RNS Number:9861Q
Sheffield United PLC
28 March 2008
28 March 2008
Embargoed 0700hrs
Sheffield United plc
Interim results
Sheffield United plc ('Sheffield United' or 'the Company') (AIM: SUT), the
football, property and leisure services business, announces interim results for
the six months ended 31 December 2007.
Financial Highlights
* Operating profit before interest of �1.3 million (2006: �2.6 million)
* Retained loss of �0.1 million (2006: Profit �1.3 million)
* Turnover of �17.1 million (2006: �25.9 million)
* Repayment of �7.3 million bank debt during the period
* A "stand alone" �13.5 million facility obtained from HBOS plc to finance the
construction of the Copthorne Hotel, Sheffield
* Significant advancement of leisure division with Thames Club increasing
its turnover by 14% during the period to �0.8 million (2006: �0.7 million)
* Increase in turnover of 19% for non-match day and events activities
Operational Highlights
* Best supported club in the Championship.
* Average crowd for the season so far of 25,002 (2006: 30,325).
* Over 19,000 season ticket holders
* Successful implementation of an automated entrance system at Bramall Lane
* Third gymnasium in Crookes opened alongside a "junior community
development centre"
* Construction of the 158 bed, four star Sheffield Copthorne Hotel at
Bramall Lane progressing well
* Chengdu Blades promoted to the Chinese Super League during the period
Commenting, Kevin McCabe, Chairman of Sheffield United, said: "The development
of the Blades as a leisure, services and property company with an international
portfolio of football brands at its core has progressed, despite the temporary
setback of our current Championship league position.
"The strategy for the business has concentrated on growing non-match income
which is not directly dependent on success on the field. Our Leisure division
has advanced significantly over the year, with Thames Club increasing its
turnover in the first half of the year to �0.8 million from �0.7 million. This
is the result of much hard work and excellent marketing to increase the
membership level".
He added: "Having strengthened commercial management we now look to restructure
the way we manage our football operations. The re-shaping of the Football
Executive is fundamental in producing a successful first team squad worthy of
the best supported team in the Championship. Our international activities should
add value to the company within the near future with potentially three sister
teams operating at high levels in their respective leagues. Our primary
objective remains to return to the top echelon of football as soon as possible.
We intend to sensibly invest in both the salary level and squad quality to
enable us to maximise our chances of an early return to the Premier League."
For further information:
Sheffield United plc: 0870 787 1960
Kevin McCabe, Chairman
Jason Rockett, Chief Executive
Simon Capper, Chief Financial Officer
KBC Peel Hunt Ltd 020 7418 8900
Nick Maslen
Tavistock Communications: 020 7920 3150
Jeremy Carey
Andrew Dunn
Chairman's Statement
I introduce my statement by advising that this set of interim results is the
first produced under International Financial Reporting Standards ("IFRS") as
required by the rules of AIM. A full reconciliation to the UK GAAP results
previously reported has been provided and I trust the effects of the transition
are satisfactorily explained.
The results to 31 December 2007 demonstrate that despite relegation from the
Premier League, our business continues to grow in most areas and illustrates
increasing international activities.
The operating profit before interest has fallen to �1.3 million (2006: �2.6
million) and a retained loss of �0.1 million incurred (2006: Profit �1.3
million). Turnover held up well, with a reduction to �17.1 million from �25.9
million relating mainly to a decrease in television revenues in the current
season.
FOOTBALL: FIRST TEAM AND YOUTH ACADEMY
As this report is produced Sheffield United FC are mid table in the
Championship. Whilst another season in this division appears likely the Blades
have not given up on the opportunity of reaching the play-offs. We are however
focusing on reshaping our management team and first team squad with the
intention of mounting a promotion challenge in 2008/9 if success eludes us this
season. The recent appointment of Kevin Blackwell as first team manager until
30th June 2008 is intended to allow the club time to reorganise to meet with
current best practice. Kevin has made an excellent start on his return to
Bramall Lane and demonstrated first class managerial experience and motivational
qualities. Our sincere thanks go to Bryan Robson and Brian Kidd for the efforts
they applied whilst at Sheffield United FC.
The Club's performance in the Carling Cup and the FA Cup sponsored by EON was
encouraging. In both we performed well against Premier League teams in televised
fixtures winning two, drawing one and losing two of these encounters. The defeat
to Middlesbrough FC in the replayed 5th round of the FA Cup in extra time being
in the most unfortunate of circumstances. The Cup runs have generated both
optimism and additional revenue and remind us that these competitions still play
a major role in the overall success of a club.
We have traded players in the year, amongst others being the sales of Phil
Jagielka, Mikele Leigertwood, Christian Nade and Ahmed Fathi in the summer
transfer window partly assisting the financing and purchase of James Beattie,
Gary Naysmith, Billy Sharp, Lee Hendrie, David Carney and others. Further
strengthening through the acquisition of Gary Speed and Ugo Ehiogu was
undertaken in the January transfer window together with the use of the loan
system to improve the squad when required. Funds from players sales have been
reinvested in the squad.
Our overseas player development programme has produced new and exciting links.
Sheffield United is part of a consortium recently announced as preferred bidder
for Ferencvaros FC, historically the most successful club in Hungary. We are
moving to complete this transaction as soon as practicable.
It is intended to strengthen the Ferencvaros squad by the loaning of certain
Ivorian players previously at Chengdu, where they contributed to the promotion
of the Blades to the Super League in China. Additionally our West Indian players
currently at Royal White Star Woluwe FC in Belgium, may be relocated to
Budapest.
Also we are in the final stages of concluding an agreement with Sao Paulo FC to
secure young players to develop within the European League systems and have
already taken our first player from Inter Milan on loan with us to the end of
this season.
FOOTBALL: COMMERCIAL
The crowds at Bramall Lane so far this season have averaged 25,002 (2006:
30,325) making us proudly the best supported club in the Championship. With over
19,000 season ticket holders the fans have managed to maintain the intensity of
support on many occasions and it is clear the team perform better when the crowd
are fully behind them. To retain this level of support for next year we are in
some cases lowering prices of season tickets and for every adult renewal an
under 12's season ticket will be free as the club acknowledge the importance of
our fans to achieve success.
The implementation of the automated entrance system has been positive and as we
exploit its potential it should remove the requirement for most regular visitors
to the Lane to have paper tickets.
Sponsorship, match day hospitality and merchandising sales fell slightly in the
present year, but proactive management has led to profitability in some areas
being enhanced. The improved website has increased revenue from merchandising
and we are planning to open a number of new outlets in South Yorkshire within
the stores of a major retailer.
EVENTS AND LEISURE
The business strategy has concentrated on growing non-match day income which is
not directly dependent on success on the field. Our Leisure division has
advanced significantly over the year, with Thames Club, Staines increasing its
turnover in the first half of the year to �0.8 million from �0.7 million. This
is the result of much hard work and excellent marketing to increase membership
levels.
