Interim Results
CSS Stellar PLC
13 September 2006
For Immediate Release 13 September 2006
CSS Stellar plc
('CSS' or 'the Group')
Interim Results
for the six months ended 30 June 2006
CSS Stellar plc, the entertainment and sports management and marketing group,
today announces its interim results for the six months ended 30 June 2006.
Highlights:
• Profit before tax of £9,000 compared to a loss before tax of £15.3
million in the comparable period in 2005
• Turnover on continuing operations increased by 7% to £14.5m (2005: £13.5m)
• All business segments are now profitable both in Europe and US
• Significant improvement in earnings per share to 1.39p (2005: 0.20p)
adjusted for amortisation of goodwill
• Further reduction in structured debt to £1.6 million (2005: £3.0 million)
Commenting on the results Peter Owen, Chairman, commented:
'I am delighted to report results which show the Group's return to
profitability, a performance which has exceeded the Board's expectations. I look
forward to further improvements in the second half of the year.'
For further information please contact:
CSS Stellar
Sean Kelly, Chief Executive Tel: 020 7078 1400
Buchanan Communications
Bobby Morse/Rebecca Skye Dietrich Tel: 020 7466 5000
CHAIRMAN'S STATEMENT
During the period to 30 June 2006 the Group made a profit before tax of £9,000
(2005: loss before tax of £15.3 million).
The Group recorded an operating profit of £912,000 prior to goodwill
amortisation (2005: operating profit of £490,000 prior to goodwill amortisation
and impairment of £13.7 million).
At the interim stage in 2005 the Group announced that it was going to adopt an
investment holding company approach with the focus on creating shareholder value
from individual operating businesses it owned in the Sports and Entertainment
industry. I am pleased to say that this approach has led to significantly
improved profitability with no exceptional write downs and a performance which
has exceeded expectations.
The restructuring of the Group over the past two years has led to these improved
results; all trading segments are now profitable, both in Europe and the US, and
the central costs are now at the right level for a business of this size. We
advised shareholders in March 2006 that the focus of the Group would be in the
entertainment sector; this industry continues to be of interest to investors,
and talent management is an important link in the value chain. We will continue
to focus on the realisation of investment value in all our businesses.
The businesses are now reviewed in more detail below.
DIVISIONAL REVIEW OF CONTINUING OPERATIONS
Talent Management
In the six months to 30 June 2006, turnover was £6.8m (2005: £5.9m) and
operating profit was £359,000 (2005: £645,000), an increase of 15% in turnover
and a 44% decrease in operating profit. The increase in turnover is as a result
of the inclusion of certain pass through costs in the USA. There has been a
decrease in gross profit in the period of £79,000, some pressure on remuneration
costs, with continuing investment in our New York literary business and an
increased level of apportioned central overheads within the European operations.
Entertainment
Within PFD, a number of acting and writing talent enjoyed success within the
period. Keira Knightley has recently starred in the Hollywood blockbuster
'Pirates of the Caribbean II'. Alan Bennett's 'The History Boys' won the award
for Best Play at this year's Tony Awards, as well as picking up five other
awards, making it the most honoured play on Broadway since 1949. The film
version of the play will be released later this year. Alan Bennett also won
Author of the Year at the 2006 British Book Awards. Anna Maxwell Martin won the
Best Actress award at the 2006 BAFTA awards for her role in Bleak House, which
was directed by Susanna White. At the 2006 Primetime Emmy Awards, Richard
Curtis' 'Girl in the Cafe' won both Outstanding Made for TV movie and
Outstanding Writing.
CSS Presenters' clients continue to have great success on television. Michael
Parkinson continues to achieve excellent ratings with his ITV chat show, and
Anne Robinson continues to be involved in many successful television programmes.
Sport
Within Motorsports, we continue to expand our roster of talent with Formula 1
driver, Tiago Monteiro and rising US star, AJ Allmendinger becoming clients. Our
clients continue to achieve success on a global basis with highlights including
Pedro de la Rosa returning to Formula 1 replacing Juan Pablo Montoya at the
McLaren F1 team and Dan Wheldon tied for the Indy Racing League Championship.
