Celtic Plc Annual Report Year Ended 30 June 2009
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Celtic plc Annual Report Year Ended 30 June 2009 69611 Cover w6mm.indd 1 1/9/09 22:12:28 9^gZXidgh!D[ÒXZghVcY6Yk^hZgh HjbbVgnd[i]ZGZhjaih##########################################################& 8dgedgViZ<dkZgcVcXZ##########################################################&, NZVg:cYZY(%?jcZ'%%. 8]^Z[:mZXji^kZÉhGZk^Zl########################################################( GZbjcZgVi^dcGZedgi############################################################&. 8DCI:CIH ;^cVcX^VaGZk^Zl############################################################################. HiViZbZcid[9^gZXidghÉGZhedch^W^a^i^Zh##################'* 8]V^gbVcÉhHiViZbZci#############################################################& 9^gZXidghÉGZedgi#######################################################################&( ;^kZNZVgGZXdgY#########################################################################'* 9^gZXidgh 7Vc`Zgh 9g?d]cGZ^Y8]V^gbVc I]Z8d"deZgVi^kZ7Vc`eaX EZiZgIAVllZaa8]^Z[:mZXji^kZ '.<dgYdcHigZZi :g^X?G^aZn;^cVcX^Va9^gZXidg <aVh\dl!<&(E; I]dbVh:6aa^hdc 9Zgbdi;9ZhbdcY GZbjcZgVi^dc8dbb^iiZZ >VcEA^k^c\hidc I]dbVh:6aa^hdc8]V^gbVc 7g^Vc?BX7g^YZ 7g^Vc?BX7g^YZ 7g^Vc9=L^ahdc 9g?d]cGZ^Y 7g^Vc9=L^ahdc >cYZeZcYZciCdc":mZXji^kZ9^gZXidg HZc^dg>cYZeZcYZci9^gZXidg 6jY^i8dbb^iiZZ 8dbeVcnHZXgZiVgn >VcEA^k^c\hidc8]V^gbVc GdWZgiB=dlVi 7g^Vc?BX7g^YZ 9Zgbdi;9ZhbdcY 8dbeVcnCjbWZg 7g^Vc9=L^ahdc H8()-, Cdb^cVi^dc8dbb^iiZZ GZ\^hiZgZYD[ÒXZ 9g?d]cGZ^Y8]V^gbVc 8Zai^XEVg` I]dbVh:6aa^hdc <aVh\dl!<)%(G: 9Zgbdi;9ZhbdcY 9^gZXidghd[I]Z8Zai^X;ddiWVaaVcY HidX`Wgd`ZgVcYCdb^cViZY6Yk^hZg 6i]aZi^X8dbeVcnA^b^iZY HZnbdjgE^ZgXZA^b^iZY EZiZgIAVllZaa '%DaY7V^aZn :g^X?G^aZn AdcYdc!:8)B,:C ?d]cH@ZVcZ B^X]VZa6BX9dcVaY GZ\^higVgh @Zk^cHlZZcZn 8dbejiZgh]VgZ>ckZhidgHZgk^XZhEA8 I]ZEVk^a^dch ;ddiWVaaBVcV\Zg 7g^Y\lViZgGdVY IdcnBdlWgVn 7g^hida!7H..(;6 6jY^idgh LZWH^iZ E@;J@AAE lll#XZai^X[X#cZi ,-8VgaidcEaVXZ <aVh\dl!<*.I= Hda^X^idgh 9A6E^eZgAAE ').LZhi<Zdg\ZHigZZi <aVh\dl <')G7 +% 69611 Cover w6mm.indd 2 8/9/09 09:40:29 Independent Auditors’ Report to the Members ... 26 Company Balance Sheet ....................................................... 31 Notes to the Financial Statements ............................... 35 Celtic Charity Fund .................................................................. 27 Statement of Changes in Equity..................................... 32 Notice of Annual General Meeting and Notes ...... 55 Consolidated Income Statement ................................... 29 Consolidated Cash Flow Statement ..............................33 Explanatory Notes .................................................................... 57 Consolidated Balance Sheet .............................................. 30 Company Cash Flow Statement ...................................... 34 Directors, Offi cers and Advisers ...................................... 60 69611 Front New.indd 3 7/9/09 22:22:01 Chairman’s Statement “… we fi rmly believe that Tony Mowbray and his coaching staff are the right choice to take the Club forward.” Dr John Reid SUMMARY OF THE RESULTS I am pleased to report on the Company’s performance in the year to 30 June 2009. It was a year of great challenges, promise and expectation, both fi nancially Operational Highlights and from a football perspective. The fi nancial storm of Winners of the Co-operative Insurance Cup 2008/2009 has been weathered successfully, so far, but our objective of achieving four SPL championships in a Participation in the group stages of the row was not fulfi lled; once again we have seen just how UEFA Champions League playing 3 home closely fought the SPL title can be. Losing the SPL title European fi xtures (2008: 5) and the accompanying direct entry place to this year’s Champions League to our greatest rivals is not easy Season ticket sales of 54,252 (2008: 53,517) to accept; it is not in our nature to be satisfi ed with following a price freeze and introduction second best. of low-priced concession tickets It is a measure of how far we have come in recent years, 26 home matches played at Celtic Park and the high standards that have been set, that our in the year (2008: 28) football fortunes in a year in which we won the CIS Cup, Appointment of Tony Mowbray as participated once again in the group stage of the football manager UEFA Champions League and challenged until the very last for a fourth consecutive SPL title, could be NIKE’S appointment as kit manufacturer described as mixed. This highlights the contribution extended for 5 years until 2015 and achievements of Gordon Strachan and his backroom staff in their time with the Club, for which we thank them. Financial Highlights The new management team have much to live up Group revenue reduced by 0.5% to £72.59m to, but we fi rmly believe that Tony Mowbray and his (2008: £72.95m) coaching staff are the right choice to take the Club forward. Operating expenses