Last checked at 22 Aug 2011 07:00
22nd August 2011 PARALLEL MEDIA GROUP PLC ("PMG" OR THE "GROUP") INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2011
Parallel Media Group Plc (AIM:PAA), a leading sports marketing and media group, announces its interim results for the period ended 30th June 2011.
Highlights
* Successfully promoted and delivered the Ballantine's Championship, the largest golf tournament in South Korea which this year moved to Seoul * 3% increase in turnover to £6.0 million (2010: £5.8million) * 8% increase in gross profit to £1.6 million (2010: £1.5 million) * 21% increase in operating profit to £441,000 (2010: £365,000) * 414% increase in net profit after tax to £396,000 (2010 profit £77,000)
Post Balance Sheet Highlights:
* Placing to raise £1.2 million at a 55.5% premium to the then share price of 22.5p * Successful acquisition of 50% of PSM (Parallel Smart Media) * PSM has already produced Smart Media Viewing Platforms (SMVP) for Darren Clarke, Indonesian Eye and Korean Eye and has a strong pipeline of opportunities
Chairman of PMG, David Ciclitira, commented:
"The first six months of this year have been a positive period for Parallel Media Group plc, as we have continued to grow the traditional events and sponsorship business in Asia, whilst continuing to invest in a revolutionary new Smart Media Platform with global applications in sport, culture, and lifestyle.
"We are pleased to receive continued and growing support from existing directors and shareholders whilst also welcoming some new shareholders as we embark on the next exciting phase of this journey."
Contact Details
For more information please contact:
Parallel Media Group PlcDavid Ciclitira +44 (0) 20 7225 2000Chairman Northland Capital Partners Limited Edward Hutton, Luke Cairns +44 (0) 20 7796 8800 Bishopsgate Communications +44 (0)20 7562 3350Deepali Schneider, Natalie Quinn pmg@bishopsgatecommunications.com www.parallelmediagroup.com CHAIRMAN'S STATEMENTOverview
The first six months of this year have been a positive period for Parallel Media Group plc, as we have continued to grow the traditional events and sponsorship business in Asia, whilst continuing to invest in a revolutionary new Smart Media Platform with global applications in sport, culture, and lifestyle. In this period under review and subsequently PMG has:
* Successfully completed the Ballantine's Championship in Korea
* Raised new Capital
* Developed and acquired a 50% interest in Parallel Smart Media
Operational Review
As mentioned at the release of the 2010 full year results in June 2011, in the short term, the core of PMG's business will continue to promote successful Golfing Tournaments in mainstream Asian Markets. PMG has successfully moved the Ballantine's Championship in Korea to Seoul and extended our partnership with Pernod Ricard until 2013 which provides strong profit growth potential. PMG has agreed a new date for an event on the European Tour calendar to be hosted in China and we expect to announce new sponsors in the near future. PMG is in discussions to also launch a new Ladies Golf Tournament in Korea from 2012, building on the success of the Korean Ladies Masters.
In July 2011 PMG successfully completed the acquisition of a 50% interest in PSM (Parallel Smart Media) and has now launched significant marketing activities to capitalise on this new media platform opportunity. This enables consumers to dynamically stream multiple live and on-demand content on smart devices including Apple IOS, Android, Windows and Blackberry Tablet OS. We are working with international sportsmen and women, federations, cultural institutions, and brands and have a strong pipeline of opportunities for our products and services in this rapidly growing and dynamic market.
Within a short period, PSM has produced Smart Media Viewing Platforms (SMVP) for Darren Clarke, Indonesian Eye, sponsored by Prudential, and Korean Eye, sponsored by Standard Chartered. It is in discussions with multiple clients for the new SMVP, details of which will be announced over the next few months.
Financial Review
Turnover for the six months to 30 June 2010 increased 3% to £6.0million (2010: £5.8million), due mainly to increased secondary sponsorship for the Ballantine's Championship. The gross profit for the period increased 8% to £ 1.6million (2010: £1.5 million). Gross margins are expected to continue improving as events mature and demand for secondary sponsorship increases.
The operating profit for the period increased 21% to £0.44 million (2010: profit £0.36 million). The profit for the period after finance costs and tax increased 414% to £396,000 (2010: profit £ 77,000), which has been particularly rewarding after the lean and challenging market conditions of the last 12 months.
After significant investments in PSM, the cash balance at the 30 June 2011 was a positive £0.18 million (2010: £0.32 million).
