TIDMPNE
RNS Number : 4487J
Preston North End PLC
30 March 2010
Preston North End plc
("Preston North End" or the "Company")
Interim Results for the six months ended 31 December 2009
Chairman's Statement
On behalf of the Board of directors of Preston North End plc, I am pleased to
present the Group's interim results for the six months ended 31 December 2009.
Introduction
Our revenue in the first six months of the financial year was 29% higher than
the same period last year at GBP5.21m (2008: GBP4.03m). This is mainly due to
increased levels of central funding to all clubs in the Championship from the
Football League and Premier League under the 'solidarity' arrangement. In
addition, we continued to receive rental income from the Minerva Health Centre
under the Invincibles Pavilion which was not included in the same period last
year.
Whilst revenues increased, total wages and salaries, including non-playing
staff, were held to a 2% increase at GBP5.84m (2008: GBP5.72m).
Other operating charges, however, increased by 28% to GBP1.87m (2008: GBP1.45m),
primarily due to costs associated with the operation of the Minerva Health
Centre which were covered by rental income received.
Other operating income of GBP1.3m represents the net amount received from the
loan of Sean St Ledger to Middlesbrough Football Club.
After accounting for a profit on disposal of player registrations of GBP0.72m
(2008: GBP0.27m) and depreciation and amortisation charges of GBP1.32m (2008:
GBP1.34m), the operating loss was GBP1.81m compared to a loss of GBP4.21m in the
same period in 2008.
Although overall levels of borrowing were higher, total interest costs were
GBP0.49m compared to GBP0.56m which reflects the prevailing low base rate during
the period.
Despite the overall improvement in the pre-tax loss from GBP4.76m in the six
months to December 2008 to GBP2.30m in the same period in 2009, the loss has
still needed to be funded. In addition to the losses, the group made cash
payments of GBP1.16m (2008: GBP1.43m) in relation to the acquisition of new
players.
The resulting total cash requirement was GBP3.5m with the consequence that the
Club has required significant further amounts of external finance from its bank
and shareholders. The Company's bankers provided a new GBP1.0m loan in addition
to GBP1.2m overdraft utilisation in the period and the Company's major
shareholder, Guild Ventures Limited advanced a further GBP1.3m of loan funding.
The Board remain extremely grateful for this support, particularly from Guild
Ventures Limited, which has also extended its support into the second half of
the financial year.
Football
The most significant event in the period was the decision to replace Alan Irvine
as manager.
Despite Alan's achievements in retaining Championship status in 2008 and
securing a play-off place in 2009, the team had suffered a poor run of results.
In a competitive league, and with the major shareholders lending the Group
considerable sums to funds its operations, the Board felt it had to act swiftly.
The decision was not an easy one, nor was it taken lightly but I believe it was
in the best interests of the Club. On behalf of the Board, I would like to
place on record my thanks to Alan for his commitment and dedication during in
his time at Deepdale and also to wish him every success in his continuing
managerial career.
I was pleased to confirm the appointment of Darren Ferguson as Alan's
replacement early in January 2010. Darren also brought his backroom staff with
him in Kevin Russell, Scott Taylor and Darren Ward, which also signalled the
departure of Rob Kelly, Billy Barr and Andy Rhodes. Again I would like to thank
these staff for their contribution during their time at the Club and wish them
well for the future.
Darren has quickly established his own training methods and style of play with
the players and made his own changes to the squad. Although occurring after the
six month period under review, the permanent signings of Paul Coutts and Keith
Treacy along with the loan signings of Danny Welbeck, Matt James and Tom
Williams have all made an impact in the games since the turn of the year.
Prior to Darren's arrival, the Summer transfer window had seen the departures of
Simon Whaley and Paul McKenna, which accounted for the GBP0.72m of profits in
the period.
During the Summer transfer window, we also signed Paul Parry from Cardiff City
and Veliche Shumulikoski from Ipswich Town.
When I wrote my interim statement last year for the six months to December 2008,
I reported that we had granted two youth team players two-and-a-half year
professional contracts. I am delighted that both Danny Mayor and Adam Barton
have been included in the first team squad on a number of occasions and that
Danny has also now made four substitute appearances in competitive games. At
the time of writing, George Miller and Jamie Proctor have also been included in
the first team matchday squad in the away games at West Bromwich Albion and
Middlesbrough, respectively. George and Jamie have also signed professional
contracts, along with Conor McLaughlin. I hope that I will be able to report
on further first team appearances in the near future.
Other activities
Whilst the economic climate has continued to be challenging, we have maintained
good working relationships with the majority of our corporate sponsors. With
the addition of the new stand, we have also been entertaining record numbers of
hospitality clients at games during the current season.
