Interim Results
Media Content PLC
25 January 2002
MEDIA CONTENT PLC ('MEDIA CONTENT')
25 JANUARY 2002
RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2001
CHAIRMAN'S STATEMENT
Introduction
The second half of calendar year 2001 has been a challenging period for Media
Content plc. The global economic slowdown has affected the media industry
severely, while at the same time diminishing available funding from the capital
markets for young and growing companies such as Media Content. The current
investment market climate has not been receptive to small media companies and
therefore, despite considerable efforts funding has not been raised.
This combination of factors has had the effect of substantially reducing
turnover. At the same time the Company experienced increases in operating
expenses due to commitments to develop and launch new businesses and seek
acquisitions in accordance with our previously announced corporate strategy.
As a consequence, the operating results are by any standards disappointing. The
loss for the six months ending 31 December 2001 increased to £1.6 million from
£146,000 for the same period one year earlier, a difference of approximately
£1.46 million. This is primarily attributable to four factors: (a) a decrease of
approximately £368,000 in turnover from the sports advisory and related
distribution business, (b) an increase of approximately £602,000 related to the
launch of sportsmediarights.com and the Asia-Pacific office in Hong Kong, (c)
approximately £398,000 in amortisation of goodwill and development expenses
related to the acquisition of SDCi Ltd., and (d) a decrease of approximately
£93,000 in interest income.
The Company has undertaken a review of its operations with the goal of
substantially reducing operating costs in the immediate term, and focusing of
developing stronger revenues in our core competencies.
We are also continuing to evaluate strategic alternatives that may include
acquisitions or other strategic business transactions. However, the Company
believes that its ability to capitalise on any such opportunities remains
subject to its obtaining financing in today's difficult environment.
Financial Results
Turnover in the six-month period ended 31 December 2001 was £ 95,000 as compared
to £ 463,000 during the same period in 2000. Although the Company was able to
add important new clients such as the G-14 European Football Clubs Grouping, the
Company was not successful in reaching planned levels of new sports advisory or
content distribution business. Media Content expects significant revenues in the
second half of the financial year due to contracts currently in place.
Operating expenses increased during the six months ended 31 December 2001 to
£1,733 from £733 in the same six months during 2001. This was due primarily to
the launch of SportsMediaRights.com (SMR) in June 2001, the operation of the
Hong Kong office, growth in corporate overhead, and amortisation related to the
SDCi acquisition.
Operations Review
The sports advisory services business, Sports Media Advisors, made progress in
terms of adding new clients such as the G-14 European Football Clubs Grouping,
and pursuing distribution deals based on our contract for world-wide television
rights distribution from the World Snooker Association. Both represent turnover
opportunities during calendar 2002 and in the future. While the Company retained
its important client relationships and marketed its services extensively
throughout the sports industry, the volume of advisory turnover and related
content distribution fell sharply to slightly less than £100,000 in the six
months ended 31 December 2001.
Since June 2001, SportsMediaRights.com has succeeded in signing over 200
companies on six continents as Users of the marketplace and now has on offer
over 3,500 hours of sports programming. Accordingly, the Company believes that
industry acceptance of SMR is growing. However, the results of the SMR
operations have not produced revenues for the six months ending 31 December 2001
and thus have not met the Company's expectations. The Company is currently
reviewing SMR to determine what strategic actions should be taken to improve the
performance of SMR, which may include a change in the SMR revenue model.
Management
Mr. Ian C. Buckley has resigned from the Board of Directors effective 24 January
2002 due to potential conflicts of interest related to future fundraising of
Media Content.
Current actions and conclusion
Media Content plc is going through a challenging period and must significantly
'tighten its corporate belt' to stem its losses. Until the general economic
environment improves, we believe it may be difficult to raise additional
financing, and therefore, the Company must reduce its operating costs.
Management is in the process of reviewing and making substantial cuts in
overhead and operating costs in each area of our business. For example, we are
in the process of converting the Asia-Pacific office in Hong Kong into an agency
/representative relationship. The Company believes this will save substantial
costs while retaining our ability to sell and service the market. In addition,
we are re-focusing our resources on content distribution and marketing which has
in the past provided the bulk of turnover for the Company. With these changes,
we anticipate that the Company will emerge from this period both leaner and
stronger.
