Final Results, Notice of AGM and Proposed Dividend

Catalyst Media Group PLC
12 December 2024
 

12 December 2024

Catalyst Media Group Plc

("CMG", the "Company" or the "Group")

Final Results for the Year Ended 30 June 2024,

Notice of Annual General Meeting and Declaration of Dividend

The Board of CMG (AIM: CMX) is pleased to announce the Company's final results for its financial year ended 30 June 2024 including details of a proposed final dividend.

CMG is a 20.54% shareholder in Sports Information Services (Holdings) Limited ("SIS") and the results for the year to 30 June 2024 incorporate its share in the profits/losses of SIS for its financial year ended 31 March 2024, as an equity-accounted associate.

Highlights:

·      CMG profit after taxation of £283k (2023: £2.6 million, further to a reversal of historic impairment charges recognised against the carrying value of its investment in SIS totalling approximately £1.9 million)

·      Profit per share of 1.35p (2023: 12.43p)

·      Net asset value per share of 149p (2023: 175p)

·      For its financial year to 31 March 2024, SIS achieved:

·      Turnover of £234.1 million (2023: £230.7 million)

·      Operating profit of £3.5 million (2023: £5.4 million)

·      Profit after taxation of £1.9 million (2023: £4.9 million)

·      On 31 October 2023, the Company received its share of an ordinary and special dividend paid by SIS being £6.16 million and on 21 November 2023 paid an interim dividend of approximately £5.68 million, equating to 27 pence per CMG ordinary share

SIS Current Trading and Outlook

Management is continuing to invest in scaling its content creation business with a focus on an increased volume of matches and the securing of additional customers in addition to the continued expansion of its racing business both through direct deals and distributors. Progress in the US remains strong and SIS Content Services Inc. continues to apply for regulatory licences in states on top of the 10 already secured which will serve to fuel growth of the existing Competitive Gaming business in the US.

SIS has advised CMG that following changes to its Greyhound rights and, in particular, with the cessation of Greyhound Television in April 2024 together with its ongoing investment in the scaling of its content creation business, its financial year to 31 March 2025 will see a decline in profitability year on year although the absolute outturn remains difficult to predict as new customers such as FanDuel scale up their use of the product in new markets.

SIS's cash position as of 31 October 2024 was approximately £5.2 million, following the payment of an ordinary dividend to its shareholders totalling £3.1 million.

Availability of Annual Report & Financial Statements and Notice of AGM

A PDF copy of the Company's full Annual Report and Financial Statements for its financial year ended 30 June 2024, together with the formal notice of AGM and form of proxy, will shortly be made available to download from the Company's website at: www.cmg-plc.com.

The AGM is to be held at 6 Stratton Street, London, W1J 8LD at 11.00 a.m. on Friday, 17 January 2025.

Dividend Declaration

Further to the Company's announcement of 31 October 2024 regarding the payment of a dividend of £3,078,732 by SIS (the "SIS Dividend") of which the Company received £632,275, the Board of CMG has resolved, subject to shareholder approval at the Company's forthcoming AGM, to pay a final dividend of approximately £0.84 million, equating to 4p per CMG ordinary share on 31 January 2025, to shareholders on the Company's register at 17 January 2025. The ex-dividend date will therefore be 16 January 2025.

 

Enquiries:

Catalyst Media Group plc

Michael Rosenberg, Non-executive Chairman
Melvin Lawson, Non-executive Director    

 

Mob: 07785 727 595
Tel:  020 7734 8111

Strand Hanson Limited

James Harris
Matthew Chandler



Tel:  020 7409 3494

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019.

Key Extracts from the Company's audited Annual Report and Financial Statements are set out below:

The Board of Catalyst Media Group plc ("CMG" or the "Company") is pleased to present the audited financial statements of CMG and its subsidiaries (the "Group") for the year ended 30 June 2024. Such results incorporate the Company's share of profits/losses for Sports Information Services (Holdings) Ltd ("SIS") in which CMG has a 20.54% interest.

 

The main asset of CMG continues to be its 20.54% shareholding in SIS and, as detailed further below, CMG equity accounts for its share in the profits/losses of SIS.

