Arsenal Holdings plc
Results for the six months ended
30 November 2016
ARSENAL ANNOUNCE HALF YEAR RESULTS
- Turnover from football increased to £191.1 million (2015 -
£158.0 million) with growth in broadcasting distributions at the
start of a new three year revenue cycle for the Premier League and
an increased share of UEFA Champions League market pool.
- The Club invested strongly in its playing squad. Higher player
wages were the single largest contributory factor in the Club’s
increased operating costs whilst, in terms of transfers, the Club
invested at record levels, adding £110.5 million to the cost of
player registrations.
- Amortisation charge on player registrations increased to £36.0
million (2015 - £29.2 million) as a result of the transfers
in.
- Profits on sale of players amounted to £6.3 million (2015 -
£0.3 million).
- The Group has no short-term debt and its cash reserves,
excluding the balances designated as debt service reserves,
amounted to £100.5 million (2015 - £135.9 million).
- The main cash outflow in the period was £86.6 million in
respect of player transfers and this represents a record level of
transfer expenditure for the Club.
- Activity in the Group’s property business was minimal with
profits amounting to £0.3 million (2015 - £1.8 million).
- The Group recorded an overall profit before tax of £12.6
million (2015 – loss of £6.2 million).
- Overall result for the year expected to be fully compliant with
all of the requirements of both the Premier League and UEFA
financial regulatory regimes.
Commenting on the results for the six months, the Club’s
Chairman, Sir Chips Keswick, said:
“The financial results for the first half of the year are
robust. As expected increased Premier League broadcasting revenues
have had a direct impact on player costs both in terms of transfer
prices and player wage demands. Whilst these are the market forces
that have contributed directly over time to the success of the
Premier League I would sound a note of caution in light of the very
material contractual commitments to future wages that clubs are
taking on.
We have invested in our own playing squad at record levels. It
has also been exciting to see more young players emerge from our
Academy.
We are very focused on producing a positive and exciting closing
run and with the support of our fans I believe together we can
achieve a successful and memorable end to the season.”
CHAIRMAN’S STATEMENT
We are looking forward to another exciting finish to the
season.
The Premier League season has been intensely competitive across
the top six positions. At the time of writing, we sit in fourth
place in the league and, with thirteen games remaining, there is
everything to play for. We have progressed to the Sixth Round
of the Emirates FA Cup and will compete to bring home silverware in
this competition for the third time in four years and what would be
a record-breaking thirteenth FA Cup trophy.
Everyone, including Arsène, our players, board and staff share
our fans' disappointment at our first leg result against Bayern
Munich but we will approach the second leg with professionalism and
a desire to reclaim pride. Unity has always been one of
Arsenal's strengths as a club. We are very focused on
producing a positive and exciting closing run and with the support
of our fans I believe together we can achieve a successful and
memorable end to the season.
The financial results for the first half of the year are robust
with the Group turning in a pre-tax profit of £12.6 million
compared to a loss of £6.2 million in the same period last year.
The main reason for this improvement is the start of the latest
three year cycle of Premier League broadcasting revenues and more
details can be found in the Financial Review section below.
As expected increased Premier League broadcasting revenues have
had a direct impact on player costs both in terms of transfer
prices and player wage demands. Whilst these are the market forces
that have contributed directly over time to the success of the
Premier League I would sound a note of caution in light of the very
material contractual commitments to future wages that clubs are
taking on.
We have invested strongly in our own playing squad.
Higher player wages are, once again, the single largest
contributory factor in the Club’s increased operating costs.
Furthermore, in terms of transfers, we have invested at record
levels, adding £110.5 million to the cost of player registrations.
As well as bringing Granit Xhaka,
Rob Holding, Shkodran Mustafi and
Lucas Perez to the Club we have
continued to invest in the retention of key players. Francis Coquelin, Hector Bellerin, Laurent Koscielny and Olivier Giroud have signed new contracts whilst
we have also taken up the options to extend the contracts of Club
captain Per Mertesacker and Santi
Cazorla. Further work is required in the area of
contract renewals and we will continue to invest rationally in our
squad retention as we move forward.
It has also been exciting to see more young players emerge from
our Academy. Alex Iwobi has
continued to flourish whilst Ainsley
Maitland-Niles and Jeff
Reine-Adelaide have made valuable contributions in recent
weeks.
