Primorus Inv. Regulatory News (PRIM)

RNS Number : 4392J

CSS Stellar PLC

31 March 2010

 

 

For Immediate Release

 

 

CSS Stellar plc

("CSS Stellar" or the "Group")

 

Final Results

 

CSS Stellar, the sports and entertainment management and marketing group, today announces its final results for the year ended 31 December 2009.

 

Highlights:

·; Operating loss prior to impairment of goodwill of £0.2 million (2008: loss of £1.3 million)

 

·; Continued reduction in corporate overheads

 

·; Group continues to be debt free

 

 

For further information please contact:

CSS Stellar
Julian Jakobi, Chairman	Tel: 020 7332 2002
Astaire Securities plc
Shane Gallwey / Avi Robinson	Tel: 020 7448 4400

 

CHAIRMAN'S STATEMENT

Overview

 

As we highlighted in our interim statement, the Group is now operating in a much more stable environment, being focused on our core operating activities within Motorsports and Golf. Following the disposals made in 2008, the Group has enjoyed a solid year.

 

Financial Results

 

Revenue from continuing operations for the Group of £1.4 million was 61% lower than the prior year (2008: £3.6 million) due to the change in the nature of a contract from project management where revenue was recognised on a gross basis to a net fixed fee. Group operating loss, prior to impairment of goodwill of £0.3 million, was £0.2 million, a significant reduction on 2008 (loss of £1.3 million prior to impairment of goodwill of £0.8 million).

 

Corporate overheads

 

As we highlighted in 2008, the level of corporate overheads has been reduced from that of two years ago and the Group continues to identify opportunities to further reduce these costs.

 

Board changes

 

We were sad to hear in December 2009 of the death of one of our non-executive directors, George Wardale, following a long illness. George played a valuable role in the restructuring of the Group and will be sorely missed.

 

Future strategy

The Board continues to focus its strategy on the core businesses of Motorsports and Golf. Both of these businesses have a strong portfolio of key clients. The Board continues to evaluate opportunities within the sports sector to enhance shareholder value and also identify areas where corporate overheads can be further reduced in the continuing challenging economic environment.

I should like to thank all of our employees for their efforts and support during the past year.

 

Julian Jakobi

Chairman

30 March 2010

 

OPERATING AND FINANCIAL REVIEW

Group Review of 2010

Revenue from continuing operations for the Group in the year ended 31 December 2009 was £1.4 million, a 61% reduction on 2008 (£3.6 million). The results for 2008 have been re-presented to show the results of discontinued operations separately. The reduction in revenue was due to the change in the nature of a US contract, from that of a project management role where revenue was recognised gross to a net fee based arrangement.

Group operating loss, adjusted for impairment of goodwill of £0.3 million, was £0.2 million, a significant reduction on 2008 (loss of £1.3 million prior to impairment of goodwill of £0.8 million). This was due to the significant reduction in central overheads from £1.1 million to £0.3 million.

 

Review of continuing operations

 

The Group's trading operations now consist of CSS Stellar Sports, Hambric Stellar Golf and CSS Presenters. Together these made an operating profit prior to impairment of goodwill of £0.1 million (2008: loss of £0.1 million) on revenue of £1.4 million (2008: £3.6 million), due largely to the reduction in costs during the year. The Group is now focused primarily in the core areas of Motorsports and Golf.

 

Our clients once again achieved numerous notable successes during the period. In March, Allan McNish won the Sebring 12 hour endurance race in his diesel powered Audi, becoming the most successful British driver in the history of the race by winning it for a third time. Allan also achieved a podium place in finishing third in the prestigious Le Mans 24 Hours race in June.

 

Dario Franchitti has made a hugely successful return to Indy Car by regaining the IndyCar series championship, coming from behind in the final race of the season to take the title for the second time in three years, winning five races during the season. Dan Wheldon returned to his former team, Panther Racing, in 2009, and finished second in the Indianapolis 500. He has also had eight other top ten finishes in the season and finished tenth in the championship.

