Interim Report - 31 December 2023

Celtic PLC
23 February 2024
 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

Celtic plc (the "Company")

 

INTERIM REPORT FOR THE SIX MONTHS TO 31 DECEMBER 2023

                 

 

·    14 home fixtures (2022: 14).

 

·    Participation in the UEFA Champions League group stages, securing 4 points.

 

·    Commencement of the major development at Barrowfield Training Facility.

 

·    Revenue increased by 11% to £85.2m (2022: £76.5m).

 

·    Profit from trading was £32.0m (2022: £28.1m).

 

·    Profit from transfer of player registrations (shown as profit on disposal of intangible assets)         £2.6m (2022: £1.8m).

 

·    Profit before taxation of £30.3m (2022: £33.9m).

 

·    Acquisition of player registrations of £12.9m (2022: £5.7m).

 

·    Period end cash net of bank borrowings of £67.3m (2022: £59.2m).

 

For further information contact:

 

Celtic plc



Peter Lawwell, Celtic plc

Iain Jamieson, Celtic plc


Tel: 0141 551 4235




Canaccord Genuity Limited, Nominated Adviser


Simon Bridges

          

Tel: 0207 523 8000

 

 

CHAIRMAN'S STATEMENT

 

The results for the six months ended 31 December 2023 show revenues of £85.2m (2022: £76.5m) and a profit from trading, representing the profit excluding other income and player related gains and charges, amounting to £32.0m (2022: profit of £28.1m). The profit before finance income & expense and taxation amounted to £28.5m (2022: £33.8m).

 

We benefited from Champions League qualification in both 2022 and 2023 and increased underlying revenue by £8.7m to £85.2m in the first half of 2023 relative to the same period last year. The key factors in this were higher UEFA distributions this year alongside a general incremental upturn in trading across almost all revenue streams.  A significant portion of this revenue increase was re-invested into football wages and salaries resulting in the profit from trading of £32.0m noted above. Amortisation charges were broadly in line with the same period last year and gains from player trading amounted to £2.6m for the six months to 31 December 2023 (2022: £1.8m). These principally related to the disposal of Carl Starfelt and several contingent fees that crystalised in the period.

 

Profit before finance income & expense and taxation fell to £28.5m, down from £33.8m in the prior year, despite the significant revenue increase. This is attributable to the increase in the football related investment alongside the absence of a significant non-recurring insurance receipt recognised in the prior period.

 

From a funding perspective, the cash and cash equivalents balance reduced from £72.3m to £67.3m in the period under review. A significant proportion of this cash is committed to the creation of a new training centre at the Barrowfield site, the finalisation of the Lennoxtown developments and future stadium expenditure. The Board recognises the inherent inefficiencies of holding excess cash, and, in conjunction with other cash commitments, the importance of investing in strengthening the team to deliver football success. The Board shares the frustrations of the supporters regarding the less than anticipated activity in the recent transfer window.

 

Since the opening of the transfer window in June 2023, and up to the end of the winter transfer window which closed on 1st February 2024, we have committed £23.9m in player investment. Within this we renewed and extended the contracts of Cameron Carter-Vickers, Liel Abada, Matt O'Riley, Anthony Ralston and Reo Hatate. The Board's commitment is to strengthen and improve the playing squad in every transfer window and although resources were available, we were unable to further add to the squad due to the unavailability of identified targets. This was disappointing to us all, and never the intention. The January transfer window is notoriously difficult as clubs are very reluctant to let their best players go at such a crucial time of the season just as we are. Indeed, we resisted strong interest in our players from other clubs.

 

It is notable that transfer activity in England was the lowest it has been for over ten years, excluding the impact of Covid-19. A number of reasons have been cited for this including the absence of suitable players and new UEFA regulations which impose spending caps. 

