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Catalyst Media Group (CMX)

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Tuesday 31 March, 2015

Catalyst Media Group

Interim Results

RNS Number : 9191I
Catalyst Media Group PLC
31 March 2015
 



Catalyst Media Group Plc

("CMG", "Catalyst" or the "Group")

 

Interim Results for Six Months Ended 31 December 2014

 

Catalyst Media Group Plc announces its interim results for the six months ended 31 December 2014.

 

CMG is a 20.54% shareholder in Satellite Information Services (Holdings) Ltd ("SIS") and the results include its share in the profits of SIS as an equity accounted associate.

 

Financial Highlights for the six months to 31 December 2014

·        CMG profit after taxation and before valuation adjustment of £331k (2013: £2.2m*)

·        Valuation adjustment of £359k (2013: £2.2m) resulting in a loss after taxation of £28,655 (2013: £7,770*)

·        Earnings per share (before valuation adjustment) 1.23p (2013: 7.91p*)

·        Loss per share (after valuation adjustment) 0.11p (2013: 0.03p*)

·        Net asset value per share (excluding shares held in treasury) of 98.3p (2013: 103.5p)

·        SIS revenues for six months to 30 September 2014 £106.9m (2013: £123.2m (excluding Outside Broadcasting services £101.1m))

·        SIS EBITDA for six months to 30 September 2014 of £16.0m (2013: £22.3m (excluding Outside Broadcasting services £18.1m))

·        SIS profit after tax on ordinary activities for the six months to 30 September 2014 of £1.8m (2013: £10.7m (excluding Outside Broadcasting services £5.4m))

·        Following closure of Outside Broadcasting during 2013, SIS's profits going forward will be weighted towards the second half

·        Dividend of £1.0m received from SIS on 5 December 2014

 

Notes:

* Comparative figures for the six months ended 30 September 2013 include the results for SIS's Outside Broadcasting services which formed part of SIS Live and which have been discontinued.

 

Michael Rosenberg, Chairman of Catalyst commented:

 

"Although SIS's first half profits were below the previous year, it is anticipated that the second half results will show an improvement as following the closure of Outside Broadcasting, the majority of SIS's profits will now be generated in the second half of its financial year. Meanwhile SIS continues to generate significant free cashflow. Since the announcement of the final result, there has been no change in the expiration dates of the various fixed term contracts for the existing racecourse media rights."

 

Enquiries:

 

Catalyst Media Group Plc

Michael Rosenberg, Non-executive Chairman:      07785 727 595

Melvin Lawson, Non-executive Director:                020 7637 8412

 

Strand Hanson Limited:                                      020 7409 3494

James Harris

Richard Tulloch



Chairman's Statement

 

For the six month period ended 31 December 2014 the Group has generated a net profit after taxation but before adjustment to investment valuation charges of £330,795 (2013: £2.2m). After taking account of the adjustment to valuation charge of £359,450 as referred to below, the Group recorded a loss of £28,655 for the period.

 

Net assets as at 31 December 2014 were £24.0m (30 June 2014: £25.5m). Net cash as at 31 December 2014 was £89,237 following the repurchase by the Company of, in aggregate, 3,209,316 ordinary shares of 10p each in the capital of the Company ("Shares") for a total consideration of £1.5m equating to an average buyback price of 0.46p per Share. These Shares are currently held in treasury. Excluding the Shares held in treasury, the net assets per Share as at 31 December 2014 was 98.3p (2013: 103.5p).

 

The main asset of the Group remains the 20.54% stake in SIS and, in December 2014, the Company received a dividend of £1.0m from SIS. In line with previous policy, the Board has reduced the value of the investment by the amount of its profit share for the period being £359,450. Accordingly, the value of the investment in SIS has been reduced to £24.0m after taking account of the dividend receipt referred to above.

 

CMG equity accounts for its share in the profits of SIS which were £1.8m after tax for the period (2013: £10.7m). Total revenues of SIS for the period were £106.9m (2013: £123.2m) of which £96.4m (2013: £90.6m) were derived from the business of providing integrated television and data services to licensed betting offices in the UK, Ireland and overseas and a further £10.5m (£32.6m) was contributed by SIS Live services, which provides satellite news gathering and associated transmission services to its customers. The decrease in revenues of SIS Live was a result of the previously reported closure of Outside Broadcasting, which had revenues of £22.1m for the six month period to 30 September 2013.

