Half Yearly Report

RNS Number : 1849P

Parallel Media Group PLC

30 September 2013

 

30 September 2013

PARALLEL MEDIA GROUP PLC

("PMG" OR THE "GROUP")

HALF-YEARLY RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

Parallel Media Group Plc (AIM:PAA), a leading sports marketing, media and digital agency, announces its half-yearly results for the period ended 30 June 2013.

Highlights

·      Successfully promoted and delivered a sixth Ballantine's Championship

·      Staged two AIA K-Pop concerts (Hong Kong and Singapore)

·      Staged The Causeway Trophy in June with Prudential as the title sponsor

·      Created a second new golf tournament Premier League Golf, in conjunction with Marina Bay Sands, one of the leading entertainment  groups in Asia

·      Established a jazz and blues festival, the Blue & White Festival, in PyeongChang, South Korea

·      Turnover up 39 per cent. to £7.63m (2012: £5.48m)

·      Gross profit up 44 per cent. to £1.85m (2012: £1.28m)

·      Profit before tax up 646 per cent. to £657,000 (2012: £88,000)

Post Balance Sheet Highlights

·      Raised £0.5m (before expenses) from a placing with the issue of just over 10m new ordinary shares and a debt capitalisation by PMG Directors, senior management and other creditors amounting to £0.79m which will remove certain debts owed by the company

·      In the second half of the financial year PMG will be bringing Justin Beiber to Seoul, South Korea in October for a concert at the Olympic Park Gymnasium in partnership with AEG Live

Chairman of PMG, David Ciclitira, commented: "The first six months of this financial year has been outstanding and has seen the Group record excellent results. Following the five new events that PMG has delivered in the first half we are continuing to develop new business initiatives and I look forward to reporting further progress in due course.

"I would like to make a special mention of the Company's Board and Staff worldwide for their considerable efforts in achieving these results and I would, at the same time, like to thank all our stakeholders for their support."

Board Changes

Timothy Sturm, aged 41, joins the Board as a non-executive director with immediate effect. Mr Sturm has been a Partner in private equity at Harwood Capital LLP since July 2008 and has previously worked in mergers & acquisitions and strategy consulting. He is a director of a number of companies including, with most relevance to PMG, Team Rock Limited, a multi-media rock music business comprising events and other forms of content distribution. Mr Sturm holds a master's degree in finance and economics from the London School of Economics and is a CFA charterholder.  

Pursuant to Rule 17 and Schedule 2 of paragraph (g) of the AIM Rules for Companies, the following information is disclosed:

Timothy James Sturm, aged 41, has been a director or member of the following companies or partnerships during the previous five years:

Current Directorships or Partnerships	Past Directorships or Partnerships within the last 5 years
Harwood Capital LLP	Seon Medical Limited (Orthoponents Limited)
Orthoproducts Limited	Sinav Limited
Orthoplastics Limited	SiRVis IT Holdings Limited
Nastor Investments Limited
TPE2 Nastor Limited
TPE3 Nastor Limited
Team Rock Limited
Stratifer Limited
Cyprotex PLC

Mr Sturm is interested in 170,000 ordinary shares of 2.2p each in the capital of the Company, representing 0.35% of the total issued share capital of the Company.

There is no further information to be disclosed pursuant to Schedule 2 paragraph (g) of the AIM Rules for Companies.

Contact Details

For more information please contact:

Parallel Media Group Plc David Ciclitira, Chairman Amelia Wix, Head of Business Affairs www.parallelmediagroup.com	[phone]
Sanlam Securities UK Limited Simon Bennett, Head of Corporate Broking Virginia Bull, Scott Mathieson, Corporate Finance www.sanlamsecuritiesuk.com	[phone]

CHAIRMAN'S STATEMENT

Overview

The first six months of this financial year, during which the Group has staged five new events, has been outstanding and has seen the Group record excellent results. PMG has delivered the sixth and last Ballantine's Championship, the largest golf tournament in South Korea. From 2014 this tournament will be known as "The Championship".

