- Aug 18, 2005
- 6,527
- 267
Tottenham Hotspur PLC Interim Results for the six months ended 31 December 2008.
Full statement PDF
Date: 19th March 2009
TOTTENHAM HOTSPUR PLC
Interim Results for the Six Months Ended 31 December 2008
Summary
* Revenue increased to £54.9m (6 months ended 31 December 2007: £54.5m) with higher income from gate receipts, media and broadcasting, and sponsorship.
* Record profit from operations at £42.2m (31 December 2007: £1.8m) enhanced by player trading.
* Cash generation continues to be strong.
* Investment continued during the period with intangible assets
increasing by 53% to £106.8m (31 December 2007: £69.7m).
* Total assets increased by 65% to £291.7m (31 December 2007: £177.0m).
* Preliminary works starting next month for the new world class Training Centre on over 60 acres in Enfield.
* Submission of full planning application for the Northumberland
Development Project is due in the next few months.
Daniel Levy, Chairman of Tottenham Hotspur plc, said:
"We have benefited from having a robust business that is well financed and
has continued to be able to support investment in the First Team, whilst
progressing two major capital expenditure projects, the new Training
Centre and the Northumberland Development Project. We remain mindful of
the prevailing economic climate from which no one can consider themselves
immune."
Financial Results
I am pleased to announce another set of record financial results for the
six months ended 31 December 2008. In a period of global economic
recession this is a considerable achievement and we acknowledge that both the strength of our business and the fantastic loyalty shown by our
supporters have helped ensure that these results have not been materially
affected.
Revenue remains strong at £54.9m for the period (2007: £54.5m), with media and broadcasting revenues contributing £18.1m (2007: £17.8m), chiefly through the central FAPL TV rights deal.
Premier League gate receipts rose to £10.4m (2007: £9.5m) in the first six
months of the year and this can be attributed to the categories of the
matches falling within the period and the fact that every game continues
to be played to full or near capacity.
For the third successive season, we qualified for and progressed through
the group stages of the UEFA Cup and for the second year running, by the
turn of the year, we had reached the semi-finals of the League Cup,
ultimately reaching the final in March. Despite playing one less home Cup
game this period than at the same stage last season, gate receipts for cup
competitions show a small increase of £0.2m.
Sponsorship and corporate hospitality income rose by 7% for the first six
months of the year to £14.2m. However merchandising has fallen principally
as a result of sales in the six months to December 2007 being buoyed by
sales relating to the Club's 125th anniversary.
Operating expenses before amortisation of intangible assets have risen in
the period to £50.0m (2007: £44.6m). The main contributory factors behind
this increase are an increase in player related costs, further termination
and restructuring costs and the provision for foreign exchange losses,
caused by the weakening of sterling against the euro in the period. The
foreign exchange losses relate to future player transfer payments and are
as yet unrealised.
Amortisation of intangible assets has increased to £16.2m (2007: £12.4m)
as the Club continues to re-invest proceeds raised from the sales of
players in its playing squad.
Player trading shows a profit of £53.4m for the six months (2007: £4.3m).
During the 2008 summer transfer window, gains were made on the sales of a large number of registrations, including Dimitar Berbatov, Robbie Keane,
Steed Malbranque, Teemu Tainio, Pascal Chimbonda, Paul Robinson, Younes
Kaboul and Anthony Gardner.
After deducting net finance costs of £2.3m (2007: £1.8m), the Club made
record pre-tax profits for the six month period of £39.8m (2007: loss of
£0.03m) - however, it needs to be noted that the Club did not make the
player trading profits in a manner that was planned or welcomed, as they
arose, in the main, from the regrettable sale of certain key players.
Looking at the balance sheet the investment in the playing squad resulted
in intangible assets reaching over £100m for the first time in the Club's
history. The Directors believe that the market value of intangible assets
is considerably in excess of this book value. Additionally the club has
continued to acquire property around the stadium and as a result the
carrying value of property, plant and equipment is almost £88m. Total
assets now stand at £291.7m (2007: £177.0m). This sustained investment has taken a number of years and it is a credit to the Club that net debt at 31 December 2008, after this sustained period of investment, stood at only
£40.1m.
On the pitch
With so much talent in the squad the expectation was that we would start
the season well, but we had a poor start achieving 2 points from a
possible 24, the worst ever start in the Club's history.