We have recently opened our third gymnasium at Crookes, along with a Junior
Development Centre with football pitches and other indoor and outdoor
facilities. This is expected to make a significant contribution to the local
community. The venue will be christened the "Derek Dooley Community Centre" in
recognition of the role Derek played for many decades in support of United and
indeed the City of Sheffield.
Construction of the Sheffield Copthorne Hotel at Bramall Lane, our 158 bed, four
star hotel is progressing well. The project is currently on budget with
completion scheduled for Autumn 2008. As part of our commitment to the community
we will be focussing job recruitment as much as possible within our local area
as the hotel will play a significant part in the continued regeneration of
Sharrow.
The plans for the hotel include a further gym to be operated by the club.
Our catering division has performed admirably in the first 6 months of the year.
Concourse outlets were secured back from contractors and this has proved a
success both from the point of view of improved quality of services to fans and
the generation of a larger revenue contribution than previous.
Our non-match day and events activities have prospered, with an improvement in
turnover of some 19%.
PROPERTY
The recent turmoil on the financial markets has led to a more challenging
environment for commercial property. Our view however is that this represents an
opportunity to maximise rental yields from the joint venture with Scarborough
Group Ltd. This change of market has led to a reduction in the share of profit
before interest from Blades Realty Ltd (previously christened United Scarborough
Estates Ltd) to �0.5 million in the first 6 months of the year (2006: �1.2
million) as opportunities to trade have reduced. We recently finalised useful
lettings and expect returns to improve again once the investment market
recovers.
At and around the vicinity of Bramall Lane we are developing exciting planning
applications to be submitted in the near future for an extension to the Kop,
along with associated residential developments. This should provide a further
3,500 seats and around 20,000 sq. ft of office space. The feasibility of an
additional serviced office building on the corner between the Fraser Kop and the
Valad Stand is being considered. When completed this will, along with our longer
term plans to redevelop the Valad Stand, confirm the position of Bramall Lane as
the best stadium in Yorkshire and a potential venue for England's 2018 World Cup
bid.
A planning submission for properties purchased by the club in the John Street
area and close to the Stadium is also being finalised. The rental income from
these properties has been increased by astute management of the tenants and thus
revenue adequately covers financing costs and the like.
Blades Enterprise Centre has enjoyed its best ever first 6 months, with
occupancies running high. As part of our community duties we provided emergency
office space to several Sheffield based businesses affected by the 2007 summer
floods until they were able to return to their permanent venues.
INTERNATIONAL
The promotion of the Chengdu Blades to the Chinese Super League in 2007 was a
significant achievement and Sheffield United continues to work in close
co-ordination with our colleagues in Chengdu to maximise the chances of success
in the Super League. A number of Chinese under 21 internationals have been
signed in their transfer window and the outstanding group of junior players from
the Chengdu Academy are now starting to break into the first team. Wang Song,
captain of the team, has been capped at full international level and is part of
the 2008 squad for the East Asian Cup. We look forward to a challenging season
in the Super League.
With the advancement in China recognised, the Club's potential acquisition of
Ferencvaros FC is an exciting prospect. As part of a consortium with Esplanade
Real Estates Ltd (a member of Scarborough Group Ltd) it is intended that
Sheffield United FC acquire the majority share capital of the Hungarian football
club, who in turn will receive financial assistance in order to advance
Ferencvaros FC in the first two years of ownership. Whilst much work needs to be
done to restore Fradi to its former glory, the opportunity of combining the
brands of Sheffield United with a major European club and Chengdu creates a
portfolio of football brands for others to envy.
COMMUNITY
To build on the infrastructure investments made by the club at Bramall Lane,
Shirecliffe and Crookes, the club is exploring opportunities to develop similar
Junior Community Development venues around the South Yorkshire and North
Derbyshire areas.
With the launch of the "Sheffield United Initiative" we are investing additional
resources in providing feedback to our communities. Initiatives such as "Kickz",
"Fit for schools" and the like have proved a great success.
The proposals for the construction of the a new three storey building at
Shirecliffe, which will include a National skills academy, first teams
facilities and a business centre are advancing well. Planning permission has now
been obtained and consultation for Grant funding is ongoing with a final
decision expected on both viability and construction costs before the end of the
financial year.
FINANCING
As at 31 December 2007 net debt, excluding our share of independent joint
venture borrowings has increased to �28.3 million (2006: �22.9 million). Bank
debt associated with the football division alone amounts to some �8 million
whilst the residue Bank debt relates to specific business transactions,
including health clubs, hotel and property projects.
There has been a repayment to Bank debt of �7.3 million in the period, replaced
by a �10 million Loan from a subsidiary of Scarborough Group Ltd (a company
chaired by myself and owned by the McCabe family). The funds from this Loan were
also utilised to maintain our player salary budget at a similar amount to last
season's Premier League levels.
A "stand alone" �13.5 million facility has been procured from HBOS plc to fund
the hotel, which is repayable in stages over an eighteen year period after the
completion of its construction.
Could I once again express my gratitude to HBOS plc for their continued support
of Sheffield United's business objectives. We have a Bank which acts as a true
partner working creatively with us as we attempt to bring prosperity on and off
the field of play.
PROSPECTS
The development of the Blades as a leisure, services and property company with
an international portfolio of football brands at its core has progressed,
despite the temporary setback of our current Championship League position. The
primary objective remains to return to the top echelon of English football as
soon as possible. We intend to sensibly invest in the first team squad quality
to enable us to maximise Sheffield United's chances of an early return to the
Premier League.
As previously announced, our Arbitration hearing seeking compensation from West
Ham United FC in relation to the "Tevez affair" is scheduled to be held towards
the end of June. I am unable to comment further due to the ongoing legal
process.
CONCLUSION
Having strengthened commercial management we now look to restructure the way we
manage our football operations. The re-shaping of the Football Executive is
fundamental in producing a successful first team squad worthy of the best
supported team in the Championship. Our ambition, to be a Premiership club
competing in the higher reaches of that league remains unchanged. Our
international activities should add value to the company within the near future,
potentially three sister teams operating at high levels in their respective
leagues. Sheffield United continue to be unique in world football - certainly a
club "that's different from the rest".
We are ever mindful of the problems affecting the global financial and corporate
sectors. The United Kingdom is not immune from the clearly apparent economic
downturn. At Sheffield United we acknowledge the need to adapt to changing
financial conditions and thus are planning accordingly.
Finally on behalf of the Board members of Sheffield United plc and Sheffield
United FC, I pay tribute to Derek Dooley who sadly passed away on 5th March.