Entertainment 

On the Entertainment side of the business we successfully staged two K-Pop concerts sponsored by AIA, one of the largest insurance groups in the world. The inaugural event held in January in Hong Kong was a great success as was the more recent event in Malaysia. 

Sport 

During this period PMG delivered the Causeway Trophy, an annual golf event played in a Ryder Cup format between professional golfers from Singapore and Malaysia. The event, which was played for the first time this year, was won by Team Singapore. In addition, we have created Premier League Golf, a celebrity golf tournament staged in Singapore in partnership with Marina Bay Sands, one of the leading entertainment groups in Asia, that featured legends from the world of football. The Group has also established a Korean Qualifier event and a series of qualifying tournaments, which will allow some of the more promising young Korean golfers to win places in selected events on the European and the Challenge Tours.

Financial Review

Our London office remains the creative and financial hub of the Group. Our office in Seoul, which has been responsible for running the highly acclaimed Ballantine's Championship, will be re-launching the Championship in 2014 in partnership with the European Tour and continues to spearhead the event's development and growth. Our 2012 investment in PMG's newly created office in Singapore, which is focused on the markets in south-east Asia, particularly Malaysia, Cambodia and Vietnam, has been successful with two new events, namely the Causeway Trophy and Premier League Golf.  

The new events which PMG has established are reflected in the Group's turnover which for the six months ended 30 June 2013 has increased by 39 per cent to £7.63m (2012: £5.48m). As a consequence, gross profit has increased by 44 per cent to £1.85m (2012: £1.28m) and profit before tax has increased by 646 per cent to £657,000 (2012: £88,000).

Post Balance Sheet Events

Since 30 June 2013 PMG has successfully raised £1.29m (in aggregate). Of this amount, £0.5m (before expenses) was raised from a placing with the issue of just over 10m new ordinary shares and a further £0.79m from a debt capitalisation by PMG Directors, senior management and other creditors. This included the "other loan" described in note 6 of these results.

The inaugural Volvik-Sky Lake Vietnam Masters, which was scheduled to be played in September 2013 was, at the request of the co-title sponsors and following a mutual agreement between the sponsors, the Asian Tour and PMG, postponed until 2014. The result of this delay is that the revenue from this event will now be earned in 2014, although, as previously announced, as a result of certain cost saving measures being implemented, the Board of PMG expects that the Company's profit before tax for the year ending 31 December 2013 will be in line with market expectations.  

Going forward

We continue to make progress regarding the sponsorship of the 2014 Championship tournament and are currently in discussions for several new events in the entertainment sector for next year. I look forward to reporting further progress with these discussions in due course.

Board Changes

I would like to take this opportunity to thank Leonard Fine who has been a non-executive director of PMG since 2006. Leonard, who retired recently, has given great service to the Group as the head of both the Group's Remuneration and Audit Committees. 

I would also like to welcome Timothy Sturm, aged 41, who joins the Board as a non-executive director with immediate effect. Timothy has been a Partner in private equity at Harwood Capital LLP since July 2008 and has previously worked in mergers & acquisitions and strategy consulting. He is a director of a number of companies including, with most relevance to PMG, Team Rock Limited, a multi-media rock music business comprising events and other forms of content distribution. Timothy holds a master's degree in finance and economics from the London School of Economics and is a CFA charterholder. We are very much looking forward to having Timothy on the board and believe that his considerable experience in advising companies strategically will be of great benefit to the company.

I would like to make a special mention of the Company's Board and Staff worldwide for their considerable efforts in achieving these results and I would, at the same time, like to thank all our stakeholders for their support.

