Final Results

RNS Number : 3353S

Catalyst Media Group PLC

18 November 2011

 



Catalyst Media Group Plc

("CMG" or the "Company")

Final results for the 15 months ended 30 June 2011

The Board of Catalyst Media Group ("CMG") is pleased to announce the final results for the Company covering the 15 month accounting period to 30 June 2011. CMG is a 20.54 per cent. shareholder of Satellite Information Systems (Holdings) Ltd ("SIS") and the results for the period to 30 June 2011 incorporate its share of the profits of SIS for its year ended 31 March 2011.

Highlights

·      Profits after taxation of £2.5million (12 months to 31 March 2010: £3.8 million.)

·      Net assets of £32.7 million ( 2010: £29.5million)

·      Net assets per share116.p (2010:  105p)

·      Earnings per share 8.47p (2010: 14.29p)

·      Total revenues of SIS £256 million (2010: £198 million)

·      SIS profit after tax £9.1m(2010: £15.7m)

Enquiries:

CMG:

Michael Rosenberg

[phone]     

Non Executive Chairman

Melvin Lawson

[phone]     

Non-Executive Director         

Strand Hanson Limited

[phone]     

James Harris

Angela Peace

Chairman's statement

I am pleased to report that for the 15 month period ended 30 June 2011, CMG recorded profit after taxation, including its 20.54% equity share of the profits of Satellite Information Services Ltd (SIS) for its year ended 31 March 2011, of £2.5 million (2010: £3.8 million) with earnings per share from continuing operations of 8.47p (2010: 14.29p). Net assets as at 30 June 2011 were £32.7 million (2010: £29.5 million) with Net assets per share of 116p (2010: 105p).

For the year ended 31 March 2011, SIS generated turnover of £256 million (2010: £198 million). The profit of SIS for that year has been impacted by a provision of £5.9 million deemed necessary in connection with its contract covering the Commonwealth Games in India in 2010 referred to in more detail below, and also by start up costs of £855,000 relating to the joint venture with Peel Media Services (Studios) Ltd ("Peel Media") to manage the studios and all post production content and technical services at Media City in Salford Quays, Manchester. Prior to these provisions, operating profit before interest and tax for the year was £22.8 million compared to £24.7 million in the previous year. Net profit before taxation, including all provisions was £13.5 million (2010: £23.3 million) with profit after tax of £9.1 million (2010: £15.7 million).

SIS is one of the most experienced television, production and outside broadcast service providers in Europe and considers itself a world leader in the television broadcasting industry. Its position was particularly enhanced by the acquisition on 1 April 2008 of the BBC Outside Broadcast business. Further outside broadcast trade and asset acquisitions during the last year have added additional equipment and trucks to the existing fleet. The Group now has over 110 uplink vehicles covering the spectrum of state-of-the-art uplink trucks, and with its proprietary automated uPOD technology and its rapidly deployed, dismountable Drive Fly kits, it is now the largest provider of transportable satellite uplink services in the world, transmitting tens of thousands of hours of live coverage every year to broadcasting customers worldwide. 

The services provided by SIS to the betting industry are supported in the main by fixed term contracts both with the retail owners of betting shops and with the racecourses that enable pictures to be delivered to those shops. Following the signing by SIS of long term rights agreements with Arena Leisure Plc and Northern Racing Limited, combined with other courses that have subsequently renewed contracts, SIS now holds long term media rights representing in excess of 50% of all UK horse racing fixtures. This ensures the supply of images and data from the coverage of horseracing fixtures at racecourses including Royal Windsor, Lingfield Park, Chepstow and Fontwell Park until 2016 and 2017. The services provided by SIS also include exclusive coverage of Irish racing fixtures.

SIS provides more than 45,000 betting opportunities per year to its customers from UK and international horseracing, including racing from 28 UK and 26 Irish tracks together with other countries including South Africa, France, Germany and the UAE. In addition its betting services cover football and also greyhound racing with exclusive contracts with Bookmakers Afternoon Greyhound Services, known as BAGS till 2015.

SIS has now launched a new range of football data services aimed at assisting the betting industry to generate new business. This move follows the acquisition by SIS of the Football DataCo rights for the exclusive distribution to the betting industry of live match data for the English and Scottish leagues. In addition there will be data from the Champions League, the Europa League and qualifying matches from 2012.

Shareholders of SIS include certain bookmaker customers, Ladbroke, William Hill, Fred Done of Betfred and the Tote as well as financial investors being CMG and Caledonia Investments.