Derek was not only a remarkable young footballer who played for our rivals
Sheffield Wednesday during the early 1950's but also proved over many decades to
be an exceptional man transgressing the supporter divides of the City of
Sheffield uniquely uniting red and white with blue and white. Derek joined our
club in 1974 serving in many capacities and in particular that of Chairman of
Sheffield United FC. His loyalty and dedication were always to the fore and at
all times his skills as an ambassador were of paramount importance particularly
in those periods of turmoil. He is fondly remembered and indeed in recognition
of the legacy left by Derek we will be renaming our Junior Development Centre at
Crookes - an area that is well represented by Blades and Owls - as the "Derek
Dooley Community Centre". Also in due course a statue of Derek alongside those
of other Sheffield United legends, Jimmy Hagan and Joe Shaw, will adorn our
south stand car park. His widow Sylvia is becoming an Honorary Member of
Sheffield United FC as we keep a seat in the Directors Box available for her
continued support at Bramall Lane.
Up the Blades!
Kevin McCabe
27 March 2008
INDEPENDENT REVIEW report to Sheffield United PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2007 which comprises the condensed consolidated interim income
statement, the condensed consolidated interim balance sheet, the condensed
consolidated interim statement of recognised income and expense, the condensed
consolidated interim cash flow statement and explanatory notes. We have read the
other information contained in the interim report which comprises only the
Chairman's statement and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in the International Standard on Review Engagements issued by the Auditing
Practices Board (ISRE, UK and Ireland) 2410, "Review of Interim Financial
Information performed by the Independent Auditor of the Entity". Our review work
has been undertaken so that we might state to the company those matters we are
required to state to them in a review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company for our review work, for this report, or for the
conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM rules of the London Stock Exchange.
As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. This interim report has been prepared in
accordance with the measurement and recognition principles of International
Financial Reporting Standards and the requirements of IFRS 1 "First-time
Adoption of International Financial Reporting Standards" relevant to interim
reports.
The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2007 is not prepared, in all
material respects, in accordance with the measurement and recognition principles
of International Financial Reporting Standards.
GRANT THORNTON UK LLP
REGISTERED AUDITOR
CHARTERED ACCOUNTANTS
SHEFFIELD
27 March 2008
Condensed consolidated interim income statement
for the six months ended 31 December 2007
6 month 6 month 12 month
ended ended ended
31.12.07 31.12.06 30.06.07
Unaudited Unaudited Unaudited
�000 �000 �000
Revenue 17,105 25,898 45,767
Operating profit/(loss) before promotion
bonuses, amortisation, impairment of costs
of players' registrations, profit on disposal
of non current assets and cost of terminating
players' contracts (1,699) 5,440 8,074
Amortisation and impairment of costs of
players' registrations (2,899) (2,920) (4,822)
Termination payments (63) (35) (950)
Profit on disposal of players' registrations 5,920 83 661
Profit on disposal of property, plant and
equipment - - 27
-------------------------------
1,259 2,568 2,990
-------------------------------
Operating profit before finance costs 1,259 2,568 2,990
Finance costs (1,683) (1,060) (2,664)
(Loss)/profit before tax (424) 1,508 326
Income tax expense 348 (250) (9)
(Loss)/profit for the period (76) 1,258 317
Attributable to:
Equity holders of the parent 9 1,339 474
Minority interest (85) (81) (157)
-------------------------------
(76) 1,258 317
-------------------------------
Earnings per share:
Basic and diluted (loss)/ profit per share
(pence) 0.003 0.595 0.224
Condensed consolidated interim balance sheet
at 31 December 2007
31.12.07 31.12.06 30.06.07
Unaudited Unaudited Unaudited
�000 �000 �000
ASSETS
Non-current assets
Property, plant and equipment 40,890 33,495 37,013
Goodwill 207 123 207
Other intangible assets 13,262 6,759 11,183
-------------------------------
54,359 40,377 48,403
-------------------------------
Current assets
Inventories 24,455 18,840 21,682
Trade and other receivables 12,759 11,714 9,483
Current tax receivable 267 - -
Cash and cash equivalents - 8,755 3,610
-------------------------------
37,481 39,309 34,775
-------------------------------
Non-current assets classified as held for
sale and assets in disposal groups classified
as held for sale - 1,150 -
-------------------------------
37,481 40,459 34,775
-------------------------------
Total assets 91,840 80,836 83,178
-------------------------------
LIABILITIES
Current liabilities
Trade and other payables (8,473) (7,397) (8,885)
Short-term borrowings (34,943) (21,809) (14,742)
Current portion of long-term borrowings (104) (12,281) (8,204)
Current portion of deferred income (6,708) (8,296) (147)
Current tax payable (180) (342) (499)
---------------------------------
(50,408) (50,125) (32,477)
---------------------------------
Non-current liabilities
Long-term borrowing (15,695) (13,869) (20,558)
Long-term deferred income (4,537) (4,523) (8,867)
Financial derivatives (489) - -
---------------------------------
(20,721) (18,392) (29,425)
---------------------------------
Total liabilities (71,129) (68,517) (61,902)
---------------------------------
Net assets 20,711 12,319 21,276
---------------------------------
EQUITY
Equity attributable to equity holders
of the parent
Share capital 27,851 21,184 27,851
Share premium account 20,019 16,778 20,019
Merger reserve 3,018 3,018 3,018
Hedge reserve (489) - -
Translation reserve (10) - (10)
Retained earnings (29,432) (28,576) (29,441)
---------------------------------
20,957 12,404 21,437
---------------------------------
Minority interest (246) (85) (161)
---------------------------------
Total equity 20,711 12,319 21,276
---------------------------------
Condensed consolidated interim statement of
recognised income and expense for the
six months ended 31 December 2007
6 month 6 month 12 month
ended ended ended
31.12.07 31.12.06 30.06.07
Unaudited Unaudited Unaudited
�000 �000 �000
Cash flow hedges:
Gains/(losses) taken to equity (489) - -
---------------------------------
Net income recognised directly in equity (489) - -
(Loss)/profit for the period (76) 1,258 317
Total recognised income and expense for the
period (565) 1,258 317
---------------------------------
Attributable to:
Equity holders of the parent (480) 1,339 474
Minority interest (85) (81) (157)
---------------------------------
(565) 1,258 317
=================================
Condensed consolidated interim cash flow statement
for the six month ended 31 December 2007
6 months 6 months 12 months
ended ended ended
31.12.07 31.12.06 30.06.07
Unaudited Unaudited Unaudited
�000 �000 �000
Cash flows from operating activities
(Loss)/profit after taxation (76) 1,258 317
Adjustments for:
Depreciation 585 440 871
Amortisation of players' registrations 2,899 2,042 4,822
Impairment of players' registrations - 878 -
Share in operating profit in joint
venture (495) (1,216) (1,784)
Profit on disposal of players'
registrations (5,920) (83) (661)
Profit on disposal of property, plant
and equipment - - (27)
Foreign exchange loss - - (10)
Interest expense 1,683 1,060 2,664
Taxation expense recognised in income
statement (348) 250 9
Increase in trade and other receivables (1,993) (4,479) (97)
Increase in inventories (2,773) (242) (32)
Increase/(decrease) in trade payables 1,953 (1,399) (2,676)
Increase/(decrease) in deferred income 2,231 2,467 (1,348)
---------------------------------
Cash generated from operations (2,254) 976 2,048
Interest paid (906) (546) (1,640)
Interest element of finance lease payments (10) - (9)
Net cash from operating activities (3,170) 430 399
---------------------------------
Cash flows from investing activities
Purchase of subsidiary undertakings - - (84)
Purchase of property, plant and equipment (4,200) (2,671) (3,861)
Purchase of player registrations (8,065) (5,940) (14,254)
Proceeds from sale of equipment - - 270
Proceeds from disposal of player
registrations 7,581 132 2,194
Loan made to joint venture - (99) -
---------------------------------
Net cash used in investing activities (4,684) (8,578) (15,735)
---------------------------------
Cash flows from financing activities
Proceeds from issue of share capital - - 10,000
Costs of issuing share capital - (25) (117)
Proceeds from long term borrowing 10,608 16,922 11,705
Proceeds from grants - 35 35
Payment of finance lease liabilities (71) (8) (31)
Payment of long term borrowing (7,316) (914) (3,246)
---------------------------------
Net cash used in financing activities 3,221 16,010 18,346
---------------------------------
Net increase in cash and cash equivalents (4,633) 7,862 3,010
Cash and cash equivalents at the beginning
of period 3,610 600 600
Cash and cash equivalents at the end of
period (1,023) 8,462 3,610
Notes to accounts
1. Basis of preparation
These interim condensed consolidated financial statements are for the six months
ended 31 December 2007. They have been prepared in accordance with the
recognition and measurement principles of International Financial Reporting
Standards and the requirements of IFRS 1 "First-time Adoption of International
Financial Reporting Standards" relevant to interim reports, because they are
part of the period covered by the Group's first IFRS financial statements for
the year ended 30 June 2008. They do not include all of the information required
for full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 30 June 2007.
