RNS Number:5510S
Charlton Athletic PLC
27 November 2003
CHARLTON ATHLETIC PLC
27 NOVEMBER 2003 - EMBARGOED FOR 7AM
CHARLTON ATHLETIC PLC ("Charlton Athletic" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2003
CHAIRMAN'S STATEMENT
On behalf of the board of Charlton Athletic plc, I present the trading results
for the year ended 30th June 2003. The team maintained its position in the FA
Premier League finishing 12th and I am pleased with the progress the group has
made during the financial period.
FINANCIAL SUMMARY
2003 2002
#m #m
Turnover 35.1 30.6
Operating overheads (32.3) (30.2)
Operating profit before amortisation 2.8 0.4
Profits from player disposals 1.1 2.5
Amortisation of player costs (3.7) (5.8)
Exceptional charge - (7.3)
Interest charge (0.7) (0.5)
Net loss (0.5) (10.7)
The group has recorded a 15 per cent rise in turnover to #35.1m, generated by an
increase in television receipts from the collective broadcasting agreements and
improved commercial performance in other areas of operation. During the 2002/3
season, we received income from four live BSkyB matches, compared with three in
the previous season, and our final league placing compared with 14th position
twelve months earlier. This increased our share of the merit award paid out at
the end of the season.
The importance and proportion of the revenues received from the FA Premier
League through the merit award for the team's final league position and facility
fees for matches shown live on BSkyB should not be underestimated. It is
possible to increase turnover and resulting cash flow significantly through a
successful end to a season and by increased live television appearances. I have
continued to raise the issue of the disparity in the allocation of live
televised matches at meetings of Premier League chairmen as the present system
works to the financial advantage of the biggest clubs and serves further to
erode genuine competition within the league.
Income from our match day operations improved during the period as we received
revenues from the additional seating and hospitality facilities from the north
stand extension for the full season, the facilities having been available for
only half the season in the previous year. We now offer our supporters a variety
of hospitality packages to suit most tastes and a range of ticket prices
throughout the season to widen the opportunity for supporters to attend matches.
The company receives significant commercial revenues from sponsorship, and other
partnership agreements, including in excess of #2m from agreements negotiated by
the FA Premier League for its member clubs. The non-match conference and
banqueting revenue continues to grow as our customer base widens and our repeat
business strengthens. Our expanded facilities, high levels of service and
customer loyalty give us optimism for future growth. Retail revenues were
steady, supported by two new designs of replica kits introduced during the
period, and we were pleased with the range and quality of our leisurewear and
other products. We retail through our Superstore at The Valley, our mail order
facilities, and the network of all:sports stores and now hope to expand sales
through our much-improved web based catalogue service very recently introduced.
The company's overheads increased by 7 per cent to #32.3m mainly due to
increased squad and site costs. We have continued to invest in the playing squad
and the support services it requires and have concentrated additional resources
in significantly improving the medical and fitness regime within the club. We
do remain committed to continue to invest in squad development albeit in our
traditionally prudent manner. We now operate a planned maintenance programme
which controls the maintenance costs associated with The Valley, the Sparrows
Lane training ground, the offices in Bexleyheath and other sites owned by the
club. However, site costs rose during the period due to the increased scale of
operations and the continued progress of our health and safety programme.
I am pleased to report the group made an operating profit of #2.8m before player
amortisation, improved from #445,000 in the previous year. The overall net loss
was #464,000, a significant improvement from #10.7m in the previous year.
The group drew down a further #3.3m from its mortgage facilities with Lombard
North Central, part of the Royal Bank of Scotland group, to fund the capital
expenditure programme and to replace shorter-term borrowings with HSBC Bank Plc.
The net effect of these adjustments and the years operations when combined
with capital repayments on existing loans was to reduce our net debt position by
#1.3m. The net interest charges for the period were #701,000.
