AFC ENERGY PLC
Arsenal Holdings plc
Results for the year ended 31 May 2017
ARSENAL ANNOUNCE FULL YEAR RESULTS
* Turnover from football increased to £422.8 million (2016 - £350.6 million)
with strong growth in broadcasting supported by commercial activity. First
time Club's football revenues have exceeded £400 million.
* Additional £58.0 million from broadcasting as a consequence of the
increased value of Premier League rights (first year of the latest three
year cycle) and UEFA Champions League distributions.
* Overall Commercial revenue growth for the year of 10% led by an additional
£5.9 million from secondary partnerships.
* A third successive year of increased cash investment in the squad is
reflected in higher amortisation charges and higher wage costs.
* Wage costs rose to £199.4 million (2016 - £195.4 million) and represented
47.2% (2016 - 55.7%) of football revenues. Year on year comparison is
distorted by there being no players' Champions League qualification bonus
in the 2016/17 figures.
* Amortisation charge on player registrations rose to £77.1 million (2016 - £
59.2 million).
* Limited transfers out activity - the profit on sale of player registrations
amounted to £6.8 million (2016 - £2.0 million).
* Quiet year for the Group's property business with a contribution to pre-tax
profits of £0.2 million (2016 - £2.0 million).
* Group profit before tax was £44.6 million (2016 - £2.9 million).
* Tax charge for the year of £9.3 million (2016 - £1.2 million) reflecting a
balance of higher taxable profits and lower rates of UK corporation tax.
* The Group has no short-term debt and its cash balances, excluding the
accounts designated as debt service reserves, amounted to £144.3 million
(2016 - £191.1 million). The reduction follows a Club record net cash
outflow on player transfers of £102.5 million (2016 - £54.2 million).
The liabilities for player acquisitions are, in part, payable in instalments
and the outstanding net amount due to vendor clubs was £42.7 million (2016 - £
42.5 million).
Commenting on the results for the year, the Club's Chairman, Sir Chips Keswick,
said:
"The Club's thirteenth FA Cup win was some compensation for the disappointment
of dropping out of the Premier League's top four for the first time in 20
years. This summer we have again moved to strengthen the squad and we are
optimistic about the season ahead."
The Club's Chief Executive Officer, Ivan Gazidis, said:
"Our ambition is clear - to win major trophies. In order to compete at the top,
we need to strive to be better than our competitors in everything we do. That
is why during the past season we have continued to make substantial investments
to drive the club forward. At the top of the pyramid, we have scaled up our
investment in our First Team squad significantly in recent years, spending a
net £203 million in transfer fees in the last three seasons. We have
transformed our training ground and completed a total rebuild of our Academy.
We are focused on ensuring that the structures, in terms of people, expertise
and facilities, in place around the Manager and the players are the best that
they can be. By getting that environment right, down to fine tuning the detail,
we optimise our chances of achieving the results we want on the pitch."
Arsenal Holdings plc
Chairman's report
Overview
The triumph at Wembley in the Emirates FA Cup Final against Chelsea made for an
upbeat conclusion to what had otherwise been a somewhat frustrating and
disappointing Premier League season. The Wembley finale was another memorable
day for us all as we lifted the trophy for the third time in four years and for
a record thirteenth time in our illustrious history. I thought our support on
the day was outstanding and helped us to a deserved win.
This was some compensation for the disappointment of dropping out of the
Premier League's top four for the first time in 20 years, so bringing to an end
19 consecutive seasons playing in the UEFA Champions' League. This will always
remain a remarkable run of consistency which we recognise will be increasingly
difficult to replicate in this era of increased competition.
Following the season's end we announced the reappointment of our manager Arsène
Wenger for a further two years and this summer we have again moved to
strengthen the squad. Alexandre Lacazette and Sead Kolasinac have arrived from
France and Germany and both have already made some good contributions. In
addition, the emergence of young players such as Reiss Nelson and Joe Willock
has provided further encouragement of progression from Academy to First Team
squad. We are optimistic about the season ahead.