These financial statements have been prepared under the historical cost
convention, except for revaluation of certain financial instruments.
These condensed consolidated interim financial statements (the interim financial
statements) have been prepared in accordance with the accounting policies set
out below which are based on the recognition and measurement principles of IFRS
in issue as adopted by the European Union (EU) and are effective at 30 June 2008
or are expected to be adopted and effective at 30 June 2008 ("Adopted IFRSs"),
our first annual reporting date at which we are required to use IFRS accounting
standards adopted by the EU.
Sheffield United plc's consolidated financial statements were prepared in
accordance with United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) until 30 June 2007. The date of transition to IFRS
was 1 July 2006. The comparative figures in respect of December 2006 and June
2007 have been restated to reflect changes in accounting policies as a result of
adoption of IFRS. The disclosures required by IFRS 1 concerning the transition
from UK GAAP to IFRS are given in the reconciliation schedules, presented and
explained in note 11.
2. Accounting policies
The accounting policies set out below have, unless otherwise stated, been
applied consistently for the Group to all periods presented in these condensed
consolidated financial statements, and in preparing an opening IFRS balance
sheet at 1 July 2006 for the purposes of the translation to IFRS.
Transition to adopted IFRSs
The Group statements have been prepared in accordance with Adopted IFRSs for the
first time and has applied IFRS 1. An explanation of how the transition to
Adopted IFRSs has affected the previously reported financial position, financial
performance and cash flows of the Group is provided later in this report.
IFRS 1 grants certain exemptions from the full reporting requirements of IFRSs
in the transitional period. The following exemptions have been applied in these
financial statements:
* Fair value as deemed cost: the Group has not taken the option to restate items
of property, plant and equipment to their fair value at 1 July 2006. Instead
the deemed cost under Adopted IFRSs will be the cost or revalued amount of
each asset previously shown under UK GAAP.
* Business combinations prior to 1 July 2006, the Group's date of transition to
IFRS, have not been restated to comply with IFRS 3 "Business Combinations".
Goodwill arising from these business combinations of �123,000 has not been
restated.
* The Group has not taken advantage of the transitional provisions contained in
IFRS 5 "Non-current Assets held for Sale and Discontinued Operations", and has
applied this standard with effect from 1 July 2006.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists where the
Group has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from it activities. In
assessing control, potential voting rights that are currently exercisable or
convertible are taken into account. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date that control ceases.
Jointly controlled entities are those entities over which the Group has joint
control, established by contractual agreement. The consolidated financial
statements include the Group's share of the total recognised gains and losses of
jointly controlled entities on proportionate consolidation basis, from the date
that joint control commences until the date that joint control ceases.
Intra group balances and any unrealised gains and losses or income and expenses
arising from intra group transactions are eliminated in preparing the
consolidated financial statements.
Going concern
After making enquiries, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. For this reason they continue to adopt the going concern
basis in preparing the financial statements.
Revenue
Revenue represents income arising from sales to third parties, and excludes
transfer fees receivable and value added tax.
i) Season ticket and corporate hospitality revenue is recognised over the
period of the football season as home matches are played.
ii) Fixed elements of the FA Championship League Central broadcasting contracts
and fixed elements of FA Premier League parachute payments are recognised
over the period August to May in the relevant football season. The merit
based payment in the 2006/2007 season was recognised at the end of the
league season, when the final league position was known.
iii) Sponsorship contracts are recognised over the duration of the contract,
either on a straight-line basis, or over the period of the football season,
as appropriate based on the terms of contract. Catering revenues are
recognised on the date the services and goods are supplied to the customer.
Revenue from the sale of branded products is recognised at the point of
despatch when significant risks and rewards of ownership have been
transferred to the buyer.
Expenses
Operating lease payments
Payments made under operating leases are recognised in the income statement on a
straight-line basis over the term of the lease. Lease incentives are recognised
in the income statement as an integral part of the total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the
reduction of the outstanding liability. The finance charge is allocated to each
period during the lease term so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
Net financing costs
Net financing costs comprise interest payable on borrowings, calculated using
the effective interest rate method.
The discounting of the deferred payments for the purchase of players'
registrations produces a notional interest payable amount and this is charged to
finance costs.
The discounting of the deferred receipts for sales of players' registrations
produces a notional interest receivable amount and this is credited to finance
income.
Taxation
Tax on the result for each period comprises current and deferred tax. Tax is
recognised in the income statement, except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the period,
using tax rates enacted or substantially enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used
for taxation purposes. The following temporary differences are not provided for:
the initial recognition of goodwill, the initial recognition of assets or
liabilities that affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in subsidiaries to
the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation
or settlement of the carrying amounts of assets and liabilities, using tax rates
enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
Intangible assets and goodwill
i) Acquired players' registrations
The costs associated with the acquisition of players' registrations are
initially recorded at their fair value at the date of acquisition as intangible
fixed assets. These costs are fully amortised over the period of the respective
players' contracts.
For the purpose of impairment reviews, acquired players' registrations are
classified as a single cash-generating unit until the point at which it is made
clear that the player is no longer an active member of the playing squad. In
these circumstances the carrying value of the players' registration is reviewed
against a measurable net realisable value.