In golf, Oliver Wilson continued to build on his successful 2008 season, finishing seventh in the European Tour Race to Dubai, and coming second in both the HSBC Champions and Alfred Dunhill Links tournaments. He has had a successful start to 2010 and is currently fifteenth in the European Tour Rankings, and ranked thirty-eighth in the world. Gonzalo Fernandez-Castano finished seventeenth in the Race to Dubai, and achieved four second place finishes in the season. Gonzalo is currently ranked eighty-third in Europe and seventy-seventh in the world. Francesco Molinari also had a successful season, having finished second at the UBS Hong Kong Open and Portugal Masters, and with a number of other top ten finishes in the season, including the US PGA championship. He also won the World Cup for Italy together with his brother. He finished fourteenth in the 2009 European Tour Race to Dubai, and is currently ranked thirtieth in Europe and forty-sixth in the world.

 

Discontinued Operations

 

In September 2009, the Board took the decision to close its New York based promotional marketing business, GEM New York. This was a low margin business which suffered considerably from late 2008 when major clients began to cut their media marketing budgets. The business was no longer central to the Group's strategy of focusing on core operating activities. As a consequence of this decision, revenue and expenses, gains and losses relating to GEM New York have been eliminated from the Group's continuing results and presented as a single line item on the face of the income statement (see "net loss from discontinued operations"). The comparative income statement has been represented to show the discontinued operations separately from continuing operations.

 

Central costs

Central costs in 2009 were £0.3 million, a 71% reduction on 2009 (£1.1 million). As we highlighted in our Interim statement, costs have been significantly lowered compared with 2008, principally through large reductions in professional fees and property costs, with both the Board and the head office function reduced in size. Further reductions are being considered.

 

Interest Payable

The net interest payable by the Group in 2009 was £21,000 (2008: £208,000). All of the Group's borrowings were repaid in 2008, leading to the significant reduction in interest paid.

 

Goodwill

In accordance with IAS 36, the Board reviewed the carrying value of goodwill held in the Balance Sheet for impairment. As a result of the review, the Board concluded that a write down of £0.3 million is required relating to CSS Stellar Sports.

Taxation

The Group's tax credit was £24,000 (2008: charge of £50,000), arising from an adjustment in respect of prior periods relating to UK operations.

Loss per Share

Loss per share on continuing operations on a basic and fully diluted basis shows a loss of 1.81p per share (2008: loss of 7.83p). Basic unadjusted and fully diluted earnings per share on discontinued operations were a loss of 3.02p (2008: loss of 9.67p). The losses are due to the impact of the disposals and the impairment write down booked in the year.

 

Foreign Exchange

The Group's earnings are exposed to the Sterling / US Dollar exchange rate. The average US Dollar rate in 2009 was $1.57 to the Pound (2008: $1.86), with the rate at 31 December 2009 $1.59 to the Pound (2008: $1.45), as sterling continued its weakness against the dollar.

 

Net Assets

 

As a consequence of the impairment of goodwill and loss for the year, net assets at 31 December 2009 are £1.5 million (2008: £2.9 million). Net asset value per share at 31 December 2009 was 5p (2008: 10p).

Cash Flow

The cash flow statement shows a decrease in cash of 0.3 million (2008: increase of £1.2 million) as a consequence of the closure of GEM New York.

 

 

 

Julian Jakobi

Chairman

30 March 2010

 

 

CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2009
			2009		2008
	Notes		£000		£000
Revenue	3		1,418		3,633
Cost of sales			-		(2,345)
Gross profit			1,418		1,288
Impairment of goodwill			(300)		(764)
Other administrative costs			(1,646)		(2,565)
Total administrative costs			(1,946)		(3,329)
Operating loss	3		(528)		(2,041)
Finance income			1		5
Finance costs			(22)		(213)
Sale of investments			-		27
Loss before tax			(549)		(2,222)
Income tax credit/(expense)			24		(50)
Net loss from continuing operations	3		(525)		(2,272)
Net loss from discontinued operations	3, 5		(876)		(2,800)
Net loss for the year	3		(1,401)		(5,072)
Attributable to:
Equity holders of the parent			(1,401)		(5,072)
Loss per share (pence)	4		pence		pence
Continuing operations
Basic and diluted loss per share			(1.81)		(7.83)
Discontinued operations
Basic and diluted loss per share			(3.02)		(9.67)
Total
Basic and diluted loss per share			(4.83)		(17.50)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
			£000		£000
Loss for the year			(1,401)		(5,072)
Exchange differences on translation of foreign operations			(9)		(146)
Deferred tax on revaluation of freehold property			-		164
Total comprehensive income for the year			(1,410)		(5,054)
Attributable to:
Equity holders of the parent			(1,410)		(5,054)

