Catalyst Media Regulatory News (CMX)

30 Nov 2006 07:01

Catalyst Media Group PLC30 November 2006 30 November 2006 CATALYST MEDIA GROUP PLC ("CMG" or the "Company") INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006 Catalyst Media Group plc, the media company, today announces its interim resultsfor the 6 months ended 30 September 2006. OVERVIEW CMG is a media company that manages and distributes high quality audio-visualcontent using interactive digital technology. Through its subsidiary andassociated companies, CMG provides services to support clients' onlinestrategies and is a partner to media companies in the digitalisation anddistribution of broadcast content. CMG also holds its own rights, specialisingin historic entertainment and educational content, generating revenues from thelicensing of content globally to third parties. CMG also owns a 22.2% stake in Satellite Information Services (Holdings) Limited("SIS"), the leading producer of video, audio and data to over 9,700 licensedbetting offices in the UK and Ireland. SIS is also the leading satellite uplinkcontractor in Europe, providing link units to a variety of clients includingtelevision news companies and sports event organisers. OPERATIONAL HIGHLIGHTS In September 2006, the Company exercised its call option to acquire the 20%interest not held by it in its subsidiary Catalyst Media Holdings Limited("CMHL") from Eureka Interactive Fund Ltd ("Eureka"), for a cash considerationof £5.5 million. CMHL is now a wholly owned subsidiary of CMG. As a result ofthis transaction CMG now owns a 22.2% stake in SIS and will therefore receive22.2% of future dividends paid by SIS. The Board are confident that the enhancedinterest will strengthen our earnings and net asset base. In September 2006 CMG also repaid the balance of £10.64 million to redeem theDeep Discount Bonds held by Eureka, which were issued to Eureka at the time ofCMG's acquisition of an interest in SIS. In order to finance these transactionsand the associated costs, CMG has drawn down £17.3 million of an £18.625 millionfacility that has been arranged with Investec Bank (UK) Limited ("Investec"), onterms which are more favourable than those provided by Eureka. SIS continues to perform ahead of expectations and the Board believes that asubstantial dividend is to be paid in the first quarter of 2007, which, if paid,would be applied to the repayment of a significant proportion of the Investecfacility. For the financial year ended 31 March 2006, SIS generated turnover of£127.6 million (2005: £117.7 million) and profit after tax of £14.6 million(2005: £11.8 million). In June 2006, the Company announced its intention to launch an on-line gamingplatform complete with a suite of fixed odds and exclusive head to head games.CMG acquired an exclusive five year licence from YooMedia plc ("YooMedia") forthe head to head version of Tringo and acquired the entire issued share capitalof Spoof.com Limited which has developed a head to head version of thetraditional pub game, "Spoof". YooMedia are developing the technology platformand integrating the games which will enable players to compete across mobilephones, television and computers. The platform is expected to be launched in thesecond quarter of 2007. FINANCIAL RESULTS The Company recorded a loss for the six month period ended 30 September 2006 of£0.5 million (compared to a loss of £1.4 million for the first six months to 30April 2005 of the previous 17 month accounting period to 31 March 2006). Thisreflects the Board's continued commitment to reduce costs and de-risk thebusiness following the acquisition of a stake in SIS in September 2005. There isno contribution in these results from the investment in SIS as no dividend wasreceived during the period. SIS has, in the recent past, had a policy ofdeclaring a dividend every four years. In line with this policy, the Boardbelieves a significant dividend from SIS will be paid in the first quarter of2007 which, if paid will have a direct impact on profits and earnings. Nodividend has been paid or is proposed by the Company. OUTLOOK The acquisition of the remaining stake in SIS is a very positive development forthe Group enhancing both asset value and dividend earnings potential. CMG iswell placed to seek opportunities that will leverage our existing operatingbusinesses and drive value for shareholders and is now actively examining waysto achieve this objective. Paul Duffen Chief Executive Officer Enquiries:Paul Duffen, Chief ExecutiveCatalyst Media Group plc+44 20 7927 6699 Results for the 6 months ended 30 September 2006 Consolidated profit and loss accountFor the 6 months ended 30 September 2006 