Changes were made to the coaching staff - Harry Redknapp, Kevin Bond and Joe Jordan were appointed. We thank Damien Comolli, Juande Ramos, Marcos Alvarez and Gus Poyet for their contribution to the Club, which included the winning of silverware with the League Cup in February 2008.
Outside of this period, the January window saw the return of three
previous players and it reflects well on the Club that these players chose
to return to us.
The new management, the return of key former players and the further
investment made in January 2009 resulted in a renewed confidence at the
Club and we saw greatly improved performances on the pitch and a
concurrent move up the League table.
Decisions to make significant changes are always difficult and lack any
guarantee of success, but it is a fast moving business and the ability to
respond in times of uncertainty with clarity and determination is crucial
in ensuring we continue to move forward.
Off the pitch
We continue to move our capital projects forward. With regard to the new
training facility, we have spent the last year seeking to resolve a rights
of way application which was filed after we submitted a planning
application. We engaged with all interested parties and last month
successfully reached agreement for a right of way to be built outside the
perimeter of the new Training Centre. Preliminary works start next month.
Whilst this has cost us time, the reality is we have spent the time
looking at the build costs, which in the current environment have moved in
our favour.
With regard to the Northumberland Development Project - which incorporates plans for our new stadium - we have bought significant further land and now own the freehold interest in over 85% of the core site. This month
Haringey Council demonstrated strong support for the scheme and in
assisting in the process of acquiring and assembling the remaining site
properties. Having received an overwhelmingly positive response to the plans at our first public exhibition last November, we now move towards a second public consultation in April with further enhanced designs and proposals. The project has moved on significantly and we remain confident that we will be in a position to submit a full planning application in the
next few months.
Projects of this nature require a number of contracts and decisions to
come together over a period of years. We have almost completed piecing
together the site to the north of the proposed new stadium which is likely
to be the first stage of the development, and includes a significant
retail scheme. We are looking at a deal with a US based seat rights
partner to look at ways in which we can offer long term affordable deals to fans who want to commit to the new stadium and their seat position within that stadium at an early stage. Two additional areas of focus are the procurement of a naming rights partner and the finalisation of the requirements for the site to the south of the proposed new stadium. The latter, combining important public space and housing, has the real
potential to both maximise value and provide a focal point for the project
and its community.
As we continue to assess the contributions to the scheme, we obtain more
clarity on the funding gap which will have to be financed. An equity issue
is one such possibility, particularly when debt markets are currently so
illiquid.
Finally I would like to thank Mervyn Davies, now Lord Davies, who had to
resign his post in January as a non-executive Director to take up his
position in Government. We thank Mervyn greatly for his experience and
guidance and wish him every success.
Summary and outlook
Our supporters have contributed not only to the financial strength of the
Club, but have also been unwavering in their loyalty during difficult
times. I hope that we can reward that loyalty and support with future
success, along with a recognition of the difficult financial times we are
experiencing and which are still ahead. The price freeze on season ticket
prices for next season and the offer to freeze prices for the 2010/11
season are examples of this and have been factored into our realistic
financial modelling going forward.
We have benefited from having a robust business that is well financed and
has continued to be able to support investment in the First Team, whilst
progressing two major capital expenditure projects, the new Training
Centre and the Northumberland Development Project.
We remain mindful of the prevailing economic climate from which no one can consider themselves immune.
Thank you to all those who have showed immense support to the Club.
D P Levy
Notes to the Condensed Consolidated Interim Statements
For the six months ended 31 December 2008
* Basis of preparation
The Group's next annual consolidated financial statements, for the
year ending 30 June 2009, will be prepared in accordance with
International Financial Reporting Standards adopted for use in the EU
("IFRSs"). These condensed consolidated interim financial statements have
been prepared on the basis of the recognition and measurement requirements
of IFRSs that are effective (or available for early adoption) in those
annual consolidated financial statements. These requirements are still
subject to change and to additional interpretation.
The financial information presented in this interim statement does not
constitute full financial information within the meaning of Section 435 of
the Companies Act 2006. The financial information for the year ended 30
June 2008 has been extracted from the statutory accounts for the year then
ended which has been filed with the Registrar of Companies. The audit
report on these accounts was unqualified and did not contain any
statements under s237(2) or (3) of the Companies Act 1985.