 

SIS's EBITDA for the period to 30 September 2014 was £16.0m compared to £22.3m in 2013 (£18.1m excluding Outside Broadcasting). The major factors impacting the current period were the costs of renewing the media rights for Irish racing, a one off contribution in 2013 relating to a new studio facility for a client and additional costs relating to new growth initiatives during 2014. These initiatives included a new streaming platform and an investment in the La Liga football data services.

 

Following the closure of Outside Broadcasting services, whose profits were weighted towards the first half of SIS's financial year, SIS's profits will now be weighted towards the second half of its financial year when SIS Betting makes the majority of its profits. Accordingly, SIS's management anticipates that its full year outcome will be in line with internal budgets, with trading at the operating level prior to exceptional items expected to be marginally lower than that achieved in the year to March 2014. In addition, SIS's management anticipates that exceptional items will be significantly lower in the current financial year than in the previous year, as there will be no impact of the closure of Outside Broadcasting.

 

SIS BETTING

 

SIS provides 100,000 betting opportunities per year with live and virtual content beamed into shops via generic or bespoke channels text services and data feeds. Content includes UK and Irish horse and greyhound racing plus overseas racing from France, South Africa, United Arab Emirates and Latin America.

 

Since the last published Report and Accounts of CMG to 30 June 2014 there has been no change in the expiration dates of the various fixed term contracts for the existing racecourse media rights. However, SIS has now added two new media rights venues, and broadcasting has commenced from the all-weather floodlit track at Chelmsford City which will host 58 race fixtures during 2015 and the new greyhound track at Towcester.

 

SIS LIVE

 

SIS LIVE offers comprehensive connectivity solutions via a vast satellite and fibre infrastructure. SIS's rapidly growing fibre network connects the Company's established teleports in Milton Keynes and MediaCityUK in Manchester with key broadcasting locations around the UK, including major UK broadcasters, Premier League football grounds and horse and dog racing tracks. The Company has the largest mobile satellite uplink fleet in Europe and an award winning range of portable VSAT and uplink products. In November 2014 six new satellite news gathering vehicles, which are operated by SIS, were delivered to Sky News.


Outlook

 

The business of SIS continues to generate cash but its future direction will depend on the renewal of its various media rights agreements. It was encouraging to receive a dividend during 2014 but there can be no certainty as to the timing or quantum of future dividends. Meanwhile CMG continues to operate on a very low cost base.

 

 

 

Consolidated interim statement of comprehensive income

 


Notes

6 months to 31 December 2014

 

£

Unaudited

6 months to 31 December 2013

 

£

Unaudited

12 months to 30 June 2014

 

 

£

Audited






Revenue


12,500

12,500

25,000






Cost of sales


-

-

-

Gross profit


12,500

12,500

25,000






Administrative expenses


(46,242)

(34,289)

(111,259)

Other operating income


-

-

3,172

Operating loss


(33,742)

(21,789)

(83,087)






Financial income


914

787

2,898

Net financial income


914

787

2,898

 





Share of profit of equity-accounted associate

1

359,450

2,195,315

1,367,348

Valuation adjustment of equity-accounted associate


(359,450)

(2,195,315)

(4,298,334)






Loss before taxation


(32,828)

(21,002)

(3,011,175)






Taxation


4,173

13,232

17,888






Loss for the period


(28,655)

(7,770)

(2,993,287)






Share of other comprehensive income of associate

 


-

-

(69,014)

Total comprehensive income loss for the period


(28,655)

(7,770)

(3,062,301)






Attributable to equity holders of the company


(28,655)

(7,770)

(3,062,301)






Earnings / (loss) per share:

4




Basic


(0.11p)

(0.03p)

(10.83p)

Diluted


(0.11p)

(0.03p)

(10.83p)

Pre valuation adjustment


1.23p

7.91p

4.72p

 



 

Consolidated interim statement of financial position

 


Notes

31 December 2014

 

£

Unaudited

31 December 2013

 

£

Unaudited

30 June

2014

 