 

Although disappointed by the second-round exit of the League Cup away to Kilmarnock, we looked forward to our Champions League draw against Feyenoord, Atletico Madrid and Lazio. We achieved four points in the group stages and, whilst representing an improvement over last season's two points, we finished fourth in the group stage. We took consolation from a number of good performances which will serve our squad well, but our objective is to keep improving and competing in Europe. Looking towards the year ahead, winning the SPFL and the Scottish Cup is our immediate focus and priority. With 12 matches remaining in the league and having reached the quarter final of the Scottish Cup, there remains a long way to go and all to play for. We will all unite behind the team for these purposes.

 

We also look forward to the creation of our new Barrowfield facility which is scheduled for the end of 2024 and will bring high quality facilities for our women's and academy squads. We are also nearing the completion of a significant investment in Lennoxtown delivering new First Team and B Team changing areas and a newly

enhanced medical and sports science facility. Investment in infrastructure is a key component of success in modern football.

 

December 2023 saw the departure of our women's team manager, Fran Alonso, to a new opportunity in one of the top women's football leagues in the world. Fran leaves us with our best wishes after almost four years with Celtic having overseen the transition of the women's team to professional status and having won the League Cup, two back-to-back Scottish Cups and narrowly missing out on the SWPL league title last season. Fran leaves us in a strong position and was recently replaced by Elena Sadiku. We wish to welcome Elena, at what is an exciting time for the women's game at Celtic and in Scotland.

 

UEFA and the European Club Association are close to agreeing the final aspects of the revised European Club Competition model. This will bring an exciting new format to European football and the opportunity to participate in more matches and give access to more teams across Europe. Pending completion of these discussions, this should provide stability and certainty for several years for the European football landscape.

 

As is often the case with the Club's earnings profile, we naturally expect a seasonal downturn in earnings in the second half of the year. In general terms, earnings are biased towards the first half of the year aligned to the receipts from European competition, whereas the second half is characterised by significant accounting losses. This is entirely within expectations and our planning assumptions. Our outturn earnings can also be materially impacted by football success and the year-end assessment of player registration carrying values. Taking all of this into consideration, we would expect our total outturn financial performance for the year ending 30 June 2024 to be significantly lower than the result posted for the first six months of the financial year.

 

On behalf of the Board and everyone at Celtic Football Club, I wish to extend our gratitude and appreciation to our supporters for the backing of our Club. Thanks also must go to our shareholders and commercial partners for their continued support. 

 

Peter T Lawwell                                                                                                                                                                              

Chairman

23 February 2024

 

 

 

INDEPENDENT REVIEW REPORT TO CELTIC PLC

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2023 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the London Stock Exchange AIM Rules for Companies.

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 December 2023 which comprises Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and related explanatory notes.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410"). 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.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the Directors have inappropriately adopted the going concern basis of accounting or that the Directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the Group to cease to continue as a going concern.

Responsibilities of Directors

The Directors are responsible for preparing the half-yearly financial report in accordance with the London Stock Exchange AIM Rules for Companies which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

In preparing the half-yearly financial report, the Directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

 

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 AIM Rules for Companies 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

Glasgow, UK

Date: 23 February 2024

 

 

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 2023

 

 

 

 

 

 

 

 

 

2023

Unaudited

 

 

 

 

2022

Unaudited

 

 

Note

£000

 

£000

 



 

 


Revenue


2

     85,222

 

76,542

 



 

 


Operating expenses (before intangible asset transactions)



 (53,217)

 

(48,398)

 

Profit from trading before intangible asset transactions



 

32,005

 

 

28,144

 



 

 


Exceptional operating expense


3

(50)


(53)




 



Amortisation of intangible assets


7

(6,099)


(6,018)




 



Profit on disposal of intangible assets



2,591


1,757




 



Other income


3

50


10,000

 

Operating profit



 

28,497

 

 

33,830




-

 





 

 


Finance income


4

2,540

 

636

Finance expense


4

(735)

 

(611)

 

Profit before tax

 

 

 

30,302

 

 

33,855

Income tax expense


5

(7,622)

 

(5,767)




-

 


 

Profit and total comprehensive income for the period

 


 

 

 

 

