Final Results
PARALLEL MEDIA GROUP PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005
Chairman's statement
This year has been a time of challenges for Parallel Media Group Plc (`PMG')
but has also witnessed a turnaround in its fortunes with the successful
conclusion of four new Title Sponsorships in its Asian business during the 2006
PGA European Tour international's season.
Since year end the company has agreed heads of terms for restructuring of its
Asian operations on a basis which the directors believe is beneficial to PMG.
In addition PMG is in negotiation to raise funds of at least £2 million which
will be used to redeem certain of the Company's issued convertible loan stocks.
A circular describing more of these matters will be sent to shareholders
shortly and approval of the resolutions necessary to issue shares for these
purposes will be sought at an Extraordinary General Meeting.
Key assets
PMG's business internationally is also set to expand, especially in Europe. PMG
sees great potential in the FIFPro XI Awards, and its existing property in
Kazakhstan. Another area of activity that PMG has embarked on in 2006, is its
involvement in European Golf Resorts Limited. As previously announced, your
company is involved in negotiations for one venue in Havr (Croatia). PMG is
currently also reviewing its contract with the PGA de las Americas regarding
the Tour de las Americas with the aim of making this contract potentially
profitable in 2007.
It is your board's belief that the aforementioned developments which have been
achieved between the year end and today, significantly enhance your Company's
long term prospects.
Corporate
The Company has also decided to restructure the Board to put the Company in the
best position for this coming period of growth. I will continue to spend a
considerable portion of my time overseas developing the international aspects
of the business and will continue for the foreseeable future as chairman. I am
delighted to announce that Edward Adams who is chairman of RAM Investment Group
plc which is a significant holder of convertible loan stock in the company has
agreed to become a Non-Executive Director of the Company and that Leonard Fine
has also agreed to become a Non Executive Director again. Both Edward and
Leonard have worked closely with me over recent months and I have greatly
valued their input so it is a pleasure to welcome them as directors. We will
also be looking to further strengthen the board over the forthcoming months
The board has decided that it would be appropriate for the business to have a
chief operating officer who would run the company on a day-to-day basis,
relieving me of these duties and enabling me to apply my skills more fully to
event creation and sponsorship arrangement which will be the revenue generators
for the company in coming years. We have identified a suitable candidate with
considerable experience in this field to take this role and are optimistic of
completing an agreement with him in the near future.
Outlook
The last year has been a very significant period in the development of your
company. The current year has started well and I anticipate being able to
announce results for the first half of 2006 very shortly and that these will
demonstrate the improvement in trading. The changes with regard to our Asian
activities should enable this trend to be continued further and the planned
improvements to the Group's balance sheet should enable the business to be
developed further and profitably.
Without doubt this Company would not be in the position it is today without the
tremendous support of its staff and shareholders and I thank them for their
effort and dedication.
David Ciclitira.
Chairman
14 August 2006
Financial report
Overview to 31 December 2005
In this year the Group shows a retained loss of £1.05 million compared to a
prior year loss of £2.57 million. The adjusted loss per share figure for the
year was 4.71p, against a prior year adjusted loss per share figure of 10.98p.
Turnover
Group turnover for the year was £2.58 million compared to turnover of £2.98
million in the prior year. Turnover reduced due to the cessation of the Group's
Italian operations and the expiration of a television rights contract, both of
these activities had been loss making in 2004. These reductions in turnover
were partially offset by the staging of two new Ladies European Tour golf
events in Asia and an increase in the commission generated from the Group's
associated company Parallel Media Asia (2003) Ltd.
Operating Loss
After deducting rights fees and other direct costs from the Group's gross
revenues a gross profit of £1.0 million was generated in the year. The
operating loss equalled £0.31 million which is an improvement of £1.13 million
on the £1.44 million recorded in the previous year. A major reason for this
improvement is the reduction in the administration costs incurred by the group,
especially in terms of staff and professional advisor costs.
