TIDMCMX
RNS Number : 6984T
Catalyst Media Group PLC
30 March 2021
30 March 2021
Catalyst Media Group Plc
("CMG", "Catalyst" or the "Company")
Interim Results for the Six Months Ended 31 December 2020
Catalyst (AIM: CMX) is pleased to announce its unaudited interim
results for the six months ended 31 December 2020.
CMG is a 20.54% shareholder in Sports Information Services
(Holdings) Limited ("SIS") and the results include its share in the
profits/(losses) of SIS as an equity accounted associate.
Financial Highlights for the six months to 31 December 2020
-- CMG loss after taxation of GBP0.43 million (2019: profit of GBP0.32 million)
-- Loss per share of 2.03p (2019: earnings of 1.53p)
-- Net asset value per share of 58.7p (2019: 66.3p)
-- For the six months to 30 September 2020, SIS achieved
- Revenues of GBP68.6 million (2019: GBP121.1 million)
- Operating loss of GBP2.4 million (2019: profit of GBP1.9 million)
- Loss after tax on ordinary activities of GBP1.9 million (2019: profit of GBP1.7 million)
-- SIS did not declare or pay any dividends to CMG during the
reporting period (2019: GBP5.0 million declared of which GBP1.03
million was received by CMG)
-- CMG has not declared nor paid any dividends during the
reporting period (2019: GBP1.05 million declared in October 2019
and paid in November 2019)
Impact of Covid-19
SIS's profitability has been significantly impacted by Covid-19
and its management expects SIS to make a loss for its current
financial year to 31 March 2021, of between GBP9 million and GBP10
million.
SIS's operations were impacted by the cancellation of horse and
greyhound racing in mid-March 2020. There was an orderly resumption
of horse and greyhound racing in England from 1 June 2020 and
horseracing in Ireland from 8 June 2020, with the reopening of
Licenced Betting Offices in England from 15 June 2020 resulting in
an initial return to full operations at SIS until further
restrictions were imposed from October 2020 onwards. SIS was able
to continue to provide content for its customers during this time
and has generally sought to offset revenue shortfalls from retail
with increased online digital revenues. Retail betting shops in
England are currently due to reopen in mid April 2021 and, assuming
no further government restrictions are imposed, SIS's management
expect that SIS will return to profitability in its financial year
to 31 March 2022 with increased contributions from overseas
activities together with expansion in digital and from its recent
acquisition of 49's Ltd.
Enquiries:
Catalyst Media Group Plc
Michael Rosenberg, Non-executive Chairman Mob: 07785 727 595
Melvin Lawson, Non-executive Director Tel: 020 7734 8111
Strand Hanson Limited Tel: 020 7409 3494
James Harris / Matthew Chandler
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018.
Chairman's Statement
For the six month period ended 31 December 2020, the Company
incurred a net loss after taxation of GBP0.43 million (2019: profit
of GBP0.32 million).
Net assets as at 31 December 2020 were GBP12.3 million (30 June
2020: GBP12.8 million). Net cash as at 31 December 2020 was GBP0.2
million (2019: GBP0.3 million).
CMG's main asset remains its 20.54% stake in SIS and the Company
received no dividend (2019: dividend of GBP1.03 million) from SIS
during the period. The value of CMG's investment in SIS has reduced
from approximately GBP12.5 million to approximately GBP12.1
million, due to its share of the loss incurred. As a result, CMG's
net assets per share as at 31 December 2020 were 58.7p (2019:
66.3p), though the carrying value of our investment in SIS will
need to be reviewed again at our financial year end in light of its
present difficulties.
CMG equity accounts for its share in the loss of SIS which was
GBP1.9 million after tax for its six month period to 30 September
2020 (2019: profit of GBP1.7 million). SIS's revenues for such
period were GBP68.6 million (2019: GBP121.1 million) which were
derived from its business of providing integrated television and
data services to Licensed Betting Offices in the UK, Ireland and
overseas. SIS generated an operating loss for such period of GBP2.4
million, compared to an operating profit of GBP1.9 million in the
comparable period for 2019.
CMG currently has cash reserves of approximately GBP0.2 million
which is sufficient for its present needs.
Set out below is an overview of the activities of SIS's key
divisions for the period under review.
SIS Betting - UK and Ireland Retail
SIS continued to provide a core service based on content from UK
Horseracing, Irish Horseracing, British and Irish Greyhounds, 49's
and International Horseracing to the UK and Irish retail market,
including all the major UK bookmaking groups and the majority of
the independent market. SIS also supplies additional content and
services to its UK and Irish retail customers to cover the early
morning period as well as evening products.
The last year has seen significant disruption from Covid-19 with
SIS's retail customers required to close or significantly restrict
their operations in shops for various periods of the year. As such,
this area of SIS's business has incurred losses in the period.
