Primorus Inv. Regulatory News (PRIM)

31 Mar 2009 14:03



For Immediate Release

CSS Stellar plc

("CSS" or the "Group")

Preliminary Results

for the year ended 31 December 2008

CSS Stellar plc, the sports and entertainment management and marketing group, today announces its audited preliminary results for the year ended 31 December 2008.

Highlights:

Operating loss prior to impairment of goodwill of £1.3 million (2007: loss  of £1.3 million)

Significant savings in corporate overheads in the second half of the year

Disposal of Icon Display and freehold property for £4.3 million in cash

Disposal of PFD for up to £4 million in cash

Disposal of GEM Minneapolis, Inc. for $1.8 million in cash

All debt repaid during the year

For further information please contact:

CSS Stellar
Julian Jakobi, Chairman	Tel: 020 7332 2002
Dowgate Capital Advisers Limited
Tony Rawlinson/Simon Sacerdoti	Tel: 020 7492 4777

  

CSS STELLAR PLC

CHAIRMAN'S STATEMENT

Overview 

The CSS Stellar Group is now a very different entity to that which began 2008. As we announced in our 2007 Annual Report and our 2008 Interim Results, the Group has sold a number of businesses, and repaid its bank borrowings in full from the proceeds of these sales. As a result, the Group is now debt free for the first time in its history, and can move forward into 2009 both as a much leaner business, but importantly, on a significantly more stable footing.

Financial Results

Revenue from continuing operations for the Group of £5.1 million was 11% lower than the prior year (2007: £5.8 million) due principally to a lower level of expenses incurred and then billed on to customers in our North American Sports business. Group operating loss, adjusted for impairment of goodwill of £1.2 million, was £1.3 million, in line with 2007 (loss of £1.3 million prior to impairment of goodwill of £1.2 million).

Disposals

During the year, the Group effected the disposal of three significant operating subsidiaries. In January 2008, we disposed of our 75% interest in GEM Minneapolis, Inc., a US based creative design and photography business, for $1.8 million in cash, with $1.1 million received on completion, and $0.7 million due over the next three years by way of a promissory note.

In June we disposed of our 100% subsidiary, The Peters Fraser & Dunlop Group Limited, for £4 million in cash, of which £3.75 million was paid on completion, with £0.25 million becoming payable in 2011 dependent on PFD's earnings over a three year period.

As we announced with our 2008 Interim results, in October we completed the disposal of our wholly owned subsidiary, Icon Display Limited, for a total of £4.3 million in cash, with £0.3 million deferred and payable within twelve months. These disposals are described in more detail in the Operating and Financial Review and the related notes.

Board changes

As we announced in our 2007 Annual Results, I took over as Chairman from David Buchler in July 2008. At the same time, Caroline Michel and Sir Jeremy Hanley retired from the Board.

John Webber, the former Chairman of the Group, rejoined the Board as an executive director in July. Simon Rhodes also rejoined the Board in October as a non-executive director.

Corporate overheads

Following my appointment as Chairman, the Group has radically reduced the level of corporate overheads, from an annualised rate of £1.6 million to an annualised £0.3 million, through a significant reduction in the level of professional fees incurred by the group, and the savings in property costs achieved following the relocation of our head office in October.

Investing company and future strategy

The Board intends to focus its strategy in two areas. Firstly, we intend to grow the existing businesses which form our core areas of expertise. Secondly, the Board continues to research and evaluate potential investment opportunities. As we announced in October, the Board will seek to develop its strategy of focusing on investing in the Company's core business of sport and sport media by considering only those investments which demonstrate considerable potential for growth and which will optimise shareholder value. The Board will update shareholders in due course once CSS is in a position to develop those opportunities.

Following the last of the disposals made in the year, CSS became an investing company, as defined in the AIM Rules for Companies. Its investing strategy was set out in the circular sent to shareholders on 3 October 2008, and was approved at a General Meeting on 24 October 2008. CSS is now required to complete an acquisition or acquisitions which constitute a reverse takeover, or otherwise implement its investing strategy within twelve months of becoming an investing company.

In the current challenging economic environment, the fact that the Group is now debt-free, coupled with a significantly leaner structure, leave CSS in a solid and stable position from which to develop. 

