Financial

cial Ratio Report of Arsenall London Holding plc

plc.

I. Introduction
Arsenal London Holding plc. operates
opera as a non-quoted public limited company.
pany. Th
The company is the
100% direct or indirect owner
ner of eeleven subsidiaries of which Arsenal Football
tball Club
Clu plc. is the most
1
famous, as the team of Arsenal
enal Foo
Football Club plays in the Premier League .

Arsenal London Holding hass two m main segments. The first one is the football
all segment
segme which includes
all activities connected to the football
foot business as well as support and provided
ovided services for Arsenal
Football Club plc. by subsidiaries
diaries . The second is the property segment which
ich mainly
mainl focuses on sales
2
of flats and apartments of the High
ighbury Square development.

The following ratio analysis

is focuse
focuses on the figures from the annual financial
cial statements
state of Arsenal
London Holding plc. of the years 20
2010 till 2012.

II. Analysis of the Profita

Profitability

Analysing the profitability of a foo

football club it is essential to consider player
layer trading
tra incomes and
expenses in some parts separately
eparately from normal operations as these can have a vital influence on
earnings before interests and
nd taxes (EBIT).

Revenues Trend
400
350
300
250
in £000

200
150
100
50
0
2010 2011 2012
Revenues 379,856 255,692 243,013

Graph 1 -Sour
Source: Arsenal Holding plc. 2010-2012
Note:: Revenue figures are the total revenue if the years 2010-2012

In the period between 2010 10 and 2012 Arsenal’s revenues declined aroundnd £140 million, which is
mainly due to the final phase
ase of the Highbury Square development as the main part
par has been sold in
2009 and 2010. In the property segment revenues decreased by approximat proximately £150 million,
whereas in the football segment
egment revenues increased by £12 million. These
hese two effects are also

1
The Premier League is an English
glish prof
professional league of the Football Association (FA)
FA) for as
association football
clubs.
2
Highbury Square is an apartment
ent com
complex in Highbury, London with 650 flats and apartme
apartments. It is the
redevelopment of the former football stadium of Arsenal London after the football team mo moved out into the
new Emirates Stadium nearby.
reflected in the total grosss margin which declines from 9% in 2010 to -7% in 2012,
2012 which seems to
result in a lower profitability
ity poten
potential in turnovers. Responsible for this developm
evelopment are operating
expenses of player trading, g, which increased by more than £17 million, whereawhereas other operating
expenses decreased about £102 mi million.

Regarding operating profit it margi

margin Arsenal’s development draws another her pictu
picture. Whereas the
operating profit margin wass 19% in 2010 and declined to 11% in 2011, it recover
ecovered in 2012 at a new
peak at 20%. This can be explained
xplained by the development of player trading results, especially
e profit on
disposal of player registration.
tion. Wh
Whereas in the previous year a loss of £14.7
14.7 million
mill was reported,
2012 figures account a £26 million surplus, which is reflected as net transferr activiti
activities of 52% of EBIT.

Influence of player trading on

Influen
operative income
80
70
60
50
in £000

40
30
20
10
0
-10
-20
2010 2011 2012
Profit before
74,151 28,984 50,08
50,084
taxes/interests
without player
er tradin
trading 60,587 43,651 24,04
24,046
without disposal
osal of pl
player
36,014 22,728 -15,37
15,372
registrations
ations
Graph 2 -Sour
Source: Arsenal Holding plc. 2010-2012
Note:: Blue bars
ba depict the total profit before interest and taxes (EBIT),
IT), red bars depict profit before
interest
st and taxes
t (EBIT) without player trading, green bars depict thee total p
profit before interest and
taxes (EBIT) less
le disposals of player registrations.

Graph 2 displays this influence

nce of p
player trading on the operative income results.
esults. The
T blue bars show
the trend of EBIT which is similar to the development of Arsenal’s operatingg profit m
margin. Noticeable
are two other trends. Fist,, the ope
operative income without player trading declin
declines, which may again
explained by the development
ment in Arsenal’s property segment. Second, iff profits from disposals of
player registrations are deducted,
ducted, the
t overall operating income does not onlynly decline
declin but turns into a
loss of about £15 million in 2012.