World Rally Champion Sebastien Loeb has recently notched up a record number of
wins in the World Rally Championship and is on course to win his third
consecutive title. In MotoGP, Andrea Dovizioso is currently second in the 250cc
Championship. In Football our relationship with the England Team ended after the
2006 World Cup.
In Golf, our clients continue to make excellent progress. On the European PGA
Tour, Gonzalo Fernandez Castano won the Asian Open in April and Francesco
Molinari became the first home winner of the Italian Open since 1980.
Events
In the six months to 30 June 2006 Events turnover was £4.7m (2005: £4.3m) and
operating profit was £720,000 (2005: £554,000), an increase of 9% on turnover
and 30% on operating profit.
Icon Display have again had a very successful six months, capitalising on 2005.
During the period, Icon worked closely with FIFA on the design and installation
of all internal and external stadium dressing at all venues at the 2006 World
Cup in Germany. The successful opening of Icon's Middle East office has resulted
in a busy schedule of projects: Icon has designed, produced and installed the
branding for the International Triathlon Union World Cup, the Qatar Masters Golf
Championships, one of the major events on the European PGA Tour, and the Tour of
Qatar cycling event. Icon have just recently been appointed to assist with major
elements of the branding programme for the forthcoming Ryder Cup at the K Club
in Ireland. Following on from the success of the London bid, Icon's consultancy
division has been appointed to Sochi and their bid for the 2014 Winter Olympics.
Marketing
In the Marketing division which consists wholly of North American operations, in
the six months to 30 June 2006, turnover was £3.0m (2005: £3.3m) with an
operating profit of £163,000 (2005: profit of £44,000).
The North American operations have now stabilised, with the closure of our
Canadian operations at the end of 2005. GEM's operations are split into two
units, New York and Minneapolis.
New York is primarily a promotional marketing business and has had a
satisfactory start to the year, continuing to work with GE, NBC and UBS on
promotions. The Minneapolis business, which is now operating as an independent
unit, in which local management have a 25% minority stake, has had an excellent
start to the year, providing strategic brand, packaging and catalogue design and
photography services to Best Buy, the US's leading electronics retailer, in
addition to its established client base of 3M Company, Fingerhut Direct
Marketing and others.
Central Costs
As previously indicated, we have made further improvements in the central
overhead costs of the Group, with a reduction of 42% in cost to £330,000 at the
half year. During the period, the Group negotiated the surrender of surplus
property in London, significantly reducing the Group's central property costs.
The tax charge of £356,000 is based on profit after adding back the amortisation
of goodwill and other non-deductible items.
Outlook
The Group's existing operations have a strong bias to first half profitability.
The second half of 2006 has started well, and the Board is confident of the
Group's prospects in the second half of the year.
The Group will also continue to seek to maximise shareholder value from its
investments in the Sports and Entertainment business and will take the necessary
actions to ensure its operations remain profitable.
I would like to thank the management team for their work in the first six months
and look forward to further success in the second half of the year.
Peter Owen
Chairman
13 September 2006
INDEPENDENT REVIEW REPORT TO CSS STELLAR PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2006 which comprise the consolidated profit and
loss account, the consolidated balance sheet, the consolidated cash flow
statement, the statement of total recognised gains and losses and the related
notes. We have read the other information contained in the interim report which
comprises only the Chairman's Statement and the Divisional review of continuing
operations and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information. Our responsibilities do
not extend to any other information.
This report is made solely to the company's members, as a body, in accordance
with guidance contained in APB Bulletin 1999/4 'Review of Interim Financial
Information'. Our review work has been undertaken so that we might state to the
company's members those matters we are required to state to them in a review
report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the
company's members as a body, for our review work, for this report, or for the
conclusion we have formed.