22,680

 

 

28,088

 

Basic earnings per Ordinary Share


 

6

 

23.98p

 

 

29.72p

 

Diluted earnings per Share


 

6

 

16.79p

 

 

20.74p

 



 

 


 

 

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2023

 

 

 

 

2023

Unaudited

 


 

2022

Unaudited


 

Notes

£000

 


£000


NON-CURRENT ASSETS







Property plant and equipment


56,328



55,920


Intangible assets

7

32,679



34,324


Trade and other receivables

8

8,624



4,515




97,631



94,759


CURRENT ASSETS


 





Inventories


3,802



2,534


Trade and other receivables

8

42,963



30,095


Cash and cash equivalents

10

67,327

 


60,142




114,092



92,771


TOTAL  ASSETS


211,723



187,530




 





EQUITY

 

 





Issued share capital

9

27,169



27,166


Share premium

 

15,028



14,990


Other reserve

 

21,222



21,222


Accumulated profits


67,490



39,566


TOTAL EQUITY

 

130,909



102,944




 





NON-CURRENT LIABILITIES


 





Debt element of Convertible Cumulative Preference Shares


4,173



4,174


Trade and other payables


6,280



9,018


Lease Liabilities


   469



163


Deferred tax

5

            3,482



3,189


Provisions


                  91



77


 


14,495



16,621


CURRENT LIABILITIES


 





Trade and other payables


40,338

 

 



38,390


Current borrowings

    96



1,048


Lease Liabilities


     447



   394


Provisions


 6,278



7,271


Deferred income

 

19,160

 


20,862



 

66,319

 


67,965


TOTAL LIABILITIES

 

80,814

 


84,586


TOTAL EQUITY AND LIABILITIES

 

211,723



187,530


 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE 6 MONTHS ENDED 31 DECEMBER 2023

 

 

 

        Share

        capital

 

Share premium

 

Other reserve

 

Accumulated

Profits

 

Total

 


£000

£000

£000

£000

£000

EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2022 (Audited)

27,166

14,951

21,222

11,478

74,817

 

Share capital issued

 

-

 

39

 

-

 

-

 

39

 

Profit and total comprehensive income for the period

-

-

-

28,088

28,088

 

 

 

 

 

 

EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2022 (Unaudited)

 

27,166

 

14,990

 

21,222

 

39,566

 

102,944






 

EQUITY SHAREHOLDERS' FUNDS AS AT 1 JULY 2023 (Audited)

27,168

44,810

108,190

 

Share capital issued

 

1

 

38

 

-

 

-

 

39







Profit and total comprehensive income for the period

-

-

-

22,680

22,680


 

 

 

 

 

EQUITY SHAREHOLDERS' FUNDS AS AT 31 DECEMBER 2023 (Unaudited)

27,169

15,028

21,222

67,490

130,909


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE 6 MONTHS ENDED 31 DECEMBER 2023

 

 

Note           

2023

Unaudited

 

2022

Unaudited 

 

 

£000

 

£000

Cash flows from operating activities




Profit for the period after tax


        22,680


28,088

Income tax expense


7,622


5,767

Depreciation


1,261


1,292

Amortisation


6,099


6,018

Profit on disposal of intangible assets


(2,591)


(1,757)

Finance costs


735


611

Finance income


(2,540)


(636)



33,266


39,383



 


 

(Increase)/Decrease in inventories


(376)


453

Decrease in receivables


5,142


4,137

Decrease in payables and deferred income


(28,643)


(15,522)

Cash generated from operations

9,389


28,451

Tax paid

(2,780)


-

Interest paid

-


(31)

Interest received


1,594


327

Net cash flow from operating activities


8,203


28,747

Cash flows from investing activities


 



Purchase of property, plant and equipment

 

(1,575)

 

(892)

Purchase of intangible assets

 

(23,274)

 

(14,341)

Proceeds from sale of intangible assets


12,473


16,197

Net cash (used in)/generated from investing activities


(12,376)