As well as strengthening, one of our key objectives over the summer was to
reduce the size of what had become a very large First Team squad. As a result a
number of players have left us for new opportunities and in particular our best
wishes go to Alex Oxlade-Chamberlain, Kieran Gibbs, Wojciech Szczesny and
Gabriel. All of whom made important contributions to the Club during their time
with us.
Off the pitch, we have completed the latest phase of the transformation of our
London Colney training facilities and our fully revamped Academy at Hale End
was officially opened last spring.
This is also an important year for the Arsenal Women's Super League team. They
enter their 30th year this season and continue to be at the forefront of the
women's game, the profile of which continues to rise.
Financials
You will read in the following pages that our total revenues for the year
ending 30 May 2017 were £424 million. This is the first time we have passed the
£400 million mark. The main increases were £58 million more from television in
the first year of the new Premier League broadcast deal supported by revenue
from UEFA Champions' League participation. There was an increase in Commercial
revenues of £10.3 million, driven primarily by secondary partnerships. Overall
pre-tax profit for the year was £44.6 million.
During this accounting period expenditure on transfers was at a record level
for the Club of £114 million in terms of contractual cost and £102 million in
terms of net cash outflow. This primarily relates to the 2016 summer signings
of Granit Xhaka, Shkodran Mustafi and Lucas Perez. At the same time our total
wage cost reached a level very close to £200 million.
Transforming lives
Through The Arsenal Foundation and our Arsenal in the Community team we
continue to make a significant impact on thousands of people's lives at home
and abroad. Last year we raised £1 million for The Arsenal Foundation through
the Arsenal Legends' match against Milan Glorie and the money has been put to
good effect providing pitches and facilities for young people in North London,
Jordan, Indonesia and Somalia.
This is due in large part to significant financial contributions from our
players, staff and fans for which we are hugely grateful.
Our Arsenal in the Community team continues to deliver an outstanding programme
in Islington and other nearby boroughs. The work is linked directly to local
areas of need and I am proud that we continue to maintain a significant focus
on this important work.
Thank you
I would like to recognise the support from our commercial partners who make
such important contributions both financially and in terms of helping build the
Club's name around the world.
In addition, my thanks go to Stan Kroenke for his support and guidance, and my
fellow directors, our management team and entire staff for all their hard work
and dedication
Finally, I would like to thank all of our fans for your continued support. We
understand and acknowledge your passion and your desire for further success. We
share with you high ambitions for the Club and our aim is very clear, to
deliver that success.
Sir Chips Keswick
Chairman
28 September 2017
Arsenal Holdings plc
Chief Executive's Report
Our journey as football fans will always feature a mix of strong emotions -
that emotional connection is what makes our sport so compelling.
Last season we felt the disappointment of dropping out of the top four in the
Premier League for the first time in 20 seasons yet we added to our club's
great history by winning the Emirates FA Cup for the third time in four years.
That run of league consistency in an era of fierce competition was
unprecedented and the joy of lifting the FA Cup for a record 13th time (and the
manner in which we won it) is undimmed and should bring us great pride.
But we are Arsenal and expectations quite rightly run very high. Our
overarching aim is to compete for and win trophies and, in particular, to win
the Premier League. It is that goal which informs all the decisions we make
across the Club, on and off the pitch.
In order to compete at the top, we need to strive to be better than our
competitors in everything we do. That is why during the past season we have
continued to make substantial investments to drive the club forward in areas
such as analytics, scouting, psychology and medical and fitness support as well
as broad investments in our people capabilities throughout our Academy. In
addition we have transformed our training ground at London Colney, completed a
total rebuild of our youth facilities at our Academy at Hale End and invested
in a new Desso grass pitch for our youth and women's teams at Boreham Wood. All
our facilities are now state of the art. In total we will have spent £40
million on these building projects over the last three years, all with the aim
of creating the optimal environment for us to develop and grow our players.