Exceptional Items
During the year the Company disposed of an associated company, Broadcast
Innovations Limited, this transaction resulted in a profit on sale of £0.16
million. The Company also disposed of a subsidiary company, Parallel Media
Italia SRL ("PMI"), the consideration for this disposal was the transfer to the
Company of certain sponsorship rights that PMI held. In calculating the loss on
disposal no value was attached to this consideration leading to an accounting
loss on disposal of £0.16 million.
Net liabilities
The net liabilities of the Group at the year end are £5.22 million, this
position will be dramatically improved upon conversion of convertible loans
owed by the Group and through the fund raising which the Group proposes to
undertake.
Interest and Taxation
The Group paid net interest of £0.36 million arising from convertible loan
interest, interest on the facility with Bumiputra Commerce Bank and other
loans.
There was no corporation tax charge during the year.
Loss Per Share
Adjusted loss per share in the year was 4.71p compared to 10.98p in the year
ended 31 December 2004. The adjusted loss as shown in Note 1 to the accounts
is based upon the attributable profit of the continuing operations after
adjusting for goodwill and all exceptional items. At the end of this year, the
Company made no final dividend recommendation.
Parallel Media Group plc
Consolidated profit and loss account for the year ended 31 December 2005
Year ended Year ended
31 December 2005 31 December 2004
£'000 £'000
Turnover: Group and share of 2,582 3,702
joint venture
Less share of turnover of - (723)
joint venture
Turnover 2,582 2,979
Cost of Sales (1,593) (1,943)
Gross Profit 989 1,036
Administrative Expenses (1,297) (2,474)
Operating loss before (308) (1,288)
exceptional items
Administrative expenses - - (150)
exceptional
Operating Loss (308) (1,438)
Share of operating loss in - (226)
joint ventures
Share of operating loss in (389) (672)
associates
Exceptional items - profit on 156 -
sale of associated undertaking
Exceptional items - loss on (157) 16
disposal of subsidiary
Loss on ordinary activities (698) (2,320)
before interest and tax
Interest receivable - 1
Interest payable (361) (397)
Loss on ordinary activities (1,059) (2,716)
before tax
Tax on loss on ordinary - -
activities
Loss on ordinary activities (1,059) (2,716)
after tax
Minority interests 11 144
Loss for the financial year (1,048) (2,572)
Loss per share
- basic and diluted 1 (4.72p) (11.58p)
Parallel Media Group plc
Statement of total recognised gains and losses for the year ended 31 December
2005
Year ended Year ended
31 December 31 December
2005 2004
£'000 £'000
Loss for the financial year
- Group (659) (1,674)
- Joint ventures - (226)
- Associated undertakings (389) (672)
(1,048) (2,572)
Currency translation differences on foreign
currency net investments
- Group (63) (7)
- Joint ventures & associated undertakings (278) 150
Total recognised gains and losses for the year (1,389) (2,429)
Parallel Media Group plc
Balance sheets at 31 December 2005
Group Company
31 31 31 31
December December December December
Note 2005 2004 2005 2004
£'000 £'000 £'000 £'000
Fixed assets
Tangible assets 17 62 14 9
Investments 619 883 3,408 3,010
636 945 3,422 3,019
Current assets
Debtors - Due within one 1,264 923 2,012 1,449
year
- Due after one 805 1,890 802 1,890
year
2,069 2,813 2,814 3,339
Cash 107 47 105 -
2,176 2,860 2,919 3,339
Creditors: amounts falling
due
within one year (1,906) (2,003) (1,633) (1,447)
Net current assets 270 857 1,286 1,892
Total assets less current 906 1,802 4,708 4,911
liabilities
Creditors: amounts falling
due
after one year: (6,130) (5,468) (6,130) (5,468)
Provisions for liabilities
and charges
Associates - (156) - -
Net liabilities (5,224) (3,822) (1,422) (557)
Capital and reserves
Called up share capital 2 1,110 1,110 1,110 1,110
Share premium account - - - -
Other reserves 5,591 5,591 5,591 5,591
Profit and loss account (11,802) (10,413) (8,123) (7,258)
Shareholders' funds - (5,101) (3,712) (1,422) (557)
equity
Minority interest - equity (123) (110) - -
(5,224) (3,822) (1,422) (557)