SIS Betting - International & Online
SIS produces 24/7 channels covering horseracing, greyhound
racing, virtual racing and mixed channels, having secured content
covering the whole 24-hour period. Such content includes
horseracing from Argentina, Latin America, USA, Germany, Spain,
Mauritius, Dubai and Saudi Arabia as well the UK and Irish
horseracing and greyhound racing from the UK, Ireland and
Mexico.
SIS distributes over 50 channels to international retail and
online operators designed to maximise betting opportunities with
further customers due to go live in the near future. Many of its
international and online operators have signed multiyear
agreements. SIS continues to progress its strategy for increasing
distribution, in both new and existing International and Digital
markets, using proprietary production technology as well as
streaming and data pricing services.
Covid-19, whilst negatively impacting revenues from
international retail operators, has resulted in a significant boost
to revenues from online operators as end-customers have sought
alternative ways to access and place bets on SIS content. Whilst
online revenues are benefitting from the current temporary retail
restrictions, there is also significant underlying growth.
India
As previously reported, the claim in respect of the Indian
project continues to be pursued but the outcome remains uncertain.
The legal and associated costs relating to this claim have been
significantly reduced but are still impacting profits. SIS accounts
for such legal costs as they arise.
Litigation
As previously announced on 9 October 2020, in the case brought
by The Racing Partnership ("TRP") and others against SIS's
subsidiary, Sports Information Services Limited ("SISL"), and
others, the Court of Appeal handed down judgment in relation to the
appeals against various elements of the High Court judgment of Mr
Justice Zacaroli in respect of liability issues in the case as
follows:
1. Upheld SISL's appeal in relation to the finding of breach of
confidence in relation to certain race day data supplied to SISL by
a co-defendant; and
2. Upheld TRP's appeal against the dismissal of its claims for unlawful means conspiracy.
There has been no ruling given in respect of damages and SIS
has, after consultation with its advisers, sought an appeal to the
Supreme Court which it expects to be heard in late 2021 if granted.
SISL have been ordered by the judge to pay 20% of TRP's costs.
Current Trading and Impact of Covid-19
SIS's current trading has been significantly impacted by the
Covid-19 restrictions placed on its retail operator customers in
the UK, Ireland and across the world who have experienced a series
of closures and operational restrictions as part of the battle
against the Covid-19 pandemic. Most recently, such restrictions
have seen Licensed Betting Offices closed across the UK and Ireland
since the end of December 2020 with reopening currently expected in
England in mid-April 2021 but potentially subject to further
operating limitations.
During the period SIS has seen a series of online operators both
in the UK and Internationally sign contracts for new or additional
content and is experiencing significantly higher revenues from its
online operators due to higher volumes of end-customer use. Such
higher revenue has helped offset some of the shortfall from retail
operators.
SIS's profitability for its financial year to 31 March 2021 has
been significantly impacted by Covid-19 and its management expects
SIS to make a loss for its current financial year of between GBP9
million and GBP10 million. Although it is too early to be certain
of prospects for its financial year to 31 March 2022, it is
currently expected by SIS's management that as conditions improve,
and retail markets reopen, SIS will return to profitability for
that period. Despite the overall adverse impact of Covid-19, SIS
has continued to achieve growth in its International and online
customer base, most recently launching channels for Latin American
and European customers and has seen the launch of its Competitive
Gaming (esports) product as well as increased benefit from its
acquisition of the 49's business completed earlier in the year.
Outlook
As stated above, it is currently expected that SIS will return
to profitability in its next financial year as the benefits from
its online businesses and international opportunities develop. The
cash position of SIS remains strong though at a lower level than
previously anticipated. However, the result of the abovementioned
litigation with TRP remains uncertain. Accordingly, no decisions
are currently expected to be made with regard to dividend payments
by SIS this year. CMG has sufficient working capital for its
foreseeable needs and continues to operate at a very low level of
overheads.