Our work in the community continues to go from strength to strength. We
continue to encourage as many young people as possible to participate in
football-related activities and healthy lifestyles messages continue to be
delivered in local schools in partnership with NHS Central Lancashire.
Finally, I would like to formally thank our staff and most importantly our
dedicated fans for their continued support.
Derek Shaw
Chairman
Consolidated income statement
for the six months ended 31 December 2009
+------------------------------------+-----------+-----------+-----------+
| | 6 months | 6 months | 12 months |
| | to | to | to |
| | 31 | 31 | 30 June |
| | December | December | 2009 |
| | 2009 | 2008 | |
+------------------------------------+-----------+-----------+-----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Audited |
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Revenue | 5,208 | 4,034 | 8,507 |
+------------------------------------+-----------+-----------+-----------+
| Staff costs | (5,844) | (5,723) | (11,243) |
+------------------------------------+-----------+-----------+-----------+
| Other operating income | 1,302 | - | - |
+------------------------------------+-----------+-----------+-----------+
| Other operating charges | (1,868) | (1,454) | (3,202) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Loss from operations before player | | | |
| trading and amortisation | (1,202) | (3,143) | (5,938) |
+------------------------------------+-----------+-----------+-----------+
| Depreciation and amortisation of | (1,319) | (1,336) | (2,712) |
| player registrations | | | |
+------------------------------------+-----------+-----------+-----------+
| Profit on disposal of players' | 716 | 274 | 312 |
| registrations | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Loss from operations | (1,805) | (4,205) | (8,338) |
+------------------------------------+-----------+-----------+-----------+
| Finance income | - | - | 300 |
+------------------------------------+-----------+-----------+-----------+
| Finance expenses | (491) | (557) | (1,128) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Loss before taxation | (2,296) | (4,762) | (9,166) |
+------------------------------------+-----------+-----------+-----------+
| Taxation | - | - | 75 |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Loss for the period attributable | | | |
| to equity holders of the parent | (2,296) | (4,762) | (9,091) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Loss per share (basic and diluted) | (69.7)p | (144.5)p | (275.8)p |
| | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
Consolidated statement of changes in equity
for the six months ended 31 December 2009
+--------------------------------------------+---------+-------------+----------+
| | Share | | Profit |
| | premium | Revaluation | and |
| | account | Reserve | loss |
| | | | account |
+--------------------------------------------+---------+-------------+----------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+---------+-------------+----------+
| | | | |
+--------------------------------------------+---------+-------------+----------+
| At 1 July 2009 | 7,051 | 6,737 | (19,177) |
+--------------------------------------------+---------+-------------+----------+
| Loss for the period | - | - | (2,296) |
+--------------------------------------------+---------+-------------+----------+
| | | | |
+--------------------------------------------+---------+-------------+----------+
| At 31 December 2009 | 7,051 | 6,737 | (21,473) |
+--------------------------------------------+---------+-------------+----------+
| | | | |
+--------------------------------------------+---------+-------------+----------+
Consolidated balance sheet
as at 31 December 2009
+------------------------------------+-----------+-----------+-----------+
| | 31 | 31 | 30 June |
| | December | December | 2009 |
| | 2009 | 2008 | |
+------------------------------------+-----------+-----------+-----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Audited |
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Non-current assets | | | |
+------------------------------------+-----------+-----------+-----------+
| Intangible assets | 2,734 | 3,849 | 3,050 |
+------------------------------------+-----------+-----------+-----------+
| Property, plant | 28,250 | 20,406 | 28,504 |
| and equipment | | | |
+------------------------------------+-----------+-----------+-----------+
| Derivative | 300 | - | 300 |
| financial instruments | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total non-current assets | 31,284 | 24,255 | 31,854 |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Current assets | | | |
+------------------------------------+-----------+-----------+-----------+
| Inventories | 336 | 310 | 340 |
+------------------------------------+-----------+-----------+-----------+
| Trade and other | 1,112 | 3,067 | 1,506 |
| receivables | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total current assets | 1,448 | 3,377 | 1,846 |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total assets | 32,732 | 27,632 | 33,700 |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Current liabilities | | | |
+------------------------------------+-----------+-----------+-----------+
| Bank overdraft | (5,530) | (13,710) | (4,330) |
+------------------------------------+-----------+-----------+-----------+
| Other | (1,370) | (385) | (467) |
| interest-bearing loans and | | | |
| borrowings | | | |
+------------------------------------+-----------+-----------+-----------+
| Trade and other | (3,805) | (4,473) | (4,925) |
| payables | | | |
+------------------------------------+-----------+-----------+-----------+
| Deferred income | (1,718) | (1,874) | (2,580) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total current liabilities | (12,423) | (20,442) | (12,302) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Non-current liabilities | | | |
+------------------------------------+-----------+-----------+-----------+
| Other | (20,028) | (8,421) | (18,490) |
| interest-bearing loans and | | | |
| borrowings | | | |
+------------------------------------+-----------+-----------+-----------+
| Trade and other | (251) | (472) | (343) |
| payables | | | |