reduced by 4.3% to £61.36m (2008: £64.09m) From a fi nancial perspective our results for the year continue to provide us with a solid footing and remain Profi t from trading before asset transactions highly creditable. Turnover, at £72.59m, was on a par and exceptional operating expenses of £11.23m with the £72.95m of 2007/2008, despite playing only (2008: £8.86m) 26 home games rather than the 28 of the year before. Exceptional operating expenses of £2.78m Merchandising sales improved and multi-media sales (2008: £3.19m) increased. Operating expenses reduced by 4.3% in the year (£2.74m) to £61.36m. Exceptional operating Gain on disposal of intangible assets of £1.55m expenses of £2.78m were incurred, mainly relating (2008: £5.70m) to player impairment values and costs from onerous contracts and employment contract terminations. Profi t before taxation of £2.00m (2008: £4.44m) These are good results in the present economic context. Year end bank debt of £1.51m (2008: £3.52m) net of cash Gains on player trading of £1.55m this year against £5.70m last time, and higher amortisation costs Investment of £8.53m (2008: £5.11m) in the from investment in players, offset by the savings in acquisition of football players operating expenses, result in our profi t before tax of £2.00m compared with £4.44m the year before. Our year end bank debt, net of cash, was £1.51m, down from £3.52m the previous year. Investment in players increased from £5.11m to £8.53m, refl ecting our policy of and commitment to strengthening the team within the parameters of a sustainable fi nancial model. Put simply, last year we brought in less from selling players and spent more in bringing in new players than in the previous year. At 53.4% the ratio of total labour cost to turnover 1 Annual Report Year Ended 30 June 2009 69611 Front New.indd 4 2/9/09 08:13:07 has been maintained at the same level as last year – the year before. Our season ticket sales so far are refl ecting a total outlay on labour of £38.75m. encouraging but we will have to work extremely hard to match our performance last year. Your support in These results have been achieved in trying and often doing so will be vital. frustrating circumstances and substantially in reliance upon the tremendous contribution of the Celtic The diffi cult economic circumstances are no reason support. In football, at home and abroad, and in other for us to cut back on our Foundation and Charity work. fi elds, many organisations are in fi nancial diffi culty. Indeed in many ways these become more important in We have placed a premium on fi nancial prudence in times of greater deprivation. That is why I am delighted order to safeguard this Club for future generations. that the Celtic Foundation continues to tackle social inequality in many fi elds, with over 6,500 young people Unlike other sectors, the football transfer market has and adults participating in its programmes each week not been depressed by recessionary infl uences; indeed and a staggering 1,250,000 young people and adults wages for good quality players, as well as transfer fees having been involved in some way with its work since have increased, buoyed mainly by the broadcasting its activities began in May 2003. Celtic Charity Fund money available in England. The Scottish broadcasting has again had a major effect on the lives of many of the deal negotiated by the SPL with Setanta last summer - least fortunate in society, both at home and abroad, although in no way as lucrative as that offered by SKY with almost £446,500 donated in cash to good causes in England - was held out as a substantial increase on in the year. As a sum equivalent to 0.61% of Group the agreement then in place. Celtic did not support turnover this year, we are well on our way to achieving that new agreement, preferring the SKY option. the target of 0.7% I set for us at last year’s AGM, a We believed that in selecting Setanta instead of SKY commendable effort during an economic recession. I am in the competitive bid process, an opportunity for the proud that over the last 12 months the Club has been SPL to benefi t from the greater status, stability, reach involved in more charitable, educational and community and fi nancial resources of one of the world’s largest work than it has at any other time in its history. broadcasters was lost, as became apparent when Setanta entered into administration just after the end This coming year sets us further football challenges. of the season. The recently agreed arrangements with We look forward very much to working with our new SKY / ESPN are signifi cantly less than could have been manager Tony Mowbray and his team. Tony is in the the case had SKY’s offer been accepted last year, and process of rebuilding the squad. In recent weeks we are a hard lesson in what could and should have been have been joined by new faces on the playing staff, a far more positive outcome for all of the SPL clubs.