The Board of Directors continually monitor the Group's exposure to a
range of risks and uncertainties, including the success of the First Team,
the development of the new stadium and the current economic downturn. The
Directors believe that these risks and uncertainties are mitigated by,
inter alia, the robust nature of our business with long-term fixed
revenues from the key business areas, notably the FAPL TV deal.
The Board of Directors have undertaken a recent thorough review of the
Company's budgets and forecasts and have produced detailed and realistic
cash flow projections. These cash flow projections, which when considered
in conjunction with the Group's forecast cash and available banking
facilities (some of which fall due for renewal later this year),
demonstrate that the Group will have sufficient working capital for the
foreseeable future. Consequently, the Directors believe that the Company
has adequate resources to continue in operational existence for the
foreseeable future and the financial statements have been prepared on the
going concern basis.
Accounting policies
The following accounting policies have been identified by the Board as
being the most significant to the financial statements.
Revenue
Revenue represents income receivable from football and related commercial
activities, exclusive of VAT.
Gate receipts and other matchday revenue is recognised as the games are
played. 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 football season whilst
facility fees received for live coverage or highlights are taken when
earned. Merit awards are accounted for only when known at the end of the
football season.
Player costs
Remuneration of players is charged in accordance with the terms of the
applicable contractual agreements and any discretionary bonus when there
is a legal or contractual obligation.
Signing-on fees are charged evenly, as part of operating expenses, to the
income statement over the period of the player's contract. These fees are
paid over the period of the player's contract.
Loyalty fees are accrued, as part of operating expenses, to the income
statement over the period to which they relate.
Property, plant and equipment
Freehold land is not depreciated. Leasehold property is amortised over the
term of the lease. Other fixed assets are depreciated on a straight-line
basis at annual rates appropriate to their estimated useful lives as
follows:
Freehold properties 2% - 4%
Motor vehicles 20%
General plant and equipment 10% - 33%
The Group capitalise costs in relation to an asset when economic benefit
from the asset is considered probable. Assets under the course of
construction are carried at cost and include professional fees.
Depreciation commences when the assets are ready for their intended use.
Land and buildings that are currently held for the Northumberland
Development Project are included within Assets Under Construction. In the
event that the proposed Northumberland Development does not proceed, £8.1m
of professional fees capitalised would need to be written off.
Intangible fixed assets
The costs associated with the acquisition of players and key football
management staff registrations are capitalised as intangible fixed assets,
at the fair value at the date of the acquisition.
The acquisition costs are fully amortised over their useful economic
lives, in equal annual instalments over the period of the respective
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. Provision is made for any
impairment of the carrying value of the playing squad should the carrying
value of the squad as a whole exceed the amount recoverable from the squad
as a whole through use or sale.
Where a player is not considered to be part of the playing squad a
provision for impairment would be made if the individual player's carrying
value exceeds the amount recoverable through use or sale.
Under the conditions of certain transfer agreements, further fees will be
payable to the vendors 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
transfers are accounted for, as provisions, when it becomes probable that
the number of appearances will be achieved or the specified future events
will occur.
Profits or losses on the disposal of these registrations represent the
consideration receivable, net of any transaction costs, less the
unamortised cost of the original registration.
Preference shares
Convertible Redeemable Preference Shares ("CRPS") are regarded as compound
instruments, consisting of a liability component and an equity component.
At the date of issue, the fair value of the liability component is
estimated using the prevailing market interest rate for similar
non-convertible debt. The difference between the proceeds of issue of the
CRPS and the fair value assigned to the liability component, representing
the embedded option to convert the liability into equity of the Group, is
included in equity.
Issue costs were apportioned between the liability and equity components
of the CRPS based on their relative carrying amounts at the date of issue.
The portion relating to the equity component is charged directly against
equity.
The finance expense on the liability component is calculated by applying
the prevailing market interest rate for similar non-convertible debt to
the liability component of the instrument. The difference between this
amount and the interest paid is added to the carrying amount of the
liability component.
These statements were approved by the Board of Directors on 19 March
2009, and are not audited.
These results were announced to the Stock Exchange on 19 March 2009 and
are being posted to all shareholders. Copies will be available to personal
callers at the registered office,
Bill Nicholson Way, 748 High Road, Tottenham, London N17 0AP.