The results of SIS for the year ended 31 March 2011 are as follows:-

	Year ended 31/3/11	Year ended 31/3/10
	£'000	£'000
Turnover
Ongoing operations	255,583	194,498
Acquisitions	-	3,701
	---------	-----------
Subtotal	255,583	198,199
Operating expenses	238,698	173,485
Operating Profit
Ongoing operations	16,885	24,252
Acquisitions Share of operating loss of joint venture	-    (855)	462 -
Profit on disposal of fixed asset	10	-
Net interest payable	(2,585)	(1,451)
Profit on ordinary activities before tax	13,455	23,263
Tax on profit on ordinary activities	(4,342)	(7,543)
Retained profit transferred to reserves	9,113	15,720

The revenues of SIS included £124 million derived from the long established business of providing integrated television and data services to licensed betting offices in the UK, Ireland and overseas. This division contributed approximately £12 million to operating profits.

Revenues of £133 million were generated from the business of SISLIVE which provides satellite news gathering and associated transmission services to its customers and also provides outside broadcast television production units including sound support and communication. This division made a loss of approximately £1.0 million after the provision referred to above relating to the Commonwealth Games project.

A further £26 million of revenues came from other services included the production of pictures to the licensed betting offices and services offered to overseas customers. These services contributed approximately £5.9 million to operating profits.  

Growth in turnover of SIS for the year to 31 March 2011 was 29% compared to 2.7% in 2010. The most significant drivers for the increase in revenue during 2011 relates to revenues from the Commonwealth Games contract and content price increases for licensed betting office subscribers and additional BBC and non BBC revenue.

The SIS group operating profit margin decreased in 2011 to 6.6% from 12.5% in the previous year primarily due to the provision of £5.9m referred to above relating to the Commonwealth Games.

Net debt of the SIS group as at the year end was £27.1m (2010: £28.5m).

On 5^th July 2010, SIS entered into a joint venture agreement with Peel Media to form MediaCity Studios Ltd ("MediaCity Studios"). The company commenced trading in December 2010 and provides studio, technical and production services at Media City in Salford. MediaCity Studios currently has a contractual relationship with Peel Media for provision of services to the BBC for an initial contractual period of ten years with an option to extend.

SIS has also announced plans to relocate its London operation and some of its Milton Keynes operations to Media City in Salford. The move is expected to be completed in 2013 and will involve further capital expenditure and certain non-recurring operational costs. As part of their move SIS LIVE is installing and commissioning the largest broadcast teleport in the North of England. SIS LIVE has expanded with a move into a new expanded facility in Paris to serve broadcast and media customers throughout France. The facility is located close to the Eiffel Tower. A total of 19 people are employed in Paris.

SIS won the prestigious contract to provide the production and coverage facilities and services to cover the XIX Commonwealth Games which took place in India in October 2010. Under the terms of the agreement, SIS LIVE provided all the production facilities and personnel to cover 17 different sports across 12 venues in Delhi, as well as the Games' opening and closing ceremonies. As well as providing the technical infrastructure to cover the Games, SIS LIVE provided over 1,000 highly skilled technical and production staff at the 12 venues.

A partnership in the name of SIS LIVE was set up in January 2010 as a special purpose vehicle to deliver the production and facilities for the Games. While the TV coverage was concluded successfully (and generated plaudits from the international television community) due to post Games developments in India beyond SIS's control, approximately 40% of amounts still owing under the contract have not yet been paid. A corresponding proportion has been withheld by SIS LIVE from its principal Indian subcontractor and legal proceedings have been initiated to recover the outstanding payment from the Indian broadcaster. As a result of these ongoing discussions the provision referred to above of £5.9m has been recognized in the accounts of SIS.

Dividend Policy

The policy of SIS has been to distribute 50% of available profits by way of dividend, subject to cash considerations. However, the board of SIS is currently considering certain strategic investment opportunities which, should they proceed, would require significant additional funding. In light of such potential investment plans, no dividend will be declared by SIS until such time as there is further certainty as to the likely outcome of its deliberations. Should SIS determine to proceed with any of the potential investments in the near future it is likely that dividends would be temporarily suspended with the intention to resume payments at the end of 2013. If it is decided not to go ahead with any such investments then dividend payments are expected in line with current policy.

CMG overheads

The net overheads of CMG now run at an annualised rate of approximately £175,000 excluding exceptional items and interest and are expected to stay at that level for the foreseeable future. Pending a decision on the timing of a dividend by SIS the Board has put in place facilities to ensure that sufficient funds are available to support the business of CMG.

AGM

Notice of the Annual General Meeting is attached. This will be held at 9.30am on Monday 12th December at the office of GAM, 20 King St London SW1Y6QY There will be a Special Resolution proposed to renew the authority given last year for the company to purchase up to 15% of its share capital in the market. To date no shares have been purchased under this authority.