Note 6 months ended 5 months ended 17 months ended 30-Sep-06 31-Mar-06 31-Mar-06 (Unaudited) (Unaudited) (Audited) £ £ £TurnoverContinuingoperations 1 138,949 166,217 391,003Discontinuedoperations - 74,583 2,488,937 -------- -------- -------- 138,949 240,800 2,879,940Cost of sales (11,695) (60,643) (2,237,219) -------- -------- --------Gross profit 127,254 180,157 642,721Operating expenses:- goodwill impairment - - (2,457,021)- other (661,558) (73,353) (4,238,600)Dividend income - - 2,205,403 -------- ------- --------- Operating profit/(loss) 2Continuingoperations (534,304) (1,406,367) (2,331,041)Discontinuedoperations - 1,513,171 (1,516,456) -------- -------- -------- (534,304) 106,804 (3,847,497)Loss on disposalof subsidiary - (310,519) (1,946,513)Interestreceivable andsimilar income 3,112 1,619,488 99,704Interest payable (493,771) (427,827) (710,334) -------- -------- --------Profit/(loss) onordinaryactivities beforetaxation (1,024,963) 987,946 (6,404,640)Taxation 329,500 547,250 699,249 -------- -------- --------Profit/(loss) onordinaryactivities aftertaxation (695,463) 1,535,196 (5,705,391) -------- -------- --------Minority Interest 198,371 (150,957) (219,750) -------- -------- --------Profit/(loss) forthe period (497,092) 1,384,239 (5,925,141) -------- -------- -------- Note 3:Basic and diluted loss per ordinary share (0.07p) 0.28p (1.21p)Basic and diluted loss per ordinary share:continuing operations (0.07p) (0.45p) (0.94p)Basic and diluted loss per ordinary share:discontinued operations - 0.74p (0.27p) Consolidated Statement of Total Recognised Gains and LossesFor the six months ended 30 September 2006 6 months ended 17 months ended 30 Sept 2006 31 March 2006 £ £ Loss for the period (497,092) (5,925,141)Currency translation difference 32,848 (69,746) -------- --------Total recognised lossfor the period (464,244) (5,994,887) ======== ======== Consolidated Balance SheetAs at 30 September 2006 Note At At 30-Sep 31-Mar 2006 2006 £ £ -------- --------Fixed assetsIntangible assets 4 10,072,760 3,067,352Tangible assets 68,636 89,367Investments 22,240,000 22,193,670 -------- -------- 32,381,396 25,350,389Current assetsDebtors 5 414,908 472,438Cash at bank 773,636 634,250 -------- -------- 1,188,544 1,106,688 Creditors: amounts falling due within oneyear 6 (1,732,185) (4,022,475) -------- --------Net current liabilities (543,641) (2,915,787) -------- --------Total assets less current liabilities 31,837,755 22,434,602 Creditors: amounts falling due after morethan one year 7 (17,305,000) (9,049,491) -------- --------Net assets 14,532,755 13,385,111 ======== ======== Capital and reservesCalled up share capital 7,143,196 6,272,361Share premium account 30,896,287 27,928,193Merger reserve 2,402,674 2,402,674Profit and loss account (25,909,402) (25,466,537) -------- --------Equity shareholders' funds 9 14,532,755 11,136,691Minority interest - 2,248,420 -------- -------- 14,532,755 13,385,111 ======== ======== Consolidated Cash Flow StatementFor the six months ended 30 September 2006 Note 6 months ended 17 months ended 30 Sept 2006 31 March 2006 £ £ Net cashinflow/(outflow) fromoperating activities 10 190,240 (2,236,529) Returns oninvestment andservicing of finance 11 (490,659) (610,630) Taxation 329,500 334,249 Capital expenditure 11 (616) (20,482) Acquisitions 11 (5,979,695) (23,115,000) --------- --------Cash outflowbefore financing (5,951,230) (25,648,392) Financing 11 6,090,616 25,855,482 --------- --------Increase in cash 12 139,386 207,090 ========= ======== Notes to the Accounts 1. Accounting policies and additional information These interim results for the six month period ended 30 September 2006 do notconstitute statutory accounts within the meaning of Section 240 of the CompaniesAct 1985 and have been neither reviewed nor audited by our auditors. Thefinancial information for the 17 month period ended 31 March 2006 is derivedfrom the statutory accounts for that period and have been delivered to theRegistrar and included the auditors' report which was unqualified and did notcontain a statement either under section 237(2) or 237(3) of the Companies Act1985. The accounting policies are consistent with those applied in the preparation ofthe statutory accounts for the 17 month period ended 31 March 2006. Basis of accounting The financial statements are prepared under the historical cost convention. Basis of consolidation The group financial statements consolidate the financial statements of CatalystMedia Group plc and all of its subsidiaries at the period end. Newsplayer Limited has been consolidated using acquisition accounting principlesbut the difference between the nominal value of the shares issued