Back to all announcements

DJ Arsenal Holdings PLC Final Results

 
TIDMAFC 
 
Arsenal Holdings plc                  Results for the year ended 31 May 2015 
 
ARSENAL ANNOUNCE FULL YEAR RESULTS 
 
  * Group profit before tax was GBP24.7 million (2014 - GBP4.7 million). 
  * The Group's total turnover amounted to GBP344.5 million (2014 - GBP301.9 
    million). 
  * Turnover from football increased to GBP329.3 million (2014 - GBP298.7 
    million) with strong growth in Commercial activity driven by the new kit 
    partnership with PUMA. 
  * Revenues of GBP103.3 million (2014 - GBP77.2 million) from Commercial 
    activities (including retail and licensing) exceeded GBP100 million for the 
    first time. 
  * Match-day revenue of GBP100.4 million (2014 - GBP100.2 million) is now 
    ranked behind both Broadcasting and Commercial as a source of revenue for 
    the Club. 
  * Significant investment in the squad with a record level of expenditure on 
    player acquisitions (GBP114.0 million) which has in turn resulted in a 
    higher amortisation and higher wage costs in the profit and loss account. 
  * Wage costs rose to GBP192.2 million (2014 - GBP166.4 million) and 
    represented 58.4% (2014 - 55.7%) of football revenues. 
  * Profit on sale of player registrations amounted to GBP28.9 million which 
    was significantly higher than the prior period comparative (2014 - GBP6.9 
    million). 
  * Group's property business made a contribution to pre-tax profits of GBP13.4 
    million (2014 - GBP0.9 million) having benefited from a one-off profit 
    share bonus in relation to a previously sold development site. 
  * The Group has no short-term debt and its cash reserves, excluding the 
    balances designated as debt service reserves, amounted to GBP193.1 million 
    (2014 - GBP173.3 million). 
  * The liabilities for player acquisitions are in part payable in instalments 
    and transfer creditors rose to GBP80.5 million (2014 - GBP38.3 million). 
 
Commenting on the results for the year, the Club's Chairman, Sir Chips Keswick, 
said: 
 
"The Club has had a successful year both on and off the pitch. We are in a 
robust position across all the key areas of our activities and we look forward 
with optimism and strong belief that we are on a positive trajectory." 
 
The Club's Chief Executive Officer, Ivan Gazidis, said: 
 
"Everyone at the Club is determined to build on the FA Cup successes of the 
past two seasons. We continue to look to develop every aspect of our operations 
while remaining true to our principles around being self-funding, investing in 
youth, our style of play and our commitment to our fans and to our place in the 
community. We are focused on delivering more success." 
 
Arsenal Holdings plc 
 
Chairman's Statement 
 
The Club has had a successful year on and off the pitch. Returning to Wembley 
in May to defend the FA Cup was a significant achievement and the manner and 
style of our performance to beat Aston Villa in the final was a source of real 
pride. 
 
This was our twelfth FA Cup win making us the most successful club in the 
history of the world's oldest cup competition. Our FA Cup record is testimony 
to the efforts the Club has made through the years and also to our manager 
Arsène Wenger, who has now won the competition a record equalling six times. 
 
Naturally our victory at Wembley prompted celebrations amongst our fans around 
the world and we again enjoyed a rousing reception from our supporters closer 
to home in Islington during the open top bus parade the day after the game. It 
was another special day for all and I would like to thank Islington Council for 
their hospitality at the Town Hall and their support for the whole event. 
 
The FA Cup Final victory was a fitting end to an exciting season which saw us 
recover from a slow start in the league to finish third. In doing so we reached 
the UEFA Champions League for an 18th successive season and, thankfully, 
avoided the challenge of a qualifying game. This is a remarkable record of 
consistency unmatched by anyone else in England and huge credit must go to our 
manager and the players in this regard. 
 
It is also testimony to the Club's philosophy, which we continue to adhere to 
season to season. We remain committed to spending only the money we earn, our 
style of play, investing in young talent and our local community. 
 
I am delighted that we have been able to invest strongly in the team over the 
last year including, most recently, to bring in promising defender Gabriel in 
January and the experienced Petr Cech during the summer. We have also retained 
the core of our team on new contracts which means we can build on the unity and 
spirit which was so evident last season.  It has also been hugely encouraging 
to see Hector Bellerin, Francis Coquelin and Chuba Akpom emerge from our youth 
programme. 
 
We have also invested off the pitch to ensure that, looking to our future 
requirements, our training facilities are of the appropriate highest quality 
for all of our teams. We are close to finishing a second phase of development 
works at our Hale End Academy, with a third phase to come subject to planning 
consents. In addition, we are just underway on a major two year project for the 
first team site at London Colney, which will include a new player performance 
centre. These infrastructure investments may not attract the headlines in the 
same way as player transfers but they will provide benefits over a longer term, 
which are just as important to the Club. 
 