964

Cash flows from financing activities


 



Repayment of debt

 

-


(640)

Payments on leasing activities

 

(300)


(343)

Dividend on Convertible Cumulative Preference Shares

 

(485)


(455)

Net cash used in financing activities

 

(785)


(1,438)

 

 

 



Net (decrease)/increase in cash and cash equivalents

 

(4,958)


28,273

Cash and cash equivalents at 1 July


72,285


31,869

Cash and cash equivalents at 31 December

10

67,327


60,142

 

NOTES TO THE FINANCIAL INFORMATION

 

1.      BASIS OF PREPARATION

 

The financial information in this interim report comprises the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cash Flow Statement and accompanying notes.  The financial information in this interim report has been prepared under the recognition and measurement requirements in accordance with UK adopted international accounting standards, but does not include all of the disclosures that would be required under those accounting standards. The accounting policies adopted in the financial statements for the year ended 30 June 2023 will be in accordance with UK adopted international accounting standards.

 

The financial information in this interim report for the six months to 31 December 2023 and to 31 December 2022 has not been audited, but it has been reviewed by the Company's auditor.

 

Adoption of standards effective for periods beginning 1 July 2023

 

The following amended standards have been adopted as of 1 July 2023

·      Amendments to IAS 8, IAS 1, IAS 12, IFRS 17, IFRS 9 and IAS 12

           

 Going concern

 

The Company has sufficient financial resources available to it, together with established contracts with a number of customers and suppliers.  As a consequence, the Directors believe that the Company is well placed to continue managing its business risks successfully and they have a reasonable expectation that the 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 financial information in this interim report.

                                                                                                             

2.   REVENUE



6 months
to 31
Dec 2023

 

6 months
to 31
Dec 2022



Unaudited
£000

 

Unaudited
£000

Football and stadium operations


29,778

 

28,250

Multimedia and other commercial activities


37,153

 

30,866

Merchandising


18,291

 

17,426



85,222

 

76,542






Number of home games


14

 

14

 

3.      EXCEPTIONAL OPERATING ITEMS AND OTHER INCOME

 

The exceptional operating expense of £0.05m represents settlement payments.  These items are deemed to be unusual in relation to what management consider to be normal operating conditions.

 

Other income in the prior period represents incoming cash or receivables to the business which is not deemed to be generated from the normal course of business and does not meet the definition of revenue under IFRS15. In the current financial period this is represented by a compensation sum receivable relating to the release of contractual obligations. In the prior period this related to an amount received in respect of a Business Interruption insurance claim.  The amount of income is only recognised when the likelihood and value of any receipt is virtually certain i.e. the cash or confirmation of payment have been received.

 

4.      FINANCE INCOME AND EXPENSE

 

 

 

 

 

6 months to

31 December

2023

 

6 months to

31 December

2022

 

 

 

 

Unaudited

£000

 

Unaudited

£000

 

Finance income:

 

 

 


 

Interest receivable on bank deposits

 

1,789

 

326

 

Notional interest income

 

751

 

310

 


 

2,540

 

636

 


 

 

 


 

 

 

 

 

 

 

6 months to

31 December

2023

 

6 months to

31 December

2022

 

 

 

 

Unaudited

£000

 

Unaudited

£000

 

 

Finance expense:

 

 

 


 

Interest payable on bank and other loans

 

  -

 

(31)

 

Notional interest expense


(451)

 

(296)


Dividend on Convertible Cumulative Preference Shares


(284)

 

(284)


 

 

(735)

 

(611)

 

 

5.    TAXATION                                                                                            

        

         Tax has been charged at 25% for the six months ended 31 December 2023 (2022: 19%) representing the best estimate of the average annual effective tax rate expected to apply for the full year, applied to the pre-tax profit of the six month period. After accounting for deferred tax, this has resulted in tax expense in the statement of comprehensive income of £7.6m (2022: £5.8m).