 

After taking account of CMG's share in the profit of SIS for its year ended 31 March 2024 of £0.39 million (2023: £0.88 million), and a reversal of historic impairment charges recognised against the carrying value of its interest in SIS totalling £nil (2023: £1.86m), CMG recorded a profit before taxation of £0.25 million (2023: £2.58 million). Net assets at the year end were £31.4 million (149.3p per share) (2023: £36.8 million (175.0p per share)).

 

On 31 October 2023 the Company announced that SIS had recently declared and paid an ordinary and special dividend totalling £30 million, of which CMG had received its share being £6.16 million. On the same date, CMG declared an interim dividend of 27p per share, amounting to £5.68 million, that was paid to its shareholders on 21 November 2023. In late October 2024 SIS declared a dividend of £3.1 million and CMG received its share of such dividend on 31 October 2024 amounting to £0.63 million. Accordingly, the Board of CMG has resolved to declare a final dividend of 4p per share, amounting to £0.84 million, subject to shareholder approval at the Company's forthcoming Annual General Meeting. Further details of the record and payment dates are provided in the outlook section below.

 

SIS - UK and Ireland Retail

 

SIS continues to provide its core offering including Racecourse Media Group horseracing, Irish Horseracing, Chelmsford City Horseracing, 49's and International Horseracing to almost the entire UK and Irish retail market, including all the major UK bookmaking groups and the majority of the independent market. At the start of 2024, the SIS Greyhound Service was restructured, with a reduction in the volume of meetings, following changes to both the track rights and some customer contracts both from a retail and online perspective.

 

SIS supplies its retail services, production distribution and content, to the major retail brands on recently renewed long term agreements.

 

Rights deals are typically for between three to five-year terms, and, in June 2023, SIS strengthened its long-term position by securing a five-year renewal to the Horse Racing Ireland and Association of Irish Racecourses' worldwide Fixed Odds rights. SIS's management continues to work on securing rights renewals as they fall due.

 

SIS - International & Online

 

SIS continues to expand its international racing operations both through acquisition and renewal of rights, which has recently included new rights deals in Selangor (Malaysia) and Taif (Saudi Arabia). It is also expanding its customer base geographically with over 150 live feeds to customers designed to maximise betting opportunities for international retail and online operators with multi-year agreements.

 

SIS continues to progress its strategy to increase distribution, in both new and existing international and online markets, using proprietary production technology as well as ultra-low latency streaming and data pricing services.

 

In February 2024, SIS Content Servies Inc, its US subsidiary, launched fixed odds horseracing in Colorado USA with bet365 following approval by state authorities. This followed the previous launches in calendar year 2023 of Competitive Gaming in three states including Colorado.

 

On 12 March 2024 the board of Racelab Pty Limited, a company based in Australia in which SIS has a 50% stake, appointed a Voluntary Administrator following its failure to secure further funding. The assets of the business have subsequently been sold by the administrator and following a Deed of Company Arrangement the Racelab Pty Limited company has been returned to its shareholders debt and asset free. SIS's results for its financial year to 31 March 2024 include a write-down in respect of its investment in this company.

 

SIS - Non-racing content

The SIS Competitive Gaming (e-sports) service, has seen significant customer growth in the year and remains focussed on two sports related titles, e-football, and e-basketball, further to feedback from its customers. It provides over 150,000 unique events per annum with plans underway to increase this number further. The events are supplied to customers in several territories worldwide and June 2024 saw an enhancement in distribution capabilities with Genius Sports and EveryMatrix commencing distribution of the Competitive Gaming events thereby expanding availability for customers.

SIS Content Services Inc is, as of October 2024, licenced in ten US states which as well as experiencing revenue growth from existing US customers has also seen FanDuel, the US sports arm of Flutter, launch the e-basketball product.

The 49's branded numbers business has a range of products from its original draw (twice daily) to over 500,000 draws per annum from its stable of branded products, 49's, Fast 15's, 39's and the 49's virtual racing product plus a bespoke draw product, Lotto365, for bet365.

SIS - Results

 

SIS's final result for its year ended 31 March 2024, prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, was a profit before tax of £6.8 million (2023: £6.6 million) prior to accounting for the discontinued operations of its Racelab subsidiary. The Group's profit before tax including discontinued operations and after the write down of such investment was £4.6 million. SIS's cash balance on 31 March 2024 was approximately £5.9 million (2023: £47.4 million), a decrease on the prior year due to a significant total distribution to its shareholders in October 2023 of £30 million and increased investment in its content creation business. In December 2023, SIS secured an initial £35 million banking facility to provide funds for working capital and to finance growth, including acquisition financing. Such banking facility can be increased to £50 million.