Post Balance Sheet Events
PMG in July 2011 successfully completed the acquisition of a 50% interest in Parallel Smart Media (a venture now co-owned by PMG and Korean technology company Talspace ) for a consideration of £1 million. In addition to these exciting business developments, your company in July 2011 successfully effected a placing to raise £1.2 million of new ordinary share capital at a 55.5% premium to the then share price of 22.5p in order to provide working capital to accelerate the investment in the business. As part of the Placing David Ciclitira and Ranjit Murugason, both directors of the Company, purchased 250,000 and 142,857 Placing Shares respectively.Since 30 June 2010 and taking into account the July placing, PMG has affected a transformation in the capital structure of the business with a net improvement of some £3.9 million. PMG has converted and/or repaid convertible loan note holders, repaid previously expensive medium term debt, agreed new long-term bank facilities and raised capital in support of growth. This provides a strong and solid base from which to advance. We are pleased to receive continued and growing support from existing directors and shareholders whilst also welcoming some new shareholders as we embark on the next exciting phase of this journey.
Stakeholders
I would like to thank our board members, major stakeholders and staff who continue to contribute to PMG's success. I would also like to take the opportunity to welcome new staff into our world class team and I hope that you will join me in wishing them every success in their respective roles.
David CiclitiraChairman19 August 2011CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2011 Notes 6 months to 6 months to 12 months to 30 June 30 June 31 December 2011 2010 2010 unaudited unaudited audited £'000 £'000 £'000 Continuing operations Revenue 6,013 5,836 6,651 Cost of Sales (4,397) (4,340) (4,406) Gross Profit 1,616 1,496 2,245 Administrative Expenses (1,154) (1,123) (2,945) Foreign Exchange 62 92 77 Earnings before interest, tax, 524 465 (623)depreciation and amortisation Depreciation and Amortisation of (83) (100) (162)intangibles Operating Profit / (Loss) 441 365 (785) Finance cost (45) (288) (484) Profit on ordinary activities 396 77 (1,269)before tax Taxation - - - Profit for the period 396 77 (1,269) Attributable to: Minority Interests - - - Equity Holders of the parent 396 77 (1,269) 396 77 (1,269) Earnings per share 4 Basic 2.6p 3.6p (24.1p) Diluted 2.6p 3.3p (24.1p)CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE SIX MONTHS ENDED 30 JUNE 2011 6 months to 6 months to 12 months to 30 June 30 June 31 December 2011 2010 2010 unaudited unaudited audited £'000 £'000 £'000 Profit / (Loss) for the year 396 77 (1,269) Other comprehensive income Exchange difference on translation of 25 (46) (34)foreign operations Tax effect of changes in other comprehensive income Total comprehensive income for the year 421 31 (1,303) Total comprehensive income attributable to: Equity holders of the parent 417 25 (1,301) Minority interest 4 6 (2) 421 31 (1,303)CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2011 Notes 31 30 June 30 June December 2011 2010 2010 unaudited unaudited audited £'000 £'000 £'000 Non-current assets Property, Plant & Equipment 3 8 6 Intangible Assets 2,070 2,205 2,138 Development Costs 294 481 306 Investments 12 12 12 Total non-current assets 2,379 2,706 2,462 Current Assets Trade Receivables 1,898 1,756 1,388 Cash 186 319 142 Total current assets 2,084 2,075 1,530 Current Liabilities: Financial Liabilities - borrowings 6 250 1,193 104 Financial Liabilities - loans 7 39 613 39 Trade & Other payables 3,602 3,622 3,556 Total current liabilities 3,891 5,428 3,699 Net current assets/(liabilities) (1,807) (3,354) (2,169) Non- current liabilities - 8 (750) (2,207) (896)financial borrowings Net Liabilities (178) (2,854) (603) Equity Share Capital 9 3,362 3,070 3.362 Share premium 5,429 2,091 5,429 Equity element of convertible - 57 -loans Other reserves 557 557 557 Capital redemption reserve 5,034 5,034 5,034 Foreign translation reserve 13 (33) (12) Retained earnings (14,439) (13,488) (14,835) Total Equity (44) (2,712) (465) Minority Interest (134) (142) (138) Equity attributable to equity (178) (2,854) (603)holders of the parent CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2011 30 June 30 June 31 Dec 2011 2010 2010 unaudited unaudited audited £'000 £'000 £'000 Cash flows from operating activities Operating Profit / (Loss) 441 365 (785) Depreciation 3 5 7 Amortisation of intangibles - Tournament 68 68 136rights Amortisation of intangibles - development 12 27 19costs Increase in debtors (509) (404) (104) Increase in creditors 45 389 305 Foreign exchange on non-operating (27) (52) (23)activities Increase in translation reserve 29 (60) (35) Cash generated from operating activities 62 338 (480) Cash flow from investing activities Acquisition of development costs - (254) (71) Interest received - - 1 Net cash used in investing activities - (254) (70) Cash flow from financing activities Repayments of bank facility - (64) (247) Convertible loans repaid - - (494) Cash proceeds from issue of new shares - 950 Loan received - 200 1,200 Loan repaid - (105) (783) Interest paid (45) (83) (228) Net cash used in financing activities (45) (52) 398 Cash and cash equivalents at beginning of 142 322 322the year Exchange (loss) / gains on cash and cash 27 (35) (28)equivalents Net (decrease)/increase in cash and cash 17 32 (152)equivalents Cash and cash equivalents at end of the 186 319 142period CONSOLIDATED CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2011 Capital Non Share Share Equity Other redemption Forex Retained Sub controlling Capital Premium reserve reserves reserve reserve earnings total interest Total At 1 January 3,362 5,429 - 557 5,034 (12) (14,835) (465) (138) (603)2011 Profit for the period - - - - - - 396 396 - 396 Foreign exchange - - - - - 25 - 25 - 25 Non controlling interest - - - - - - - - 4 4movement At 30 June 3,362 5,429 - 557 5,034 13 (14,439) (44) (134) (178)2011
The table below sets out the movements in reserve for the six months ended 30 June 2010
Capital Non Share Share Equity Other redemption Forex Retained Sub controlling Capital Premium reserve reserves reserve reserve earnings total interest Total At 1 January 3,070 2,091 57 557 5,034 20 (13,566) (2,737) (136) (2,873)2010 Profit for the period 77 77 77 Foreign exchange (52) (52) (52) Non controlling interest - (6) (6)movement At 30 June 3,070 2,091 57 557 5,034 (33) (13,489) (2,713) (142) (2,854)2010
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 2010, which have been prepared in accordance with International Financial Reporting Standards. The comparative figures shown for the year ended 31 December 2010 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. 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 2010
3. Segment Information
The group is organised into two main divisions Event Promotion and Consultancyand Sales. The Event Promotion operates professional golf tournaments in Asiawhich are Sanctioned by the European Tour and Ladies European Tour. TheConsultancy and Sales division is based in the London headquarters and workswith major international brands, sports federations and tourist boards onsports and lifestyle projects, brand development, sales and marketingopportunities. Event Promotion Sales & Consultancy Consolidated Asia Europe 6 months 6 months 6 months 6 months 6 months 6 months to to to to to to 30 June 30 June 30 June June 30 June June 2011 2010 2011 2010 2011 2010 £'000 £'000 £'000 £'000 £'000 £'000 Group Revenue 5,556 5,415 457 420 6,013 5,836 Segment result 1,159 1,076 457 420 1,616 1,496 Unallocated corporate overhead (1,175) (1,131) Operating profit 441 365 Finance Costs (45) (288) Investment income - Profit for the 396 77period Segment Assets 2,626 2,465 293 456 2,919 2,921 Unallocated corporate assets 1,544 1,860 Consolidated total 4,463 4,781assets Segment (1,961) (1,906) (363) (491) (2,324) (2,396)liabilities Unallocated corporate (2,317) (5,239)liabilities Consolidated total (4,641) (7,635)liabilities Net liabilities (178) (2,854) 4. Earnings per Share The basic earnings per share is calculated by dividing the profit attributableto equity shareholders by the weighted average number of shares in issue duringthe year. In calculating the diluted earnings per share, outstanding shareoptions, warrants and convertible loans are taken into account where the impactof these is dilutive. year 6 months 6 months ended to to 31 30 June 30 June December 2011 2010 2010 (i) Basic Profit (loss) for the period (£'000) 396 77 (1,269)
Weighted average number of shares in issue (No.) 15,437,437 2,123,057 5,257,672
Earning (loss) per share (p) 2.6 p 3.6 p (24.1p) (ii) Fully diluted Profit for the period (£'000) 396 77 (1,269) Add back interest charged on convertible loans 2 59 57(£'000) Revised Profit for the period (£'000) 398 136 (1,212)
Weighted average number of shares in issue (No.) 15,437,437 2,123,057 5,257,672
Ordinary shares issuable under convertible loan - 2,032,161 -agreements * 15,437,437 4,155,218 5,257,672 Diluted Earnings per share (p) 2.6 p* 3.3p** (24.1p)*
* * Ordinary shares issuable under outstanding convertible loan agreements,
share options and warrants are anti-dilutive.