The development of our own players through our academy remains a priority for
our football club. Ainsley Maitland-Niles and Jeff Reine-Adelaide have
progressed into the first team dressing room this season, joining the likes of
Alex Iwobi, Hector Bellerin and Francis Coquelin who have recently made the
same journey to become important members of our First Team squad. We have high
hopes for other young players such as Reiss Nelson, Joe Willock and Eddie
Nketiah, all of whom impressed on the pre-season tour to Sydney, Shanghai and
Beijing.
At the top of the pyramid, we have also scaled up our investment in our First
Team squad significantly in recent years, spending a net £203 million in
transfer fees in the last three seasons (including a record £103 million last
summer alone). This is coupled with an increase in our wage bill from £166
million to £199 million in the same period. With few notable outward transfers
during this period, our squad size had grown and we therefore had two major
objectives for the summer transfer window. To add to the squad only where we
could improve the quality of the players available to our manager - quality
over quantity - and to reduce our overall squad size.
To that end, we secured Sead Kolasinac and Alexandre Lacazette, our two primary
targets for this transfer window. We also transferred or loaned a number of
squad players to enhance the efficiency of our spending, to generate transfer
revenue for reinvestment into the team and in some cases (for example, as in
the case of Emi Martinez) to aid their development. At the same time, we
retained Alexis Sanchez and Mesut Özil and promoted new young talent from our
Academy pipeline into the first team. These decisions, taken as a whole, have
again strengthened our squad for this season's competitions. We will continue
this long term approach of progressively reinvesting all our available revenue
in our playing resources as we look forward.
Arsenal Women's Football
This season, we are celebrating the 30th season of our women's team and the
launch of the FA Women's Super League. We are proud of our history and our
leadership position in women's football. To mark the milestone and in keeping
with our constant progression we have dropped the use of the term "Arsenal
Ladies" which we felt was an outdated descriptor in the modern day. The women's
game continues to go from strength to strength and Arsenal remains at the
forefront of that progress.
Business update
The financial results for the year, which are covered in more detail in the
Financial Review section, show our turnover finished in excess of £400 million
for the first time. This was driven by a £58 million increase in television
revenues as a result of the first year of the new Premier League broadcast
deal. Commercial revenues also rose by £10 million primarily as a result of
commercial partnerships.
Commercial Partnerships/Retail
We continue to be an attractive proposition for partners around the world. They
are keen to engage directly with our huge global following and recognise the
power the Arsenal name has to reach people.
Over the course of this year new partnerships have been agreed with Octopus
Energy, MTN, Universal Pictures and Cavallaro Napoli and we have renewed our
deals with BNN Technology, MBNA and Gatorade. The partnership with Octopus
Energy assisted our transition to using 100 per cent renewably supplied
electricity at Emirates Stadium.
Our retail operations are performing strongly and generated record sales of
some £26 million. We have made significant investment in our online retail
operations and this is coming through strongly in terms of financial
performance and improved customer service. Visitor numbers for stadium tours
continued to rise with 230,000 visitors from all round the world.
Our partnership with PUMA continues to thrive. The new season's kits have been
particularly well received and the launch of the third kit with Sydney Harbour
Bridge as the backdrop was one of our iconic images of the summer.
Arsenal Media Group
The development of our media platforms underpins the growth of our partnership
and retail businesses. Our combined digital following of 60 million gives us
one of the biggest followings in sport and we continue to drive reach and
engagement across all channels. We now have 38 million Facebook followers, 11
million on Twitter and approaching 10 million on Instagram. Our YouTube,
Snapchat and Sina Weibo (China) channels are also growing at pace.
Ticketing
General admission prices have been held flat for the second successive year and
we have announced significant reductions in prices for our home matches in the
UEFA Europa League. We continue to offer 43,000 tickets across the season at £
26 and up to 14,000 £10 tickets are available per season to 14-16 year olds
within the Young Guns Enclosure. A further 26,000 tickets priced as low as £10
are available for each potential home League Cup fixture.
Our support for away fans continues with the provision of subsidised travel
when appropriate plus a cap of £26 on away match tickets, £4 below the £30
level mandated by the Premier League.
We continue to develop Ticket Exchange and Ticket Transfer. Last season more
than 105,000 tickets were processed.