+------------------------------------+-----------+-----------+-----------+
| Deferred income | (2,685) | (2,422) | (2,924) |
+------------------------------------+-----------+-----------+-----------+
| Deferred tax | (1,734) | (376) | (1,734) |
| liabilities | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total non-current liabilities | (24,698) | (11,691) | (23,491) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total liabilities | (37,121) | (32,133) | (35,793) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Net liabilities | (4,389) | (4,501) | (2,093) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Equity | | | |
+------------------------------------+-----------+-----------+-----------+
| Share Capital | 3,296 | 3,296 | 3,296 |
+------------------------------------+-----------+-----------+-----------+
| Share premium | 7,051 | 7,051 | 7,051 |
+------------------------------------+-----------+-----------+-----------+
| Revaluation reserve | 6,737 | - | 6,737 |
+------------------------------------+-----------+-----------+-----------+
| Retained earnings | (21,473) | (14,848) | (19,177) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Total equity | (4,389) | (4,501) | (2,093) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
Consolidated Cash Flow Statement
for the six months ended 31 December 2009
+------------------------------------+-----------+-----------+-----------+
| | 6 months | 6 months | Year to |
| | to | to | 30 June |
| | 31 | 31 | 2009 |
| | December | December | |
| | 2009 | 2008 | |
+------------------------------------+-----------+-----------+-----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Audited |
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Cash flows from operating | | | |
| activities | | | |
+------------------------------------+-----------+-----------+-----------+
| Loss for the period | (2,296) | (4,762) | (9,166) |
+------------------------------------+-----------+-----------+-----------+
| Adjustments for: | | | |
+------------------------------------+-----------+-----------+-----------+
| Depreciation, | 1,319 | 1,336 | 2,712 |
| amortisation and impairment | | | |
+------------------------------------+-----------+-----------+-----------+
| Finance expense | 491 | 557 | 828 |
+------------------------------------+-----------+-----------+-----------+
| Gain on sale of | (716) | (274) | (312) |
| intangible assets | | | |
+------------------------------------+-----------+-----------+-----------+
| Capital grants | (28) | (28) | (56) |
| release | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| | (1,230) | (3,171) | (5,994) |
+------------------------------------+-----------+-----------+-----------+
| | 645 | 188 | (221) |
| Decrease/(increase) in trade and | | | |
| other receivables | | | |
+------------------------------------+-----------+-----------+-----------+
| | 4 | (33) | (63) |
| Decrease/(increase) in inventories | | | |
+------------------------------------+-----------+-----------+-----------+
| | (1,733) | (493) | 3,592 |
| (Decrease)/increase in trade and | | | |
| other payables | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| | (2,314) | (3,509) | (2,686) |
+------------------------------------+-----------+-----------+-----------+
| Interest paid | (298) | (456) | (787) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Net cash flows from operating | (2,612) | (3,965) | (3,473) |
| activities | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Cash flows from investing | | | |
| activities | | | |
+------------------------------------+-----------+-----------+-----------+
| Acquisition of | (1,161) | (1,433) | (2,698) |
| intangible assets | | | |
+------------------------------------+-----------+-----------+-----------+
| Proceeds from sale of intangible | 466 | 2,444 | 3,985 |
| assets | | | |
+------------------------------------+-----------+-----------+-----------+
| Acquisition of property, plant and | (136) | (4,042) | (5,093) |
| equipment | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Net cash flow from investing | (831) | (3,031) | (3,806) |
| activities | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Cash flows from financing | | | |
| activities | | | |
+------------------------------------+-----------+-----------+-----------+
| Proceeds from new | 2,300 | 3,502 | 13,435 |
| loans | | | |
+------------------------------------+-----------+-----------+-----------+
| Repayment of finance lease | (17) | (6) | (26) |
| liabilities | | | |
+------------------------------------+-----------+-----------+-----------+
| Repayments of borrowings | (40) | - | (250) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Net cash flows from financing | 2,243 | 3,496 | 13,159 |
| activities | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Net (decrease)/increase in cash | (1,200) | (3,500) | 5,880 |
| and cash equivalents | | | |
+------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents at start | (4,330) | (10,210) | (10,210) |
| of period | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents at end | (5,530) | (13,710) | (4,330) |
| of period | | | |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Analysed as: | | | |
+------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents | - | - | - |
+------------------------------------+-----------+-----------+-----------+
| Bank overdraft | (5,530) | (13,710) | (4,330) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
| Closing cash and cash equivalents | (5,530) | (13,710) | (4,330) |
+------------------------------------+-----------+-----------+-----------+
| | | | |
+------------------------------------+-----------+-----------+-----------+
Notes to the accounts
For the six months ended 31 December 2009
1 Basis of preparation
The interim financial statements for the 6 months ended 31 December 2009 and 6
months ended 31 December 2008 have not been audited. In relation to the
financial statements for the year ended 30 June 2009, this has been extracted
from the financial information taken from the Group's statutory accounts for
that financial year.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from those results.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The accounting policies have been applied consistently to all periods presented
in these consolidated financial statements.