Acquired players' registrations are classified as 'Assets held for sale' on the
balance sheet if, at any time, it is considered that the carrying amount of a
registration will be recovered principally through a sale. The measurement of
the registration is the lower of (a) fair value (less costs to sell) and (b)
carrying value. Amortisation of the asset is suspended at the time of
reclassification, although impairment charges still need to be made if
applicable.
ii) Goodwill
Goodwill arises on business combinations, representing the differences between
the cost of acquisition and the fair value of assets acquired. Goodwill is
stated at cost less any accumulated impairment losses. Goodwill is allocated to
cash-generating units and is not amortised but is tested annually for
impairment.
iii) Amortisation
Amortisation is charged to profit or loss on a straight-line basis over the
estimated useful lives of player registrations.
Property, plant and equipment
i) Owned assets
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses.
ii) Leased assets
Finance leases are those which transfer substantially all of the risks and
rewards of ownership to the lessee. Assets held under finance leases are
capitalised as property, plant and equipment and are depreciated over the
shorter of the lease term or their useful economic life. The capital elements
are charged to the income statement over the period of the lease to produce a
constant rate of charge on the balance of capital repayments outstanding.
All other leases are operating leases, the rentals on which are charged to the
income statement on a straight-line basis over the lease term.
iii) Depreciation
Depreciation is charged to the income statement to write off the cost of
property, plant and equipment less estimated residual value, on a straight-line
basis, over their estimated useful lives as follows:
Freehold Buildings 50 years
Fixtures, Plant and Equipment 4-5 years
Motor Vehicles 4 years
No depreciation is provided on freehold land or assets in the course of
construction. The residual value is reassessed annually.
Interest incurred on borrowings to finance assets in the course of construction
is capitalised. Once construction has been completed, interest is charged to the
income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the weighed average principle and includes expenditure incurred in
acquiring the inventories and bringing them to their existing location and
condition. Net realisable value is based on the estimated selling price in the
ordinary course of business. Provision is made for obsolete, slow-moving or
defective items where appropriate.
Inventories of property are stated at the lower of cost and net realisable
value.
Cash and cash equivalents
Cash and cash equivalents compromise cash balances.
Signing on fees
Signing on fees are charged to the income statement in accordance with the terms
of the player's contract. Where a player's registration is transferred, any
signing on fees payable in respect of future periods are charged against the
profit/(loss) on disposal of players' registrations in the period in which the
disposal is recognised.
Deferred income
Deferred income comprises amounts received from capital grants, sponsorship and
season ticket income. Capital grants are released to the income statement on a
straight-line basis over the estimated useful lives of the assets to which they
relate. Other deferred income is released to the income statement on a
straight-line basis over the period to which it relates.
Foreign currency
Transactions in foreign currencies are translated into Sterling at the rate of
exchange ruling at the date of the transaction. Foreign currency monetary assets
and liabilities at the balance sheet date are translated at the foreign exchange
rate ruling at that date. Foreign exchange differences arising on translation
are recognised in the income statement. Non-monetary assets and liabilities
measured at historical cost in a foreign currency are translated into Sterling
at the rate of exchange on the date of the transaction.
In the Group's financial statements, all items and transactions of group
entities with a functional currency other than Sterling were translated into
Sterling upon consolidation. Assets and Liabilities have been translated into
Sterling at the closing rate at the balance sheet dates. Income and expenses
have been translated at the average rate over the reporting periods. Any
differences arising have been charged/credited to the currency translation
reserve in equity.
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity (i.e. forming
part of shareholders' funds) only to the extent that they meet the following two
conditions:
(a) They include no contractual obligations upon the Company (or Group as the
case may be) to deliver cash or other financial assets or to exchange
financial assets or financial liabilities with another party under
conditions that are potentially unfavourable to the Company (or Group); and
(b) Where the instrument will or may be settled in the Company's own equity
instruments, it is either a non-derivative that includes no obligation to
deliver a variable number of the Company's own equity instruments or is a
derivative that will be settled by the Company's exchanging a fixed amount
of cash or other financial assets for a fixed number of its own equity
instruments.
To the extent that this definition is not met, the proceeds of issue are
classified as a financial liability. Where the instrument so classified takes
the legal form of the Company's own shares, the amounts presented in these
financial statements for called-up share capital and share premium account
exclude amounts in relation to those shares.
Where a financial instrument that contains both equity and financial liability
components exists these components are separated and accounted for individually
under the above policy. The finance cost on the financial liability component is
correspondingly higher over the life of the instrument.
Finance payments associated with financial liabilities are dealt with as part of
finance expenses. Finance payments associated with financial instruments that
are classified in equity are dividends and are recorded directly in equity.
Where the Company enters into financial guarantee contracts to guarantee the
indebtedness of other companies within its group, the Company considers these to
be insurance arrangements and accounts for them as such. In this respect, the
Company treats the guarantee contracts as a contingent liability until such time
as it becomes probable that the Company will be required to make payment under
the guarantee.
Derivative financial instruments and hedging
The Group uses derivative financial instruments to hedge its exposure to risks
arising from operational, financing and investment activities. The only hedge at
31 December 2007 was an interest rate swap in respect of the borrowings for the
construction of the hotel at Bramall Lane. In accordance with its treasury
policy, the Group does not hold or issue derivative financial instruments for
trading purposes.
Derivative financial instruments are recognised at fair value. To the extent
that the hedge is effective the gain or loss on remeasurement to fair value is
reflected in equity within the hedging reserve. The fair value of forward
exchange contracts is their quoted market price at the balance sheet date, being
the present value of the quoted forward price.
When a derivative financial instrument is used as an economic hedge of the
foreign exchange exposure of a recognised monetary asset or liability, hedge
accounting is not applied and any gain or loss on the hedging instrument is
recognised in profit or loss.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference
between cost and redemption being recognised in profit or loss over the period
of the borrowing on an effective interest basis.
Employee benefits
Defined contribution plans
Obligations for contributions to defined contributions pension plans are
recognised as an expense in the income statement as incurred.
Impairment
The carrying value of the Group's assets, other than inventories and deferred
tax assets, are reviewed at each balance sheet date to determine whether there
is any indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated.
For goodwill and intangible assets that are not yet available for use, the
recoverable amount is estimated at each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to cash-generating
units and then to reduce the carrying amount of the other assets in the unit on
a pro-rata basis. A cash-generating unit is the smallest identifiable group of
assets that generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets.
Goodwill and intangible assets that are not yet available for use were tested at
1 July 2006, the date of transition to Adopted IFRSs.
Trade and other payables and receivables
Trade and other payables and receivables on normal terms are stated at their
nominal value, less, in the case of receivables, any impairment losses that may
be required.
Other payables on deferred terms, in particular the purchase of players'
registrations are recorded at their fair value on the date of the transaction
and subsequently at amortised cost.
Other receivables on deferred terms, in particular the proceeds from sales of
players' registrations are recorded at their fair value at the date of sale and
subsequently at amortised cost less allowances for impairment.