The increased strength in depth we have across the squad has
been a positive feature so far this season and will be of
increasing importance as fixtures congest in the closing months of
the campaign.
As I have previously mentioned, we have been working hard to
ensure our training facilities are amongst the best available
anywhere in the game. The extensive redevelopment of our Hale End
Academy is almost completed. Work at our London Colney training
centre is also progressing well and an impressive new Player
Performance Centre building will come into full use this
spring.
On the commercial front, new partnerships have recently been
signed with Octopus Energy and MTN Nigeria and interest remains
high from other prospective partners. The plans for our 2017 summer
tour are well advanced with pre-season games in Australia and China already confirmed. Our retail business
also continues to develop well with significant growth in our
online operation and ever increasing numbers of supporters enjoying
the stadium tour.
As always, our contribution to the community here in Islington
and further afield remains extremely important to us. Following the
very successful Legends’ Match at Emirates Stadium in September,
The Arsenal Foundation donated £1 million to build football pitches
for children in London,
Jordan and Somalia. In addition, the manager, players,
staff and supporters showed their generosity through our dedicated
charitable match-day in December, raising a record £250,000. We are
very grateful for everyone’s contribution.
Financial Review
The financial results for the six months ended 30 November 2016 show continued growth in the
Group’s football revenues, mainly as a consequence of the start of
the new Premier League broadcasting cycle, with an overall
pre-tax profit for the period of £12.6 million (2015 – loss of £6.2
million).
During the summer the Club made significant investments in new
players with £110.5 million added to the cost of player
registrations. Cash payments relating to these and certain past
transfers were £86.6 million and, as a result, the Group’s cash and
bank balance was significantly lower at £123.7 million, compared
with £226.5 million at the start of the period. Certain elements of
the transfer fees payable are deferred and payable in instalments
with an amount of £64.6 million still to pay of which £42.0 million
is payable within the next twelve months.
|
2016 |
2015 |
|
£m |
£m |
Turnover |
|
|
Football |
191.1 |
158.1 |
Property development |
0.8 |
2.1 |
Total
turnover |
191.9 |
160.2 |
Operating profits* |
|
|
Football* |
54.2 |
33.0 |
Property development |
0.2 |
1.6 |
Total operating profit* |
54.4 |
34.6 |
Player trading |
(27.6) |
(27.5) |
Depreciation and amortisation of
goodwill |
(7.5) |
(7.2) |
Joint venture |
0.2 |
0.5 |
Net finance charges |
(6.9) |
(6.6) |
Profit / (Loss) before
tax |
12.6 |
(6.2) |
*= operating profits before depreciation and player trading
costs |
The total turnover from football was a little more than 20%
higher at £191.1 million compared with £158.1 million for the same
period last year.
Broadcasting accounted for £25.0 million of the increase with
the primary driver being the increased value of the Premier League
contracts. Champions League broadcasting revenues were also ahead
as a result of our increased share of Market Pool (30% share as
Premier League runners up 2015/16) and a favourable weaker sterling
exchange rate in converting the UEFA distributions which are made
in Euro. Broadcasting contributed 45% of our Football revenues for
the period.
There were three more home games compared to the prior period
(one Premier League and two EFL Cup) and this meant match day
revenue was higher at £45.8 million (2015 - £41.2 million).
Match day revenue remains weighted to the second half of the
financial year and at 30 November we had played 12 (2015 – 9) of
the 26 home fixtures we are so far certain of playing for the full
season.
Commercial and retail revenues were up some 5% on the prior
period to £57.9 million which is a positive result given that our
two main partnerships, with Emirates and Puma, are steady in
mid-term. During the period we launched an extensive upgrade of our
on-line store and the improved revenues derived from this are
promising at an early stage.
The start of a new broadcasting cycle has, once again, signalled
a strong upward pressure on our player costs and it follows that
our operating costs for football were increased by £11.2 million.
The main component of this increase was payroll with the new
players signed in the summer adding to the impact of certain
contract extensions within the squad. It will take some time, as
player contracts fall for renewal, for the wage bill to be fully
recalibrated against market rates which are informed by the
increased broadcasting revenues available to Premier League clubs
and so we must expect further increases in this area. There were
also increased costs associated with our commercial activities and
a one-off charge of £1.0 million associated with the planned
withdrawal from an operational property site.
