Last checked at 30 Jul 2009 12:10
PARALLEL MEDIA GROUP PLC ("PMG" OR THE "GROUP") INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2009HIGHLIGHTS - Successfully promoted and delivered the second Ballantine's Championship, the largest golf tournament in South Korea - Delivered highly acclaimed art exhibitions in Seoul and London sponsored by Standard Chartered - Turnover increased 17% to 5.7m (2008: 4.8m) - Gross profit increased 47% to 1.4m (2008: 0.9m) - EBITDA (Earnings before interest, tax, deprecation and amortisation) 385,000 (2008: loss 154,000) - Operating Profit 296,000 (2008: loss 222,000) - Profit for the period 60,000 (2008 loss 346,000) - Positive cash inflow from operations 356,000 (2008: 34,000)
Contact Details
For more information please contact:
Martin Doherty +44 (0) 20 7225 2000Chief Financial Officer, ParallelMedia Group PlcTony Rawlinson / Antony Legge +44 (0) 20 7492 4777
Dowgate Capital Advisers Limited
www.parallelmediagroup.comCHAIRMAN'S STATEMENTBusiness Overview
Parallel Media Group PLC (PMG) continues to make positive progress. In 2009 to date, PMG has successfully promoted and delivered the second Ballantine's Championship, (a PGA European Tour golf event in Jeju Island, Korea) and launched the Korean Eye - the Moon Generation, a highly acclaimed exhibition of contemporary art in Seoul and in the Saatchi Gallery in London.
The success of the Ballantine's Championship (Korea's largest golf tournament) and the Korean Eye (sponsored by Standard Chartered Bank and Visit Korea, the Korean National Tourist Board) has now established PMG as the premier promoter of international sports & lifestyle sponsorship events in Korea.
PMG has continued its role as commercial partner and advisor for the Omega Mission Hills World Cup of Golf in China, which will continue to at least until 2018.
Internationally, PMG distributes the worldwide television rights for the Ladies European Tour which continues to 2013. New sponsorship, media and hospitality propositions for several events are being developed including the Football World Cup in 2010 and the London Olympics in 2012.
Financial Review
Turnover for the six months to 30 June 2009 increased 17% to 5.7m (2008: 4.8m), due mainly to increased secondary sponsorship for the Ballantine's Championship. The gross profit for the period increased 47% to 1.4m (2008: 0.9m) and gross margins are expected to continue improving as events mature and demand for secondary sponsorship increases.
PMG is investing in building new long-term opportunities with multi-year revenue contracts providing a platform for growth in Asia and internationally. In the period under review, development costs (the costs incurred to create new events from which future revenues are expected) were 0.13m; The operating profit for the period was 0.30m (2008: loss 0.22m). The profit for the period after finance costs was 60,000 (2008: loss 346,000).
The cash balance at the 30 June 2009 was a positive 0.86m. During the period PMG extended existing bank facilities and entered into new loans totalling 0.2m. Convertible loans and medium term loans totalling 0.1m were repaid in the period.
The net liability of the group has been reduced in the period to 30 June 2009 to 2.85m (31 December 2008 3m). Convertible loans outstanding at 30 June 2009 are 2.5m (31 December 2008: 2.4m). At the 30 June 2009, the group had net debt of 3.1m (31 December 2008: 3.2m). The group generated 0.36m cash from operations during the period and will actively manage the demands for cash required for growth, with the reduction of debt expected in 2009 and beyond.
I am pleased to update you on the ongoing case of RAM Media Limited (in administration) vs The Greek Ministry of Culture, which I have mentioned in past reports. The High Court in London has made an award in favour of RAM Media Limited and is holding hearings with regards to costs. PMG is RAM Media's largest creditor with a claim of 0.75m and it would presently appear that we should receive a substantial proportion of our claim by early 2010.
Stakeholders
I would like to take this opportunity to thank our board members, major stakeholders and staff who continue to contribute to PMG's success. PMG has built a loyal, world class team, whose dynamism enables us to offer expertise and support to a growing international clientele of blue chip companies, tourist boards and brands. Our team is now beginning to reap the benefits of determined and focussed investment in our core business. I also believe that we shall soon be in a position to reward the patience of our shareholders.