£

Audited

Assets





Non-current assets





Investment in associate

1

23,973,116

28,000,000

25,000,000



23,973,116

28,000,000

25,000,000






Current assets





Trade and other receivables


12,879

35,158

31,097

Cash and cash equivalents


89,327

571,596

538,416



102,206

606,754

569,513






Total assets


24,075,322

28,606,754

25,569,513






Equity and liabilities










Capital and reserves attributable to equity holders of the parent





Share capital


2,764,567

2,764,567

2,764,567

Capital redemption reserve


49,752

49,752

49,752

Merger reserve


2,402,674

2,402,674

2,402,674

Retained surplus


18,813,794

23,366,286

20,311,755



24,030,787

28,583,279

25,528,748






Current liabilities





Trade and other payables


32,726

23,475

31,399

Corporation tax payable


11,809

-

9,366



44,535

23,475

40,765






Total equity and liabilities


24,075,322

28,606,754

25,569,513

 



 

Consolidated interim cash flow statement

 



6 months

to 31 December 2014

 

£

Unaudited

6 months

to 31 December 2013

 

£

Unaudited

12 months

to 30

June

2014

 

£

Audited





 

Cash flow from operating activities





(Loss) before taxation


(32,828)

(21,002)

(3,011,175)

Adjustments for:





Depreciation, amortisation and valuation adjustment


359,450

2,195,315

(1,367,348)

Share of profit from associate


(359,450)

(2,195,315)

4,298,334

Finance income


(914)

(787)

(2,898)

Corporation taxes recovered


6,626

14,214

27,446






Net cash outflow from operating activities before changes in working capital


(27,116)

(7,575)

(55,641)

Decrease / (increase) in trade and other receivables


18,217

(25,665)

(21,604)

Increase / (decrease) in trade and other payables


1,318

(18,714)

(10,000)






Net cash outflow used in operating activities


(7,581)

(51,954)

(87,245)






Investing activities





Dividend received


1,026,884

-

-

Interest received


914

787

2,898






Net cash inflow from investing activities


1,027,798

787

2,898






Financing activities





Shares purchased into treasury


(1,469,306)

-

-

 





Net cash outflow from financing activities


(1,469,306)

-

-






Net decrease in cash and cash equivalents in the period


(449,089)

(51,167)

(84,347)

Cash and cash equivalents at the beginning of the period


538,416

622,763

622,763






Cash and cash equivalents at the end of the period


89,327

571,596

538,416

 


Consolidated interim statement of changes in equity

 


Share

 capital

 

£

Unaudited

Capital redemption reserve

£

Unaudited

Merger

 reserve

 

£

Unaudited

Retained surplus/ (deficit)

 

£

Unaudited

Total shareholders equity

 £

Unaudited







At 1 July 2013

2,764,567

49,752

2,402,674

23,374,056

28,591,049







Loss for the 6 month period to 31 December 2013

-

-

-

(7,770)

(7,770)

Total comprehensive loss for the period

-

-

-

(7,770)

(7,770)







At 31 December 2013

2,764,567

49,752

2,402,674

23,366,286

28,583,279







Loss for the 6 month period to 30 June 2014

-

-

-

(2,985,517)

(2,985,517)

Share of other comprehensive loss of associate

-

-

-

(69,014)

(69,014)

Total comprehensive loss for the period

-

-

-

(3,054,531)

(3,054,531)







At 30 June 2014

2,764,567

49,752

2,402,674

20,311,755

25,528,748

 


Share

 capital

 

£

Unaudited

Capital redemption reserve

£

Unaudited

Merger

 reserve

 

£

Unaudited

Retained surplus/ (deficit)

 

£

Unaudited

Total shareholders equity

 £

Unaudited







At 1 July 2014

2,764,567

49,752

2,402,674

20,311,755

25,528,748







Loss for the 6 month period to 31 December 2014

-

-

-

(28,655)

(28,655)

Share repurchase




(1,469,306)

(1,469,306)

Total comprehensive loss for the period

-

-

-

(1,497,961)

(1,497,961)







At 31 December 2014

2,764,567

49,752

2,402,674

18,813,794

24,030,787

 

On 15 July 2014 the Group purchased in the market 502,272 Shares of 50p per Share. On 17 December 2014 the Group purchased in the market a further 2,707,044 Shares at 45p per Share. The purchases were made out of distributable reserves and the Shares are being held in treasury by the Group.


