R4E.L Regulatory News (R4E)

7 Feb 2005 07:00

First Artist Corporation PLC07 February 2005 7 February 2005 First Artist Corporation Plc ('First Artist' or 'the Company') Final results for the year ended 31 October 2004 First Artist is a leading European management and representation company lookingafter the commercial interests of footballers and other high profile mediapersonalities in the football and television market. Highlights of Results for the Year ended 31 October 2004 • Sales of £3.98 million in the year ended 31 October 2004 compared to £4.23 million for the sixteen months ended 31 October 2003. • Sales up 29% from £3.08 million for the twelve months to October 2003. • Operating profit of £0.04 million before goodwill amortisation and impairment and one-off exceptional costs for the twelve month period is an upturn compared to the loss of £2.54 million for the sixteen months ended October 2003 and also up from the loss of £1.66 million for the corresponding twelve month period ended October 2003 • The operating loss of £0.45 million is stated after £0.09 million of goodwill impairment and £0.39 million of exceptional charges arising from the Group's restructuring, aborted acquisition costs and the strategic review, undertaken in January 2004. The restructuring costs include the costs of closure relating to the First Artist Snooker Academy and the FIMO Geneva offices. • At 31 October 2004 the net cash balance of the Group was £310,000, up from a net cash balance of £19,000 as at 31 October 2003. • There was a net £0.26 million operating cash inflow this was after the deducting £0.39 million of one-off restructuring costs. • Continued expansion of the Company's commercial and media division which now represents over 30 well known sports and media personalities. • The Group is working with other leading European agency operations, senior European clubs and leagues to enhance the position, reputation and transparency of the football transfer market and in particular the role of the Football Agent. The Group wishes to establish a professional body alongside the industry, clarify trading terms and practice. • Acquisition of Mel Stein's Team Sports Management Limited and merger of this operation into our London office. For further information please contact: First Artist Corporation PLC 020 8900 1818Jon Smith, Chief ExecutiveRichard Hughes, Finance Director Shore Capital 020 7408 4090Alex Borrelli Chairman's Statement In my interim report for the six months to 30 April 2004, I stated thatfollowing a profitable January we forecast an upturn in the 2004 summer tradingwindow and an improvement in the contribution from the European markets. We arepleased to announce that this confidence has been well placed and the Group hasreturned to trading profitability before exceptional administrative expenses andgoodwill amortisation for the year to 31 October 2004. The continuing Group made a profit before exceptional costs of £57,000 (2003:Loss £2,019,000), a significant turnaround from the previous period, underliningthe positive steps taken by the Board to restructure the business cost base in2003. Comparing this year to the same 12-month period to October 2003, Sales increased29%, Gross profit 16% and overheads have reduced by 32% As previously reported we closed the First Artist Snooker Academy in May and arealso closing the FIMO Geneva office. We continue to maintain strong managementcontrols of cash and costs with direct expenditure focussed on strengthening anddeveloping the core business. The Group as a whole made an operating loss before interest and tax and goodwillimpairment of £355,000 (2003: Loss £3,020,000), which is after accounting fornon-recurring exceptional costs of £391,000 mainly related to restructuring andclosure costs. OUTLOOK AND CURRENT OPERATIONS: First Artist is one of Europe's leading football management groups and continuesto improve and expand both in the UK and across Europe with increased activityand some notable transfers being undertaken during the summer trading window.We are continuing to develop our presence in the Far East and US with minimaldrain on the Group's central resources. In January 2005, the Company acquired the staff, player contracts and businessassets of Mel Stein's Team Sports Management Limited and merged this operationinto our London office. This acquisition will strengthen the London operationboth with operational and player resource. The UK's commercial and media department is continuing its organic growth andnow represents over 30 well known sports and media personalities on a fullmanagement basis. The department is expanding to include personalities outsidesport and a lead role in the West End was recently secured for one of our newclients. The launch of our Corporate Division in September 2004 is provingsuccessful and activity is increasing as different markets