Final Results
Arsenal Holdings plc Results for the year ended 31 May 2011
ARSENAL STARTS ITS 125th YEAR IN STRONG FINANCIAL POSITION
* Group turnover was £255.7 million (2010 - £379.9 million). Reduction was
due to the expected lower level of property sales activity.
* The sale of apartments at Highbury Square is in its final stages, with 69
sale completions in the year (2010 - 362) generating £30.3 million of
revenue from property (2010 - £156.9 million).
* Operating profit in the property business was £12.6 million (2010 - £15.2
million) including the write back of part of a previous impairment
provision in respect of the Queensland Road development site.
* Operating profit (before exceptional costs, depreciation and player
trading) in the football business was £45.8 million (2010 - £56.8 million)
with commercial gains offset by increased wage costs.
* Loss from player trading of £14.7 million (2010 - profit of £13.6 million)
with no significant disposals of registrations in the year.
* Group profit before tax was £14.8 million (2010 - £56.0 million).
* The Group's property business continues to be debt free and generating
surplus cash for the Group. The overall level of Group net debt had been
reduced to £97.8 million (2010 - £135.6 million) at the balance sheet date.
Commenting on the results for the year, Peter Hill-Wood, non-executive
Chairman, said:
"The sad passing of our dear colleague Danny Fiszman has heralded a time of
change in terms of ownership. We continue to run the Club effectively and in a
self-sustaining way which is important for our long-term future. We have had a
robust financial performance, reporting another profitable set of full year
results."
Ivan Gazidis, Chief Executive, said:
"Our primary objective, as we take the Club forward, will always be success on
the field. To give the Club the best opportunity to achieve this, we must drive
a virtuous circle of increased revenue, increased investment in the team and a
larger engaged fan base and we must do this in a way which is self-sustaining
and protects the long-term future of the Club.
Our goals for the organisation are clear and unchanged:
* to support and fund on field success; and
* to enhance the fan experience.
We are making progress on all fronts and the Club starts its 125th year in a
strong position."
Arsenal Holdings plc
Chairman's Statement
I am pleased to open my report to shareholders by confirming that a strong
financial performance across the second half of the year means that the Group
has delivered another profitable set of full year results. Strong financial
performance is not an end in itself, but creates the platform from which the
Club can build and sustain the on-field success which is always its main
objective.
On the pitch, the year has featured a number of competitive highs and lows
whilst off the field the sad passing of our dear colleague Danny Fiszman has
heralded a time of change.
The team played some fantastic, entertaining football and mounted a strong
challenge on four competitive fronts. We saw the emergence of a terrific new
home-grown talent in the shape of Jack Wilshere and young goalkeeper Wojciech
Szczesny grabbed his chance to excel in the latter stages of the campaign.
Although we were always battling against injuries to key players such as Cesc
Fabregas, Thomas Vermaelen and Robin van Persie, some of our displays were
memorable. My personal highlight was the inspirational clash with Barcelona in
a packed Emirates Stadium. Although we went on to lose that Round of 16 tie,
the first leg victory was a spectacular evening and one of the best games many
of us have ever seen.
Defeat by Barcelona in the second leg triggered a challenging spell with the
frustration of defeat in the dying moments of the Carling Cup Final against
Birmingham City followed by our 6th round FA Cup exit at the hands of
Manchester United. Despite those setbacks, we continued to compete in the race
for the Barclays Premier League title right up to the closing games.
Ultimately, a fourth placed finish felt less than our performances deserved but
it was still notable for the fact it gave us a route to the UEFA Champions
League for a remarkable 14th season in succession. This is a record of which we
are justly very proud.
I would like to pay tribute, once again, to the Arsenal Ladies as they
collected the FA Women's Cup for the 11th time, the FA WSL Continental Cup and
were the inaugural winners of the Women's Super League.
We continue to run the Club effectively, in a way which will be sustainable
over the long-term, and, as you will read in the following pages, we have had a
robust financial performance, reporting a profit before tax for the year of £
14.8 million. This is lower than last year which was, in light of reduced
incomes from player sales and from our property business, entirely to be
expected.
The landscape at the top of the game remains fiercely competitive. As such the
Group's future revenue growth is vital as we aim to drive increased investment
into the team and hence provide the best opportunity for success on the field.