These facts show that the increase in EBIT is mainly due to player trading results. In the accounts of
2012 are more than £65 million profit
p from players sold, which should normally lead to an even
higher increase in Arsenal’s
’s EBIT. B
But even as the company sold some players,
yers, they also bought new
3
ones with higher salaries , which nearly
n doubled operating expenses of player
layer tra
trading from around
£21 million in 2011 to moree than £4
£42 million in 2012.

Overall, Arsenals profitability

lity seem
seems so recover in 2012 after a low in 2011, also shown
sh by the return
on capital employed, which h went uup from 5% to 8% in 2012. Profitability is still not
no back at its 13%-

3
The purchasing costs are no expenses as the players, or to be more precise their licenses,
icenses, aare recognized in
the balance sheet as intangible assets according to FRS 10 and have therefore no effect
ffect on tthe loss and income.
level in 2010 while overallall profit
profits are getting more dependent on disposals
sposals of player trading.
Nevertheless, Arsenal is still
ill reporting
report positive earnings after interests and
d taxation
taxatio and continues a
period of 9 years without a financial
financia loss.

III. Analysis of the Liquidi

Liquidity & Efficiency

III.a Liquidity

To analysis the liquidity situation

ituation of a company is important to assess itss ability to cover its short
term liabilities. In footballll clubs th
these current liabilities contain trade debtors from player trading,
other debtors, and prepayments and accrued income.

Curren ratio / Acid-test ratio

Current
1,8
1,6
1,4
1,2
1
0,8
0,6
0,4
0,2
0
2010 2011 2012
Currentt Ratio 1,55 1,71 1,25
Acid Test
st Ratio 1,25 1,45 1,45
Graph 3 -So
Source: Arsenal Holding plc. 2010-2012

Assessing arsenals situation on with the current ratio shows an increasingg ability to cover current
liabilities with current assets. This implies
i that Arsenal has sufficient liquidity
ity to meet
me its current debt
and capital expenditure needs.. This T figure matters most to suppliers to assur assure them that the
company is able to payback ack its ddebt and will be therefore more willingg to provide
pro Arsenal with
services and inventories. This is aalso confirmed by the Acid-test-ratio, which hich de
deduces inventories
from current ratios. Even without inventories Arsenal has a current liability ty cover of 1.45 (145%) in
2012, which shows that thee compa
company is not dependent on their inventories. ies. In 2010
20 only cash and
short-term deposits were able ble to cover
c 82% of current liabilities, whereass in 2011 (122%) and 2012
(106%) current liabilities where
here fully
ful covered by those. This is especially due ue to a strong increase of
cash in 2010 (approx. £27 million) aand 2011 (approx. £33 million) from high operati rative cash flows.

Even as both ratios grew weaker aafter a significant increase between 2010
0 and 2011,
20 Arsenal has a
very solid liquidity base.

III.b Efficiency

Analysing Arsenal’s efficiency

ncy can indicate how well they can utilize theirr assets and liabilities and
also gives insight in business
ss driving factors.
 Working capital cycle
80

in number if days
70
60
50
40
30
20
10
0
Working
orking
DCP SHP CCP
capital
ital cylce
2010 12,96 50,51 10,65 52,82
2011 14,32 53,98 14,74 53,98
2012 30,63 55,28 16,5 69,41
Graph 4 - Source:
Sour Arsenal Holding plc. 2010-2012
Note:: DCP is debtor
d collection period, SHP is stock holding period and CPP is
creditor
tor payment
paym period.

Regarding the working capital

ital cycle (Graph 4) the duration increases considerably
derably bbetween 2010 and
2012. Therefore Arsenal was not been able to increase efficiency of managing cash flows. The
increase in mainly due to a sharp increase in the debtor collection period, riod, which
wh nearly tripled.
Consequently, the creditorr payme
payment period increased too, but not as strong. trong. Another important
factor, which affects the working
orking capital
ca cycle strongly, is the stock holdingg period. As Arsenal’s main
business is the football segment,
ment, ththere would be only merchandise articless on stocstock. But in the years
2010-2012 a main part of stocks aare the remaining development properties,, which whic was on average
96% of total stock in all three
ree year
years. Once the properties will be sold, the stockock holding
h period will
drop considerably and so will the working capital cycle. Nevertheless, Arsenals overall ability to
efficiently organise their cash man
management decreased significantly. This may be explained by the
credit crunch and that somee suppl
suppliers or other clubs, which purchased players
ayers fro
from Arsenal are not
longer able to pay within a shorter time periode.