Directors' Responsibilities
The interim report including the financial information contained therein is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim report in accordance with the AIM Rules
which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where any changes, and the reasons for them,
are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of Interim Financial Information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists primarily of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom auditing standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the financial
information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.
GRANT THORNTON UK LLP
CHARTERED ACCOUNTANTS
London
13 September 2006
CSS STELLAR PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the period ended 30 JUNE 2006
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 30 June 31 December
Note 2006 2005 2005
£'000 £'000 £'000
Turnover
- Continuing operations 14,476 13,521 27,854
- Discontinued operations - 15,909 26,558
----------- ---------- ----------
Total Turnover 14,476 29,430 54,412
Cost of Sales (4,543) (15,809) (29,251)
----------- ---------- ----------
Gross Profit 9,933 13,621 25,161
----------- ---------- ----------
Impairment of goodwill - (13,731) (14,769)
Amortisation of goodwill (792) (1,193) (1,881)
Other administrative expenses (9,021) (13,131) (24,695)
----------- ---------- ----------
Total administrative expenses (9,813) (28,055) (41,345)
----------- ---------- ----------
Operating profit/(loss)
- Continuing operations 120 (68) (2,476)
- Discontinued operations - (14,366) (13,708)
----------- ---------- ----------
Total operating profit/(loss) 120 (14,434) (16,184)
Exceptional items 3 - (725) (843)
----------- ---------- ----------
- (15,159) (17,027)
Interest receivable 55 65 99
Interest payable (166) (209) (447)
----------- ---------- ----------
Profit/(loss) on ordinary activities
before taxation 9 (15,303) (17,375)
Tax on loss on ordinary activities (356) (72) (51)
----------- ---------- ----------
Loss on ordinary activities after
taxation (347) (15,375) (17,426)
Equity minority interest (42) - -
----------- ---------- ----------
Transferred from reserves (389) (15,375) (17,426)
----------- ---------- ----------
Loss per ordinary share 4
Basic (1.34) (53.19) (60.25)
Diluted (1.34) (53.19) (60.25)
----------- ---------- ----------
Statement of total recognised gains and losses £'000 £'000 £'000
Loss for the financial year (389) (15,375) (17,426)
Translation adjustment on opening
reserves (73) (6) 20
----------- ---------- ----------
Total losses recognised since last
annual report (462) (15,381) (17,406)
=========== ========== ==========
CSS STELLAR PLC
CONSOLIDATED BALANCE SHEET AT 30 JUNE 2006
Unaudited Unaudited Audited
30 June 30 June 31 December
2006 2005 2005
£'000 £'000 £'000
Fixed assets
Intangible assets 18,604 21,784 19,397
Tangible assets 2,017 3,050 2,043
Investments - other 41 1,074 41
----------- ---------- ---------
20,662 25,908 21,481
Current assets
Stocks and work in progress 644 650 280
Debtors 7,537 13,009 5,102
Cash at bank and in hand 1,373 516 954
----------- ---------- ---------
9,554 14,175 6,336
Creditors: amounts falling due
within one year (10,415) (16,614) (6,751)
----------- ---------- ---------
---------
Net current liabilities (861) (2,439) (415)
----------- ---------- ---------
Total assets less current liabilities 19,801 23,469 21,066
----------- ---------- ---------
Creditors: amounts falling due
after more than one year (953) (1,452) (1,275)
Minority interests 361 - (120)
----------- ---------- ---------
19,209 22,017 19,671
=========== ========== =========