Demand on Club Level continues to be very strong, with our sell out for the
2017/18 season being completed in record time.
The Arsenal Foundation and Arsenal in the Community
We fully appreciate the impact we can have on people's lives at home and around
the world and the work of The Arsenal Foundation and Arsenal in the Community
is a core part of our club.
Earlier this year the Arsenal Foundation and Save the Children combined to open
a football pitch in Indonesia. Work is underway on similar football projects in
Jordan and Somalia, as well as nearer to home in North London. An important
area of focus is with refugees and displaced people - a growing issue globally.
Our projects bring some sense of normality to people whose lives have been
turned upside down.
All this work is funded through the generosity of our players, manager, staff
and supporters.
As always, we have also given our support to a large number of local charitable
causes during the year while Arsenal in the Community's 'Arsenal Hub' continues
to be a hive of activity, delivering programmes for more than 1,000 local
participants every week.
Looking ahead
We are well placed to compete at the highest levels on and off the pitch, both
in the short and the longer term. We have an outstanding squad with a good
balance of experience and young home grown players. Off the pitch we continue
to build our infrastructure and capabilities across all aspects of our
operations. In particular we are focused on ensuring that the structures, in
terms of people, expertise and facilities, in place around the Manager and the
players are the best that they can be. By getting that environment right, down
to fine tuning the detail, we optimise our chances of achieving the results we
want on the pitch.
Our ambition is clear: to win major trophies and make Arsenal fans around the
world proud of this great club.
Thank you for your support.
I E Gazidis
Chief Executive Officer
28 September 2017
Arsenal Holdings plc
Financial Review
Increased revenues in the first year of a new Premier League broadcast cycle
have meant the Group's turnover exceeded £400 million for the first time with a
profit before tax of £44.6 million for the 2016/17 year, as compared to a
profit of £2.9 million in the prior year.
The principal factors influencing this result were:
An increase of £58.0 million in broadcasting revenue as a consequence of the
increased value of the Premier League contracts and higher Champions League
distributions;
An increase of £10.3 million in commercial and retail revenues mainly as a
result of new secondary partnerships:
Further investment into our playing resources leading to a combined increase of
£21.9 million in our wage bill and player amortisation costs;
Marginally improved profits from the sale of player registrations at £6.8
million (2016 - £2.0 million);
Low activity in the Group's property development business, contributing only £
0.2 million of pre-tax profits as against £2.0 million in the prior year; and
A small increase in net finance charges of £1.3 million as a result of adverse
movements in the market value of our interest rate swap and lower interest
rates on deposits.
2017 2016
£m £m
Group turnover 424.0 353.5
Operating profit before amortisation, 137.5 84.0
depreciation and player trading
Player trading (see table below) (63.4) (54.0)
Amortisation of goodwill and depreciation (15.4) (14.7)
Joint venture 0.6 1.0
Net finance charges (14.7) (13.4)
Profit before tax 44.6 2.9
Player Trading
Player trading consists of the profit from the sale of player registrations,
the amortisation charge, including any impairment, on the cost of player
registrations and fees charged for player loans.
2017 2016
£m £m
Profit on disposal of player registrations 6.8 2.0
Amortisation of player registrations (77.1) (59.2)
Loan fees 6.9 3.2
Total Player Trading (63.4) (54.0)
The sale of Serge Gnabry was the main component of player disposal profits
whilst the loans of Jack Wilshere, Callum Chambers, Wojciech Szczesny and Joel
Campbell helped us to generate loan fees (being premiums over and above the
recovery of contracted wages) of £6.9 million.
The increased amortisation charge is a direct result of a record level of
investment into the Club's playing resources. Led by the acquisitions of Granit
Xhaka, Shkodran Mustafi and Lucas Perez the Club invested £113.9 million in
acquiring new players and to a lesser extent extending the contracts of certain
existing players, for example Hector Bellerin.
The amortisation charge, being the mechanism by which the cost of player
acquisitions is expensed to profit and loss over the term of a player's
contract, provides a direct indication of the level of the underlying
investment in transfers. This is indicative of our own spending but also
reflects the upward movement in market prices for player talent which has been
driven both by Premier League revenues and the activities of certain cash rich
clubs.
