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For immediate release                    19 November 2008

Millwall Holdings PLC

Final Results

Board Statement

Business Review

The 2007-8 season was a turbulent one. After a disappointing start Willie Donachie was replaced as manager, with Kenny Jackett taking on the role on 6 November 2007.

There were consequential managerial changes across the backroom staff and the new team struggled to deal with exceptional levels of injury. During the course of the season it was necessary to make extensive use of loan players to deal with this problem. This increased the player wage cost to the club and resulted in a total of 41 different players representing Millwall during that period.

The team finished the 2007-8 league campaign with 52 points and in 17th position, having battled against relegation to League 2 throughout the second half of the season. Early exits in both the Johnston Paint Trophy and the Carling Cup competitions were a cause for disappointment. However, Millwall reached the 4th round of the FA Cup, losing an away tie to a Championship team, Coventry City. The signs of improvement in team performance were there and could be seen, particularly, in a good away victory at Swansea City (eventual Champions) and a 3-0 home win against promotion hopefuls Carlisle United .

The average home league attendance was 8,668 (2007: 9,231), which placed the Club in the top five of the Divisional attendance league.  

During the period further on-going working capital was raised from Chestnut Hill Ventures and Directors of Millwall Holdings. This was provided by the Company entering into a further sterling term loan facility of £3,000,000 with Chestnut Hill Ventures (the Lender) and a further loan from Directors of £300,000. These loans were approved by the Board on 30th June 2008 and are non-convertible.

 

Results

The consolidated income statement for the period is set out below. 

Revenue for the period remained broadly stable but gate and associated match-day revenues were down 3% due to a disappointing team performance, the Club having ended the league season in 17th position. Additional revenues were secured in non-matchday conferencing and events, and retail sales, which compensated for these losses.

Total staff costs were higher than anticipated due to the player related costs in respect of loan players required to cover for injured players and amounted to £6.3m for the thirteen month period. They were broadly in line, on a pro rata basis, with the same cost for the previous year (2007: £5.9m - 12 months). The total wages to turnover ratio rose to 118% (2007 : 109%) This increase is mainly due to the thirteen month period having included June 2008, a month with no football fixtures and therefore the lowest income generating month of the calendar year.

Administration costs (excluding Depreciation and Amortisation) increased to £5.202m (2007: £4.492m). This increase is attributable to expenses in connection with the regeneration programme of £1.345m (2007: £0.455m) and costs associated with raising financing and the convening of an EGM. Cost efficiencies have been made in the Football Club resulting in savings in administration costs in this area of the business.

Player sales amounted to £913,000 (2007: £413,758) and included the transfer of Tony Craig , Marvin Elliott and Ben May as well as three young players from the club's youth system to Liverpool , Chelsea and Portsmouth.

The Directors do not recommend payment of a dividend (2007: no dividend). 

Principal risks and uncertainties

In common with many football clubs outside the Premiership 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. 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.

Prospects

Football

The team has started the new season in good form and after 16 games of 2008 -2009 season are in 3rd place in League 1 having already won 10 games. The improvement in on-field performance has led to optimism amongst the supporters and the average home attendance for the first seven league games being 8,975 and corporate matchday sales increasing.

The player wage costs remain challenging with 3 of the highest paid contracted players not part of the manager's plans for the team. These players, along with 11 others, have contracts that expire in June 2009 and the board is constantly reviewing the position in regard to the balance between protecting player asset values and offering extended player contracts.

The Den

The policy of utilising the stadium on non-matchdays to increase revenues has proved successful over the past 13 months and further marketing initiatives will be put in place to strengthen this key area of business.

The Community

The Club continues to recognise the importance of the relationship with the broader community and more work has been undertaken with the Millwall Community Scheme. We now employ a shared liaison officer funded via The Football League, whose focus is to promote the work and activities of both Football Club and Community Scheme across this sector of London.

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. 

Finance

The Company is principally financed by CHV by way of loans. At the AGM in December 2007 the Company failed to secure Section 89 authority to issue share capital. This was due to a significant shareholder voting against this recommendation. Therefore, the Company is constrained and can raise money only by way of debt. The Company will seek to secure the Section 89 authority at the next AGM.

Regeneration

On regeneration and development, the planning process has been delayed due to changes in the overall planning regime and the election of a new Mayor of London, all outside the control of the company. Significant work has been undertaken to contribute to the overall masterplan of the area, which will be the subject of detailed consultation in the New Year (2009).

H Rabbatts

Executive Deputy Chairman

19 November 2008

  Millwall Holdings PLC

Consolidated Income Statement

	for the thirteen months ended 30 June 2008
										Thirteen
										months					Year
										Ended					Ended
										30 June					31 May
										2008					2007
										Total					Total
	Notes									£000					£000
Revenue										5,367					5,388
Other income - profit on disposal of player's registrations										913					414
Staff costs										(6,313		)			(5,865		)
Amortisation of players' registrations										(126		)			(63		)
Depreciation of property, plant and equipment										(309		)			(382		)
Total Depreciation and amortisation expense										(435		)			(445		)
Other expenses										(5,202		)			(4,492		)
										______					______
Loss from operations										(5,670		)			(5,000		)
Finance income										31					17
Finance expense										(476		)			(208		)
										______					______
Loss before taxation										(6,115		)			(5,191		)
Tax expense										-					-
										______					______
Loss for the period attributable to:
Equity shareholders										(6,115		)			(5,191		)
										______					______
Loss per share - basic and diluted	2									(0.022		)p			(0.024		)p
										______					______