2. Revenue analysis
Revenue, which is all derived from the Group's principal activity, is
analysed as follows:
Six months ended 31 Six months ended Year
December 2008 31 December 2007
ended 30
June
2008
£'000 £'000 £'000
Revenue comprises:
Gate receipts - Premier 10,362 9,540 18,274
League
Gate receipts - Cup 3,919 3,727 10,341
competitions
Media and broadcasting 18,099 17,767 40,329
Sponsorship and corporate 14,210 13,254 27,778
hospitality
Merchandising 4,806 6,570 9,723
Other 3,493 3,622 8,343
54,889 54,480 114,788
3. Profit on disposal of intangible assets
Six months ended Six months ended Year ended
31 December 2008 31 December 2007 30 June
2008
£'000 £'000 £'000
Proceeds 73,174 8,489 22,618
Net book value of disposals (19,762) (4,177) (6,256)
53,412 4,312 16,362
4. Taxation
A corporation tax charge of £12,248,000 has been accrued as at 31
December 2008 on the profit before tax of £39,828,000 - an effective tax
rate of 31%.
5. Earnings/(loss) per share
Earnings/(loss) per share has been calculated using the weighted average
number of shares in issue in each period.
Six months ended Six months Year ended
ended
31 December 2008 30 June
31 December
2007 2008
£'000 £'000 £'000
Earnings/(loss) for the purpose 27,580 (189) 969
of basic earnings per share being
net profit attributable to equity 1,323 - 993
holders of the company
Interest charge in respect of
CRPS
Diluted earnings/(loss) 28,903 (189) 1,962
Number Number Number
Weighted average number of 92,787,460 92,892,956 93,032,204
ordinary shares for the purposes
of basic earnings per share
CRPS 91,063,038 - 91,075,534
183,850,498 92,892,956 184,107,738
Basic earnings/(loss) per share 29.7p (0.2p) 1.0p
Diluted earnings/(loss) per share 15.7p (0.2p) 1.0p
There are no ordinary share options outstanding at period end (31 December
2007: nil). On conversion the fully diluted share capital at period end
would be 183,862,111 shares (31 December 2007: 183,968,490 shares).
In the period ended 31 December 2007 the CRPS were not dilutive as they
would have reduced loss per share.
Full statement PDF
Date: 19th March 2009
TOTTENHAM HOTSPUR PLC
Interim Results for the Six Months Ended 31 December 2008
Summary
* Revenue increased to £54.9m (6 months ended 31 December 2007: £54.5m) with higher income from gate receipts, media and broadcasting, and sponsorship.
* Record profit from operations at £42.2m (31 December 2007: £1.8m) enhanced by player trading.
* Cash generation continues to be strong.
* Investment continued during the period with intangible assets
increasing by 53% to £106.8m (31 December 2007: £69.7m).
* Total assets increased by 65% to £291.7m (31 December 2007: £177.0m).
* Preliminary works starting next month for the new world class Training Centre on over 60 acres in Enfield.
* Submission of full planning application for the Northumberland
Development Project is due in the next few months.
Daniel Levy, Chairman of Tottenham Hotspur plc, said:
"We have benefited from having a robust business that is well financed and
has continued to be able to support investment in the First Team, whilst
progressing two major capital expenditure projects, the new Training
Centre and the Northumberland Development Project. We remain mindful of
the prevailing economic climate from which no one can consider themselves
immune."
Financial Results
I am pleased to announce another set of record financial results for the
six months ended 31 December 2008. In a period of global economic
recession this is a considerable achievement and we acknowledge that both the strength of our business and the fantastic loyalty shown by our
supporters have helped ensure that these results have not been materially
affected.
Revenue remains strong at £54.9m for the period (2007: £54.5m), with media and broadcasting revenues contributing £18.1m (2007: £17.8m), chiefly through the central FAPL TV rights deal.
Premier League gate receipts rose to £10.4m (2007: £9.5m) in the first six
months of the year and this can be attributed to the categories of the
matches falling within the period and the fact that every game continues
to be played to full or near capacity.
For the third successive season, we qualified for and progressed through
the group stages of the UEFA Cup and for the second year running, by the
turn of the year, we had reached the semi-finals of the League Cup,
ultimately reaching the final in March. Despite playing one less home Cup
game this period than at the same stage last season, gate receipts for cup
competitions show a small increase of £0.2m.
