Interim Results

Parallel Media Group PLC 30 June 2003 30 June 2003 Parallel Media Group plc Interim Results for the period ended 31 December 2002 Chairman's statement The Company today announces its un-audited results for the six month period ended 31 December 2002. There is no dividend recommendation. Turnover for the period was £16.7 million (6 months ended 30 December 2001: £18.5 million). This generated an operating loss after goodwill and exceptional administrative expenses of £9.2 million (6 months ended 30 December 2001: £75.7 million) and an overall loss for the period of £9.6 million (6 months ended 30 December £77.2 million). The adjusted loss per share was 2.16 pence (6 months ended 30 December 2001: Earnings Per Share 3.84 pence). The net liabilities as at 31 December 2002 equalled £7.2 million (as at 30 December 2001: Net assets of £8.9 million). The net debt as at 31 December 2002 stood at £1.1 million (as at 30 December 2001: £1.3 million). In my statement accompanying the interim accounts for the six months to 30 June 2002, I set out the Company's plans to dispose of those Group companies that are primarily involved with football and cricket to focus on its strengths and existing rights ownership in professional golf. I am pleased to confirm that these disposals took place on 21st January 2003 and I shall be giving more detail regarding this transaction in my statement accompanying the Company's audited financial statements for the period ended 22nd January 2003 (the Company's new accounting reference date) which will be published in July 2003. These unaudited interim accounts therefore represent the performance of the total business formerly known as The World Sport Group Plc prior to the disposals mentioned above. In preparing these interim accounts, difficulties have been encountered in obtaining full and reliable information for certain of the Group's (now disposed of) subsidiaries and which form part of the Discontinued Operations set out in the results. Estimates have therefore been made where necessary in the preparation of these accounts. As a consequence of January 2003's disposal of The World Sport Group Ltd, the capital reconstruction and the open offer, the net assets, share capital and reserves recorded in the consolidated Group balance sheet as at 22nd January 2003 will be substantially different to those which form part of these results. As at the date of these Financial Statements, the net liabilities of the disposed of businesses was estimated to be in the region of £11 million. An impairment review of the carrying value of goodwill will be carried out at that date. All restructuring costs relating to the disposals will be reflected in the period to 22nd January 2003. Trading in the period covered by these results continued to suffer from the difficult market conditions experienced in the first half of the year. I shall be providing a fuller explanation of trading performance with the Group's full year results along with a commentary on current market conditions and the current performance of the restructured business. David Ciclitira Chairman Parallel Media Group plc Interim Results for the period ended 31 December 2002 Consolidated profit and loss account for the 6 months ended 31 December 2002 6 months ended 6 months ended 31 December 2002 30 December 2001 Continuing Discontinued Total Total Operations Note £'000s £'000s £'000s £'000s Turnover 7,904 8,790 16,694 18,464 Cost of sales (6,028) (7,086) (13,114) (7,213) Gross Profit 1,876 1,704 3,580 11,251 Administrative Expenses (3,655) (9,110) (12,765) (86,968) Other operating income - - - 15 Operating (loss)/profit before goodwill (1,246) (4,987) (6,233) 2,156 Impairment of goodwill - (1,784) (1,784) (74,065) Goodwill amortisation (275) - (275) (1,607) Administrative expenses - exceptional 2 (258) (635) (893) (2,186) Operating loss (1,779) (7,406) (9,185) (75,702) Share of operating profit/(loss) in 16 (868) (852) (969) associates Exceptional items - Cost of fundamental restructuring - - - (362) Loss on ordinary activities before interest and tax (1,763) (8,274) (10,037) (77,033) Interest receivable - 138 138 181 Interest payable (8) (299) (307) (375) (Loss)/profit on ordinary activities before (1,771) (8,435) (10,206) (77,227) tax Tax on (loss)/profit on ordinary activities - (2) (2) (16) (Loss)/profit on ordinary activities after (1,771) (8,437) (10,208) (77,243) tax Minority interest - 599 599 70 (Loss)/profit for the financial period (1,771) (7,838) (9,609) (77,173) (Loss)/earnings per share - basic and diluted 3 (16.78p) (169.11p) - adjusted 3 (2.16p) 3.84p Parallel Media Group plc Interim Results for the period ended 31 December 2002 Consolidated balance sheet at 31 December 2002 Group 31 December 2002 30 December 2001 £'000 £'000 Fixed Assets Intangible assets 10,451 11,007 Tangible assets 990 1,100 Investments 690 1,756 12,131 13,863 Current Assets Debtors - due within one year 14,638 16,512 - due after one year - 1,169 14,638 17,681 Cash - 2,305 14,638 19,986 Creditors: amounts falling due within one year (29,397) (19,656) Net current (liabilities)/assets (14,759) 330 Total assets less current liabilities (2,628) 14,193 Creditors: amounts falling due after one year (1,147) (26) Provision for liabilities and charges (3,453) (5,301) Net (liabilities)/assets (7,228) 8,866 Capital and reserves Called up share capital 11,453 11,453 Share premium