Results - Period to 31 August 1999

Sports Internet Group PLC 21 December 1999 SPORTS INTERNET GROUP PLC ('SPORTS INTERNET' OR 'THE GROUP') Results for the period to 31 August 1999 Sports Internet, one of Europe's leading Internet sports content, statistics and betting groups, announces results for the period to 31 August 1999. These are the first results published by the Group since its flotation on the Alternative Investment Market in March 1999. HIGHLIGHTS * Successful flotation in March 1999 to raise an initial sum of £1.95 million * £29.85 million acquisition of Planetfootball.com Limited in May 1999 * £3.87 million acquisition of Opta Index Limited in June 1999 * £19.7 million acquisition of Surrey Group plc completed in October 1999 * Rapid growth of sports content and traffic, with 21 official football club websites currently designed and managed by Planetfootball.com * Impressive management team assembled to develop and implement the Group's strategy of creating a leading Internet sports and gaming group * Optasoccer.com launched on 8 December 1999 * Online agreement entered into with Yahoo! Inc. Jeremy Fenn, Chief Executive of Sports Internet, said today: 'The progress made by Sports Internet since its formation has been spectacular. We have quickly put together the components necessary to build a highly successful Internet sports and gaming business, with the potential to derive revenue from an increasing number of sources. From this solid foundation, and with the high quality management team that we now have in place, we will continue our aggressive development, particularly through the formation of relationships with major players in the Internet industry, as demonstrated by our agreement with Yahoo!, announced today.' Enquiries: Sports Internet Group plc Jeremy Fenn, Chief Executive Tel: 01423 700 800 College Hill Tel: 020 7457 2020 Archie Berens SPORTS INTERNET GROUP PLC Results for the period to 31 August 1999 CHAIRMAN'S STATEMENT Results Sports Internet was floated on the Alternative Investment Market on 8 March 1999. During the period under review, the Group bought two companies, namely, Planetfootball.com Limited ('Planetfootball') in May and Opta Index Limited ('Opta') in June. The acquisition of Surrey Group Plc ('Surrey Group') was completed subsequent to the period end in October. The results for the period ended 31 August 1999 contain only four months of trading for Planetfootball and two months for Opta. Turnover for the period ended 31 August 1999 was £240,399, with a loss before amortisation of goodwill, interest and taxation of £374,711. After charging amortisation of goodwill of £537,570, the operating loss was £912,281 and the loss before and after tax was £822,281. At 31 August 1999, the Group had net assets of £37,808,248. Review of Activities The financial results for Sports Internet for the period obviously do not reflect the enormous progress that has been made in developing the Group's business, which was clearly set out in the strategy at flotation. We have now successfully laid the foundations for developing a leading sports Internet group through the combination of sports content (Planetfootball), statistics (Opta) and betting (Surrey Group). On 7 May 1999, we announced the acquisition of Planetfootball for £29.85 million. The consideration was satisfied by the issue of 15 million new ordinary shares of 5p each in Sports Internet. An additional cash consideration of £675,000 was paid in satisfaction of outstanding loans to Planetfootball. Established in 1996, Planetfootball designs, builds and maintains the official branded websites for a portfolio of 21 football clubs; 12 in the FA Carling Premier League and 9 in the Nationwide Football League First Division. It also provides official websites for the Scottish Premier League, League Managers Association, Wasps Rugby Club and the Professional Darts Corporation. It is at present generating in excess of 20 million page impressions from more than 1 million unique individual visitors that visit its portfolio of websites each month. Planetfootball currently generates revenues from sponsorship and advertising, e-commerce, audio subscription and on-line auctions. On 29 June 1999, we announced the acquisition of Opta, the sports media and information company. The consideration was satisfied by the payment of £500,000 in cash, together with the issue of 1 million ordinary shares of 5p each in Sports Internet, which valued Opta at £3.87 million. In addition, Sports Internet agreed to guarantee to provide £500,000 of working capital to Opta to include the repayment of £120,000 of original seed capital. Established in 1996, Opta developed an index to analyse the