Sponsorship and corporate hospitality income rose by 7% for the first six
months of the year to £14.2m. However merchandising has fallen principally
as a result of sales in the six months to December 2007 being buoyed by
sales relating to the Club's 125th anniversary.
Operating expenses before amortisation of intangible assets have risen in
the period to £50.0m (2007: £44.6m). The main contributory factors behind
this increase are an increase in player related costs, further termination
and restructuring costs and the provision for foreign exchange losses,
caused by the weakening of sterling against the euro in the period. The
foreign exchange losses relate to future player transfer payments and are
as yet unrealised.
Amortisation of intangible assets has increased to £16.2m (2007: £12.4m)
as the Club continues to re-invest proceeds raised from the sales of
players in its playing squad.
Player trading shows a profit of £53.4m for the six months (2007: £4.3m).
During the 2008 summer transfer window, gains were made on the sales of a large number of registrations, including Dimitar Berbatov, Robbie Keane,
Steed Malbranque, Teemu Tainio, Pascal Chimbonda, Paul Robinson, Younes
Kaboul and Anthony Gardner.
After deducting net finance costs of £2.3m (2007: £1.8m), the Club made
record pre-tax profits for the six month period of £39.8m (2007: loss of
£0.03m) - however, it needs to be noted that the Club did not make the
player trading profits in a manner that was planned or welcomed, as they
arose, in the main, from the regrettable sale of certain key players.
Looking at the balance sheet the investment in the playing squad resulted
in intangible assets reaching over £100m for the first time in the Club's
history. The Directors believe that the market value of intangible assets
is considerably in excess of this book value. Additionally the club has
continued to acquire property around the stadium and as a result the
carrying value of property, plant and equipment is almost £88m. Total
assets now stand at £291.7m (2007: £177.0m). This sustained investment has taken a number of years and it is a credit to the Club that net debt at 31 December 2008, after this sustained period of investment, stood at only
£40.1m.
On the pitch
With so much talent in the squad the expectation was that we would start
the season well, but we had a poor start achieving 2 points from a
possible 24, the worst ever start in the Club's history.
Changes were made to the coaching staff - Harry Redknapp, Kevin Bond and Joe Jordan were appointed. We thank Damien Comolli, Juande Ramos, Marcos Alvarez and Gus Poyet for their contribution to the Club, which included the winning of silverware with the League Cup in February 2008.
Outside of this period, the January window saw the return of three
previous players and it reflects well on the Club that these players chose
to return to us.
The new management, the return of key former players and the further
investment made in January 2009 resulted in a renewed confidence at the
Club and we saw greatly improved performances on the pitch and a
concurrent move up the League table.
Decisions to make significant changes are always difficult and lack any
guarantee of success, but it is a fast moving business and the ability to
respond in times of uncertainty with clarity and determination is crucial
in ensuring we continue to move forward.
Off the pitch
We continue to move our capital projects forward. With regard to the new
training facility, we have spent the last year seeking to resolve a rights
of way application which was filed after we submitted a planning
application. We engaged with all interested parties and last month
successfully reached agreement for a right of way to be built outside the
perimeter of the new Training Centre. Preliminary works start next month.
Whilst this has cost us time, the reality is we have spent the time
looking at the build costs, which in the current environment have moved in
our favour.
With regard to the Northumberland Development Project - which incorporates plans for our new stadium - we have bought significant further land and now own the freehold interest in over 85% of the core site. This month
Haringey Council demonstrated strong support for the scheme and in
assisting in the process of acquiring and assembling the remaining site
properties. Having received an overwhelmingly positive response to the plans at our first public exhibition last November, we now move towards a second public consultation in April with further enhanced designs and proposals. The project has moved on significantly and we remain confident that we will be in a position to submit a full planning application in the
next few months.
Projects of this nature require a number of contracts and decisions to
come together over a period of years. We have almost completed piecing
together the site to the north of the proposed new stadium which is likely
to be the first stage of the development, and includes a significant
retail scheme. We are looking at a deal with a US based seat rights
partner to look at ways in which we can offer long term affordable deals to fans who want to commit to the new stadium and their seat position within that stadium at an early stage. Two additional areas of focus are the procurement of a naming rights partner and the finalisation of the requirements for the site to the south of the proposed new stadium. The latter, combining important public space and housing, has the real
potential to both maximise value and provide a focal point for the project
and its community.