Michael Rosenberg OBE
Chairman
30 March 2021
Consolidated interim statement of comprehensive income
Notes 6 months 6 months 12 months
to 31 December to 31 December to 30 June
2020 2019 2020
GBP GBP GBP
Unaudited Unaudited Audited
Revenue 12,500 12,500 25,000
Cost of sales - - -
---------------- ---------------- -------------
Gross profit 12,500 12,500 25,000
Administrative expenses (49,424) (51,279) (123,600)
Other operating income - - -
---------------- ---------------- -------------
Operating loss (36,924) (38,779) (98,600)
Financial income 13 464 712
Financial costs - - -
Net financial income 13 464 712
---------------- ---------------- -------------
Share of profit/(loss) of equity-accounted
associate (384,303) 359,245 125,294
Impairment of equity-accounted
associate 3 - - (1,160,843)
Profit/(loss) before taxation (421,214) 320,930 (1,133,437)
Taxation (4,934) - 25,583
Profit/(loss) for the period (426,148) 320,930 (1,107,854)
---------------- ---------------- -------------
Share of other comprehensive
profit of associate - - 262,707
Total comprehensive income/(loss)
for the period (426,148) 320,930 (845,147)
---------------- ---------------- -------------
Attributable to equity holders
of the company (426,148) 320,930 (845,147)
---------------- ---------------- -------------
Earnings/(loss) per share: 4
Basic (2.03p) 1.53p (5.27p)
---------------- ---------------- -------------
Diluted (2.03p) 1.53p (5.27p)
---------------- ---------------- -------------
Consolidated interim statement of financial position
Notes 31 December 31 December 30 June
2020 2019 2020
GBP GBP GBP
Unaudited Unaudited Audited
Assets
Non-current assets
Investment in associate 3 12,090,677 13,607,067 12,474,980
------------ ------------- -----------
12,090,677 13,607,067 12,474,980
------------ ------------- -----------
Current assets
Trade and other receivables 35,734 18,795 62,741
Cash and cash equivalents 260,020 326,182 270,654
------------ ------------- -----------
295,754 344,977 333,395
------------ ------------- -----------
Total assets 12,386,431 13,952,044 12,808,375
------------ ------------- -----------
Equity and liabilities
Capital and reserves
attributable to equity
holders of the parent
Share capital 2,103,202 2,103,202 2,103,202
Capital redemption
reserve 711,117 711,117 711,117
Merger reserve 2,402,674 2,402,674 2,402,674
Retained profits 7,127,752 8,719,977 7,553,900
------------ ------------- -----------
12,344,745 13,936,970 12,770,893
------------ ------------- -----------
Current liabilities
Trade and other payables 41,686 15,074 37,482
Corporation tax payable - - -
------------ ------------- -----------
41,686 15,074 37,482
------------ ------------- -----------
Total equity and
liabilities 12,386,431 13,952,044 12,808,375
------------ ------------- -----------
Consolidated interim cash flow statement
6 months 6 months 12 months
to 31 December to 31 December to 30
2020 2019 June
2020
GBP GBP
Unaudited Unaudited GBP
Audited
Cash flow from operating activities
Profit / (loss) before taxation (421,214) 320,930 (1,133,437)
Adjustments for:
Share of (profit) / loss from associate 384,303 (359,245) (125,294)
Impairment of investment in associate - - 1,160,843
Finance income (13) (464) (712)
Corporation taxes recovered 34,875 - -
---------------- ---------------- ------------
Net cash outflow from operating activities
before changes in working capital (2,049) (38,779) (98,600)
(Increase) / Decrease in trade and
other receivables (12,802) 20,212 1,849
Increase / (Decrease) in trade and
other payables 4,204 (14,588) 7,820
Net cash outflow used in operating
activities (10,647) (33,155) (88,931)
---------------- ---------------- ------------
Investing activities
Dividend received - 1,026,884 1,026,884
Interest received 13 464 712
Net cash inflow from investing activities 13 1,027,348 1,027,596
---------------- ---------------- ------------
Financing activities
Dividends paid - (1,051,623) (1,051,623)
---------------- ---------------- ------------
Net cash outflow from financing activities - (1,051,623) (1,051,623)
---------------- ---------------- ------------
Net movement in cash and cash equivalents
in the period (10,634) (57,430) (112,958)
Cash and cash equivalents at the
beginning of the period 270,654 383,612 383,612
Cash and cash equivalents at the
end of the period 260,020 326,182 270,654
---------------- ---------------- ------------
Consolidated interim statement of changes in equity
Share Capital redemption Merger Retained Total shareholders
capital reserve reserve surplus/ equity
GBP (deficit) GBP
GBP Unaudited GBP GBP Unaudited
Unaudited Unaudited Unaudited
At 1 July 2019 2,103,202 711,117 2,402,674 9,450,670 14,667,663
Profit for the 6 month period to 31
December 2019 - - - 320,930 320,930
Dividend paid to company
shareholders - - - (1,051,623) (1,051,623)
Total comprehensive loss for the
period - - - (730,693) (730,693)
At 31 December 2019 2,103,202 711,117 2,402,674 8,719,977 13,936,970
----------- ------------------- ----------- ------------ -------------------
Loss for the 6 month period to 30
June 2020 - - - (1,428,784) (1,428,784)
Share of other comprehensive profit
of associate - - - 262,707 262,707
Total comprehensive loss for the
period - - - (1,166,077) (1,166,077)
At 30 June 2020 2,103,202 711,117 2,402,674 7,553,900 12,770,893
----------- ------------------- ----------- ------------ -------------------
Share Capital redemption Merger Retained Total
capital reserve reserve surplus/ shareholders
GBP (deficit) equity
GBP Unaudited GBP GBP GBP
Unaudited Unaudited Unaudited Unaudited
At 1 July 2020 2,103,202 711,117 2,402,674 7,553,900 12,770,893
Loss for the 6 month period to 31
December 2020 - - - (426,148) (426,148)
Dividend paid to company shareholders - - - - -
----------- ------------------- ----------- ----------- --------------
Total comprehensive loss for the period - - - (426,148) (426,148)
----------- ------------------- ----------- ----------- --------------
At 31 December 2020 2,103,202 711,117 2,402,674 7,127,752 12,344,745
----------- ------------------- ----------- ----------- --------------
Notes to the interim financial statements
1. Corporate information
CMG is a company incorporated in England and Wales and quoted on
the AIM market operated by London Stock Exchange plc.
