Last checked at 30 Sep 2009 07:00
CATALYST MEDIA GROUP PLC
Catalyst Media Group Plc("CMG") is pleased to announce its final results for the year ended 31 March 2009
CMG is a 20.54% shareholder in Satellite Information Services (Holdings) Ltd ("SIS") and the results below include its share of SIS profits as an equity accounted associate.
SIS' principal activities are:
1. a long-established business providing integrated television and information services delivered via satellite to licensed betting offices in the United Kingdom, Ireland and overseas( Racing Services);
2. the provision of satellite news-gathering and associated transmission services; and
3. the provision of outside broadcast television production units, including sound, support and communication.
Financial Highlights
Michael Rosenberg , the Chairman commented
"We are pleased to report that during the current financial year the SIS Group has been successful in strengthening its position in its marketplace after the dismissal of the legal dispute with its competitor Turf TV in August 2008 for which SIS was awarded substantial costs. Further to this SIS is now delivering not only its own televised services but also those of Turf TV into more than 75% of the UK market.
Since the year end SIS has now secured the future of its revenue stream from UK racing pictures by agreeing long-term media rights agreements with Arena Leisure and Northern Racing, the major operators in this sector, up to the end of 2016.
Following the acquisition by SIS of BBC's Outside broadcast business, it is now one of the most experienced television, production and outside broadcast service providers in Europe. It is also the largest provider of transportable satellite uplink services in the world, covering 100,000 hours of live events each year including Formula One, The Wimbledon Championships, UEFA Champions League football and European Tour Golf.
We have reduced CMG's borrowings and with a continued dividend policy from SIS we hope to be able to give consideration to the payment of dividends to shareholders by the end of 2010.
Chairman's Statement for the year ended 31 March 2009
During the year under review the Board of CMG has continued the process of reducing overheads with a view to focusing the Group's main activity on its holding of 20.54% in SIS.
CMG has equity accounted its share of the SIS profits and for the year ended 31 March 2009 the Group showed profit after tax of £2.4 million (2008: £1.0 million) representing an increase of approximately 246 per cent and EPS of 8.4p(2008: 3.4p). Net Assets at the balance sheet date were £25.3 million (2008: £22.9 million) representing a net asset per share value of approximately 90p(2008: 81p).
SIS
For the year ended 31 March 2009, SIS reported revenues of £193 million (2008: £159 million), profit from ongoing operations of £25.3 million (2008: £24.1 million) and profit before taxation of £21.3 million (2008: £26.1 million).
The principal activities of SIS are:
The SIS Group acquired the BBC Outside broadcast business on 1 April 2008 and is now one of the most experienced television, production and outside broadcast service providers in Europe. With a fleet of over 110 uplinks covering the spectrum of state-of-the-art uplink trucks, its proprietary automated Upod technology and its rapidly deployed, dismountable Drive Fly kits, it is now the largest provider of transportable satellite uplink services in the world. It covers 100,000 hours of live events worldwide each year, including Formula One, The Wimbledon Championships ,UEFA Champions League football and European Tour Golf and delivers approximately 80% of live news feeds across the UK.
During the year ended 31 March 2008, Turf TV, a competitor of SIS, launched a TV service providing coverage of horseracing to the UK and Ireland's Bookmakers. Turf TV's High Court claim against SIS was comprehensively dismissed in August 2008 and SIS was awarded significant costs.
The SIS Group has subsequently strengthened its position and is delivering not only its own televised services, but also those of Turf TV into more than 75% of the UK market. The SIS Group intends to stay ahead of the competition by offering visual and data services that are of the highest quality and competitively priced.
On 22 July 2009 it was announced that SIS had signed a long term agreement with Arena Leisure plc ("Arena"), the UK's leading operator of horseracing fixtures, which owns and operates seven race courses in the UK. The rights agreement ensures that SIS will continue to provide horse racing images from Doncaster, Royal Windsor, Folkestone, Lingfield Park, Southwell, Wolverhampton and Worcester in its services to Licensed Betting Offices until the end of 2016. The tracks include all weather and floodlit courses that ensure racing is available to bookmakers all year round and during the increasingly important evening trading period.