* ** The 2010 weighted average number of shares have been adjusted to take
account of the share consolidation in 31 August 2010 for comparative
purposes. New ordinary shares of 2.2p each were issued in exchange for 220
ordinary share of 0.01p.
5. Dividends - No dividend was recommended or paid for the period under review
6. Financial Liabilities - Borrowings
31 30 June December 2011 2010 £'000 £'000 Bank borrowings 250 104
The bank borrowings represent amounts due to Lloyds Bank Plc in less than one year. The total amount outstanding to Lloyds Bank as at 30 June 2011 and 31 December 2010 is £1 million repayable in 48 consecutive monthly instalments. See note 8 for details.
7. Current Liabilities - Financial Borrowings - Loans
30 June 31 December 2011 2010 £'000 £'000 Convertible loans 39 39 Short term loans - - 39 39
The balance outstanding represents convertible loans due for conversion or repayment by 31 December 2011.
8. Non-Current Liabilities - Borrowings
30 June 31 December 2011 2010 £'000 £'000 Bank loan > 1 year 750 896 750 896
The 2011 bank loan represents amounts due to Lloyds Bank in more than one year. Lloyds Bank has provided a loan totalling £1 million. The loan is repayable in 48 consecutive monthly instalments from August 2011 (an effective 5 year term with a one year repayment holiday). The loan carries interest payable at 3% over base and may be repaid early at the discretion of the company. The loan is secured by personal guarantees provided by the David Ciclitira concert party.
9. Issued Share Capital
Issued share capital as at 30th June 2011 is comprised as follows:
* 15,437,437 ordinary shares of 2.2 pence being £0.34 million;
* 199,831,545 deferred ordinary shares of 0.5p each being £0.99 million*
* 103,260 deferred B shares of £19.60 being £2.02 million*
* The deferred ordinary shares do not entitle their holders to receive dividend or other distribution nor do they entitle their holders to receive notice, attend speak or vote at any General Meeting of the Company. The rights of deferred share holders are set out in full in the financial statements as at 31 December 2010 on page 33.
10. Related Parties
Walbrook Trustees (Jersey) Limited is a company who are trustees of a discretionary trust (the Tokyo Settlement) of which David Ciclitira is a potential beneficiary.
The Tokyo Settlement provided convertible loans totalling £1.175 million to the company. Interest was charged on the loan at Euro Libor + 4%. The convertible loan was converted in full in 2010.
Period Year ended ended 30 June 31 December 2011 2010 £'000 £'000 Opening balance - (1,296) Interest charged (not paid) - (30) Settled by the issue of ordinary shares - 1,326 Closing balance - -Luna Trading Limited is a company under the control of David Ciclitira, whichprovides consultancy services loans and guarantees to Parallel Media Group Plcas follows: Period Year ended ended 30 June 31 December 2011 2010 £'000 £'000 Opening balance due to Luna 161 296 Net interest earned and expenses paid by PMG on - (15)behalf of Luna Costs incurred to convert Luna loan and short - 55term loans Balance of the Luna loan as at 31 October 2010 - 336 Amount of loan converted - (175) Amount of loan outstanding 161 161 Luna Intercompany balances Opening balance (47) Interest / Guarantees on loans 25 30 Net movement in PMG/Luna balances (14) (77) Amount of intercompany balances (36) (47) Total of loan and intercompany amounts payable 125 114to Luna trading
The Luna loan of £161,000 is convertible at 35 pence per ordinary share and/or repayable. Luna Trading is the company through which PMG contract with D Ciclitira for consulting and business services. During the period, Luna Trading charged PMG for consultancy fees of £110,000 and remote office costs of £ 19,500.
In 2010, Luna Trading Limited, David and Serenella Ciclitira agreed to provide persona guarantees of £1 million to Lloyds Bank to support long term PMG loans. As consideration for providing the guarantees, Luna trading charges 5% per annum of the guarantee amount for the period of the guarantee. In addition David Cicilitira has been granted a fixed and floating charge over the Company's assets for the period of the guarantee and has been granted an option to acquire at fair value, Parallel Media (Championships) Limited (a wholly owned subsidiary of PMG which holds the rights to the Company's major sporting events).