With that imperative in mind we have continued our programme of building our
head office capabilities - putting in place a top quality management and staff
resource to drive long term future commercial success. We are beginning to see
the first returns from this investment in the form of a successful Far East
pre-season tour and a number of valuable new sponsorships and renewals. This is
an ongoing process, but the early results are very encouraging and give us
reason to look forward with confidence.
Another feature of the year was our partnership with Centrepoint, the charity
which helps homeless young people. Through the `Be a Gooner. Be a Giver.'
campaign, the partnership raised more than £600,000. This exceeded the target
set at the start of the year, to fund the refurbishment of one of Centrepoint's
facilities in Soho, and I'd like to congratulate everyone involved on a
terrific effort.
This year our Arsenal community suffered a profound loss with the death of our
dear friend, fellow director, fan and inspiration Danny Fiszman. Danny was much
loved by those who knew him, not just for his extraordinary vision and
commitment driving Arsenal forward but because he was a respectful gentleman
with a deep passion for the Club. We miss him deeply but his legacy will live
with us forever in the shape of the Emirates Stadium. I was honoured to unveil
the Danny Fiszman Bridge in acknowledgement of his outstanding contribution to
the Club. On the same day I was also privileged to unveil the Ken Friar Bridge.
Ken's contribution to this Club is unsurpassed. For the past 62 years, from the
age of 12, he has worked tirelessly for the good of Arsenal and it was entirely
appropriate that he should be formally recognised alongside Danny.
Both Danny and Ken embody Arsenal's spirit of innovation and forward thinking
and Danny's passing heralded change for the Club and the start of a new era.
Danny had agreed for his estate executors to sell his shares in the Club to
Stan Kroenke. This prompted a wider offer from Mr Kroenke's organisation, KSE
UK Inc., which both I and my fellow board directors agreed to accept for our
own holdings in the Club and to recommend to shareholders generally. This
decision arose from no other desire than to protect the long-term interests of
the football club we support and love. Following the offer KSE UK Inc. holds a
controlling interest of 66.8% of the share capital of Arsenal Holdings plc. We
have all grown to know Stan well during his three years as a fellow board
member and we are confident he is the appropriate custodian to support the Club
through the next stage of its evolution.
That evolution will be built on the foundations that have been created over the
125 years of the Club's history. This year we will be celebrating those
enlightened individuals working at the Woolwich Arsenal who broke ranks to set
up a football team to break the monotony of their daily lives. Back in December
1886 founder David Danskin had a vision to create a community around football,
to give people a sense of purpose, fun and belonging. That vision has been the
foundation of everything that has been achieved since. It is important that we
mark this 125 year milestone, important that we pay tribute to our founding
fathers and important that we recognise Arsenal Football Club will always be
capable of bringing people together around a common cause.
Ultimately Arsenal Football Club is here for our fans. Once again we had a full
stadium for all of the Club's home fixtures last season and passionate away
support which I believe is second to none. I would like to thank those fans and
indeed our fans from all around the world for their fantastic ongoing support.
I also thank my fellow directors, our management team and entire staff for all
their hard work and dedication over the last year. I also fully recognise and
appreciate the support from our sponsors and commercial partners.
I look forward to welcoming you all again to Emirates Stadium over the course
of this, our 125th season.
P D Hill-Wood
Chairman
30th September 2011
Arsenal Holdings plc
Chief Executive's Report
Overview
As we enter our 125th year it makes sense to reflect on what has been achieved
by our great football club and to look forward to what comes next.
Arsenal Football Club was born out of one man's vision to help his work
colleagues break free from the daily grind of life in the Woolwich Armoury.
David Danskin had an ambition to build a community of people with a kindred
spirit and aim, namely playing football, having fun and being together.
December 1st 1886 was the date. The Royal Oak public house in Woolwich was the
venue.
Mr Danskin could never have dreamed that Arsenal Football Club would achieve
the fame and global reach it has today, but his original sense of community
remains very much part of the Arsenal way. There are other common themes which
have also carried through to the present day, notably a refusal to stand still
and a desire for the Club to represent all that is the very best in the game.
Our desire to drive the Club forward is critical in the current competitive
landscape of European football. Other clubs are growing rapidly, expanding
their international reach and fan base and using the revenues generated, or
other resources, to enhance performance on the field. It has been said before
but is worth repeating - standing still is not an option for Arsenal.