You will read in the following pages that our revenues have exceeded GBP344 
million and that we have reported a profit before tax of GBP24.7 million. The 
primary source of this revenue uplift was from progress made on our commercial 
agenda. We also benefited from a one-off profit share within our property 
income.  Revenue from commercial activities passed GBP100 million for the first 
time. We have brought a number of new partners to the Club and our retail 
operation enjoyed a record year. The latter was due in large part to a 
successful first year of our new PUMA partnership. 
 
As a Club we remain committed to making a difference to communities at home and 
abroad. The Arsenal Foundation goes from strength to strength, thanks to 
significant financial contributions from our players and fans. At the same 
time, our much respected Arsenal in the Community team marked 30 years of hard 
work delivering programmes in and around Islington. The anniversary was marked 
by the opening of the new Arsenal Hub in Queensland Road. It was particularly 
gratifying to see Alan Sefton, who has led the community team for many years, 
receive personal recognition in the form of an M.B.E. in the Queen's New Year's 
Honours List. 
 
I would again pay tribute to our loyal fans. Throughout the season your support 
was outstanding. Emirates Stadium was sold out for most games with a better 
than ever atmosphere. The support given to the team both home and away is first 
class and really makes a difference. 
 
Finally my thanks go to Stan Kroenke for his continued support and guidance, my 
fellow directors, our management team and entire staff for all their hard work 
and dedication over the last year. I would also like to publicly 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 closing, we look forward with optimism and strong belief that we are on a 
positive trajectory. We are in a robust position across all the key areas of 
our activities and, financially, we stand ready to support the manager with 
such further investment as he deems appropriate. 
 
I look forward to welcoming you to Emirates Stadium and to a successful season. 
 
Sir Chips Keswick 
Chairman 
18 September 2015 
 
Arsenal Holdings plc 
Chief Executive's Report 
 
Overview 
 
Winning the FA Cup for a second successive season was a wonderful achievement 
and continued the progress the Club is making. 
 
I cannot recall a team playing so well and with such style on a day which is 
renowned for being tense and difficult.  The display against Aston Villa 
epitomised much of what we are trying to achieve together. 
 
Our Club will always have a philosophy of investing in and supporting the 
development of young players. We also have the financial ability to invest in 
world class, experienced players. The Cup Final demonstrated what a potent 
force the right blend of youth and experience can be. The sight of young 
players such as Hector Bellerin and Francis Coquelin, alongside established 
stars such as Alexis Sanchez and Mesut Özil, rising to the occasion with a 
performance of style and substance was hugely gratifying. 
 
A trophy in consecutive seasons only serves to increase our desire for more 
success and sets us up well for what should be an exciting period for the Club 
both on and off the pitch. 
 
Football 
 
We have put a lot of work into building and investing in this group of players 
over the past three years. Over that period they have developed a strong bond 
and belief. Arsène is, I know, very happy with the balance we have in the squad 
in terms of age profile, depth in all positions and, importantly, length of 
contracts. 
 
Our improved financial position allows us to support the manager as and when he 
identifies players capable of adding genuine quality to our squad. With this in 
mind, we were delighted to sign defender Gabriel in January and Petr Cech from 
Chelsea during the summer. Gabriel has settled in well and is an important part 
of the squad.  Petr's experience is already proving invaluable on and off the 
pitch and he will make a strong contribution. 
 
Equally importantly we have again done a lot of work this year agreeing 
contract extensions with key players. Chuba Akpom, Mikel Arteta, Hector 
Bellerin, Santi Cazorla, Francis Coquelin, Olivier Giroud, Alex Iwobi, Carl 
Jenkinson, Jon Toral and Theo Walcott have all signed extensions to their 
existing contracts. This ensures we will maintain continuity in the squad and 
puts us in a strong position for the future. 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 18, 2015 09:00 ET (13:00 GMT)

DJ Arsenal Holdings PLC Final Results -2-

We have also recruited a number of exciting players in the Under-17 and 
Under-18 age groups. These are players we have identified and targeted through 
our international scouting network and who join a group of talented scholars 
and young professionals already at the Club. I look forward to seeing them 
develop their careers and hopefully a number will progress into the first team 
squad in due course. 
 
Staying with youth development, I am glad to report that work at our Hale End 
Academy is going well. The new buildings are complete and the final phase of 
development will start when we get the go ahead from local planners to re-lay 
all the pitches. We have continued investing in new staff and the use of the 
very latest techniques in sports science and physical development. We also 
continue to strengthen our scouting networks to ensure we find the very best 
young global talent. 
 
As indicated last year, work is also underway on a multi-million pound 
programme at our London Colney training centre. This two year project will 
transform our training, fitness and preparation facilities. 
 
The Arsenal Ladies 
 
Arsenal Ladies have enjoyed a year of progress, in what has been a changing 
time for the women's game. 
 
Under the stewardship of Pedro Martinez Losa, who joined the club in August 
2014, the team has been adjusting well to the demands of the increasingly 
competitive Women's Super League. Last season, a fourth place finish in the 
table and a place in the FA Continental Cup final represented a good recovery 
after a difficult start. 
 
We have since been bolstered by the arrival of some excellent new players and 
are once again in a position to challenge for honours. 
 