Another factor which showsws simil

similar results is the wages-turnover-ratio, which decreased
d strongly
from 29% to nearly 60% between
etween 2010 and 2012. This development indicates cates tha
that originally player
wages where low and increased
eased notably. As stated before, this is due to new
w more expensive football
players and decreasing revenues
enues from
fr the property segment. It also showss that ArArsenal Holding plc.
becomes more dependent on their staff, especially their first squad.

Finally, when looking at asset

sset turn
turnover of Arsenal Holding plc. a clear negative
gative tre
trend is visible, as it
decreases from 0.52 in 2010010 to 0.32
0 in 2012. This means that Arsenall also lolooses efficiency in
generating turnover from their utilized
utili assets.

All three employed figures show a d

declining efficiency in Arsenal’s operations.

IV. Analysis of Cash Contr

Control

Continuing with analysing the cashcas flows of Arsenal Holding plc. showss whethe
whether the business is
funded by sufficient cash-inn and if tthe company generates enough cash itself
elf on the long run to cover
its cash-out and will therefore
ore face no liquidity obstacles.
 Operative cash flow
200
151
151,879
150
in £000
100
49,021
50
9,167
0
2010 2011 2012

operative cash flow

Graph 5 - Source:
Sour Arsenal Holding plc. 2010-2012

First of all the cash flow stateme

statement shows positive operating cash flowss in all three years, even
though a strong decline is striking. But the explanation is again decreasing operativ
operative cash flows from
the property segment. This is is also reflected by a decreasing operating marginargin rat
ratio with more than
40% in 2010 down to less than 4 4%. This is a remarkable trend as it shows that Arsenal’s
A ability to
generate cash from their sales diminishes,
d which is beside the revenues es reduction
reduc an effect of
increasing wages for footballall player staff. Also Arsenals ability to pay back current lliabilities with cash
mitigated strongly, as can be show
shown by the operational cash flow ratio. It dropped from a 98% cover
of current liabilities in 2010
10 to ononly 6% in 2012. As current liabilities stayed
tayed ne
nearly constant this
change is mainly due to thee change of operative cash flow.

Investment cash flow

15
10
5
in £000

0
-5
-10
-15
2010 2011 2012
Investment
ent CF 11,299 -10,509 -9,563
Capital expendi
expenditures -5,342 -9,546 -8,610
Graph 6 - Source:
Sour Arsenal Holding plc. 2010-2012

Another trend is the increasing

asing inv
investment cash flow. 2010s’ positive result is due to higher cash-in
from player trading of £15 million
million, whereas in 2011 and 2012 the investment ent cash flow from player
trading turn negative, but to only £1.5
£ million in 2011 and £1.7 million in 2012. Re
Remarkable, Arsenal
has been able to cover its player pupurchases with players sold or even generated
ated a surplus
su like in 2010.
The second main investment ArsenalArse took was in fixed intangible assets,ts, which increased by £3
million in 2011 and fell in 2012
012 to £8.6
£ million.
 FCF and
a Finance cash flow
200,000
150,000
100,000
in £000 50,000
0,000
-50,000
-100,000
-150,000
-200,000
2010 2011 2012
FCF 163,178 38,512 -0,396
Fin. CF -135,188 -5,890 -6,210
Graph 7 - Source:
Sour Arsenal Holding plc. 2010-2012

Graph 7 presents the combination

bination of operative and investment cash flow (FCF),
(FCF) which shows that
Arsenal generated a strongg free cash
cas flow in 2010 which was mainly used to pay off
of short term debt.
In 2011 and 2012 the free cash flow
flo decreased strongly and so did the financing
nancing cash
c flow. In 2011
the board decided to retain
ain addit
additional cash for player purchases in 20122 to cover
cov an anticipated
ongoing drop in free cash flow.