I should like to thank all of our employees for all of their efforts and support during the unwanted turbulence of the last two years.

Julian Jakobi

Chairman

31 March 2009

CSS STELLAR PLC

OPERATING AND FINANCIAL REVIEW

Group Review of 2009

Revenue from continuing operations for the Group in the year ended 31 December 2008 was £5.1 million, an 11% reduction on 2007 (£5.8 million). 2007 results have been re-presented to show the results of discontinued operations separately. The reduction was due to reduced gross revenue from one of our US contracts, due to a reduction in expenses incurred and then billed on.

Group operating loss, adjusted for impairment of goodwill of £1.2 million, was £1.3 million, in line with 2007 (loss of £1.3 million prior to impairment of goodwill of £1.2 million).

Review of continuing operations

Talent Management

The Talent Management division now consists of CSS Stellar Sports, Hambric Stellar Golf and CSS Presenters. The division made an operating loss prior to impairment of goodwill of £0.1 million (2007: profit of £0.3 million) on revenue of £3.6 million (2007: £4.3 million), due largely to restructuring costs incurred during the year. The division is now focused primarily in the core areas of Motorsports and Golf.

Our clients once again achieved many sporting successes throughout the year. In Motorsports, Allan McNish won the prestigious Le Mans 24 Hours for the second time, becoming the first Briton to be victorious in a diesel powered sports car. Andrea Dovizioso performed superbly during his first season in Moto GP, having stepped up from 250cc. He achieved a highly respectable fifth place in the Championship, reaching the podium in third place in the penultimate race of the season. Dario Franchitti returns to IndyCar to race for Ganassi in 2009, with an impressive pedigree in the sport having won the Indianapolis 500 and the Indy Racing League in 2007.

In Golf, our clients achieved many successes on tour. Oliver Wilson was a member of the European Ryder Cup team in Kentucky, having qualified for the team for this prestigious event following a highly successful season, finishing eleventh on the European Order of Merit, having had four runner up finishes in the 2008 season. Gonzalo Fernandez-Castano captured the fourth title of his career in the British Masters at the Belfry, and Francesco Molinari had his best season to date on the European Tour.

In other sports, Andy Hodge, the stroke of the Great Britain coxless four, powered the team to the gold medal at the Olympics in Beijing in August. In February, round-the-world yachtsman Alex Thomson finished second in the Barcelona World Race, and in doing so broke the 24 hour distance record for a 60 foot monohull yacht. 

Marketing

The Group's Marketing division is represented by the GEM Group, a promotional marketing business based in New York, which provides marketing solutions to a range of blue chip clients including GE and NBC.

Revenue in 2008 was £1.5m (2007: £1.5m), in line with 2007. Adjusting for goodwill impairment, the division broke even in the year, compared to a small profit of £0.1 million in 2007.

During the year GEM worked with GE's Lighting division on a number of marketing campaigns, including a full advertising campaign to highlight how customers can save energy, and the creation of an online promotional campaign for GE's Olympic Marketing Program.

GEM also worked with NBC Universal to deliver an interactive micro-site platforming the 2008 Beijing Olympic Games' sports content and marketing tools provided by NBC Universal.

Discontinued Operations

As discussed in the Chairman's Statement, the group disposed of a number of businesses during the year.

GEM Minneapolis, Inc., our US based creative design and photography business, was sold for $1.8 million in cash in January 2008, with $1.1 million in cash received on completion, and a further $0.7 million due over the next three years by way of a promissory note. The disposal generated a profit of £0.2 million prior to write off of goodwill of £0.7 million.

In June 2008, we sold The Peters Fraser & Dunlop Group Limited ("PFD"), the literary and talent agency, for £4 million, with £3.75 million payable in cash on completion, and £0.25 million becoming payable in 2011 dependent on PFD's earnings over a three year period. The disposal realised a profit of £2.5 million prior to a write off of goodwill of £3.2 million.

Icon Display, our Events branding and signage business, was sold in October 2008 for £4.3 million in cash, with £0.3 million becoming due within twelve months. This sale contributed a profit of £0.1 million prior to a write off of goodwill of £2.2 million.

Finally, the group disposed of two smaller operations, Talent Financial Limited, a wholly owned subsidiary, in January, and our investment in Michael Storrs Music Limited in December, together generating a profit of £0.1 million for the Group.