In late October 2024, SIS declared a total dividend of £3.1 million (2023: £30 million) and CMG received its share of such dividend on 31 October 2024.

The consolidated results of Sports Information Services (Holdings) Limited and its subsidiaries for its year ended 31 March 2024, prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, were as follows:

 


31 March 2024

31 March 2023


Before individually significant items*

Individually significant

Items*

Total

Before individually significant items*

Individually significant

Items*

Total


£'000

£'000

£'000

£'000

£'000

£'000

Turnover

234,117

-

234,117

230,748

-

230,748

Operating expenses

(226,606)

-

(226,606)

(225,356)

-

(225,356)

Other operating income

-

(4,059)

(4,059)

-

-

-

Group operating profit / (loss)

7,511

(4,059)

3,452

5,392

-

5,392

Other interest receivable and similar income

1,204

-

1,204

1,344

-

1,344

Interest payable and similar expenses

(43)

-

(43)

(165)

-

(165)

Profit / (loss) before taxation

8,672

(4,059)

4,613

6,571

-

6,571

Tax on (profit) / loss

(2,730)

-

(2,730)

(1,687)

-

(1,687)

Profit / (loss) after taxation

5,942

(4,059)

1,883

4,884

-

4,884

Other comprehensive income

(28)

-

(28)

(4,740)

-

(4,740)

Total comprehensive income

5,914

(4,059)

1,855

144

-

144

 

Note: * - Individually significant items for 2024 relate to the impairment of an investment.

 

Share of assets and liabilities of associate

 

 

 

31 March 2024

31 March 2023

Non-current assets

32,950

31,729

Current assets

49,301

97,125

Current liabilities

(52,179)

(70,201)

Non-current liabilities

(1,922)

(2,522)

Defined benefit pension asset

1,301

1,495

Net assets

29,451

57,626

 

SIS - India

 

An arbitration award was made in July 2020 which the respondent has paid into court. These funds are now subject to appeals in the Delhi High Court by both parties: SIS continues to pursue claims disallowed by the arbitrators whilst the respondent attempts to nullify the award in its entirety. The overall outcome therefore remains uncertain.

The legal and associated costs relating to this claim have been significantly reduced but are still impacting profits.

SIS - Current Trading and Outlook

 

Management is continuing to invest in scaling its content creation business with a focus on an increased volume of matches and the securing of additional customers in addition to the continued expansion of its racing business both through direct deals and distributors. Progress in the US remains strong and SIS Content Services Inc. continues to apply for regulatory licences in states on top of the 10 already secured which will serve to fuel growth of the existing Competitive Gaming business in the US.

 

SIS has advised CMG that following changes to its Greyhound rights and, in particular, with the cessation of Greyhound Television in April 2024 together with its ongoing investment in the scaling of its content creation business, its financial year to 31 March 2025 will see a decline in profitability year on year although the absolute outturn remains difficult to predict as new customers such as FanDuel scale up their use of the product in new markets.

 

SIS's cash position as of 31 October 2024 was approximately £5.2 million, following the payment of an ordinary dividend to its shareholders totalling £3.1 million.

 

CMG's outlook and Annual General Meeting

 

The Directors consider that the most appropriate treatment for the Group's investment in its associate, SIS, as at 30 June 2024 is to retain its holding at the existing carrying value for the investment of £30.8 million (2023: £36.6 million), the movement on which reflects the Group's share of SIS's total comprehensive income of £0.38 million (2023: £0.23 million) and the dividend received from SIS amounting to £6.16 million (2023: £0.90 million).

 

The Directors consider that at 30 June 2024 there were no significant indicators that an impairment should be recorded. During the prior year, as at 30 June 2023, previously recognised impairments totalling £1.86 mllion were reversed by the Directors. Following the resolution of The Racing Partnership ("TRP") litigation during a previous financial period and based on the current return to profitability of SIS, the extension of its core RMG horseracing rights, and the optimism around the prospects for future trade, the Directors expect the performance of SIS to continue to strengthen in future financial periods and consider that valuation methodologies such as the comparable company model, and discounted cashflow analysis are sufficiently reliable to support a valuation of the investment at its current carrying value.