Furthermore SIS has signed a long term agreement with Northern Racing Ltd an operator of ten racecourses in the UK including Chepstow and Fontwell Park. The agreement now runs to 2017.
OTHER ACTIVITIES
In addition to focussing on its investment in SIS, CMG has also continued the development of the two on line games, namely Tringo and Spoof, that have been referred to in previous statements. CMG are in active discussions to bring these games to market in the near term.
In April 2008, Newsplayer International Limited was sold for £225,000. This completed the exit from previous businesses owned by the Group save for the development of the games referred to above.
SIS DIVIDEND POLICY
During the year ended 31 March 2009, SIS paid a dividend of £15 million to shareholders and has a policy in place to pay dividends of not less than 50% of retained profits subject only to cash flow needs. Assuming that dividends continue to be distributed by SIS it is anticipated that borrowings within CMG Group will continue to reduce which will enable the Board to give consideration to the payment of dividends by the end of 2010.
Conclusion
SIS continues to trade profitably in its core businesses with long term income secured. In addition the acquisition of the 'BBC Outside Broadcast' business has added significantly to the scale of the SISLINK business.
The online games of Tringo and Spoof have now reached the stage where they can be commercially exploited and active discussions are underway with a view to seeking to bring them to market in the near term
Meanwhile the overheads of CMG continue to be reduced and, excluding financing costs related to the SIS investment and the retirement of older debt and other exceptional costs, were £324,651 for the year (2008: £642,703). These are anticipated to be further reduced in the year ending 31 March 2010.
Michael Rosenberg OBE
Chairman
Enquiries:
Melvin Lawson
Catalyst Media Group plc
020 7637 8412
James Harris/Angela Peace
Strand Partners Limited
020 7409 3494
Consolidated income statement
| 2009 | 2008 | |
| £ | £ | |
| Revenue | 92,392 | 130,337 |
| Cost of sales | (2,990) | - |
| Gross profit | 89,402 | 130,337 |
| Administrative expenses | (324,651) | (642,703) |
| Loss on sale of subsidiary | - | (21,561) |
| Profit on sale of investment | - | - |
| Impairment of development costs | (66,447) | (129,254) |
| Total administrative expenses | (391,098) | (793,518) |
| Operating loss | (301,696) | (663,181) |
| Financial income | 32,322 | 64,646 |
| Financial costs | (906,563) | (1,809,778) |
| Net financial costs | (874,241) | (1,745,132) |
| Share of profit from equity-accounted associate | 3,114,275 | 2,814,023 |
| Profit/(loss) before taxation | 1,938,338 | 405,710 |
| Taxation | 310,000 | 687,000 |
| Profit/(loss) for the year from continuing operations | 2,248,338 | 1,092,710 |
| Profit/(loss) for the year from discontinued operations | 217,378 | (132,634) |
| Profit/(loss) for the year | 2,465,716 | 960,076 |
| Loss for the period attributable to minority interests | - | - |
| Profit/(loss) attributable to equity holders of the Company | 2,465,716 | 960,076 |
| Earnings/(loss) per share: | ||
| Basic | 8.8p | 3.4p |
| Diluted (As restated 2008) | 8.8p | 3.4p |
| Earnings /(loss) per share from continuing operations: | ||
| Basic | 8.0p | 3.9p |
| Diluted (As restated 2008) | 8.0p | 3.9p |
Consolidated balance sheet
| 2009 £ | 2008 £ | |
| Assets | ||
| Non-current assets | ||
| Intangible assets | - | 66,447 |
| Property, plant and equipment | 278 | 758 |
| Investment in associate | 28,942,897 | 28,909,152 |
| 28,943,175 | 28,976,357 | |
| Current assets | ||
