CTNA.L Regulatory News (CTNA)

28 June 2019

Ultimate Sports Group PLC

("USG" or the "Company" or the "Group")

Final Results and Notice of AGM

Ultimate Sports Group PLC, the AIM listed investment vehicle, is pleased to announce its results for the year ended 31 December 2018. The Company also gives notice that its Annual General Meeting ('AGM') will be held at the Hellenic Centre 16/18 Paddington Street, London W1U 5AS on 24 July 2019 at 11.30am. Copies of the Notice of AGM together with the Annual Report for the year ended 31 December 2018 will be posted to shareholders and be available to view on the Company's website www.ultimatesportsgroup.me.

The financial information set out in this announcement does not constitute statutory accounts as defined in the Companies Act 2006.

The Group Statement of Comprehensive Income, Group Statement of Financial Position, Group Statement of Changes in Equity, Group Statement of Cash Flows and associated notes have been extracted from the Group's 2018 statutory financial statements upon which the auditor's opinion is unqualified and does not include any statement under section 498 of the Companies Act 2006.

Those financial statements will be delivered to the Registrar of Companies following the release of this announcement.

This announcement and the annual report and accounts are available on the Company's website www.ultimatesportsgroup.me . A copy of the report and accounts will be sent to shareholders who have elected to receive a printed copy with details of the annual general meeting in due course.

Chairman's Statement and Chief Executive's Review

We are reporting a total comprehensive loss from continuing activities of £144,485 before tax against a total comprehensive loss before tax and discontinued activities for the prior year of £780,192. There were no discontinued activities in the year ended 31 December 2018, whilst in the prior year there was a profit from discontinued activities after tax of £53,567. USG's consolidated cash balances as at 31 December 2018 were £535,329 (2017- £129,611) The directors are not recommending the payment of a dividend.

FUNDRAISE

As set out in the circular to shareholders issued in February 2018, the Company raised £537,500 (before legal and other professional expenses) by the issue of 10,750,000 new shares at 5p per share following approval obtained from shareholders at the General Meeting in March 2018.

SUBSTANTIAL SHAREHOLDERS

The Company welcomes the involvement of Mr Richard Bernstein as a strategic shareholder following on from the fundraising concluded in March 2018. The Company also entered into an agreement with Mr Bernstein pursuant to which he will seek to introduce the Company to potential investment or acquisition opportunities. To date Mr Bernstein has carried out and continues to undertake initial due diligence on potential introductions at his own expense with follow up work undertaken by the Company.

PANTHEON LEISURE PLC ("PANTHEON ")

USG holds 85.87% of the issued share capital of Pantheon which in turn owns 100% of the operating business of a Sport and Leisure division which trades as Sport in Schools Ltd and The Elms Sport in Schools ("ESS").

Pantheon as a group made a profit of £32,817 for the year ended 31 December 2018 (2017 (profit - £2,950).

SPORT IN SCHOOLS LIMITED

On a turnover of £1,546,733 (2017- £1,368,710) ESS contributed a much- improved divisional profit of £100,754 (2017 - £28,255). The improved result is a combination of increased turnover by virtue of additional schools engaged, increased income from existing schools due to an increase in government subsidies, improved weather conditions resulting in less working days lost in 2018 and tighter control of overheads.

CORPORATE GOVERNANCE CODE

In accordance with changes to AIM Rules regarding corporate governance our Annual Report & Accounts and Company website reflect compliance with (and any departures from) the Guidance set out in the QCA Corporate Governance Code.

PROSPECTS

We continue to pursue, from a firm financial base, a strategy of developing the business of ESS and to carefully appraise all acquisition opportunities, including those proposed by Mr Bernstein.

R L Owen (Chairman)

G M Simmonds (Chief Executive)

* * ENDS * *

For further information, please visit www.ultimatesportsgroup.me or contact:

Consolidated statement of comprehensive income for the year ended 31 December 2018

Loss per share (basic and diluted)

Consolidated statement of financial position as at 31 December 2018

Company statement of financial position as at 31 December 2018

Company statement of changes in equity

Consolidated statement of cash flows for the year ended 31 December 2018

Company statement of cash flows for the year ended 31 December 2018

Notes to the group and parent company financial statements

1. General information

Ultimate Sports Group Plc is a public company limited by shares, domiciled and incorporated in England and Wales and its activities are as described in the strategic report on pages 5 to 7.

These financial statements are prepared in pounds sterling being the currency of the primary economic environment in which the group operates.

2. Basis of Accounting

The consolidated financial statements of the group and the financial statements of the parent company for the year ended 31 December 2018 have been prepared under the historical cost convention and are in accordance with International Financial Reporting standards ("IFRS") as adopted by the EU. These policies have been applied consistently except where otherwise stated.

For the purpose of the preparation of these consolidated financial statements, the group has applied all standards and interpretations that are effective for accounting periods beginning on or after 1 January 2018. The adoption of new standards and interpretations in the year has not had a material impact of the group's financial statements.

IFRS 15

The group has adopted IFRS 15 retrospectively in its consolidated financial statements for the year ended 31 December 2018. IFRS 15 replaces all existing revenue requirements in IFRS and sets out principles for recognising revenue that must be applied using a 5-step model. Revenue should only be recognised when (or as) control of goods or services is passed to the customer, when distinct 'performance obligations' are met, at the amount to which the entity expects to be entitled. The group has completed its assessment of IFRS and has not identified any material differences between the group's current revenue recognition policy and the requirements of IFRS 15.

Future standards in place but not yet effective.