David Ciclitira

Chairman

27 September 2013

Consolidated income statement for half year to 30 June 2013
		30 June 2013 unaudited	30 June 2012 unaudited	31 December 2012 audited
	Note	£'000	£'000	£'000
Continuing operations
Revenue		7,630	5,475	6,264
Cost of sales		(5,780)	(4,191)	(4,847)
Gross profit		1,850	1,284	1,417
Administrative expenses		(930)	(924)	(1,800)
Foreign exchange		(95)	(32)	(28)
Profit/(loss) before interest, tax, depreciation,		825	328	(411)
Depreciation of fixed assets		(3)	0	(3)
Amortisation of intangibles		(88)	(80)	(220)
Operating Profit/(loss) before exceptional Items		734	248	(634)
Exceptional items			(100)
Operating Profit/(loss) after exceptional Items		734	148	(634)
Finance costs		(47)	(34)	(84)
Share of post acquisition loss of Joint Venture		(30)	(26)	(114)
Profit/(loss) on ordinary activities before tax		657	88	(832)
Taxation		-	-	-
Profit/(loss) for the year		657	88	(832)
Attributable to:
Non-controlling interests		(27)	(110)	(198)
Equity holders of the parent		684	198	(634)
Profit /(loss) for the financial year		657	88	(832)
Earnings Profit/(loss) per share
-basic	4	3.1p	0.9p	(2.8p)
-diluted	4	3.1p	0.9p	(2.8p)

Statement of comprehensive income for half year to 30 June 2013
		Group
	30 June 2013 unaudited	30 June 2012 unaudited	31 December 2012 audited
	£'000	£'000	£'000
Profit/(loss) for the year	657	88	(832)
Total comprehensive income /(expense) for the year	657	88	(832)
Total comprehensive income /(expense) attributable to:
Equity holders of the parent	684	198	(634)
Non - controlling interest	(27)	(110)	(198)
	657	88	(832)

Statement of Financial Position to 30 June 2013
			Group
		30 June 2013 unaudited	30 June 2012 unaudited	31 December 2012 audited
		£'000	£'000	£'000
Non-current assets
Property, plant and equipment		5	9	7
Intangible assets - Tournament rights		1,798	1,934	1,866
Intangible assets - Development costs		2,945	850	2,960
Investment in Joint Venture		27	-	-
Goodwill		200	1,267	200
Investments		2	12	2
Total non-current assets		4,977	4,072	5,035
Current assets
Inventory		13	-	13
Trade and other receivables		1,909	1,312	2,519
Cash and cash equivalents		59	78	68
Total current assets		1,981	1,390	2,600
Current liabilities
Financial liabilities - Borrowings	6	400	250	406
Deferred income		-	-	2,281
Trade and other payables		4,182	3,487	3,049
Total current liabilities		4,582	3,737	5,736
Net current liabilities		(2,601)	(2,347)	(3,136)
Non-current liabilities
Financial liabilities - Borrowings	7	436	542	616
Deferred tax		708	-	708
		1,144	542	1,324
Net assets		1,232	1,183	575

Equity
Share capital		3,527	3,527	3,527
Share premium		7,288	7,259	7,288
Other reserves		557	557	557
Capital redemption reserve		5,034	5,034	5,034
Foreign exchange reserve		13	13	13
Retained earnings		(15,160)	(15,012)	(15,844)
Equity attributable to equity holders of the parent		1,259	1,378	575
Non-controlling interests		(27)	(195)	0
		1,232	1,183	575

Statement of cashflows for the half year to 30 June 2013
		Group
	30 June 2013 unaudited	31 December 2012 audited	30 June 2012 unaudited
	£'000	£'000	£'000
Cash flows from operating activity
Operating profit/(loss)	684	(634)	148
Depreciation	2	3	-
Amortisation of intangibles-Tournament rights	68	136	68
Amortisation of intangibles-Development costs	20	84	12
Share based payments	-	81	-
Loss on disposal of investment	-	10	-
Increase in inventory	-	(13)	-
Decrease/(increase) in receivables	580	(907)	605
(Decrease)/increase in payables	(1,098)	867	(712)
Cash generated from/(used in) operations	256	(373)	121
Cash flow from investing activities
Acquisition of development costs	(5)	(95)	-
Acquisition of equipment	-	(9)	-
Investments in joint ventures	(27)	(4)	(406)
Net cash (used in) investing activities	(32)	(108)	(406)
Cash flow from financing activities
Shares issued to non-controlling interests	-	10	-
Cash proceeds from issue of new shares	-	496	500
Loans received	-	281	-
Loans repaid	(180)	(212)	(125)
Interest paid	(47)	(84)	(34)
Net cash (used in)/generated from financing activities	(227)	491	341
Cash and cash equivalents at beginning of the year	32	22	22
Net (decrease)/increase in cash and cash equivalents	(3)	10	56
Cash and cash equivalents at end of the year	29	22	78

