RNS Number:2295N
Charlton Athletic PLC
16 November 2001
CHARLTON ATHLETIC PLC
16 NOVEMBER 2001
CHARLTON ATHELTIC PLC ("CHARLTON" OR the "Company")
PRELIMINARY RESULTS FOR THE PERIOD ENDED 30 JUNE 2001
HIGHLIGHTS
1. Turnover Analysis
2001 2000
#'000 #'000
Television and broadcast income 15,756 3,279
Match day activities 7,371 5,154
Marketing and commercial 3,170 1,311
Retail and other income 1,269 1,410
Conference and banqueting 751 592
-------- --------
28,317 11,746
======== =======
- Broadcast income was up to #15.8m as a result of membership of the FA
Premier League. Included in this was income related to the six BSkyB live
matches that the club was featured in, only one falling in the first half of
the financial year. The merit award received was based on our 9th place at the
season end.
- Match day income included the first year of gross revenue from the
stadium concourse catering, following the change to in house management of
these facilities.
- Programme sales rose 9 per cent., and there was no price rise for the
2000/1 season.
- Stadium ticket receipts were up 31 per cent. to #5.3m.
- Match day hospitality income was up 86 per cent.
- Marketing and commercial income has risen by 140 per cent. to #3.2m,
including the income from the FA Premier League central commercial and
sponsorship contracts.
- Retail income was static, with no real increase from the previous year.
- A grant of #138,000 received for the FA Youth Academy in 2000 was not
receivable this year, reducing other income.
- Conference and banqueting income from non match day activities was up 27
per cent. to #751,000.
- The turnover for the last year that the football club was in the FA
Premier League, season 1998/9, was #16.3m.
Playing Statistics
- The team won 14 matches, 11 at home, and drew 10, gaining 52 points for
the season and a final position of ninth.
- In the Worthington Cup the team lost in the second round, beaten by Stoke
City on penalties following an aggregate 5-5 score after two legs.
- In the FA cup income was received from the two matches against Dagenham
and Redbridge, and then the home defeat by Tottenham Hotspur at the fourth
round stage by 4 goals to 2.
Profits
- Net profit after tax and interest was #323,000.
- Profit before tax, interest, amortisation, depreciation and the proceeds
from player sales was #5.3m.
- The annual amortisation charges relating to the carrying value of the
costs of player's registrations were #4.7m.
- Interest charges were #184,000, set against treasury receipts of #
239,000.
Shares Issued In Period
- On 17 July 2000 the Company completed a Placing and Open Offer of shares,
issuing 9,694,586 shares at 55 pence per share. This provided gross funds of #
5,332,023.
- On 8 December 2000 the Company placed 2,617,585 shares at 50 pence which
provided funds of #1,308,793.
- The number of issued shares at 30th June 2001 was 54,969,293.
CHAIRMAN'S STATEMENT
Introduction
The Board of Charlton Athletic plc is pleased to announce the group's
financial results for the year ended 30 June 2001. During this period, the
ongoing development of our football club, both on and off the field, has
continued with some momentum.
Finishing last season in ninth position in the most competitive league in the
world was a truly magnificent achievement and one of which everyone connected
with the club can be rightly proud. The foundation for this success can be
traced back to the 1998/9 season, our first in the F.A Premier League. When
faced with relegation the Board recognised the risks associated with trying to
buy survival as other clubs had done. The decision not to extend the club
beyond its means enabled us essentially to retain the first team squad and
then by maintaining stability at all levels we went on to win the First
Division championship the following year, regaining our Premiership status at
the first attempt. With the club much stronger in all respects, we were very
confident we could retain our status second time around and this was our
overriding priority.
Financial highlights
The group made a net profit for the year of #323,000 on turnover which
increased to #28.3m compared with a loss of #2.8m and #11.8m turnover for the
previous year, when the club was playing in Division One of the Football
League.
This significant rise in turnover, following our elevation to F.A. Premier
League status, was derived mainly from increased television and gate receipts,
a share of commercial agreements negotiated by the FA Premier League on behalf
of its member clubs and also increased club sponsorships and commercial
activity.
Television and broadcast income rose from #3.3m to #15.8m as a result of the
F.A Premier League central contracts for domestic and overseas rights.
The club had promised existing season ticket holders the opportunity to renew
their season tickets at prices frozen to the level of our first season in the
FA Premier League. Despite this commitment, revenues relating to match day
activities increased from #5.2m to #7.4m. Marketing and sponsorship income
rose from #1.3m to #3.2m through receipts from central deals and new
sponsorship opportunities.