The overall impact of these changes is that half year operating
profits from football have increased significantly to £54.2 million
(2015 - £33.0 million).
There was limited activity in the Group’s property business,
with the only transaction of note being the sale of one apartment
from our small portfolio of Highbury Square in-fill properties; the
remaining 3 units are not currently available for sale. The
operating profit from property was £0.2 million (2015 - £1.6
million).
Whilst the overall result was effectively unchanged – a loss of
£27.6 million (2015 – loss of £27.5 million) – the two main
components of player trading did show some variation. The
investment in the squad over the summer meant that the amortisation
component was further increased to £36.0 million (2015 – £29.2
million). However, this was offset by a higher profit on
player transfers at £6.3 million, mainly from the sales of Serge
Gnabry and Isaac Hayden, against
only £0.3 million in the same period last year. For a second
year running there were no major sales in the summer window and the
Club retained all of its key players going into the current
campaign.
Net finance costs for the period were £6.9 million (2015 - £6.6
million) with an underlying fall as we pay off our fixed rate
stadium finance bonds offset by lower interest rates available on
our cash balances and a negative change in the market value of the
interest rate swap.
The increased revenues and operating profit from football mean
that the overall outcome for this half year is a profit before tax
of £12.6 million (2015 – loss of £6.2 million). The tax charge for
the period is £2.4 million.
The Group has maintained a healthy cash position with balances
as at 30 November 2016 of £123.7
million (2015 - £159.4 million), inclusive of debt service
reserves, which are not available for football purposes, of £23.3
million (2015 - £23.5 million).
As referenced above the main cash outflow in the period was
£86.6 million in respect of player transfers and this represents a
record level of transfer expenditure for the Club. In addition we
paid £14.5 million in respect of additions to fixed assets. This
level of capital expenditure remains comparatively high and
reflects the important development projects now nearing completion
at the London Colney and Hale End
training grounds.
The Group enters into a number of transactions, relating mainly
to its participation in European competition (UEFA Champions League
distributions are paid in €) and player transfers, which create
exposure to movements or volatility in foreign exchange, including
€. The Group monitors this foreign exchange exposure on a
continuous basis and will usually hedge any significant exposure in
its currency receivables and payables.
Summary
The after tax result for the period is a profit of £10.3 million
(2015 – loss of £3.4 million).
As always, the actual outcome for the second half will be
strongly influenced by the extent of progress in the knock-out
competitions, the level of live TV coverage for Premier League
games and final League position. The overall result for the year
will be compliant with all of the requirements of both the Premier
League and UEFA financial regulatory regimes.
In closing I should thank everyone for their support so far this
season. Our fans have been first class at every game, home and
away. It looks like the closing months of the 2016/17 campaign will
be very competitive when we all, as supporters, can really back the
team and make a difference.
Sir Chips Keswick
Chairman
24 February 2017
Arsenal Holdings Plc
Consolidated profit and loss account
For the six months ended 30 November
2016
|
|
|
Six
months |
|
|
|
|
to 30 |
Year
ended |
|
|
|
November |
31 May |
|
|
Six months to 30 November 2016 |
2015 |
2016 |
|
|
Unaudited |
Unaudited |
Audited |
|
|
Operations |
|
|
|
|
|
|
|
|
|
excluding |
|
|
|
|
|
|
|
|
|
player |
Player |
|
|
|
|
|
|
|
|
trading |
trading |
Total |
|
Total |
|
Total |
|
|
Notes |
£’000 |
£’000 |
£’000 |
|
£’000 |
|
£’000 |
|
|
|
|
|
|
|
|
|
|
|
Turnover of the Group including
its share of joint ventures |
|
191,290 |
2,094 |
193,384 |
|
161,627 |
|
356,548 |
|
Share of turnover of joint