Away from domestic football, we have been extremely proud of our international 
players, who helped to take the popularity of the women's game to new heights 
at the World Cup in Canada.  In particular, Jordan Nobbs, Alex Scott and Casey 
Stoney excelled for England, helping the Three Lions to third place in the 
competition. 
 
Their efforts have translated to the domestic game and the team has enjoyed 
excellent attendances since. Arsenal's first game back following the World Cup 
attracted a crowd of 2,061 - a league record for the Gunners at Meadow Park. 
 
With improvements planned to the Ladies' training facilities as part of the 
Colney redevelopment, there is every reason to be positive about the year ahead 
for Arsenal Ladies. 
 
Business update 
 
The financial results for the year, which are covered in more detail in the 
Financial Review section, show our turnover moved to in excess of GBP340 
million. This was driven by our commercial operations delivering more than 
GBP100 million in revenue for the first time, together with an uplift in 
Premier League broadcasting revenues and a one-off revenue bonus in our 
property business. 
 
Commercial Partnerships 
 
We continue to be focused on growing our family of commercial partners around 
the world. Since our last annual report we have agreed new partnerships with 
Markets.com, Capital Bank, Betfair, Duchamp, DJI Holdings and Indosat. 
 
All these businesses have two things in common; a desire to engage with our 
fans wherever they are in the world and the recognition that Arsenal can help 
them achieve their business objectives in a powerful and meaningful way. 
 
We now have 27 partnerships around the world. This is due to a lot of hard work 
by many people across the Club which has seen us transform our sales 
capability, including the opening of our first international office in 
Singapore, and the development of what is regarded as industry leading 
management of partnership relationships. 
 
We are confident in our ability and capacity to make further progress in this 
area which remains a key priority for us. 
 
 Retail 
 
Our new partnership with PUMA and a major re-fit of our flagship Armoury store 
have helped deliver record retail and licensing revenues this financial year. 
 PUMA have put significant effort into promoting our partnership globally 
through innovative and effective marketing campaigns and prominent presentation 
of Arsenal products in their stores all around the world, resulting in record 
levels of replica kit sales.  We have also recently entered into agreements to 
build our e-commerce and retail presence internationally. Our stadium tours 
continue to attract increasing numbers of visitors. More than 197,000 toured 
the stadium last year. 
 
Arsenal Media Group 
 
Our media group continues to drive strong reach and engagement with supporters 
around the world through digital and social media channels.  Arsenal.com 
continues to be the central hub for all news from around the Club. We have 
grown our Facebook following from 26 million to 33 million, we are the most 
followed English team on Twitter with 6 million followers and our YouTube, 
Instagram, Sound Cloud, Google+ and Sina Weibo channels continue to thrive. 
 
We also this year released our first in-house produced documentary - 
'Invincibles' - to positive reviews. The film has been screened on both Sky 
Sports in the UK and NBC in the USA. 
 
Ticketing 
 
Demand in our General Admission and Premium / Hospitality levels continues to 
be extremely strong and subscriptions to our various membership schemes are 
also growing. 
 
We continue to make investments in the facilities and infrastructure at 
Emirates Stadium, including new LED floodlights and perimeter boards alongside 
a major renovation of the 'Royal Oak' area on Club Level this close season. 
Additionally, we have improved the functionality of Ticket Exchange and Ticket 
Transfer, making it easier for season ticket holders unable to attend matches 
to sell or transfer their seats to other Arsenal supporters. 
 
In March we hosted a high profile Brazil v Chile international friendly in 
front of a sell-out crowd. 
 
Looking ahead, ticket prices at the Emirates Stadium were held flat for the 
2015/16 season and for a seventh time in ten seasons. Whilst our match day 
revenue is now ranked behind both broadcasting and commercial as a source of 
income, it remains vitally important to the Club and is a key differentiator to 
competitor clubs with smaller, less modern venues. 
 
Pre-season 2015/16 
 
We made a highly successful visit to Singapore to take part in the Barclays 
Asia Trophy. Two competitive games against a Singapore XI and Everton saw us 
emerge as the tournament winners and we received a fantastic reception from 
fans from across Asia and Australia during our stay. It was great to see young 
players like Chuba Akpom, Dan Crowley, Alex Iwobi, Jon Toral and Gideon Zelalem 
involved at a first team level. Off the pitch, players took part in a number of 
events including a well received launch of our away kit, a soccer school with 
Emirates and a fan party attended by 700 passionate supporters. 
 
The following week we hosted another highly popular Emirates Cup. Firmly 
established as one of the best pre-season tournaments on the calendar we again 
sold out across the weekend, with 120,000 fans visiting the Emirates Stadium. 
It was great to see us lift the trophy after some exciting games involving 
Lyon, Wolfsburg and Villarreal. 
 
The pre-season preparations concluded a week later when we returned to Wembley 
for the FA Community Shield match against Chelsea. Another impressive display 
saw us retain the Shield and enter the season on a winning run. 
 