Central costs

Central costs in 2008 were £1.1 million, a 31% reduction on 2007 (£1.7 million). Significant savings were made in the second half of the year, with both the Board and the head office function reduced in size. The second half of 2008 also saw a significant reduction in professional fees following the disposal of PFD. The move to new premises in October 2008 will generate further savings in 2009.

Interest Payable

The net interest payable by the Group in 2007 was £208,000 (2007: £469,000). All of the Group's borrowings were repaid in October 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 £1.2 million is required, of which £0.8 million relates to CSS Stellar Sports, and £0.4 million to The GEM Group.

Taxation

The Group's tax charge was £0.1 million (2007: credit of £0.2 million), which relates entirely to the UK operations.

Loss per Share 

Loss per share on continuing operations on a basic and fully diluted basis shows a loss of 9.28p per share (2007: loss of 8.93p). Basic unadjusted and fully diluted earnings per share on discontinued operations were a loss of 8.22p (2007: loss of 34.29p).  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 2008 was $1.86 to the Pound (2007: $2.00), with the rate at 31 December 2008 $1.45 to the Pound (2007: $2.00), as sterling weakened significantly in the latter part of the year.

  

Bank Debt

The Group's gross bank debt of £3.1 million at 31 December 2007 was repaid in full following the disposal of Icon. The Group is now debt free for the first time since its inception in 1999.

Net Assets

As a consequence of the disposals during the year and the impairment of goodwill, Net Assets at 31 December 2008 are £2.9 million (2007: £7.4 million). Net asset value per share at 31 December 2008 was 10p (2007: 26p).

Cash Flow

The cashflow statement shows an increase in cash of £1.2 million (2007: decrease of £0.2 million) as a consequence of the disposals in the year and the repayment of borrowings.

Julian Jakobi

Chairman

31 March 2009

CSS STELLAR PLC
CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2008
			2008		2007
	Notes		£000		£000
Revenue	1		5,135		5,780
Cost of sales			(3,560)		(3,971)
Gross profit			1,575		1,809
Impairment of goodwill			(1,184)		(1,230)
Abortive disposal costs			-		(26)
Restructuring costs			-		(746)
Other administrative costs			(2,851)		(2,307)
Total administrative costs			(4,035)		(4,309)
Operating loss	1		(2,460)		(2,500)
Finance income			5		-
Finance costs			(213)		(469)
Sale of investments			27		260
Loss before tax			(2,641)		(2,709)
Income tax expense	2		(50)		167
Net loss from continuing operations	1		(2,691)		(2,542)
Net loss from discontinued operations	1, 5		(2,381)		(9,935)
Net loss for the year	1		(5,072)		(12,477)
Attributable to:
Equity holders of the parent			(5,072)		(12,524)
Minority interest			-		47
			(5,072)		(12,477)
Loss per share (pence)	3		pence		pence
Continuing operations
Basic and diluted loss per share			(9.28)		(8.93)
Discontinued operations
Basic and diluted loss per share			(8.22)		(34.29)
Total
Basic and diluted loss per share			(17.50)		(43.22)

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
	£000		£000
Exchange differences on translation of foreign operations	(146)		98
Loss for the year	(5,072)		(12,477)
Total recognised income and expense for the year	(5,218)		(12,379)
Attributable to:
Equity holders of the parent	(5,218)		(12,426)
Minority interest	-		47
	(5,218)		(12,379)

CSS STELLAR PLC
CONSOLIDATED BALANCE SHEET
As at 31 December 2008
			2008		2008		2007		2007
	Notes		£000		£000		£000		£000
ASSETS
Non-current assets
Property, plant and equipment			33				1,713
Goodwill	4		902				8,240
Available for sale financial assets			-				37
Other receivables			394				-
					1,329				9,990
Current assets
Inventories			-				270
Trade and other receivables			3,009				6,393
Cash and cash equivalents			524				759
					3,533				7,422
Disposal group classified as held for sale					-				772
Total assets					4,862				18,184
EQUITY
Equity attributable to equity holders of the parent
Share capital			14,488				14,488
Share premium account			28,158				28,158
Revaluation reserve			-				439
Translation reserve			(111)				35
Profit and loss account			(39,663)				(35,194)
					2,872				7,926
Minority interest					-				(485)
Total equity					2,872				7,441
LIABILITIES
Non-current liabilities
Long-term borrowings					-				549
Current liabilities
Trade and other payables			1,794				4,239
Short-term borrowings			-				2,039
Current portion of long-term borrowings			-				509
Current tax payable			188				632
Deferred tax liability			8				61
					1,990				7,480
Liabilities directly associated with disposal group classified as held for sale					-				2,714
Total liabilities					1,990				10,743
Total equity and liabilities					4,862				18,184