STATEMENT OF FINANCIAL POSITION
As at 31 December 2009
			2009		2009		2008		2008
			£000		£000		£000		£000
ASSETS
Non-current assets
Property, plant and equipment			12				33
Goodwill			402				902
Other receivables			-				394
					414				1,329
Current assets
Trade and other receivables			1,242				3,009
Cash and cash equivalents			188				524
					1,430				3,533
Total assets					1,844				4,862
EQUITY
Equity attributable to equity holders of the parent
Share capital			14,488				14,488
Share premium account			28,158				28,158
Translation reserve			(120)				(111)
Profit and loss account			(41,064)				(39,663)
Total equity					1,462				2,872
LIABILITIES
Current liabilities
Trade and other payables			357				1,794
Current tax payable			25				188
Deferred tax liability			-				8
Total liabilities					382				1,990
Total equity and liabilities					1,844				4,862

 

CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2009
		2009		2009		2008		2008
		£000		£000		£000		£000
Cash flows from operating activities
Loss after taxation				(1,401)				(5,072)
Adjustments for:
Depreciation		8				294
Impairment of goodwill		500				1,184
Net interest expense		21				168
Taxation credit/(expense) recognised in profit and loss		(24)				521
Profit from sale of investments		-				(27)
Loss on disposal of subsidiaries		-				3,235
Change in trade and other receivables		1,196				229
Change in inventories		-				(167)
Change in trade and other payables		(925)				(3,435)
Income taxes paid		(88)				503
				688				2,505
Net cash used in operating activities				(713)				(2,567)
Cash flows from investing activities
Purchase of property, plant and equipment		(4)				(171)
Proceeds from sale of investments		12				20
Proceeds from sale of subsidiaries		340				7,463
Net cash disposed of with subsidiaries		-				(3,061)
Proceeds from sale of property, plant and equipment		17				839
Interest received		1				45
Net cash generated by investing activities				366				5,135
Cash flows from financing activities
Repayment of long-term borrowings		-				(1,018)
Payment of finance lease liabilities		-				(56)
Interest paid		(22)				(213)
Net cash used in financing activities				(22)				(1,287)
Net change in cash and cash equivalents				(369)				1,281
Exchange loss/(gain) on cash and cash equivalents				33				(98)
Cash and cash equivalents at beginning of period				524				(659)
Cash and cash equivalents at end of period				188				524

 

 

STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2009

	Share capital	Share premium	Revaluation Reserve	Translation Reserve	Retained earnings	Total attributable to owners of parent
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2009	14,488	28,158	-	(111)	(39,663)	2,872
Loss for the year	-	-	-	-	(1,401)	(1,401)
Other comprehensive income:
Exchange differences on translation of foreign operations	-	-	-	(9)	-	(9)
Total comprehensive income for the year	-	-	-	(9)	(1,401)	(1,410)
Balance at 31 December 2009	14,488	28,158	-	(120)	(41,064)	1,462

 

	Share capital	Share premium	Revaluation Reserve	Translation Reserve	Retained earnings	Total attributable to owners of parent
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2008	14,488	28,158	439	35	(35,194)	7,926
Loss for the year	-	-	-	-	(5,072)	(5,072)
Transfer of realised revaluation reserve	-	-	(439)	-	439	-
Other comprehensive income:
Exchange differences on translation of foreign operations	-	-	-	(146)	-	(146)
Deferred tax on revaluation of freehold property	-	-	-	-	164	164
Total comprehensive income for the year	-	-	(439)	(146)	(4,469)	(5,054)
Balance at 31 December 2008	14,488	28,158	-	(111)	(39,663)	2,872

 

 

 

NOTES TO THE FINANCIAL INFORMATION
Year ended 31 December 2009

 

1. Basis of preparation

CSS Stellar plc is a company incorporated in the United Kingdom. The Group financial statements are for the year ended 31 December 2009 and have been prepared under the historical cost convention, except for revaluation of certain properties and financial instruments.