Our primary objective will always be success on the field. To give the Club the
best opportunity to achieve this, we must drive a virtuous circle of increased
revenue, increased investment in the team and a larger engaged fan base and we
must do this in a way which is self-sustaining and protects the long-term
future of the Club. That has been my mission since joining the Club and we are
making good progress.
On the Pitch
The 2010/11 season was one of considerable extremes. The team played some
fantastic attacking football and mounted a serious challenge in all four
competitions but ultimately we fell short of winning a trophy.
The Chairman has referred to the victory over Barcelona in his report and I am
sure that was a highlight for many of our supporters, as it was for me. The
performance on the pitch coupled with the atmosphere in the stands and the hard
work behind the scenes made it a night which the Club can reflect on with
considerable pride.
That high was followed by the pain of second leg defeat in the Camp Nou and a
6th round FA Cup exit at the hands of Manchester United. In the Carling Cup we
reached a Wembley final for the first time in 13 seasons but fate was against
us as we went down to a late winner against Birmingham City.
In the Barclays Premier League we remained in the running for the title right
up to the closing weeks of the season. Ultimately, we finished fourth, securing
UEFA Champions League entry for the 14th season in succession, a remarkable
feat in an increasingly competitive environment.
The Arsenal Ladies enjoyed another hugely successful season, lifting the
Women's FA Cup for the 11th time and then going on to win the first ever
Women's Super League. A 3-1 victory over Liverpool in the final game gave them
the Super League title. They completed a treble by beating Birmingham City to
collect the FA WSL Continental Cup. This is a fantastic achievement and one
that ensures Arsenal Ladies remain the pre-eminent force in the women's game
here in the UK.
The new season started with the Emirates Cup, which was again a resounding
success, with 115,000 fans enjoying four games across an entertaining weekend.
It was a pleasure to see Thierry Henry, a true Arsenal legend, back on the
Emirates Stadium turf as his New York Red Bulls side lifted the trophy.
During a very busy summer transfer window we have added some significant talent
to the squad in the shape of Mikel Arteta, Yossi Benayoun (season loan),
Gervinho, Carl Jenkinson, Per Mertesacker, Ryo Myaichi, Alex
Oxlade-Chamberlain, Ju Young Park and André Santos. In addition, we now have
Aaron Ramsey back available for selection and we have seen Emmanuel Frimpong
become the latest youngster to make the transition from our youth programme
into first team reckoning.
At the same time we have said goodbye to Cesc Fabregas, Samir Nasri, Gael
Clichy and Emmanuel Eboue. We thank them for their contributions to Arsenal and
wish them well with their new Clubs.
As I write, the new season is entering its second month. There is no doubt that
we have had a tough start to the 2011/12 campaign but we have won through an
awkward UEFA Champions League qualifier, against Udinese, and we remain
confident in the quality within the squad and of our prospects for the rest of
the season.
Business Update
Once again the financial results for the year, which are covered in more detail
in the Financial Review section, are sound. Whilst profits are lower than last
year, due to a reduced level of exceptional gains from player sales and from
our property business, this was expected. We continue to be in excellent shape
financially and well set for future growth.
It is important to remember our business goal is to increase revenues for
ongoing investment in the team and across the Club. We have a clearly defined
plan to take the Club forward and I am pleased with the progress we are making.
The capability of our staff will be vital to the successful delivery of our
commercial plans and, accordingly, we have continued to recruit expert staff in
the areas of Information Technology, Partnerships, Human Resources, Marketing,
Retail, Hospitality and Communications. Our investment in new head office staff
across the last two years has not been made lightly but with a clear objective
of delivering a sustained period of business growth. I am pleased to confirm
that, although we are only in the early stages of our plan to drive commercial
revenue growth, we are already generating incremental commercial revenues which
exceed our investment made in new staff.
During the year we completed the biggest research study ever conducted by the
Club. We examined and talked in detail to our various categories of fan and
analysed their Arsenal experience, what they love about the Club and where they
think we can improve. This comprehensive and valuable research will inform our
thinking as we move forward and it is already coming to life through changes in
the way we interact with our fans day to day, the experience we create at the
Emirates Stadium and how we operate as an organisation.
