SuperGroup Regulatory News (SGP)

25 Jan 2005 14:54

Sanctuary Group PLC25 January 2005 Tuesday 25th January 2005 The Sanctuary Group plc Pre Full Year Results Trading Update The Sanctuary Group plc ("Sanctuary" or the "Group"), which will announce itspreliminary results for the year ended 30th September 2004 on Thursday 27thJanuary, is today making a statement in advance of these results regarding apreviously unanticipated provision and a Book Publishing division loss that havearisen during its audit process. Extraordinary item - Cloud 9 In discussion with the Group's auditors, the Board has decided that it isprudent to make a provision of £11.4m against loan notes issued in connectionwith the sale in 2003 of its television business, Cloud 9. The Board took the strategic decision to withdraw from Cloud 9 in 2003 deemingit to be a non-core business. The business was sold to its founder as a goingconcern for £28.5m in loan notes. Sanctuary retains security over theintellectual property rights (including 5 complete series of the global sellingseries "The Tribe" and "The Enid Blyton Adventure Series") against default onthe loan notes over a period of a further 15 years and is entitled to receiverevenues from Cloud 9's catalogue activities. The Board believes that Cloud 9 remains a viable business and had allowed forthe founder to restructure the business during early 2004 and to initiate newprojects. However, revenues have been slower to materialise than had beenexpected and the Directors regard the provision to be both prudent andappropriate at this time. Book Publishing division loss, and impact on Operational Trading and ConsensusFigures The Group has until now expected to meet market consensus expectations for thefull year to 30th September 2004, being c£27m for EBITDA and c£18m forNormalised PBT. However, it became apparent during the final discussions withthe Group's auditors that certain provisions and write-offs to the tradingresults for the Group's non-core Book Publishing division were required. Thishas resulted in book publishing reporting a loss of £2.1m for the year comparedto market expectations of breakeven which will have a direct impact on theperformance of the Group. The Group has taken action to restructure thisdivision and the Board does not expect any further losses to arise. Broader trading performance in line with expectations The Board has emphasised that the core trading divisions of Records, ArtistManagement, Live Agency and Merchandising have all performed to expectations. Inaddition, the Group expects to announce improvements to the cash conversion rateas well as recoupment levels against advances, as forecast in the pre-closetrading update issued in November 2004. The Group will announce its preliminary results on Thursday 27th January 2004. Ends. For further information, please contact: The Sanctuary Group plcAndy Taylor, Executive Chairman +44 (020) 7300 6618 Mike Miller, Finance Director +44 (020) 7300 6618 Philip Ranger, Director, Corporate & Investor Relations +44 (020) 7300 1323 +44 (0)7768 534 641 Eddy Leviten, Head of Communications +44 (020) 7300 6542 +44 (0)7768 057 464 Merlin Paul Downes or Rebecca Penney +44 (020) 7653 6620 This information is provided by RNS The company news service from the London Stock Exchange