Leonard M. Fertig
Chairman
PROFIT AND LOSS ACCOUNT
Note 6 months to 31 6 months to 31 Year
December 2001 December 2000 ended
30 June
(unaudited) (unaudited) 2001
£000 £000 (audited)
£000
TURNOVER 95 463 629
Administrative expenses
Amortisation of goodwill (269) - (141)
Amortisation of development costs (129) - -
Exceptional items:
Impairment of investments - - (394)
Bad debt provision - - (220)
Other administrative expenses (1,335) (733) (1,585)
(1,733) (733) (2,340)
OPERATING LOSS (1,638) (270) (1,711)
Interest receivable and similar income 31 124 217
Interest payable and similar charges - -
LOSS ON ORDINARY ACTIVITIES BEFORE AND AFTER
TAXATION BEING RETAINED LOSS (1,607) (146) (1,494)
Basic loss per share (pence) 3 (0.2) (0.02) (0.2)
Diluted loss per share (pence) 3 (0.2) (0.02) (0.2)
All of the company's operations were classified as continuing in the year.
There were no other recognised gains or losses other than shown above.
BALANCE SHEETS
At 31 December At 31 December At
2001 2000 30 June
(unaudited) (unaudited) 2001
£000 £000 (audited)
£000
FIXED ASSETS
Intangible assets 3,188 - 3,586
Tangible assets 148 33 47
Investments 42 437 42
3,378 470 3,675
CURRENT ASSETS
Debtors 244 171 263
Cash at bank and in hand 934 3,967 2,170
1,178 4,138 2,433
CREDITORS: amounts falling due (240) (146) (185)
within one year
NET CURRENT ASSETS 938 3,992 2,248
TOTAL ASSETS LESS CURRENT LIABILITIES 4,316 4,462 5,923
CAPITAL AND RESERVES
Called up share capital 7,011 6,362 7,011
Share premium 6,693 4,532 6,693
Profit and loss account (9,388) (6,432) (7,781)
EQUITY SHAREHOLDERS' FUNDS 4,316 4,462 5,923
SHAREHOLDERS' FUNDS
At 31 December At 31 December At
2001 2000 30 June
(unaudited) (unaudited) 2001
£000 £000 (audited)
£000
Opening shareholders' funds 5,923 4,593 4,593
Loss for the financial year/period (1607) (146) (1,494)
Shares issued in the year/period - 15 2,824
Closing shareholders' funds 4,316 4,462 5,923
1. ACCOUNTING POLICIES
The financial statements are prepared in accordance with applicable
accounting standards. The particular accounting policies adopted are
described below.
Accounting convention
The financial statements are prepared under the historical cost convention.
Turnover
Turnover represents fees and expense reimbursements receivable by the
company net of any applicable VAT.
Goodwill and intangible fixed assets
For acquisitions of a business in accordance with the provisions of FRS 10
'Goodwill and Intangible Assets', purchased goodwill is capitalised in the
year in which it arises and amortised over its estimated useful life up to a
maximum of 5 years.
Research and development
Research and development expenditure is written off as incurred except that
development expenditure incurred on an individual project is carried forward
when its technological feasibility is reasonably established and the
commercial viability can be foreseen with reasonable assurance.
Capitalisation of development expenditure ceases when the products derived
from the project are completed and fully tested. Any expenditure carried
forward is amortised on a straight line basis over four years or the
estimated useful life, if shorter, of the related products generated from
the project, commencing in the accounting period in which the product is
available for sale. Expenditure considered to be irrecoverable is written
off immediately.
Foreign exchange
Transactions denominated in foreign currencies are translated into sterling
at the rates ruling at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are
translated at the rates ruling at that date. These translation differences
are dealt with in the profit and loss account.
2. ANALYSIS OF TURNOVER
All of the entity's operations derive from the provision of sports media
advice and investment. A geographical analysis of operations is given below:
At 31 December At 31 December At
2001 2000 30 June
(unaudited) (unaudited) 2001
£000 £000 (audited)
£000
Geographical analysis of turnover by destination
North America - 259 325
United Kingdom 40 31 111
Rest of the World 55 173 193
3 LOSS PER SHARE
Basic
The loss per share figure for the six months ended 31 December 2001 is based on
the loss for the period on ordinary activities after taxation of £1,607,000
(2000 Interim : £146,000; 2000/2001 final £1,494,000).
The weighted average number of shares used in the calculation of basic earnings
per share was 701,091,543 shares (2000 Interim : 633,962,290 shares; 2000/2001 :
655,147,543 shares.)
Diluted
The weighted average number of shares used in the calculation of diluted
earnings per share was 702,029,043 shares (2000 Interim : 633,969,858 shares;
2000/2001 final : 662,262,408) . The number of shares reflects the share options
in existence at the respective dates.
The interim results for the six months ended 31 December 2001 are expected to be
posted shortly to all shareholders. Copies of these will be available to the
public free of charge for one month from 96-98 Baker Street, London W1U 6RA.
This information is provided by RNS
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