Underpinning our thinking is the recognition that Arsenal Football Club is
about making people proud to be part of the Arsenal community. Whether he or
she is the fan who travels around the world to watch every game, or the fan who
cheers us on from a settee in London or a bar in Singapore, or the member of
staff who works for the Club day to day, our aim must be to make them feel
proud to be a part of our club.
That pride is clearly driven to a significant extent by results and
performances on the pitch but it is about more than only this. It is about the
way we run the Club day to day, it is about our contribution to communities
around the world, it is about the way we treat people, it is about the memories
we create. We must strive to represent our fans in the way they would wish to
be represented and to reflect their highest aspirations of what their club
should be. I believe our fans are proud of the fact that Arsenal's successes
are achieved in a responsible and sustainable way, a way that other clubs
around the world seek to emulate, and a way that is good for the game of
football.
Partnerships
One of the areas where our investment in people has begun to generate growth is
in the area of commercial partnerships. Historically, like most football clubs,
we have created value by selling to partners what was effectively advertising
space in varying shapes and forms. Partners today, however, are increasingly
focused on creating value in their sponsorships and this requires Arsenal to
have a much deeper understanding of a partner's business objectives and clear
proposals for how we can work closely with them to help them achieve their
objectives. This progressive approach has attracted the likes of Italian white
goods manufacturer Indesit, who have signed a three year agreement with us. In
addition, Citroen has renewed its partnership at an increased value and we have
also signed contracts in recent months with Carlsberg, Thomas Cook and on-line
gambling firm Bettson.
Our two main sponsorship relationships - Nike and Emirates - helped to secure
the move to the Emirates Stadium and remain contracted through to 2014. We have
developed an excellent relationship with both partners and have worked very
closely with them over the years. There is important work that we can and are
doing now with Nike and Emirates to ensure that we can continue to maximise the
value of those relationships when these sponsorships come up for renewal.
Another important area of focus is the development of our broadcast programming
and content development. This is a key component of our drive to build on our
engagement with fans around the world. We have continued to invest in our
website, our media production capability and our partnership with MP&Silva, a
leading international sports media company that manages and distributes
television and media rights around the world, is developing well. Arsenal
programmes are now being broadcast in 88 territories around the world, reaching
an estimated 110 million households. This is in addition to the extensive
exposure we receive through global broadcasts of the Barclays Premier League.
Membership
Building our Club membership is another key area as we move forwards. We have
now included the re-branded Arsenal Player, our in-house television programme,
into the package of benefits offered to our 200,000 paying Arsenal members.
This package also includes increased access to match day tickets - in the
coming season twice as many tickets will be open to Red Members compared to
previous years. In addition we have developed a highly successful Junior
Gunners road-show, which has toured southern England during the summer, giving
thousands of young supporters a behind the scenes glimpse of life at Arsenal.
Asia Tour
This summer the Club made its first long distance pre-season tour in twelve
years, travelling to Malaysia and China. This was an important development as
we look to build our fan base around the world and to deliver value to our
commercial partners. The tour was a great success and a remarkable experience
for everyone involved. Our fans in Asia showed unbridled passion and love for
Arsenal whilst displaying in-depth knowledge of the players and Club.
We played in front of 65,000 fans in Kuala Lumpur against a Malaysia XI,
winning 2-1 and followed that with a 1-1 draw against Hangzhou Greentown in
China. The games were useful in terms of early preparation for the season ahead
but, more significantly, I am confident that the tour helped us create a
platform for future development in Asia. The fact more than 2.5 million people
joined a web chat involving Bacary Sagna and Thomas Rosicky and that we had
more than 270,000 fans register for our website in China in less than a month
underlines the opportunity which we have in this part of the world.
Stadium Development
We have completed a second year of work designed to improve the experience fans
have when they visit Emirates Stadium. This is an ongoing programme, which we
are developing in consultation with our supporters, and over the last year:
* we have dedicated the two bridges leading to the stadium to Danny Fiszman
and Ken Friar;
* we have developed a series of fan tributes to star players, past and
present, which now adorn the lower surrounds of the stadium;
* we are flying flags in tribute to key fans and Club figures;
* we have continued our development of the Club Tier with the introduction of
the new 49ers bar; and
* we have created new "super-boxes" to meet the needs of some of our
corporate supporters.
