TIDMPNE
RNS Number : 6436P
Preston North End PLC
27 March 2009
?
Preston North End plc
("Preston North End" or the "Company")
Interim Results for the six months ended 31 December 2008
Chairman's Statement
On behalf of the Board of Directors of Preston North End plc, I am pleased to
present the Group's interim results for the six months ended 31 December 2008.
Introduction
The operating and financial climate has been particularly challenging in the
first six months of the current financial year. Whilst turnover was 5% lower
than the same six month period in 2007, wages have increased by 26%. This
reflects both wages of new players added to the squad at the start of this
season and also contractual rises for players who were already in the squad.
This has inevitably contributed to an increased operating loss of GBP3.14m,
GBP1.35m higher than the loss generated in the six months to December 2007.
In addition to the operating losses, we made cash payments of GBP1.4m to other
clubs for players purchased both in the current and previous financial periods.
The resulting cash requirement has continued to far outweigh the income
generated by the Group with the consequence that the Club has required
significant further amounts of external finance from its major shareholders. The
Board remain extremely grateful for this support which has also extended into
the second half of the financial year.
Football
Alan Irvine and his backroom staff have continued to deliver good results on the
pitch. At the time of writing the Club is just outside the play-off positions in
the Championship Division. Given our limited financial resources this is an
excellent achievement.
In the first six months of the year we signed two new players on permanent
contracts. Jon Parkin joined us from Stoke City and Stephen Elliott joined from
Wolverhampton Wanderers. In addition we signed two players on loan. Ross
Wallace signed from Sunderland and Eddie Nolan from Blackburn Rovers. Both of
these loan deals have subsequently been made permanent transfers and all four
players have made a significant contribution to the Club's current success this
season.
In the same transfer window, Matt Hill left the Club to join Wolverhampton
Wanderers. Having made over a hundred appearances for Preston North End, I wish
Matt every success at Wolves.
One particular highlight of the season so far was the Club's FA Cup game against
Liverpool. Despite losing the game, it was fantastic to see the stadium so full,
especially as the Invincibles Pavilion had only been completed for the start of
this season. Such games also provide a valuable financial benefit, although
this will fall into the second half of the financial year.
I am pleased to report on the continued progress of the Youth Development
Department under the guidance of Dean Ramsdale, Director of Youth. We have
already granted two Youth Team players - Danny Mayor and Adam Barton -
two-and-a-half year professional contracts. The early completion of these
arrangements and the fact that they are longer contracts reflects the
significant progress made by these players and the potential they have
demonstrated during their Scholarship period at the Club. Since the year end we
have also granted a further two-and-a-half year professional contract to Dominic
Collins and one year contracts to Philip Quirk and Tom Smyth. I wish all these
players well in their professional careers and hope that they will ultimately
make First Team appearances for the Club.
Other activities
The end of the first six month period saw the completion of the Long Term
Conditions Health Centre - named the Minerva Health Centre - to be occupied by
NHS Central Lancashire. The partnership between the Club and the Primary Care
Trust has enabled us to complete the final side of the Deepdale Stadium. I was
delighted that Her Royal Highness The Princess Royal was able to attend to open
the Minerva Health Centre in January and the subsequent dinner to support The
Princess Royal Trust for Carers was a huge success.
We have commenced a number of new commercial partnerships in the current season.
Our partnerships with The New Football Pools and Westinghouse are well
established in the stadium. These and other commercial and hospitality clients
continue to generate valuable revenue for the Club, for which the Board continue
to be grateful.
Finally, I would like to formally thank our staff and most importantly our
dedicated fans for their continued support.