Our profit was #5.3m before adjusting for depreciation, player amortisation,
income from player disposals and interest charges, which is a very pleasing
result. There is no taxation charge this year as a result of previous
accumulated tax losses. Our major overhead remains the costs associated with
the playing squad and there were strong inflationary pressures during the
period, arising mainly from the effects of the extra money coming into the
football industry from the television contracts. We will continue to keep a
tight control of our costs and ensure a measured balance between income and
expenditure.
Our capital expenditure programme for the year was approximately #3m, with #
2.3m of this being spent on the initial stages of the #9.8m north stand
development. This is an increase on the provisional figure of #9m which I
reported in our interim statement and reflects the outcome of the final tender
negotiations for the fit-out contract and the provision of additional
capacity in the lower tier of the north stand. The remaining sums were spent
on the development work at our training ground pavilion, refurbishment of the
stadium concourse catering facilities and improving administrative support
systems.
The football club spent #12.6m on acquiring additional players for the squad
including Shaun Bartlett, Mark Fish, Claus Jensen, Jonatan Johansson and
Radostin Kishishev. All five are full international players for their
respective countries. The insurance value of the squad in July 2001 was #
36.6m immediately prior to the purchases of Jason Euell and Luke Young. This
has increased from #21m in the previous July.
The Company completed two equity issues during this financial period. In July
net proceeds of #5.2m were raised from a Placing and Open Offer at 55 pence
per share, which allowed both supporters and institutional shareholders the
opportunity to invest, and in the following December a further #1.3m was
raised through a placing of shares at 50 pence per share. These funds were
used to strengthen the playing squad and provide working capital for the
group's activities.
Of the total sum raised, some #2.8m was contributed by investors not on the
board and I am delighted they have demonstrated their confidence in the
company by making significant contributions during these issues.
The board has once again decided it is not appropriate to pay a dividend this
year.
Football
The 2000/1 season was without doubt one of the most successful and exciting in
the history of the club, culminating in our highest league position for 47
years. There is no doubt that finishing ninth exceeded the expectation of
supporters and commentators alike.
Throughout the year, Alan Curbishley strengthened a good squad of players
still further. Our home form was particularly outstanding with 11 home
victories, including those over Arsenal, Chelsea and Spurs, which when added
to the thrilling 3-3 draws with Premiership champions Manchester United and
Aston Villa, provided us with some excellent entertainment at The Valley. The
support for the team was truly inspirational and rivalled that at any other
ground in the Premier League. The style of football played was exciting and it
was particularly pleasing that Shaun Bartlett's goal against Leicester City in
April should win the coveted BBC Goal of the Season award providing
recognition for the club and player alike. Jonatan Johansson ended the season
as the club's top scorer with 14 goals in his first season with the club.
During the season Chris Powell became the first Charlton player to play for
the full England side since Mike Bailey in 1964 and he joins an impressive
array of other international players currently at the club. It is especially
pleasing that during the year seven academy players also gained international
recognition at youth level, which demonstrates the depth of talent emerging
from within the club and fully justifies the investment in our F.A. Youth
Academy.
Sadly, our leading goalscorer in the Division One championship team, Andy
Hunt, was forced to retire through illness. Andy has played a key role in the
progress of the club in recent years and we wish him well in the future as he
sets out to develop a new career outside the game. I would also like to
record my appreciation of Shaun Newton for his efforts on behalf of the club.
Shaun was a product of our youth scheme and left to join Wolverhampton
Wanderers where he has already made an impact.
This summer saw us further strengthen the squad with the purchase of Jason
Euell from Wimbledon and Luke Young from Tottenham Hotspur at a combined
initial cost of #7.75 million. At the start of the season a number of key
players sustained serious long term injuries and the loss in particular of
Richard Rufus, last year's supporter's club Player Of The Year, Radostin
Kishishev and Mathias Svensson has significantly reduced the pool of players
available for selection, which combined with a number of short term injuries
to other established players forced Alan Curbishley to play the early matches
of the current season with a weakened first team. This to a large extent
explains the slow start we have made so far.
Since gaining promotion in May 2000, the football club has invested over #20
million in the playing squad, demonstrating our ambition to become established
in the top league.
It is also our intention to complete the development of our training ground
complex for the benefit of both the professional and academy teams. To do this
we have recently acquired two sports grounds which adjoin the Sparrows Lane
training ground, Charlton Park rugby ground and the Pippenhall sports ground
which combined now occupy 31 acres. We have also received a planning consent
for the construction of a new indoor sports facility at Sparrows Farm. We
intend to develop these sites to provide a range of high quality pitches and
indoor and outdoor facilities.
