RNS Number:6544U
Aston Villa PLC
27 January 2004
27 January 2004
ASTON VILLA PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 NOVEMBER 2003
Aston Villa PLC announces Interim results for the six months ended 30 November
2003
Key Points:
* Turnover #19.1m (2002 : #18.0m)
* Operating loss before player amortisation and trading #5.7m (2002 :
loss #3.6m)
* Player amortisation (#6.7m) (2002 : (#7.3m))
* Loss on disposal of players #4.1m (2002 profit : #2.8m)
- mainly due to release of Alpay and Balaban
* Net debt #2.7m (2002 : Net funds #1.9m)
* Average league attendance up to 33,755 (2002 : 31,668)
In his statement to shareholders, Chairman, Doug Ellis, said:
"Our results in the early part of the season were disappointing, but since the
half-year end there has been a considerable improvement both in terms of results
and league position.
"Despite an adverse trading performance in the first half of the year our
balance sheet remains strong and is undoubtedly one of the strongest amongst our
peers in the Premier League.
"The lack of buoyancy in the transfer market has placed even greater emphasis on
commercial income and we have introduced management and operational changes to
improve our ability to identify and capitalise on the range of services and
facilities that the club has to offer."
For further information contact:
Steve Kind
Aston Villa PLC 01536 413 113
Mark Edwards / Suzanne Brocks
Buchanan Communications 020 7466 5000
Operating Results
As I have reported previously, when shareholders consider the interim results
they should appreciate that these must not be looked at as pro rata to the
remainder of the year. The results are distorted not only by the incidence of
the fixtures, which will see some of the more high profile home matches being
played in the second half of the year, but also because a higher proportion of
our income is released to the profit and loss account in the second half of the
year.
During the half-year 6 league matches and 1 cup match have taken place at Villa
Park compared with 8 league and 3 cup matches in the previous year. This has
therefore affected overall attendance figures which at 229,259 show a reduction
of 89,462 when compared to the same period last year. Despite poor league
results up to the end of November, average league attendances were up by 7% to
33,755 (2002: 31,668).
The merit award, which is based on final league position, is not taken into
account until the end of the football season. Our position of 16th place last
year resulted in a merit award of #2.5m. Our current position of 12th would be
equivalent to a merit award at the year end of #4.9m.
The results for the 6 months ended 30 November 2003 are therefore summarised as
follows:
2003 2002
#m #m
Turnover 19.1 18.0
Operating Expenses before player amortisation (24.8) (21.6)
---------- ----------
(5.7) (3.6)
Player Amortisation (6.7) (7.3)
---------- ----------
Operating Loss (12.4) (10.9)
(Loss)/Profit on Disposal of Players (4.1) 2.8
========== ==========
Loss before interest and taxation (16.5) (8.1)
========== ==========
The summary shows an Operating Loss before Player Amortisation and Trading of
#5.7m, representing an increased loss over last year of #2.1m for the equivalent
period.
Turnover has increased by #1.1m which is attributable to the release of #1.3m
income following termination of certain exclusive agency rights granted to
Premium TV(Ventures) which would otherwise have been released to the profit and
loss account in future periods. Increased income from broadcasting of #1.2m has
been eroded by reductions in other operations largely as a result of 4 less home
matches in the period compared to last year.
The Board has taken steps in the period to reduce ongoing salary costs by
agreeing the mutual termination of two player's contracts. As a result there is
a loss on disposal of players in the period of #4.1m which in the main relates
to the releases of Alpay and Balaban. However, particularly in respect of
Balaban, the Company will benefit from substantial savings in wages and future
amortisation costs. Since the end of November, Peter Enckelman has been
transferred and Mark Kinsella's contract has also been terminated by mutual
consent.
Against the backdrop of a declining player transfer market the above figures
reflect the continuing difficult financial challenges faced by the majority of
league clubs.
I have commented previously on the virtual disappearance of the transfer market
and as I write this report there has been very little actual or even anticipated
activity during the current transfer window which again is a reflection of the
difficult financial circumstances facing the majority of Clubs. Further
evidence is provided by the fact that our own transfer surpluses amounted to
#9.8m in 2001 which fell to #2.8m in 2002 and at this period end show a net loss
of #4.1m.