These consolidated financial statements (the financial statements) have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("adopted IFRS").

The principal accounting policies of the Group are set out in the Group's 2008 Annual Report and Financial Statements. These policies have remained unchanged.

 

2. Financial Information

 

The financial information relating to the year ended 31 December 2009 set out in this announcement does not constitute Statutory Accounts as defined in Section 435 of the Companies Act 2006, but has been extracted from the statutory accounts, which received an unqualified auditors' report and which have not yet been filed with the Registrar of Companies. The financial information relating to the period ended 31 December 2008 is extracted from the statutory accounts, which incorporated an unqualified audit report and which has been filed with the Registrar of Companies.

 

3. Segment Reporting
The Group has adopted IFRS 8 Operating Segments during the year, which has led to a change in the way segments are disclosed in the financial statements. In previous years, segments were identified by reference to the division each business operated in. In the year under review, all continuing businesses fall under the division of Talent Management. At 31 December 2009, the Group is organised into two separate segments, being the primary reporting format: Motorsports and Golf. Both segments derive revenues largely through commissions earned through client representation. Revenues are from external customers only and there are no inter-segment transfers. Central costs are not absorbed by each segment and are shown separately. In addition, one minor operating segment for which IFRS 8's quantitative thresholds have not been met is included within 'Other'.
31 December 2009	Motorsports	Golf	Other		Central costs	Total Continuing	Discontinued activities	Total
Revenue	1,095	286	37		-	1,418	359	1,777
Cost of sales	-	-	-		-	-	-	-
Gross profit	1,095	286	37		-	1,418	359	1,777
Employee benefits expense	471	111	15		157	754	353	1,107
Depreciation, amortisation and impairment of non-financial assets	302	-	-		5	307	418	725
Other administrative costs	474	181	59		171	885	464	1,349
Total administrative costs	1,247	292	74		333	1,946	1,235	3,181
Operating loss	(152)	(6)	(37)		(333)	(528)	(876)	(1,404)
Finance income	-	-	-		1	1	-	1
Finance costs	-	-	-		(22)	(22)	-	(22)
Loss before tax	(152)	(6)	(37)		(354)	(549)	(876)	(1,425)
Income tax credit	-	-	-		24	24	-	24
	(152)	(6)	(37)		(330)	(525)	(876)	(1,401)
Loss on disposal	-	-	-		-	-	-	-
Loss for the year	(152)	(6)	(37)		(330)	(525)	(876)	(1,401)
Segment assets
- Continuing operations	1,212	263	488		(120)	1,843	1	1,844
Segment liabilities
- Continuing operations	471	193	219		(757)	126	256	382
Segment impairment losses
- Continuing operations	(300)	-	-		-	(300)	(200)	(500)

 

31 December 2008	Motorsports	Golf	Other	Central costs	Total Continuing	Discontinued activities	Total
Revenue	3,193	282	158	-	3,633	13,149	16,782
Cost of sales	(2,345)	-	-	-	(2,345)	(7,045)	(9,390)
Gross profit	848	282	158	-	1,288	6,104	7,392
Employee benefits expense	634	108	92	443	1,277	3,284	4,561
Depreciation, amortisation and impairment of non-financial assets	769	-	1	61	831	646	1,477
Other administrative costs	398	117	71	635	1,221	1,308	2,529
Total administrative costs	1,801	225	164	1,139	3,329	5,238	8,567
				(1,139)
Operating loss	(953)	57	(6)	(1,139)	(2,041)	866	(1,175)
Finance income	4	-	-	1	5	40	45
Finance costs	(37)	-	-	(176)	(213)	-	(213)
Sale of investments	-	-	-	27	27	-	27
(Loss)/profit before tax	(986)	57	(6)	(1,287)	(2,222)	906	(1,316)
Income tax expense	-	-	-	(50)	(50)	(471)	(521)
	(986)	57	(6)	(1,337)	(2,272)	435	(1,837)
Loss on disposal	-	-	-	-	-	(3,235)	(3,235)
(Loss)/profit for the year	(986)	57	(6)	(1,337)	(2,272)	(2,800)	(5,072)
Segment assets
- Continuing operations	1,438	202	547	2,370	4,557	305	4,862
Segment liabilities
- Continuing operations	356	126	226	879	1,587	403	1,990
Segment impairment losses
- Continuing operations	(764)	-	-	-	(764)	(420)	(1,184)