The club has a proud history of developing young talent and since establishing
the Youth Academy in 1998 we have completely overhauled our scouting and
recruitment systems and as a result there are some top quality young players
beginning to emerge. In excess of #1.5 m of capital expenditure relating to
the Youth Academy is committed including a new outdoor Fieldturf facility, an
indoor sports hall and a hostel for scholars living away from home.
The loss of Pierre Bolangi in August 2000 in tragic circumstances particularly
affected his fellow players in the Academy and, as a mark of respect to him,
the number three shirt was not worn in Under 19 academy matches during the
2000/1 season. Such was the effect of his death on the club that the entire
first team squad attended his funeral and the supporters' club has set up a
trust fund in his memory.
The Valley
The progressive development of The Valley continues and, as I have already
noted, we started construction work in March on the redevelopment of the north
stand, which, as the largest building project in our history, will raise the
capacity of The Valley to approximately 26,500, by adding an additional 6,500
seats and a range of new hospitality facilities. To enable us to do this, we
have since June 2001 put in place an additional #7.5m facility with Lombard
North Central bank, and including the earlier mortgage used to develop the
West stand, our long term debt is now approximately #10m. We are currently in
negotiation for further facilities to complete our capital expenditure
programme. Demand for season tickets remains strong and we are currently on
course to sell our target of 22,175 season tickets for this season, leaving
just 3,000 seats for away supporters and the 1,325 seats required for match by
match sales in accordance with F.A. Premier League rules.
The landscape of our home is changing. The Valley is recognised for its
passionate and inspiring atmosphere and this latest development, we are
confident, will improve this still further.
Commercial
We have developed a strong portfolio of sponsors and I thank them all for
their continued support and in particular Redbus, Le Coq Sportif and Greenwich
Council. I am particularly pleased that our relationship with Redbus has
developed in other areas such as video streaming on the club's website, and
our relationship with the council will be particularly important as we
continue the further development of the club both at The Valley and the
training ground.
The North Stand Patrons Scheme offered supporters the opportunity to invest in
their club by buying a lifetime season ticket or long-term ticket for selected
hospitality suites and we are pleased to welcome these subscribers. The new
five year VIP scheme was launched this summer and, to date, in excess of 800
supporters have taken the opportunity to show their commitment to our club
until the end of the 2005/6 season. These two new schemes have generated in
the order of #1.6m.
A number of significant new contracts have been signed and I would
particularly mention the agreement with Capital Radio that was concluded in
March 2001 following the ending of the collective rights agreement covering
all London Premiership clubs. We managed to secure a club record payment for
our radio rights and, in addition, negotiated the facility for us to promote
our season ticket campaign extensively to millions of people in the South
East, which has had very pleasing results. Other contracts include support for
the Youth Academy and its development centres programme from Railtrack and the
Virgin group and an extension to the kit supply agreement with Le Coq Sportif.
People
Alan Curbishley is now rightly regarded as one of the best English managers in
the Premiership and during the 2000/1 season notched up his 500 first team
match in charge at Charlton. Notwithstanding other opportunities potentially
being available, I am delighted that he has signed an extension to his
contract, committing his long term future to the club.
Alan would be the first to acknowledge the enormous contribution to our
success of first team coach Mervyn Day, assistant manager Keith Peacock, Andy
Jones and his medical team and all the backroom staff.
I would like to thank the chief executive of the football club, Peter Varney,
for his efforts during the year, and his deputy, Nigel Capelin, who in
addition to his role with the football club, has responsibility for group
finance.
Off the field there is an array of people working hard to develop the club
and, in this respect, I would like to thank all our staff who operate at The
Valley, the training ground complex and our new administration offices in
Bexleyheath for their enormous commitment and hard work. Many other people
give their time to support the club and the organisations associated with it
and this contribution should not be underestimated or pass unrecognised.
There is one special group of people who have had a major influence on our
current success. Our supporters have played a key role at every stage of our
development since the return to The Valley. Their enthusiasm and loyalty has
not only been an important ingredient in our current success but has also
served as an inspiration to all of us involved in the club.
Future Industry Prospects
The revenues flowing into the Premiership clubs from the new television
contracts and other sources are principally being used by clubs to finance
player acquisitions and stadium improvements.
Many clubs are taking on unprecedented levels of long-term debt in order to
improve their stadia and playing squads, a number using their future revenues
to underpin current needs. Clubs are mortgaging their futures and yet the
number who can be successful remains relatively small. Against this
background, the football industry must consider whether this method of long
term financing to support stadium and player investment programmes is
sustainable at a time when the existing transfer system is under threat.
The additional money coming into the game is fuelling wage inflation and
spiralling transfer fees and the destabilising activities of some players'
agents only serve to increase both.