Arsenal Foundation and Arsenal in the Community 
 
Our commitment to our local and wider community remains a central part of what 
we stand for as a football club. The Arsenal Foundation continued to provide 
invaluable support for projects here in Islington and further afield. In the 
past three years the Foundation has raised GBP1 million for Save the Children 
to support emergency appeals. This year some of the money will go towards 
developing artificial football pitches in a refugee camp in Iraq. This is a 
perfect example of using the power of football and Arsenal to change people's 
lives and I look forward to seeing the project develop. 
 
Closer to home, our Arsenal in the Community team celebrated its 30th 
anniversary of delivering programmes in Islington and surrounding boroughs. 
They have done a remarkable job, now reaching more than 5,000 people through 
350 sessions every week. As the Chairman has noted, it was fitting that Alan 
Sefton, who leads our local community work, was recognised in the Queen's New 
Year honours with an M.B.E. 
 
Looking ahead 
 
We know the Premier League will be more competitive than ever this season as 
clubs invest more money in top players from around the world. Teams across the 
league are raising their level, which means each and every game will be a 
significant challenge. The promise of the increased value of Premier League 
broadcasting revenues from 2016/17 may already be having an impact. 
 
The new Premier League TV revenues are good news for Arsenal and for the other 
member clubs. The increased revenue may see the league becoming even more 
competitive and it raises a number of strategic questions and opportunities 
that will need to be discussed in the forthcoming months. For now it is too 
early to say what the impact of the Premier League's changing financial 
landscape will be, either domestically or in a wider context across Europe 
 
We look forward to another exciting campaign in the UEFA Champions League with 
the new format throwing up a challenging series of group stage games against 
Bayern Munich, Olympiacos and GNK Dinamo Zagreb. 
 
Everyone at the Club is in optimistic mood and determined to build on the FA 
Cup successes of the past two seasons. We continue to look to develop every 
aspect of our operations while remaining true to our principles around being 
self-funding, investing in youth, our style of play and our commitment to our 
fans and to our place in the community. 
 
We are focused on delivering more success. This remains the shared ambition of 
our majority shareholder Stan Kroenke, the board and everyone connected with 
the Club. 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 18, 2015 09:00 ET (13:00 GMT)

DJ Arsenal Holdings PLC Final Results -3-

We look forward to the rest of the season with excitement and your continued 
support. 
 
I E Gazidis 
Chief Executive Officer 
18 September 2015 
 
Arsenal Holdings plc 
Financial Review 
 
The Group recorded a profit before tax for the 2014/15 year of GBP24.7 million 
(2014 - GBP4.7 million). 
 
The principal factors influencing this result were: 
 
  * Increased revenues from commercial activities and sponsorship of GBP26 
    million, taking the Group's commercial revenues above GBP100 million for 
    the first time and ensuring overall revenues from football activities alone 
    were comfortably in excess of GBPGBP300 million. 
  * Increased profits from player transfers of GBP28.9 million (2014 - GBP6.9 
    million). 
  * Profits in the property development business of GBP13.3 million (2014 - 
    GBP0.9 million). 
  * Significant investment in the playing squad resulting in higher 
    amortisation charges on player registrations of GBP55.3 million (2014 - 
    GBP40.0 million) and driving an overall increase of GBP25.8 million in our 
    wage bill. 
 
                                                 2015        2014 
                                                 GBPm        GBPm 
 
Group turnover                                  344.5       301.9 
 
Operating profit before amortisation,            77.3        62.4 
depreciation and player trading 
 
Player trading (see table below)               (25.6)      (32.6) 
 
Amortisation of goodwill and depreciation      (15.0)      (12.8) 
 
Joint venture                                     0.8         0.7 
 
Net  finance charges                           (12.8)      (13.0) 
 
Profit before tax                                24.7         4.7 
 
The main reason for increased turnover from football was our new kit 
partnership with PUMA from July 2014 which has had a strong, positive impact 
across our sponsorship, retail and licensing revenue lines. We have also again 
increased our revenues from secondary partnerships. 
 
The property business recorded an operating profit of GBP13.0 million (2014 - 
GBP0.4 million) which included a profit share / overage bonus in respect of one 
of the development land sites sold by the Group in a prior year. The overage 
receivable represents a share of the revenues achieved by the developer on its 
successful sale of completed residential units on the finished site. 
 
The wage bill for the year of GBP192.2 million (2014 - GBP166.4 million) was 
increased primarily as a consequence of the players added to the squad in the 
year and the contract extensions agreed with existing players. There is also an 
impact from Champions League qualification bonuses, which are a feature of many 
of our First Team player contracts. By virtue of reaching the Group Stage of 
the 2014/15 competition, via the play-off round, and the Group Stage of the 
2015/16 edition, via third place in the Premier League, there have been two 
bonus trigger events during the 2014/15 financial year. 
 