Despite a significant declinee in cash flows and the first negative cash-flow in
n 2012 ssince 2004, Arsenal
still generates strong operating
rating ca
cash flows which cover cash-out, but has as to sto
stop the continuing
decline. Otherwise Arsenall will ha have less possibility to invest as they firstt have to pay back their
liabilities.

V. Future prospect

Arsenal Holding plc. is getting

tting mo
more dependent on the football segment,, as the analysis showed
before, and therefore the football environment development has to be taken en into aaccount.
Comparing Arsenals revenues from the football segment with other football all clubs around the world,
Arsenal had the fifth highest
est reve
revenue of all football clubs. CEO I.E. Gazidis
idis also expects the new
revenue contract for domestic ic TV rights
r to boost revenues and based on the loyalty
loya of their fans to
4
also increase advertising revenue
revenues . Gazidis believes this will help them
em to sstay in the Top 5
5
concerning revenues .

4
Cf. Financial Review; Arsenal Holding plc. 2011/2012.
5
espn.co.uk (2012).
 Revenues 2011
in million €
Real Madrid 479,5
479,
F.C. Barcelona 450,7
Manchester United 367
Bayern München 321,4
Arsenal London 251,1
Chelsea 249,8
AC Milan 235,1
Internazionale 211,4
Liverpool 203,3
Schalke 04 202,4

Graph 8 - Source:
Sour Deloitte Football Money League, February 2012

Aside from that, Arsenal is the onl

only football club in the Premier League off the Top 5 Clubs (Arsenal,
Chelsea, Liverpool, Manchester City and Manchester United) which generated ted a po
positive income over
more than the last three years. Onl Manchester United achieved a first positive result in 20116.
ears. Only

Premi League Profit/(Loss)

Premier
before tax
100
50
0
in £000

-50
-100
-150
-200
-250
Manches
Manches
Manc Chelsea Liverpool Arsenal
ter
ter City
C London F.C. London
United
2009/10 -
-121,3 -70,4 -19 -15 56
2010/11 -
-197,5 -67 29,7 14,8
Gra 9 - Source: http://swissramble.blogspot.co.uk
Graph

Additionally, the new FIFA Financia

Financial Fair Play rules, which will be introduced
ed in the season 2014/15,
will probably enhance Arsenals
senals competitive
co position as other clubs havee to cut costs to become
profitable. Especially the new
ew Emira
Emirates Stadium and renegotiations of primary ary spon
sponsorship, including
7
the £150 million banked courtesy
ourtesy o
of Emirates , will help the club. Even Arsenals
rsenals approximately
a 60%
8
staff costs in 2012 comparedred to re
revenues are still under the Premier Leaguegue average
aver of 63% from
2010.

Nevertheless, there are also

o certain future risks, which have to be taken into
to accou
account. As a main part
ith the performance and popularity of the first team9, this gets additional
of revenues is connected with

6
Figures of 2012 were not completely
pletely available as some clubs do not have to publish
sh their aannual reports.
7
Cf. Olley, J. (2012).
8
Cf. Benchmark Report UEFA 2010,, p.68.
p.
9
Cf. Financial Review; Arsenal Holding plc. 2011/2012.
weight by considering the actual position in the Premier League. After a good start Arsenal is now
down to 10th position, with now about 5 Points to a place which approves participation in the UEFA
Champions League after taking part in this for 15 consecutive seasons. The loss of revenues
connected with this scenario would potentially drive the business into an overall loss. Also ticket
prices, which are among the highest in Premier League, would have to be lowered, also resulting in a
drop of revenues. In addition, a qualification for the Europe League cannot compensate the revenue
decrease, as revenues from this competition are significantly lower. And in 2014 two of the main
three sponsorship contracts with Emirates and Nike expire10. A negative development of League
performance, which could result in decreasing fans interest, could influence new negotiations. In the
worst case a new sponsor has to be found connected with lower revenues.