No new standards, amendments or interpretations to existing standards that have been published and that are mandatory for the Group's accounting periods beginning on or after 1 January 2019, or later periods, have been adopted early. The following standards and amendments are not yet applied at the date of authorisation of these financial statements:

· IFRS 16 - Leases (effective 1 January 2019)

· Annual Improvements to IFRS Standards 2015 - 2017 Cycle (effective 1 January 2019)

· IAS 12 - Income taxes (effective 1 January 2019)

· Definition of Material (Amendments to IAS 1 and IAS 8) (effective 1 January 2020)

· Definition of a Business (Amendments to IFRS 3) (effective 1 January 2020)

Except for IFRS 16, see below, the group does not believe that there will be a material impact on the financial statements from the adoption of these standards / interpretations.

IFRS 16 requires the recognition of an asset and liability by introducing a lessee accounting model. As at 31 December 2018, the group would recognise an asset and liability in respect of leases of approximately £79,000.

There were no material changes in the financial statements as a result of adopting new or revised accounting standards during the year.

3. Significant accounting policies

(a) Basis of consolidation

The financial statements of the group incorporate the financial statements of the company and entities controlled by the company, which are its subsidiary undertakings. Control is achieved where the company has the power to govern the financial and operating policies of its subsidiary undertakings so as to benefit from their activities.

Details of subsidiary undertakings are set out in note 18.

All intra-group transactions and balances have been eliminated in preparing the consolidated financial statements.

(b) Revenue

Revenue arises from the disposal of available-for-sale investments and income from sports and leisure activities undertaken by the company and its subsidiary undertakings. In the case of sports and leisure activities it represents invoiced and accrued amounts for services supplied in the year, exclusive of value added tax and trade discounts.

(c) Intangible assets

Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities of subsidiary entities at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed.

For the purpose of impairment testing, goodwill is allocated to each of the group's cash generating units expected to benefit from synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, associate or jointly controlled entity, the amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRS's has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

Development costs are expensed in arriving at the operating profit or loss for the year unless the directors are satisfied as to the technical, commercial and financial viability of individual project. In this situation, the expenditure is recognised as an asset and is reviewed for impairment on an annual basis.

Any impairment is recognised immediately in the income statement in administrative expenses and is not subsequently reversed.

3. Significant accounting policies

(d) Plant and equipment

Plant and equipment is stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less their estimated residual value over their expected useful lives.

The rates applied to these assets are as follows:

(e) Operating leases

Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against revenue as and when incurred.

(f) Deferred taxation

Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance is not discounted.

The recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences.

 (g) Trade receivables

Trade receivables are recognised at fair value. A provision for impairment of trade receivables is established where there is objective evidence that the company or group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or liquidation and default or delinquency of payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement within administrative expenses. When a trade receivable is uncollectable it is written off against the allowance account for trade receivables.

(h) Investments

Investments are classified as available for sale, are measured at fair value. Gains or losses in changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss are not subsequently reversed through profit or loss.

Fair value of quoted investments is based on current bid prices. If an investment is suspended from trading, fair value is based on quoted bid prices on the first day that trading recommences following suspension.

Investments in subsidiary undertakings are stated at cost less provision for impairment in the parent company balance sheet.

(i) Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks. Bank overdrafts are shown as borrowings within current liabilities.

3. Significant accounting policies (continued)

(j) Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Ordinary shares are classified as equity. Incremental costs directly attributable to new shares are shown in equity as a deduction from the proceeds.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowing using the effective interest method.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the statement of financial position.

4. Critical accounting judgements and key sources of estimation uncertainty

The preparation of the group's financial statements requires the directors to make judgements, estimates and assumptions that effect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on the director's best knowledge of the relevant facts and circumstances. Information about such judgements and estimation is contained in the accounting policies and/or notes to the financial statements.

Deferred tax asset

At the present time the directors' do not consider that there is sufficient certainty regarding the utilisation of tax losses available in the group. As a result, no deferred tax asset has been recognised.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill is the deemed cost on first time application of IFRS.

Details of the impairment review calculation are given in note 17.

Impairment of intangible assets

The carrying value of intangible assets comprising unamortised website costs are determined by reference to an assessment of future income generated by the UltimatePlayer.me platform. Having regard to the Board's decision to delay future plans for further website development, all unamortised costs have been fully impaired as an exceptional item in 2017 (note 8).

5. Going concern

The directors have prepared financial forecasts covering the 12 months following approval of these financial statements, which show the Group can continue to carry on trading within its existing finance facilities over that period.

In view of the above, the directors consider it appropriate to prepare the financial statements on a going concern basis.

6. Business segment analysis

Segmental information with regard to continuing and non- continuing activities is disclosed below and is based on the different business activities in the group.

All turnover, profits, losses, assets and liabilities relate to operations undertaken in the UK.

*Segment operating profit in relation to Sports and Leisure is after charges for depreciation of £7,507 (2017: £7,553). Segment operating losses in relation to the social media website is after charges for amortisation and impairment of £Nil (2017: £520,792).

** 'Group operating expenses' represent the costs of running the group as a whole. The directors consider that the costs of running Pantheon Leisure Plc of £68,824 (2017: £53,370) form part of these costs as opposed to forming part of the segmental costs of the sports and leisure division.

Non segmental assets include group cash balances of £535,329 (2017: £129,611), goodwill of £59,954 (2017: £59,954), other assets and receivables of £14,985 (2017: £24,444). Non segmental liabilities include trade and other payables of £36,840 (2017: £13,042).

Sports and leisure segment assets include £nil (2017: £2,727) from discontinued activities. Segment liabilities include £nil (2017: £8,638) from discontinued activities.

7. Discontinued activities

8. Exceptional item and non- recurring costs

9. Operating loss