Conclusion

The main objective of the Board has been to reduce overheads to a minimum while focusing on its investment in SIS. It is hoped that in due course the flow of dividends from SIS should eliminate borrowings which currently stand at £650,000 and enable a policy of distributions to shareholders to commence. In the interim, arrangements have been made to re-finance the existing outstanding debt due to be repaid by end of December 2011.

Whilst the current potential investment plans of SIS have resulted in there being some uncertainty as to whether a dividend will be received by the Company in the current year, the Directors are confident that any strategic investments made by SIS, in the event that these were to proceed, should ultimately be anticipated to result in a longer term enhancement in shareholder value for the benefit of all CMG shareholders.

Michael Rosenberg OBE

Chairman

17^th NOVEMBER 2011

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Consolidated statement of comprehensive income

				30 June		31 March
				2011		2010
					£		£
	Revenue				31,250		43,909
	Cost of sales				(25,000)		(95,292)
	Gross profit / (loss)				6,250		(51,383)
	Administrative expenses				(228,152)		(290,212)
	Operating loss				(221,902)		(341,595)
	Financial income				68		88
	Financial costs				(48,813)		(201,569)
	Net financial costs				(48,745)		(201,481)
	Share of profit of equity-accounted associate				2,589,272		3,812,224
	Profit before taxation				2,318,625		3,269,148
	Taxation				64,634		752,840
	Profit for the period from continuing operations				2,383,259		4,021,988
	Profit for the period				2,383,259		4,021,988
	Share of other comprehensive income / (loss) of associate				118,105		(184,655)
	Total comprehensive income for the period				2,501,364		3,837,333
	Attributable to equity holders of the Company				2,501,364		3,837,333
	Earnings per share:
	Basic				8.47p		14.29p
	Diluted				8.47p		14.29p
	Earnings per share from continuing operations:
	Basic				8.47p		14.29p
	Diluted				8.47p		14.29p

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Consolidated statement of financial position

		30 June 2011 £	31 March 2010 £
Assets
Non-current assets
Intangible assets		-	-
Property, plant and equipment		-	-
Investment in associate		32,662,725	29,955,348
		32,662,725	29,955,348
Current assets
Trade and other receivables		26,426	82,592
Corporation tax receivable		10,886	327,198
Cash and cash equivalents		27,582	46,444
		64,894	456,234
Total assets		32,727,619	30,411,582
Equity and liabilities
Capital and reserves attributable to equity holders of the parent
Share capital		2,814,319	9,243,197
Share premium		-	38,904,450
Merger reserve		2,402,674	2,402,674
Retained profits/ (deficit)		26,826,782	(21,007,910)
Total equity		32,043,775	29,542,411
Non-current liabilities
Interest-bearing loans and borrowings		-	806,854
Current liabilities
Interest-bearing loans and borrowings		634,635	-
Trade and other payables		49,209	62,317
		683,844	62,317
Total equity and liabilities		32,727,619	30,411,582

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Consolidated statement of cash flows

		30 June 2011 £	31 March 2010 £
Cash flow from operating activities
Profit before taxation including discontinued operations		2,318,625	3,269,148
Adjustments for:
Depreciation, amortisation and impairment		-	278
Share of profit from associate		(2,589,272)	(3,812,224)
Finance income		(68)	(88)
Finance expense		48,813	201,569
Corporation taxes recovered		380,946	544,032
Net cash flow from operating activities before changes in working capital		159,044	202,715
Decrease in trade and other receivables		44,735	69,167
Decrease in trade and other payables		(13,108)	(135,967)
Net cash flow from operating activities		190,671	135,915
Investing activities
Dividend received		-	2,915,002
Interest received		68	88
Net cash flow from investing activities		68	2,915,090
Financing activities
Proceeds from long-term borrowings		-	200,000
Repayment of long-term borrowings		(172,219)	(3,157,045)
Interest paid		(37,382)	(120,467)
Net cash flow from financing activities		(209,601)	(3,077,512)
Net decrease in cash and cash equivalents in the period		(18,862)	(26,507)
Cash and cash equivalents at the beginning of the period		46,444	72,951
Cash and cash equivalents at the end of the period		27,582	46,444

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Notes to the financial statements

1. Investment in associate Period Ended 30 June 2011		Share of net  assets	Fair Value of   Intangibles	Total
		Group	Group	Group
		£	£	£
Cost
At 1 April 2010		8,777,307	21,178,041	29,955,348
Share of profit		2,589,272	-	2,589,272
Share of other comprehensive income		118,105	-	118,105
At 30 June 2011		11,484,684	21,178,041	32,662,725

The Group's interest in the associate, Satellite Information Services (Holdings) Limited (SIS), a company incorporated in Great Britain, is held by Alternateport Limited. Alternateport Limited holds an investment of 20.54% in the equity share capital of SIS and is entitled to appoint a director and alternate director to the SIS board. This right has been exercised since acquisition. Alternateport Limited is a wholly owned subsidiary of Catalyst Media Holdings Limited a wholly owned subsidiary of Catalyst Media Group Plc. The intangible assets recognised upon acquisition of the Group's interest represent customer contracts and goodwill. These are subject to an annual impairment review.