During the period we negotiated the combined termination of the PTV convertible
loan agreement and their exclusive agency rights (with the exception of internet
and some mobile and delayed broadcast rights) for a consideration of #2.3m. We
now have the freedom to actively pursue a range of new commercial opportunities.
Despite an adverse trading performance in the first half of the year our balance
sheet remains strong and is undoubtedly one of the strongest amongst our peers
in the Premier League. I think it is also worth reminding shareholders that
unlike the majority of other Premier League clubs, we continue to have a
relatively low level of net debt which currently stands at #431,000. In fact,
despite the losses shown above, our current borrowings are at a lower level than
those at the previous financial year end.
Playing Matters
Our results in the early part of the season were disappointing but since the
half-year end there has been a considerable improvement both in terms of results
and league position. Since the period end we have also enjoyed success in the
Carling Cup having reached the semi-final of the competition. As I write these
notes the first leg of the Semi Final against Bolton Wanderers FC has taken
place at the Reebok Stadium and having lost the match we are faced with a very
difficult second leg at Villa Park.
It has been particularly pleasing to me to see the emergence through our academy
system of Peter Whittingham, Stefan Moore and Liam Ridgewell who have become
regular members of the first team squad. The current financial position within
the game as a whole highlights the need to identify and develop talented young
players and the continued performances and achievements of our Reserve team who
are 17 points clear at the top of their league, our U19 team who have reached
the 5th round of the FA Youth Cup and our U17 team bodes well for the future.
Dividend
The Board has decided that it would not be appropriate to pay an interim
dividend.
Other Issues
In November Mark Ansell, Deputy Chief Executive and Finance Director, left the
company by mutual consent and we thank him for his service and wish him well in
the future. In December Steve Kind FCCA was appointed to the Board as a
non-executive Director and brings with him his financial expertise within the
football sector.
I have already announced that it is my intention to relinquish the position of
Chief Executive as and when a new Chief Executive is appointed. In this respect
the Board has appointed a leading firm of Executive Recruitment Consultants to
identify appropriate candidates and we have already received an extensive list
of high quality applicants.
Financial Outlook 2003/2004
Since the end of November average League attendances have continued to grow and
currently stand at 34,036. I believe that by the end of the season they will
exceed 35,000.
At the present time we have guaranteed broadcasting income for 4 live TV and 4
pay-per-view matches up to the end of March, compared to last years total of 5
and 3 respectively.
The lack of buoyancy in the transfer market has placed even greater emphasis on
commercial income and we have already introduced management and operational
changes to improve our ability to identify and capitalise on our consumer base
across the whole range of services and facilities which the club offers. It is
anticipated that the new Chief Executive will have a strong commercial
background and will be responsible for developing and implementing the overall
business strategy to meet ambitious growth targets which will build on the
changes already in place in order to achieve our full commercial potential.
The challenges are self-evident but your Board is confident that we have the
structures in place to meet those challenges positively.
ASTON VILLA PLC
CONSOLIDATED PROFIT & LOSS ACCOUNT for the 6 months ended 30 November 2003
Unaudited Audited
6 months to 12 months to
30 November 31 May
Reviewed 6 months to 30 November 2003 2002 2003
Operations
excluding
player Player
amortisation amortisation
and trading and trading Total Total Total
Notes #'000 #'000 #'000 #'000 #'000
Turnover
Match receipts 2 3,150 - 3,150 3,881 9,732
Broadcasting 2 7,985 - 7,985 6,777 17,013
Merit awards 2 - - - - 2,528
Merchandising,
associated
royalties and travel 1,932 - 1,932 1,937 3,709
Conference,
banqueting and catering 1,688 - 1,688 1,819 4,436
Executive box rentals 2 800 - 800 915 1,884
Exceptional
commercial income 8 1,349 - 1,349 - -
Other commercial
income 2 2,216 - 2,216 2,633 6,145
---------- ---------- ---------- ---------- ----------
19,120 - 19,120 17,962 45,447
Operating expenses (24,843) (6,728) (31,571) (28,901) (58,997)
---------- ---------- ---------- ---------- ----------
Operating loss (5,723) (6,728) (12,451) (10,939) (13,550)
(Loss)/profit
on disposal of
players - (4,044) (4,044) 2,853 1,913
---------- ---------- ---------- ---------- ----------
Loss before
interest and
taxation (5,723) (10,772) (16,495) (8,086) (11,637)
---------- ----------
Net interest
(payable)/rece ivable (11) 91 85
---------- ---------- ----------
Loss on ordinary
activities before
taxation (16,506) (7,995) (11,552)
Tax credit on
loss on ordinary
activities 3 - - 126
---------- ---------- ----------
Loss for the
period (16,506) (7,995) (11,426)
Dividends 5 - - -
---------- ---------- ----------
Retained loss
for the period (16,506) (7,995) (11,426)
---------- ---------- ----------
Loss per share 6 #(1.44) #(0.70) #(1.00)
Diluted loss
per share 6 #(1.44) #(0.70) #(1.00)
All activities are derived from continuing operations.
