Last checked at 30 Sep 2009 07:00
CSS Stellar plc
("CSS" or the "Group")
Interim Results for the six months ended 30 June 2009
CSS Stellar plc, the entertainment and sports management and marketing group, today announces its interim results for the six months ended 30 June 2009.
Highlights:
Strong performance from core sports business
Significant reduction in central overheads following 2008 disposals
Focus on developing the substantial Sports operations
For further information please contact:
|
CSS Stellar Plc | |
| Julian Jakobi, Chairman | Tel: 020 7332 2002 |
|
Astaire Securities Plc, Nominated Adviser | |
| Luke Cairns | Tel: 020 7448 4400 |
CHAIRMAN'S STATEMENT
Following the disposals the Group made in 2008, the CSS Stellar Group is now operating in a significantly more stable environment, having reduced overheads, and is now focused on its core operating companies within Motorsports and Golf.
Group Results
In the six months to June 2009, revenue was £0.8 million (2008: £2.5 million), a fall of 67%. This reduction is due to the change in the nature of a client contract, from the management of a race programme, where revenue and costs were recognised gross, to a fixed retainer. An operating loss of £494,000 after impairment of goodwill of £200,000 relating to the GEM Group represents a 77% improvement on the comparable period in 2008, due to an improved performance from CSS Stellar Sports, and a reduced level of overheads across the Group.
The results on continuing operations for the six months to June 2009 are considered below in turn:
Talent Management
In the six months to 30 June 2009 revenue on continuing operations was £0.6 million (2008: £1.8 million) and the operating profit was £43,000 (2008: loss of £365,000). The increase in operating profit is due to the focus on a number of strongly performing key clients and a significant reduction in overheads within CSS Stellar Sports.
CSS Stellar Sports
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 highly successful return to Indy Car after winning the series championship in 2007. Dario is second in the current championship standings, having won four races, with one race remaining. 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.
Hambric Stellar Golf
In golf, Oliver Wilson continues to build on his successful 2008 season, finishing second in the HSBC Champions tournament, and is currently ninth in the European Tour Rankings, and ranked forty-fifth in the world. Gonzalo Fernandez-Castano is currently ranked tenth on the European Tour, and forty-fourth in the world, having achieved four second place finishes this season. Francesco Molinari is also having a successful season, having finished second at the UBS Hong Kong Open, and with a number of other top ten finishes in the season. He is ranked twenty-fourth on the European Tour and sixty-fifth in the world.
Marketing
Our marketing division, which consists of the remainder of The GEM Group, a promotional marketing business based in New York, has suffered due to exceptionally tough trading conditions in the media market. In the six months to 30 June 2009, revenue on continuing operations was £0.2 million (2008: £0.7 million) and the division produced an operating loss of £134,000 (2008: profit of £11,000). Action has been taken to reduce overheads in line with the fall in revenue and we anticipate making further structural changes in the second half of the year to reduce the current level of losses. An impairment charge of £200,000 has been recognised in the period to reflect this.
Central Costs
In the six months to 30 June 2009, central costs were £0.2 million (2008: £0.7 million), a reduction of 72%. As we highlighted in 2008, costs have been significantly lowered compared with the same period in 2008, principally through large reductions in professional fees and property costs. The Group has identified further areas where overheads can be reduced, and the benefit of this should be seen in the second half of the year.
Future Strategy
We announced in October 2008 that following the disposal of Icon Display and other subsidiaries within the previous twelve months, the Company would be treated as an investing company under Rule 15 of the AIM Rules. However, on review, and following consultation with the Exchange, the Board now considers that the Company should not have been classified as an investing company, since it retains a number of trading businesses within motorsports, golf, and marketing, as discussed in more detail within this report. Therefore, with immediate effect the Company will no longer be classified as an Investing Company for the purposes of the AIM Rules and there will be no obligation to complete a reverse takeover prior to 24 October 2009 as was previously stated. Nevertheless the Company continues to pursue its strategy to build on its core business as outlined at the time of the disposal of Icon Display.