Going concern
The financial statements have been drawn up on a going concern basis which the
directors believe to be appropriate for the following reasons:
The directors acknowledge that, in common with many clubs in the Championship,
the football club is likely to continue making operating losses and suffering
net cash outflows. Therefore the Group and Company remain reliant on the
Company's ability to secure appropriate financing.
The support of the Company's shareholders has been evident for many years.
During the period shareholder loans increased from GBP10.2m to GBP11.6m and
since the period end a further GBP2.0m has been made available to the Company's.
These shareholder facilities have been committed until January 2011 and the
shareholders have indicated that they may be extended thereafter if necessary.
The terms of these loans have been formally documented. The bank overdraft
facility of GBP6m and new term loan of GBP1m are due for renewal annually and
are currently agreed until June 2010. The Board are currently not in possession
of any information that would lead the directors to believe that an extension
would not be granted.
The Company has prepared outline cash flow forecasts for the period to 30 June
2011. Those forecasts show that the Group and Company do not currently have
facilities in place to fund all of their projected cash requirements over the
next twelve months. However, as in previous years, those forecasts have been
prepared on a prudent basis. A good performance in the league, a player sale, a
cup run or increased TV coverage will significantly increase projected income
and therefore reduce the deficit. Conversely the Club may choose to make
additional signings in the Summer and/or January transfer windows if this is
considered to be in its best interests and this could increase the deficit.
Unlike previous seasons the Company has not sought to secure guaranteed finance
to fund its cash flow projections in full for the forthcoming twelve months,
given the high level of variables involved and the cost of securing additional
facilities that may not be required. The directors are confident that
sufficient additional funds will be sourced should they be required. In the
current economic climate, the directors are not relying on further funds being
available either from its bankers or shareholders. If funds are required, as
indicated by the current cash flow forecasts, the shortfall will be met through
asset sales and the selling of future income entitlements. However, as with all
sales, the directors cannot be certain that they will be able to make these
sales or whether the sales proceeds will cover the deficit. As in previous
years the directors continue to seek to increase the income of the Company
whilst controlling costs.
Whilst the directors believe the going concern basis is appropriate, the fact
that the Company does not currently have facilities in place to fund all of its
projected cash requirements over the next twelve months may cast significant
doubt on the Group and Company's ability to continue as a going concern. The
Company and Group may therefore be unable to continue realising their assets and
discharging their liabilities in the normal course of business but the financial
statements do not include any adjustments that would result from the basis of
preparation being inappropriate.
2 Status of financial information
The comparative figures for the year ended 30 June 2009 are not the Group's
statutory accounts for that financial year. Those accounts, which were prepared
under IFRS have been reported on by the Group's auditors and delivered to the
registrar of companies.
The report of the Auditor was (i) unqualified, (ii) included a reference to
going concern to which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
3 Taxation
There is no charge for the period. This is based on the anticipated effective
rate for the year ending 30 June 2010.
4 Loss per share
The loss per share of 69.7p (2008: loss per share of 144.5p) has been calculated
by dividing the loss for the period of GBP2,296,000 (2008:loss for the period of
GBP4,762,000) by 3,295,679 (2008: 3,295,679), being the weighted average number
of ordinary shares.
For more information please contact:
+------------------------------+------------------------------+
| Kevin Abbott, Preston North | 0844 856 1964 |
| End: | |
+------------------------------+------------------------------+
| | |
+------------------------------+------------------------------+
| Katy Mitchell, WH Ireland | 0161 832 2174 |
| Limited: | |
+------------------------------+------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZBLFXBXFZBBQ
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