There are more plans in the works for some iconic additions to the stadium
surrounds which will be unveiled later this season to mark our 125th
anniversary.
The feedback from fans has been strong and positive and we will continue to
look for more ways to keep our magnificent home at the forefront of modern
stadia thinking as we move forward.
Community Activities
Our Charity of the Season was Centrepoint and through the `Be a Gooner. Be a
Giver.' campaign, we raised over £600,000. This was a magnificent achievement
and my thanks go to everyone who offered their support.
The Club continues to place great importance on its work in the community by
offering and supporting a variety of innovative social inclusion, education and
sport programmes around Islington and beyond. I am delighted to report that
this community work has again been formally recognised with:
* three National Kickz Awards 2010;
* the Elthorne Park Cruyff Court winning the Mayor of London's Safer Parks
Gold Award; and
* the Double Club education scheme acknowledged for "Outstanding Commitment
as Business Language Champions".
I'd like to congratulate everyone involved in those particular projects and our
community team in general for another year of outstanding work.
During the year ahead the Club will be partnering with Save the Children. We
will support the charity on a range of education projects designed to help the
poorest children, both in the UK and overseas, get a better start in life. We
look forward to a successful programme of activity.
Prospects
Once again, we have started the new season with general admission and Club Tier
season tickets fully subscribed. In addition and encouragingly, we have begun
to see the early stages of growth in our commercial revenues from the Far East
tour, from sponsors and from our retail business.
During the close season we have again committed funds to the improvement of our
stadium facilities and the training ground facilities at London Colney.
The summer months have seen a period of intense activity in the transfer
market. Clearly that activity will be judged by results on the field but it
also needs to be considered in terms of both the transfer fees paid and
received and the movement in contracted wage commitments. Overall we have made
a significant net investment in the development of the playing squad. We
continue to invest in outstanding young players as part of our core strategy
but we have also added players of considerable experience in this transfer
window. This mix of youth and experience is powerful and we have always
invested in players with the quality which Arsène Wenger believes can help take
the team forward. We are confident that we have a squad that can and will meet
the challenges of what is sure to be an exciting and very competitive season
domestically and in Europe.
Off the field, our goals for the organisation are clear and unchanged:
* to support and fund on field success; and
* to enhance the fan experience.
We are making progress on all fronts and the Club starts its 125th year in a
strong position.
Arsenal Football Club strives to strike the right balance between short-term
objectives and long-term success. We continue to work hard to get that balance
right each day as we aim to take the Club forward and make everyone proud to be
part of the Arsenal family.
I E Gazidis
Chief Executive Officer
30th September 2011
Arsenal Holdings plc
Financial Review
At this time last year the Group reported record financial results for the 2009
/10 year. Those results were driven by the inclusion of two particular one-off
items - significant profits from player sales and a peak in the property
trading activity at Highbury Square - and the 2010/11 results are, inevitably,
at a lower level.
Strong financial performance in the second half of 2010/11 means that the
losses reported for the first half of the financial year have been converted
into a full year pre-tax profit of £14.8 million. This was a result of both the
football and property business segments delivering positive contributions.
2011 2010
£m £m
Group turnover 255.7 379.9
Operating profit before depreciation, player 50.5 72.0
trading and exceptional items
Exceptional items 4.8 -
Depreciation (12.5) (11.9)
Player trading (14.6) 13.6
Joint venture 0.8 0.5
Net finance charges (14.2) (18.2)
Profit before tax 14.8 56.0
During the year under review the amortisation of player registrations was only
partially offset by profits on the sale of player registrations, the main
contribution to which was from the sale of Eduardo. As a consequence, there was
a net loss on player trading of £14.6 million (2010 - net profit of £13.6
million).
Net finance charges have been reduced to £14.2 million (2010 - £18.2 million).
The lower cost reflects the fact that our property business was debt free
throughout 2010/11 and, therefore, represents the fixed cost of our stadium
finance bonds net of the interest earned on our bank deposits. Having paid off
its bank loans during the prior year, our property business has continued to be
strongly cash generative. As a consequence, at the balance sheet date, the
Group's cash and bank balances amounted to £160.2 million (2010 - £127.6
million) and the Group's overall net debt was £97.8 million (2010 - £135.6
million).