are targeted andreached. The commercial department has recently completed negotiations toexclusively market a new product to sporting arenas worldwide and is working topromote several major events at leading sporting venues. All aspects of thisdivision give us confidence of increased activity here over the coming year. Our business diversification strategy continues to be a priority and the Groupis actively seeking suitable acquisition opportunities, which can utilise ourcore-skills into non-football related sectors. Should suitable opportunities,as with Team Sports Management, present themselves in the football market thenthe Group will pursue these too. The Group is working with other leading European agency operations, seniorEuropean clubs and leagues to enhance the position, reputation and transparencyof the football transfer market and in particular the role of the FootballAgent. The Group wishes to establish a professional body alongside the industryto clarify trading terms and practice. We previously reported that the Board would be seeking approval from itsshareholders and confirmation by the High Court to restructure its balance sheetto remove the deficit on the profit and loss account by cancellation of theshare premium account. In light of the cost involved in undertaking such anexercise the Board has decided to reinvest this expenditure into the developmentof the Group with the intention to revisit the option at a more appropriatetime. I would like to thank all those involved in the restructuring of this group andthank the Board for its continued commitment in turning around a group in whatremains a difficult environment. Alex JohnstonChairman7 February 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 OCTOBER 2004 Continuing Discontinued Operations Operations Total Period from 1 Year ended Year ended Year ended July 2002 to 31 October 31 October 31 October 31 October 2004 2004 2004 2003 £000 £000 £000 £000 TURNOVER 3,739 236 3,975 4,229Cost of sales (1,114) (29) (1,143) (1,147) GROSS PROFIT 2,625 207 2,832 3,082Administrative expenses (2,568) (228) (2,796) (5,622) Profit/(loss) before exceptional 57 (21) 36 (2,540)administrative expensesExceptional administrative expenses (113) (278) (391) (480) OPERATING LOSS before goodwill amortisation (56) (299) (355) (3,020) Administrative expenses - goodwill impairment - (92) (92) (11,820)and amortisation GROUP OPERATING LOSS (56) (391) (447) (14,840) Share of operating loss of associates - - - (97) TOTAL OPERATING LOSS (56) (391) (447) (14,937) Loss on disposal of investment - (26) (447) (14,963) Investment income 8 11Interest payable (54) (54) LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (493) (15,006)Taxation 167 414 LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (326) (14,592)Dividends - - RETAINED LOSS FOR THE YEAR (326) (14,592) LOSS PER SHAREBasic loss per share (0.63) (27.08) pence pence Fully diluted loss per share (0.62) (27.08) pence pence Basic earnings/(loss) per share before 0.30 (4.21)goodwill amortisation and exceptional costs pence pence Fully diluted earnings/(loss) per share 0.30 (4.21)before goodwill amortisation and exceptional pence pencecosts CONSOLIDATED BALANCE SHEETAS AT 31 OCTOBER 2004 2004 2003 £000 £000 FIXED ASSETSIntangible assets - -Tangible assets 755 811 755 811 CURRENT ASSETSDebtors 2,243 3,504Cash at bank and in hand 310 156 2,553 3,660 CREDITORS: Amounts falling due within one year (2,133) (2,908) NET CURRENT ASSETS 420 752 TOTAL ASSETS LESS CURRENT LIABILITIES 1,175 1,563 CREDITORS: Amounts falling due after more than one year (98) (87) NET ASSETS 1,077 1,476 CAPITAL AND RESERVESCalled up share capital 120 135Capital redemption Reserve 15 -Share premium account 6,217 6,217Profit and loss account (5,275) (4,876) EQUITY SHAREHOLDERS' FUNDS 1,077 1,476 CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 OCTOBER 2004 Year ended Period from 1 July 31 October 2002 to 31 October 2004 2003 £000 £000 Cash inflow/(outflow) from operating activities 313 (623) Returns on investments and servicing of finance (46) (43) Taxation 87 (97) Capital expenditure and financial investment 22 43 Acquisitions and investments (92) (141) CASH INFLOW/(OUTFLOW) BEFORE FINANCING 284 (861) Financing 7 (600) INCREASE/(DECREASE) IN CASH IN THE PERIOD 291 (1,461) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Year ended Period from 1 July 31 October 2002 to 31 October 2004 2003 £000 £000 Increase/(decrease) in cash in the period 291 (1,461) Cash from increase in debt financing (7) 600 New finance leases (32) (104) Deferred consideration on acquisition of subsidiaries - 1,627 252 662 NET DEBT AT 1 NOVEMBER 2003 (403) (1,065) NET DEBT AT 31 OCTOBER 2004 (151) (403) STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE YEAR ENDED 31 OCTOBER 2004 Year ended Period from 1 July 31 October 2002 to 31 October 2004 2003 £000 £000 Loss for the financial period (326) (14,592)Currency translation differences on net foreign currency investments (73) 59 Total recognised gains and losses relating to the period (399) (14,533) NOTES 1. BASIS OF PREPARATION The financial information contained in this report does not constitute statutoryaccounts within the meaning of Section 240 of the Companies act 1985. The financial information for the period ended 31 October 2003 contained in thisreport has been extracted from the audited accounts of the Company for which theauditors have given an unqualified report. 