 

The Directors have chosen to use the comparable company methodology using an appropriate EBITDA multiple to assess the recoverable value of the investment. The Directors consider the comparable company valuation methodology to be more appropriate than other methods.

 

For further details in respect of the judgments and estimation techniques used by the Directors in their assessment, please refer to notes 1 and 2 to the financial statements.

 

While there can be no certainty of the potential realisation value of this asset, it is the reasonable belief and judgement of the Directors based, inter alia, on extensive discussions with SIS's management and a review of its strategic plans and current and forecast trading, that it is appropriate to maintain the carrying value of the asset at its current level.

 

As stated above, SIS is on course to expand its interests in the USA and elsewhere. Following the recent receipt of a £632,275 dividend payment from SIS the Company has the capacity to declare and pay a final dividend to CMG's shareholders whilst retaining sufficient working capital for its foreseeable future needs and continuing to operate with minimal overheads. Accordingly, the Board of CMG has resolved, subject to shareholder approval at the Company's forthcoming Annual General Meeting, to pay a final dividend of 4p per share on 31 January 2025 to shareholders on the Company's register on 17 January 2025.

 

The next Annual General Meeting of CMG will take place on Friday, 17 January 2025.  Formal notice of the meeting is set out at the end of the annual report and accounts together with a form of proxy.

 

Michael Rosenberg, OBE

Chairman

 

11 December 2024

 

Strategic Report

 

The Directors present their strategic report for the year ended 30 June 2024.

 

Principal activities and review of the business

 

The principal activities of the business are outlined in the Chairman's Statement. A review of the business is also included within the Chairman's Statement.

 

Principal risks and uncertainties

 

Investment in SIS

 

The principal strategic investment of the Group is its 20.54% shareholding in SIS. The Group is entitled to appoint one director to the board of SIS which currently comprises nine directors, of which five are appointed by shareholders, two are independent and one is the Chairman. Although it can influence the board on strategic decisions, the Group is not in a position to control the day-to-day business and affairs of SIS other than with the support of other directors and a majority of the shareholders of SIS. The Group currently has no representative on the board of SIS.

 

There are a number of risks and uncertainties associated with the business of SIS which could potentially have an adverse impact on the value of the Group's investment. At a technical level this includes the fact that the customers of SIS rely upon real time data and uninterrupted content delivery. Loss of content would result in reduced quality of services and potentially reduced income. SIS has therefore adopted advanced disaster recovery solutions and has built back up facilities which are located around the UK.

 

Financial risk

 

The Group is subject to financial risk through its exposure to financial assets and liabilities. The Group's main financial risk is its exposure to its investment in SIS.

 

Credit risk

 

The Group is not exposed to any credit risk.

 

Liquidity risk

 

There is a very low risk that the Group will encounter difficulty in meeting its financial obligations as they fall due, on the basis that the Group operates with minimal overheads and cash flow is well managed.

 

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The principal liabilities of the Group and Company arise in respect of administrative expenditure and trade and other payables. Trade and other payables are all payable within three months.

 

The Board receives cash flow projections on a regular basis as well as information on cash balances.

 

Key Performance Indicators ("KPIs")

 

The Company's key performance indicators used by the Board in monitoring the general performance of the Group and its investments are:

Net asset value per share

 

The net asset value per share of the Group was approximately 149 pence as at 30 June 2024 (2023: 175 pence). The net asset value of the Group as at 30 June 2024 and 30 June 2023 is shown in the Group's consolidated statement of financial position.

 

Administrative expenses

 

The Directors closely monitor the anticipated overheads for the Group and ensure that these are kept to a minimum.

 

Earnings per share ("EPS")

 

EPS shows the relative performance year-on-year of the Group's profitability measured as an amount of profit or loss attributable to one ordinary share. The calculation of earnings per share is based on the weighted average number of ordinary shares in issue for the financial year concerned and the profit/(loss) after taxation attributable to ordinary shareholders. EPS in respect of operations for the year and the prior financial year is shown in the Group consolidated statement of comprehensive income.

 

Key Performance Indicators of Associate

 

The Directors additionally monitor the performance of SIS in order to evaluate the general performance of the Group. The Directors consider that group turnover, group operating profit percentage before individually significant items, net cashflow from operating profits and average number of employees are of most significance in evaluating the performance of the Group. The 2024 financial results of SIS are disclosed in the Chairman's Statement.

