RNS Number:3483I
Preston North End PLC
22 November 2007
Preston North End plc
("PNE" or the "Company")
FINAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2007
Chairman's Statement
On behalf of the Board of Directors of Preston North End plc, I am pleased to
present our annual report and accounts for the period ended 30th June 2007.
The 2006/07 season saw a number of significant changes at the Club - not least
the appointment of a new manager and, subsequently, an entire backroom staff.
With only a short lead-in time to the new season following his appointment, Paul
Simpson was faced with a substantial task. In the limited time available, the
Board assisted Paul to make adjustments to the squad which he felt were needed.
By November 2006, Paul temporarily guided the team to the top of the
Championship, the Club's best position for 55 years.
Following this fantastic achievement, everyone at the Club was disappointed that
we missed out on the Play-Offs by a single point. However, we have continued to
make changes at the Club which we hope will bring us additional success in the
current season.
Turnover for the year was 9% higher than 2006 at #7.93m (2006: #7.26m) which was
mainly due to the Club's success in the FA Cup as outlined below. However,
wages continued to increase as we have again strengthened the squad of players.
Total staff costs have increased by 7% to #7.71m (2006: #7.19m) with the vast
majority of this increase being the players' wage bill.
We have, however, continued to control the Club's other operating expenses-
actually achieving a 2% reduction in these costs to #2.92m (2006: #3.0m).
Together with the increased turnover, the result was an operating loss (before
depreciation and amortisation) of #2.70m, #227,000 better than the 2006 loss of
#2.93m.
Despite this improvement, any losses still have to be financed and we have again
done this with our player sale receipts. Current year profits on sale were
#1.42m, although total cash receipts were #4.38m, after accounting for proceeds
from sales recognised in prior years' accounts. These funds have basically
funded the operating loss and the #1.77m cash outflow on new players in the
financial year.
We continue to depreciate the value of our playing squad over the length of
their initial contracts. After accounting for depreciation charges on both our
tangible assets and playing squad of #1.63m (2006 #1.25m), our retained loss was
#3.19m (2006: retained profit of #0.06m).
Football
As outlined above, despite not reaching the play-offs, the Board was encouraged
by the achievements of the season- most significantly reaching the top of the
Championship and also delivering a good performance in the FA Cup. The fifth
round tie against Manchester City at Deepdale was a great occasion at the Club
as well as being a good source of additional revenue, particularly as the game
was televised.
The continued strengthening of the squad welcomed Sean St. Ledger, Danny Pugh,
Wayne Henderson, Liam Chilvers and Neil Mellor to the Club. We also made short
term signings in the January transfer window of Michael Ricketts, Pavel Pergl
and Seyfo Soley who have all moved on since the end of the season.
Other players who have left the Club include Tyrone Mears who joined West Ham
United, Alan McCormack joined Southend United, Brian Stock joined Doncaster
Rovers, Carlo Nash joined Wigan Athletic, David Hibbert joined Shrewsbury Town,
Danny Dichio joined Toronto FC and Andy Smith's contract was terminated by
mutual consent.
As ever, I would like to formally welcome the new players and place on record my
thanks to those players who have left for their input during their time at
Preston North End.
There was a certain amount of speculation from fans that there should have been
additional investment in the squad in January to help in the push for promotion.
This was more prevalent because of the expectation of David Nugent's departure
in the Summer- a situation that we all know has since come to pass. The reality
of the situation is that the majority of the funds generated from this sale will
contribute to offset the Club's losses both in the current and future seasons.
Nothwithstanding that, the Board supported Paul to sign the four players he
wanted in January, plus the loan signing of Frank Songo'o from Portsmouth.
Unfortunately we did not achieve our ambition of at least reaching the Play-Offs
but, as ever, we will continue to do the best we can with the resources
available to us.
Stadium
Following many months of meetings and negotiations, I am delighted to report
that the contract for the construction of the new stand at Deepdale has been
signed and the funding has been secured. As a consequence the final side of the
Deepdale Stadium will be completed with a new 3,700 seat stand incorporating
executive boxes and lounges. Preston Primary Care Trust will also have a
Long-Term Conditions Health Centre occupied under a long lease from the Club.
This is a much-needed facility for the Deepdale area of Preston and I am
delighted with the mutual benefits the programme will deliver, for the Club and
the local community.
Youth Development and Community
Our Youth Development Department continues to improve under the guidance of Dean
Ramsdale. The Youth Team had a good season, finishing third in the Puma
Alliance League and reaching the semi-finals of the Lancashire Youth Cup.
Three players from the Youth department were given professional contracts with
the Club which commenced on the 1st July 2007. I would like to congratulate
Chris McGrail, Andrew Murphy and Dylan Adams on this achievement.
We have made a number of new staff appointments who are dedicated to expanding
the scope of coaching sessions for young people in the local area and beyond.
This has the dual aim of improving the Club's profile in the local community and
also, in conjunction with a strengthened scouting department, identifying young
football talent for our Development Centres.