Derek Shaw
Chairman Consolidated income statement
for the six months ended 31 December 2008
+----------------------------------------+------------+------------+------------+
| | 6 months | 6 months | 12 months |
| | to | to | to |
| | 31 | 31 | 30 June |
| | December | December | 2008 |
| | 2008 | 2007 | |
+----------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | | | |
+----------------------------------------+------------+------------+------------+
| Revenue | 4,034 | 4,248 | 8,455 |
+----------------------------------------+------------+------------+------------+
| Staff costs | (5,723) | (4,543) | (8,991) |
+----------------------------------------+------------+------------+------------+
| Other operating charges | (1,454) | (1,494) | (2,847) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Loss from operations before player | (3,143) | (1,789) | (3,383) |
| trading and amortisation | | | |
+----------------------------------------+------------+------------+------------+
| Depreciation and amortisation of | (1,336) | (968) | (2,731) |
| player registrations | | | |
+----------------------------------------+------------+------------+------------+
| Profit on disposal of players' | 274 | 4,834 | 5,740 |
| registrations | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| (Loss)/profit from operations | (4,205) | 2,077 | (374) |
+----------------------------------------+------------+------------+------------+
| Finance income | - | 75 | - |
+----------------------------------------+------------+------------+------------+
| Finance expenses | (557) | (337) | (733) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| (Loss)/profit before taxation | (4,762) | 1,815 | (1,107) |
+----------------------------------------+------------+------------+------------+
| Taxation | - | - | 83 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| (Loss)/profit for the period | (4,762) | 1,815 | (1,024) |
| attributable to equity holders of the | | | |
| parent | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| (Loss)/earnings per share (basic and | (144.5)p | 55.1p | (31.1)p |
| diluted) | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
Consolidated statement of changes in equity
for the six months ended 31 December 2008
+----------------------------------------------------+---------+---+----------+
| | Share | | Profit |
| | premium | | and loss |
| | account | | account |
+----------------------------------------------------+---------+---+----------+
| | GBP000 | | GBP000 |
+----------------------------------------------------+---------+---+----------+
| | | | |
+----------------------------------------------------+---------+---+----------+
| At 1 July 2008 | 7,051 | | (10,086) |
+----------------------------------------------------+---------+---+----------+
| Loss for the period | - | | (4,762) |
+----------------------------------------------------+---------+---+----------+
| | | | |
+----------------------------------------------------+---------+---+----------+
| At 31 December 2008 | 7,051 | | (14,848) |
+----------------------------------------------------+---------+---+----------+
| | | | |
+----------------------------------------------------+---------+---+----------+
Consolidated balance sheet
as at 31 December 2008
+----------------------------------------+------------+------------+------------+
| | 31 | 31 | 30 June |
| | December | December | 2008 |
| | 2008 | 2007 | |
+----------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | | | |
+----------------------------------------+------------+------------+------------+
| Non-current assets | | | |
+----------------------------------------+------------+------------+------------+
| Intangible assets | 3,849 | 2,494 | 3,817 |
+----------------------------------------+------------+------------+------------+
| Property, plant and equipment | 20,406 | 12,490 | 17,723 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total non-current assets | 24,255 | 14,984 | 21,540 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Current assets | | | |
+----------------------------------------+------------+------------+------------+
| Inventories | 310 | 364 | 277 |
+----------------------------------------+------------+------------+------------+
| Trade and other receivables | 3,067 | 4,865 | 5,452 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total current assets | 3,377 | 5,229 | 5,729 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total assets | 27,632 | 20,213 | 27,269 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Current liabilities | | | |
+----------------------------------------+------------+------------+------------+
| Bank overdraft | (13,710) | (5,331) | (10,210) |
+----------------------------------------+------------+------------+------------+
| Other interest-bearing loans and | (385) | - | (600) |
| borrowings | | | |
+----------------------------------------+------------+------------+------------+
| Trade and other payables | (4,473) | (3,032) | (6,018) |
+----------------------------------------+------------+------------+------------+
| Deferred income | (1,874) | (1,415) | (2,264) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total current liabilities | (20,442) | (9,778) | (19,092) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Non-current liabilities | | | |
+----------------------------------------+------------+------------+------------+
| Other interest-bearing loans and | (8,421) | (3,914) | (4,776) |
| borrowings | | | |
+----------------------------------------+------------+------------+------------+
| Trade and other payables | (472) | (920) | (661) |
+----------------------------------------+------------+------------+------------+
| Deferred income | (2,422) | (2,042) | (2,103) |
+----------------------------------------+------------+------------+------------+