Following the disposals in 2008, the Group has focused on reducing overheads to a level appropriate for the size of the Group. CSS remains debt free, and as we reported in 2008, the focus of the Group is now on building on the strong foundations of the Sports businesses within the Group. The economic climate remains challenging, but despite this the Board is actively considering a number of opportunities within the sports sector to enhance shareholder value. The Board hopes to be in a position to update shareholders in the near future.
Julian Jakobi
Chairman
30 September 2009
Consolidated interim income statement
| 6 months to 30 June 2009 | 6 months to 30 June 2008 | Year to 31 December 2008 | ||
| Unaudited | Unaudited | Audited | ||
| Note | £'000 | £'000 | £'000 | |
| Continuing operations | ||||
| Revenue | 838 | 2,533 | 5,135 | |
| Cost of sales | (104) | (1,996) | (3,560) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Gross profit | 734 | 537 | 1,575 | |
| Impairment of goodwill | (200) | (1,064) | (1,184) | |
| Other administrative costs | (1,028) | (1,621) | (2,851) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Total administrative costs | (1,228) | (2,685) | (4,035) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Operating loss | (494) | (2,148) | (2,460) | |
| Finance income | 1 | 3 | 5 | |
| Finance expense | (1) | (153) | (213) | |
| Disposal of available for sale financial assets | - | - | 27 | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Loss before tax | (494) | (2,298) | (2,641) | |
| Income tax expense | - | (50) | (50) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Net result from continuing operations | (494) | (2,348) | (2,691) | |
| Net result from discontinued operations | - | (1,588) | (2,381) | |
| ------------------------- | ------------------------- | ------------------------- | ||
| Loss for the period | (494) | (3,936) | (5,072) | |
| ========================= | ========================= | ========================= | ||
| Loss per share: | ||||
| Continuing operations: | ||||
| Basic and diluted loss per share | 4 | (1.70) | (8.10) | (9.28) |
| Discontinued operations: | ||||
| Basic and diluted loss per share | - | (5.48) | (8.22) | |
| Total: | ||||
| Basic and diluted loss per share | (1.70) | (13.58) | (17.50) | |
Consolidated interim balance sheet
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 30 | 1,371 | 33 |
| Goodwill | 700 | 3,124 | 902 |
| Available for sale financial assets | - | 37 | - |
| Other receivables | 195 | - | 394 |
| ------------------------- | ------------------------- | ------------------------- | |
| 925 | 4,532 | 1,329 | |
| ------------------------- | ------------------------- | ------------------------- | |
| Current assets | |||
| Inventories | - | 462 | - |
| Trade and other receivables | 2,163 | 8,771 | 3,009 |
| Cash and cash equivalents | 213 | 256 | 524 |
| ------------------------- | ------------------------- | ------------------------- | |
| 2,376 | 9,489 | 3,533 | |
| ------------------------- | ------------------------- | ------------------------- | |
| Total assets | 3,301 | 14,021 | 4,862 |
| ========================= | ========================= | ========================= | |
| EQUITY | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 14,488 | 14,488 | 14,488 |
| Share premium account | 28,158 | 28,158 | 28,158 |
| Revaluation reserve | - | 431 | - |
| Translation reserve | 82 | 80 | (111) |
| Profit and loss account | (40,157) | (39,167) | (39,663) |
| ------------------------- | ------------------------- | ------------------------- | |
| Total equity | 2,571 | 3,990 | 2,872 |
| ------------------------- | ------------------------- | ------------------------- | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Long-term borrowings | - | 487 | - |
| ------------------------- | ------------------------- | ------------------------- | |
| Current liabilities | |||
| Trade and other payables | 536 | 5,400 | 1,794 |
| Short-term borrowings | - | 3,102 | - |
| Current portion of long-term borrowings | - | 183 | - |
| Current tax payable | 194 | 690 | 188 |
| Deferred tax liability | - | 169 | 8 |