As we continue to assess the contributions to the scheme, we obtain more
clarity on the funding gap which will have to be financed. An equity issue
is one such possibility, particularly when debt markets are currently so
illiquid.
Finally I would like to thank Mervyn Davies, now Lord Davies, who had to
resign his post in January as a non-executive Director to take up his
position in Government. We thank Mervyn greatly for his experience and
guidance and wish him every success.
Summary and outlook
Our supporters have contributed not only to the financial strength of the
Club, but have also been unwavering in their loyalty during difficult
times. I hope that we can reward that loyalty and support with future
success, along with a recognition of the difficult financial times we are
experiencing and which are still ahead. The price freeze on season ticket
prices for next season and the offer to freeze prices for the 2010/11
season are examples of this and have been factored into our realistic
financial modelling going forward.
We have benefited from having a robust business that is well financed and
has continued to be able to support investment in the First Team, whilst
progressing two major capital expenditure projects, the new Training
Centre and the Northumberland Development Project.
We remain mindful of the prevailing economic climate from which no one can consider themselves immune.
Thank you to all those who have showed immense support to the Club.
D P Levy
Notes to the Condensed Consolidated Interim Statements
For the six months ended 31 December 2008
* Basis of preparation
The Group's next annual consolidated financial statements, for the
year ending 30 June 2009, will be prepared in accordance with
International Financial Reporting Standards adopted for use in the EU
("IFRSs"). These condensed consolidated interim financial statements have
been prepared on the basis of the recognition and measurement requirements
of IFRSs that are effective (or available for early adoption) in those
annual consolidated financial statements. These requirements are still
subject to change and to additional interpretation.
The financial information presented in this interim statement does not
constitute full financial information within the meaning of Section 435 of
the Companies Act 2006. The financial information for the year ended 30
June 2008 has been extracted from the statutory accounts for the year then
ended which has been filed with the Registrar of Companies. The audit
report on these accounts was unqualified and did not contain any
statements under s237(2) or (3) of the Companies Act 1985.
The Board of Directors continually monitor the Group's exposure to a
range of risks and uncertainties, including the success of the First Team,
the development of the new stadium and the current economic downturn. The
Directors believe that these risks and uncertainties are mitigated by,
inter alia, the robust nature of our business with long-term fixed
revenues from the key business areas, notably the FAPL TV deal.
The Board of Directors have undertaken a recent thorough review of the
Company's budgets and forecasts and have produced detailed and realistic
cash flow projections. These cash flow projections, which when considered
in conjunction with the Group's forecast cash and available banking
facilities (some of which fall due for renewal later this year),
demonstrate that the Group will have sufficient working capital for the
foreseeable future. Consequently, the Directors believe that the Company
has adequate resources to continue in operational existence for the
foreseeable future and the financial statements have been prepared on the
going concern basis.
Accounting policies
The following accounting policies have been identified by the Board as
being the most significant to the financial statements.
Revenue
Revenue represents income receivable from football and related commercial
activities, exclusive of VAT.
Gate receipts and other matchday revenue is recognised as the games are
played. 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 football season whilst
facility fees received for live coverage or highlights are taken when
earned. Merit awards are accounted for only when known at the end of the
football season.
Player costs
Remuneration of players is charged in accordance with the terms of the
applicable contractual agreements and any discretionary bonus when there
is a legal or contractual obligation.
Signing-on fees are charged evenly, as part of operating expenses, to the
income statement over the period of the player's contract. These fees are
paid over the period of the player's contract.
Loyalty fees are accrued, as part of operating expenses, to the income
statement over the period to which they relate.
Property, plant and equipment
Freehold land is not depreciated. Leasehold property is amortised over the
term of the lease. Other fixed assets are depreciated on a straight-line
basis at annual rates appropriate to their estimated useful lives as
follows:
Freehold properties 2% - 4%
Motor vehicles 20%
General plant and equipment 10% - 33%
The Group capitalise costs in relation to an asset when economic benefit
from the asset is considered probable. Assets under the course of
construction are carried at cost and include professional fees.
Depreciation commences when the assets are ready for their intended use.
Land and buildings that are currently held for the Northumberland
Development Project are included within Assets Under Construction. In the
event that the proposed Northumberland Development does not proceed, £8.1m
of professional fees capitalised would need to be written off.