Increased depreciation charges of GBP14.6 million (2014 - GBP12.4 million) 
reflect a fairly high level of fixed asset additions for the year at GBP12.8 
million. There have been major projects developing the facilities and a new 
building at our Hale End Academy training ground and fitting out the Arsenal 
Hub community building on Queensland Road. Capital expenditure is expected to 
remain at an elevated level over the short term as the Club is committed to a 
major development project at its first team training ground at London Colney, a 
further phase of works at Hale End and a programme of upgrades at Emirates 
Stadium, which commenced with the new LED floodlights and perimeter boards 
installed this summer and the refit of the Royal Oak area in Club Tier. 
 
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. 
 
                                                 2015        2014 
                                                 GBPm        GBPm 
 
Profit on disposal of player                     28.9         6.9 
registrations 
 
Amortisation of player registrations           (54.4)      (40.0) 
 
Impairment of player registrations              (0.9)           - 
 
Loan fees                                         0.8         0.5 
 
Total Player Trading                           (25.6)      (32.6) 
 
The profit on sale of players for the year amounted to GBP28.9 million (2014 - 
GBP6.9 million) which includes the transfer of Thomas Vermaelen and the 
proceeds of an agreement to cancel the Club's option to reacquire the 
registration of former player Carlos Vela. 
 
The increased amortisation charge is a direct result of the fact that we have 
invested strongly in the playing squad. Additions of GBP114 million have been 
booked in relation to the acquisition of new player registrations, including 
Alexis Sanchez, Calum Chambers, Danny Welbeck and Gabriel and, to a lesser 
extent, the extension of contract terms for certain existing players. 
 
In cash terms the impact of these acquisitions 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; nonetheless GBP46.2 million of 
net cash paid out in the year for player registrations still represents a 
record high level for the Club. 
 
At the balance sheet date, the Group's total cash and bank balances amounted to 
GBP228.2 million (2014 - GBP207.9 million), inclusive of debt service reserve 
balances of GBP35.0 million (2014 - GBP34.6 million). This is considered to be 
a robust position with the Group's overall net debt standing at GBP5.7 million 
(2014 - GBP32.6 million). However, proper consideration of the Group's cash 
balance must include allowance for the payments for the aforementioned 
transfers, as follows: 
 
                                                 2015        2014 
                                                 GBPm        GBPm 
 
Bank balance excluding debt service             193.1       173.3 
 
Net balance payable on transfers               (65.6)      (28.8) 
 
                                                127.5       144.5 
 
In addition, it is important to understand that our year end bank balance 
includes advance receipts, of sponsorship and season ticket sales, which 
represent working capital for season 2015/16. 
 
Football Segment 
 
                                                 2015        2014 
                                                 GBPm        GBPm 
 
Turnover                                        329.3       298.7 
 
Operating profit before depreciation and         64.4        62.1 
player trading 
 
Player trading                                 (25.6)      (32.6) 
 
Profit before tax                                11.4         3.8 
 
There were two fewer home fixtures than in the prior year, with two rounds in 
our successful defence of the FA Cup being drawn as away fixtures. Our 27 home 
fixtures (19 Barclays Premier League, five UEFA Champions League, two FA Cup 
and one Capital One Cup) achieved an average tickets sold per game of 59,930 
(2014 - 59,790). 
 
When the Club first moved to the Emirates for season 2006/07 our match-day 
revenues of GBP90 million represented the Group's main source of income. 
Despite achieving a highest ever level of GBP100.4 million for the 2014/15 
season (2014 - GBP100.2 million) match-day has now been overtaken, by both 
Broadcasting and Commercial, in terms of its ranking as a source of revenue. 
 
Broadcasting revenues this year were only slightly increased at GBP124.8 
million (2014 - GBP120.8 million) as was to be expected given this was the 
second season of three for the current Premier League broadcasting contracts 
and the final year of a UEFA contract cycle. Our League form meant we once 
again attracted 25 live Premier League game facility fees (2014 - 25). 
 
Looking to the next cycle of broadcasting revenues UEFA's successful marketing 
of Champions League broadcast and commercial rights (including BT's purchase of 
exclusive UK rights) will drive further growth in values for the participating 
English clubs for the 2015/16 season and beyond. The underlying revenue growth 
may be slightly offset by a weaker Euro. The Premier League has confirmed a 
significant uplift in the value achieved for the UK TV rights for the three 
seasons commencing 2016/17. The process for tendering the international 
broadcasting rights for these three seasons is ongoing. We note that an 
investigation into the sale of live broadcast rights in the UK is currently 
being undertaken by OFCOM the outcome of which cannot be predicted at this 
stage. 
 
Combined commercial and retail revenues for the year rose by some 34% to 
GBP103.3 million (2014 - 24% growth to GBP77.1 million). 
 
The main driver for this growth was the new kit partnership contract with PUMA 
which started in July 2014 and has had an excellent first 11 months. In 
addition, we benefited from a major re-fit of our flagship Armoury store which 
was completed to coincide with the launch of the first PUMA kits. The PUMA 
contract signals the end of a period where our commercial revenues lagged 
behind a number of our competitors as a consequence of the long-term deals that 
were in place as part of the funding of the Emirates move. 
 