Segment reporting
A segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment) or in providing products or
services within a particular economic environment (geographical segment) which
is subject to risks and rewards that are different from those of the other
segments.
Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
If the effect is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessment of
the time value of money and, where appropriate, the risks specific to the
liability.
Joint ventures
Entities whose economic activities are controlled jointly by the group and by
the other ventures (joint venture) are accounted for using the proportionate
consolidation method.
3. Segment analysis
The Group has five separately identifiable business segments.
The revenues and operating profit/(loss) before promotion bonuses, amortisation
and impairment of costs of players are summarised as follows:
Revenue
6 months 6 months 6 months 6 months 12 months
ended ended ended ended ended
31.12.07 31.12.07 31.12.07 31.12.06 30.06.07
Unaudited Unaudited Unaudited Unaudited Unaudited
China UK Total Total Total
�000 �000 �000 �000 �000
Football 346 14,682 15,028 19,451 36,350
Royalty and
stewarding - 62 62 79 132
Business centre
income - 471 471 420 853
Health club income - 819 819 735 1,550
Property ventures - 725 725 5,213 6,882
-----------------------------------------------------------
346 16,759 17,105 25,898 45,767
-----------------------------------------------------------
Operating profit/(loss) before promotion bonuses, amortisation, impairment of
costs of players' registrations and profit on disposal of non current assets
6 months 6 months 6 months 6 months 12 months
ended ended ended ended ended
31.12.07 31.12.07 31.12.07 31.12.06 30.06.07
Unaudited Unaudited Unaudited Unaudited Unaudited
China UK Total Total Total
�000 �000 �000 �000 �000
Football (848) (1,826) (2,674) 3,966 5,561
Royalty and
stewarding - 18 18 25 8
Business centre
income - 190 190 136 376
Health club income - 217 217 97 310
Property ventures - 550 550 1,216 1,819
-----------------------------------------------------------
(848) (851) (1,699) 5,440 8,074
-----------------------------------------------------------
4. During the six months ended 31 December 2007 the Group entered into an
interest rate swap in relation to the �13.5 million loan obtained to finance
the construction of the hotel. The Group has designated the hedge as a
cashflow hedge. The hedge has a fixed interest rate of 4.99%, the value of
the hedge amortises over the period to 2027, in accordance with the loan's
repayment schedule. The Group recognised a liability of �488,500 in respect
of the fair value of the interest rate hedge at 31 December 2007. This
movement in the fair value has been recognised in the hedge reserve.
5. The Income Tax shown in the profit and loss account represents the Group's
share of the joint venture tax charge and credit for Group losses relieved
by consortium relief. No income tax liability arises in the rest of the
Group during the six months ended 31 December 2007 due to the availability
of losses brought forward.
6. Reconciliation of equity
Share
Share premium Merger Hedge Translation Retained Minority
capital account reserve reserve reserve earnings Total interest Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
�000 �000 �000 �000 �000 �000 �000 �000 �000
Balance at 30 June
2006 21,184 16,803 3,018 - - (29,915) 11,090 (4) 11,086
Change in equity in the six months to 31 December 2006
Profit for the
period - - - - - 1,339 1,339 (81) 1,258
-----------------------------------------------------------------------------------------------
Total recognised
income and expense
for the period - - - - - 1,339 1,339 (81) 1,258
Dividends
Issue of share
capital - (25) - - - - (25) - (25)
------------------------------------------------------------------------------------------------
Balance at 31
December 2006 21,184 16,778 3,018 - - (28,576) 12,404 (85) 12,319
===============================================================================================
Share
Share premium Merger Hedge Translation Retained Minority
capital account reserve reserve reserve earnings Total interest Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
�000 �000 �000 �000 �000 �000 �000 �000 �000
Balance at 30 June
2006 21,184 16,803 3,018 - - (29,915) 11,090 (4) 11,086
Change in equity in the year to 30 June 2007
Exchange differences on
translation of
foreign operations - - - - (10) - (10) - (10)
Net income recognised
directly in equity - - - - (10) - (10) - (10)
Profit for the
period - - - - - 474 474 (157) 317
-----------------------------------------------------------------------------------------------
Total recognised
income and expense
for the period - - - - (10) 474 464 (157) 307
Dividends
Issue of share capital 6,667 3,216 - - - - 9,883 - 9,883
-----------------------------------------------------------------------------------------------
Balance at 30 June
2007 27,851 20,019 3,018 - (10) (29,441) 21,437 (161) 21,276
===============================================================================================
Share
Share premium Merger Hedge Translation Retained Minority
capital account reserve reserve reserve earnings Total interest Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
�000 �000 �000 �000 �000 �000 �000 �000 �000
Balance at 30 June
2007 27,851 20,019 3,018 - (10) (29,441) 21,437 (161) 21,276
Change in equity in the six months to 31 December 2007
Exchange differences on
translation of
foreign operations - - - - - - - - -
Cash flow hedge:
Loss taken to equity - - - (489) - - (489) - (489)
Net income recognised
directly in equity - - - (489) - - (489) - (489)
Profit for the period - - - - - 9 9 (85) (76)
-----------------------------------------------------------------------------------------------
Total recognised income
and expense for the
period - - - (489) - 9 (480) (85) (565)
Dividends
Issue of share capital - - - - - - - - -
Balance at 31 -----------------------------------------------------------------------------------------------
December 2007 27,851 20,019 3,018 (489) (10) (29,432) 20,957 (246) 20,711
===============================================================================================
7. The calculation of earnings/(loss) per share is based on the profit/(loss) on
ordinary activities after tax divided by 278,508,014 shares (six months
ended 31 December 2006: 211,841,348 and year ended 30 June 2007:
225,174,681), being the weighted average number of shares in issue during
each period.
8. Post balance sheet events
During January 2008 the Club purchased players for a total maximum
consideration of �0.4 million and sold players for �1 million.
On 13 February 2008 Esplanade Real Estate Kft, controlled by Kevin McCabe,
Sheffield United's chairman, obtained preferred bidder status in a tender to
redevelop the Hungarian football club Ferencvaros' stadium and its additional
land interests. As part of the this deal the Group has entered into a
co-operative agreement to acquire 100% of the share capital of FTC Labdarugo
Zft. This company operates Ferencvaros football club.
9. The financial information for the six months ended 31 December 2007 and 31
December 2006 contained within this report is unaudited. The financial
information for the year ended 30 June 2007, which does not constitute
statutory accounts within the meaning of Section 240(5) of the Companies Act
1985, has been extracted from the statutory accounts of the Company for that
period which have been delivered to the Registrar of Companies and restated
for the impact of adoption of IFRSs as set out in note 11.
10. Copies of this report will be sent to shareholders and will be available
from the Secretary, Sheffield United plc, Bramall Lane, Sheffield, S2 4SU.