Share of profit of associate*	2011 SIS Total £'000	2011 CMG share £'000	2010 CMG share £'000
Revenue:
UK racing	124,338	25,539	24,465
SIS live services	105,345	21,638	11,424
Other services	25,900	5,320	4,821
Total revenue	255,583	52,497	40,710
Operating profit from ongoing operations (i)	19,523	4,010	5,457
Net interest payable	(2,585)	(531)	(298)
Profit on disposal of fixed asset	10	2	-
Gain on disposal of subsidiary	-	-	203
Profit before tax	16,948	3,481	5,362
Taxation	(4,342)	(892)	(1,550)
Share of profit after taxation	12,606	2,589	3,812
Net income from associate	12,606	2,589	3,812
Other comprehensive income:
Actuarial gain/(loss)	799	164	(257)
Deferred tax	(224)	(46)	72
	575	118	(185)
Share of net assets and liabilities of associate
Net assets (i)	169,469	34,809	29,005
Net liabilities (i)	(113,555)	(23,324)	(20,228)
Net equity	55,914	11,485	8,777

*The period covered by the associate's accounts is 12 months.

(i)         The financial results for SIS are taken from its latest accounts to 31 March 2011, adjusted in order to align the accounting policies of SIS (whose accounts are prepared under UK GAAP) and CMG (whose accounts are prepared under International Financial Reporting Standards). Adjustments have been made in respect of the amortisation of goodwill and the recognition of the fair value of derivatives held by SIS as at the balance sheet date. The net effect of these adjustments is to increase the value of the investment in associate in the financial statements by £1,396k (2010: £681k).

Year Ended 31 March 2010		Share of net  assets	Fair Value of   Intangibles	Total
		Group	Group	Group
		£	£	£
Cost
At 1 April 2009		8,064,740	21,178,041	29,242,781
Share of profit		3,812,224	-	3,812,224
Share of other comprehensive income		(184,655)	-	(184,655)
Dividend received		(2,915,002)	-	(2,915,002)
At 31 March 2010		8,777,307	21,178,041	29,955,348

2. Earnings per share (diluted and undiluted)
The calculation of the basic  and diluted earnings per share is based upon the net profit after tax and minority interests attributable to ordinary shareholders of £2,383,259 (2010: £4,021,988) and a weighted average number of shares in issue for the period of 28,143,197 (2010: 28,143,197).

3. Interest-bearing loans and borrowings

		Current	Current
		Group	Group
		£	£
		2011	2010
	Bank loan	634,635	-
	Bank revolving credit facility	-	-
		634,635	-
		Non-current	Non-current
		Group	Group
		£	£
		2011	2010
	Bank loan	-	606,854
	Bank revolving credit facility	-	200,000
		-	806,854

On 9 October 2008, Catalyst Media Holdings Limited refinanced its loan with National Westminster Bank Plc which is due to be repaid no later than 31 December 2011. Interest is rolled up into the loan balance and is payable at 3% margin above LIBOR. The Group is required to apply all SIS dividends received against this loan in priority to other uses. The loan is also secured by a fixed and floating charge over the Group's assets. The loan facility includes a further revolving credit facility of £500,000 available to the Group up until 31 December 2011. As at the period end £nil had been drawn down by the Group.

4. Basis of preparation and significant accounting policies

These consolidated financial statements of Catalyst Media Group plc have been prepared in accordance with accepted International Financial Reporting Standards (IFRSs), International Accounting Standards (IAS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations (collectively "IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies listed below include those applicable to Satellite Information Services (Holdings) Limited, given its materiality to the Group as a whole.

Catalyst Media Group plc is a publicly limited company registered in England and Wales where it is domiciled for tax purposes.

The financial statements are prepared under the historical cost convention.

5. Annual Report

The Annual Report for the 15 month period ended 30 June 2011 will be posted to shareholders today and is also available from the Company's website www.cmg-plc.com today.

The Annual General Meeting will be held at the offices of GAM, 20 King Street, London SW1Y 6QY, on 12th December 2011 at 9.30 a.m.

 

END

 

 

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