RNS No 1204d
CHARLTON ATHELTIC PLC
1 April 1999
CHAIRMAN'S STATEMENT
Introduction
Celebrating our first season in the F.A. Premier League,
I am pleased to present the Company's financial results
for the half year to 31 December 1998.
Financial Report
Turnover for the six months was #8.1m compared with #2.5m
for the comparable period in 1997. This increase is a
direct result of gaining promotion to the F.A. Premier
League with its effect on our match day operations and
attendances, and our share of the revenues produced by
the BSkyB television deal. The period saw an operating
profit, before transfer fees and finance charges, of
#2,050k, compared with a loss of #377k in the
corresponding period in 1997. Net assets have risen to
#16.4m from #9.7m at 31 December 1997.
In the last financial year the Club adopted the new
accounting policy, as Financial Reporting Standard No.
10, which amortises the costs of obtaining a player's
registration over the period of his contract. The
amortisation of the existing squad cost has given a
charge to the profit and loss account of #546k. The
remaining cost is carried forward in the balance sheet at
31st December 1998 at a value of #3,883k. This
accounting policy does not place a value on new players
for whom the Club did not pay a transfer fee, and those
players who have risen through the Club's youth teams.
The insurance value of the current first team squad
exceeds #21m.
Finance charges have reduced to #81k from #101k as
interest rates have generally been lower in 1998.
The net profits recorded for this period was #1,423k,
compared with a loss of #1,130k for the equivalent period
in 1997.
In December 1998, Charlton Athletic plc issued 7,077,424
shares through a Placing and Open Offer, raising a sum of
approximately #3.5m net of expenses. This financed a
number of capital projects and provided additional
working capital for the development of the commercial
operations and the first team squad.
The Team
Following promotion to the F.A. Premier League, the Club
has made significant investment in the first team squad
with the signing of eight new players. These are in
alphabetical order, John Barnes, Andy Hunt, Chris Powell,
Martin Pringle, Neil Redfearn, Simon Royce, Graham Stuart
and Carl Tiler. In addition, a significant number of the
first team squad are signed on long term contracts. We
have expanded the size of the first team squad, making it
one of the largest we have had in recent times.
The team has won many admirers for its committed and
skilful performances this season and, with nine games
left, has a realistic chance of retaining Premiership
status for next season. This season has seen a
particularly close struggle at the bottom of the F.A.
Premier League involving some eight teams.
The Club secured a licence in June 1998 from the Football
Association to operate a Youth Academy which will
significantly enhance the quality of our youth
development programme. Our Academy currently has a
number of promising schoolboys, YTS and young
professional players which will form the basis of the
Club's future first team squad. Paul Konchesky at 17 and
Scott Parker at 18 have both played in the Premier League
this season, and are important members of the first team
squad.
During March 1999, the Club conditionally acquired the
50% share of the training ground owned by the Alwen
Family Trust, giving us full ownership of the site. This
acquisition will enable us to develop this facility in
line with our current commitments to our Youth Academy
and the expanded first team squad.
The Club's supporters deserve enormous credit for the
tremendous atmosphere they have produced at The Valley
and as travelling support which has been much appreciated
by everyone at the Club and which provides such a lift to
the team.
Alan Curbishley is one of the country's most respected
managers. He is the only F.A Premier League manager to
have won two Carling "Manager of the Month" Awards this
season. These were collected in August following a fine
start to the season and in February when a poor run of
results was broken by victory against Wimbledon, with 10
points gained from a possible 12 in that month. Alan,
Keith Peacock and Mervyn Day give the Club a formidable
management team at The Valley this season.
Review of Operations
We have witnessed further encouraging growth in the
commercial infrastructure of the Club. The main force
behind this growth has been the combination of promotion
to the F.A. Premier League and a new commercial focus
brought to the exploitation of our new facilities at The
Valley, the majority of which are housed in the
magnificent new West Stand.
The principal revenue streams remain our season ticket
sales, match day receipts, television rights, corporate
sponsorship, retail activities and conference and
banqueting. These have all shown sharp increases this
season.
Annual season tickets have increased from 5,500 last
season to nearly 17,000 currently. Capacity crowds of
over 20,000 have been reached for all F.A. Premier League
home games since the completion of the new #7m West Stand
in September 1998.
The Club's progressive retail strategy, including the new
mail order operation, has produced impressive results and
further expansion of the popular new leisurewear ranges
is planned. Retail revenues this year are expected to
more than double, fully justifying the decision to build
the Superstore at The Valley.
The Club receives a basic television award from BSkyB of
#3.3m with further amounts payable dependent on live
television appearances and final league placing. The
team has already appeared live on Sky Television on four
occasions and which has helped to push television
revenues in excess of #5.5m for the full year.
Record new three-year deals for shirt sponsorship and kit
manufacture have been negotiated with Mesh Computers plc
and Le Coq Sportif. This is in addition to a number of
other lucrative deals for stand sponsorships, support for
our varied community projects and the new Youth Academy.
The new West Stand facilities which incorporate the new
Millennium Suite overlooking the pitch, and the
Observatory which overlooks the Millennium Dome, will
provide important new revenue streams for the Club. A
programme of reorganisation and development within the
management structure will ensure that we are well placed
to exploit the significant commercial opportunities which
follow the choice of Greenwich as the nation's focal
point for the Millennium Celebrations.