account 24,277 24,277 Other reserves 5,591 5,591 Profit and loss account (48,403) (32,352) Shareholders' funds - equity (7,082) 8,969 Minority interest - equity (146) (103) (7,228) 8,866 The financial statements, which are unaudited, were approved by the board of directors on 30th June 2003. Parallel Media Group plc Interim Results for the period ended 31 December 2002 Notes forming part of the financial statements for the 6 months ended 31 December 2002 1. Accounting policies The financial statements have been prepared on the basis of the accounting policies as set out in the Group's 2001 statutory accounts, save for the implementation of FRS 19 Deferred Tax, the effect of which is not material in the period. Comparative figures have been given for period ended 30 December 2001 as they are the latest audited financial statements available. The figures for the period ended 30 December 2001 do not constitute statutory accounts as they have been extracted from the statutory accounts which were filed with the Registrar of Companies. The auditors' report on those financial statements which was issued on 23 December 2002 was unqualified but contained a reference to a fundamental uncertainty, details of which are shown below. The auditors' report did not contain any statement under section 237 of the Companies Act 1985. 'Basis of preparation - Going concern The financial statements have been prepared on a going concern basis which assumes that the Group will continue in operational existence for the foreseeable future. The directors intend to raise the necessary funding to meet the Group's immediate requirements from an Open Offer, details of which are included in a document issued to shareholders today. The prospectus also outlines a proposed disposal of certain subsidiaries in order to reduce the funding requirement for the Group. The financial statements do not include any adjustments which would be required if the proposed disposal were not approved by the shareholders or if the necessary funds from the Open Offer were not received.' 2. Exceptional administrative items The exceptional items of £893,000 included in administrative expenses, comprise the provision against a long term debtor balance of £258,000 (included in continuing operations) and the loss on the sale of an associated undertaking of £635,000 (included in discontinued operations). In the period ended 30 December 2001 the exceptional items included in administrative expenses of £2,186,000 comprised provisions against balances due from associated undertakings of £1,629,000 (£323,000 of which is included in discontinued operations) redundancy costs of £143,000, £208,000 of costs incurred in the acquisition of World Sport Group Ltd and Parallel Media Group International Ltd, and £206,000 of aborted deal costs. Parallel Media Group plc Interim Results for the period ended 31 December 2002 Notes forming part of the financial statements for the 6 months ended 31 December 2002 (Continued) 3. (Loss)/earnings per share 6 months ended 6 months ended 31 December 30 December 2002 2001 (i) Basic Loss for the financial period (£9,609,000) (£77,173,000) Number of shares in issue (weighted average as adjusted for in the 1:200 consolidation in August 2001) 57,263,281 45,635,327 Loss per share (16.78p) (169.11p) (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) 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 profit excluding goodwill, 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. 6 months ended 6 months ended 31 December 2002 30 December 2001 EPS Earnings EPS Earnings Pence £'000s Pence £'000s Basic loss per share (16.78p) (9,609) (169.11p) (77,173) Impairment of goodwill (continuing operations only) - - 162.30p 74,065 Amortisation of goodwill 0.48p 275 3.52p 1,607 Discontinued operations - 2002 13.69p 7,838 - - Discontinued operations - 2001 - - 3.05p 1,393 Administrative expenses - Exceptional (continuing operations only) 0.45p 258 4.08p 1,863 Adjusted earnings per share (2.16p) (1,238) 3.84p 1,755 The discontinued operations figure shown in 2001 has not been restated to reflect comparability with the 2002 figure. Parallel Media Group plc Interim Results for the period ended 31 December 2002 Notes forming part of the financial statements for the 6 months ended 31 December 2002 (Continued) 4. Post balance sheet events On 21st January 2003, the Company sold its holding of shares in the World Sport Group Ltd and its subsidiaries to Park House Holdings Ltd. The consideration paid by Park House Holdings Ltd comprised cash of £1 million, the capitalisation of the loans made by Park House Holdings Ltd to the Company into Deferred Shares and the re-designation of the Ordinary Shares, to which Park House Holdings Ltd was entitled pursuant to the capital reconstruction, as Park House Deferred Shares which were subsequently cancelled. Details of the open offer and the capital reconstruction, together with further details of the disposal, are included the prospectus issued to shareholders in December 2002. 5. Other Copies of unaudited interim financial statements have not been sent to shareholders, however copies are available on request from the Company Secretary at the company's Registered Office: 56 Ennismore Gardens, London SW7 1AJ. This information is provided by RNS The company news service from the London Stock Exchange

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