Consolidated statement of changes in equity for half year to 30 June 2013
	Ordinary Share Capital	Share Premium	Other Reserves	Capital Redemption	Foreign Exchange Reserve	Retained Earnings	Subtotal	Non controlling Interests	Total
Group
As at 31 December 2012	3,527	7,288	557	5,034	13	(15,844)	575	0	575
Gain for the year	-	-	-	-	-	684	684	(27)	657
Total comprehensive income	-	-	-	-	-	684	684	(27)	657
Issued share capital	-	-	-	-	-	-	-	-	-
At 30 June 2013	3,527	7,288	557	5,034	13	(15,160)	1,259	(27)	1,232

Consolidated statement of changes in equity for the year ended 31 December 2012
	Ordinary Share Capital	Share Premium	Other Reserves	Capital Redemption	Foreign Exchange Reserve	Retained Earnings	Subtotal	Non controlling Interests	Total
Group
At 31 December 2011	3,463	6,653	557	5,034	13	(15,210)	510	(134)	376
Loss for the year	-	-	-	-	-	(634)	(634)	(198)	(832)
Total comprehensive income	-	-	-	-	-	(634)	(634)	(198)	(832)
Issued share capital	64	769	-	-	-	-	833	-	833
								10	10
NCI in PSM arising on acquisition	-	-	-	-	-	-	-	322	322
Share issue costs	-	(134)	-	-	-	-	(134)	-	(134)
At 31 December 2012	3,527	7,288	557	5,034	13	(15,844)	575	-	575

NOTES TO THE FINANCIAL INFORMATION

1.     Basis of Preparation

The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards. The condensed consolidated Half-yearly Financial Statements should be read in conjunction with the annual financial statements for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards. These half-yearly results are unaudited and do not constitute statutory accounts.

2.     Significant Accounting Policies

The condensed financial statements have been prepared under the historical cost convention. The same accounting policies, presentation and method of computation are followed in these condensed financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2012.

3.     Segment Information - Changes in Operating Segments

The group has changed the way it is organised. The group now operates under three new segments, Sports, Entertainment and Media. The previous segments which are no longer in use were Event Promotion, Sales & Consultancy and Smart Media.

Operating Segments	Sports		Entertainment		Media		Consolidated
	£'000		£'000		£'000		£'000
	June 2013	June 2012	June 2013	June 2012	June 2013	June 2012	June 2013	June 2012
Revenue	6,399	5,408	1,172	67	60	-	7,631	5,475
Joint ventures	-	-	(30)	(26)	-	-	(30)	(26)
Segment result	1,623	1,217	168	41	60	-	1,851	1,258
Unallocated corporate expenses							(1,116)	(1,136)
Operating profit							735	122
Finance costs							(47)	(34)
Profit for the year							688	88

4.     Earnings per Share

The basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average number of shares in issue during the year. In calculating the diluted earnings per share, outstanding share options, warrants and convertible loans are taken into account where the impact of these is dilutive.

	Six months to		Six months to		Year ended
	30 June		30 June		31 December
	2013		2012		2012
(i) Basic
Profit /(loss) for the period (£'000)	684		198		(634)
Weighted average number of shares in issue (No.)	22,301,518		21,712,508		22,301,518
Earning/(loss) per share  (p)	3.1 p		0.9 p		(2.8p)
(ii) Fully diluted
Profit/(loss) for the period (£'000)	684		198		(634)
Revised Profit/(loss) for the period  (£'000)	684		198		(634)
Weighted average number of shares in issue (No.)	22,301,518		21,712,508		22,301,518
Ordinary shares issuable under convertible loan agreements *	-		-		-
	[22,301,518]		21,712,508		(2.8p)
Diluted Earnings per share (p)*	3.1 p		0.9p		(2.8p)

* The fully diluted gain/loss per share is the same as the basic loss per share as the effects of potential shares are anti-dilutive.