CSS STELLAR PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2008
		2008		2008		2007		2007
		£000		£000		£000		£000
Cash flows from operating activities
Loss after taxation				(5,072)				(12,477)
Adjustments for:
Depreciation		294				505
Impairment of goodwill		1,184				11,157
Net interest expense		168				246
Taxation expense recognised in profit and loss		521				283
Profit from sale of investments		(27)				(259)
Loss on disposal of subsidiaries		3,235				-
Change in trade and other receivables		131				571
Change in inventories		(167)				(86)
Change in trade and other payables		(3,435)				598
Income taxes paid		503				-
				2,407				13,015
Net cash (used in)/from operating activities				(2,665)				538
Cash flows from investing activities
Purchase of property, plant and equipment		(171)				(413)
Proceeds from sale of investments		20				264
Proceeds from sale of subsidiaries		7,463				-
Net cash disposed of with subsidiaries		(3,061)				-
Proceeds from sale of property, plant and equipment		839				13
Interest received		45				155
Net cash generated by investing activities				5,135				19
Cash flows from financing activities
Repayment of long-term borrowings		(1,018)				(376)
Payment of finance lease liabilities		(56)				-
New finance leases		-				21
Interest paid		(213)				(469)
Net cash used in financing activities				(1,287)				(756)
Net change in cash and cash equivalents				1,183				(199)
Cash and cash equivalents at beginning of period				(659)				(460)
Cash and cash equivalents at end of period				524				(659)

CSS STELLAR PLC
NOTES TO THE FINANCIAL INFORMATION
Year ended 31 December 2008
1. Segment Reporting
The Group has identified two distinct service areas as operating segments. These operating segments are monitored on an ongoing basis and strategic decisions are made in the context of the reported segmental results. In addition, central operating costs, which are not apportioned to each of the operating segments, are reported separately.
31 December 2008	Talent Management	Marketing	Central costs	Total Continuing	Discontinued activities	Total
Revenue	3,633	1,502	-	5,135	11,647	16,782
Cost of sales	(2,345)	(1,215)	-	(3,560)	(5,830)	(9,390)
Gross profit	1,288	287	-	1,575	5,817	7,392
Employee benefits expense	834	81	443	1,358	3,203	4,561
Depreciation, amortisation and impairment of non-financial assets	770	437	61	1,268	209	1,477
Other administrative costs	586	188	635	1,409	1,120	2,529
Total administrative costs	2,190	706	1,139	4,035	4,532	8,567
Operating (loss)/profit	(902)	(419)	(1,139)	(2,460)	1,285	(1,175)
Finance income	4	-	1	5	40	45
Finance costs	(37)	-	(176)	(213)	-	(213)
Other income	-	-	27	27	-	27
(Loss)/profit before tax	(935)	(419)	(1,287)	(2,641)	1,325	(1,316)
Income tax expense	-	-	(50)	(50)	(471)	(521)
	(935)	(419)	(1,337)	(2,691)	854	(1,837)
Loss on disposal	-	-	-	-	(3,235)	(3,235)
Loss for the year	(935)	(419)	(1,337)	(2,691)	(2,381)	(5,072)
Segment assets
- Continuing operations	2,187	305	2,370	4,862	-	4,862
Segment liabilities
- Continuing operations	708	403	879	1,990	-	1,990
Segment impairment losses
- Continuing operations	(764)	(420)	-	(1,184)	-	(1,184)