performance of players and teams within the FA Premier League. Working alongside the FA Premier League, Opta devised a means of analysing the key elements of a football match in order to produce a comprehensive database of statistics for every game, team and player in the FA Premier League. Sky Sports first used Opta's analyses during the 1996/97 season. As a result of this initial success, at the start of the 1997/98 season, Opta was appointed as official statistics provider to the FA Premier League and more recently to the Nationwide Football League (Divisions 1, 2 and 3). In September 1999, and after the end of the financial period covered by this statement, Sports Internet announced a recommended offer for Surrey Group for £19.7 million, the consideration being satisfied by the issue of 6.28 million new ordinary shares of 5p each in Sports Internet. Surrey Group's established bookmaking brand is widely recognised in the industry and it holds betting licences in both the UK and Alderney. These licences allow the Group to offer both onshore and offshore, tax paid or tax free bookmaking services and products to customers around the world via both telephone and Internet platforms. Management I am pleased to report that since my appointment as Chairman on 12 April 1999, the Board of Sports Internet has been significantly strengthened. Peter Wilkinson, as the founder and sole shareholder of Planetfootball, joined the Board as Executive Deputy Chairman in May. Jeremy Fenn joined the Board in August as Chief Executive, having spent the last three years with Leeds Sporting plc. The operational management of the Group has also been enhanced with the appointment of Richard James as Managing Director of Planetfootball and Michael Norris as Managing Director of Surrey Racing. Suzy Russell, who has run Opta since its inception in 1995, has remained as Managing Director following its acquisition by the Group. As a result of the Group's development, the Board has decided to centralise Group finance and administration in the Harrogate head office. Having made a significant contribution to the development of the Group, Rodger Sargent, the Finance Director, has informed the Board that he feels this is an appropriate time for him to move on to pursue other interests and will resign from the Board with effect from 31 December 1999. The Board is delighted to announce that Nigel Myers has been appointed as Group Finance Director with effect from 1 January 2000. Nigel joins the Group from Century Inns plc where he has spent the last two years as Financial Controller. Prospects I am delighted to report that the first stage of development of the business in line with the Group's stated strategy has now been completed with the key elements of sports content, statistics and betting having been put in place. The objective during the next period is to combine these elements into an integrated Internet based platform which is capable of delivering multiple revenue streams. The initial stage in achieving this objective was the launch on 8 December 1999 of a brand new website called optasoccer.com which combines football news and statistics. The Board is also delighted to announce that Sports Internet has today entered into an agreement with Yahoo! Inc. to supply statistics for Yahoo! Sports' new fantasy football game, which was launched on 17 December 1999. This deal will include a direct link from the player game pages on Yahoo! Sports to optasoccer.com for related player statistics and information. The traffic that we expect to be directed will, we believe, greatly accelerate optasoccer.com's establishment as the number one generic football website. A separate announcement, containing further details of this agreement, has been issued today. Subsequent to the acquisition of Surrey Group, the Board instituted an investment programme to develop a highly sophisticated Internet betting platform that would combine with the Group's content and statistics. The programme is on schedule and will result in the Group's Internet betting product being launched during first quarter 2000. Whilst the Board is concentrating on the consolidation of the existing businesses, it will continue to pursue acquisitions and joint venture possibilities where it believes they will enhance the development of the Group's business in line with its stated strategy. The Board looks forward to the second half of the year with tremendous confidence. Keith Harris Chairman SPORTS INTERNET GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT For the period ended 31 AUGUST 1999 Note Period ended 31 August 1999 Unaudited £ Turnover 240,399 Cost of sales (97,326) Gross profit 143,073 Administrative