ventures |
|
(1,493) |
- |
(1,493) |
|
(1,454) |
|
(3,009) |
|
|
|
________ |
________ |
_______ |
|
________ |
|
________ |
|
Group turnover |
5 |
189,797 |
2,094 |
191,891 |
|
160,173 |
|
353,539 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
- other |
|
(142,934) |
- |
(142,934) |
|
(131,300) |
|
(281,093) |
|
- amortisation of player
registrations |
|
- |
(35,974) |
(35,974) |
|
(29,231) |
|
(59,257) |
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
(142,934) |
(35,974) |
(178,908) |
|
(160,531) |
|
(340,350) |
|
|
|
________ |
________ |
_______ |
|
________ |
|
________ |
|
Operating profit/(loss) |
|
46,863 |
(33,880) |
12,983 |
|
(358) |
|
13,189 |
|
Share of operating profit of joint
venture |
|
236 |
- |
236 |
|
451 |
|
1,004 |
|
Profit on disposal of player
registrations |
|
- |
6,260 |
6,260 |
|
309 |
|
2,047 |
|
|
|
________ |
________ |
_______ |
|
________ |
|
________ |
|
Profit/(loss) on ordinary activities
before net finance charges |
|
47,099 |
(27,620) |
19,479 |
|
(402) |
|
16,240 |
|
|
|
________ |
________ |
|
|
|
|
|
|
Net finance charges |
|
|
|
(6,853) |
|
(6,565) |
|
(13,373) |
|
|
|
|
|
________ |
|
________ |
|
________ |
|
Profit/(loss) on ordinary
activities |
|
|
|
|
|
|
|
|
|
before taxation |
|
|
|
12,626 |
|
(6,163) |
|
2,867 |
|
Taxation |
|
|
|
(2,364) |
|
2,770 |
|
(1,218) |
|
|
|
|
|
________ |
|
________ |
|
________ |
|
Profit/(loss) after taxation
retained for |
|
|
|
|
|
|
|
|
|
the financial period |
|
|
|
10,262 |
|
(3,393) |
|
1,649 |
|
|
|
|
|
________ |
|
________ |
|
________ |
|
Earnings per share |
6 |
|
|
£164.94 |
|
(£54.53) |
|
£26.50 |
|
|
|
|
|
________ |
|
________ |
|
________ |
|
|
|
|
|
|
|
|
|
|
|
|
|
All trading resulted from continuing operations.
The accompanying notes are an integral part of these
statements.
Arsenal Holdings PLC
Consolidated Statement of Comprehensive Income
For the six months ended 30 November
2016
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Profit/(loss) for the period |
10,262 |
(3,393) |
1,649 |
Gains on cash flow hedges |
- |
612 |
1,092 |
Exchange differences |
28 |
2 |
9 |
|
_______ |
_______ |
_______ |
Total comprehensive
income/(loss) |
10,290 |
(2,779) |
2,750 |
|
_______ |
_______ |
_______ |
Arsenal Holdings Plc
Consolidated balance sheet
At 30 November 2016
|
Notes |
30 November |
31 May |
|
|
2016 |
2015 |
2016 |
|
|
Unaudited |
Unaudited |
Audited |
|
|
£’000 |
£’000 |
£’000 |
Fixed assets |
|
|
|
|
Goodwill |
|
458 |
874 |
666 |
Tangible assets |
|
428,271 |
421,808 |
421,059 |
Intangible assets |
7 |
220,169 |
160,792 |
146,005 |
Investment in joint venture |
|
5,166 |
4,535 |
4,977 |
|
|
________ |
________ |
________ |
|
|
654,064 |
588,009 |
572,707 |
|
|
________ |
________ |
________ |
Current assets |
|
|
|
|
Stock – Development properties |
|
11,309 |
11,003 |
11,148 |
Stock – Retail merchandise |
|
4,157 |
4,206 |
4,834 |
Debtors – Due within one year |
|
74,115 |
52,509 |
57,961 |
Debtors – Due after one year |
|
2,420 |
5,657 |
4,404 |
Cash and cash equivalents |
8 |
123,734 |
159,431 |
226,459 |
|
|
________ |
________ |
________ |
|
|
215,735 |
232,806 |
304,806 |
Creditors: Amounts
falling due within one year |
|
(239,329) |
(205,917) |
(239,945) |
|
|
________ |
________ |
________ |
Net current
(liabilities)/assets |
|
(23,594) |
26,889 |
64,861 |
|
|
________ |
________ |
________ |
Total assets less current
liabilities |
|
630,470 |
614,898 |
637,568 |
Creditors: Amounts
falling due after more than one year |
|
(246,166) |
(248,456) |
(265,460) |
Provisions for
liabilities |
|
(45,953) |
(43,910) |
(44,047) |
|
|
________ |
________ |
________ |
Net assets |
|
338,351 |
322,532 |
328,061 |
|
|
________ |
________ |
________ |
Capital and reserves |
|
|
|
|
Called up share capital |
|
62 |
62 |
62 |
Share premium |
|
29,997 |
29,997 |
29,997 |
Merger reserve |
|
26,699 |
26,699 |
26,699 |
Hedging reserve |
|
- |
(481) |
- |
Profit and loss account |
|
281,593 |
266,255 |
271,303 |
|
|
________ |
________ |
________ |
Shareholders’ funds |
|
338,351 |
322,532 |
328,061 |
|
|
________ |
________ |
________ |
|
|
|
|
|
The accompanying notes are an integral part of this consolidated
balance sheet.