31 December 2007	Talent Management	Marketing	Central costs	Total Continuing	Discontinued activities	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	4,259	1,521	-	5,780	21,653	27,433
Cost of sales	(2,789)	(1,182)	-	(3,971)	(5,880)	(9,851)
Gross profit	1,470	339	-	1,809	15,773	17,582
Employee benefits expense	787	84	543	1,414	10,878	12,292
Depreciation, amortisation and impairment of non-financial assets	1,233	29	60	1,322	10,334	11,656
Restructuring costs	-	-	772	772	1,404	2,176
Other administrative costs	369	152	280	801	2,864	3,665
Total administrative costs	2,389	265	1,655	4,309	25,480	29,789
Operating (loss)/profit	(919)	74	(1,655)	(2,500)	(9,707)	(12,207)
Finance income	-	-	-	-	228	228
Finance costs	12	-	(481)	(469)	(5)	(474)
Other income	-	-	260	260	-	260
(Loss)/profit before tax	(907)	74	(1,876)	(2,709)	(9,484)	(12,193)
Income tax expense	(142)	-	309	167	(451)	(284)
(Loss)/profit for the year	(1,049)	74	(1,567)	(2,542)	(9,935)	(12,477)
Segment assets
- Continuing operations	2,456	450	10,034	12,940	5,244	18,184
Segment liabilities
- Continuing operations	5,119	1,978	1,324	8,421	2,322	10,743
Segment impairment losses
- Continuing operations	(1,230)	-	-	(1,230)	(9,927)	(11,157)

Geographical market
	Revenues		Assets		Plant, Property & Equipment
	2008	2007	2008	2007	2008	2007
	£000	£000	£000	£000	£000	£000
Europe	1,310	1,582	(2,489)	2,000	19	1,694
North America	3,825	4,198	(1,873)	(2,984)	14	19
Central costs/net assets	-	-	7,235	8,425	-	-
	5,135	5,780	2,873	7,441	33	1,713

2. Income tax expense/(credit)
The relationship between the expected tax expense/(credit) based on the effective tax rate of the Group at 28% (2007: 30%) and the tax expense/(credit) actually recognised in the income statement can be reconciled as follows:
Loss for the year before tax	(2,641)		(2,709)
Tax rate	28%		30%
Expected tax credit	(739)		(813)
Expenses not deductible for tax purposes	75		2
Losses in overseas subsidiaries	-		278
Tax losses arising/(utilised) in the year	329		(75)
Impairment of goodwill and loss on disposal of subsidiaries	334		369
Difference in tax rates	-		7
Adjustments to tax in respect of prior periods	50		-
Deferred tax income resulting from the
origination and reversal of temporary differences	-		61
Other timing differences	1		4
Actual tax expense/(credit)	50		(167)

3. Loss Per Share
		Weighted average	Basic per share amount
		no. of shares	pence
2008	£000
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 loss per share			(17.50)
2007
Continuing operations
Loss after tax	(2,589)
Earnings attributable to ordinary shareholders	(2,589)
Weighted average number of shares		28,976,581	(8.93)
Discontinued operations
Profit after tax	(9,935)
Earnings attributable to ordinary shareholders	(9,935)
Weighted average number of shares (used for basic earnings per share)		28,976,581	(34.29)
Total basic and diluted loss per share			(43.22)

4. Goodwill
	CSS Stellar GEM Group, Inc.	CSS Stellar Sports / CSS Presenters	Other	Total Continuing operations	Discontinued operations	Total continuing and discontinued operations
	£000	£000	£000	£000	£000	£000
Cost or valuation:
1 January 2007	620	4,356	82	5,058	14,339	19,397
Additions	-	-	-	-	-	-
Disposals	-	-	-	-	-	-
At 31 December 2007	620	4,356	82	5,058	14,339	19,397
1 January 2008	620	4,356	82	5,058	14,339	19,397
Additions	-	-	-	-	-	-
Disposals	-	(1,742)	-	(1,742)	(14,339)	(16,081)
At 31 December 2008	620	2,614	82	3,316	-	3,316
Accumulated impairment:
1 January 2007	-	-	-	-	-	-
Charge for the year	-	1,148	82	1,230	9,927	11,157
Disposals	-	-	-	-	-	-
At 31 December 2007	-	1,148	82	1,230	9,927	11,157
1 January 2008	-	1,148	82	1,230	9,927	11,157
Charge for the year	420	764	-	1,184	-	1,184
Disposals	-	-	-	-	(9,927) (9,927)	(9,927) (9,927)
At 31 December 2008	420	1,912	82	2,414	-	2,414
Net book value at 31 December 2008	200	702	-	902	-	902
Net book value at 31 December 2007	620	3,208	-	3,828	4,412	8,240
Net book value at 1 January 2007	620	4,356	82	5,058	14,339	19,397

