Celtic Finances
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 £000 |
1995 £000 |
1996 £000 |
1997 £000 |
1998 £000 |
|
| Turnover | 8,736 | 10.376 | 16,055 | 22,189 | 27,891 |
| Profit from Operations | 282 | 669 | 2,735 | 5,899 | 5,094 |
| (Loss)/Profit after Taxation | (1,404) |
(401) |
(1,013) |
5,152 | 7,101 |
| Dividends | – | – | – | 533 | 533 |
| Shares in issue (000) | 226 | 453 | 475 | 475 | 475 |
| (Loss)/Earnings per Ordinary Share (£) | (35.03) |
(1.73) |
(3.49) |
15.93 | 22.65 |
| Fully Diluted (Loss)/Earnings per share (£) | (32.58) |
(1.29) |
(2.24) |
10.83 | 14.90 |
| Net Assets | 16,316 | 29,095 | 31,388 | 36,007 | 42,575 |
| Number of Employees | 292 | 237 | 288 | 320 | 375 |
| FOOTBALL | |||||
| League Position | 4th | 4th | 2nd | 2nd | 1st |
| League Points | 65 | 51 | 83 | 75 | 74 |
| Scottish Cup | Third Rd | Winners | Semi Final | Semi Final | Semi Final |
| League Cup | Semi Final | Final | Fourth Rd | Fourth Rd | Winners |
| European Ties Played | 2 | 0 | 2 | 2 | 3 |
| CELTIC PARK Stadium | |||||
| Investment to date (£000) | 8,694 | 23,335 | 34,690 | 37,011 | 46,764 |
| 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 Attendance | 22,888 | 25,347 | 33,225 | 46,317 | 46,415 |
| Season Ticket Sales | 7,162 | 18,029 | 29,370 | 40,529 | 42,322 |
The attendance and capacity figures for 1995 are for Hampden Park.
GROUP PROFIT AND LOSS ACCOUNT YEAR ENDED 30 JUNE 1998
| 1998 £000 |
1997 £000 |
|
| Turnover | 27,821 | 22,189 |
| Operating Expenses | (22,727) |
(16,290) |
| Profit from Operations |
5,094 |
5,899 |
| Amortisation of Intangible Fixed Assets | (5348) | (3,302) |
| Net Gain on Sale of Intangible Fixed Assets | 7,410 | 2,606 |
| Operating Profit |
7,156 |
5,203 |
| Interest Receivable and similar charges | 97 | 27 |
| Income Interest payable and similar charges | (121) | (78) |
| Profit on Ordinary Activities | 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 000 |
1997 £000 |
|
| Fixed Assets | 41,724 | 32,606 |
| Intangible Assets | 14,441 | 8,958 |
| Current Assets |
56,165 |
41,564 |
| Stocks | 495 | 126 |
| Debtors | 2,642 | 3,367 |
| Cash at Bank and in hand | 21 | 3,478 |
| 3,158 |
6,971 |
|
| Creditors | ||
| Amounts falling due within one year | (8,621) |
(6,223) |
| Income deferred less than one year | (7,918) |
(6,000) |
| (16,539) |
(12,223) |
|
| Net Current Liabilities | (13,381) |
(5,252) |
| Total Assets les Current Liabilities |
42,784 |
36,312 |
| Amounts falling due after more than one year | (209) |
(305) |
| Net Assets |
42,575 |
36,007 |
| Capital and Reserves | ||
| Called up Share Capital (includes non-equity) | 11,390 | 11,390 |
| Share Premium | 17,361 | 17,361 |
| Profit and Loss Account | 13,824 | 7,256 |
| 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.