Conclusion
The Club has continued its remarkable progress of recent
years both on and off the field. The commercial
opportunities available to the Club from the newly
constructed facilities are very exciting, and it is our
intention to exploit them to the full. The importance of
this new commercial strategy is that the facilities will
generate good quality earnings not directly affected by
league status. It is our intention to establish The
Valley as a leading conference and banqueting centre, in
a part of South East London now benefiting from a
national focus and large scale Government investment.
The Board has followed a policy of investment in the
first team squad in order to retain its F.A. Premier
League status. We will not, however, do anything which
would in any way jeopardise the future financial well-
being of the Club and remain fully committed to the
development of the business in a structured and
financially responsible way.
CHARLTON ATHLETIC PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 DECEMBER 1998
Unaudited Half Year to Audited
31 December year to 30
June
1998 1997 1998
#'000 #'000 #'000
TURNOVER 8,065 2,491 5,770
---------- ---------- ----------
Costs of sales (1,101) (400) (1,049)
Administrative (1,420) (211) (921)
expenses
Player and match (3,023) (1,970) (4,366)
expenses
---------- ---------- ----------
(5,544) (2,581) (6,336)
Signing on fees (471) (287) (608)
---------- ---------- ----------
(6,015) (2,868) (6,944)
---------- ---------- ----------
PROFIT/(LOSS) ON
OPERATIONS BEFORE 2,050 (377) (1,174)
PLAYER TRANSFER FEES
Net transfer account (546) (652) (588)
---------- ---------- ----------
PROFIT/(LOSS) ON TOTAL
OPERATIONS 1,504 (1,029) (1,762)
Financing charges (81) (101) (248)
---------- ---------- ----------
PROFIT/(LOSS) FOR ON
ORDINARY ACTIVITIES 1,423 (1,130) (2,010)
Taxation charges 0 0 0
---------- ---------- ----------
PROFIT/(LOSS) FOR THE
FINANCIAL PERIOD 1,423 (1,130) (2,010)
========== ========== ==========
EARNINGS PER SHARE 4.88p (5.12)p (8.41)p
========== ========== ==========
The comparative figures shown for December 1997 have been
re-stated to reflect the adoption of Financial Reporting
Standard No 10. This standard was adopted for the
release of the financial reports to 30 June 1998.
CHARLTON ATHLETIC PLC
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 1998
Unaudited Half Year to Audited
31 December year to 30
June
1998 1997 1998
#'000 #'000 #'000
TANGIBLE FIXED ASSETS 21,105 16,420 17,707
INTANGIBLE ASSETS 3,883 1,384 3,944
--------- ---------- ----------
24,988 17,804 21,651
CURRENT ASSETS
Stocks 203 99 134
Debtors 3,000 738 1,504
Cash at bank and in hand 1,817 393 124
--------- ---------- ----------
TOTAL ASSETS 30,008 19,034 23,413
Creditors falling due
within one year and (9,797) (4,241) (7,444)
deferred income
--------- ---------- ----------
Total assets less
current liabilities 20,211 14,793 15,969
Creditors falling due
after one year (33) (1,589) (1,053)
Deferred income (3,745) (3,474) (3,475)
--------- ---------- ----------
16,433 9,730 11,441
========= ========== ==========
CAPITAL AND RESERVES
Called up share capital 17,694 11,481 14,155
Share premium account 1,703 1,754 1,672
Revaluation reserve 2,595 2,595 2,595
Profit and loss account (5,559) (6,100) (6,981)
--------- ---------- ----------
16,433 9,730 11,441
========= ========== ==========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 1998
1. The financial statements combine the results of
Charlton Athletic plc and it's two subsidiaries, Charlton
Athletic Football Company (1984) Limited and Charlton
Athletic Holdings Limited. The financial statements have
been prepared in accordance with applicable accounting
standards and under the historical cost convention, as
modified by the revaluation of freehold properties.
2. Turnover represents receipts from matches played,
the FA Premier League, the Football Association and other
revenues generated from the commercial activities
associated with a professional football club. These are
all stated net of value added taxation.
3. Grants received from the Football Trust in respect
of safety work and ground improvement are carried in the
balance sheet as deferred income and released to the
profit and loss account over the life of the assets to
which they relate.
4. Deferred income includes Football Trust grants
received, and the proportion of season tickets receipts,
marketing, promotional and sponsorship income that
relates to the remainder of the financial period.
Included in creditors and deferred income is a total in
excess of #4,398,000 of revenues applicable to the second
half of the financial year.
5. The costs of player's registrations are capitalised
and amortised over the period of the respective player's
contracts.
6. Signing on fees are recognised in the profit and
loss account evenly over the period covered by the
player's contract.
7. There is no liability for taxation arising in the
period due to trading losses brought forward.
8. The calculation of earnings per share is based on
the profit after taxation for the six month period and on
the weighted average of 29,155,912 shares in issue during
this period (1997: 22,058,381).
9. Year 2000 compliance. The directors are aware of
the issues that may arise as a result of the millenium,
with both computer systems and data-aware microchip based
equipment. The directors have considered the
implications of these issues and are satisfied that there
will be no significant impact on the operations of the
group, and that costs relating to this will not be
material.
10. Copies of this statement are being sent to
shareholders and are available from the Company
Secretary, Charlton Athletic plc, The Valley, London, SE7
8BL.
END
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