| Deferred tax liabilities | (376) | (459) | (376) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total non-current liabilities | (11,691) | (7,335) | (7,916) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total liabilities | (32,133) | (17,113) | (27,008) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Net (liabilities)/assets | (4,501) | 3,100 | 261 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Equity | | | |
+----------------------------------------+------------+------------+------------+
| Share Capital | 3,296 | 3,296 | 3,296 |
+----------------------------------------+------------+------------+------------+
| Share premium | 7,051 | 7,051 | 7,051 |
+----------------------------------------+------------+------------+------------+
| Retained earnings | (14,848) | (7,247) | (10,086) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Total equity | (4,501) | 3,100 | 261 |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
Consolidated Cash Flow Statement
for the six months ended 31 December 2008
+----------------------------------------+------------+------------+------------+
| | 6 months | 6 months | Year to |
| | to | to | 30 June |
| | 31 | 31 | 2008 |
| | December | December | |
| | 2008 | 2007 | |
+----------------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
| | | | |
+----------------------------------------+------------+------------+------------+
| Cash flows from operating activities | | | |
+----------------------------------------+------------+------------+------------+
| Profit/(loss) for the period | (4,762) | 1,815 | (1,107) |
+----------------------------------------+------------+------------+------------+
| Adjustments for: | | | |
+----------------------------------------+------------+------------+------------+
| Depreciation, amortisation and | 1,336 | 970 | 2,731 |
| impairment | | | |
+----------------------------------------+------------+------------+------------+
| Finance expense | 557 | 337 | 733 |
+----------------------------------------+------------+------------+------------+
| Finance income | - | (75) | - |
+----------------------------------------+------------+------------+------------+
| Gain on sale of intangible assets | (274) | (4,834) | (5,740) |
+----------------------------------------+------------+------------+------------+
| Capital grants release | (28) | (29) | (58) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| | (3,171) | (1,816) | (3,441) |
+----------------------------------------+------------+------------+------------+
| (Increase)/decrease in trade and | 188 | (41) | (461) |
| other receivables | | | |
+----------------------------------------+------------+------------+------------+
| (Increase)/decrease in inventories | (33) | (31) | 55 |
+----------------------------------------+------------+------------+------------+
| Increase/(decrease) in trade and | (493) | (808) | (232) |
| other payables | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| | (3,509) | (2,696) | (4,079) |
+----------------------------------------+------------+------------+------------+
| Interest paid | (456) | (200) | (550) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Net cash from operating activities | (3,965) | (2,896) | (4,629) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Cash flows from investing activities | | | |
+----------------------------------------+------------+------------+------------+
| Acquisition of intangible assets | (1,433) | (1,548) | (2,841) |
+----------------------------------------+------------+------------+------------+
| Proceeds from sale of intangible | 2,444 | 2,250 | 2,980 |
| assets | | | |
+----------------------------------------+------------+------------+------------+
| Acquisition of property, plant and | (4,042) | (1,212) | (5,115) |
| equipment | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Net cash flow from investing | (3,031) | (510) | (4,976) |
| activities | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Cash flows from financing activities | | | |
+----------------------------------------+------------+------------+------------+
| Proceeds from new loans | 3,502 | 3,914 | 4,690 |
+----------------------------------------+------------+------------+------------+
| Repayment of finance lease liabilities | (6) | - | |
+----------------------------------------+------------+------------+------------+
| Repayments of borrowings | - | (544) | - |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Net cash flows from financing | 3,496 | 3,370 | 4,690 |
| activities | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Net decrease in cash and cash | (3,500) | (36) | (4,915) |
| equivalents | | | |
+----------------------------------------+------------+------------+------------+
| Cash and cash equivalents at start of | (10,210) | (5,295) | (5,295) |
| period | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Cash and cash equivalents at end of | (13,710) | (5,331) | (10,210) |
| period | | | |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Analysed as: | | | |
+----------------------------------------+------------+------------+------------+
| Cash and cash equivalents | - | - | - |
+----------------------------------------+------------+------------+------------+
| Bank overdraft | (13,710) | (5,331) | (10,210) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
| Closing cash and cash equivalents | (13,710) | (5,331) | (10,210) |
+----------------------------------------+------------+------------+------------+
| | | | |
+----------------------------------------+------------+------------+------------+
Notes to the accounts
For the six months ended 31 December 2008
1 Basis of preparation
The interim financial statements for the 6 months ended 31 December 2008 and 6
months ended 31 December 2007 have not been audited. In relation to the
financial statements for the year ended 30 June 2008, this has been extracted
from the financial information taken from the Group's statutory accounts for
that financial year.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from those results.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
The accounting policies have been applied consistently to all periods presented
in these consolidated financial statements.