| Trade and other receivables | 232,319 | 225,667 |
| Corporation tax receivable | 118,390 | 300,523 |
| Cash and cash equivalents | 72,951 | 1,209,088 |
| 423,660 | 1,735,278 | |
| Total assets | 29,366,835 | 30,711,635 |
| Equity and liabilities | ||
| Capital and reserves attributable to equity holders of the parent | ||
| Share capital | 9,243,197 | 9,243,197 |
| Share premium | 38,904,450 | 38,904,450 |
| Merger reserve | 2,402,674 | 2,402,674 |
| Retained deficit | (25,145,127) | (27,610,843) |
| Total equity | 25,405,194 | 22,939,478 |
| Non-current liabilities | ||
| Interest-bearing loans and borrowings | 3,763,899 | 7,312,689 |
| Current liabilities | ||
| Trade and other payables | 197,742 | 459,468 |
| 197,742 | 459,468 | |
| Total equity and liabilities | 29,366,835 | 30,711,635 |
Consolidated cash flow statement
| 2009 £ | 2008 £ | |
| Cash flow from operating activities | ||
| Profit/(loss) before taxation including discontinued operations | 2,465,716 | 273,076 |
| Adjustments for: | ||
| Depreciation, amortisation and impairment | 66,927 | 168,522 |
| Effect of foreign currency translation movements | - | - |
| Share of profit from associate | (3,114,275) | (2,814,023) |
| Loss/(profit) from sale of subsidiary and interest in associate | (217,378) | 61,566 |
| Loss on sale of plant and equipment | - | 113 |
| Finance income | (32,322) | (64,646) |
| Finance expense | 1,010,499 | 1,809,778 |
| Corporation taxes recovered | 310,000 | 618,887 |
| Net cash flow from operating activities before changes in working capital | 489,167 | 53,273 |
| Decrease/(increase) in trade and other receivables | (134,519) | 256,592 |
| Increase/(decrease) in trade and other payables | 82,751 | (1,442,966) |
| Net cash flow used in operating activities | 437,399 | (1,133,101) |
| Investing activities | ||
| Payments for property, plant and equipment | - | (669) |
| Dividend received | 3,080,530 | 2,053,685 |
| Interest received | 32,322 | 64,646 |
| Sale of subsidiary | - | 93,248 |
| Net cash flow from investing activities | 3,112,852 | 2,210,910 |
| Financing activities | ||
| Issue of ordinary shares | - | 10,500,000 |
| Cost of share issue | - | (391,837) |
| Proceeds from long-term borrowings | 3,763,899 | 7,312,689 |
| Repayment of long-term borrowings | (7,312,689) | (17,465,000) |
| Interest paid | (1,137,598) | (1,773,159) |
| Net cash flow from financing activities | (4,686,388) | (1,817,307) |
| Net (decrease)/increase in cash and cash equivalents in the year | (1,136,137) | (739,498) |
| Cash and cash equivalents at the beginning of the year | 1,209,088 | 1,948,586 |
| Cash and cash equivalents at the end of the year | 72,951 | 1,209,088 |
Notes to the financial statements
1. Investment in associate
| Share of net assets | Fair Value of Intangibles | Total | |
| Group | Group | Group | |
| £ | £ | £ | |
| Cost | |||
| At 1 April 2008 | 7,731,111 | 21,178,041 | 28,909,152 |
| Additions - share of profit | 3,114,275 | - | 3,114,275 |
| Amortisation charged in year | - | - | - |
| Dividend received | (3,080,530) | - | (3,080,530) |
| At 31 March 2009 | 7,764,856 | 21,178,041 | 28,942,897 |
The Group's interest in the associate, Satellite Information Services (Holdings) Limited, a company incorporated in Great Britain, (SIS) 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. This right has been exercised since acquisition. Alternateport Limited is a wholly owned subsidiary of Catalyst Media Holdings Limited (CMHL) a wholly-owned subsidiary of the Company. The intangible assets recognised upon acquisition of the Group's interest represent customer contracts and relationships. These are subject to an annual impairment review.