| ------------------------- | ------------------------- | ------------------------- | |
| Total liabilities | 730 | 9,544 | 1,990 |
| ------------------------- | ------------------------- | ------------------------- | |
| Total equity and liabilities | 3,301 | 14,021 | 4,862 |
| ========================= | ========================= | ========================= |
Consolidated interim statement of comprehensive income
| 6 months to 30 June 2009 | 6 months to 30 June 2008 | Year to 31 December 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Loss for the period | (494) | (3,936) | (5,072) |
| Exchange differences on translation of foreign operations | 193 | - | (146) |
| Deferred tax on revaluation of freehold property | - | - | 164 |
| ------------------------- | ------------------------- | ------------------------- | |
| Total comprehensive income for the period | (301) | (3,936) | (5,054) |
| ========================= | ========================= | ========================= | |
| Attributable to: | |||
| Equity holders of the parent | (301) | (3,936) | (5,054) |
| ========================= | ========================= | ========================= |
Consolidated interim statement of changes in equity
Six months ended 30 June 2009
| Share capital | Share premium | Revaluation Reserve | Translation Reserve | Profit and Loss Account | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 01 January 2009 | 14,488 | 28,158 | - | (111) | (39,663) | 2,872 |
| Loss for the period | - | - | - | - | (494) | (494) |
| Transfer of realised revaluation reserve | - | - | - | - | - | - |
| Other comprehensive income | ||||||
| Exchange differences on translation of foreign operations | - | - | - | 193 | - | 193 |
| Deferred tax on revaluation of freehold property | - | - | - | - | - | - |
| Total comprehensive income for the period | - | - | - | 193 | - | 193 |
| Balance at 30 June 2009 | 14,488 | 28,158 | - | 82 | (40,157) | 2,571 |
Six months ended 30 June 2008
| Share capital | Share premium | Revaluation Reserve | Translation Reserve | Profit and Loss Account | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 01 January 2008 | 14,488 | 28,158 | 439 | 35 | (35,194) | 7,926 |
| Loss for the period | - | - | - | - | (3,936) | (3,936) |
| Transfer of realised revaluation reserve | - | - | (8) | - | 8 | - |
| Other comprehensive income | ||||||
| Exchange differences on translation of foreign operations | - | - | - | 45 | (45) | - |
| Deferred tax on revaluation of freehold property | - | - | - | - | - | - |
| Total comprehensive income for the period | - | - | - | 45 | (45) | - |
| Balance at 30 June 2008 | 14,488 | 28,158 | 431 | 80 | (39,167) | 3,990 |
Year ended 31 December 2008
| Share capital | Share premium | Revaluation Reserve | Translation Reserve | Profit and Loss Account | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 01 January 2008 | 14,488 | 28,158 | 439 | 35 | (35,194) | 7,926 |
| Loss for the period | - | - | - | - | (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 period | - | - | - | (146) | 164 | 18 |
| Balance at 31 December 2008 | 14,488 | 28,158 | - | (111) | (39,663) | 2,872 |
Consolidated interim statement of cash flows
| 6 months to 30 June 2009 | 6 months to 30 June 2008 | Year to 31 December 2008 | |
| Unaudited | Unaudited | Audited | |
| £'000 | £'000 | £'000 | |
| Cash flows from operating activities | |||
| Loss after taxation | (494) | (3,934) | (5,072) |
| Adjustments for: | |||
| Depreciation | 5 | 192 | 294 |
| Impairment of goodwill | 200 | 1,205 | 1,184 |
| Net interest expense | - | 110 | 168 |
| Taxation expense recognised in profit and loss | - | 50 | 521 |
| Loss/(profit) from sale of investments | - | 1,263 | (27) |
| Loss on disposal of subsidiaries | - | - | 3,235 |
| Change in trade and other receivables | 1,175 | (660) | 131 |
| Change in inventories | (107) | (191) | (167) |
| Change in trade and other payables | (1,088) | 1,336 | (3,435) |
| Income taxes paid | - | - | 503 |
| ------------------------- | ------------------------- | ------------------------- | |
| Net cash used in operating activities | (309) | (629) | (2,665) |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment | (2) | (148) | (171) |