Besides that, it is doubtful, if Arsenal starts to invest into new players to make a turnaround in the
league, that they will again be able to sell enough players to equalize cash-out. Therefore it is very
likely that Arsenal will have a significant higher negative cash flow in the next 1-2 years.
Nevertheless, as Arsenal was able to accumulate some profits of the years and have a compared to
other football companies’ good equity ratio of approximately 39% they should be able to endure
some financial distressful years. Also having a look at their gearing development shows that there is
after a ratio of 1.28 in 2012 is now down to 1.09 in 2012. As long-term debt is only from the original
financing of Emirates Stadium, which is really good collateral, there is also only a very small financial
risk.

Another trend in the football world are new private investors buying shares or even whole clubs and
invest huge amounts in these, like for instants Chelsea London or Manchester City. Through
increasing spending of these clubs, the Arsenal prudent model with “sensible wages and a core value
of developing a young group of players over time suddenly appeared outdated”11. But this trend,
which Arsenal suffered from, might be diminished by the new UEFA Financial Fair Play regulation but
on the long run they maybe must also find a new investor which supports them financially.

VI. Conclusion

Arsenal London seems to get into a phase of difficulties, but with such a good financial base,
especially compared to main competitors, the company is well equipment enough to stay on their
path. Even short-term prospective bare some considerably risks; the long-term development is
potentially good. Therefore, this report recommends potential prospect investors to stay patient and
await the development of current season. In the long-term Arsenal has a very good potential to stay
one of the cash cows of football companies in the world.

10
Cf. Financial Review; Arsenal Holding plc. 2011/2012.
11
Cf. Olley, J. 2012.
 References
Arsenal Holding plc. (2012). Statement of Accounts and Annual Report 2011/12. [online] Available at:
<http://www.arsenal.com/assets/_files/documents/oct_12/gun__1349166617_ARSENAL_HOLDINGS
_plc_ANNUAL_RE.pdf> [Accessed 2 November 2012].

Arsenal Holding plc. (2012). Statement of Accounts and Annual Report 2010/11. [online] Available at: <
http://www.arsenal.com/assets/_files/documents/oct_11/gun__1318409853_Arsenal_Holdings_plc
_-_Annual_.pdf> [Accessed 2 November 2012].

Arsenal Holding plc. (2012). Statement of Accounts and Annual Report 2009/10. [online] Available at: <
http://www.arsenal.com/assets/_files/documents/oct_11/gun__1318505919_Arsenal_Holdings_plc
_Annual_Re.pdf> [Accessed 2 November 2012].

Battle, R., Bridge, T., Bull, A., Hanson, C., Taylor, R. And Thorpe, A. (2012). Football Money League Report
2010/11. Deloitte. [online] Available at: <http://www.deloitte.com/assets/Dcom-
Sweden/Local%20Assets/Documents/FootballMoneyLeague%202012-uk-sbg-dfml-2012-
final120209.pdf> [Accessed 2 November 2012].

ESPN staff (2012). Gazidis: Arsenal will be on par with best. [online] Available at:
<http://www.espn.co.uk/football/sport/story/179467.html#> [Accessed 5 December 2012].
Olley, James (2012). Wenger will see out his deal but only a trophy may keep him at Arsenal. Evening
Standard, December, 5th, p. 62

Perry, S. And Leach, S. (2011). The European Club Footballing Landscape. Club Licensing Benchmarking Report
Financial Year 2010. UEFA. [online] Available at:
<http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/74/41/25/1744125_D
OWNLOAD.pdf> [Accessed 7 December 2012].

The Swiss Ramble (2012). Arsenal’s Mystery Dance. [online] Available at:
<http://swissramble.blogspot.co.uk/2012/02/arsenals-mystery-dance.html> [Accessed 5 December
2012].
 Appendix
I. Additional Explanation
II. Ratios
III. Explanation Ratios
IV. Balance Sheet
V. Income Statement
VI. Cash Flow Statement

Additional Explanation
This document and all graphs were constructed by using a German Microsoft Word and Excel
version. This made it sometimes impossible to program figures exactly in the form which is used
in English, especially the difference in using a point and comma when presenting figures. To
make it more readable the following should help to understand the figures which are concerned:

Ratio German English

Current ratio/ Acid-test ratio 1,68 1.68
Working capital cycle (days) 15,5 15.5
 Ratio Calculation Arsenal Holding plc.
Ratio 2010 Ratio 2011 Ratios 2012
Classification Definition of Ratio without PT PT Total without PT PT Total without PT PT Total
Profitability
Growth of Turnover (Turnover 201x- Turnover 201y)*100 22% -87% 21% -33% 60% -33% -6% 295% -5%
Turnover 201y
Gross Margin Operating Profit 16% -5342% 9% 17% -2847% 8% 10% -1359% -7%
Turnover
Operating Profit Margin/ Return on Sales EBIT 16% 2949% 19% 17% -1996% 11% 10% 898% 20%
Turnover
Return on Capital Employed EBIT 10% 2% 13% 7% -3% 5% 4% 4% 8%
Shareholder's funds + liabilities and provisions

Net Transfer activity as % of operating income EBIT of player trading 18% -51% 52%
EBIT Total

Liquidity
Current Ratio Current assets 1,55 1,71 1,73
Current liabilities
Quick Ratio Current assets- inventories 1,25 1,45 1,45
Current liabilities
Current liability cover by cash and short-term deposits Cash and short-term deposits 0,82 1,22 1,06
Current liabilities
Efficiency Ratios
Debtors Collection Period Trade Debtors *365 12,96 14,32 30,63
Sales
Stock Holding Period Stock/ Inventory *365 50,506 53,979 55,28
Operating expenses
Creditors Payment Period Trade Creditors *365 10,65 14,74 16,50
Sales
Working Capital Cycle SHP+DCP-CPP 52,818 53,562 69,414

% of property development on overall stock. Stock -development properties 0,960 0,968 0,957
Total Stock

Wages/Turnover-Ratio Wages 29,15% 48,65% 59,03%

Turnover
Asset turnover Revenues 0,52 0,36 0,32
Total Assets
Financial Gearing and other ratios
Gearing Ratio Long-term borrowing + preferred shares 1,28 1,17 1,09
Ordinary shareholder funds
Equity-Ratio Shareholder funds 34,66% 37,57% 38,86%
Total assets
Liability Ratio Liabilities 65,34% 62,43% 61,14%
Total assets
Cash flow ratios
Cash flow margin ratio Cashflow from operations 39,98% 19,17% 3,77%
Net Sales
Operational Cash flow Ratio Cashflow from Operations 98% 37% 6%
Current liabilities
 Explanantion Ratios
Profitability
Growth of Turnover
Gross Margin
Operating Profit Margin/ Return on Sales
Return on Capital Employed
Net Transfer activity as % of operating income
Liquidity
Current Ratio
Quick Ratio
Liability cover by cash and short-term deposits
Efficiency Ratios
Debtors Collection Period
Stock Holding Period
Creditors Payment Period
Working Capital Cycle
% of property development on overall stock.
Wages/Turnover-Ratio
Asset turnover
Financial Gearing and other ratios
Gearing Ratio
Equity-Ratio
Liability Ratio
Cash flow ratios
Cash flow margin ratio
Operational Cash flow Ratio
Source of definitions:
Percentage of turnover growth
The gross margin represents the percent of total sales
revenue that the company retains after incurring the
direct costs associated with producing the goods and
services sold by a company.
Operating margin is a measurement of what proportion
of a company's revenue is left over after paying for
variable costs of production such as wages, raw
materials, etc.
Ratio indicates the efficiency and profitability of a
company's capital investments. The ROCE should always
be higher than the rate at which the company borrows,
otherwise any increase in borrowing will reduce
shareholders' earnings
Percentage of onyl expenses and revenues from
transfer activities (player trading) to earnings before
interest and taxes (EBIT).
A liquidity ratio that measures a company's ability to
pay short-term obligations.
An indicator of a company's short-term liquidity, which
measures a company's ability to meet ist short term
obligations wihtout liquidating inventories.
The ratio indicates the amount of current liabilities the
company would be able to pay off just by using their
cash and short-term deposits.
Indicates the average time taken to colect trade debts.
Indicates the average time an item is on stock before
sold.
Indicates the average time taken to pay off trade
creditors.
Measures the amount of time that elapses between the
moment a business begins to investing money in a
product or service and the moment the business
receives payment für that product or service.
Measures the amount of property development stock to
total stock.
Measures the share of wage and salary expenses to
total turnover.
The amount of sales generated for every dollar's worth
of assets.
Measure that compares some form of owner's equity to
borrowed funds. It is a measure of financial leverage,
demonstrating the degree to which a firm's activites are
funded by owner's funds versus creditr's funds.
Share of Equity compared with total assets.
Share of liabilities compared with total assets.
A measure of the money a company generates from its
core operations per one pound per sales.
A measure of how well current liabilities are covered by
the cash flow generated from a company's operations.
www.investopedia.com
 Charts
Influence on player trading on income results