11. Explanation of Transition to IFRSs
As stated in the accounting policies in note 1, these are the Group's
first consolidated financial statements prepared in accordance with Adopted
IFRSs. The significant accounting policies have been applied in preparing
these accounts for the six months ended 31 December 2007, and in the
preparation of a comparative IFRS balance sheet at 1 July 2006 (the group's
date of transition). In preparing its opening IFRS balance sheet, the Group
has adjusted amounts reported previously in financial statements prepared
in accordance with UK GAAP.
An explanation of how the transition from UK GAAP to IFRSs has affected the
Group's financial position and financial performance is set out in the following
tables and notes
Intangible assets
(1) Acquisition of player registrations
Under IAS 38 "Intangible Assets" players acquired on deferred terms are recorded
at the fair value at the date of acquisition. The related creditor is then
increased to the settlement value on an effective interest basis over the period
of deferral, with this value being charged as notional interest within 'Finance
expenses' in the income statement. The net effect is a reduction in the creditor
of �44,000 at 31 December 2006 and �7,000 at 30 June 2007.
The increased interest is charged to finance costs over the deferral period and
amounted to �56,000 for the six months ended 31 December 2006 and �82,000 for
the twelve months ended 31 December 2007.
The corresponding player registration value is also reduced by the notional
interest; the lower intangible asset value results in a reduced charge to
operating profit as the intangible asset is amortised over the length of the
player's contract. The net effect on intangible assets is a reduction of �86,000
at 31 December 2006 and a reduction of �71,000 at 30 June 2007. Operating profit
for the six months to 31 December 2006 increased by �15,000. Operating profit
for the year ended 30 June 2007 was unchanged.
(2) Disposal of Player Registrations
Under IAS 38 "Intangible Assets" players sold on deferred terms are recorded at
the fair value at the date of disposal. The related receivable is then reduced
to the settlement value on an effective interest basis over the period of
deferral, with this value being credited to notional interest within 'Finance
expenses' in the income statement. The net effect is a reduction in the debtor
of �19,000 at 30 June 2007. The net effect of the reduction in debtors at
31 December 2006 was not material and no adjustment has been made.
The reduced interest is credited to finance costs over the deferral period and
amounts to �11,000 for the six months ended 30 June 2007.
Goodwill
Under IRFS 3 "business combinations" goodwill arising on a business combination
is not amortised, but is subject to an annual impairment review.
The Board of Directors has performed such a review and do not consider an
impairment necessary. Accordingly the amortisation accounted for under UK GAAP
has been reversed.
Non - current assets held for resale
Under IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" if
at any time, it is considered that the carrying amount of an asset (including a
player's registration) will be recovered principally through sale, rather than
continuing use, then the value of that asset is required to be reclassified as a
'Non-current asset held for resale' and disclosed as such on the balance sheet
within current assets. At the time of reclassification, impairment charges still
need to be made if applicable.
The Board of Directors has reviewed the squad at 31 December 2007 and concluded
that no reclassification should be made under the provisions of IFRS 5. The
players sold in the January 2008 had no net book value at 31 December 2007.
The reclassification at 31 December 2006 was made in respect of the net book
value of Paul Ifill and Ade Akinbiyi, both of whom were sold in the January 2007
transfer window.
Cashflow
In accordance with IAS 7 the cashflow statement has been represented.
Joint venture accounting
In accordance with IAS 31 from transition date, 1 July 2006, the Group will
account for its interest in a joint venture using the proportionate
consolidation method.
Explanation of transition to IFRSs
Group
The reconciliation of the condensed consolidated income statement between
UK GAAP and IFRSs for the six months ended 31 December 2006 is included
below:
UK GAAP IAS31 IAS 38 IFRS's
31 December 31 December
2006 2006
�000 �000 �000 �000
Revenue 25,898 - - 25,898
Operating profit before promotion
bonuses, amortisation and
impairment of cost of players'
registrations and cost of
terminating player's contracts 4,224 1,216 - 5,440
Amortisation and impairment of
cost of players' registrations (2,935) - 15 (2,920)
Cost of terminating
players' contracts (35) - - (35)
--------------------------------------
Operating profit 1,254 1,216 15 2,485
Share of operating profit
in joint venture 1,216 (1,216) - -
Profit on disposal of
players' registrations 83 - - 83
--------------------------------------
Operating profit before
finance costs 2,553 - 15 2,568
Finance costs (1,004) - (56) (1,060)
Profit before tax 1,549 - (41) 1,508
Income tax expense (250) - - (250)
--------------------------------------
Profit for the period 1,299 - (41) 1,258
--------------------------------------
Attributable to:
Equity holders of the
parent 1,380 - (41) 1,339
Minority interest (81) - - (81)
--------------------------------------
1,299 - (41) 1,258
The reconciliation of the condensed consolidated income statement between UK
GAAP and IFRSs for the year ended 30 June 2007 is included below:
UK GAAP IAS 31 IAS 38 IFRS IFRS's
3
30 June 30 June
2007 2007
�000 �000 �000 �000 �000
Revenue 45,767 - - - 45,767
-------------------------------------------
Operating profit/(loss) before
promotion bonuses,amortisation and
impairment of cost of players'
registrations and cost of
terminating players' contracts 6,269 1,784 - 21 8,074
Amortisation and impairment of cost
of players' registrations (4,852) - 30 - (4,822)
Cost of terminating players'
contracts (950) - - - (950)
-------------------------------------------
Operating profit/( loss) 467 1,784 30 21 2,302
Share of operating profit in
joint venture 1,784 (1,784) - - -
Profit on disposal of
players' registrations 691 - (30) - 661
Profit on disposal of
tangible fixed assets 27 - - - 27
-------------------------------------------
Operating profit before
finance costs 2,969 - - 21 2,990
Finance costs (2,582) - (82) - (2,664)
-------------------------------------------
Profit before tax 387 - (82) 21 326
Income tax expense (9) - - - (9)
-------------------------------------------
Profit for the period 378 - (82) 21 317
-------------------------------------------
Attributable to:
Equity holders of the parent 535 - (82) 21 474
Minority interest (157) - - - (157)
-------------------------------------------
378 - (82) 21 317
Explanation of transition to IFRSs
Group
The reconciliation of equity as at 1 July 2006 (IFRS) and UK GAAP is included
below:
IFRS 5
UK GAAP Non-current
as IAS 31 IAS 38 assets
reported Joint Intangible held for IFRS 3 IFRS's
1 July 2006 ventures assets resale Goodwill 1 July 2006
�000 �000 �000 �000 �000 �000
ASSETS
Non-current assets
Property, plant and
equipment 31,264 - - - - 31,264
Goodwill 134 - - - (11) 123