We also made strong progress with secondary partnerships adding brands such as 
Cooper Tires, Vitality and Europcar to our roster and bringing the Club's total 
number of partnerships to 24 at the end of the 2014/15 year. During the year we 
opened our first commercial office outside the UK, in Singapore, and have 
already secured a number of new contracts from this location. 
 
We have a healthy pipeline of potential partner deals and commercial 
opportunities; as such we expect that our commercial revenues will continue to 
grow. However, inevitably, the growth rate will now slow as we have our key 
partnerships with Emirates and PUMA in place for the medium term. 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 18, 2015 09:00 ET (13:00 GMT)

DJ Arsenal Holdings PLC Final Results -4-

As ever payroll was the largest and most important area of cost. Wage costs for 
the year rose by 15.5% (2014 - 7.7%) to GBP192.2 million (2014 - GBP166.4 
million), which was mainly attributable to increases in the cost of our 
football playing and support staff. As mentioned above, the Club's on field 
performance meant there were two trigger events in the year in respect of 
certain elements of remuneration linked to Champions League qualification. 
 
The ratio of total wage bill to football revenues was slightly increased to 
58.4% (2014 - 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. 
 
The Club was fully compliant with the Premier League's wage cap / short term 
cost control regulations. In light of the strong correlation which exists 
between player wage expenditure and on-field success we should be clear that 
having the resources to grow our wage bill in a rational and responsible manner 
continues to represent a positive outcome. 
 
Other operating costs, which include all the direct and indirect costs and 
overheads associated with the Club's football operations and revenues, rose 
3.3% to GBP72.1 million (2014 - GBP69.8 million) and represented 21.9% of 
football revenues (2014 - 23.3%). 
 
Property Segment 
 
                                                 2015        2014 
                                                 GBPm        GBPm 
 
Turnover                                         15.2         3.2 
 
Operating profit                                 12.9         0.4 
 
Profit before tax                                13.3         0.9 
 
In general, activity in the Group's property business was at a very low level 
with revenues limited to the rental of certain retained commercial units, such 
as the gym at Highbury Square, and sale of remaining car park spaces at 
Highbury Square. 
 
However, one of the Group's prior land sales included provision for the receipt 
of a sales overage (effectively a profit share) in the event that the 
purchasing developer's final total revenues, from sale of completed residential 
units, exceeded a pre-agreed target level. That residential development has now 
reached a sufficient stage of completion that an overage payment has been 
calculated and agreed as due to us. Accordingly, the applicable overage income 
and certain limited direct costs have been recognised in the 2014/15 results of 
the Group's property business. 
 
Unlocking the future sale value of the two remaining major property sites, on 
Hornsey Road and Holloway Road, is tied to the resolution of the underlying 
planning consents which are proving to be complex and long running. We remain 
confident that viable schemes will be agreed and implemented in due course. 
 
Profit after Tax 
 
Overall there is a tax charge of GBP4.7 million (2014 - credit of GBP2.6 
million) on the pre-tax result for the period. This meant that the retained 
profit for the year has increased to GBP20.0 million (2014 - GBP7.3 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 resulted in corporation tax charge payable for the year of 
GBP6.3 million (2014 GBP3.7 million). The corporation tax charge was partially 
offset by a deferred tax credit of GBP1.6 million (2014 - credit of GBP6.3 
million). 
 
Financial Regulation 
 
The Club continues to be fully compliant with the Financial Fair Play 
regulations put in place by UEFA and the Premier League. The impact of these 
regulations on the financial hierarchy of the game remains unclear. The 
revenues from the new Premier League broadcasting contracts from 2016/17 are 
also likely to have a material impact on the future financial landscape. 
 
Arsenal remains in a strong financial position. The Club has made significant 
affordable investments, both in terms of transfers and wage growth, but at the 
same time recorded another set of profitable results and maintained the cash 
resources to allow further investment toward on-field success. 
 
Stuart Wisely 
Chief Financial Officer 
18 September 2015 
 
 
 
Arsenal Holdings plc 
Consolidated profit and loss account 
For the year ended 31 May 2015 
 
                                            2015                          2014 
 
                                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              346,498      805   347,303    303,754      513   304,267 
including its share of 
joint ventures 
 
Share of turnover of joint         (2,779)        -   (2,779)    (2,395)        -   (2,395) 
venture 
 
                                  -------- --------  --------   -------- --------  -------- 
 
Group turnover                3    343,719      805   344,524    301,359      513   301,872 
 
Operating expenses               (281,400) (55,365) (336,765)  (251,736) (40,072) (291,808) 
 
                                  -------- --------  --------   -------- --------  -------- 
 
Operating profit/(loss)             62,319 (54,560)     7,759     49,623 (35,559)    10,064 
 
                                       762        -       762        710        -       710 
Share of joint venture 
operating result 
 
Profit on disposal of                    -   28,944    28,944          -    6,912     6,912 
player registrations 
 
                                  -------- --------  --------   -------- --------  -------- 
 
Profit/(loss) on ordinary           63,081 (25,616)    37,465     50,333 (32,647)    17,686 
activities before net 
finance charges 
 
