The Company announces its Annual Results for the year ended 30 June 2011.
Chairman's Statement
As Chairman of Millwall Holdings Plc I am pleased to announce
our results for the twelve months to June 2011.
Firstly, football. After achieving our initial goal of
getting the club back to competing in The Football League
Championship it was extremely pleasing to finish 9th in the
table and be pushing for a play-off place almost up to the
last home game of the season. There were some memorable
performances during the season including an opening day away
win at Bristol City, a fantastic home victory against
eventual Champions QPR, and home and away wins against local
rivals Crystal Palace. Defensively we were solid with the 3rd
best goals against record in the Championship even allowing
for the exceptional home defeat to Watford where we conceded
6!
I would like to praise our entire management team for their
performance during the year, their hard work and commitment
ensured we had a successful first year back.
At the end of the season we decided to accept an offer for
our top goal scorer Steve Morison from newly promoted to the
FA Premier League, Norwich City. When a player such as Steve
has the opportunity to earn a contract in the FA Premier
League it is very difficult for a club such as ours to stand
in his way. However, we are not in such a financial situation
to have to accept a first offer or even a second and it took
Norwich a long time and many attempts before they made a bid
which we as a board felt was good business for the club.
I feel that once again we have progressed both on and off the
field during the year. At last
year's AGM we were successful with an Open Offer which
strengthened the Balance Sheet
and reduced the Company debt position whilst providing the
funds for the football club to
continue to progress. The support I and the board received
from shareholders and supporters was both vital and welcome,
thank you.
We will continue to look at ways in which we can become more
cost efficient across the whole
Group which will enable us to maximise the football budget
available to the manager. A lot has been discussed in the
media on football ?financial fair play? regulations. I
believe it is the
right time for the football world to be considering
regulations regarding the financing of clubs and hope it will
have the desired effect of ensuring a fairer football league
and ensuring that the long term future of all existing clubs
is a more financially stable one. We have been working within
a self imposed financial budget and although breakeven has
not yet been achieved the financial results for the year are
a very big step forward and the reduction in losses
encouraging. This has allowed us to operate with stability, a
key word in the world of football.
Regarding the regeneration of the area surrounding the
stadium, it was very pleasing that Lewisham Council approved
an outline planning application for a development called the
Surrey Canal Triangle in October this year. We have been
working very closely with the
applicant, Renewal, to ensure that The Den (Millwall's
Stadium) not only remains at the centre
of the development but we have the ability to enhance the
stadium in the future both in terms
of extended capacity and enhanced facilities so that the club
has the ability to grow. There is more hard work to be done
in the near future, firstly, in respect of agreeing a Section
106 agreement with all parties involved in the regeneration
scheme and we will continue to push
forward with the club's best interests being protected.
Finally I would like to thank my fellow board members, the
manager, players and every single member of staff for their
continued dedication and of course the fans who continue to
make this football club such a very special place.
John G Berylson
The year under review reflects the performance of the 2010/11
season being the first year of
Millwall FC (the ?Club?) playing in the Football League
Championship, the second tier of
English football below the FA Premier League, following its
promotion to this league after an absence of 4 seasons. The
first season resulted in a creditable final position of
9th, just 8 points from a play-off position.
The team commenced the season with resounding wins over
Bristol City as well as Hull City, who had been playing in
the Premier League the previous season. Over the first half
of the season the team earned 32 points, putting them in 10th
position at that stage, with a further
35 points in the second part of the season. The leading goal
scorer was, once again, Steve Morison whose contract was
transferred to newly promoted Norwich City after the end of
the season. However, the league position of the Club was due,
in the main, to the performance of defenders, including Alan
Dunne who was celebrating his testimonial season, which
conceded only 48 goals, the 3rd lowest in the
league. There was a total of 32 players used during the
season (2010: 28).
The Club finished the 2010-11 league campaign with 67 points
and in 9th position. (2010: 85 points and 3rd
position in League 1.) The team's run in the Carling Cup
ended in round 3 with
a loss at home to Ipswich Town and the Club was defeated at
home by Birmingham City, then a Premier League team, in the
3rd round of the FA Cup.
The average home league attendance was 12,439 (2010: 10,385)
an increase of 19.8% over last year and up by more than 39%
over the year before that. However, with better supported
clubs playing in the Championship, there were only 4 clubs
with lower attendances during this season.
The consolidated statement of comprehensive income is set out
below.
The result for the year shows a significant improvement of
some £2.8m reduction in the loss from operations, down to
£0.6m from £3.4m reflecting the benefit of £1.7m (2010:
£0.2m) of income from player sales. Indeed, before taking
account of non-cash charges for amortisation and
depreciation, as well as interest, the Group earned a profit
this year of £0.2m (2010: loss of £2.9m.) This is the best
result since 2004.