Other intangible
assets 6,164 - (101) (1,150) - 4,913
Investment in joint
venture: 1,647 (1,647) - - - -
-------------------------------------------------------------------------
39,209 (1,647) (101) (1,150) (11) 36,300
-------------------------------------------------------------------------
Current assets
Inventories 326 8,810 - - - 9,136
Trade and other
receivables 6,756 353 - - - 7,109
Cash and cash
equivalents 600 - - - - 600
-------------------------------------------------------------------------
7,682 9,163 - - - 16,845
-------------------------------------------------------------------------
Non-current assets
classified as held for
sale and assets in
disposal groups
classified as held for
sale - - - 1,150 - 1,150
-------------------------------------------------------------------------
7,682 9,163 - 1,150 - 17,995
-------------------------------------------------------------------------
Total assets 46,891 7,516 (101) - (11) 54,295
LIABILITIES
Current liabilities
Trade and other
payables (9,933) (380) 100 - - (10,213)
Short-term borrowings (1,664) (2,502) - - - (4,166)
Current portion of
long-term borrowings (26) - - - - (26)
Current portion of
deferred income (146) - - - - (146)
Current tax payable - (157) - - - (157)
-------------------------------------------------------------------------
(11,769) (3,039) 100 - - (14,708)
Non-current liabilities
Long-term borrowing (13,853) (4,477) - - - (18,330)
Long-term deferred
income (10,171) - - - - (10,171)
-------------------------------------------------------------------------
(24,024) (4,477) - - - (28,501)
Total liabilities (35,793) (7,516) 100 - - (43,209)
Net assets 11,098 - (1) - (11) 11,086
-------------------------------------------------------------------------
EQUITY
Equity attributable to equity holders of the parent
Share capital 21,184 - - - - 21,184
Share premium account 16,803 - - - - 16,803
Merger reserve 3,018 - - - - 3,018
Translation reserve - - - - - -
Retained earnings (29,903) - (1) - (11) (29,915)
-------------------------------------------------------------------------
11,102 - (1) - (11) 11,090
Minority interest (4) - - - - (4)
-------------------------------------------------------------------------
Total equity 11,098 - (1) - (11) 11,086
-------------------------------------------------------------------------
Explanation of transition to IFRSs
Group
The reconciliation of equity as at 31 December 2006 (IFRS) and UK GAAP is included below:
IFRS 5
UK GAAP Non-current
as IAS 31 IAS 38 assets
reported Joint Intangible held for IFRS 3 IFRS's
31 December 2006 ventures assets resale Goodwill 31 December 2006
�000 �000 �000 �000 �000 �000
ASSETS
Non-current assets
Property, plant and
equipment 33,495 - - - - 33,495
Goodwill 134 - - - (11) 123
Other intangible
assets 7,995 - (86) (1,150) - 6,759
Investment in joint
venture: 2,230 (2,230) - - - -
-----------------------------------------------------------------------------
43,854 (2,230) (86) (1,150) (11) 40,377
-----------------------------------------------------------------------------
Current assets
Inventories 568 18,272 - - - 18,840
Trade and other
receivables 11,334 380 - - - 11,714
Cash and cash
equivalents 8,462 293 - - - 8,755
-----------------------------------------------------------------------------
20,364 18,945 - - - 39,309
Non-current assets classified as
held for sale and assets in
disposal groups classified
as held for sale - - - 1,150 - 1,150
-----------------------------------------------------------------------------
20,364 18,945 - 1,150 - 40,459
-----------------------------------------------------------------------------
Total assets 64,218 16,715 (86) - (11) 80,836
LIABILITIES
Current liabilities
Trade and other payables (7,497) 56 44 - - (7,397)
Short-term borrowings (10,001) (11,808) - - - (21,809)
Current portion of
long-term borrowings (12,281) - - - - (12,281)
Current portion of
deferred income (8,296) - - - - (8,296)
Current tax payable - (342) - - - (342)
-----------------------------------------------------------------------------
(38,075) (12,094) 44 - - (50,125)
Non-current liabilities
Long-term borrowing (9,248) (4,621) - - - (13,869)
Long-term deferred
income (4,523) - - - - (4,523)
-----------------------------------------------------------------------------
(13,771) (4,621) - - - (18,392)
Total liabilities (51,846) (16,715) 44 - - (68,517)
Net assets 12,372 - (42) - (11) 12,319
-----------------------------------------------------------------------------
EQUITY
Equity attributable to equity holders of the parent
Share capital 21,184 - - - - 21,184
Share premium account 16,778 - - - - 16,778
Merger reserve 3,018 - - - - 3,018
Translation reserve - - - - - -
Retained earnings (28,523) - (42) - (11) (28,576)
-----------------------------------------------------------------------------
12,457 - (42) - (11) 12,404
Minority interest (85) - - - - (85)
-----------------------------------------------------------------------------
Total equity 12,372 - (42) - (11) 12,319
-----------------------------------------------------------------------------
Explanation of transition to IFRSs
Group
The reconciliation of equity as at 30 June 2007
(IFRS) and UK GAAP is included below:
IFRS 5
UK GAAP Non-current
as IAS 31 IAS 38 assets
reported Joint Intangible held for IFRS 3 IFRS's
30 June 2007 ventures assets resale Goodwill 30 June 2007
�000 �000 �000 �000 �000 �000
ASSETS
Non-current assets
Property, plant and
equipment 37,013 - - - - 37,013
Goodwill 197 - - - 10 207
Other intangible
assets 11,254 - (71) - - 1,183
Investment in joint
venture: 1,697 (1,697) - - - -
-------------------------------------------------------------------------
50,161 (1,697) (71) - 10 48,403
-------------------------------------------------------------------------
Current assets
Inventories 358 21,324 - - - 21,682
Trade and other
receivables 8,417 1,085 (19) - - 9,483
Cash and cash
equivalents 3,610 - - - - 3,610
-------------------------------------------------------------------------
12,385 22,409 (19) - - 34,775
Total assets 62,546 20,712 (90) - 10 83,178
LIABILITIES
Current liabilities
Trade and other
payables (8,202) (690) 7 - - (8,885)
Short-term
borrowings - (14,742) - - - (14,742)
Current portion of
long-term borrowings (8,204) - - - - (8,204)
Current portion of
deferred income (147) - - - - (147)
Current tax payable - (499) - - - (499)
-------------------------------------------------------------------------
(16,553) (15,931) 7 - - (32,477)
Non-current
liabilities
Long-term borrowing (15,777) (4,781) - - - (20,558)
Long-term deferred
income (8,867) - - - - (8,867)
-------------------------------------------------------------------------
(24,644) (4,781) - - - (29,425)
Total liabilities (41,197) (20,712) 7 - - (61,902)
Net assets 21,349 - (83) - 10 21,276
EQUITY
Equity attributable to equity holders of the parent
Share capital 27,851 - - - - 27,851
Share premium accounts 20,019 - - - - 20,019
Merger reserve 3,018 - - - - 3,018
Translation reserve (10) - - - - (10)
Retained earnings (29,368) - (83) - 10 (29,441)
-------------------------------------------------------------------------
21,510 - (83) - 10 21,437
Minority Interest (161) - - - - (161)
Total equity 21,349 - (83) - 10 21,276
-------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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