                                  -------- --------             -------- -------- 
 
Net finance charges                                  (12,751)                      (13,018) 
 
                                                     --------                      -------- 
 
Profit on ordinary                                     24,714                         4,668 
activities before taxation 
 
Taxation (charge)/credit                              (4,670)                         2,603 
 
                                                     --------                      -------- 
 
Profit after taxation                                  20,044                         7,271 
retained for the financial 
year 
 
                                                     --------                      -------- 
 
Earnings per share 
 
Basic and diluted             4                       GBP322.16                       GBP116.87 
 
                                                     --------                      -------- 
 
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 2015 
 
                                                               2015           2014 
                                                            GBP'000        GBP'000 
 
Fixed assets 
 
Goodwill                                                      1,082          1,498 
 
Tangible fixed assets                                       419,180        421,402 
 
Intangible fixed assets                                     171,658        114,986 
 
Investments                                                   4,174          3,571 
 
                                                         ----------     ---------- 
 
                                                            596,094        541,457 
 
Current assets 
 
Stock - development properties                                9,741          9,849 
 
Stock - retail merchandise                                    4,530          4,935 
 
Debtors   - due within one year                              74,175         65,642 
 
                - due after one year                          6,658          4,861 
 
Cash and short-term deposits                                228,167        207,878 
 
                                                         ----------     ---------- 
 
                                                            323,271        293,165 
 
Creditors: amounts falling due within one year            (273,733)      (203,032) 
 
                                                         ----------     ---------- 
 
Net current assets                                           49,538         90,133 
 
                                                         ----------     ---------- 
 
Total assets less current liabilities                       645,632        631,590 
 
Creditors: amounts falling due after more than one year   (264,362)      (266,478) 
 
Provisions for liabilities and charges                     (50,601)       (54,494) 
 
                                                         ----------     ---------- 
 
Net assets                                                  330,669        310,618 
 
                                                         ----------     ---------- 
 
Capital and reserves 
 
Called up share capital                                          62             62 
 
Share premium                                                29,997         29,997 
 
Merger reserve                                               26,699         26,699 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 18, 2015 09:00 ET (13:00 GMT)

DJ Arsenal Holdings PLC Final Results -5-

Profit and loss account                                     273,911        253,860 
 
                                                         ----------     ---------- 
 
Shareholders' funds                                         330,669        310,618 
 
                                                         ----------     ---------- 
 
 
 
Arsenal Holdings plc 
Consolidated cash flow statement 
For the year ended 31 May 2015 
 
                                                               2015           2014 
                                                            GBP'000        GBP'000 
 
Net cash inflow from operating activities                   102,395         96,169 
 
Player registrations                                       (46,241)       (11,121) 
 
Returns on investment and servicing of finance             (12,130)       (12,409) 
 
Taxation                                                    (2,206)        (2,445) 
 
Capital expenditure                                        (14,255)        (8,873) 
 
                                                         ----------     ---------- 
 
Net cash inflow before financing                             27,563         61,321 
 
Financing                                                   (7,274)        (6,900) 
 
Management of liquid resources                                7,770       (39,781) 
 
                                                         ----------     ---------- 
 
Change in cash in the year                                   28,059         14,640 
 
Change in short-term deposits                               (7,770)         39,781 
 
                                                         ----------     ---------- 
 
Increase in cash and short-term deposits                     20,289         54,421 
 
                                                         ----------     ---------- 
 
Management of liquid resources represents the transfer of cash to/(from) the 
Group's bank accounts to short-term bank treasury deposits. 
 
Reconciliation of operating profit to net cash inflow          2015           2014 
from operating activities 
                                                            GBP'000        GBP'000 
 
Operating profit                                              7,759         10,064 
 
Amortisation of player registrations                         54,430         40,072 
 
Impairment of player registrations                              935              - 
 
Amortisation of goodwill                                        416            426 
 
Loss/(profit) on disposal of tangible fixed assets              273          (140) 
 
Depreciation (net of grant amortisation)                     14,618         12,418 
 
Decrease/(increase) in stock                                    513        (2,472) 
 
(Increase)/decrease in debtors                              (4,983)          9,657 
 
Increase in creditors                                        28,434         26,144 
 
                                                         ----------     ---------- 
 
Net cash inflow from operating activities                   102,395         96,169 
 
                                                         ----------     ---------- 
 
 
 
Analysis of changes in net debt          At 1 June     Non cash         Cash    At 31 May 
                                              2014      changes        flows         2015 
                                           GBP'000      GBP'000      GBP'000      GBP'000 
 
Cash at bank and in hand                    80,555            -       28,059      108,614 
 
Short-term deposits                        127,323            -      (7,770)      119,553 
 
                                        ----------   ----------   ----------   ---------- 
 
                                           207,878            -       20,289      228,167 
 
Debt due within one year (bonds)           (6,704)      (7,689)        7,274      (7,119) 
 
Debt due after more than one year        (205,921)        7,399            -    (198,522) 
(bonds) 
 
Debt due after more than one year         (27,830)        (377)            -     (28,207) 
(debentures) 
 
                                        ----------   ----------   ----------   ---------- 
 
Net debt                                  (32,577)        (667)       27,563      (5,681) 
 
                                        ----------   ----------   ----------   ---------- 
 
Non cash changes represent GBP570,000 in respect of the amortisation of costs 
of raising finance, GBP377,000 in respect of rolled up, unpaid debenture 
interest and GBP280,000 in respect of amortisation of the premium on certain of 
the Group's interest rate swaps. 
 