5.     Dividends - No dividend was recommended or paid for the period under review

6.     Financial Liabilities - Borrowings

	30 June 2013		30 June 2012
	£'000		£'000
Bank facility	250		250
Other Loan	120		-
Overdraft	30		-
	400		250

The bank facility represents amounts due to Lloyds Bank Plc in less than one year. The total amount outstanding to Lloyds Bank as at 30 June 2013 was £556,000. See note 7 for details.

7.     Non-Current Liabilities  - Borrowings

	30 June 2013		30 June 2012
	£'000		£'000
Bank facility > 1 year	306		542
Other loan > 1 year	130		-
	436		542

The bank facility represents amounts due to Lloyds Bank in more than one year. Lloyds Bank has provided a loan totalling £1 million. The loan is repayable in 48 consecutive monthly instalments from August 2011 (an effective 5 year term with a one year repayment holiday). The loan carries interest payable at 3% over base and may be repaid early at the discretion of the company. The loan is secured by personal guarantees provided by the David Ciclitira concert party at a cost to PMG of £4,167 per month.

The other loan was provided in December 2012 by David Ciclitira. The loan at the 30 June 2013 was £250,000 of which £130,000 was repayable after one year. The debt capitalisation after 30^th June 2013 exchanged the loan for equity at 5p per share therefore at 30^th September 2013 the amount of other loan owed to Luna Trading Ltd was Zero.

8.     Issued Share Capital

Issued share capital as at 30 June 2013 is comprised as follows:

·      22,912,346 ordinary shares of 2.2 pence being £0.504 million;

·      199,831,545 deferred ordinary shares of 0.5p each being £0.999 million*

·      103,260 deferred B shares of £19.60 being £2.024 million*

* The deferred ordinary shares do not entitle their holders to receive dividend or other distribution nor do they entitle their holders to receive notice, attend speak or vote at any General Meeting of the Company.  The rights of deferred share holders are set out in full in the financial statements for the year ended 31 December 2012.

9.     Related Parties 

Luna Trading Limited and its subsidiary, Parallel Contemporary Arts Limited (PCA), is a company under the control of David Ciclitira, which provides consultancy services, loans and guarantees to Parallel Media Group Plc.

	Period ended 30 June 2013	Period ended      30 December 2012 (audited)
	£'000	£'000
Opening balance	135	157
Loan guarantee interest paid	25	50
Offsets against PCA balances owed to PMG.	(274)	(71)
Expenses Incurred	(98)	(151)
Payments Made	275	150
New Other Loan	250	-
Total amounts outstanding to Luna Trading Ltd	288	135

Luna Trading is the company through which PMG contract with D Ciclitira for consulting and business services. During the period, Luna Trading charged PMG for consultancy fees of £110,000 and remote office costs of £20,000.

In 2010, Luna Trading Limited, David and Serenella Ciclitira agreed to provide personal guarantees of £1 million to Lloyds Bank to support long term PMG loans. As consideration for providing the guarantees, Luna trading charges 5% per annum of the guarantee amount for the period of the guarantee. In addition David Ciclitira has been granted a fixed and floating charge over the Company's assets for the period of the guarantee and has been granted an option to acquire at fair value, Parallel Media (Championships) Limited (a wholly owned subsidiary of PMG which holds the rights to the Company's major sporting events). On the 20 June 2013 David Ciclitira waived his right to the call option to acquire Parallel Media (Championship) Limited.

During the half year PMG received all recoverable amounts owed by Parallel Contemporary Arts against amounts owed to Luna Trading Ltd. As at the 30 June 2013 amounts owed to PMG by PCA was zero.

10.   Other

Copies of unaudited half-yearly results have not been sent to shareholders, however copies are available at www.parallelmediagroup.com or on request from the Company Secretary at the company's Registered Office:

11.   Approval of Half-Yearly Financial Statements

The half-yearly financial statements were approved by the board of directors on 30^th September 2013.

 

END

 

 

IR PGUPPBUPWGCB