Notes to the interim financial statements

 



 

1.       Investment in associate

Share of net assets

Fair Value of Intangibles

Total

 


Group

Group

Group


£

£

£

Cost




At 1 July 2014

13,786,364

11,213,636

25,000,000

Additions - share of profit

359,450

-

359,450

Dividend received

(1,026,884)

-

(1,026,884)

Valuation adjustment

-

(359,450)

(359,450)





At 31 December 2014

13,118,930

10,854,186

23,973,116

 

The Group's interest in the associate, Satellite Information Services (Holdings) Limited, ("SIS") a company incorporated in England and Wales, is held by Alternateport Limited ("Alternateport"). Alternateport 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. This right has been exercised since acquisition. Alternateport is a wholly owned subsidiary of Catalyst Media Holdings Limited, a wholly-owned subsidiary of the Company. The intangible assets represent the value attributable to the ongoing business activities of SIS, which are subject to an annual valuation adjustment.

 

The Board has reviewed its valuation of the investment in SIS as at 31 December 2014 and has, in line with previous policy, reduced the value of the investment by the amount of its profit share for the period. As a result, it has concluded that the investment should be held at a value of £23,973,116.

 

Share of profit of associate*

30 September

2014


31 December 2014

31 December 2013

30 June

2014


SIS Total


CMG share

CMG share

CMG share


£'000


£'000

£'000

£'000

Revenue:






SIS Betting Services

96,411


19,803

18,608

40,708

SIS LIVE services

10,471


2,151

6,700

11,416







Total revenue

106,882


21,954

25,308

52,124







Operating profit from ongoing operations

3,347


687

2,822

4,920

Net interest payable

(623)


(128)

(237)

(450)

Profit on disposal of fixed asset

-


-

160

(2,156)

Exceptional items

(520)


(107)

(219)

163







Profit before tax

2,204


452

2,526

2,477

Taxation

(454)


(93)

(331)

(1,110)

Share of profit after taxation

1,750


359

2,195

1,367

Net income from associate

1,750


359

2,195

1,367







Other comprehensive income






Actuarial (loss) /gain

-


-

-

(90)

Deferred tax

-


-

-

21


-


-

-

(69)







Share of gross assets and liabilities of associate






Gross assets

144,115


29,601

31,672

36,722

Gross liabilities

(80,243)


(16,482)

(14,254)

(22,936)

Net equity

63,872


13,119

17,418

13,786

 

*The period covered by the associate's accounts is six months to 30 September 2014. The 2013 revenues have been restated to exclude internal revenues.

 

The financial results for SIS are taken from SIS's management accounts to 30 September 2014, adjusted in order to align the accounting policies of SIS (whose accounts are prepared under UK GAAP) and CMG (whose accounts are prepared under International Financial Reporting Standards). Adjustments have been made in respect of the recognition of the fair value of derivatives held by SIS as at the balance sheet date. The net effect of these adjustments is to increase the value of the investment in associate in the financial statements by £97k (2013: increase of £3,785k).

 

2.       Corporate information

 

The Company is a company incorporated in England and Wales and quoted on the AIM market of the London Stock Exchange plc.

 

3.       Basis of preparation

 

These unaudited consolidated interim financial statements cover the six month period from 1 July 2014 to 31 December 2014 including the financial results of SIS for the six month period to 30 September 2014.

 

These consolidated interim financial statements of the Company and its subsidiaries (the "Group") for the six months ended 31 December 2014 have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) as adopted by the European Union and also in accordance with the Companies Act 2006.

 

The accounting policies adopted for the preparation of this interim statement are consistent with the accounting policies adopted in the financial statements for the year ended 30 June 2014.

 

The financial information set out above does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2014, on which the report of the auditors was unqualified and did not contain a statement under section 498 of the Companies Act 2006, have been filed with the Registrar of Companies.

 

4.       Earnings/(loss) per share

 

The calculation of the basic earnings per ordinary share of 10p each in the capital of the Company ("Share") is based upon the following:

 


6 months to

31 December 2014

£

6 months to

31 December 2013

£

12 months to 30 June

2014

£

Basic and Diluted



 

Earnings per Share pre valuation adjustment - pence

1.23p

7.91p

4.72p

(Loss) per Share - pence

(0.11p)

(0.03p)

(10.83p)





Profit attributable to equity shareholders (before valuation adjustment)

330,795

2,187,545

1,305,047

(Loss) attributable to equity shareholders

(28,655)

(7,770)

(2,993,287)





Weighted average number of Shares in issue

26,960,934

27,645,673

27,645,673

 

5.       Share repurchases

 

On 15 July 2014, the Company purchased, in the market, 502,272 Shares at a price of 50p per Share.

 

On 17 December 2014, the Company purchased, in the market, a further 2,707,044 Shares at a price of 45p per Share.

 

The Shares repurchased during the period will be held in treasury by the Company.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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