 
 
Arsenal Holdings plc 
Notes to preliminary results 
For the year ended 31 May 2015 
 
1. The financial information set out above does not constitute the company's 
statutory accounts for the years ended 31 May 2014 or 2015, but is derived from 
those accounts. Statutory accounts for 2014 have been delivered to the 
Registrar of Companies and those for 2015 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 2015. 
 
The company has complied with the Guidance note 69.1 of the ISDX Growth Market 
- Rules for Issuers throughout the year ended 31 May 2015. 
 
2. Segmental analysis 
 
Class of business:-                                             Football 
 
                                                             2015            2014 
                                                          GBP'000         GBP'000 
 
                                                          329,337         298,658 
Turnover 
 
                                                       ----------      ---------- 
 
Segment operating (loss)/profit                           (5,198)           9,650 
 
Share of operating profit of joint venture                    762             710 
 
Profit on disposal of player registrations                 28,944           6,912 
 
Net finance charges                                      (13,149)        (13,455) 
 
                                                       ----------      ---------- 
 
Profit on ordinary activities before taxation              11,359           3,817 
 
                                                       ----------      ---------- 
 
Segment net assets                                        279,181         272,449 
 
                                                       ----------      ---------- 
 
 
 
Class of business:-                                            Property 
                                                              development 
 
                                                             2015            2014 
                                                          GBP'000         GBP'000 
 
                                                           15,187           3,214 
Turnover 
 
                                                       ----------      ---------- 
 
Segment operating profit                                   12,957             414 
 
Net finance charges                                           398             437 
 
                                                       ----------      ---------- 
 
Profit on ordinary activities before taxation              13,355             851 
 
                                                       ----------      ---------- 
 
Segment net assets                                         51,488          38,169 
 
                                                       ----------      ---------- 
 
 
 
Class of business:-                                              Group 
 
                                                             2015            2014 
                                                          GBP'000         GBP'000 
 
                                                          344,524         301,872 
Turnover 
 
                                                       ----------      ---------- 
 
Segment operating profit                                    7,759          10,064 
 
Share of operating profit of joint venture                    762             710 
 
Profit on disposal of player registrations                 28,944           6,912 
 
Net finance charges                                      (12,751)        (13,018) 
 
                                                       ----------      ---------- 
 
Profit on ordinary activities before taxation              24,714           4,668 
 
                                                       ----------      ---------- 
 
Segment net assets                                        330,669         310,618 
 
                                                       ----------      ---------- 
 
Operating profit from football before amortisation, depreciation and player 
trading amounted to GBP64.4 million (2014 - GBP62.1 million); being segment 
operating loss (as above) of GBP5.2 million (2014 - profit of GBP9.7 million), 
adding back depreciation (net of grant amortisation) of GBP14.6 million (2014 - 
GBP12.4 million), amortisation of goodwill of GBP0.4 million (2014 - GBP0.4 
million) and operating loss from player trading of GBP54.6 million (2014 - 
GBP39.6 million). 
 
3. Turnover 
 
Turnover, all of which originates in the UK,                 2015          2014 
comprises the following:                                  GBP'000       GBP'000 
 
Gate and other match day revenues                         100,401       100,229 
 
Broadcasting                                              124,844       120,762 
 
Retail and licensing                                       24,685        17,938 
 

(MORE TO FOLLOW) Dow Jones Newswires

September 18, 2015 09:00 ET (13:00 GMT)

DJ Arsenal Holdings PLC Final Results -6-

Commercial                                                 78,602        59,216 
 
Property development                                       15,187         3,214 
 
Player trading                                                805           513 
 
                                                       ----------    ---------- 
 
                                                          344,524       301,872 
 
                                                       ----------    ---------- 
 
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 (2014 - 62,217 
shares). 
 
5. Reconciliation of movement in shareholders' funds 
 
                                                             2015          2014 
                                                          GBP'000       GBP'000 
 
Profit for the year                                        20,044         7,271 
 
Exchange difference                                             7           (8) 
 
Opening shareholders' funds                               310,618       303,355 
 
                                                       ----------    ---------- 
 
Closing shareholders' funds                               330,669       310,618 
 
                                                       ----------    ---------- 
 
6. Annual General Meeting 
 
The annual general meeting will be held at Emirates Stadium, London, N7, on 
Thursday 15 October 2015 at 11.30 am. The full statement of accounts and annual 
report will be posted to shareholders 23 September 2015. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 18, 2015 09:00 ET (13:00 GMT)