Revenue for the year reflects the benefit of the first year
of playing once again the Football League Championship.
Overall turnover has increased by 58.5% (2010: 15.3%) from
£7.5m to £11.8m. This is mainly as a result of a substantial
increase in the Central League awards, principally TV
sponsorship rights, which this year were £4.7m, compared with
£0.7m last year. Despite the higher gates, Match Day income
showed only a small increase of 2.8% (2010:
22.3%), but this year did not benefit by the revenue
generated by the play-off final at
Wembley that occurred in the previous year.
Income from player sales rose substantially this year to
£1.7m (2010: £0.2m). This is mainly the transfer fee for the
sale of Steve Morison to Norwich City, less the element of
this fee due to Stevenage Town under the terms of the
contract for the transfer of the player to Millwall in
2008.
Operating in the Championship has enabled the Company to
benefit from the investment in the strengthening of the
marketing team and processes made in the previous year. Once
again income from executive boxes and match day catering
showed a reasonable increase
over last year. Advertising, club sponsorship and retail
showed the greatest increase in commercial income. However,
this was offset by a reduced level of income from non-
matchday conferencing and events, reflecting current economic
conditions nationally.
Total staff costs rose to £8.4m (2010: £6.4m). Contracts with
players were adjusted to a rate of salary commensurate with
playing in the Championship. Despite this increase, the ratio
to revenue fell to 71% (2010: 85%).
Other expenses (excluding Depreciation and Amortisation)
increased to £4.9m (2010: £4.1m), representing 42% of revenue
(2010: 55%). The principal reason for this increase is
attributable to the additional costs of policing and
stewarding the higher profile games that occur in the
Championship, these costs having risen by £0.3m. Other major
increases relate to the higher costs of £0.3m for the retail
operation, reflecting the higher turnover and an increase of
£0.2m in agents fees, once again reflecting the costs
incurred in operating at a higher level of the football
league.
Finance costs were reduced by £0.2m during the year as a
result of lower borrowings following the successful Open
Offer in December last year.
In common with many football clubs outside the FA Premier
League the main business risk is the maintenance of a
positive cash flow, bearing in mind the uncertainty of
turnover and the
high cost of maintaining a playing squad on which the success
of the Group's business is
largely dependent. In order to achieve a positive cash flow
there is the constant requirement
to raise new finance and refinance existing facilities which,
in turn, requires the continuing support of existing
providers of those facilities.
A significant amount of the Club's revenue derives from
ticket sales. Income generated from gate receipts is highly
dependent on the level of attendance at matches. Weak
economic conditions in the United Kingdom may have a negative
impact on match attendance and gate receipts as supporters
may have less disposable income.
Some income streams of the Club (such as television rights
and related income) are dependent on third party contracts
and arrangements to which the Club is not a party and over
which the Club can exercise no or little influence.
As part of its normal activities, the Club deals in the
trading of player registrations and there is always a risk of
significant and lasting injuries to players that may impair
player values. Players aged 24 years or older are free to
move between clubs once their contract has come to an end and
the Board monitors expiry dates carefully with a view to
renewing contracts or realising value.
Future uncertainties relate to the continuation of TV
sponsorship of football at current levels and in its current
form and the impact of the proposed ?financial fair play?
policies to be
introduced by the Football League for clubs operating in the
Championship. Whilst the details of these policies are not
yet available, they are likely to place limits upon the total
annual amount that clubs may pay to players.
Relevant business risks are discussed during Board meetings
so that, where a material exposure is identified, mitigating
action can be taken.
Football
With the Club now into its second season playing in the
Football League Championship there will not be the same level
of opportunities to increase revenue streams as has occurred
in the year under review. As is usual, attendances and
matchday income will be affected by the
team's performance and the Club's position in the league.
More generally, the current national
economic difficulties could have an impact upon supporter
spend. There are a number of
clubs in the Championship with more substantial spending
power than the Club, creating stiffer competition within the
league. However, the Directors have set budgets for all areas
of income and costs with plans in place to monitor financial
and team performance and to take such steps that are needed
to achieve the best outcome for the year.
Performances at the start of the 2011-2012 season were
promising, having played the first 3 league games before
suffering a defeat. Since then the results have been mixed
with the
team in 17th position after 14 games (2010:
16th after 15 games). Having met last
season's
ambition of establishing the team within the higher league,
the objective is now to build on the
squad both to retain this status and to plan for promotion in
the longer term.
So far this season the average home attendance for the first
seven league games has been
11,856 (2010: 12,150 for first 7 league games), with
corporate match day and retail sales similar to last
year.
The budgeted player wage costs for the current year will
increase over the final costs for
2010-11 augmented by the reinvestment of the net proceeds
received to date from the high level of transfer fees earned
last year. There is now a core squad of 33 players, including
3 on loan, and these have contracts with expiry dates that
are well spread over the end of the next
3 seasons. As ever the Directors and the manager constantly
review future player needs bearing in mind the continuing
requirement to balance between protecting player asset values
and offering extended player contracts.