Parallel Media Group plc
Consolidated cash flow statement for the year ended 31 December 2005
31 31 31 31
December December December December
2005 2005 2004 2004
£'000 £'000 £'000 £'000
Net cash outflow from (59) (2,404)
operating activities
Returns on investments and s
ervicing of finance
Interest paid (187) (397)
Interest received - 1
Net cash outflow from (187) (396)
returns on investments and
servicing of finance
Capital expenditure
Payments to acquire tangible (9) (48)
fixed assets
Net cash outflow from (9) (48)
capital expenditure and
financial investment
Acquisitions and disposals
Further investment in - (158)
associated undertaking
Net (cash)/overdrafts sold (1) (242)
with subsidiary
Purchase of other - (30)
investments
(1) (430)
Net cash outflow before (256) (3,278)
management of liquid
resources & financing
Financing
Bank facility (568) 1,562
Convertible loan 890 678
Loan from director - 514
322 2,754
Increase/(decrease) in cash 66 (524)
Parallel Media Group plc
Notes forming part of the financial statements for the year ended 31 December
2005
1. Loss per share
Year ended Year ended
31 December 31 December
2005 2004
(i) Basic £'000 £'000
Loss for the financial year (1,048) (2,572)
Number of shares in issue 22,203,505 22,203,505
Loss per share (4.72p) (11.58p)
(ii) Diluted
Diluted loss and earnings per share is calculated on the same basis as basic
loss and earnings per share because the effect of the potential ordinary shares
(share options and convertible loans) reduces the net loss per share and is
therefore anti-dilutive.
(iii) Adjusted earnings per share
The adjusted earnings per share figure shown below is calculated on
attributable loss excluding discontinued operations, exceptional items included
in administrative expenses, and exceptional items included after operating
profit. This calculation has been used as it is deemed to give a more
appropriate indication of the earnings of the continuing operations of the
Group.
Year ended Year ended
31 December 2005 31 December 2004
EPS Earnings EPS Earnings
Pence £'000 Pence £'000
Basic loss per share (4.72p) (1,048) (11.58p) (2,572)
Administrative expenses - - - 0.67p 150
Exceptional (continuing
operations only)
Exceptional items (continuing 0.01 1 (0.07p) (16)
operations only)
Adjusted loss per share (4.71p) (1,047) (10.98p) (2,438)
2. Called up share capital
31 31
December December
2005 2004
£'000 £'000
Authorised
1,799,533,475 ordinary shares of 0.5p each (31 December 8,998 9,997
2004: 199,936,502 ordinary shares of 5p each)
199,831,545 deferred shares of 0.5p each (31 December 999 -
2004: Nil)
9,997 9,997
Issued and fully paid
22,203,505 ordinary shares of 0.5p each (31 December 111 1,110
2004: 22,203,505 ordinary shares of 5p each)
199,831,545 deferred shares of 0.5p each (31 December 999 -
2004: Nil)
1,110 1,110
(i) Ordinary shares and deferred shares
A re-organisation of the Company's capital was approved at an extraordinary
general meeting of the Company held on 2 August 2005. Every Ordinary Share of
5p in issue was subdivided into one Ordinary Share of 0.5 pence each and nine
Deferred Shares of 0.5 pence each. The deferred shares do not entitle their
holders to receive any dividend or other distribution, they do not entitle
their holders to receive notice of or to attend, speak or vote at any General
Meeting of the Company, and they do not entitle their holders on a return of
assets on a winding-up of the Company or otherwise only to the repayment of the
capital paid up on such Deferred Shares and only after repayment of the capital
paid up on each Ordinary Share in the capital of the Company and the payment of
a further £100,000 on each such Ordinary Share.
The financial information set out above does not constitute the Company's
statutory accounts for the year to 31 December 2005 but is derived from those
accounts.
Copies of the Report and Accounts for the period ended 31 December 2005 are
being sent to shareholders. Further copies will be available from the Company's
registered office, which is 3-12 Harbour Yard, Chelsea Harbour, London, SW10
OXD.
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