ASTON VILLA PLC
CONSOLIDATED BALANCE SHEET as at 30 November 2003
Reviewed Unaudited Audited
As at As at As at
30 November 30 November 31 May
Notes 2003 2002 2003
#'000 #'000 #'000
Fixed assets
Tangible assets 40,357 41,489 40,638
Intangible assets 2 18,197 31,601 24,793
---------- ---------- ----------
58,554 73,090 65,431
========== ========== ==========
Current assets
Stocks 959 882 387
Debtors 6,876 9,884 6,846
Cash at bank and in hand 63 1,883 50
---------- ---------- ----------
7,898 12,649 7,283
Creditors - amounts falling due
within one year (15,336) (11,705) (12,887)
---------- ---------- ----------
Net current
(liabilities)/assets (7,438) 944 (5,604)
========== ========== ==========
Total assets less
current liabilities 51,116 74,034 59,827
Creditors - amounts falling due after
more than one year (262) (337) (385)
Provision for liabilities and charges (1,046) (1,063) (1,046)
Deferred income (17,931) (18,524) (7,717)
---------- ---------- ----------
31,877 54,110 50,679
========== ========== ==========
Capital and reserves
Called up share capital 572 572 572
Share premium account 15,150 15,150 15,150
Shareholders' other funds 7 - 21,103 21,103
Profit and loss account 7 16,155 17,285 13,854
---------- ---------- ----------
Equity shareholders' funds 31,877 54,110 50,679
========== ========== ==========
ASTON VILLA PLC
CONSOLIDATED CASH FLOW STATEMENT for the 6 months ended 30 November 2003
Reviewed Unaudited Audited
6 months to 6 months to 12 months to
30 November 30 November 31 May
2003 2002 2003
#'000 #'000 #'000
Net cash inflow from operating activities 4,140 4,590 1,415
Net interest (payable)/receivable (11) 91 85
Taxation (paid)/received (2) 43 43
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (700) (805) (893)
Payments to acquire intangible fixed assets (2,562) (6,432) (9,421)
Receipts from sale of tangible fixed assets 90 - -
Receipts from sale of intangible fixed
assets 2,575 7,250 7,653
Net cash outflow from capital ---------- ---------- ----------
expenditure and financial investment (597) 13 (2,661)
========== ========== ==========
3,530 4,737 (1,118)
Equity dividends paid - (756) (756)
Net cash inflow/(outflow) before use ---------- ---------- ----------
of liquid resources and financing 3,530 3,981 (1,874)
Financing - termination of
convertible loan (2,296) - -
---------- ---------- ----------
Increase/(decrease) in cash 1,234 3,981 (1,874)
Net debt at 1 June 2003 (3,972) (2,098) (2,098)
---------- ---------- ----------
Net (debt)/funds at 30 November 2003 (2,738) 1,883 (3,972)
========== ========== ==========
Reconciliation of operating loss to net cash inflow from operating activities
Operating loss (12,451) (10,939) (13,550)
Depreciation of tangible fixed assets 948 915 1,854
Amortisation of intangible fixed assets 6,728 7,287 13,750
Profit on disposal of tangible fixed assets (57) - -
(Increase)/decrease in stocks (572) (446) 49
(Increase)/decrease in debtors (2,390) (2,360) 134
Increase/(decrease) in
creditors and deferred income 11,934 10,333 (622)
Decrease in provisions - (200) (200)
---------- ---------- ----------
4,140 4,590 1,415
========== ========== ==========
ASTON VILLA PLC
NOTES TO THE REVIEWED INTERIM RESULTS for the 6 months ended 30 November 2003
1 Basis of preparation
The interim results have been prepared on the same basis and using the same
accounting policies as those used in the preparation of the full year's
accounts to 31 May 2003.