 

s172 Statement

 

CMG's directors are mindful of their responsibilities under section 172 of the Companies Act 2006 to promote the success of the business through operating in accordance with good corporate practice and with considered engagement with the Group's stakeholders. Several of the Group's major shareholders are also directors of the Group, as referenced in the Directors' Report, and are therefore actively involved in all key decision-making. Please see the Corporate Governance Statement for further details of engagement with stakeholders.

 

The board of directors regularly review and identify other principal stakeholders of the business, and decisions in respect of the Group's activities are made only after reviewing, and discussing, the potential impact on such stakeholders. Furthermore, in terms of engagement with the Group's suppliers, the directors continue to actively monitor ethical standards and environmental issues to ensure that the wider business is compliant with global standards.

 

Michael Rosenberg, OBE

Chairman

 

11 December 2024

 

 

 

Consolidated statement of comprehensive income for the year ended 30 June 2024


Year

Year


ended

ended


30 June

30 June


2024

2023


£

£


 

 

Revenue

25,000

25,000


 

 

Administrative expenses

(184,611)

(179,447)

Other operating income

14,669

-


 

 

Operating loss

(144,942)

(154,447)


 

 

Financial income

9,859

2,243

Financial costs

-

-

Net financial income

9,859

2,243


 

 

Share of profit of equity-accounted associate, net of tax

386,768

880,174

Reversal of impairment of equity-accounted associate

-

1,856,276


 

 

Profit before taxation

251,685

2,584,246


 

 

Taxation

31,500

30,300


 

 

Profit for the year

283,185

2,614,546


 

 

Share of other comprehensive loss of associate

(5,751)

(651,323)


 

 

Total comprehensive profit for the year

277,434

1,963,223


 

 

Attributable to equity holders of the Company

277,434

1,963,223


 

 

Profit per share:

 

 


 

 

Basic

1.35p

12.43p


 

 

Diluted

1.35p

12.43p

 

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes in the Company's full Annual Report and Financial Statements.

Consolidated statement of financial position as at 30 June 2024


30 June

2024

£

30 June

2023

£

Assets



Non-current assets



Investment in associate

30,831,299

36,611,584





30,831,299

36,611,584




Current assets



Trade and other receivables

95,203

78,668

Cash and cash equivalents

525,192

174,364




 

620,395

253,032

 



Total assets

31,451,694

36,864,616

 



Equity and liabilities



 



Capital and reserves attributable to equity holders of the parent



Share capital

2,103,202

2,103,202

Capital redemption reserve

711,117

711,117

Merger reserve

2,402,674

2,402,674

Retained profits

26,177,995

31,579,260




Total equity

31,394,988

36,796,253




Current liabilities



Trade and other payables

56,706

68,363




Total equity and liabilities

31,451,694

36,864,616




The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes in the Company's full Annual Report and Financial Statements.

Consolidated statement of changes in equity for the year ended 30 June 2024

Attributable to equity holders of the Group

 

30 June 2024

Share

Capital

Capital

Redemption Reserve

Merger

Reserve

Retained

Profits

Total

Shareholders

Equity


£

£

£

£

£

At 1 July 2023

2,103,202

711,117

2,402,674

31,579,260

36,796,253







Profit for the year

-

-

-

283,185

283,185

Other comprehensive income:






Share of other comprehensive loss of associate

-

-

-

(5,751)

(5,751)

Total comprehensive profit for the period

-

-

-

277,434

277,434

Dividends paid

-

-

-

(5,678,699)

(5,678,699)

At 30 June 2024

2,103,202

711,117

2,402,674

26,177,995

31,394,988

 

The following describes the nature and purpose of each reserve within owners' equity:

 

Share capital

Amount subscribed for shares at nominal value.

Share premium

Amount subscribed for share capital in excess of nominal value.

Capital redemption reserve

Amounts arising from the purchase by the group of its own shares.

Merger reserve

Amounts arising from the merger of subsidiary investments.

Retained profits

Cumulative profit of the Group attributable to equity shareholders.