Other football related income
The Club, having benefited last year from operating in a higher league, anticipates a continuation of the enhanced range of services offered by the Club to sponsors and other business partnerships from catering to on-line sales and marketing. A new lead sponsor, Racing +, has entered into a 3 year contract with other key sponsors continuing to support in other areas. The retail operation is expected to be static, pending improvements to be implemented to the product range and methods of operation.
The Den
Revenues from the utilisation of the stadium on non-matchdays are expected to continue at a similar level to last year.
The Community
The Club continues to recognise the importance of the relationship with the broader community of South London and a key way of strengthening that link is the close co-operation with the work that is undertaken with the Millwall Community Scheme, reflected by our Chief Executive, Andy Ambler, acting as a Trustee. Together the Club and the Community Scheme work to help promote community sports education and charitable activities to benefit the local area of South East London. Once again a very successful Junior Lions Community Day sponsored by McDonalds, was recently enjoyed by 1,200 young people at The Den with the playing squad being in attendance. This was jointly promoted by the Club, its Junior Lions Committee and the Millwall Community Scheme giving a practical example of the Club working together to benefit the Millwall Community and to meet the shared common objectives held by each. Throughout the year the squad of players attend many local youth and charity events organised by the Community Scheme to make their own contribution to the local community.
Communication
Communication lies at the heart of the activities, with the
Fan on the Board providing a crucial link between Board and
supporters. Regular meetings and forums take place with all
levels of
the Club's supporters and partners.
As a result of the resolution passed at an Extraordinary
General Meeting of shareholders held in October 2010 which
agreed to a consolidation of shares and a gift of fractions
arising to The Lions Trust, that organisation was gifted
10,173 shares representing 2.7% of the issued share capital.
One of the objectives of The Lions Trust is to improve
communications between
the Club and its supporters and to enable the views of the
Club's supporters to influence
decision making.
All NFL Loan Notes and related PIK Notes were repaid during
the year from the proceeds of the Open Offer. £0.4m was by
way of cancellation of loans upon underwriting and £1.2m was
by cash repayment. In addition, all director loans were
repaid as part of the Open Offer by way of cancellation upon
subscription or underwriting.
Regeneration
The Company welcomes the Outline Planning approval for the
Surrey Canal Triangle development which was granted by
Lewisham Borough Council at a meeting held in Lewisham Town
Hall on the 13 October 2011. The scheme approved includes The
Den (Millwall Stadium) and the areas surrounding it, but is
subject to a detailed Section 106 planning agreement being
entered into and agreed by all relevant parties (including
Millwall).
At a previous meeting earlier this year Lewisham Borough
Council's planning strategy approved a decision whereby any
future development around Millwall's Stadium (The Den) had to
allow for both the future expansion of The Den's capacity and
ability to enhance
Stadium facilities if and when the football club needed to do
so. These decisions are a major step forward for the Club's
vision to improve the facilities and area around The Den to
suit the needs of Millwall F.C.'s supporters and also allow
the Group the future ability to attempt to
increase non match related revenue streams.
Year Ended
30 June 2010
Other income - profit on disposal of
player's registrations 1,680 154
Staff costs (8,354) (6,357) Amortisation of players'
registrations (525) (320)
Depreciation of property, plant and
equipment (242) (264)
Total depreciation and amortisation
expense (767) (584) Other expenses (4,972) (4,111)
Finance income 1 -
Finance expense (1,354) (1,511)
Tax expense - -
Loss after tax for the financial year and total comprehensive loss (1,958) (4,958) Attributable to:Equity holders of the parent | (1,958) | (4,958) |
Loss per share - basic and diluted | £(2.15) | £(13.21) |
Ordinary | Deferred | Share | Equity | Capital | Retained | Total | |||||
Shares | Shares | premium | component | reserve | deficit | Equity | |||||
of £10 | of 0.09p | of | |||||||||
each | each | Convertible | |||||||||
Loan Notes | |||||||||||
£000 | £000 | £000 | £000 | £000 | £000 | £000 | |||||
1 July 2009 | 3,750 | 2,333 | 15,120 | 181 | 21,474 | (43,035) | (177) | ||||
New Shares Issued | 16 | - | 32 | - | - | - | 48 | ||||
Loss for the year | - | - | - | - | - | (4,958) | (4,958) |
1 July 2010 | 3,766 | 2,333 | 15,152 | 181 | 21,474 | (47,993) | (5,087) | ||||||
