RNS Number:1001R
Watford Leisure PLC
31 March 2008
31 March 2008
Watford Leisure PLC
("Watford Leisure" or the "Company")
Unaudited Interim Results for the six months ended 31 December 2007
Chairman's Statement
General overview
I am pleased to report that the results for the six-month period ended 31
December 2007 show a profit before taxation of £4,144,404 against a profit of
£1,383,017 for the equivalent period last year.
Following relegation from the Premier League last season, the period under
review has seen Watford Football Club ("the Club") competing once again in the
Championship. With hindsight I think it is fair to say that the Club was simply
not prepared for sustained Premiership football last season and we went through
a difficult learning process. However both the players and management team
gained invaluable experience and the Club took advantage of the opportunity to
invest both in its playing staff and in the Club infrastructure more generally.
We did not want to lose momentum so the decision was taken at the start of this
season to try and maintain, as far as possible, the current playing squad in
order to give the Club the best possible chance of securing promotion back into
the Premiership at the earliest opportunity.
At the Club, the home fans are now making good use of the new concourse
facilities in the Rookery Stand and our corporate customers are enjoying the new
hospitality suites in the Rous Stand. Construction of the key worker housing
units at the back of the Rookery Stand continues apace. The work also extends to
the development of the "shell and core" for the south-west corner, the infill
for which will be constructed during the latter months of 2008. This will enable
us to move the current changing rooms and other matchday facilities out of the
East Stand into the south-west corner and ultimately to re-build the East Stand.
Financial Results
The profit on ordinary activities after taxation was £3,754,404 (2006:
£1,383,017 profit).
Revenue for the first six months of the year was £11,269,805 (2006: £13,976,538)
- a decrease of £2,706,733. This is due primarily to the drop in league funding.
In addition the average match attendance to date in the Championship this season
is 16,786 versus 18,882 last season in the Premiership. The drop in average
attendances flows through into lower ticket sales and to a lesser extent lower
matchday catering income (albeit the home supporters are currently spending more
per head in the kiosks on matchdays).
Cost of sales increased period on period by £2,032,841 which is driven by higher
footballing costs and an increased amortisation charge on capitalised players'
registrations. Administrative expenses increased by £1,065,853 to £3,336,776 as
a result of additional costs relating to the new office in Tolpits Lane, a
higher depreciation charge following significant capital investment in the
stadium last year as well as increased staff costs.
The profit on disposal of players' registrations of £3,941,635 is comprised
primarily of the profit arising on the sale of Hameur Bouazza's registration to
Fulham FC in August 2007 together with appearance and sell-on payments for
players transferred in previous seasons. The exceptional income of £4,558,008
relates to the lease premium received in connection with the 125 year lease
granted by the Club to the St. Pancras & Humanist Housing Association for the
key worker housing units at the rear of the Rookery Stand. Given the length of
the lease, the transaction is being treated as an outright disposal and
recognised in full in the Income Statement in the year of receipt.
The Team and Football Management
The team did not progress very far in either the Carling Cup or FA Cup
competitions being knocked out at the second and fourth round stages
respectively. In some respects this has been a blessing in disguise as our
primary focus this season has always been to finish in one of the two top places
in the Championship and thereby achieve automatic promotion.
In January 2008 Marlon King was transferred to Wigan. To many observers this may
have seemed to be a strange decision given Marlon's undoubted scoring and
all-round football abilities. However Marlon had decided that the time was right
for him to move to another club and we decided, with regret, not to stand in his
way. The transfer cash received enabled us to strengthen our squad with the
purchase of John Eustace, Leigh Bromby and Matt Sadler all of whom have made a
significant and immediate impact to the team's performances.
In addition, we also we received the news in January that Al Bangura had won his
fight to remain in the United Kingdom following the grant of a work permit. Many
people worked tirelessly on his and our behalf not least Claire Ward, Watford's
MP. I am delighted with the outcome and thank all those supporters in Watford
and beyond who helped keep up the pressure on the relevant authorities.
Currently the team is well-placed to compete for one of the automatic promotion
places. The Championship is proving to be a very competitive league and a number
of teams have a realistic chance of achieving promotion. With Aidy Boothroyd,
his management team and the current squad of players, I believe we have a great
chance of returning to the Premiership.
I would like to take this opportunity to thank Keith Burkinshaw, who recently
stepped down as Assistant Manager, for his contribution to the success of the
Club over the last three years.