| Proceeds from sale of investments | - | - | 20 |
| Proceeds from sale of subsidiaries | - | (851) | 7,463 |
| Net cash disposed of with subsidiaries | - | - | (3,061) |
| Proceeds from sale of property, plant and equipment | - | - | 839 |
| Interest received | 1 | 43 | 45 |
| ------------------------- | ------------------------- | ------------------------- | |
| Net cash (used in)/from investing activities | (1) | (956) | 5,135 |
| ------------------------- | ------------------------- | ------------------------- | |
| Cash flows from financing activities | |||
| Repayment of long-term borrowings | - | (348) | (1,018) |
| Payment of finance lease liabilities | - | (24) | (56) |
| Interest paid | (1) | (153) | (213) |
| ------------------------- | ------------------------- | ------------------------- | |
| Net cash used in financing activities | (1) | (525) | (1,287) |
| ------------------------- | ------------------------- | ------------------------- | |
| Net change in cash and cash equivalents | (311) | (2,110) | 1,183 |
| Cash and cash equivalents at beginning of period | 524 | (659) | (659) |
| ------------------------- | ------------------------- | ------------------------- | |
| Cash and cash equivalents at end of period | 213 | (2,769) | 524 |
| ========================= | ========================= | ========================= |
Notes to the consolidated interim financial statements
1 Publications of non-statutory accounts
The financial information set out in this interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The figures from the year ended 31 December 2008 have been extracted from the statutory financial statements (reclassified in accordance with IFRS 5) which have been filed with the Registrar of Companies. The auditors' report was unqualified and did not contain statements under either Section 237(2) or Section 237(3) of the Companies Act 1985.
2 Basis of preparation
These unaudited condensed consolidated interim financial statements ('the interim financial statements') are for the six months ended 30 June 2009. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2008.
These interim financial statements have been prepared in accordance with accounting policies under the historical cost convention, except for revaluation of certain properties and financial instruments. They are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU).
The principal accounting policies have remained unchanged from those set out in the consolidated financial statements of the Group for the year ended 31 December 2008, except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8 Operating Segments.
The adoption of IAS 1 (Revised 2007) does not affect the financial position or profits of the Group, but requires additional disclosures. The measurement and recognition of the Group's assets, liabilities, income and expenses is unchanged, although some items that were recognised directly in equity are now recognised in other comprehensive income, for example exchange differences on translation of foreign operations. IAS 1 (Revised 2007) affects the presentation of owner changes in equity and introduces a "Statement of comprehensive income". In accordance with the new standard, a "Statement of recognised income and expense", as presented in the 2008 consolidated financial statements, is not included. Additionally, a "Statement of changes in equity" is presented.
As part of the adoption of IFRS 8, the Group has disclosed revenue and segmental results by the main operating segments in addition to the geographical segment. This is also in line with how the information is reported internally.
3 Revenue and segmental information
The Group's principal activities consist of sports and entertainment management ("Talent Management") and marketing services. Revenue is attributable to the principal activity, which is mainly carried out in the UK and US.The main operating segments are Talent Management and Marketing. The other operating segments do not meet the quantitative thresholds required by IFRS 8 to be reported as separate segments.