Going concern
The financial statements have been drawn up on a going concern basis which the
directors believe to be appropriate for the following reasons:
The directors acknowledge that, in common with many clubs in the Championship,
the football club is likely to continue making operating losses. Therefore the
group and company remain reliant on its ability to secure appropriate financing.
The support of the company's shareholders has been evident for many years.
During the period shareholder loans increased from GBP5.1m to GBP8.4m and since
the period end a further GBP1.6m has been made available to the company. The
terms of these total loans have now been formally documented which commits the
funds until January 2010 and the shareholders have indicated that they may be
extended thereafter if necessary. In addition, the bank overdraft facility of
GBP6m is currently under review for renewal for a period of not less than six
months. The Board are currently not in possession of any information that would
lead the Directors to believe that an extension would not be granted.
The company has prepared outline cash flow forecasts for the period to 30 June
2010. Those forecasts show that the group and company does not currently have
facilities in place to fund all of its projected cash requirements over the next
twelve months. However, as in previous years, those forecasts have been prepared
on a prudent basis.
Unlike previous seasons the company has not sought to secure guaranteed finance
to fund its cash flow projections in full for the forthcoming twelve months,
given the high level of variables involved and the cost of securing additional
facilities that may not be required. The directors are confident that sufficient
additional funds will be sourced should they be required, including player sales
or the securitisation of future income entitlements.
If further shareholder funding is not available in the future then the directors
will seek to manage the group's resources accordingly. As in previous years the
directors continue to seek to increase the income of the company whilst
controlling costs.
Whilst the directors believe the going concern basis is appropriate, the fact
that the company does not currently have facilities in place to fund all of its
projected cash requirements over the next twelve months may cast significant
doubt on the group and company's ability to continue as a going concern. The
company may therefore be unable to continue realising its assets and discharging
its liabilities in the normal course of business but the financial statements do
not include any adjustments that would result from the basis of preparation
being inappropriate.
2 Status of financial information
The comparative figures for the year ended 30 June 2008 are not the Group's
statutory accounts for that financial year. Those accounts, which were prepared
under IFRS have been reported on by the Group's auditors and delivered to the
registrar of companies.
The report of the Auditor was (i) unqualified, (ii) included a reference to
going concern to which the auditors drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under section
237(2) or (3) of the Companies Act 1985
3 Taxation
There is no charge for the period. This is based on the anticipated effective
rate for the year ending 30 June 2009.
4 (Loss)/earnings per share
The loss per share of 144.5p (2007: earnings per share of 55.1p) has been
calculated by dividing the loss for the period of GBP4,762,000 (2007:profit for
the period of GBP1,815,000) by 3,295,679 (2007: 3,295,679), being the weighted
average number of ordinary shares.
For more information please contact:
Kevin Abbott, Preston North End: 0844 856 1964
David Youngman, WH Ireland Limited: 0161 832 2174
This information is provided by RNS
The company news service from the London Stock Exchange
END
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