The increased rewards from European competition are significant and it is
vital that this does not lead to a dilution of the domestic game.
For the game to flourish and remain attractive to the paying and television
audiences, it must have a competitive structure with many teams able to
challenge for honours. If it does not, the success of the few may well lead
to the failure of the many.
The current spread of revenue distribution is too narrow with the top clubs
benefiting most from the current arrangements. This unequal distribution
should be radically changed to provide greater competition within the leagues.
It is the dreams and aspirations of supporters for their teams to have a
realistic opportunity for success which is important for the continuing health
of the game.
Sport must be truly competitive, and predictability is the enemy of all
because it will ultimately turn off the paying customer and devalue the
product in the eyes of the television audience.
The changes to the transfer system demanded by the European Commission are of
great concern as they could undermine the viability of contracts, which has
provided the stability so many clubs enjoy currently. The introduction of
transfer windows and a new compensation regime for young players will also
impact on the game.
The current threat of strike action by the players and the damage such a
strike could do to the long term interests of clubs and players alike is of
great concern to all of us in the professional game and everything possible
must be done to reach a negotiated settlement to the dispute without the need
for legal remedies.
Whatever pressures we may face in the future, we remain committed to
affordable ticket prices and this policy, together with success on the field
and a range of innovative marketing schemes, has seen our season ticket base
rise from 5,500 in 1997 to over 21,000 today.
Ten years ago, everyone connected with the club shared a dream; to see
Charlton Athletic back playing at The Valley among English football's elite
with a team capable of competing with the very best in a modern family
orientated stadium packed to capacity; to be part of a football club which
stood for something and one of which its supporters could be proud.
Sometimes dreams do come true.
RICHARD ALAN MURRAY
Chairman
CONSOLIDATED PROFIT & LOSS ACCOUNT
for the period ended 30 June 2001
12 months to 30 June 2001
Operations
excluding Amortisation 12 months to
amortisation and and player 30th June
player trading trading Total 2000
#'000 #'000 #'000 #'000
TURNOVER 28,317 0 28,317 11,746
Cost of sales (3,019) (3,019) (2,336)
---------------- ------------ -------- ------------
GROSS PROFIT 25,298 0 25,298 9,410
Operating expenses (20,723) (4,660) (25,383) (16,020)
---------------- ------------ -------- ------------
OPERATING 4,575 (4,660) (85) (6,610)
(LOSS)/PROFIT
Profit on disposal 0 354 354 3,954
of players
---------------- ------------ -------- ------------
PROFIT/(LOSS)
BEFORE INTEREST AND
TAXATION 4,575 (4,306) 269 (2,656)
================ ============
Net interest 54 (141)
receivable/(payable)
-------- ------------
PROFIT/(LOSS) ON
ORDINARY ACTIVITIES
BEFORE TAXATION 323 (2,797)
Taxation charges 0 0
-------- ------------
PROFIT/(LOSS) FOR 323 (2,797)
THE PERIOD
======== ============
EARNINGS PER 0.60 (7.31)
SHARE/PENCE
======== ============
All amounts derive from continuing operations.
There is no difference between historical cost profits and losses and the
reported results in the profit and loss account.
CONSOLIDATED BALANCE SHEET
at 30 June 2001
As at 30 June 2001 As at 30 June 2000
#'000 #'000
FIXED ASSETS
Tangible fixed assets 24,407 21,750
Intangible assets 12,658 4,951
------------- -------------
37,065 26,701
CURRENT ASSETS
Stocks 189 218
Debtors 3,727 3,559
Cash at bank and in hand 2,505 4,586
------------- -------------
TOTAL ASSETS 43,486 35,064
Creditors falling due within one (12,453) (11,111)
year and deferred income
------------- -------------
TOTAL ASSETS LESS CURRENT 31,033 23,953
LIABILITIES
Creditors falling due after one (1,849) (2,160)
year
Deferred income (4,912) (4,359)
------------- -------------
24,272 17,434
============= =============
CAPITAL AND RESERVES
Called up share capital 27,485 21,328
Share premium account 2,018 1,660
Revaluation reserve 2,975 2,975
Profit and loss account (8,206) (8,529)
------------- -------------
24,272 17,434
============= =============
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
2001, which received an unqualified audit opinion, will be filed with the
Registrar of Companies in England and Wales.
2. 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 2001 30 June 2000
#'000 #'000
Profit/(Loss) for the year #323 #(2,797)
Weighted number of shares in issue 53,389,719 38,280,766
Earnings/(Loss) per share 0.6 pence (7.31) pence
3. The Annual Report and Accounts for the year ended 30 June 2001 will be
sent to shareholders in December. 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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