a Celtic milestone and an achievement of which all our supporters and shareholders can be proud. Revenues in the year just begun are expected to increase through use of the full stadium capacity, a full year operation of the Superstore and Visitor Centre, a new major Banqueting and Matchday Suite in the West Stand, a better League television agreement with British Sky Broadcasting, and further expansion of our retail and mail order division. In common with other major clubs, our cost of salaries for top players is forecast to continue to rise this year, but more slowly in view of the high number of new contracts begun or renewed last season. Supporters and shareholders alike will note with satisfaction that whilst the Club was founded to help the poor and hungry of Glasgow's east end parishes, it is now the largest employer in this area, and our staff has risen in number over the last four years from 292 to 375 people. I am also pleased to tell you that our efforts as a leading institution in Scottish life both as promoters of socially responsible, hate-free behaviour and attitudes and as a supporter of deserving causes through the Celtic Charity fund are having a real impact. In view of my intended departure in the spring of next year, your Board is now engaged in recruiting a Chairman Designate to replace me in this position.We are also working to appoint a new, full-time, Chief Executive of the Company and assure an orderly transition. Meantime the Company intends to seek a listing on the London Stock Exchange main market, and your approval is being sought to split the nominal value of your shares in the ratio of 100 for 1. Both these moves will benefit all shareholders, present and future, while assisting in the change of ownership of my shareholding after I leave Celtic.I intend that existing shareholders and season ticket holders will have an opportunity to participate in that transaction. As you study Celtic's record of the last few years, shown below, I encourage you to share my confidence in a successful future for this great Club. Its continued rapid growth as a leisure company built around football and a world- wide brand will finance the on-field performance and achievements that both shareholders and supporters desire. I commend and thank those whose collective talents and commitment have brought us to where we are now - players, fellow directors, management, staff and especially supporters. With this level of dedication and ability and from so many we can only succeed. 4th August 1998 Fergus McCann FIVE YEAR RECORD YEARS ENDED 30 JUNE 1994 1995 1996 1997 1998 £000 £000 £000 £000 £000 FINANCIAL Turnover 8,736 10,376 16,005 22,189 27,821 Profit from 282 669 2,735 5,899 5,094 Operations (Loss)/ Profit After (1,404) (401) (1,013) 5,152 7,101 Taxation Dividends - - - 533 533 Shares in Issue 226 453 475 475 475 ('000) (Loss)/ Earnings per Ordinary (35.03) (1.73) (3.49) 15.93 22.65 Share (£) Fully Diluted (Loss)/ Earnings (32.58) (1.29) (2.24) 10.83 14.90 per Share (£) Net Assets 16,316 29,095 31,388 36,007 42,575 Number of Employees 292 237 288 320 375 FOOTBALL League Position Fourth Fourth Second Second Champions League 65 51 83 75 74 Points Scottish Third Rd Winners Semi Final Semi Final Semi Final Cup League Cup Semi Final Final Fourth Rd Fourth Rd Winners European Ties 2 0 2 2 3 Played CELTIC PARK Stadium Investment to Date 8,694 23,335 34,690 37,011 46,764 (#000) Stadium Capacity 49,856 34,082 37,944 50,552 50,552 Seating Capacity 13,200 34,082 37,944 50,552 50,552 Average Home 22,888 25,347 33,225 46,317 46,415 Attendance Season Ticket 7,162 18,029 29,370 40,529 42,322 SalesThe attendance and capacity figures for 1995 are for Hampden Park. GROUP PROFIT AND LOSS ACCOUNT YEAR ENDED 30 JUNE 1998 1998 1997 #000 #000 TURNOVER 27,821 22,189 OPERATING EXPENSES (22,727) (16,290) _______ _______ PROFIT FROM OPERATIONS 5,094 5,899 AMORTISATION OF INTANGIBLE FIXED (5,348) (3,302) ASSETS NET GAIN ON SALE OF INTANGIBLE 7,410 2,606 FIXED ASSETS ______ ______ OPERATING PROFIT 7,156 5,203 INTEREST RECEIVABLE AND SIMILAR 97 27 INCOME INTEREST PAYABLE AND SIMILAR (121) (78) CHARGES ______ ______ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 7,132 5,152 TAX ON ORDINARY ACTIVITIES (31) - _____ _____ PROFIT FOR THE YEAR 7,101 5,152 PREFERENCE DIVIDEND (533) (533) ______ ______ RETAINED PROFIT FOR THE YEAR 6,568 4,619 ----- ----- EARNINGS PER ORDINARY SHARE £22.65 £15.93 FULLY DILUTED EARNINGS PER SHARE £14.90 £10.83 All amounts relate to continuing operations. There were no gains or losses recognised in 1998 other than the profit for the year.GROUP BALANCE SHEET 30 JUNE 1998 1998 1997 £000 £000 £000 £000 FIXED ASSETS Tangible assets 41,724 32,606 Intangible assets 14,441 8,958 _______ _______ 56,165 41,564 CURRENT ASSETS Stocks 495 126 Debtors 2,642 3,367 Cash at bank and in 21 3,478 hand ______ ______ 3,158 6,971 ------ ------ CREDITORS - Amounts falling due within (8,621) (6,223) one year Income deferred less than one year (7,918) (6,000) _______ _______ (16,539) (12,223) ------- ------- NET CURRENT (13,381) (5,252) LIABILITIES ________ ________ TOTAL ASSETS LESS CURRENT LIABILITIES 42,784 36,312 CREDITORS - Amounts falling due after (209) (305) more than one year _____ _____ NET ASSETS 42,575 36,007 ------ ------ CAPITAL AND RESERVES Called up share capital (includes non- 11,390 11,390 equity) Share premium 17,361 17,361 Profit and loss 13,824 7,256 account _______ _______ SHAREHOLDERS' FUNDS 42,575 36,007 ------- ------- Copies of the Preliminary Results can be obtained from the Company's Registered office at 95, Kerrydale Street, Glasgow, G40 3RE.