Other Developments and Future Prospects
It is fitting that the Club was recently named Community Club of the Year for
2008 at the Football League Awards recognising its achievement in the local
community. Watford Football Club has long since been recognised for its
outstanding work in not just Watford, but also the rest of Hertfordshire and
beyond. To be named Community Club of the Year is one of the great honours and
serves to highlight just how dedicated, committed and talented our group of
staff are at Vicarage Road. Particular congratulations must go to Community
Director Julian Winter and Head of Community Development Rob Smith, who have led
their team to this prestigious award.
Furthermore, we were also delighted to be honoured by the High Sheriff of
Hertfordshire for our contribution to the county with our pioneering Positive
Futures campaign, which works to eradicate anti-social behaviour and crime in
the locality. Our CEO, Mark Ashton, also received a personal award for his
contribution to community work.
Work on our stadium continues to provide a positive outlook for the future. As
mentioned previously improvements to the Rookery and Rous Stands have
significantly enhanced the matchday experience of supporters accommodated in
these areas. In the south-west corner we are providing new facilities for
playing and management staff, as well as the media, whilst plans for a new East
Stand have been submitted to Watford Borough Council for approval.
The aforementioned development work sits alongside the ongoing plans for the
£1bn Watford Health Campus project. The Club is proud to be a partner in what
widely regarded to be Watford's most important single development which is
currently in the planning submission stage with an outcome anticipated in the
coming months. The Campus project will result in a significantly enhanced west
Watford, a new state-of-the-art acute hospital for Hertfordshire and improved
transport links, both to and from the existing hospital and Club site, which
will provide huge potential for the Club on matchdays and non-matchdays alike.
As always we are looking to improve the Club's future prospects and my thanks go
out to all our staff, fans and others involved in the Club for your ongoing
commitment and support.
GRAHAM SIMPSON
Chairman
31 March 2008
WATFORD LEISURE PLC
Consolidated income statement for the half year ended 31 December 2007
Unaudited Unaudited
half year half year
Unaudited
ended ended year
ended
31 December 31 December 30
June
2007 2006
2007
£ £
£
Revenue 11,269,805 13,976,538
29,911,673
Cost of sales 12,378,119 10,345,278
23,302,773
---------- ---------- ----------
Gross (loss) / profit (1,108,314) 3,631,260
6,608,900
Administrative expenses 3,336,776 2,270,923
6,773,307
---------- ---------- ----------
(4,445,090) 1,360,337
(164,407)
Other operating income 274,470 220,220
426,138
---------- ---------- ----------
Operating (loss) / profit (4,170,620) 1,580,557
261,731
Premium received on grant of long lease 4,558,008 -
-
Profit on disposal of players' registrations 3,941,635 22,500
7,956,784
Financing income 48,693 45,388
92,975
Financing costs (233,312) (265,428)
(348,014)
---------- ---------- ----------
Profit before taxation 4,144,404 1,383,017
7,963,476
Taxation (390,000) -
-
---------- ---------- ----------
Profit for the period 3,754,404 1,383,017
7,963,476
========== ==========
==========
Attributable to :
Equity holders of the parent 3,603,211 1,330,289
7,634,646
Minority interests 151,193 52,728
328,830
---------- ---------- ----------
Profit for the period 3,754,404 1,383,017
7,963,476
========== ========== ==========
Earnings per 1p share (basic and diluted) 8.6p 3.0p
17.4p
========== ==========
==========
None of the company's activities was acquired or discontinued during the above financial
periods.
The company has no recognised gains or losses other than those included in the results above
and therefore no separate statement of total recognised gains and losses has been presented.