expenses (1,055,354) Operating loss 7 (912,281) Interest receivable and 90,000 similar income Loss on ordinary activities before and after taxation (822,281) Basic and diluted loss per 5 (4.93)p share All transactions arise from acquired operations. There were no recognised gains or losses other than those recognised in the result for the period. SPORTS INTERNET GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 AUGUST 1999 Note As at 31 August 1999 Unaudited £ Fixed assets Intangible assets 1 33,609,698 Tangible assets 2 311,960 33,921,658 Current assets Debtors 348,705 Cash at bank and in hand 4,016,563 4,365,268 Creditors: amounts falling due (478,678) within one year Net current assets 3,886,590 Total assets less current 37,808,248 liabilities Capital and reserves Called up share capital 3 1,386,667 Share premium account 4 37,243,862 Profit and loss account 4 (822,281) Equity shareholders' funds 37,808,248 SPORTS INTERNET GROUP PLC CONSOLIDATED CASH FLOW STATEMENT For the period ended 31 AUGUST 1999 Note Period ended 31 August 1999 Unaudited £ £ Net cash outflow from operating activities 6 (308,348) Return on investments and servicing of finance Interest received 22,326 Net cash inflow from investments and servicing of finance 22,326 Acquisitions and disposals Purchase of subsidiary (500,000) undertakings Net cash acquired with subsidiary undertakings 10,815 Repayment of loans on acquisition of subsidiary undertakings (795,137) Net cash outflow from acquisitions and disposals (1,284,322) Capital expenditure and financial investment Purchase of tangible fixed assets (88,080) Net cash outflow from capital expenditure and financial (88,080) investment Financing Issue of ordinary share capital 6,693,333 Share issue expenses (1,018,346) Net cash inflow from financing 5,674,987 Increase in cash in the period 4,016,563 SPORTS INTERNET GROUP PLC NOTES TO THE INTERIM FINANCIAL STATEMENTS For the period ended 31 AUGUST 1999 1. Intangible fixed assets Purchased goodwill Unaudited £ Cost At 8 February 1999 - Additions 34,147,268 At 31 August 1999 34,147,268 Amortisation At 8 February 1999 - Provided in the period 537,570 At 31 August 1999 537,570 Net book value At 31 August 1999 33,609,698 2. Tangible fixed assets Fixtures and fittings Unaudited £ Cost At 8 February 1999 - Additions 88,080 Acquisition of subsidiary undertakings 239,835 At 31 August 1999 327,915 Depreciation At 8 February 1999 - Provided in the period 15,955 At 31 August 1999 15,955 Net book value At 31 August 1999 311,960 SPORTS INTERNET GROUP PLC NOTES TO THE INTERIM FINANCIAL STATEMENTS For the period ended 31 AUGUST 1999 3. Share capital 1999 Unaudited £ Authorised 37,000,000 ordinary shares of 5p each 1,850,000 Allotted called up and fully paid 27,733,333 ordinary shares of 5p each 1,386,667 4. Share premium account and reserves Share premium Profit and account loss account Unaudited Unaudited £ £ At 8 February 1999 - - Retained loss for the period - (822,281) Premium on allotments during the period 38,531,666 - Less: costs of share issues (1,287,804) - At 31 August 1999 37,243,862 (822,281) 5. Loss per share The calculation of the basic loss per share is based on the loss for the period divided by the weighted average number of shares in issue during the period, being 16,663,415 shares. Share options outstanding at the period end do not have a dilutive effect on the stated loss per share. SPORTS INTERNET GROUP PLC NOTES TO THE INTERIM FINANCIAL STATEMENTS For the period ended 31 AUGUST 1999 6. Net cash outflow from operating activities 1999 Unaudited £ Operating loss (912,281) Depreciation 15,955 Amortisation 537,570 Increase in debtors (90,034) Increase in creditors 140,442 Net cash outflow from operating activities (308,348) 7. Operating loss The operating loss is stated after charging amortisation of goodwill of £537,570. 8. Post balance sheet event In October 1999 the company acquired a controlling interest in Surrey Group plc via a share for share exchange. Surrey Group plc's principal activity is that of gambling and betting which is undertaken primarily through telephone betting and a chain of licensed betting offices. 9. Interim report An interim report will be sent to all shareholders by January 2000. Copies will be available from the Company's registered office, 9th Floor, Winchester House, 259 Old Marylebone Road, London NW1 5RA. 10. New Director Nigel Myers is aged 33. Over the five years preceding the date of this announcement, he has held no directorships, nor has he been a partner in any partnerships. No further details regarding Mr Myers are required for disclosure pursuant to 16.8(e) of the AIM Rules.

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