by CatalystMedia Group plc in exchange for shares in Newsplayer Limited and the nominalvalue of the shares held in Newsplayer Limited has been transferred to a mergerreserve. The interest in Satellite Information Services (Holdings) Limited isheld as a fixed asset investment reflecting the underlying nature and purpose ofthe stake. All other subsidiaries have been consolidated using acquisitionaccounting principles. Revenue recognition and turnover Revenue is recognised under an exchange transaction with a customer, when, andto the extent that, the group obtains the right to consideration in exchange forits performance. Turnover represents amounts derived from the provision of services which fallwithin the group's ordinary activities after deduction of trade discounts andvalue added tax. Those services include internet web design, televisionprogramme editing and production, website administration and revenues fromstreamed advertising. 2. Operating loss on ordinary activities before taxation 6 months ended 17 months ended 30 Sept 2006 31 March 2006 £ £Operating loss is stated after charging:Amortisation ofgoodwill 9,783 677,334Depreciation 12,939 185,301 -------- --------- 3. Loss per share The calculation of basic loss per share has been based on the loss aftertaxation and minority interest for the period 6 months to 30 September 2006 of£497,092 (17 months to 31 March 2006; £5,925,141) and the weighted averagenumber of ordinary shares in issue during the period of 686,217,802 (17 monthsto 31 March 2006; 488,640,167). The diluted loss per share calculation is identical to that used for basicearnings per share as the exercise of share options would have the effect ofreducing the loss per ordinary share and therefore is not dilutive under theterms of the Financial Reports Standard 22 "Earnings per Share". 4. Intangible fixed assets Development Licences Goodwill Intellectual Total Expenditure Property £ £ £ £ £CostAt 1 April 2006 94,951 - 8,267,498 4,213,834 12,576,283Additions 1,212,845 950,000 4,860,354 - 7,023,199Disposals - - - - 0Foreignexchangeadjustments - - (14,449) - (14,449) -------- ------- ------- ------- --------At 31 March2006 1,307,796 950,000 13,113,403 4,213,834 19,585,033 ======== ======= ======= ======= ======== AmortisationAt 1 April 2006 (94,951) - (5,200,146) (4,213,834) (9,508,931)Charge for theperiod - - (9,783) - (9,783)Disposals - - - - 0Foreignexchangeadjustments - - 6,441 - 6,441 -------- ------- -------- -------- --------At 31 March2006 (94,951) 0 (5,203,488) (4,213,834) (9,512,273) ======== ======= ======== ======== ======== Net book valueAt 30 Sept 2006 1,212,845 950,000 7,909,915 0 10,072,760 ======== ======= ======== ======== ======== At 31 March2006 0 0 3,067,352 0 3,067,352 ======== ======= ======== ======== ======== Analysis of Acquisition During the period, Catalyst Media Group plc purchased the remaining 20% of itssubsidiary Catalyst Media Holdings Limited ("CMHL") for £5.5 million , withcosts total consideration was £5.97 million. The group also acquired the entireissued share capital of Spoof.com Limited for total consideration of £1.16million. The fair value and book value of these company's assets were; At 30 Sept At 30 Sept At 30 Sept 2006 2006 2006 £ £ £ CMHL Spoof.com Total LimitedFixed Assets 4,623,000 150,287 4,773,287Current Assets - 42,871 42,871Creditors (2,548,000) - (2,548,000) -------- -------- --------Net Assets 2,075,000 193,158 2,268,158Goodwill arising onconsideration 3,892,137 968,217 4,860,354 -------- -------- --------Consideration 5,967,137 1,161,375 7,128,512 ======== ======== ======== 5. Debtors: At 30 Sept At 31 March 2006 2006 £ £ Trade debtors 99,316 112,547Other debtors (including £116,717 due ingreater than one year) 209,177 201,478Prepayments and accrued income 106,415 158,413 --------- --------- 414,908 472,438 ========= ========= 6. Creditors: amounts falling due within one year At 30 Sept At 31 March 2006 2006 £ £ Bank loan and overdraft 47,457 121,028Other loans (including convertible loan note) 390,000 1,640,612Obligations under finance leases 116,562 285,134Trade creditors 363,294 296,980Other taxation and social security 93,198 61,799Other creditors 338,522 516,390Accruals and deferred income 383,152 1,100,532 --------- --------- 1,732,185 4,022,475 ========= ========= 7. Creditors: amounts falling due after more than one year At 30 Sept At 31 March 2006 2006 £ £Loan 17,305,000 -Deep Discount bonds - 9,049,491 --------- --------- 17,305,000 9,049,491 ========= ========= 8.Changes in share capital In May 2006, 437,500 new 1p ordinary shares were issued to Paradine ProductionsLimited, a company owned by Sir David Frost OBE at 4p