 

Millwall Holdings PLC

Consolidated Statement of Changes in Equity

For the thirteen months ended 30 June 2008

Group	Ordinary Shares		Deferred Shares	Share		Equity component
	of 0.01p		of 0.09p	premium		of Convertible		Capital		PIK note		Profit and		Total
	each		each	account		Loan Notes		reserves		reserve		loss account		Equity
	£000		£000	£000		£000		£000		£000		£000		£000
1 June 2006	1,838		2,333	11,087		-		21,474		-		(26,697	)	10,035
Share issues	669		-	1,707		-		-		-		-		2,376
Share issues - costs	-		-	(160	)	-		-		-		-		(160	)
Equity proportion of Convertible Loan Notes Issued	-		-	-		252		-		-		-		252
Allocated Convertible Loan Note transaction costs	-		-	-		(33	)	-		-		-		(33	)
Share based compensation	-		-	-		-		-		-		4		4
Loss for the year	-		-	-		-		-		-		(5,191	)	(5,191	)
	________		_______	__________		_____		_______		_____		_________		________
31 May 2007	2,507		2,333	12,634		219		21,474		-		(31,884	)	7,283
	________		_______	__________		_____		_______		_____		_________		________
1 June 2007	2,507		2,333	12,634		219		21,474		-		(31,884	)	7,283
Share issues	1,156		-	2,311		-		-		-		-		3,467
Equity proportion of Convertible Loan Notes Issued	-		-	-		224		-		-		-		224
Conversion to share capital of equity proportion of Convertible loan Notes	87		-	175		(262	)	-		-		-		-
Share based Compensation	-		-	-		-		-		-		164		164
PIK notes issued	-		-	-		-		-		333		-		333
Loss for the period	-		-	-		-		-		-		(6,115	)	(6,115	)
	_________		________	___________		_____		________		_____		________		__________
30 June 2008	3,750		2,333	15,120		181		21,474		333		(37,835	)	5,356
	________		_______	__________		_____		_______		_____		________		________

 

  Millwall Holdings PLC

Consolidated Balance Sheet

			30 June				31 May
				2008			2007
				£000			£000
Non-current assets
Intangible assets				291			36
Property, plant and equipment				15,127			15,691
				_______			_______
				15,418			15,727
				_______			_______
Current assets
Inventories				66			93
Trade and other receivables				1,104			801
Cash and cash equivalents				204			749
				_______			_______
				1,374			1,643
				_______			_______
Total assets				16,792			17,370
Non-current liabilities
Trade and other payables				-			(107	)
Financial liabilities				(4,357	)		(2,178	)
Deferred income				(3,770	)		(4,591	)
				_______			_______
Total Non-current liabilities				(8,127	)		(6,876	)
				_______			_______
Current liabilities
Trade and other payables				(2,239	)		(2,259	)
Deferred income				(1,070	)		(952	)
				_______			_______
Total Current liabilities				(3,309	)		(3,211	)
				_______			_______
Total liabilities				(11,436	)		(10,087	)
				_______			_______
Net assets				5,356			7,283
				_______			_______
Equity
Called up share capital				6,083			4,840
Share premium				15,120			12,634
Equity proportion of Convertible Loan Notes				181			219
Capital reserve				21,474			21,474
PIK note reserve				333			-
Retained deficit				(37,835	)		(31,884	)
				_______			_______
Total Equity				5,356			7,283
				_______			_______

 

Millwall Holdings PLC

Consolidated Cash Flow Statement

   for the thirteen months ended 30 June 2008

	30 June 2008                £'000		31 May 2007  £'000
Operating activities
Net loss before tax   Net loss before taxation	(6,115)		(5,191	)
Share based payments	497		4
Depreciation on property plant and equipment	309		382
Amortisation of intangible assets	126		63
Amortisation of grants	(98)		(104	)
Profit on disposal of players' registrations	(913)		(414	)
Profit on disposal of property, plant and equipment	(300)		-
Finance income	(31)		(17	)
Finance expenses	476		208
	_____________		_______
Cash flow from operations before changes in working capital	(6,049)		(5,069	)
Decrease/(increase) in inventory	27		(1	)
(Increase)/decrease in trade and other receivables	(303)		893
(Decrease)/increase in trade and other payables and accruals and deferred income	(110)	)	132
	_______________		_______
Cash generated from operations	(6,435)		(4,045	)
Investing activities
Purchase of property, plant and equipment	(36)		(122	)
Proceeds on disposal of players' registrations	695		416
Purchase of players' registrations	(381)		(60	)
Interest received	31		17
	_______________		_______
Net cash generated by investing activities	309		251
Financing activities
Proceeds from issue of new share capital	900		1,475
Costs of issue of new share capital	-		(41	)
Proceeds from issue of convertible loan notes	3,022		3,596
Proceeds from issue of loan notes	1,673		-
Capital element of finance leases and hire
purchase contracts repaid	-		(16	)
Interest paid	(8)		(208	)
	_______________		_______
Net cash generated by financing activities	5,587		4,806
Net (decrease)/increase in cash and cash equivalents	(539)		1,012
Cash and cash equivalents at start of period	743		(269	)
	_______________		_______
Cash and cash equivalents at end of period	204		743
	_______________		_______

During the period, £2,829,050 (2007: £900,000) of convertible loan notes issued were converted into ordinary shares of the Company. 

  

Millwall Holdings PLC

 

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