Future Prospects
The second half of 2009 will see PMG managing the Kazakhstan Open and promoting the Korean Ladies Masters and the UBS Hong Kong Open. We remain confident of achieving profits for the full year 2009 based on current contracts. Discussions are continuing with several potential replacement sponsors for the Hong Kong Open event in November 2010 and beyond. PMG is positioning itself to benefit from the increasing focus of Olympic sponsor spend targeted at the London 2012 games and is building sponsorship and media event assets in Asia and internationally. PMG now has a portfolio of events and sponsorship deals that continue in to the next decade and which, together with the opportunities in the pipeline, underpin the creation of long term value for shareholders.
David CiclitiraChairman,30 July 2009CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2009 6 months to 6 months to 12 months to 30 June 30 June 31 December 2009 2008 2008 unaudited unaudited audited Notes GBP'000 GBP'000 GBP'000Continuing operationsRevenue 5,679 4,842 9,500Cost of Sales (4,308) (3,914) (7,358)Gross Profit 1,371 928 2,142Administrative Expenses (1,055) (1,071) (1,799)Foreign Exchange 69 (11) 53Impairment Profit (Loss) onrevaluation of investment - - (38)Earnings before interest, tax,depreciation and amortisation 385 (154) 358Amortisation of intangibles (89) (68) (136)Operating Profit / (Loss) 296 (222) 222Finance cost (237) (131) (508)Investment Income 1 7 16Profit / (Loss) on ordinaryactivities before tax 60 (346) (270)Taxation - - -Profit / (Loss) for the period 60 (346) (270)Attributable to:Minority Interests - - -Equity Holders of the parent 60 (346) (270) 60 (346) (270) Earnings (loss) per share 4Basic 0.01p (0.08p) (0.06p)Diluted 0.01p (0.08p) (0.06p)
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2009 30 June 30 June 31 December 2009 2008 2008 unaudited unaudited audited Notes GBP'000 GBP'000 GBP'000Non-current assetsProperty, Plant & Equipment 19 19 22Intangible Assets 2,341 2,477 2,409Development Costs 280 - 161Investments 13 55 17Total non-current assets 2,653 2,551 2,609 Current AssetsTrade Receivables 1,227 459 851Cash 859 762 728Total current assets 2,086 1,221 1,579 Current Liabilities:Financial Liabilities - borrowings 6 867 766 514Financial Liabilities - convertibleloans 146 2,226 208Trade & Other payables 3,675 2,674 3,290Total current liabilities 4,688 5,666 4,012
Net current assets/(liabilities) (2,602) (4,445) (2,433)
Non- current liabilities -financial borrowings 7 (2,898) (1,011) (3,186)Net Liabilities (2,847) (2,905) (3,010) EquityShare Capital 9 3,070 3,064 3,070Share premium 2,091 2,077 2,091Equity element of convertible loans 57 92 57Other reserves 557 557 557Capital redemption reserve 5,034 5,034 5,034Foreign translation reserve 45 177 (41)Retained earnings (13,571) (13,799) (13,631)Total Equity (2,717) (2,798) (2,863)Minority Interest (130) (107) (147)Equity attributable to equity holdersof the parent (2,847) (2,905) (3,010)
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2009
30 June 30 June 31 Dec 2009 2008 2008 unaudited unaudited audited GBP'000 GBP'000 GBP'000Cash flows from operating activityOperating Profit / (Loss) 296 (222) 222Depreciation 4 6 8Sale of investments 5 - -Amortisation of intangibles 89 68 136Impairment loss on revaluation of - - 38
investments
Development costs capitalised (139) - (161)(Increase)/decrease in debtors (377) 382 (196)Increase/(decrease) in creditors 385 (187) 592Increase in share capital re: elimination - - 20of debtForeign exchange on non-operating (11) (13) 129
activities
Increase in translation reserve 104 - (259)Cash generated from / (used in) 356 34 529
operations
Cash flow from investing activitiesPurchase of property, plant & equipment (1) (1) (6)Interest received 1 8 16Net cash generated from (used in) - 7 10
investing activities
Cash flow from financing activitiesIncrease in bank facility 184 - (188)Cash received from convertible loans 14 - 198Convertible loans repaid (55) (548) (577)Loan received - 693 761Loan repaid (56) (215) (480)Costs incurred re: share consolidation - - (106)Interest paid (173) (61) (417)Net cash (used in) / generated from (86) (131) (809)financing activitiesNet increase / (decrease) in cash and 270 (90) (270)