2. GOING CONCERN In view of the Group's losses, the Directors have been closely monitoring thefinancial situation and the restructuring of the business during the current andprevious period has led to a subsequent return to profitability (beforeexceptional items and goodwill). The Directors continue to closely monitor andcontrol the Group's financial situation and through diversification seek newways in which to reduce reliance on traditional deal based revenue and to reviewopportunities in sports other than football. The Directors have considered in detail the trading and cash flow forecasts forthe next twelve months. Whilst the Directors cannot predict the future tradingand funding requirements of the Group with certainty, they consider that theabove actions and the continued support of the Company's bankers will providesufficient finance to enable the Group to meet its liabilities as they fall due. Therefore it is appropriate for the financial statements to be prepared on agoing concern basis. The financial statements do not include any adjustmentthat might result from the Directors' forecasts not being met. 3. TAXATION Year Period 2004 2003 £000 £000Current tax:UK corporation tax (credit)/charge on (losses)/profits of the period - (66)Foreign taxes (91) (294)Adjustments in respect of previous periods (56) 8 Current tax (credit)/charge for the period (147) (352) Deferred taxation:Origination and reversal of timing differences (20) (62) Tax (credit)/charge on profit on ordinary activities (167) (414) 4. EARNINGS PER SHARE Basic loss per share has been calculated on a loss on ordinary activities aftertaxation of £326,000 (2003: loss of £14,952,000) and on a weighted average of51,784,044 (2003: 53,893,666) ordinary shares in issue during the year. Fully diluted loss per share is based on a loss of £324,000 (2003: £14,592,000)and on a weighted average of 52,409,427 (2003: 53,893,666) potential shares inissue. In addition, the Directors have included earnings per share calculations basedon earnings before the amortisation of goodwill and before exceptional costs asthey believe that these figures provide a more meaningful and useful indicationof the Group's performance during the period. The basic earnings/(loss) per share before amortisation of goodwill andexceptional costs has been calculated on a profit on ordinary activities aftertaxation of £157,000 (2002: loss of £2,266,000) and on a weighted average of51,784,044 (2003: 53,893,666) ordinary shares in issue during the year. The fully diluted earnings/(loss) per share before amortisation of goodwill andexceptional costs is based on a profit of £159,000 (2003: loss of £2,266,000)and on a weighted average of 52,409,427 (2003: 53,893,666) potential shares inissue. 5. RESERVES AND RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Capital Total Share redemption Share Profit and shareholders' capital Reserve premium loss account Funds £000 £000 £000 £000 £000 GROUP1 November 2003 135 - 6,217 (4,876) 1,476Loss for the financial period - - - (326) (326)Purchase of own shares (15) 15 - - -Exchange adjustments - - - (73) (73) 31 October 2004 120 15 6,217 (5,275) 1,077 Capital Total Share redemption Share Profit and shareholders' capital Reserve premium loss account Funds £000 £000 £000 £000 £000 COMPANY1 November 2003 135 - 6,217 (4,619) 1,733Loss for the financial period - - - (530) (530)Purchase of own shares (15) 15 - - - 31 October 2004 120 15 6,217 (5,149) 1,203 6. CASH FLOWS Year Period 2004 2003 £000 £000 Reconciliation of operating loss to net cash inflow/(outflow) fromoperating activitiesOperating loss (447) (14,937)Depreciation 67 166Amortisation of goodwill 92 11,820Loss on disposals of fixed assets (1) 41Share of operating loss of associates - 97Decrease in debtors 1,208 2,232Decrease in creditors (533) (101)Exchange (73) 59 Net cash inflow/(outflow) from operating activities 313 (623) 7. ANNUAL REPORT Copies of the Annual Report and Financial Statements will be circulated toShareholders shortly and may be obtained after the posting date from the CompanySecretary, First Artist Corporation plc, First Artist House, 87 Wembley HillRoad, Middlesex, HA9 8BU, or from the Companies Website www.firstartist.com This information is provided by RNS The company news service from the London Stock Exchange