per share, 3,100,264 new1p ordinary shares at 3.39p per share and 97,222 new 1p ordinary shares at 18pper share. In June 2006, 13,751,375 new 1p ordinary shares were issued at 4 pence per shareto settle the sum of £1,085,612 payable to J. Servidio and S. Domenico under theBetelgeuse Stock Purchase Agreement resulting in a cash saving of £535,557. In July and September 2006, 32,777,782 and 11,666,664 respectively, new 1pordinary shares were issued at 4.5 pence per share to YooMedia plc. In August 2006, 25,252,776 new 1p ordinary shares were issued at 4.5 pence pershare for the acquisition of Spoof.com Limited. At 30 September 2006, there were 8,245,083 (2004: 9,164,000) unapproved shareoptions under the Executive Share Option Scheme and 27,385,869 EMI shareoptions. There were 18 million warrants in issue, exercisable at any time up toand including 27 May 2010 and further warrants in issue for 1 per cent of theissued share capital of the company at the time of exercise of the warrantexercisable at any time up to and including 4 August 2010. 9. Reconciliation of movement in shareholders' funds 6 months ended 17 months ended 30 Sept 2006 31 March 2006 £ £ Loss for the period (497,092) (5,925,141)Issue of shares 870,835 4,867,262Premium on issue of shares 2,968,094 12,624,510Finalisation of deferred consideration - (476,000)Minority Interest 21,379 -Currency translation difference 32,848 (69,746) -------- ---------Net increase inshareholders'funds 3,396,064 11,020,885Opening shareholders' funds 11,136,691 115,806 -------- ---------Closing shareholders'funds 14,532,755 11,136,691 ======== ========= 10.Reconciliation of operating loss to operating cash flows 6 months ended 17 months ended 30 Sept 2006 31 March 2006 £ £ Operating loss (534,353) (3,847,497)Impairment of goodwill - 2,457,021Depreciation 12,939 185,301Amortisation of goodwill onacquisition 9,783 677,334Decrease in debtors 75,401 1,314,051Increase/(decrease) in creditors 577,158 (2,919,925)Exchange adjustment 49,312 (102,814) --------- ---------Net cash inflow/(outflow)from operating activities 190,240 (2,236,529) ========= ========= 11. Analysis of cash flows for headings netted in the cash flow statement At 30 Sept At 31 March 2006 2006 £ £Returns on investments and servicing of financeInterest paid (493,771) (692,406)Interest paid on finance leases - (17,928)Interest received 3,112 99,704 --------- --------- (490,659) (610,630) --------- ---------Capital expenditure and financial investmentPurchase of intangible assets - (161,446)Purchase of tangible assets (616) (30,467)Proceeds on the disposal of fixed assets - 171,431 --------- --------- (616) (20,482) --------- ---------FinancingCapital element of finance lease payments (168,572) (28,141)Repayment of bank loan (73,571) (690,106)Repayment of loan notes (10,972,241) (2,700,509)Issue of ordinary share capital - 17,068,272Issue of loans 17,305,000 12,205,966 --------- --------- 6,090,616 25,855,482 --------- --------AcquisitionPurchase of business (5,979,695) (23,115,000) --------- --------- (5,979,695) (23,115,000) --------- --------- 12. Reconciliation of net cash flow to movement in net debt At 30 Sept At 31 March 2006 2006 £ £ Increase in cash in the period 139,386 207,090Repayment of loan notes 10,465,103 -Repayment of bank loan 68,578 699,301Repayment of finance leases 113,977 44,161Disposal of finance leases 15,153 -Increase in loans (17,305,000) (9,444,491)Exchange adjustments 44,439 (86,182) --------- ---------Movement in debt in the period (6,455,954) (8,580,121)Net debt at start of period (10,462,015) (1,881,894) --------- ---------Net debt at end of period (16,920,379) (10,462,015) ========= ========= 13. Analysis of net debt At 31 March Cash flow Decrease in Exchange At 30 Sept 2006 Debt Movement 2006 £ £ £ £ £Cash at bank 634,250 139,386 - - 773,636Bank loan (121,028) 68,578 - 4,998 (47,452)Convertibleloan note (160,000) - - - (160,000)Finance (285,134) 113,977 15,153 39,441 (116,563)leasesLoan notes (1,085,612) - 1,085,612 - -Other Loans (9,444,491) (7,925,509) - - (17,370,000) --------- --------- --------- --------- --------- (10,462,015) (7,601,158) 1,100,765 44,439 (16,920,379) ========= ========= ========= ========= ========= 14. Post balance sheet events There have been no post balance events. This Interim Report was approved by the Directors on 29 November 2006. The report will be sent to all registered shareholders and will be available tomembers of the public from the Company's registered office at Portland House, 4Great Portland Street, London W1W 8QJ and online from the Company's corporatewebsite at www.CMG-plc.com. 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