cash equivalents
Cash and cash equivalents at 728 837 837beginning of the yearExchange (loss) / gains on cash and (139) 15 161cash equivalentsNet (decrease)/increase in cash and 270 (90) (270)cash equivalentsCash and cash equivalents at end 859 762 728of the periodCONSOLIDATED CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2009The table below sets out the movements in reserve for the six months ended 30June 2009 Share Share Equity Other Capital Forex Minority P&L Total Capital Premium reserve reserves Redemption reserve InterestAt 1 January 2009 3.070 2.091 57 557 5.034 (41) (147) (13,631) (3,010)Profit for the period - - - - - - - 60 60Foreign exchange - - - - - 86 - - 86Minority Interestmovement - - - - - - 17 - 17At 30 June 2009 3,070 2,091 57 557 5,034 45 (130) (13,571) (2,847) The table below sets out the movements in reserve for the year ended 31December 2008 Share Share Equity Other Capital Forex Minority P&L Total Capital Premium reserve reserves Redemption reserve InterestAt 1 January 2008 3.064 2.077 92 557 5.034 177 (109) (13,453) (2,561)(Loss) for the period - - - - - - - (270) (270)Equity element of oldconvertible loan - - (92) - - - - 92 -Equity element ofnew convertible loan - - 57 - - - - 57Foreign exchange - - - - - (218) - - (218)Proceeds of shareissue 6 14 - - - - - - 20Minority Interestmovement - - - - - - (38) - (38)
At 31 December 2008 3,070 2,091 57 557 5,034 (41) (147) (13,631) (3,010)
NOTES TO THE FINANCIAL INFORMATION
1. Basis of Preparation
The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting.
The condensed consolidated Interim Financial Statements should be read in conjunction with the annual financial statements for the year ended 31 December 2008, which have been prepared in accordance with IFRS's. The comparative figures shown for the year ended 31 December 2008 do not constitute statutory accounts as they have been extracted from the statutory accounts which have been filed with the Registrar of Companies. These interim results are unaudited and do not constitute statutory accounts.
2. Significant Accounting Policies
The condensed financial statements have been prepared under the historical cost convention, except for the revaluation of financial instruments.
The same accounting policies, presentation and method of computation are followed in these condensed financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2008.
3. Segment Information
The group is organised into two main divisions Event Promotion and Consultancy and Sales. The Event Promotion division is based in Hong Kong and operates professional golf tournaments in Asia which are Sanctioned by the European Tour and Ladies European Tour. The Consultancy and Sales division is based in the London headquarters and works with major international brands, sports federations and tourist boards on sports and lifestyle projects, brand development, sales and marketing opportunities.
Event Promotion Sales & Consultancy Consolidated Asia Europe 6 months to 6 months to 6 months to 6 months to 6 months to 6 months to 30 June 30 June 30 June 30 June 30 June 30 June 2009 2008 2009 2008 2009 2008 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000GroupRevenue 5,397 4,647 282 195 5,679 4,842Segment result 983 552 119 39 1,102 591Unallocatedcorporateoverhead (806) (813)Operating profit /loss 296 (222)Finance Costs (237) (124)Investment income 1 -Profit / (Loss) 60 (346) Segment Assets 3,113 2,776 752 169 3,865 2,945Unallocatedcorporateassets 871 815Consolidated totalassets 4,736 3,760 Segment liabilities (2,843) (1,871) (19) (13) (2,862) (1,883)Unallocatedcorporateliabilities (4,721) (4,782)Consolidated totalliabilities (7,583) (6,665)Net liabilities (2,847) (2,905)
4. Earnings / (loss) per Share
The basic earnings per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue during the year. In calculating the diluted earnings per share, outstanding share options, warrants and convertible loans are taken into account where the impact of these is dilutive.