The schools visits programme has continued throughout the 2006/07 season with
the 'Deepdale Duck Roadshow' presented to nearly 40,000 children, promoting the
message of leading an active lifestyle and eating a healthy diet.
I am proud to be able to report that we have assisted over 700 charitable causes
during the season with donations of merchandise, tickets and player appearances.
The 'Playing for Success' facility based at the Club continues to go from
strength-to-strength. The centre worked closely with 21 primary schools and 12
secondary schools last year with the focus on raising standards in literacy,
numeracy and IT skills with the football environment being a key motivator for
children.
The free under 8's season ticket initiative has continued to be a success with
over 1,600 children currently watching our games at Deepdale under the scheme.
Over 45% of children have gone on to purchase a season ticket beyond the age of
8 which I consider is an encouraging statistic in terms of developing future
fans for the Club.
Women's Team
PNE's women consolidated their position in the Northern Premier League-
finishing fifth after a good run of results towards the end of the season. I
congratulate them on their continued success.
Commercial Activities
Our commercial activities have again made an important financial contribution to
our operations and the Board continues to be grateful to all companies and
individuals who support the Club through advertising and hospitality packages.
Finally, I would like to thank our shareholders, employees and fans for their
continued loyalty and support.
D Shaw
Chairman
For further information, please contact:
Kevin Abbott, Preston North End plc Tel: 0870 442 1964
David Youngman, WH Ireland Limited Tel: 0161 832 2174
Consolidated profit and loss account
for the year ended 30 June 2007
2007 2006
#000 #000
Turnover 7,930 7,256
Staff costs - Normal (7,652) (7,086)
- Exceptional (58) (103)
Other operating charges (2,921) (2,995)
Group operating loss before depreciation and amortisation of
player registrations (2,701) (2,928)
Depreciation and amortisation of player registrations (1,634) (1,250)
Total operating loss (4,335) (4,178)
Profit on sale of fixed assets 1,420 4,387
Interest payable and similar charges (353) (296)
Loss on ordinary activities before taxation (3,268) (87)
Tax on loss on ordinary activities 82 142
Retained (loss)/profit for the year (3,186) 55
(Loss)/earnings per share (basic and diluted) (9.7)p 1.7p
All amounts in 2006 and 2007 relate to continuing operations.
Consolidated statement of total recognised gains and losses
for the year ended 30 June 2007
The consolidated profit and loss account includes the only gains and losses of
the Group for the current and prior year.
Consolidated statement of historical cost profits and losses
for the year ended 30 June 2007
PRIVATE 2007 2006
#000 #000
Reported loss on ordinary activities before taxation (3,268) (87)
Difference between a historical cost depreciation charge and the actual
depreciation charge for the year calculated on the revalued amount 22 22
Historical cost loss on ordinary activities before taxation (3,246) (65)
Historical cost (loss)/profit on ordinary activities after taxation (3,164) 77
Consolidated balance sheet
at 30 June 2007
2007 2006
#000 #000 #000 #000
Fixed assets
Intangible assets 1,314 1,625
Tangible assets 11,511 11,573
12,825 13,198
Current assets
Stocks 332 347
Debtors 1,014 4,054
1,346 4,401
Creditors: amounts falling due within one year (10,268) (7,378)
Net current liabilities (8,922) (2,977)
Total assets less current liabilities 3,903 10,221
Creditors: amounts falling due after more than (2,159) (5,209)
one year
Provisions for liabilities and charges (459) (541)
Net assets 1,285 4,471
Capital and reserves
Called up share capital 3,296 3,296
Share premium account 7,051 7,051
Revaluation reserve 888 910
Profit and loss account (9,950) (6,786)
Equity shareholders' funds 1,285 4,471
Consolidated cash flow statement
for the year ended 30 June 2007
2007 2006
#000 #000
Net cash outflow from operating activities (2,890) (2,668)
Return on investments and servicing of finance (345) (278)
Capital expenditure 2,440 877
Cash outflow before financing (795) (2,069)
Financing 371 115
Decrease in cash in the year (424) (1,954)
Reconciliation of net cash flow to movement in net debt
for the year ended 30 June 2007
2007 2006
#000 #000
Decrease in cash in the year (424) (1,954)
Cash inflow from change in debt (371) (115)
Movement in net debt in the year (795) (2,069)
Net debt at beginning of year (5,177) (3,108)
Net debt at end of year (5,972) (5,177)
Notes to the Accounts for the Year Ended 30 June 2007
(forming part of the financial statements)
1 Accounting policies
a) Accounting convention
The financial statements have been prepared under the historical cost
convention, modified by the revaluation of certain tangible fixed assets, and in
accordance with applicable accounting standards.
b) Basis of preparation
The financial statements have been prepared on a going concern basis. The group
is projected to generate further losses for the year to 30 June 2008. However,
having considered the budgets for the year ahead and the resources available to
the Group, the directors consider that the group will be able to manage its
financial position within current available funding facilities.