Consolidated balance sheet at 31 December 2007
Unaudited Unaudited Unaudited
31 December 31 December 30 June
2007 2006 2007
£ £ £
Non-current assets
Property, plant and equipment 13,926,052 9,112,461 11,853,766
Intangible assets 10,110,739 5,978,809 8,522,521
---------- ---------- ----------
24,036,791 15,091,270 20,376,287
---------- ---------- ----------
Current assets
Inventories 215,491 322,602 157,420
Trade and other receivables 4,440,711 1,815,728 5,719,927
Cash at bank and in hand 1,367,586 66,861 569,550
---------- ---------- ----------
6,023,788 2,205,191 6,446,897
---------- ---------- ----------
Total assets 30,060,579 17,296,461 26,823,184
---------- ---------- ----------
Non-current liabilities
Convertible Loan Notes 2009 592,000 667,000 592,000
Bank loan 60,068 184,074 116,964
Trade and other payables 1,675,388 1,034,693 1,162,601
Deferred taxation 390,000 - -
Other financial liabilities 831,782 831,782 831,782
---------- ---------- ----------
3,549,238 2,717,549 2,703,347
---------- ---------- ----------
Current liabilities
Bank overdraft - 1,021,371 2,460,735
Bank loan 5,113,434 91,355 110,084
Trade and other payables 7,284,075 6,846,575 11,330,210
Other financial liabilities 75,000 2,547,500 2,047,500
Deferred income 4,670,735 5,038,877 2,557,615
---------- ---------- ----------
17,143,244 15,545,678 18,506,144
---------- ---------- ----------
Total liabilities 20,692,482 18,263,227 21,209,491
========== ========== ==========
Net assets 9,368,097 (966,766) 5,613,693
========== ========== ==========
Equity
Capital and reserves
Called up share capital 438,857 438,857 438,857
Special reserve 10,650,875 10,650,875 10,650,875
Retained deficit (1,634,784) (11,542,352) (5,237,995)
---------- ---------- ----------
Equity attributable to equity holders of 9,454,948 (452,620) 5,851,737
the parent
Minority interests (86,851) (514,146) (238,044)
---------- ---------- ----------
Total equity 9,368,097 (966,766) 5,613,693
========== ========== ==========
Consolidated cash flow statement for the half year ended 31 December 2007
Unaudited Unaudited Unaudited
half year half year year ended
ended ended
31 December 31 December 30 June
2007 2006 2007
£ £
£
Operating activities
Profit before tax 4,144,404 1,383,017 7,963,476
Amortisation of intangible fixed assets 2,185,341 1,172,629 3,239,813
Depreciation of property, plant and equipment 354,042 102,358 267,513
Net loss / (profit) on disposal of sundry 2,409 - 8,927
fixed assets
Profit on disposal of players' registrations (3,941,635) (22,500) (7,956,784)
Premium received on grant of long lease (4,558,008) - -
Financing income (48,693) (45,388) (92,975)
Financing costs 233,312 265,428 348,014
Increase in inventories (58,071) (191,480) (26,298)
(Increase) / decrease in receivables (682,534) 548,007 1,155,558
Increase in payables and deferred income 927,352 1,258,013 172,697
---------- ---------- ----------
Cash generated from operations (1,442,081) 4,470,084 5,079,941
---------- ---------- ----------
Cash flows from investing activities
Purchase of intangible fixed assets (5,032,378) (2,849,054) (5,457,191)
Purchase of property, plant and equipment (3,559,719) (1,184,889) (2,915,957)
Proceeds from sale of intangible fixed assets 5,934,788 149,750 3,668,000
Proceeds from sale of leasehold interest 4,558,008 - 5,131
---------- ---------- ----------
Net cash generated by / (used in) investing 1,900,699 (3,884,193) (4,700,017)
activities
---------- ---------- ----------
Financing activities
Advances / (repayments) of debt 2,973,954 (1,818,356) (2,441,737)
Interest received 48,693 45,388 92,975
Interest paid (222,494) (218,184) (373,098)
---------- ---------- ----------
Net cash generated by / (used in) financing 2,800,153 (1,991,152) (2,721,860)
activities
---------- ---------- ----------
Net increase / (decrease) in cash
and cash equivalents 3,258,771 (1,405,261) (2,341,936)
Cash and cash equivalents at start of period (1,891,185) 450,751 450,751
---------- ---------- ----------
Cash and cash equivalents at end of period 1,367,586 (954,510) (1,891,185)
========== ========== ==========
Cash and cash equivalents consist :
Cash at bank and in hand 1,367,586 66,861 569,550
Bank overdraft - (1,021,371) (2,460,735)
---------- ---------- ----------
Total 1,367,586 (954,510) (1,891,185)
========== ========== ==========
Consolidated statement of changes in equity for the half year ended 31 December 2007
Attributable to equity holders of the parent Minority
Total
Share Special Retained interest
capital reserve earnings Total
£ £ £ £ £
£
Equity shareholders' 438,857 10,650,875 (12,872,641) (1,782,909) (566,874)
(2,349,783)
funds at 1 July 2006
Profit for the period - - 1,330,289 1,330,289 52,728
1,383,017
------- ------- ------- ------- -------
-------
Equity shareholders' 438,857 10,650,875 (11,542,352) (452,620) (514,146)
(966,766)
funds at 31 December
2006
Profit for the period - - 6,304,357 6,304,357 276,102
6,580,459
------- ------- ------- ------- -------
-------
Equity shareholders' 438,857 10,650,875 (5,237,995) 5,851,737 (238,044)
5,613,693
funds at 30 June 2007
Profit for the period - - 3,603,211 3,603,211 151,193
3,754,404
------- ------- ------- ------- -------
-------
Equity shareholders' 438,857 10,650,875 (1,634,784) 9,454,948 (86,851)
9,368,097
funds at 31 December
2007 ======= ======= ======= ======= =======
=======
NOTES TO THE FINANCIAL STATEMENTS
1. The annual financial statements of the Group to 30 June 2008 are required to
be prepared in accordance with International Financial Reporting Standards
("IFRS"). This Interim Report, comprising a Consolidated Income Statement,
Consolidated Balance Sheet, Consolidated Statement of Changes in Equity,
Consolidated Cash Flow Statement and accompanying notes, has been prepared
in accordance with the recognition and measurement criteria of IFRS and the
AIM rules save that the Group has elected not to adopt IAS34, Interim
Reports. These IFRS interim financial statements do not include all the
information required for full IFRS financial statements.