Arsenal Holdings PLC
Consolidated Statement of Changes in Equity
For the six months ended 30 November
2016
|
Share |
Share |
Merger |
Hedging |
Profit |
|
|
|
Capital |
Premium |
Reserve |
Reserve |
And Loss |
|
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
£’000 |
|
|
|
|
|
|
|
|
At 1 June 2015 |
62 |
29,997 |
26,699 |
(1.092) |
269,645 |
|
325,311 |
Total comprehensive income for year
ended 31 May 2016 |
- |
- |
- |
1,092 |
1,658 |
|
2,750 |
|
________ |
________ |
________ |
_______ |
________ |
|
________ |
At 31 May 2016 |
62 |
29,997 |
26,699 |
- |
271,303 |
|
328,061 |
Total comprehensive income for the
six months ended 30 November 2016 |
- |
- |
- |
- |
10,290 |
|
10,290 |
|
_______ |
_______ |
_______ |
_______ |
________ |
|
________ |
As at 30 November
2016 |
62 |
29,997 |
26,699 |
- |
281,593 |
|
338,351 |
|
________ |
________ |
________ |
________ |
________ |
|
________ |
Arsenal Holdings Plc
Consolidated cash flow statement
For the six months ended 30 November
2016
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Net cash inflow/(outflow) from
operating activities |
13,579 |
(1,052) |
93,841 |
Taxation |
(1,729) |
(4,823) |
(8,331) |
Cash flow from investing
activities |
|
|
|
Interest received |
338 |
401 |
746 |
Proceeds from sale of fixed
assets |
15 |
681 |
748 |
Purchase of fixed assets |
(14,535) |
(10,479) |
(14,232) |
Player registrations (see note
below) |
(86,604) |
(39,401) |
(54,190) |
|
________ |
________ |
________ |
Net cash flow from investing
activities |
(100,786) |
(48,798) |
(66,928) |
|
________ |
________ |
________ |
Cash flows from financing
activities |
|
|
|
Interest paid |
(5,705) |
(6,395) |
(12,622) |
Repayment of debt |
(8,084) |
(7,668) |
(7,668) |
|
________ |
________ |
________ |
Net cash flow from financing
activities |
(13,789) |
(14,063) |
(20,290) |
|
________ |
________ |
________ |
Net decrease in cash and cash
equivalents |
(102,725) |
(68,736) |
(1,708) |
Cash and cash equivalents at start
of period |
226,459 |
228,167 |
228,167 |
|
________ |
________ |
________ |
Cash and cash equivalents at
close of period |
123,734 |
159,431 |
226,459 |
|
________ |
________ |
________ |
Note: Gross cash flows –
player registrations |
|
|
|
Payments for purchase of
players |
(90,602) |
(47,287) |
(66,833) |
Receipts from sale of players |
3,998 |
7,886 |
12,643 |
|
________ |
________ |
________ |
|
(86,604) |
(39,401) |
(54,190) |
|
________ |
________ |
________ |
Arsenal Holdings Plc
Notes to the cash flow statement
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
a) Reconciliation of
operating result to net cash inflow/(outflow) from operating
activities |
|
|
|
|
|
|
|
Operating profit/(loss) |
12,983 |
(358) |
13,189 |
(Profit)/loss on disposal of
tangible fixed assets |
(8) |
(7) |
(72) |
Amortisation of goodwill |
208 |
208 |
416 |
Depreciation (net of grant
amortisation) |
7,270 |
7,032 |
14,258 |
Amortisation of player
registrations |
35,974 |
29,231 |
59,257 |
|
________ |
________ |
________ |
Operating cash flow before
working capital |
56,427 |
36,106 |
87,048 |
Decrease/(increase) in stock |
516 |
(938) |
(1,711) |
(Increase)/decrease in debtors |
(12,066) |
16,915 |
9,707 |
(Decrease) /increase in
creditors |
(31,298) |
(53,135) |
(1,203) |
|
________ |
________ |
________ |
Net cash inflow/(outflow) from
operating activities |
13,579 |
(1,052) |
93,841 |
|
________ |
________ |
________ |
|
|
|
|
b) Analysis of changes in net debt
|
At 1 June |
|
|
At 30 November |
|
2016 |
Non cash
changes |
Cash flows |
2016 |
|
£’000 |
£’000 |
£’000 |
£’000 |
Cash at bank and in hand |
117,622 |
- |
(66,069) |
51,553 |
Cash equivalents |
108,837 |
- |
(36,656) |
72,181 |
|
_______ |
_______ |
_______ |
_______ |
|
226,459 |
- |
(102,725) |
123,734 |
Debt due within one year
(bonds) |
(7,557) |
(8,533) |
8,084 |
(8,006) |
Debt due after more than one year
(bonds) |
(186,441) |
8,267 |