2. Basis of preparation
These unaudited consolidated interim financial statements cover
the six month period from 1 July 2020 to 31 December 2020 including
the financial results of Sports Information Services (Holdings)
Limited ("SIS") for the six month period to 30 September 2020.
These consolidated interim financial statements of the Company
and its subsidiaries (the "Group") for the six months ended 31
December 2020 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 these
unaudited interim financial statements are consistent with the
accounting policies adopted in the Group's financial statements for
the year ended 30 June 2020 and will remain so for the year ending
30 June 2021.
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 2020, 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.
New financial reporting requirements
The Group has applied the following new financial reporting
standards for the first time in preparing its financial statements
for the year ended 30 June 2021. There has been no material impact
on the Group's financial statements
-- IFRS 16: Covid-19 Related Rent Concessions
Standards, interpretations and amendments to published standards
not yet effective
At the date of authorisation of these consolidated financial
statements, the IASB and IFRIC have issued the following standard
and interpretations which are effective for annual accounting
periods beginning on or after the stated effective date. This
standard is not effective for, and has not been applied in, the
preparation of these consolidated financial statements:
-- IFRS 17: Insurance Contracts (effective as of 1 January
2023)
The Directors anticipate that the adoption of this standard will
not have a material impact on the Group's financial statements in
the period of initial adoption.
3. Investment in associate
Total
Group
GBP
Cost
At 1 July 2020 12,474,980
Additions - share of loss (384,303)
Dividend received -
At 31 December 2020 12,090,677
-----------
The Group's interest in its associate, 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 Board has reviewed its valuation of the Company's investment
in SIS as at 31 December 2020 and has, in line with the Group's
accounting policies, reduced the value of the investment by the
amount of its share of losses for the period. As a result, the
investment is carried at a value equal to its 20.54% interest in
SIS's net assets of GBP58.85m.
Share of profit of associate* 30 September 31 December 31 December 30 June
2020 2020 2019 2020
SIS Total CMG share CMG share CMG share
GBP'000 GBP'000 GBP'000 GBP'000
Revenue:
SIS Betting Services 68,604 14,091 24,866 43,667
SIS LIVE services - - - -
Total revenue 68,604 14,091 24,866 43,667
Operating profit/(loss)
from ongoing operations (2,374) (488) 393 743
Net interest receivable
/ (payable) 63 13 54 155
Losses on business wind
down - - - (735)
Profit on disposal of fixed
asset - - - -
Profit/(loss) before tax (2,311) (475) 446 163
Taxation 440 90 (87) (38)
------------- ------------ ------------ ----------
Share of (loss)/income
after taxation (1,871) (384) 359 125
------------- ------------ ------------ ----------
Net income from associate (1,871) (384) 359 125
Other comprehensive income
Actuarial (loss) /gain - - - 404
Deferred tax - - - (141)
- - - 263
------------- ------------ ------------ ----------
Share of gross assets and
liabilities of associate
Gross assets 125,516 25,781 22,999 19,273
Gross liabilities (66,666) (13,693) (9,529) (6,801)
------------- ------------ ------------ ----------
Net equity 58,850 12,088 13,470 12,472
------------- ------------ ------------ ----------
* - The period covered by the associate's accounts is the six
months to 30 September 2020. The revenues have been stated
excluding internal revenues.
SIS continued to be involved in a litigation case brought by The
Racing Partnership ("TRP") and others against SIS's subsidiary,
Sports Information Services Limited ("SISL"), and others. SISL has
successfully defended two of the three claims and, following the
year end, both SISL and TRP have been granted permission by the
judge to appeal elements of the judgement. SISL have been ordered
by the judge to pay 20% of TRP's costs.
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 6 months 12 months
to to to 30 June
31 December 31 December 2020
2020 2019 GBP
GBP GBP
Basic and Diluted
(Loss)/earnings per share - pence (2.03p) 1.53p (5.27p)
(Loss)/ profit attributable to equity
shareholders (426,148) 320,930 (1,107,854)
Weighted average number of Shares
in issue 21,032,030 21,032,030 21,032,030
------------- ------------- ------------
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IR EQLFLFXLXBBZ
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