 

6.    EARNINGS PER SHARE

        

         Basic earnings per share has been calculated by dividing the profit for the period of £22.7m (2022: £28.1m) by the weighted average number of Ordinary Shares in issue of 94,596,518 (2022: 94,515,655). Diluted earnings per share has been calculated by dividing the profit for the period by the weighted average number of Ordinary Share, Convertible Cumulative Preference Shares and Convertible Preferred Ordinary Shares in issue, assuming conversion at the Balance Sheet date if dilutive. 

 

7.      INTANGIBLE ASSETS

 

 

 

31 December 2023

 

 

31 December 2022


 

 

Unaudited

 

Unaudited


Cost

 

£000

 

 

£000

 


At 1 July


55,747


67,511


Additions


12,866


5,650


Disposals


(15,448)


(13,683)


At period end


53,165


59,478


 

Amortisation


 




At 1 July


27,708


32,022


Charge for the period


6,099


6,018


Disposals


(13,321)


(12,886)


At period end


20,486


25,154


 

Net Book Value at period end


 

32,679


 

34,324


 

 

8.      TRADE AND OTHER RECEIVABLES


31 December 2023

Unaudited

 

31 December 2022

Unaudited

£000

£000





          Trade receivables

34,365

 

21,232

          Prepayments and accrued income

11,068

 

7,053

          Other receivables

6,154

 

6,325


51,587

 

34,610


 

 


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





31 December

2023

Unaudited


31 December 2022

Unaudited

 

 

£000

 

 

£000

 


          Trade receivables

8,624


4,515


 

 


 

9.      SHARE CAPITAL

 


Authorised

 

Allotted, called up and fully paid


31 December

 

31 December


2023

 

2022

 

2023

2023

2022

2022

 

Unaudited

 

Unaudited

Unaudited

 

No 000

 

No 000

 

No 000

£000

No 000

£000

Equity









Ordinary Shares of 1p each

223,775


223,681


94,615

946

94,526

945

Deferred Shares of 1p each

680,722


677,885


680,722

6,807

677,885

6,778

Convertible Preferred Ordinary Shares of £1 each

 

14,678


 

14,721


 

12,692

 

12,692

 

12,718

 

12,718

Non-equity

 




 

 



Convertible Cumulative Preference Shares of 60p each

 

18,295


 

18,298


 

15,795

 

9,477

 

15,797

 

9,478

 

Less reallocated to debt:

Initial debt

 

 

-


 

 

-


 

 

-

 

 

(2,753)

 

 

-

 

 

(2,753)


 




 

 




937,470


934,585


803,824

27,169

800,926

27,166

 

     

 

10.      ANALYSIS OF NET CASH AT BANK

   The reconciliation of the movement in cash and cash equivalents per the cash flow statement to net cash is as follows:                   

 

 

 

 

31 December

2023

 

31 December

2022


 

 

Unaudited

 

Unaudited


 

 

£000

 

£000



 

 




Bank Loans due within one year

 

-


(948)



 

 




Cash and cash equivalents:

 

 




Cash at bank and on hand

 

67,327


60,142


 

 

 

 



Net  cash at bank at period end

 

67,327

 

59,194


 

 

11.   POST BALANCE SHEET EVENTS

Since the Balance Sheet date, we have acquired the permanent registration of Nicolas Kuhn from SK Rapid Vienna and the temporary registration of Adam Idah from Norwich City.

 

We have permanently transferred the registrations of David Turnbull and Yosuke Ideguchi, and temporarily transferred the registrations of Adam Montgomery, Hyeokkyu Kwon, Michael Johnston and Marco Tilio to other clubs.

 

 

 

 

 

 

 

 

Directors

         Peter T Lawwell (Chairman)

Michael Nicholson (Chief Executive Officer)

Christopher McKay (Chief Financial Officer)

Thomas E Allison

Dermot F Desmond

Brian D H Wilson

Sharon Brown

Brian Rose

 

Company Secretary

Christopher Duffy

 

Registered Office

Celtic Park

Glasgow

G40 3RE

 

Registered Number

SC003487

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