In cash terms the impact of this year's acquisitions, together with instalments
due on those prior year acquisitions payable on deferred terms, was partially
offset by the collection of receivables on player sales (both current and
previous) and by the credit terms agreed with the vendor clubs. For the third
year running the net cash outflow on transfers established a new record level
for the Club of £102.5 million (2016 - £54.2 million). This meant that our net
cash payments on player transfers over the last three years have exceeded £200
million.
Cash position
The investment in transfers has resulted in a reduction in the Group's total
cash and bank balances which amounted to £180.1 million at the balance sheet
date (2016 - £226.5million). These balances are inclusive of debt service
reserve deposits of £35.9 million (2016 - £35.4 million). With a lower cash
position, the Group's overall net debt rose to £47.4 million (2016 - £6.1
million).
Proper consideration of the Group's cash balance must include allowance for the
payments for the aforementioned transfers, as follows:
2017 2016
£m £m
Bank balance excluding debt service 144.3 191.1
Net balance payable on transfers (42.7) (42.5)
101.6 148.6
Our year end bank balance includes advance receipts, of primary sponsorship and
season ticket sales, which represent working capital for the 2017/18 season.
These advance receipts amounted to £85.1 million (2016 - £100.6 million).
Football Segment
2017 2016
£m £m
Turnover 422.8 350.6
Operating profit before depreciation and 137.5 82.2
player trading
Player trading (63.4) (54.0)
Profit before tax 44.4 0.9
There were 26 home fixtures (19 Barclays Premier League, four UEFA Champions
League, one FA Cup and two EFL Cup), one fewer than the prior year, with an
average tickets sold per game of 59,885 (2016 - 59,834). The mix of games (two
EFL instead of three FA Cup) was unfavourable but this was balanced by shares
of away round FA Cup gate money and involvement in the FA Cup semi-finals. Gate
and match day revenue overall amounted to £100.0 million (2016 - £99.9
million).
Broadcasting revenues increased to £198.6 million (2016 - £140.6 million) for
the reasons referred to at the start of this commentary. Of the increase some £
39 million was attributable to the increased Premier League contracts. Aside
from the underlying contract increases we attracted 25 live Premier League game
facility fees (2016 - 27) and the merit payment associated with fifth place.
Champions League broadcasting revenues were also ahead as a result of our
increased share of Market Pool (30% share as Premier League runners up 2015/16)
and a favourable weaker sterling exchange rate in converting the UEFA
distributions which are made in Euro. Broadcasting contributed 47% (2016 - 40%)
of our Football revenues for the period.
Combined commercial and retail revenues rose to £117.2 million (2015 - £106.9
million). We achieved strong growth in our secondary partnerships, in a
competitive marketplace, rising by 34.5% (2016 - 39.6%) to £23.0 million (2016
- £17.1 million). Our retail business continued to perform strongly, with a new
and enhanced website driving on-line sales, with revenues rising by £1.7
million or 7%. Finally, we include prize money from the Emirates FA Cup
campaign in this category.
Wage costs for the year rose to £199.4 million (2016 - £195.4 million), which
was mainly attributable to increases in the cost of our football playing and
team support staff. The year to year upward change is depressed by the fact
that there was no Champions League qualification trigger event in 2016/17
whereas the prior year included a Champions League qualification bonus for
applicable First Team players.
A number of players joined or received contract increases part way through 2016
/17 and the reported wage cost is therefore not reflective of the full
annualised cost of these players. As such there is an increasing trend to our
underlying wage costs. In addition, it is usual at the start of a new
broadcasting cycle that the wage bill takes a little time to be fully
recalibrated against prevailing market rates which are informed by the
increased broadcasting revenues available to Premier League clubs.
The Club was fully compliant with the Premier League's wage cap / short term
cost control regulations.