Football Segment
2011 2010
£m £m
Turnover 225.4 222.9
Operating profit before depreciation, player 45.8 56.8
trading and exceptional items
Player trading (14.6) 13.6
Profit before tax 2.2 44.8
There were 28 home fixtures (19 Barclays Premier League, four UEFA Champions
League, three e.on FA Cup and two Carling Cup). This was one more game than in
the prior year but the mix of games was less favourable with two less games
played in the Champions League. As a result, match day revenue was slightly
lower at £93.1 million (2010 - £93.9 million). The average ticket sales per
game was 59,849 (2010 - 59,765).
Broadcasting revenues were also little changed overall at £85.2 million (2010 -
£84.6 million) with the earlier exit from the Champions League compensated by
the media revenues associated with our FA Cup and Carling Cup campaigns and a
better £:€ exchange rate on converting Champions League distributions from
UEFA.
Combined retail and commercial revenues were slightly increased at £46.3
million (2010 - £43.9 million) reflecting some positive early returns on
initiatives implemented by the new management teams in these areas.
We have indicated in previous reports the continuing upward pressure on player
wage costs and, in addition, we have continued to invest in developing the
commercial and support staff to deliver significant revenue growth for the Club
over the next few years. These factors combined to produce a full year wage
cost of £124.4 million (2010 - £110.7 million) which represented 55.2% of our
football revenues (2010 - 49.7%). Our investment in player wages, which means
not just a significant current cost but also represents a high level of
committed future cost, is underwritten by our accumulated property profits and
cash reserves.
Other operating costs, which include all the direct and indirect costs and
overheads associated with the Club's football operations and revenues, fell
slightly to £54.5 million (£55.0 million).
Property Segment
2011 2010
£m £m
Turnover 30.3 156.9
Operating profit before exceptional items 4.7 15.2
Reversal of impairment provision 7.9 -
Profit before tax 12.6 11.2
Turnover from property was derived from the continuing sale of flats in the
Highbury Square development. Sales progress has been steady as we have sought
to achieve value rather than sell off the remaining flats at the fastest
possible rate. 69 flats were sold during the period bringing the cumulative
sales up to 639 of 655 market housing apartments within the development.
We have commenced construction and refurbishment works on a small number of
properties owned by the Group in the roads immediately adjacent to Highbury
Square and this project will deliver some 21 additional property units for sale
from spring 2012.
Visitors to Emirates Stadium will be aware of the extensive construction works
ongoing to the south at Queensland Road. These works are being undertaken by
Newlon Housing Trust following our sale of part of the site to them in February
2010. The area of the site to the north east and adjacent to the stadium podium
is now being cleared and remediated in readiness for completion of the sale
contract, exchanged with Barratt in June 2011, for three towers of market
residential accommodation. Although the revenues and costs associated with the
Barratt contract will not be recognised in the profit and loss account until
legal completion occurs, likely to be in summer 2012, the value of the contract
means that part of the impairment provision previously booked against the site
can be released and £7.9 million has been credited in the current year results
in this respect.
We continue to work with Islington Council's planning department to determine
the optimum development schemes for our two remaining property sites on Hornsey
Road and Holloway Road.
Profit after Tax
The tax charge for the year was £2.1 million (2010 - credit of £5.0 million).
The effective rate of taxation of 14.5% benefits from the revaluation of the
Group's deferred tax liabilities to the 26% rate of corporation tax effective
from April 2011.
The retained profit for the year was £12.6 million (2010 - £61.0 million).
Emirates Stadium
During the year we continued to invest in our stadium and player facilities.
Expenditure of £9.6 million on fixed assets included the major redevelopment of
the dining and hospitality facilities within one quadrant of Club Tier, further
Arsenalisation initiatives throughout the stadium including the return of the
Clock End and the construction of a state of the art medical and rehabilitation
centre at the first team's training ground at London Colney.
Financial Fair Play
The 2011/12 financial year will be the first to be included in the break even
monitoring arrangements being introduced as part of UEFA's Financial Fair Play
initiative.
At the core of these new regulations is a requirement for clubs to balance
revenues and costs and to operate their football businesses on a self
sustaining basis. This has consistently been our approach and, accordingly, the
Club is well placed to comply with UEFA's new regime.