Capital and reserves
Called up share capital 14,487 14,452 14,487
Share premium account 28,158 28,025 28,158
Shares to be issued - 489 -
Revaluation reserve 629 646 637
Profit and loss account (24,065) (21,595) (23,611)
----------- ---------- ---------
Equity shareholders' funds 19,209 22,017 19,671
=========== ========== =========
CSS STELLAR PLC
CONSOLIDATED CASHFLOW STATEMENT
For the period ended 30 JUNE 2006
Unaudited Unaudited Audited
6 months to 6 months to year to
30 June 30 June 31 December
Note 2006 2005 2005
£'000 £'000 £'000
Net cash (outflow)/inflow from
operating activities 1 (263) (364) 284
Returns on investments and
servicing of finance
Interest paid (171) (209) (447)
Interest received 60 65 99
----------- ---------- ----------
Net cash outflow from returns on
investments and servicing of finance (111) (144) (348)
----------- ---------- ----------
Taxation - - (20)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (178) (267) (350)
Sale of tangible fixed assets 10 - 15
----------- ---------- ----------
Net cash outflow from capital
expenditure and financial investment (168) (267) (335)
----------- ---------- ----------
Acquisitions and disposals
Purchase of investments - (37) (41)
Disposal of subsidiaries - 655 2,546
Net cash disposed of with
subsidiaries - - (540)
----------- ---------- ----------
Net cash inflow from
acquisitions and disposals - 618 1,965
----------- ---------- ----------
Net cash (outflow)/inflow before
financing (542) (157) 1,546
Financing
Repayment of borrowings (177) (847) (2,080)
New finance leases - - 57
Capital element of finance lease
rentals - (3) -
----------- ---------- ----------
Net cash outflow from financing (177) (850) (2,023)
=========== ========== ==========
Decrease in cash (719) (1,007) (477)
=========== ========== ==========
CSS STELLAR PLC
NOTES TO THE ACCOUNTS
For the period ended 30 JUNE 2006
1. RECONCILIATION OF OPERATING LOSS TO NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES
6 months to 6 months to Year to
30 June 30 June 31 December
2006 2005 2005
£'000 £'000 £'000
Operating profit/(loss) 120 (14,434) (16,184)
Depreciation charge 194 419 610
Impairment of goodwill - 13,731 14,769
Amortisation of goodwill 792 1,193 1,881
Increase in stocks (364) (477) (109)
(Increase)/decrease in debtors (2,595) (1,213) 106
Increase/(decrease) in creditors 1,590 417 (789)
------------ ------------ -------------
Net cash (outflow)/inflow from
operating activities (263) (364) 284
============ =========== ============
2. ANALYSIS OF TRADING BY CLASS OF BUSINESS
Divisions Turnover Profit/(loss) before taxation
6 months 6 months Year 6 months 6 months Year
to to to to to to
30 June 30 June 31 December 30 June 30 June 31 December
2006 2005 2005 2006 2005 2005
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Talent
Management 6,762 5,896 12,088 359 645 1,128
Marketing 3,016 3,328 6,354 163 44 (83)
Events 4,698 4,297 9,412 720 554 623
Central costs (1) - - - (330) (573) (887)
--------- -------- --------- -------- -------- ---------
14,476 13,521 27,854 912 670 781
--------- -------- --------- -------- -------- ---------
Discontinued
operations
Talent Management - - - - - -
Marketing - 15,909 26,558 - (180) (315)
Events - - - - - -
--------- -------- --------- -------- -------- ---------
- 15,909 26,558 - (180) (315)
--------- -------- --------- -------- -------- ---------
Impairment of
goodwill - (13,731) (14,769)
Amortisation
of goodwill (792) (1,193) (1,881)
-------- -------- ---------
Operating
profit/(loss) 120 (14,434) (16,184)
Net interest (111) (144) (348)
Exceptional
items - (725) (843)
-------- -------- ---------
Group
profit/(loss)
before
taxation 9 (15,303) (17,375)