| Share of profit of associate | 2009 SIS Total £'000 | 2009 CMG share £'000 | 2008 CMG Share £'000 |
| Revenue: | |||
| UK racing | 113,842 | 23,383 | 25,029 |
| SIS live services | 55,653 | 11,431 | 2,860 |
| Other services | 23,442 | 4,815 | 4,764 |
| Total revenue | 192,937 | 39,629 | 32,653 |
| Operating profit from ongoing operations | 25,346 | 5,206 | 4,956 |
| Operating profit from acquisitions | (3,623) | (744) | - |
| 21,723 | 4,462 | 4,956 | |
| Net interest receivable | - | - | 401 |
| Net interest payable | (384) | (79) | - |
| Profit before tax | 21,339 | 4,383 | 5,357 |
| Taxation | (6,233) | (1,280) | (1,673) |
| Share of profit after taxation | 15,106 | 3,103 | 3,684 |
| Share of other reserve movements | 56 | 11 | (23) |
| Retained profit transferred to reserves | 15,162 | 3,114 | 3,661 |
| Amortisation of fair-value of intangible asset | - | (847) | |
| Net income from associate | 3,114 | 2,814 | |
| Share of net assets and liabilities of associate | |||
| Net assets | 97,683 | 20,064 | 13,998 |
| Net liabilities | (59,437) | (12,208) | (6,175) |
| Net equity | 38,246 | 7,856 | 7,823 |
| Other adjustments | - | (91) | (92) |
| 38,246 | 7,765 | 7,731 | |
2. Revenue
An analysis of the Group's revenue and income is as follows:
| 2009 £ | 2008 £ | ||
| Business administrative services | 92,392 | 130,337 | |
| Leisure and media - discontinued | - | 34,202 | |
| Total revenue | 92,392 | 164,539 |
3. Segmental analysis
A segment is a distinguishable component of the Group that is engaged in providing products or services in a particular business sector (business segment) or in providing products or services in a particular economic environment (geographic segment), which is subject to risks and rewards that are different in those other segments. The Group operated in the year in one segment, business administrative services and in one principal geographic area - the United Kingdom (UK). In April 2007 the Group sold its operations in the United States of America. Royalties were received from Global Media Services Inc in the year representing deferred consideration arising from the disposal of the Group's interest in that business in 2006. Management considers that this revenue arises from UK managed operations and is included within revenue arising from leisure and media activities.
The Group also holds a strategic investment in Satellite Information Services (Holdings) Limited.
| Year ended 31 March 2009 | SIS
| Business administrative services | Unallocated activities | Total | |
| £ | £ | £ | £ | ||
| Revenue | - | 92,392 | - | 92,392 | |
| Segment result | - | (235,249) | - | (235,249) | |
| Impairment charges | - | - | (66,447) | (66,447) | |
| Finance income | - | - | 32,322 | 32,322 | |
| Finance costs | - | - | (906,563) | (906,563) | |
| Share of profit of associate | 3,114,275 | - | - | 3,114,275 | |
| Discontinued operations | - | 217,378 | - | 217,378 | |
| Profit before tax | 3,114,275 | (17,871) | (940,688) | 2,155,716 | |
| Tax | - | - | 310,000 | 310,000 | |
| Profit for the year | 3,114,275 | (17,871) | (630,688) | 2,465,716 | |
| Segment assets | 28,942,897 | 423,938 | - | 29,366,835 | |
| Segment liabilities: | |||||
| Continuing operations | - | (3,961,641) | - | (3,961,641) | |
| Discontinued operations | - | - | - | ||
| Total liabilities | - | (3,961,641) | - | (3,961,641) | |
| Net assets | 28,942,897 | (3,537,703) | - | 25,405,194 |
Other segmental information
All capital expenditure, depreciation and amortisation and impairment charges in 2009 related to the Business Administrative Services segment.