Certain shareholders of the Group have specifically agreed to make a short term
facility of up to #2 million available to the Group. This will, together with
existing facilities available to the Group, enable it to meet its projected
financial obligations as they fall due.
The financial statements do not include any adjustments that would result from
the going concern basis of preparation being inappropriate.
c) Basis of consolidation
The consolidated financial statements include the financial statements of the
Company and its subsidiary undertaking made up to 30 June 2007.
The acquisition method of accounting has been adopted. Under this method, the
results of subsidiary undertakings acquired or disposed of in the year are
included in the consolidated profit and loss account from the date of
acquisition or up to the date of disposal.
Under section 230(4) of the Companies Act 1985 the Company is exempt from the
requirement to present its own profit and loss account.
d) Investments
In the Company's financial statements investments in subsidiary undertakings are
stated at cost less amounts written off for any permanent diminution in value.
e) Player registrations and signing on fees
Transfer fees and amounts paid to third parties for player registrations are
capitalised as intangible fixed assets and are amortised on a straight line
basis over the period of the respective player's initial contract. Any transfer
fees payable as a result of the occurrence of one or more uncertain future
events are capitalised when it is probable such an event will occur.
Player registrations are assessed on an annual basis and impairment losses
arising are charged to the profit and loss account in the period in which they
arise. Any surpluses arising are not accounted for.
Player signing on fees have been expensed to the profit and loss account as
wages and salaries over the period to which they relate. The profit/(loss) on
the disposal of a player registration is calculated after charging any signing
on fees which become payable as a result of the disposal.
f) Depreciation
Depreciation is provided to write off the cost or valuation less the estimated
residual value of tangible fixed assets by equal instalments over their
estimated useful economic life as follows:
Freehold buildings - 50 years
Leasehold land and buildings - 50 years
Plant and equipment - 4 to 40 years
No depreciation is provided on freehold land.
Notes (continued)
1 Accounting policies (continued)
g) Grants
Grants in respect of capital expenditure on assets which are depreciated are
treated as deferred income, a portion of which is transferred to revenue
annually over the estimated useful life of the asset. Grants are recognised in
the financial statements when they are received.
h) Leases
Assets acquired under finance leases and similar hire purchase contracts are
capitalised and the outstanding future lease obligations are shown in creditors.
Operating lease rentals are charged to the profit and loss account on a
straight line basis over the period of the lease.
i) Stocks
Stocks, which comprise goods for resale, are stated at the lower of cost and net
realisable value. Cost is determined on a first-in-first-out basis.
j) Related party transactions
The directors have taken advantage of the exemption in Financial Reporting
Standard 8, paragraph 3(a) and have not disclosed transactions or balances with
Group entities that have been eliminated on consolidation.
k) Turnover
Turnover comprises income from television rights, gate receipts, merchandising
sales, sponsorships and other commercial activities, exclusive of value added
tax.
All income is recognised in the season to which it relates. Season ticket
income in respect of the 2007/08 season is included in deferred income.
l) Pension costs
The Group pays contributions to personal money purchase schemes for eligible
employees and accounts for the amount due in each year as a cost to the profit
and loss account.
m) Taxation
The charge for taxation is based on the profit or loss for the year and takes
into account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes. Deferred tax
is recognised, without discounting, in respect of all timing differences between
the treatment of certain items for taxation and accounting purposes which have
arisen but not reversed by the balance sheet date, except as otherwise required
in FRS 19.
Notes (continued)
2 Turnover
Turnover derives from the Group's principal activities and arises wholly within
the UK.
3 Loss on ordinary activities before taxation
PRIVATE 2007 2006
#000 #000
This is stated after charging/(crediting):
Auditors' remuneration:
Audit fees 13 12
Other fees paid to the auditors and their 2 2
associates (taxation services)
Provision for potential VAT/NI liabilities 49 204
Amortisation of player registrations 1,171 782
Depreciation 463 468
Release of grants (56) (56)
Profit on disposal of player registrations 1,420 4,387
Operating lease rentals 4 4
Auditors remuneration for the audit of the parent company is #11,000 (2006:
#10,000).
4 Profit on sale of fixed assets
The net profit on disposal of player registrations relates principally to the
sale of Tyrone Mears to West Ham United and Carlo Nash to Wigan Athletic.
In addition, there was further money receivable on the earlier sales of Claude
Davis to Sheffield United and Dickson Etuhu to Norwich City. These amounts were
receivable as Claude and Dickson reached the required number of appearances for
their new clubs specified in their transfer agreements.
5 Annual Report
The annual report has been sent to shareholders today. Additional copies are
available from the Company's website www.pne.com
6 Annual General Meeting
The Annual General Meeting of the Company will be held at 6.30pm on 17th
December 2007 at The Great Room, Deepdale Stadium, Sir Tom Finney Way, Deepdale,
Preston, PR1 6RU
This information is provided by RNS
The company news service from the London Stock Exchange
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