The interim results do not constitute the statutory accounts within the meaning
of s240 of the Companies Act 1985. The financial information in this report for
the six months to 31 December 2007 and 31 December 2006 has not been audited.
The comparative figures for the year ended 30 June 2007 are extracted from the
Group's audited financial statements for that period as filed with the Registrar
of Companies and restated for IFRS. It does not constitute the financial
statements for that period. Those accounts received an unqualified audit report
which did not contain any statement under sections 237 (2) or (3) of the
Companies Act 1985.
The financial statements for the interim period have been prepared in accordance
with policies which the Group will adopt for its 2008 financial statements.
2. Taxation
The taxation charge for the six months to 31 December 2007 is £390,000 (2006:
£NIL). During the period, a premium was received on the granting of a long
lease. This represents a capital disposal for tax purposes, the taxable gain on
which will be deferred through effecting a roll-over into other assets of the
club which are either already owned or which are to be acquired within the
requisite period. The resulting reduction in the tax cost of the assets into
which the gain has been deferred gives rise to a temporary difference between
the tax cost and the accounting book value of these assets. This temporary
difference is required to be recognised under International Accounting Standard
12, "Income Taxes", even though it is the club's intention that this liability
be deferred for the foreseeable future.
3. Earnings per Share
Unaudited Unaudited
Unaudited
half year ended half year ended year
ended
31 December 31 December 30
June
Earnings per ordinary share have been calculated 2007 2006
2007
as follows: £ £
£
Profit for the financial period £ 3,754,404 £ 1,330,289 £
7,634,646
========= =========
=========
Weighted average number of shares in issue 43,885,693 43,885,693
43,885,693
========= =========
=========
Earnings per ordinary share 8.6p 3.0p
17.4p
========= =========
=========
4. Analysis of changes in net debt
Unaudited Unaudited Unaudited
Unaudited
At 30 June Cash flows Other changes At 31
2007 December
2007
£ £ £
£
Cash at bank and in hand 569,550 798,036 -
1,367,586
Bank overdraft (2,460,735) 2,460,735 -
-
---------- ---------- ----------
----------
Net cash at bank and in hand (1,891,185) 3,258,771 -
1,367,586
---------- ---------- ----------
----------
Bank loans due within 1 year (110,084) (4,946,454) (56,896)
(5,113,434)
Other loans due within 1 year (2,047,500) 1,972,500 -
(75,000)
Loan notes 2009 (592,000) - -
(592,000)
Bank loans due after than 1 year (116,964) - 56,896
(60,068)
Other loans due after 1 year (831,782) - -
(831,782)
---------- ---------- ---------- ----------
(3,698,330) (2,973,954) -
(6,672,284)
---------- ---------- ----------
----------
Net cash/(debt) (5,589,515) 284,817 -
(5,304,698)
========== ========== ========== ==========
5. Transition to International Financial Reporting Standards ("IFRS")
As stated in note 1 above, the annual financial statements for the year ending
30 June 2008 will be prepared in accordance with IFRS. IFRS 1 "First time
adoption of IFRS" requires the disclosure of the effect of adopting IFRS on
figures previously reported under UK GAAP. At 30 June 2006, 31 December 2006 and
30 June 2007 and for the financial periods ended on those dates, there is no
financial effect of adopting IFRS on the previously reported UK GAAP figures. No
reconciliation is therefore presented.
Enquiries:
Watford Leisure PLC Tel: 01923 496 000
Graham Simpson - Chairman
Mark Ashton - Chief Executive Officer
Alastair Ferguson - Finance Director
Strand Partners Limited Tel: 0207 409 3494
Rory Murphy / Matthew Chandler
This information is provided by RNS
The company news service from the London Stock Exchange
END
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