The transfer expenditure on players during the financial year was #2.4m. This
was mainly for the purchases of Matt Holland and Hermann Hreidarsson from
Ipswich Town, both of whom have now settled in at the club and who are
first-team regulars this season. Income of #1.1m relates to the sale of Mark
Kinsella to Aston Villa and appearance-related payments for other players
previously sold.
It is important to note that the value of the players shown in the balance sheet
only includes the transfer costs of those players who have been acquired by the
football club, and that these costs are written down over the period of their
contracts. Therefore, this figure does not reflect the value of the first-team
squad at any time and excludes any players who have been acquired for no cost or
who have come through the youth structures at the club.
FOOTBALL
The team finished the season in 12th place in the FA Premier League at the end
of the season with 49 points, an improvement of two places from the previous
season.
It is possible that the team would have finished higher in the table if it was
not for the fact that our season was disrupted by injuries to key players and we
ended the season with a considerably weakened first-team squad. We felt that a
finish in the top half of the table was achievable until the final stages of the
season. In the circumstances it was as much as we could expect with a squad of
our size to finish our third consecutive Premiership season in 12th position and
at no stage was the team involved in the relegation dogfight. Our record of 14
wins and seven draws compares with 10 wins and 14 draws in the previous season.
Disappointingly, Oxford United and Fulham knocked us out of the Worthington and
FA Cup competitions at the second-round and fourth-round stages respectively.
To have in excess of 26,000 supporters attending The Valley for each home game
demonstrates the passion that now exists for the club and our supporters never
fail to give the team their full backing. They remain a pivotal element of our
current success and are among the best behaved in English football. I am
personally grateful to the many supporters who wrote to me with such warm
messages of support following the death this year of my beloved wife Jane.
In every football season there are a number of matches, that stand out from the
rest. I personally feel that pride of place must go to our 2-0 home defeat of
Liverpool, not only because of the excellent team performance but also because
it marked the tenth anniversary of our return to The Valley with all the
emotional celebrations that went on.
Long serving players Steve Brown and John Robinson left the club to continue
their careers with Reading and Cardiff City respectively and we all thank them
for their significant contributions to the success of the club since our return
to The Valley in 1992. Both players celebrated testimonial seasons during their
time with the club and will always be welcome back at The Valley. Jesper
Blomqvist, Tahar El-Khalej and Robbie Mustoe also left the club at the end of
the season and I would like to thank them for their contribution.
During the late spring and summer, we signed Republic of Ireland international
Matt Holland and Icelandic international Hermann Hreidarsson from Ipswich Town.
Paolo Di Canio joined the club from West Ham United shortly after the start of
the season on a free transfer and Carlton Cole subsequently joined us on loan
from Chelsea. These four players have substantially strengthened the first-team
squad, providing a platform for further progression as we seek to improve our
position in the FA Premier League.
I am particularly pleased with the reorganisation of the medical department at
the training ground which has enhanced the level of player care. Wayne Diesel
has been recruited to lead the new team, having previously been the medical
officer for the South African national rugby team and Gloucester rugby club and
he has introduced a range of specialist techniques into the department aimed at
providing the optimum level of player care.
Our youth academy is continuing to provide a stream of genuine footballing
talent, some of which has already progressed to the first and reserve teams and
the future in this area looks bright indeed. Mick Browne and his team are doing
a commendable job.
I will also pay tribute to our women's team for their magnificent achievement in
reaching the Women's FA Cup Final where they lost to Fulham in a match watched
live on BBC Television by an audience of 1.3 million people. The women have
also got off to a flying start this season and I know support for the team is
growing strongly.
The increased media scrutiny and the pressure that exerts, coupled with the
financial complexities and the expectation of supporters, dictates that you must
have many qualities to be a successful football manager in the top flight. Alan
Curbishley has the qualities needed in abundance and I have no doubt that we
have the right man at the helm to take this club forward. I would also like to
acknowledge the valuable contribution and support given to Alan by Mervyn Day,
Keith Peacock, Glynn Snodin and all the backroom staff at the training ground.
The media scrutiny of Premiership football and players has never been greater
and I am very proud of the exemplary manner in which our players conduct
themselves.