6 months to 6 months to year ended 30 June 30 June 31 December 2009 2008 2008(i) BasicProfit /Loss for the period ( '000) 60 (345) (270)Weighted average number of sharesin issue (No.) 467,072,593 413,037,700 422,540,236Earning / (loss) per share (p) 0.01p (0.08p) (0.06p) (ii) Fully dilutedProfit / Loss for the period ( '000) 60 (345) (270)Add back interest charged on convertibleloans ( '000) 79 37 169Revised Profit / Loss for the period( '000) 139 (308) (101) Weighted average number of shares inissue (No.) 467,072,593 413,037,700 422,540,236Weighted average of potential dilutiveeffect of ordinary shares issuable under:- Convertible loan agreements 1,679,630,220 179,830,274 671,650,685- Employee share schemes 15,162,750 12,543,000 13,031,063- Warrants 31,706,202 25,778,025 29,007,572Weighted average number ofshares (No.) 2,193,571,765 631,189,000 1,136,229,556 Diluted Earnings / (loss) pershare (p) 0.01p (0.08p) (0.06p)
5. Dividends - No dividend was recommended or paid for the period under review
6. Financial Liabilities - Borrowings
30 June 31 December 2009 2008 GBP'000 GBP'000Bank facility 300 116Medium Term Lending (repayable < 1year) 567 398 867 514
7. Non-Current Liabilities - Financial Borrowings
30 June 31 December 2009 2008 GBP'000 GBP'000Convertible loans 2,321 2,235Loans (1 to 2 years) 129 129Medium term lending (1 to 2 years) 448 822 2,898 3,186
Convertible Loans
The value of convertible loans at the balance sheet date has been determined in accordance with IAS 32. This requires the recognition of the debt and equity components of the amounts received, with equity components shown directly in equity reserves.
30 June 31 December 2009 2008 GBP'000 GBP'000Convertible loans due in less than one year 146 208
Convertible loans due in more than one year 2,321 2,235
30 June Latest Interest at Conversion Conversion or Eurolibor + price 2009 repayment date GBP'000Convertible loans due in less 146 31 +3% 0.25pthan one year (see note (1) Decemberbelow) 2009
Convertible loans due in more 2,321 1 July 2010 +4% 0.25p than one year (see note (2) below)
note 1: This loan is secured via a fixed and floating charge. Interest is accrued at Euro Libor + 3%. The loan can be converted into ordinary shares at a price of 0.25 pence. The lender has the right to convert into ordinary shares or be repaid in 6 instalments to December 2009.
note 2: The convertible loan amounts due in more than one year of 2,321,000 includes 1,265,241 which is owed to Walbrook Trustees (Jersey) Limited, who are trustees of a discretionary trust (the Tokyo Settlement) of which D Ciclitira is a potential beneficiary.
The convertible loans due in more than one year are eligible for a redemption premium equal to 50 per cent as approved at the General Meeting on 24 October 2008, with such premium payable in cash at the election of the Company or otherwise through the issue of New Ordinary Shares at the conversion price of 0.25 pence per share or such lower price as any other person is issued shares in the Company after the date on which the relevant loan agreement is varied.
Other loans
The loan of 129,000 is payable to a company under the control of D Ciclitira. This loan is unsecured and carries interest at 14%. This loan together with short-term lending from other DCiclitira controlled entities which totalled 327,000 have the option to convert into ordinary shares at 0.025p together with associated premium as approved by shareholders at the General Meeting on 24th October 2008.
Medium term lending
The amount of 448,000 is comprised of scheduled instalments due to repay medium term debt, due in more than one year.
8. Issued Share Capital
Issued share capital as at 30th June 2008 is 3.07m being 467,072,593 ordinary shares of 0.01 pence; 199,831,545 deferred shares of 0.5 pence and 103,260 deferred B shares of 19.60. There were no movements in the issued share capital of the Company in the period.
9. Other
Copies of unaudited interim results have not been sent to shareholders, however copies are available at www.parallelmediagroup.com or on request from the Company Secretary at the company's Registered Office: 3-12 Harbour Yard, Chelsea Harbour, London, SW10 0XD
10. Approval of Interim Financial Statements
The interim financial statements were approved by the board of directors on 30th July 2009.
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