The recoverable amounts for the following cash-generating units were determined based on value-in-use calculations, covering detailed forecasts prepared by management and approved by the board, followed by an extrapolation of expected cash flows for a period of ten years at the growth rates stated below. The growth rates reflect the long-term average growth rates for the cash-generating units within the sectors in which they operate. Growth rates following 2013 are not in excess of long term average GDP.
	CSS Stellar GEM Group, Inc.	CSS Stellar Sports / CSS Presenters
Growth rates	3%	3%
Discount rates	14%	14%
The valuation of each cash generating unit is considered in turn below:
CSS Stellar GEM Group, Inc.
CSS Stellar GEM Group, Inc. is deemed to represent one income generating unit: that of Marketing Services. The loss of a number of contracts during the period and a reduction in staff levels has led to a reduced expectation of future income streams, resulting in an impairment charge of £0.4 million. Associated costs have been applied to these income streams and a discount factor of 14% has been assumed. Growth of 3% on remaining income streams is felt by management to be appropriate on the basis of historic trends and is not considered to be in excess of market growth rates. Given the recent disposals within the group, and with the focus of management now on the remaining businesses, growth rates over a ten year period are expected to be at least 3%.
CSS Stellar Sports/CSS Presenters
CSS Stellar Sports and CSS Presenters are deemed to represent one income generating unit: that of Talent Management. The loss of a number of staff during the period has led to a reduced expectation of future income streams, resulting in an impairment charge of £0.8 million. Again, associated costs have been applied to these income streams and a discount factor of 14% has been assumed. Growth of 3% on remaining income streams is felt by management to be appropriate on the basis of historic trends and is not considered to be in excess of market growth rates. Goodwill arising on the acquisition of Icon Display previously carried within this income generating unit of £1.7 million has been disposed of. The consequent impairment loss of £1.2 million has been recognised in the Income Statement in 2007 and attributed to the relevant operating segments in Note 1. Apart from the considerations described in determining the value in use of the cash generating units described above, the directors are not aware of any other factors that would necessitate changes in its key estimates.

5. Net result from discontinued operations

The Group has disposed of a number of businesses during the year. In January, the Group sold its 75% interest in GEM Minneapolis, Inc. ("GEM"), a brand design and packaging business based in Minnesota, USA. As part of its strategy to focus on core businesses, the board decided that the nature of the business of GEM Minneapolis, Inc., in addition to its geographical location, meant that it was no longer central to the Group's future strategy.

In July 2008, the Group disposed of The Peters Fraser & Dunlop Group Limited ("PFD"), as announced in our 2007 Annual Results. The decision to dispose of PFD followed an operational review by the board, in which it became clear that there are no real links between the activities of PFD and any other Group company. In these circumstances the Directors concluded that it is in the best interests of shareholders to effect a disposal of PFD.

In October 2008, the Group sold its 100% interest in Icon Display Limited ("Icon"), its events signage business. Following the review of the business announced with our 2007 Annual Results, the Board decided it is in the best interests of shareholders to focus on the core business of sports and sports media.

Others 

In addition, in January 2008, the Group sold its interest in Talent Financial Limited, a provider of financial advice and services.

As a consequence of the above disposals, revenue and expenses, gains and losses relating to these disposals 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 result from discontinued operations"). The comparative income statement has been represented to show the discontinued operations separately from continuing operations. The operating results for each of these businesses until the change of control can be summarised as follows:

Operating activities of discontinued operations
	GEM	PFD	Icon	Others	Total
	2008	2008	2008	2008	2008
	£000	£000	£000	£000	£000
Revenue	-	1,856	9,791	-	11,647
Cost of sales	-	(28)	(5,802)	-	(5,830)
Gross profit	-	1,828	3,989	-	5,817
Administrative costs	-	(1,885)	(2,647)	-	(4,532)
Operating (loss)/profit	-	(57)	1,342	-	1,285
Finance income	-	40	-	-	40
Finance costs	-	-	-	-	-
(Loss)/profit before tax	-	(17)	1,342	-	1,325
Income tax expense	-	-	(471)	-	(471)
(Loss)/profit for the year	-	(17)	871	-	854
(Loss)/profit on disposal	(474)	(703)	(2,099)	41	(3,235)
Net (loss)/profit from discontinued operations	(474)	(720)	(1,228)	41	(2,381)