The ratio of total wage bill to football revenues was reduced to 47.2% (2016 -
55.7%). We disclose this ratio as a benchmark which is widely used in the
analysis of football finance although our own monitoring in this area is based
on total player spend, a combination of wages plus transfer expenditure and
related costs, on a rolling three year basis against projections for the
available funds generated over that period by the Group's business activities.
Other operating costs, which include all the direct and indirect costs and
overheads associated with the Club's football operations and revenues, rose to
£79.4 million (2016 -£70.2 million) and represented 18.8% of football revenues
(2016 - 20.0%). Increases included costs associated with our commercial
activities including the logistics for the California tour matches, enhanced
match security, the donation of profits from the Legends game to charity and a
one-off charge of £1 million associated with the planned withdrawal from a
former operational property site.
Property Segment
2017 2016
£m £m
Turnover 1.2 2.9
Operating profit 0.1 1.7
Profit before tax 0.2 2.0
There was minimal activity in the Group's property business, with the only
transaction of note being the sale of one apartment from our small portfolio of
Highbury Square in-fill properties and rental income from two commercial lets.
A new build house in the in-fill portfolio will shortly go on sale but the two
remaining apartments are not yet available for sale.
Of the two remaining main development sites, we are at an advanced stage of
negotiations for the sale of the site adjacent to Holloway Road tube station
and completion of this sale should be included in our interim accounts for the
first half of 2017/18. We continue to consider options for the final remaining
site on Hornsey Road.
Profit after Tax
Overall there is a tax charge of £9.3 million (2016 - £1.2 million) on the
pre-tax result for the period. This meant that the retained profit for the year
was £35.3 million (2016 - £1.6 million).
The tax deductibility of the amortisation charge on player registrations is
partially restricted as a result of previous roll-over reliefs claimed on
player sales. This means that our taxable profit is higher than our accounts
pre-tax profit and this resulted in a corporation tax charge for the year of £
13.6 million (2016 - £5.6 million). During the year the Group paid UK
corporation tax of £7.7 million being the balance of the 2015/16 charge and due
instalments on account of the 2016/17 liability.
The corporation tax charge has been partially offset by a deferred tax credit
of £4.3 million (2016 - credit of £4.4 million). This credit reflects the
downward revaluation of the Group's deferred tax liabilities in light of the
lower future rates of corporation tax expected to apply when the underlying tax
deferrals unwind.
Outlook
The adverse impact of competing in the UEFA Europa League, as compared to the
UEFA Champions League, is forecast to be in the order of £20 million of which
one component is the fact there is no players' Champions League qualification
bonus accounted for in the 2016/17 results. The full financial impact will
depend on a number of factors including the actual progress made in the
competition, as this impacts both performance and market pool distributions
from UEFA. The Club has previously fully self-insured against a season's
participation in the UEFA Europa League within its cash reserves.
The changes to the playing squad over the summer's transfer window have been
referred to elsewhere in the Annual Report and certain of the player sales give
rise to profits which will be accounted for in our 2017/18 results. In
addition, we expect to account for the profits on sale of the Holloway Road
property site.
The external inflationary pressures on wage and transfer costs represent a
concern to clubs, such as Arsenal, who are operating a self-funding model.
However, it remains to be seen whether the levels of certain recent
transactions are rational and indicative of a sustainable permanent upward
shift in pricing.
Efficiency of spend will always be a key factor for us but the levels of cash
outlay on transfers and the wage costs which we have achieved are strong
evidence of our ability to compete financially in the top tier of clubs. The
Club remains in a robust financial position at the start of the new season.