Stuart Wisely
Chief Financial Officer
30th September 2011
Arsenal Holdings plc
Consolidated profit and loss account
For the year ended 31 May 2011
2011 2010
Note Operations Player Total Operations Player Total
excluding trading £'000 excluding trading £'000
player £'000 player £'000
trading trading
£'000 £'000
Turnover of the group 257,107 735 257,842 381,262 460 381,722
including its share of
joint ventures
Share of turnover of (2,150) - (2,150) (1,866) - (1,866)
joint venture
---------- ---------- ---------- ---------- ---------- ----------
Group turnover 3 254,957 735 255,692 379,396 460 379,856
Operating expenses (212,128) (21,658) (233,786) (319,272) (25,033) (344,305)
---------- ---------- ---------- ---------- ---------- ----------
Operating profit/(loss) 42,829 (20,923) 21,906 60,124 (24,573) 35,551
Share of joint venture 822 - 822 463 - 463
operating result
Profit on disposal of - 6,256 6,256 - 38,137 38,137
player registrations
---------- ---------- ---------- ---------- ---------- ----------
Profit on ordinary 43,651 (14,667) 28,984 60,587 13,564 74,151
activities before
finance charges
---------- ---------- ---------- ----------
Net finance charges (14,208) (18,183)
---------- ----------
Profit on ordinary 14,776 55,968
activities before
taxation
Taxation (2,143) 5,024
---------- ----------
Profit after taxation 12,633 60,992
retained for the
financial year
---------- ----------
Earnings per share
Basic and diluted 4 £203.05 £980.31
---------- ----------
Player trading consists primarily of the amortisation of the costs of acquiring
player registrations, any impairment charges and profit on disposal of player
registrations.
All trading resulted from continuing operations.
There are no recognised gains or losses in the current or previous year other
than those recorded in the consolidated profit and loss account and,
accordingly, no statement of total recognised gains and losses is presented.
Arsenal Holdings plc
Consolidated balance sheet
At 31 May 2011
2011 2010
£'000 £'000
Fixed assets
Tangible fixed assets 431,428 434,494
Intangible fixed assets 55,717 60,661
Investments 1,648 1,053
---------- ----------
488,793 496,208
Current assets
Stock - development properties 33,460 45,755
Stock - retail merchandise 1,114 1,887
Debtors - due within one year 27,435 62,289
- due after one year 2,214 2,928
Cash and short-term deposits 160,229 127,607
---------- ----------
224,452 240,466
Creditors: amounts falling due within one year (131,104) (154,835)
---------- ----------
Net current assets 93,348 85,631
---------- ----------
Total assets less current liabilities 582,141 581,839
Creditors: amounts falling due after more than one (275,912) (283,883)
year
Provisions for liabilities and charges (38,274) (42,634)
---------- ----------
Net assets 267,955 255,322
---------- ----------
Capital and reserves
Called up share capital 62 62
Share premium 29,997 29,997
Merger reserve 26,699 26,699
Profit and loss account 211,197 198,564
---------- ----------
Shareholders' funds 267,955 255,322
---------- ----------
Arsenal Holdings plc
Consolidated cash flow statement
For the year ended 31 May 2011
2011 2010
£'000 £'000
Net cash inflow from operating activities 53,142 176,560
Player registrations (1,528) 15,903
Returns on investment and servicing of finance (17,220) (17,649)
Taxation 13,664 (6,294)
Capital expenditure (9,546) (5,342)
---------- ----------
Net cash inflow before financing 38,512 163,178
Financing (5,890) (135,188)
Management of liquid resources 49,340 (48,542)
---------- ----------
Change in cash in the year 81,962 (20,552)
Change in short-term deposits (49,340) 48,542
---------- ----------
Increase in cash and short-term deposits 32,622 27,990
---------- ----------
Reconciliation of operating profit to net cash inflow 2011 2010
from operating activities £'000 £'000
Operating profit 21,906 35,551
Amortisation of player registrations 21,658 25,033
Profit on disposal of tangible fixed assets (35) (14)
Depreciation 12,498 11,915
Decrease in stock 13,068 121,261
Decrease/(increase) in debtors 4,500 (869)
Decrease in creditors (20,453) (16,317)
---------- ----------
Net cash inflow from operating activities 53,142 176,560
---------- ----------
Analysis of changes in net debt At 1 June Non cash Cash flows At 31 May
2010 changes 2011
£000 £000 £000 £000
Cash at bank and in hand 33,547 - 81,962 115,509
Short-term deposits 94,060 - (49,340) 44,720
---------- ---------- ---------- ----------
127,607 - 32,622 160,229
Debt due within one year (bonds) (5,248) - (335) (5,583)
Debt due after more than one year (231,575) (362) 6,225 (225,712)
(bonds)
Debt due after more than one year (26,423) (338) - (26,761)
(debentures)
---------- ---------- ---------- ----------
Net debt (135,639) (700) 38,512 (97,827)
---------- ---------- ---------- ----------
Non cash changes represent £642,000 in respect of the amortisation of costs of
raising finance, £338,000 in respect of rolled up, unpaid debenture interest
and £280,000 in respect of amortisation of the premium on certain of the
Group's interest rate swaps.