 

4. Loss Per Share
		Weighted average					Basic per share
				no. of shares				amount (pence)
2009	£000
Continuing operations
Loss after tax	(525)
Earnings attributable to ordinary shareholders	(525)
Weighted average number of shares				28,976,581				(1.81)
Discontinued operations
Loss after tax	(876)
Earnings attributable to ordinary shareholders	(876)
Weighted average number of shares				28,976,581				(3.02)
Total basic and diluted loss per share								(4.83)
2008
Continuing operations
Loss after tax	(2,272)
Earnings attributable to ordinary shareholders	(2,272)
Weighted average number of shares				28,976,581				(7.83)
Discontinued operations
Loss after tax	(2,800)
Earnings attributable to ordinary shareholders	(2,800)
Weighted average number of shares				28,976,581				(9.67)
Total basic and diluted loss per share								(17.50)

 

 

 

5. Net loss from discontinued operations

 

In September 2009, the Board took the decision to close its New York based promotional marketing business ("GEM New York"). This was a low margin business which suffered considerably from late 2008 when major clients began to cut their media marketing budgets. The business was no longer central to the Group's strategy of focusing on core businesses. As a consequence of this decision, revenue and expenses, gains and losses relating to GEM New York have been eliminated from the Group's continuing results and presented as a single line item on the face of the income statement (see "net loss from discontinued operations"). The comparative income statement has been represented to show the discontinued operations separately from continuing operations. The operating results for this business are summarised below.

 

Prior year disposals

 

In 2008, a number of other businesses were disposed of by the Group. These results are described in detail in the 2008 Report and Financial Statements, and are shown below for comparative purposes.

 

 

Operating activities of discontinued operations
	GEM	PFD	Icon	Others	Total
	2009	2009	2009	2009	2009
	£000	£000	£000	£000	£000
Revenue	359	-	-	-	359
Cost of sales	-	-	-	-	-
Gross profit	359	-	-	-	359
Impairment of goodwill	(200)	-	-	-	(200)
Administrative costs	(1,035)	-	-	-	(1,035)
Operating loss	(876)	-	-	-	(876)
Finance income	-	-	-	-	-
Finance costs	-	-	-	-	-
Loss before tax	(876)	-	-	-	(876)
Income tax expense	-	-	-	-	-
Loss for the year	(876)	-	-	-	(876)
(Loss)/profit on disposal	-	-	-	-	-
Net loss from discontinued operations	(876)	-	-	-	(876)

 

 

 

Operating activities of discontinued operations
	GEM	PFD	Icon	Others	Total
	2008	2008	2008	2008	2008
	£000	£000	£000	£000	£000
Revenue	1,502	1,856	9,791	-	13,149
Cost of sales	(1,215)	(28)	(5,802)	-	(7,045)
Gross profit	287	1,828	3,989	-	6,104
Impairment of goodwill	(420)	-	-	-	(420)
Administrative costs	(286)	(1,885)	(2,647)	-	(4,818)
Operating (loss)/profit	(419)	(57)	1,342	-	866
Finance income	-	40	-	-	40
Finance costs	-	-	-	-	-
(Loss)/profit before tax	(419)	(17)	1,342	-	906
Income tax expense	-	-	(471)	-	(471)
(Loss)/profit for the year	(419)	(17)	871	-	435
(Loss)/profit on disposal	(474)	(703)	(2,099)	41	(3,235)
Net result from discontinued operations	(893)	(720)	(1,228)	41	(2,800)

 

 

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