An analysis of revenue and segment result by geography and operating segment is shown below:
| Six months to 30 June 2009 | UK | US | Central costs | Total |
| £'000 | £'000 | £'000 | £'000 | |
| Revenue | ||||
| Talent Management | 591 | - | - | 591 |
| Marketing | - | 247 | - | 247 |
| Other | - | - | - | - |
| 591 | 247 | - | 838 | |
| Segment result | ||||
| Talent Management | 43 | - | - | 43 |
| Marketing | - | (134) | - | (134) |
| Other | - | - | (203) | (203) |
| 43 | (134) | (203) | (294) | |
| Impairment | (200) | |||
| Interest | - | |||
| Tax | - | |||
| Total loss for the period | (494) |
| Six months to 30 June 2008 | UK | US | Central costs | Total |
| £'000 | £'000 | £'000 | £'000 | |
| Revenue | ||||
| Talent Management | 1,774 | - | - | 1,774 |
| Marketing | - | 731 | - | 731 |
| Other | 28 | - | - | 28 |
| 1,802 | 731 | - | 2,533 | |
| Segment result | ||||
| Talent Management | (365) | - | - | (365) |
| Marketing | - | 11 | - | 11 |
| Other | - | - | (730) | (730) |
| (365) | 11 | (730) | (1,084) | |
| Impairment | (1,064) | |||
| Interest | (150) | |||
| Tax | (50) | |||
| Net result from discontinued operations | (1,586) | |||
| Total loss for the period | (3,934) |
| Year to 31 December 2008 | UK | US | Central costs | Total |
| £'000 | £'000 | £'000 | £'000 | |
| Revenue | ||||
| Talent Management | 3,563 | - | - | 3,563 |
| Marketing | - | 1,502 | - | 1,502 |
| Other | 70 | - | - | 70 |
| 3,633 | 1,502 | - | 5,135 | |
| Segment result | ||||
| Talent Management | (137) | - | - | (137) |
| Marketing | - | - | - | - |
| Other | - | - | (1,139) | (1,139) |
| (137) | - | (1,139) | (1,276) | |
| Impairment | (1,184) | |||
| Interest | (208) | |||
| Sale of investments | 27 | |||
| Tax | (50) | |||
| Net result from discontinued operations | (2,381) | |||
| Total loss for the period | (5,072) |
4 Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.
Reconciliations of the earnings and weighted average number of shares used are set out below.
6 months to 30 June 2009 (unaudited)
| Earnings | Weighted average number of shares | Basic Per share amount | |
| £'000 | Pence | ||
| Continuing operations | |||
| Loss after tax | (494) | ||
| ------------------------- | |||
| Earnings attributable to ordinary shareholders | (494) | ||
| Weighted average number of shares | 28,976,581 | ||
| Total basic and diluted earnings per share | (1.70) | ||
| ======= |
6 months to 30 June 2008 (unaudited)
| Earnings | Weighted average no. shares | Basic Per share amount | |
| £'000 | Pence | ||
| Continuing operations | |||
| Loss after tax | (2,348) | ||
| ------------------------- | |||
| Earnings attributable to ordinary shareholders | (2,348) | ||
| Weighted average number of shares | 28,976,581 | (8.10) | |
| ======= | |||
| Discontinued operations | |||
| Loss after tax | (1,588) | ||
| ------------------------- | |||
| Earnings attributable to ordinary shareholders | (1,588) | ||
| Weighted average number of shares | 28,976,581 | (5.48) | |
| ======= | |||
| Total basic and diluted earnings per share | (13.58) | ||
| ======= |
Year to 31 December 2008 (audited)
| Earnings | Weighted average no. shares | Basic Per share amount | |
| £'000 | Pence | ||
| Continuing operations | |||
| Loss after tax | (2,691) | ||
| ------------------------- | |||
| Earnings attributable to ordinary shareholders | (2,691) | ||
| Weighted average number of shares | 28,976,581 | (9.28) | |
| ======= | |||
| Discontinued operations | |||
| Loss after tax | (2,381) | ||
| ------------------------- | |||
| Earnings attributable to ordinary shareholders | (2,381) | ||
| Weighted average number of shares | 28,976,581 | (8.22) | |
| ======== | |||
| Total basic and diluted earnings per share | (17.50) | ||
| ======== |