Operating activities of discontinued operations
	GEM	PFD	Icon	Others	Total
	2007	2007	2007	2007	2007
	£000	£000	£000	£000	£000
Revenue	3,334	9,687	8,292	340	21,653
Cost of sales	(499)	(88)	(5,293)	-	(5,880)
Gross profit	2,835	9,599	2,999	340	15,773
Impairment of goodwill	(3,841)	(6,086)	-	-	(9,927)
Administrative costs	(3,272)	(9,292)	(2,657)	(332)	(15,553)
Operating (loss)/profit	(4,278)	(5,779)	342	8	(9,707)
Finance income	-	142	86	-	228
Finance costs	-	-	(5)	-	(5)
(Loss)/profit before tax	(4,278)	(5,637)	423	8	(9,484)
Income tax expense	(66)	(207)	(173)	(5)	(451)
(Loss)/profit for the year	(4,344)	(5,844)	250	3	(9,935)

GEM Minneapolis, Inc. was sold on 8 January 2008 for a total of $1.8 million (£0.9 million), representing cash paid on completion of $1.1 million (£0.55 million), in addition to a further $700,000 (£0.35 million) payable by way of a promissory note payable in three annual instalments between January 2009 and January 2011. This has been recognised at fair value in the financial statements.

PFD was sold on 7 July 2008 for £4 million in cash, of which £3.75 million was payable on completion, with £0.25 million becoming payable in 2011 dependent on PFD's earnings over a three year period. This has been recognised at fair value in the financial statements.

Icon Display was sold on 24 October 2008 for £4.3 million in cash, of which £4 million was paid in cash on completion. This includes a payment of £0.8 million in respect of a freehold property occupied by Icon, the assumption of £0.3 million of third party debt owed by Icon which Icon agreed to discharge, and the settlement of £1.1 million of inter-company debt owed by Icon to the Company. The balance of £0.3 million is deferred consideration payable in cash and is due on or before the first anniversary of the date of completion. Under the terms of the Sale and Purchase Agreement, the purchaser of Icon Display Ltd will be liable for payment of any tax suffered by the company in the period up to the date of disposal. This has been recognised at fair value in the financial statements.

Cashflows generated by each disposal for the reporting periods under review can be summarised as follows:

	GEM	PFD	Icon	Others	Total
	2008	2008	2008	2008	2008
	£000	£000	£000	£000	£000
Operating activities	-	(424)	153	-	(271)
Investing activities	-	40	(138)	-	(98)
Financing activities	-	-	(56)	-	(56)
	-	(384)	(41)	-	(425)

	GEM	PFD	Icon	Others	Total
	2007	2007	2007	2007	2007
	£000	£000	£000	£000	£000
Operating activities	877	835	857	(41)	2,528
Investing activities	(10)	107	(175)	-	(78)
Financing activities	(216)	-	16	-	(200)
	651	942	698	(41)	2,250

6. 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 2008 and have been prepared under the historical cost convention, except for revaluation of certain properties and financial instruments.

Following the disposals effected during the year, the Group has repaid all its borrowings and remains debt free. The Group had cash balances at 31 December 2008 of £0.5 million. The directors have prepared cashflow forecasts and budgets that show that, for a period of at least twelve months from the date of these financial statements, the group has sufficient resources to continue in business for the foreseeable future. Accordingly, the directors believe that it is appropriate to prepare the financial statements on a going concern basis.

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 2007 Annual Report and Financial Statements. These policies have remained unchanged.

7. Financial Information

The financial information relating to the year ended 31 December 2008 set out in this preliminary announcement does not constitute Statutory Accounts as defined in Section 240 of the Companies Act 1985, 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 2007 is extracted from the statutory accounts, which incorporated an unqualified audit report and which has been filed with the Registrar of Companies.

ENDFR ILFIVVIILVIA