OPERATIONS
Your board took the decision to offer supporters a fixed period in which to
renew their season tickets at 2002/3 prices. The majority of season-ticket
holders took up this offer and I am delighted that once again we have over
21,000 season-ticket holders. We have also continued to build our membership
scheme and currently have in excess of 10,000 members, which is integral to our
strategy for building the level of active support for the club. By retaining
affordable pricing levels we are reinforcing our commitment to maintaining the
tremendous family atmosphere at The Valley. In doing this we recognise that
this policy has disadvantaged us financially against those clubs of a similar
size and structure to our own.
At the beginning of the current season, all:sports widened their sponsorship
support and became our official club sponsor, as a result acquiring 55 per cent
of our stadium advertising at The Valley. I would like to thank all:sports for
their much valued partnership with the club. There are 65 all:sports retail
outlets located in the south-east of England and 280 nationwide, a network that
provides a potential opportunity for our retail merchandise and other commercial
products and materials, providing a wider geographical spread than ever before
and promoting the Charlton brand across a significant area. We have introduced
a new pitchside electronic advertising system, which is part of our significant
programme of improvements earmarked for the stadium. We have plans to install a
giant screen at The Valley in December of this year.
We have a strategy to establish a hierarchy of major brand names who benefit not
only from a relationship with the club but through an association with one
another, and so we entered into a new three-year kit deal in May 2003 with the
Spanish kit manufacturer Joma. They hold a prominent market position in Spain,
Italy and South America and this is their first venture into the UK market. I
hope it will prove to be a very successful partnership for all parties. I must
also thank Le Coq Sportif who were the previous kit supplier before Joma. We
enjoyed a very fruitful partnership during their long association with the club
and I wish them well in the future.
I would like to thank Axis Europe plc, Capital Radio, Footdown, Greenwich
Council, ISN, Network Rail and the Virgin Group and all other sponsors for their
continued backing as sponsors and partners, as well as all those individuals who
sponsor matches and are patrons of the various hospitality suites and executive
boxes. My thanks also go to our partners at Greenwich Community College,
Greenwich Leisure Ltd and London Leisure College for their ongoing support.
Running a football business is no easy task and so many people at this club are
working hard to sustain our progress. I must particularly acknowledge the
contribution of the club's chief executive Peter Varney and his deputy Nigel
Capelin. I would also like to place on record my appreciation for all our staff
that operate at The Valley, the training-ground complex and the offices in
Bexleyheath. Many other people give their time and efforts to support the
operations of the club and the organisations associated with it and so I must
also thank them. I would especially mention those individuals involved in
running the many supporters branches which are so important to the future growth
of the club.
INDUSTRY PROSPECTS
The future of the FA Premier League has never looked brighter. It remains the
most competitive and the most watched league globally, with a global home reach
of over 570m in 160 countries. It is a product envied the world over and the
challenge to all 20 member clubs is to ensure that it flourishes and is not
diminished by self-interest and greed.
At the same time we must ensure there is a viable structure below the top
league. Relegation from and promotion to the Premiership should not threaten the
very existence of clubs and it is incumbent on all of us in the professional
game to demonstrate financial responsibility. There is also an obligation on
players to protect and nurture the development of the Premier League. Players in
the top flight are well paid and recent examples of unacceptable and anti-social
behaviour damage the very fabric of the game and portray a poor image to the
young children for whom the players are heroes. Such behaviour also undermines
so many of the good things that go on in football and in local communities and
particularly at our club.
The well documented problems at the Football Association have now been resolved
and I anticipate that the establishment of a Professional Game Board will go a
long way to addressing the issues which have been of concern to Premiership
clubs for some time. I also hope that we can see changes implemented to improve
the method and time for dealing with disciplinary issues and to improve the
standards and consistency in refereeing.