Stuart Wisely
Chief Financial Officer
28 September 2017
Arsenal Holdings plc
Consolidated profit and loss account
For the year ended 31 May 2017
2017 2016
Operations Operations
excluding excluding
player Player player Player
trading trading Total trading trading Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Turnover of the Group 420,120 6,932 427,052 353,318 3,230 356,548
including its share of
joint ventures
Share of turnover of joint (3,095) - (3,095) (3,009) - (3,009)
venture
-------- -------- -------- -------- -------- --------
Group turnover 3 417,025 6,932 423,957 350,309 3,230 353,539
Operating expenses (294,845) (77,126) (371,971) (281,093) (59,257) (340,350)
-------- -------- -------- -------- -------- --------
Operating profit/(loss) 122,180 (70,194) 51,986 69,216 (56,027) 13,189
598 - 598 1,004 - 1,004
Share of joint venture
operating result
Profit on disposal of - 6,760 6,760 - 2,047 2,047
player registrations
-------- -------- -------- -------- -------- --------
Profit/(loss) on ordinary 122,778 (63,434) 59,344 70,220 (53,980) 16,240
activities before net
finance charges
-------- -------- -------- --------
Net finance charges (14,737) (13,373)
-------- --------
Profit before taxation 44,607 2,867
Tax on profit (9,321) (1,218)
-------- --------
Profit for the financial 35,286 1,649
year
-------- --------
Earnings per share
Basic and diluted 4 £567.14 £26.50
-------- --------
Player trading consists primarily of loan fees receivable, the amortisation of
the costs of acquiring player registrations, any impairment charges and profit
on disposal of player registrations. All trading resulted from continuing
operations.
Arsenal Holdings plc
Consolidated balance sheet
At 31 May 2017
2017 2016
GBP'000 GBP'000
Fixed assets
Goodwill 250 666
Tangible assets 430,973 421,059
Intangible assets 182,029 146,005
Investments 5,444 4,977
---------- ----------
618,696 572,707
Current assets
Stock - development properties 12,300 11,148
Stock - retail merchandise 7,357 4,834
Debtors - due within one year 63,696 57,961
- due after one year 2,175 4,404
Cash at bank and in hand 180,116 226,459
---------- ----------
265,644 304,806
Creditors: amounts falling due within one year (213,807) (239,945)
---------- ----------
Net current assets 51,837 64,861
---------- ----------
Total assets less current liabilities 670,533 637,568
Creditors: amounts falling due after more than one year (264,162) (265,460)
Provisions for liabilities (43,003) (44,047)
---------- ----------
Net assets 363,368 328,061
---------- ----------
Capital and reserves
Called up share capital 62 62
Share premium account 29,997
29,997
Merger reserve 26,699 26,699
Profit and loss account 306,610 271,303
---------- ----------
Shareholders' funds 363,368 328,061
---------- ----------
Arsenal Holdings plc
Consolidated cash flow statement
For the year ended 31 May 2017
2017 2016
GBP'000 GBP'000
Net cash inflow from operating activities 109,045 93,841
Taxation paid (7,762) (8,331)
Cash flow from investing activities
Interest received 746
475
Proceeds from sale of fixed assets 24 748
Purchase of fixed assets (25,264) (14,232)
Player registrations (102,524) (54,190)
---------- ----------
Net cash flow from investing activities (127,289) (66,928)
---------- ----------
Cash flow from financing activities
Interest paid (12,253) (12,622)
Repayment of debt (8,084) (7,668)
---------- ----------
Net cash flow from financing activities (20,337) (20,290)
---------- ----------
Decrease in cash and cash equivalents in the year (46,343) (1,708)
Cash and cash equivalents at start of year 226,459 228,167
---------- ----------
Cash and cash equivalents at end of year 180,116 226,459
---------- ----------
Reconciliation of operating profit to net cash inflow 2017 2016
from operating activities
GBP'000 GBP'000
Operating profit 51,986 13,189
Amortisation of player registrations 77,126 59,257
Impairment of player registrations - -
Amortisation of goodwill 416 416
Profit on disposal of tangible fixed assets (16) (72)
Depreciation (net of grant amortisation) 14,972 14,258
---------- ----------
Operating cash flow before working capital 144,484 87,048
Increase in stock (3,675) (1,711)
(Increase)/decrease in debtors (5,036) 9,707
Decrease in creditors (26,728) (1,203)
---------- ----------
Net cash inflow from operating activities 109,045 93,841
---------- ----------
At 1 June Non cash Cash At 31 May
Analysis of changes in net debt 2016 changes flows 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 117,622 - (13,939) 103,683
Cash equivalents 108,837 - (32,404) 76,433
---------- ---------- ---------- ----------
226,459 - (46,343) 180,116
Debt due within one year (bonds) (7,557) (8,545) 8,084 (8,018)
Debt due after more than one year (186,441) 8,018 - (178,423)
(bonds)
Derivative financial instruments (24,411) (2,019) - (26,430)
Debt due after more than one year (14,197) (400) - (14,597)
(debentures)
---------- ---------- ---------- ----------
Net debt (6,147) (2,946) (38,259) (47,352)
---------- ---------- ---------- ----------
Non cash changes represent GBP527,000 in respect of the amortisation of costs
of raising finance, GBP398,000 in respect of rolled up, unpaid debenture
interest, GBP2,000 in respect of the change in fair value of the Group's A and
B debentures and GBP2,019,000 in respect of the change in fair value of the
Group's interest rate swaps.