| Year ended 31 March 2008 | SIS
| Leisure and Media | Business administrative services | Unallocated activities | Total |
| £ | £ | £ | £ | £ | |
| Revenue | - | - | 130,337 | - | 130,337 |
| Segment result | - | - | (499,279) | - | (449,279) |
| Impairment charges | (163,902) | (163,902) | |||
| Finance income | - | - | - | 64,646 | 64,646 |
| Finance costs | - | - | - | (1,809,778) | (1,809,778) |
| Share of profit of associate | 2,814,023 | - | - | 2,814,023 | |
| Discontinued operations | - | (132,634) | - | (132,634) | |
| Profit before tax | 2,814,023 | (631,913) | (1,909,034) | 273,076 | |
| Tax | - | - | 687,000 | 687,000 | |
| Profit for the year | 2,814,023 | (631,913) | (1,222,034) | 960,076 | |
| Segment assets | 28,909,152 | 1,802,484 | - | 30,711,636 | |
| Segment liabilities: | |||||
| Continuing operations | - | (7,730,853) | - | (7,730,853) | |
| Discontinued operations | - | (41,305) | - | - | (41,305) |
| Total liabilities | - | (41,305) | (7,730,853) | - | (7,772,158) |
| Net assets | 28,909,152 | (41,305) | (5,928,369) | - | 22,939,478 |
Other segmental information
All capital expenditure, depreciation and amortisation and impairment charges in 2008 related to the Business Administrative Services segment.
4. Operating loss (Group):
| 2009 £ | 2008 £ | |
| Operating profit/ (loss) for the year is stated after charging/(crediting): | ||
| Depreciation of plant and equipment | 480 | 4,620 |
| Staff costs | 36,460 | 239,639 |
| Impairment of goodwill | - | 104,744 |
| Foreign exchange (gains)/losses | (21,376) | 32,153 |
| Impairment of intangible assets | 66,447 | 163,902 |
| Auditors remuneration | 19,184 | 79,300 |
| Operating lease rentals | 50,000 | 50,000 |
5. Earnings/(loss) per share
The calculation of the basic earnings/(loss) per share is based upon the net profit after tax and minority interests attributable to ordinary shareholders of £2,465,716 (2008: £906,076) and a weighted average number of shares in issue for the year of 28,143,190 (2008: 27,971,066).
The calculation of the basic earnings/(loss) per share arising in respect of continuing operations is based upon the net profit after tax and minority interests attributable to ordinary shareholders of £2,248,338 (2008: £1,092,710) and a weighted average number of shares in issue for the year of 28,143,197 (2008: 27,971,066).
The calculation of the basic loss per share arising from discontinued operations is based upon the net profit after tax and minority interests attributable to ordinary shareholders of £217,378 (2008: loss of £132,634) and a weighted average number of shares in issue for the year of 28,143,197 (2008: 27,971,066).
Diluted earnings per share
The calculation of the diluted earnings/(loss) per share arising is based upon the net profit after tax and minority interests attributable to ordinary shareholders of £2,465,716 (2008: £960,076) and a weighted average number of shares in issue for the year of 28,143,197 (2008: 27,971,066). The share warrants are deemed to have an anti-dilutive effect.
The calculation of the basic earnings/(loss) per share arising in respect on continuing operations is based upon the net profit after tax and minority interests attributable to ordinary shareholders of £2,248,338 (2008: £1,092,710) and a weighted average number of shares in issue for the year of 28,143,197 (2008: 27,971,066).
The comparative for the diluted earning per share for the year ended 31 March 2008 has been restated as the warrants in issue were deemed to have an anti-dilutive effect.
Reconciliation of shares in issue:
| Year ended 31 March | Year ended 31 March | |
| 2009 | 2008 | |
| As Restated | ||
| Group | Group | |
| Number | Number | |
| Weighted average number of shares in issue | 28,143,197 | 27,971,066 |
| 28,143,197 | 27,971,066 | |
6. Basis of preparation and significant accounting policies
The consolidated financial statements of Catalyst Media Group plc have been prepared in accordance with accepted International Financial Reporting Standards (IFRSs), International Accounting Standards (IAS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations (collectively "IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.
Catalyst Media Group Plc is a publicly limited company registered in England and Wales where it is domiciled for tax purposes.
The financial statements are prepared under the historical cost convention.
7. Annual Report
The Annual Report for the year ended 31 March 2009 will be posted to shareholders today and will also be available from the Company's website www.cmg-plc.com. The Annual General Meeting of the Company will be held at the offices of Lewis Silkin, 5 Chancery Lane, Clifford's Inn, London EC4A 1BL on Monday 26th October 2009 at 11am.