 

Attributable to equity holders of the Group


 


 

30 June 2023

Share

Capital

Capital

Redemption Reserve

Merger

Reserve

Retained

Profits

Total

Shareholders

Equity


£

£

£

£

£

At 1 July 2022

2,103,202

711,117

2,402,674

30,310,114

35,527,107







Profit for the year

-

-

-

2,614,546

2,614,546

Other comprehensive income






Share of other comprehensive loss of associate

-

-

-

(651,323)

(651,323)

Total comprehensive profit for the period

-

-

-

1,963,223

1,963,223

Dividends paid

-

-

-

(694,077)

(694,077)

At 30 June 2023

2,103,202

711,117

2,402,674

31,579,260

36,796,253

 

 

Consolidated statement of cash flows for the year ended 30 June 2024

 

 

 

Year ended

30 June

2024

£

Year ended

30 June

2023

£


 

 


 

 

Cash flow from operating activities



Profit before taxation

251,685

2,584,246

Adjustments for:



Share of (profit) from associate

(386,768)

(880,174)

(Reversal of impairment) of investment in associate

-

(1,856,276)

Finance income

(9,859)

(2,243)

Corporation taxes recovered

-

17,904

 



Net cash flow used in operating activities before changes in working capital

(144,942)

(136,543)

Decrease / (increase) in trade and other receivables

14,965

(9,318)

(Decrease) / increase in trade and other payables

(11,657)

15,505




Net cash flow used in operating activities

(141,634)

(130,356)

 



Investing activities



Dividend received

6,161,302

903,543

Interest received

9,859

2,243




Net cash flow from investing activities

6,171,161

905,786




Financing activities



Dividends paid

(5,678,699)

(694,077)

 



Net cash flow used in financing activities

(5,678,699)

(694,077)

 



Net increase in cash and cash equivalents in the year

350,828

81,353

Cash and cash equivalents at the beginning of the year

174,364

93,011

 



Cash and cash equivalents at the end of the year

525,192

174,364

 



 

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes in the Company's full Annual Report and Financial Statements.

Notes to the consolidated financial information

1.   Basis of preparation and significant accounting policies

The consolidated financial information set out above does not constitute the Group's financial statements for the years ended 30 June 2024 or 30 June 2023 but is derived from those financial statements. Statutory financial statements for 2023 have been delivered to the Registrar of Companies and those for 2024 have been approved by the Board and will be delivered in due course. The auditors have reported on the 2024 and 2023 financial statements which carried unqualified audit reports and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. 

 

While the financial information included in this announcement has been compiled in accordance with, inter alia, Uk-adopted international accounting standards, this announcement does not in itself contain sufficient information to comply with such standards. The accounting policies used in the preparation of this announcement are consistent with those in the full financial statements including those applicable to SIS, given its materiality to the Group as a whole.

 

CMG is an AIM quoted public limited company registered in England and Wales where it is domiciled for tax purposes. Its financial statements are prepared under the historical cost convention.

 

Going concern

 

The Directors can report that based on the Group's budgets and financial projections, they have satisfied themselves that the business is a going concern covering a period of at least twelve months from the date of approval of the financial statements. In assessing the Group as a going concern, the directors are also mindful of the business of SIS that provides the entire value of the Group. The directors are satisfied that SIS is a going concern. The Board has a reasonable expectation that the Company and its Group have adequate resources and facilities to continue in operational existence for the foreseeable future and the financial statements are accordingly prepared on a going concern basis.

 

2.   Investment in associate

Year Ended 30 June 2024


 


Group

 


 


£

Cost





At 1 July 2023




36,611,584

Share of profit - 2024




386,768

Share of other comprehensive income - 2024




(5,751)

Dividend received - 2024




(6,161,302)

At 30 June 2024




30,831,299






 

 


 


 

Year Ended 30 June 2023


 


Group

 


 


£

Cost





At 1 July 2022




35,430,000

Share of profit - 2023




880,174

Share of other comprehensive income - 2023




(651,323)

Dividend received - 2023




(903,543)

Reversal of impairment of equity-accounted associate




1,856,276

At 30 June 2023




36,611,584

 

The Group's interest in its associate, SIS, a company incorporated in England and Wales, 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. Alternateport Limited is a wholly owned subsidiary of Catalyst Media Holdings Limited, a wholly owned subsidiary of Catalyst Media Group plc.

 

A copy of the strategic forecasts prepared by SIS was made available to the Directors of CMG showing management forecasts of the statement of comprehensive income, statement of financial position and statement of cash flow. SIS's management have assumed a growing level of future profits at a steady rate over a period of five years. CMG's management have made reference to SIS's most recently reported EBITDA, with adjustments made for exceptional and non-recurring items, while also considering the sustainability of its financial performance.