The outcome of the tendering process for the broadcasting contracts for the
three seasons commencing season 2004/5 are pleasing and fully justify the
confidence I expressed in my report to you last year. Much of the uncertainty
surrounding future values has been removed. Having said that, the challenge to
the existing contracts and the anticipated challenge to the new contracts by the
European Commission is costly, damaging and in my view totally unnecessary. It
is unreasonable to challenge the outcome of a process, that has been transparent
and fair to all concerned. Being part of the European Union offers this country
many advantages both in economic and cultural terms but time and again Brussels
undermines support for the union by their interference in matters, that are more
properly regulated domestically. The time has now come for our government to
bring an end to this threat hanging over our national sport.
Many clubs continue to be saddled with high levels of debt and I think there are
still troubled times ahead for some as they struggle to come to terms with the
excesses of the past. There is no doubt in my mind that we are seeing a new
order evolve in the Premiership. There are now two leagues, with Arsenal,
Chelsea and Manchester United at the top in one and the rest of us in a league
of seventeen teams, where the competition is such that there is likely to be a
narrow spread of points between those facing a relegation battle at one end and
those challenging for European qualification at the other end. Clubs who have
demonstrated financial responsibility will reap their reward in this new order.
All of us on the board remain as passionate about the club as the rest of the
club's supporters. We want to continue with our growth of recent years and we
want further success, but we also want to remain a club that stands for the good
things in the game, with affordable pricing, strong family orientation and a
firm community base.
Expectation levels among some supporters will rise as we continue to build the
club. I have often said in the past that while we may not be able to compete
financially with Arsenal, Chelsea and Manchester United, we shall do our best to
achieve whatever we can on and off the field. We shall give you a club of which
you can be proud.
Our policy of steady sustained progression will continue and I look forward to
celebrating the club's centenary next season in the best league in the world.
RICHARD ALAN MURRAY
CHAIRMAN
CONSOLIDATED PROFIT & LOSS ACCOUNT
for the year ended 30 June 2003
12 MONTHS TO 30 JUNE 2003 12 MONTHS
TO 30 JUNE
2002
Operations
excluding player Player
amortisation and amortisation
trading and trading Total
#'000 #'000 #'000 #'000
TURNOVER 35,141 0 35,141 30,641
Operating expenses (32,310) (3,731) (36,041) (36,023)
Exceptional item 0 0 0 (7,320)
---------------- ------------ -------- -----------
OPERATING PROFIT/(LOSS) 2,831 (3,731) (900) (12,702)
Profit on disposal of players 0 1,137 1,137 2,481
---------------- ------------ -------- -----------
PROFIT/(LOSS) BEFORE INTEREST AND
TAXATION 2,831 (2,594) 237 (10,221)
=============== ============
Net interest payable (701) (507)
-------- -----------
LOSS ON ORDINARY ACTIVITIES BEFORE (464) (10,728)
TAXATION
Taxation charge 0 0
-------- -----------
LOSS FOR THE PERIOD (464) (10,728)
======== ===========
EARNINGS PER SHARE/PENCE (0.8) (19.5)
======== ===========
All amounts derive from continuing
operations.