- |
(178,174) |
Derivative financial
instruments |
(24,411) |
(598) |
- |
(25,009) |
Debt due after more than one
year |
|
|
|
|
(debenture subscriptions) |
(14,197) |
(201) |
- |
(14,398) |
|
_______ |
_______ |
_______ |
_______ |
Net debt |
(6,147) |
(1,065) |
(94,641) |
(101,853) |
|
_______ |
_______ |
_______ |
_______ |
Non cash changes represent £266,000 in respect of the
amortisation of costs of raising finance, £201,000 in respect of
rolled up, unpaid debenture interest and £598,000 in respect of the
change in fair value of the Group’s interest rate swaps.
Arsenal Holdings Plc
Notes to the interim accounts
30 November 2016
1 Basis of
preparation of Group financial statements
The unaudited condensed consolidated interim financial
statements for the half year ended 30
November 2016 have been prepared in accordance with NEX
Growth Market Rules for Issuers and therefore do not include all of
the notes and disclosures that would otherwise be required in a
full set of financial statements, and should be read in conjunction
with the 2015/16 Annual Report. The accounting policies applied in
the preparation of the interim financial statements are consistent
with financial statements for the full year ended 31 May 2016.
The financial information for the full year ended 31 May 2016 is extracted from the financial
statements for that year. A copy of the statutory accounts has been
delivered to the Registrar of Companies. The auditor’s report on
those financial statements was unqualified and did not contain any
statement under section 498(2) and (3) of the Companies Act
2006.
The Group has two classes of business – the principal activity
of operating a professional football club and property
development.
2 Going concern
The Board has undertaken a full and thorough review of the
Group’s forecasts and associated risks and sensitivities. The
extent of this review reflects the current economic climate as well
as the specific financial circumstances of the Group. The
status of the Group’s financing arrangements is summarised in the
Chairman’s Statement. The directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and the financial
statements continue to be prepared on the going concern basis.
3 Significant
accounting policies
Income recognition
Gate and other match day revenue is recognised over the period
of the football season as games are played and events are staged.
Sponsorship and similar commercial income is recognised over the
duration of the respective contracts. The fixed element of
broadcasting revenues is recognised over the duration of the
financial year whilst facility fees for live coverage or highlights
are taken when earned at the point of broadcast. Merit awards are
accounted for only when known at the end of the financial period.
UEFA pool distributions relating to participation in the Champions
League are spread over the matches played in the competition whilst
distributions relating to match performance are taken when earned;
these distributions are classified as broadcasting revenues.
Fees receivable in respect of the loan of players are included in
turnover over the period of the loan. Income from the sale of
development properties is recognised on legal completion of the
relevant sale contract.
Player registrations
The costs associated with acquiring players’ registrations or
extending their contracts, including agents’ fees, are capitalised
and amortised, in equal instalments, over the period of the
respective players’ contracts. Where a contract life is
renegotiated the unamortised costs, together with the new costs
relating to the contract extension, are amortised over the term of
the new contract. Where the acquisition of a player
registration involves a non-cash consideration, such as an exchange
for another player registration, the transaction is accounted for
using an estimate of market value for the non-cash consideration.