 

The Directors of CMG believe that as at 30 June 2024 there were no impairment indicators in respect of the investment in SIS, owing to the expectation of future growth of SIS, the extension of core RMG horseracing rights, and the optimism around the prospects for future trade. The directors therefore believe that an enterprise method of valuation of CMG's investment in SIS was an appropriate methodology to follow. The directors identified an adjusted EBITDA figure for SIS for the twelve month period to 30 June 2024 which excluded the impact of certain non-recurring and non-trade items. An appropriate EBITDA multiple was obtained through comparisons of multiples used by businesses in comparable sectors. An average of the mean and median multiples was used. An illiquidity discount of 20% was then applied to the valuation in the midpoint of the range of illiquidity discounts identified by the Directors for unlisted businesses.

 

After applying the methodology described above, the Directors concluded that the value of the investment in SIS at 30 June 2024 was in excess of the carrying value of £30.8m and therefore no impairment is required. In the prior year, the Directors had reversed historic impairments recorded against the value of the investment in previous years totalling £1.86m. The Directors consider that the value at 30 June 2024 is appropriate based on the strategic plans of SIS.

 

Share of profit of associate

 

 

 

 

 

 

 

 

 

2024

 

 

SIS Total

 

£'000

2024

 

CMG share

 

£'000

2023

 

CMG share

 

£'000

 







 

Revenue



234,117

48,088

47,396

 







 

Operating profit before individually significant items



 

7,511

 

1,543

 

1,108

 

Group's share of loss in associate



-

-

(33)

 

Net interest receivable



1,161

238

275

 

Individually significant items



(4,059)

(833)

-

 

Profit before tax



4,613

948

1,350

 

Taxation



(2,730)

(561)

(347)

 

Share of profit after taxation



1,883

387

1,003

 

Net income from associate



1,883

387

1,003

 

IFRS 9 expected credit loss provision



-

-

(123)

 

Adjusted net income from associate



1,883

387

880

 

 

 






Other comprehensive income:






 

Actuarial (loss)



(43)

(9)

(1,498)

 

Deferred tax



15

3

524

 

Acquisition of a subsidiary and revaluation loss



-

-

322

 

Total other comprehensive income



(28)

(6)

(652)

 

 

Share of assets and liabilities of associate






 

Gross assets



83,552

17,161

26,774

 

Gross liabilities



(54,101)

(11,112)

(14,938)

 

Share of Net Asset Value



29,451

6,049

11,836

 

 

SIS prepares financial statements in accordance with FRS 102, whereas CMG prepares financial statements in accordance with UK-adopted international accounting standards. The directors have reviewed the potential differences in accounting treatment under the respective frameworks and have made an adjustment to reflect an expected credit loss provision of £nil (2023: £0.12m) under IFRS 9, and to recognise adjusted net income from its associate of £0.39m (2023: £0.88m). Following the review, the directors have concluded that there are no other material differences of accounting treatment in the application of FRS 102 and IFRS on SIS's results for the year.

 

During the prior year, SIS's defined benefit pension scheme assets were revalued on buy-in of a bulk annuity resulting in the recognition of a net revaluation loss of £4.74m (CMG's share amounted to £0.97m). Also during the prior year SIS increased its shareholding in Racelab Pty Limited from 25% to 50%, resulting in a change in accounting treatment from an investment in associate to a subsidiary and an impact on equity of £1.576m (CMG's share amounted to £0.32m). Both of these prior year items were non-recurring in nature.

 

An arbitration award was made in July 2020 which the respondent has paid into court. These funds are now subject to appeals in the Delhi High Court by both parties: SIS continues to pursue claims disallowed by the arbitrators whilst the respondent attempts to nullify the award in its entirety. The overall outcome therefore remains uncertain. The legal and associated costs relating to this claim have been significantly reduced but are still impacting profits.

3.   Post Balance Sheet Events

On 31 October 2024, CMG received its share of an ordinary dividend paid by SIS totalling £3.1 million.

See note 2 of the full Annual Report and Financial Statements for a description of the impact of the post balance sheet events as they relate to SIS's reporting date (31 March 2024) on the Group's valuation of its investment in associate as at 30 June 2024.

 

- ENDS -

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
UK 100

Latest directors dealings