Arsenal Holdings plc
Notes to preliminary results
For the year ended 31 May 2011
1. The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 May 2010 or 2011, but is derived from
those accounts. Statutory accounts for 2010 have been delivered to the
Registrar of Companies and those for 2011 will be delivered following the
company's annual general meeting. The auditor has reported on those accounts;
their reports were unqualified, did not draw attention to any matters by way of
emphasis without qualifying their report and did not contain statements under
s498(2) or (3) Companies Act 2006.
2. Segmental analysis
Class of business:- Football
2011 2010
£'000 £'000
Turnover 225,410 222,946
---------- ----------
Segment operating profit 9,328 20,389
Share of operating profit of joint venture 822 463
Profit on disposal of player registrations 6,256 38,137
Net finance charges (14,194) (14,208)
---------- ----------
Profit on ordinary activities before taxation 2,212 44,781
---------- ----------
Segment net assets 237,053 235,509
---------- ----------
Class of business:- Property
development
2011 2010
£'000 £'000
Turnover 30,282 156,910
---------- ----------
Segment operating profit 12,578 15,162
Net finance charges (14) (3,975)
---------- ----------
Profit on ordinary activities before taxation 12,564 11,187
---------- ----------
Segment net assets 30,902 19,813
---------- ----------
Class of business:- Group
2011 2010
£'000 £'000
Turnover 255,692 379,856
---------- ----------
Segment operating profit 21,906 35,551
Share of operating profit of joint venture 822 463
Profit on disposal of player registrations 6,256 38,137
Net finance charges (14,208) (18,183)
---------- ----------
Profit on ordinary activities before taxation 14,776 55,968
---------- ----------
Segment net assets 267,955 255,322
---------- ----------
Operating profits are stated after charging/(crediting) exceptional items as
follows:
2011 2010
£'000 £'000
Football segment - costs of takeover transaction 3,077 -
Property segment - write back of impairment (7,860) -
provision
---------- ----------
(4,783) -
---------- ----------
Operating profit from football before depreciation, player trading and
exceptional items amounted to £45.8
million (2010 - £56.8 million); being segment operating profit (as above) of £
9.3 million, adding back
depreciation of £12.5 million, exceptional costs of £3.1 million and operating
loss from player trading of
£20.9 million.
3. Turnover
Turnover, all of which originates in the UK, 2011 2010
comprises the following: £'000
£'000
Gate and other match day revenues 93,108 93,929
Broadcasting 85,244 84,584
Retail 13,245 12,613
Commercial 33,078 31,360
Property development 30,282 156,910
Player trading 735 460
---------- ----------
255,692 379,856
---------- ----------
4. Earnings per share
Earnings per share (basic and diluted) are based on the weighted average number
of ordinary shares of the Company in issue - 62,217 shares (2010 - 62,217
shares).
5. Reconciliation of movement in shareholders' funds
2011 2010
£'000 £'000
Profit for the year 12,633 60,992
Opening shareholders' funds 255,322 194,330
---------- ----------
Closing shareholders' funds 267,955 255,322
---------- ----------
6. Annual General Meeting
The annual general meeting will be held at Emirates Stadium, London, N7, on
Thursday 27 October 2011 at 11.30 am. The full statement of accounts and annual
report will be posted to shareholders on 3 October 2011.
Monday, 20th May 2024
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