STATEMENT OF RECOGNISED GAINS & LOSSES
for the year ended 30 June 2003
#'000 #'000
Loss for the year (464) (10,728)
Unrealised surplus on revaluation of land and buildings 0 3,646
-------- ---------
TOTAL RECOGNISED LOSSES FOR THE YEAR (464) (7,082)
======== ========
CONSOLIDATED BALANCE SHEET
for the year ended 30 June 2003
As at As at
30th June 30th June
2003 2002
#'000 #'000
FIXED ASSETS
Tangible fixed assets 35,784 35,890
Intangible assets 8,508 9,916
----------- -----------
44,292 45,806
CURRENT ASSETS
Stocks 90 118
Debtors 2,325 3,153
Cash at bank and in hand 347 16
----------- -----------
TOTAL ASSETS 47,054 49,093
Creditors falling due within one year and
deferred income (13,054) (15,548)
----------- -----------
TOTAL ASSETS LESS CURRENT LIABILITIES 34,000 33,545
Creditors falling due after one year (10,863) (9,731)
Grants and deferred income (6,410) (6,623)
----------- -----------
16,727 17,191
=========== ===========
#'000 #'000
CAPITAL AND RESERVES
Called up share capital 27,485 27,485
Share premium account 2,019 2,019
Revaluation reserve 6,572 6,597
Profit and loss account (19,349) (18,910)
----------- -----------
16,727 17,191
=========== ===========
CONSOLIDATED CASH FLOW STATEMENT
as at 30 June 2003
As at As at
30th June 30th June
2003 2002
#'000 #'000
CASH FLOW FROM OPERATIONS
Operating loss (900) (12,702)
Depreciation 1,195 908
Amortisation of player registration costs 3,731 13,147
Profit on sale of fixed assets 0 (13)
Release of deferred income (457) (262)
Decrease in stocks 28 71
Decrease in debtors 828 574
Decrease in creditors (425) (854)
---------- ---------
NET CASH INFLOW FROM OPERATIONS 4,000 869
RETURNS ON INVESTMENT AND SERVICING
OF FINANCE
Interest received 42 18
Interest paid (701) (512)
Interest element of finance lease payments (1) (5)
------- -------
NET CASH OUTFLOW (660) (499)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTS
Payments to acquire player registrations (2,369) (11,115)
Proceeds on sale of player registrations 1,183 3,191
Payments to acquire tangible fixed assets (1,055) (8,811)
Related grants and income from
long term season ticket schemes 244 1,974
Proceeds on sale of tangible fixed assets 0 79
------- ---------
NET CASH OUTFLOW (1,997) (14,682)
--------- ---------
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 1,343 (14,312)
FINANCING ACTIVITIES
New bank loans 3,277 11,554
Loan repayments (3,599) (332)
Capital element of finance lease payments (9) (80)
------- ---------
(331) 11,142
---------- ---------
INCREASE/(DECREASE) IN CASH 1,012 (3,170)
========== =========
NOTES
1. The financial information relating to the Company does not constitute
statutory accounts within the meaning of Section 240 (5) of the Companies Act
1985 (as amended). Statutory accounts in respect of the year ended 30 June
2003, which received an unqualified audit opinion, will be filed with the
Registrar of Companies in England and Wales.
2. Analysis of turnover:
Year ended Year ended
30 June 2003 30 June 2002
#'000 #'000
Television and broadcast 20,361 16,372
Match day activities 9,681 8,832
Marketing and sponsorship 2,935 3,439
Retail and other 1,179 1,155
Conference and banqueting 985 843
----------- -------------
35,141 30,641
=========== =============
3. Analysis of operating expenses:
#'000 #'000
Staff costs 23,576 21,475
Depreciation 1,195 908
Amortisation 3,731 13,147
Hire of plant and machinery 145 124
Other operating lease rentals 217 135
Grants released (114) (93)
Auditors remuneration :audit 31 30
:non audit 28 33
Other operating charges 7,232 7,584
----------- -----------
36,041 43,343
=========== ===========
4. Analysis of staff costs:
#'000 #'000
Wages and salaries 21,093 19,241
Social security costs 2,322 2,086
Other pension costs 161 148
----------- -----------
23,576 21,475
=========== ===========
5. The company has adopted the format of profit and loss account
recommended for the football industry and has presented the previous years
comparative figures in this format.
6. The board does not recommend the payment of a dividend.
7. Earnings per ordinary share have been calculated by dividing
the loss for the year by the weighted number of ordinary shares in issue for the
year.
Year ended Year ended
30 June 2003 30 June 2002
#'000 #'000
Loss for the year (464) (10,728)
Weighted number of shares in issue 54,969,293 54,969,293
Loss per share (0.8) pence (19.5) pence
8. The Annual Report and Accounts for the year ended 30 June 2003 will be sent
to shareholders during December 2003. At that time further copies will be
available from the company's Nominated Advisor and Broker, Teather & Greenwood
Limited, Beaufort House, 15 St Botolph Street, London, EC3A 7QR.
END
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