Arsenal Holdings plc
Notes to preliminary results
For the year ended 31 May 2017
1. The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 May 2016 or 2017, but is derived from
those accounts. Statutory accounts for 2016 have been delivered to the
Registrar of Companies and those for 2017 will be delivered following the
company's annual general meeting. The auditor has reported on those accounts;
their reports were unqualified, did not draw attention to any matters by way of
emphasis without qualifying their report and did not contain statements under
s498(2) or (3) Companies Act 2006.
The accounting policies applied by the Group are as set out in detail in the
Annual Report for the year ended 31 May 2017.
2. Segmental analysis
Class of business:- Football
2017 2016
GBP'000 GBP'000
422,799 350,623
Turnover
---------- ----------
Segment operating profit 51,903 11,537
Share of operating profit of joint venture 598 1,004
Profit on disposal of player registrations 6,760 2,047
Net finance charges (14,859) (13,705)
---------- ----------
Profit before taxation 44,402 883
---------- ----------
Segment net assets 309,674 274,572
---------- ----------
Class of business:- Property
development
2017 2016
GBP'000 GBP'000
1,158 2,916
Turnover
---------- ----------
Segment operating profit 83 1,652
Net finance charges 122 332
---------- ----------
Profit before taxation 205 1,984
---------- ----------
Segment net assets 53,694 53,489
---------- ----------
Class of business:- Group
2017 2016
GBP'000 GBP'000
423,957 353,539
Turnover
---------- ----------
Segment operating profit 51,986 13,189
Share of operating profit of joint venture 598 1,004
Profit on disposal of player registrations 6,760 2,047
Net finance charges (14,737) (13,373)
---------- ----------
Profit before taxation 44,607 2,867
---------- ----------
Segment net assets 363,368 328,061
---------- ----------
Operating profit from football before amortisation, depreciation and player
trading amounted to GBP137.5 million (2016 - GBP82.2 million); being segment
operating profit (as above) of GB51.9 million (2016 - GBP11.5 million), adding
back depreciation (net of grant amortisation) of GBP15.0 million (2016 -
GBP14.3 million), amortisation of goodwill of GBP0.4 million (2016 - GBP0.4
million) and operating loss from player trading of GBP70.2 million (2016 -
GBP56.0 million).
3. Turnover
Turnover, all of which originates in the UK, 2017 2016
comprises the following: GBP'000 GBP'000
Gate and other match day revenues 99,996 99,907
Broadcasting 198,637 140,579
Retail and licensing 26,352 24,626
Commercial 90,882 82,281
Property development 1,158 2,916
Player trading 6,932 3,230
---------- ----------
423,957 353,539
---------- ----------
4. Earnings per share
Earnings per share (basic and diluted) are based on the weighted average number
of ordinary shares of the Company in issue being 62,217 shares (2016 - 62,217
shares).
5. Annual General Meeting
The annual general meeting will be held at Emirates Stadium, London, N7, on
Thursday 26 October 2017 at 11.30 am. The full statement of accounts and annual
report will be posted to shareholders on Tuesday 3 October 2017.
ARSENAL HOLDINGS PLC : - Final Results
September 28, 2017 at 11:45 am EDT
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© PRNewswire - 2017