2 Significant accounting policies
Intangible fixed assets
The cost of players' registrations is capitalised, and amortised over the
period of the respective players' contracts in accordance with FRS10
(Accounting for goodwill and intangible assets).
Signing on fees
Signing on fees payable to players are charged, as part of operating
expenses, to the profit and loss account over the period of the players'
contracts. Where a player's registration is transferred, any signing on
fees payable in respect of future periods is charged against profit or loss
on disposal of players.
Income recognition
Match ticket income is recognised over the period of the football season.
Sponsorship income and roylaties are recognised over the duration of their
respective contracts. Fixed elements of broadcasting contracts are taken
over the football season, with facility fees taken when earned. Merit
awards are taken when known at the end of the financial period.
3 Taxation
The tax rate applied to the interim loss on ordinary activities has been
based so far as practicable on the effective annual tax rate.
No deferred tax asset has been recognised in respect of unrelieved trading
losses as there is uncertainty that suitable profits will be generated in
future periods. The potential deferred tax asset not recognised amounts to
#7,200,000.
4 Consolidated statement of total recognised gains and losses
There were no recognised gains or losses in the results other than the
consolidated loss for the periods.
5 Dividends
The directors do not recommend the payment of an interim dividend.
6 Loss per share
The loss per share figures are based on the loss for the period after
taxation divided by the weighted average number of ordinary shares in
issue.
Reviewed Unaudited Audited
6 months to 6 months to 12 months to
30 November 30 November 31 May
2003 2002 2003
#'000 #'000 #'000
Loss for the period (16,506) (7,995) (11,426)
========== ========== ==========
Weighted average number of ordinary shares in issue:
Number Number Number
Undiluted and diluted 11,449,245 11,449,245 11,449,245
========== ========== ==========
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive ordinary shares. FRS14 strictly requires that potential ordinary
shares should be treated as dilutive when they increase net loss per share.
This disclosure is not given as it does not provide any meaningful
information.
7 Reserves Reviewed Unaudited Audited
6 months to 6 months to 12 months to
30 November 30 November 31 May
2003 2002 2003
#'000 #'000 #'000
Shareholders' other funds
At 1 June 2003 21,103 21,103 21,103
Consideration paid for the termination of
convertible loan agreement (2,296) - -
Surplus transferred to profit and loss account (18,807) - -
---------- ---------- ----------
At 30 November 2003 0 21,103 21,103
========== ========== ==========
Shareholders' other funds consisted of a convertible loan in respect of an
agreement entered into with Premium TV, a subsidiary of NTL Incorporated.
This loan agreement was terminated and a consideration of #2,296,000 was
paid in full satisfaction of the rights of Premium TV under the loan
agreement.
The terms of the rights agreement dated 24 February 2000 have been amended
so that the grant of internet, and certain mobile and delayed broadcast
rights to Premium TV is extended to 30 June 2007.
The appointment of Premium TV (Ventures) as exclusive agent for other
rights is terminated.
Profit and loss account
At 1 June 2003 13,854 25,280 25,280
Loss for the (16,506) (7,995) (11,426)
period
Surplus transferred from shareholders' other funds 18,807 - -
At 30 November 2003 16,155 17,285 13,854
Reconciliation of movement in shareholders' funds
Loss attributable to members of the Company (16,506) (7,995) (11,426)
Consideration paid for the termination of
convertible loan agreement (2,296) - -
Opening shareholders' funds 50,679 62,105 62,105
---------- ---------- ----------
Closing shareholders' funds 31,877 54,110 50,679
========== ========== ==========
8 Exceptional commercial income
As a consequence of material amendments to the Premium TV rights agreement,
income of #1,349,000 has been credited to the profit and loss account in
the period which would otherwise have been deferred for future periods.
9 The financial information given does not constitute statutory accounts
within the meaning of Section 240 (5) of the Companies Act 1985. The
figures for the year ended 31 May 2003 have been extracted from the
statutory accounts which have been delivered to the Registrar of Companies.
The audit report on these accounts was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
10 These results were announced to the London Stock Exchange on 27 January
2004 and will be posted to shareholders shortly. Copies will be available
to personal callers at the registered office, Villa Park, Birmingham B6
6HE.
This information is provided by RNS
The company news service from the London Stock Exchange
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