Influence of player trading on income Trend net profit/loss on player trading

Year 2010 2011 2012
Profit before taxes/interests 74,151 28,984 50,084 results 30
without player trading 60,587 43,651 24,046 25
80 26,038
60 20
without disposals of
40

in £000
player registrations 36,014 22,728 -15,372 15
20
0 10 13,564
-20 5 Financial result
Trend net profit/loss on player trading before taxes 2010 2011 2012
0
Profit before
74,151 28,984 50,084 -5 2010 2011 2012
Year 2010 2011 2012 taxes/interests
Financial result 13,564 -14,667 26,038 without player trading 60,587 43,651 24,046 -10 -14,667
without disposals of player -15
36,014 22,728 -15,372
Trend net profit before taxes registrations -20

Year 2010 2011 2012

Player trading 13,564 -14,667 26,038
Operations excl pt after Trend net profit before taxes Revenues trend
bank charges 55,968 14,776 36,588 400
70 350
60 300
Trend turnover 50
40 250

in £000
in £000
30 200
Year 2010 2011 2012 20
Revenues 379,856 255,69 243,013 10 150
0
-10 100
-20 50
Trend operating cash flow 2010 2011 2012
0
Operations excl pt after 2010 2011 2012
55,968 14,776 36,588
bank charges Revenues 379,856 255,692 243,013
Year 2010 2011 2012
Player trading 13,564 -14,667 26,038
op. Cash flow 151,879 49,021 9,167

Current Ratio/ Acid Test

Operative cash flow Current ratio / Acid-test-ratio
Year 2010 2011 2012 151,879
160 2,00
Current Ratio 1,55 1,71 1,73 1,80
140
Acid Test Ratio 1,25 1,45 1,45 1,60
120 1,40
100 1,20
in £000

80 1,00
49,021 0,80
60
Current Ratio/ Acid Test 0,60
40 0,40
20 9,167 0,20
Year 2010 2011 2012 0,00
0 2010 2011 2012
DCP 12,96 14,32 30,63
2010 2011 2012
SHP 50,51 53,98 55,28 Current Ratio 1,55 1,71 1,73
CPP 10,65 14,74 16,50 op. Cash flow Acid Test Ratio 1,25 1,45 1,45
Working capital cylce 52,82 53,98 69,41

Working capital cycle FCF and Finance Cash Flow

Cash flows
80,00 200,00
in number of daysl

70,00
Year 2010 2011 2012 60,00 150,00
Op. CF 151,88 49,02 9,17 50,00 100,00
40,00 50,00
Inv. CF
in £000

11,30 -10,51 -9,56 30,00

FCF 163,18 38,51 -0,40 20,00 0,00
Fin. CF -135,19 -5,89 -6,21 10,00 -50,00
0,00 -100,00
Capital expenditures -5,34 -9,55 -8,61 Working capital
DCP SHP CPP -150,00
cylce
2010 12,96 50,51 10,65 52,82 -200,00
2010 2011 2012
2011 14,32 53,98 14,74 53,98 FCF 163,18 38,51 -0,40
2012 30,63 55,28 16,50 69,41 Fin. CF -135,19 -5,89 -6,21

Investment Cash Flow

15,00
10,00
5,00
in £000

0,00
-5,00
-10,00
-15,00
2010 2011 2012
Inv. CF 11,30 -10,51 -9,56
Capital expenditures -5,34 -9,55 -8,61
 Balance Sheet
2010 2011 2012 2009
£000's £000's £000's £000's
Assets 736,674 713,245 765,625