Under the conditions of certain transfer agreements or contract
renegotiations, further fees will be payable in the event of the
players concerned making a certain number of First Team appearances
or on the occurrence of certain other specified future
events. Liabilities in respect of these additional fees are
accounted for, as provisions, when it becomes probable that the
number of appearances will be achieved or the specified future
events will occur. The additional costs are capitalised and
amortised as set out above.
4 Segmental
analysis
Class of business |
Football |
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Turnover |
191,116 |
158,041 |
350,623 |
|
_______ |
_______ |
_______ |
Profit/(loss) on ordinary activities
before taxation |
12,319 |
(7,914) |
883 |
|
_______ |
_______ |
_______ |
Segment net assets |
284,552 |
269,510 |
274,572 |
|
_______ |
_______ |
_______ |
Class of business |
Property development |
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Turnover |
775 |
2,132 |
2,916 |
|
_______ |
_______ |
_______ |
Profit on ordinary activities before
taxation |
307 |
1,751 |
1,984 |
|
_______ |
_______ |
_______ |
Segment net assets |
53,799 |
53,022 |
53,489 |
|
_______ |
_______ |
_______ |
Class of business |
Group |
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Turnover |
191,891 |
160,173 |
353,539 |
|
_______ |
_______ |
_______ |
Profit/(loss) on ordinary activities
before taxation |
12,626 |
(6,163) |
2,867 |
|
_______ |
_______ |
_______ |
Net assets |
338,351 |
322,532 |
328,061 |
|
_______ |
_______ |
_______ |
5 Turnover
|
Six months to 30 November |
Year ended
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Gate and other match day
revenues |
45,806 |
41,207 |
99,907 |
Player trading |
2,094 |
1,452 |
3,230 |
Broadcasting |
85,269 |
60,293 |
140,579 |
Retail and licensing income |
14,521 |
14,164 |
24,626 |
Commercial |
43,426 |
40,925 |
82,281 |
Property development |
775 |
2,132 |
2,916 |
|
_______ |
_______ |
_______ |
|
191,891 |
160,173 |
353,539 |
|
_______ |
_______ |
_______ |
6 Earnings per
share
The calculation of earnings per share is based on the profit for
the period divided by the weighted average number of ordinary
shares in issue being 62,217 (period to 30
November 2015 – 62,217 shares and year to 31 May 2016 – 62,217 shares).
7 Intangible fixed
assets
|
£’000
Unaudited |
Cost of player
registrations |
|
At 1 June 2016 |
344,037 |
Additions |
110,513 |
Disposals |
(24,953) |
|
_______ |
At 30 November 2016 |
429,597 |
|
_______ |
Amortisation of player
registrations |
|
At 1 June 2016 |
198,032 |
Charge for the period |
35,974 |
Disposals |
(24,578) |
|
_______ |
At 30 November 2016 |
209,428 |
|
_______ |
Net book amount |
|
At 30 November 2016 |
220,169 |
|
_______ |
At 31 May 2016 |
146,005 |
|
_______ |
|
|
8 Cash at bank and in
hand
|
30 November |
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Debt service reserve accounts |
23,275 |
23,498 |
35,355 |
Other accounts |
100,459 |
135,933 |
191,104 |
|
_______ |
_______ |
_______ |
|
123,734 |
159,431 |
226,459 |
|
_______ |
_______ |
_______ |
|
|
|
|
The Group is required under the terms of its fixed and floating
rate bonds to maintain specified amounts on bank deposit as
security against future payments of interest and principal.
Accordingly the use of these debt service reserve accounts is
restricted to that purpose.
The Group uses short-term bank treasury deposits (cash
equivalents) as a means of maximising the interest earned on its
cash balances.
|
30 November |
31 May |
|
2016 |
2015 |
2016 |
|
Unaudited |
Unaudited |
Audited |
|
£’000 |
£’000 |
£’000 |
Cash at bank and in hand |
51,553 |
75,292 |
117,622 |
Cash equivalents |
72,181 |
84,139 |
108,837 |
|
_______ |
_______ |
_______ |
|
123,734 |
159,431 |
226,459 |
|
_______ |
_______ |
_______ |
|
|
|
|
9 Additional
information
These interim results have been reviewed by the Group’s
auditors, Deloitte LLP, who have issued a review report on the
results.