New Shares Issued | 10,139 | - | - | - | - | - | 10,139 | ||||||
Costs of issue of shares | - | - | - | - | - | (450) | (450) | ||||||
Convertible Loan Notes redeemed | - | - | - | (100 | - | 100 | - | ||||||
Loss for the year | - | - | - | - | - | (1,958) | (1,958) |
Consolidated Statement of Financial Position 30 June 2011 | ||
30 June 2011 £000 | 30 June 2010 £000 | |
Non-current assets Intangible assets | 1,191 | 661 |
Property, plant and equipment | 14,710 | 14,826 |
15,901 | 15,487 | |
Current assets Inventories | 115 | 51 |
Trade and other receivables | 3,051 | 968 |
Cash and cash equivalents | 238 | 760 |
Total assets Non-current liabilities | 19,305 | 17,266 | |
Trade and other payables | (506) | (486) | |
Financial liabilities | (7,580) | - | |
Deferred income | (3,345) | (3,571) | |
Total non-current liabilities | (11,431) | (4,057) | |
Current liabilities | |||
Trade and other payables | (3,317) | (2,100) | |
Financial liabilities | - | (14,619) | |
Deferred income | (1,913) | (1,577) | |
Total current liabilities | (5,230) | (18,296) | |
Total liabilities | (16,661) | (22,353) | |
Net assets/(liabilities) | 2,644 | (5,087) | |
Equity | |||
Called up share capital | 16,238 | 6,099 | |
Share premium | 15,152 | 15,152 | |
Equity proportion of Convertible Loan Notes | 81 | 181 | |
Capital reserve | 21,474 | 21,474 | |
Retained deficit | (50,301) | (47,993) | |
Total equity attributable to the shareholders of the parent (in deficit) | 2,644 | (5,087) |
Year Ended
30 June 2010
Loss before taxation (1,958) (4,958) Depreciation on
property, plant and equipment 242 264
Amortisation of intangible assets 525 320
Amortisation of grants (82) (82) Amortisation of prepaid
finance fees - 103
Profit on disposal of players' registrations (1,680)
(154)
Loss on disposal of property, plant and equipment - 12
Finance income (1) - Finance expense 1,354 1,511
(Increase)/decrease in inventory (64) 10 (Increase)/decrease
in trade and other receivables (133) 51
Increase in trade and other payables and deferred income
Purchase of property, plant and equipment (126) (65
Proceeds on disposal of players' registrations 406 167
Purchase of players' registrations (914) (739)
Interest received 1 -
Net proceeds Open Offer 1,839 -
Net (repayment)/drawdown under loan note facilities
Interest paid (1) -
Net cash flow from financing activities 1,296 3,240 Net movement in cash and cash equivalents (522) 369 Cash and cash equivalents at start of year 760 391 Cash and cash equivalents at end of year 238 760 Notes 1 Basis of preparation
These financial statements have been prepared in accordance
with International Financial Reporting Standards,
International Accounting Standards and Interpretations
(collectively IFRS) issued by the International Accounting
Standards
Board (IASB) as adopted by the European Union (?adopted
IFRSs?) and in
accordance with those parts of the Companies Act 2006 that
remain applicable to
the Groups reporting under the IFRS.
The financial statements are presented in sterling, rounded
to the nearest thousand. They are prepared under the
historical cost basis.
The calculation of loss per ordinary share is based on the
loss for the year of
£1,958,000 (2010: £4,958,000) and on 909,956 (2010: 375,205)
new ordinary shares, being the weighted average number of
ordinary shares in issue and ranking for dividend during the
year. There is no potential dilution on the loss per ordinary
share in 2011 or 2010 and therefore there is no difference
between basic and diluted earnings per share. As at 30 June
2011, the Group had gross convertible debt, including PIK
notes and accrued interest of £1,597,000 (2010: £4,034,000)
in issue, potentially convertible to 45,514 (2010: 113,418)
ordinary shares of £10 each, along with 30,683 (2010: 30,683)
warrants, which could dilute earnings per share in the
future. These were not included in the calculation of diluted
earnings per share because they were anti-dilutive for the
periods presented.
The Directors have announced that they are convening an
Extraordinary General
Meeting of shareholders to consider a proposal for the
cancellation of the trading of
the Company's shares on AIM. If approved the Directors will
put in place a third
party trading facility to allow shareholders to trade in
shares on a matched bargain
basis following the proposed cancellation.
November 2011.
6 The financial information set out in this announcement does not constitute the
Group's statutory accounts for the year ended 30 June 2011
but is derived from the
2011 Annual Report.
Statutory accounts for 2010 have been delivered to the
Registrar of Companies. The statutory accounts for the year
ended 30 June 2011 will be delivered to the Registrar of
Companies
following the Company's Annual General Meeting.
The auditors have reported on those accounts; their reports
were unqualified, and did not contain statements under
section 498(2) or (3) Companies Act 2006
Andy Ambler
Tom Simmons
Claes Spang
Nick Donovan