======== ======== =========
CSS STELLAR PLC
NOTES TO THE ACCOUNTS
For the period ended 30 JUNE 2006
2. ANALYSIS OF TRADING BY CLASS OF BUSINESS (cont...)
Geographical analysis Turnover Profit/(loss) before taxation
6 months 6 months Year 6 months 6 months Year
to to to to to to
30 June 30 June 31 December 30 June 30 June 31 December
2006 2005 2005 2006 2005 2005
£'000 £'000 £'000 £'000 £'000 £'000
Continuing operations
Europe 10,216 9,817 20,767 1,106 1,146 1,619
North America 4,260 3,704 7,087 136 97 49
Rest of the World - - - - - -
Central costs (1) - - - (330) (573) (887)
-------- -------- --------- -------- -------- ----------
14,476 13,521 27,854 912 670 781
======== ======== ========= ======== ======== ==========
Discontinued
operations
Europe - 2,133 3,284 - 40 102
North America - 13,776 23,274 - (220) (417)
Rest of the World - - - - - -
-------- -------- --------- -------- -------- ----------
- 15,909 26,558 - (180) (315)
======== ======== ========= ======== ======== ==========
(1) Central costs have been separately analysed to enable a direct comparison of
the operating performance of each division.
3. EXCEPTIONAL ITEMS
6 months to 6 months to Year to
30 June 30 June 31 December
2006 2005 2005
£'000 £'000 £'000
Exceptional items
Costs of restructuring - (725) (649)
Loss on disposal of subsidiary
undertakings - - (194)
------------ ------------ -------------
- (725) (843)
============ =========== ============
CSS STELLAR PLC
NOTES TO THE ACCOUNTS
For the period ended 30 JUNE 2006
4. (LOSS)/EARNINGS PER SHARE
Basic Adjusted
Weighted per share per share
average no amount amount
£'000 of shares pence pence
6 months ended 30 June 2006
Loss (389)
Amortisation of goodwill 792
----------
Adjusted earnings 403
==========
Basic earnings per share
--------- ---------
Earnings attributable to ordinary
shareholders 28,976,581 (1.34) 1.39
========= =========
Dilutive effect of securities
- options and warrants 58,450
----------
Diluted earnings per share 29,035,031 (1.34) 1.39
========== ========== ==========
6 months ended 30 June 2005
Loss (15,375)
Amortisation of goodwill 1,193
Impairment of goodwill 13,731
Loss on disposal of subsidiaries 725
Less: tax at 30% (217)
----------
Adjusted earnings 57
==========
Basic earnings per share
Earnings attributable to ordinary
shareholders 28,906,428 (53.19) 0.20
========== ==========
Dilutive effect of securities
- options and warrants -
----------
Diluted earnings per share 28,906,428 (53.19) 0.20
========== ========== ==========
Year ended 31 December 2005
Loss (17,426)
Amortisation of goodwill 1,881
Impairment of goodwill 14,769
Loss on disposal of subsidiaries 843
Operating loss on discontinued 315
activities
Less: tax at 30% (94)
----------
Adjusted earnings 288
==========
Basic earnings per share
Earnings attributable to ordinary
shareholders 28,922,957 (60.25) 1.00
========== ==========
Dilutive effect of securities
- options and warrants -
----------
Diluted earnings per share 28,922,957 (60.25) 1.00
========== ========== ==========
The adjusted earnings per share is based on the retained profits adjusted by the
amortisation of goodwill and the exceptional administrative expenses and
exceptional items net of taxation at 30%.
CSS STELLAR PLC
NOTES TO THE ACCOUNTS
For the period ended 30 JUNE 2006
5. PUBLICATIONS OF NON-STATUTORY ACCOUNTS
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
figures from the year ended 31 December 2005 have been extracted from the
statutory financial statements which have been filed with the Registrar of
Companies. The auditors' report was unqualified and did not contain a statement
under Section 237(2) of the Companies Act 1985.
6. BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with
applicable accounting standards under the historical cost convention as modified
by the revaluation of land and buildings. The principal accounting policies of
the Group have remained unchanged from those set out in the Group's annual
report and accounts, other than the adoption of FRS 20, Share based payments.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 3 hours ago Diageo
- 5 hours ago Real Estate Credit Investments Ltd
- 5 hours ago Endeavour Mining
- 5 hours ago Unite Group
- 5 hours ago Baillie Gifford US Growth Trust