Fixed assets 496,208 488,793 515,191

Tangible fixed assets 434,494 431,428 427,157

Intangible fixed assets 60,661 55,717 85,708
Investments 1,053 1,648 2,326

Current assets 240,466 224,452 250,434

Stock - development properties 45,755 33,46 37,595

Stock - retail merchandise 1,887 1,114 1,681
Debtors- due within one year 62,289 27,435 52,332
-due after one year 2,928 2,214 5,201
Cash and short-term deposits 127,607 160,229 153,625

Liabilities and Equity 736,674 713,245 765,625

Current liabilities 154,835 131,104 145,159 314,096

Creditors:
Amout falling due within one year 154,835 131,104 145,159 314,096

Liabilites and Provisions 326,517 314,186 322,918

Creditors:
Amount falling due after more than one year 283,883 275,912 268,066
Provisions for liabilities and charges 42,634 38,274 54,852

Capital and reserves (Equity) 255,322 267,955 297,548

Called up share capital 0,062 0,062 0,062

Share premium 29,997 29,997 29,997
Merger reserve 26,699 26,699 26,699
Profit and loss account 198,564 211,197 240,79

Shareholder's funds 255,322 267,955 297,548

Total assets less current liabilities 581,839 582,141 620,466

Net assets 255,322 267,955 297,548

Trade debtors 13,486 10,032 20,394

Trade creditors 11,079 10,324 10,983

Redeemable preferred shares 49,998 49,998 49,998

 Income Statement
2010 2011 2012 2009
Operations Operations Operations
excluding excluding excluding Operations
player Player player Player player Player excluding
trading trading Total trading trading Total trading trading Total player trading Player trading Total
£000's £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's £000's

Turnover of the Group including ist

share of joint ventures 381,262 0,46 381,722 257,107 0,735 257,842 242,577 2,901 245,478 312,305 3,589 315,894

Share of turnover of joint venture -1,866 0 -1,866 -2,150 0 -2,150 -2,465 0 -2,465 -2,555 0 -2,555

Group turnover 379,396 0,46 379,856 254,957 0,735 255,692 240,112 2,901 243,013 309,75 3,589 313,339

Operating expenses -319,272 -25,033 -344,305 -212,128 -21,658 -233,786 -217,018 -42,319 -259,337

Operating profit/(loss) 60,124 -24,573 35,551 42,829 -20,923 21,906 23,094 -39,418 -16,324

Share of joint venture operating result 0,463 0 0,463 0,822 0 0,822 0,952 0 0,952

Profit on disposal of player registrations 0 38,137 38,137 0 6,256 6,256 0 65,456 65,456

Profit on ordinary activities before

finance charges (EBIT) 60,587 13,564 74,151 43,651 -14,667 28,984 24,046 26,038 50,084

Net charges -18,183 -14,208 -13,496

Profit on ordinary activities before

taxation (EBT) 55,968 14,776 36,588

Taxation 5,024 -2,143 -6,995

Profit after taxation retained for the

finacial year (EB) 60,992 12,633 29,593

Earning per share

Basic and diluted £ 980,31 £ 203,05 £ 475,64

Staff costs 110,733 124,401 143,448

 Cash Flow Statement
2010 2011 2012
£000's £000's £000's
Net cash inflow from operating activities 176,56 53,142 27,694

Player registrations 15,903 -1,528 -1,785

Returns on investment and servicing of finance -17,649 -17,220 -13,071

there of servicing of finance -18,387 -17,785 -13,903

Taxation -6,294 13,664 -4,624

Capital expenditure -5,342 -9,546 -8,610

Net cash inflow before financing 163,178 38,512 -0,396

Financing -135,188 -5,890 -6,208

Management of liquid resources -48,542 49,340 -79,633

Change in cash in the year -20,552 81,962 -86,237

Change in short-term deposits 48,542 -49,340 79,633

Increase in cash and short-term deposits 27,990 32,622 -6,604

Operative CF 151,879 49,021 9,167

Investment CF 11,299 -10,509 -9,563

Free Cash Flow 163,178 38,512 -0,396

Financing CF -135,188 -5,890 -6,208