Luna Trading - Trading Balances
During the year ended 31 December 2009, Parallel Media Group plc traded with Parallel Media (Africa) Limited, a company under the control of Luna Trading Limited. Amounts invoiced by PMG during 2009 totalled £188,439 and were outstanding from Luna Trading Limited at 30 June 2011. This company was acquired by the Group on 29 July 2011 (see Post Balance Sheet Events).
During the year ended 31 December 2009, Parallel Media Group plc traded with Parallel Media Korea (New Media) Limited (formerly Parallel Media (Korea) Limited), a company under the control of Luna Trading Limited. Amounts invoiced by PMG during 2009 totalled £80,947 and were outstanding at 30 June 2011. This company was acquired by the Group on 29 July 2011 (see Post Balance Sheet Events).
During the year ended 31 December 2010, Parallel Media Group plc invoiced Luna Trading Limited for the costs incurred in the development of Parallel Smart Media Limited (a joint venture with Talspace) for £337,182. The investment in Parallel Smart Media Limited is owned by Parallel Media (Korea) Limited (formerly Parallel Media (Korea) Limited). Parallel Media Korea (New Media) Limited and Parallel Media (Africa) Limited were acquired by the Group on 29 July 2011 (see Post Balance Sheet Events).
Parallel Contemporary Arts Limited
During the year PMG incurred costs in the staging and management of Art Projects owned by Parallel Media Contemporary Arts Limited, a company under the control of David Ciclitira. Recoverable debtor amounts relating to Korean Eye outstanding as at 30 June 2011 are £70,666. Other recoverable debtor amounts relating to Korean Eye and Indonesian Eye as at 30 June 2011 are £ 43,550.
11. Post Balance Sheet Events
Acquisition
Luna, Parallel Media Korea (New Media) Limited and Talspace jointly developed a series of smart phone applications for the live streaming and digital media presentation of sporting events. The worldwide rights for the Parallel Smart Media brand, which is the name which has been assigned to these new technology products, and associated development agreements cover sales and distribution rights in all international markets outside of Korea. These rights are held through Parallel Media Korea (New Media) Limited and will be deployed in Parallel Media (Africa) Limited as part of the worldwide rollout.
On 29 July 2011, shareholders ratified the acquisition of Parallel Media Korea (New Media) Limited and Parallel Media (Africa) Limited by PMG.
On 29 June 2011, Luna Trading and Stewart Mison, agreed to sell and PMG agreed to buy Parallel Media Korea (New Media) Limited and Parallel Media (Africa) Limited for a total consideration of £1,010,947 to be satisfied by:
£ Cancellation of the amounts owed by £606,568Luna to PMG Issue of ordinary shares to Luna at the £404,379placing price Total £1,010,947
This agreement was ratified by shareholders on 29 July 2011. Full details were provided in the Financial Statements for the year ended 31 December 2010 - see pages 38 and 39.
Other
In July 2011, Luna Trading Limited settled £119,889 to PMG creditors of which £ 87,500 was subsequently settled by PMG (to Luna Trading) by the issue of ordinary shares at the placing price of 35p.
Placing
On 28 July 2011, PMG announces that it has raised £1.2 million before expenses, by way of a placing of 3,428,568 new ordinary shares in the Company at a price of 35 pence per share with both existing shareholders and new investors
The proceeds of the placing will be used to provide working capital to develop the Company's existing business and support the roll out of its new smart media platform, Parallel Smart Media ("PSM").
As part of the consideration for the Acquisition of Parallel Media Korea (New Media Limited) and Parallel Media (Africa) Limited, the Company allotted 1,153,746 new ordinary shares to Luna Trading Limited (a company controlled by David Ciclitira).
On completion of the above transactions there is 20,019,752 ordinary shares in issue. Following the issue and allotment of the Placing Shares and Consideration Shares and Admission the interests of Mr Ciclitira and Mr Murugason in the issued share capital of the Company are as follows:
David Ciclitira* 39.66%
Ranjit Murugason 4.8%
* David Ciclitira's interest includes his direct interest, that of Luna Trading Limited and that of the other members of the Concert Party as defined in the circular published by the Company dated 9 August 2010.
12. 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
13. Approval of Interim Financial Statements
The interim financial statements were approved by the board of directors on 19 August 2011
XLON