Intangible fixed assets
The costs associated with the acquisition of players and key football
management staff registrations are capitalised as intangible fixed assets,
at the fair value at the date of the acquisition.
The acquisition costs are fully amortised over their useful economic
lives, in equal annual instalments over the period of the respective
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. Provision is made for any
impairment of the carrying value of the playing squad should the carrying
value of the squad as a whole exceed the amount recoverable from the squad
as a whole through use or sale.
Where a player is not considered to be part of the playing squad a
provision for impairment would be made if the individual player's carrying
value exceeds the amount recoverable through use or sale.
Under the conditions of certain transfer agreements, further fees will be
payable to the vendors 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
transfers are accounted for, as provisions, when it becomes probable that
the number of appearances will be achieved or the specified future events
will occur.
Profits or losses on the disposal of these registrations represent the
consideration receivable, net of any transaction costs, less the
unamortised cost of the original registration.
Preference shares
Convertible Redeemable Preference Shares ("CRPS") are regarded as compound
instruments, consisting of a liability component and an equity component.
At the date of issue, the fair value of the liability component is
estimated using the prevailing market interest rate for similar
non-convertible debt. The difference between the proceeds of issue of the
CRPS and the fair value assigned to the liability component, representing
the embedded option to convert the liability into equity of the Group, is
included in equity.
Issue costs were apportioned between the liability and equity components
of the CRPS based on their relative carrying amounts at the date of issue.
The portion relating to the equity component is charged directly against
equity.
The finance expense on the liability component is calculated by applying
the prevailing market interest rate for similar non-convertible debt to
the liability component of the instrument. The difference between this
amount and the interest paid is added to the carrying amount of the
liability component.
These statements were approved by the Board of Directors on 19 March
2009, and are not audited.
These results were announced to the Stock Exchange on 19 March 2009 and
are being posted to all shareholders. Copies will be available to personal
callers at the registered office,
Bill Nicholson Way, 748 High Road, Tottenham, London N17 0AP.
2. Revenue analysis
Revenue, which is all derived from the Group's principal activity, is
analysed as follows:
Six months ended 31 Six months ended Year
December 2008 31 December 2007
ended 30
June
2008
£'000 £'000 £'000
Revenue comprises:
Gate receipts - Premier 10,362 9,540 18,274
League
Gate receipts - Cup 3,919 3,727 10,341
competitions
Media and broadcasting 18,099 17,767 40,329
Sponsorship and corporate 14,210 13,254 27,778
hospitality
Merchandising 4,806 6,570 9,723
Other 3,493 3,622 8,343
54,889 54,480 114,788
3. Profit on disposal of intangible assets
Six months ended Six months ended Year ended
31 December 2008 31 December 2007 30 June
2008
£'000 £'000 £'000
Proceeds 73,174 8,489 22,618
Net book value of disposals (19,762) (4,177) (6,256)
53,412 4,312 16,362
4. Taxation
A corporation tax charge of £12,248,000 has been accrued as at 31
December 2008 on the profit before tax of £39,828,000 - an effective tax
rate of 31%.
5. Earnings/(loss) per share
Earnings/(loss) per share has been calculated using the weighted average
number of shares in issue in each period.
Six months ended Six months Year ended
ended
31 December 2008 30 June
31 December
2007 2008
£'000 £'000 £'000
Earnings/(loss) for the purpose 27,580 (189) 969
of basic earnings per share being
net profit attributable to equity 1,323 - 993
holders of the company
Interest charge in respect of
CRPS
Diluted earnings/(loss) 28,903 (189) 1,962
Number Number Number
Weighted average number of 92,787,460 92,892,956 93,032,204
ordinary shares for the purposes
of basic earnings per share
CRPS 91,063,038 - 91,075,534
183,850,498 92,892,956 184,107,738
Basic earnings/(loss) per share 29.7p (0.2p) 1.0p
Diluted earnings/(loss) per share 15.7p (0.2p) 1.0p
There are no ordinary share options outstanding at period end (31 December
2007: nil). On conversion the fully diluted share capital at period end
would be 183,862,111 shares (31 December 2007: 183,968,490 shares).
In the period ended 31 December 2007 the CRPS were not dilutive as they
would have reduced loss per share.
