Sports Direct Regulatory News (SPD)

12 Apr 2005 07:00

SP Holdings PLC12 April 2005 SP HOLDINGS PLC PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 OCTOBER 2004 CHAIRMAN'S STATEMENT To use a football cliche, the period under review to 31 October 2004 was a gameof two halves for SP Holdings (the 'Company'). The first half saw the Company's marketing services division continue itsforward momentum with three key acquisitions of CleverTV Limited on 8 January2004, TSE Consulting SA on 11 June 2004 and The Interactive Sports Store Limitedon 7 July 2004 (since renamed SP Etail). The second half was dominated by the sudden departure of Simon Eagle as Chairmanand subsequent closure of the Company's financial services division. Since then, the marketing services businesses with their particular focus onsports, retail, leisure and media sectors have continued to develop. The Companynow has offices in London, Manchester and Lausanne, and established jointventures in Bahrain and Atlanta. The Company has an enviable and broadly basedclient portfolio, including MasterCard Europe, Unilever, Spar, Kimberley Clark,Red Bull, The Football Association, the City of Denver, Manchester United,Glasgow Rangers, and Mirror Group Newspapers. The Company also welcomed David Mends as Chief Financial Officer on 1 November2004. David has strengthened the Company's financial control and reporting. Results Summary Group turnover saw a fivefold increase over the previous year to £4,189,000(2003 - £776,000). The reported loss after minority interests for the year is£2,510,000 (2003 - loss £1,221,000). Shareholders funds after minority interestsincreased from £1,090,000 to £3,827,000. SP Middle East WLL The Company has agreed a major new joint venture within the Kingdom of Bahrain.SP Middle East will work with its joint venture partner, the GeneralOrganization for Youth and Sports, to create and implement a long-term strategicrole for sport in the country that positively contributes to Bahrain'sreputation and economic standing in the Middle East and worldwide. This partnership is already proving most successful and we are grateful to theKingdom of Bahrain for its role in this process. I am also delighted to announce that SP Middle East has been appointed byBatelco, Bahrain's leading telephone company, to provide a range of marketingservices.Financial Services The Company's former Chairman, Simon Eagle, was the architect of its financialservices division. He stepped down from that position and from being a directorsuddenly on 15 July 2004 due to reasons unrelated to the Company. The result of this was twofold: 1. Following a review of its financial services activities, the Company decided to focus solely on marketing services. The Company did actively seek to sell its financial services businesses, including to the management of those businesses, but the terms and conditions attached were for the most part not satisfactory. As a result, SP Financial Limited, SP Taxation Limited and Robert Ward & Associates Limited were liquidated. Full provision has been made for the above in these accounts. 2. At the same time as stepping down from SP Holdings, Mr Eagle also stepped down from directorships with a number of other businesses, some of which then went into administration and closure. One of those was a significant client leading to a bad debt. Again, full provision for this has been made in these accounts. Although the reasons for Mr Eagle's departure were not caused by the Company, ithas contributed to the disappointing loss reported in these accounts. Placings During the year successful placings were announced raising a total of £4,000,000to fund new contract wins and the acquisition of exclusive licences forManchester United and Glasgow Rangers football clubs. Since the year end afurther placing raising £2,000,000 for general working capital requirements hasbeen completed. Outlook 2005 is an important year for SP Holdings. Over the past 18 months, the Companyhas completely transformed the stature and scope of its activities andestablished a highly distinctive and attractive position in the marketingsector. Our new CFO, David Mends, has brought new rigour to our accounting andreporting. The challenge for the Board and every member of staff is to nowconvert these achievements into sustained profitability to the benefit ofshareholders. This continues to be our focus and commitment. Nick BitelChairman CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 OCTOBER 2004 Note 2004 2003 Unaudited Audited £'000 £'000 £'000 As restated TURNOVERContinuing operations 2,515 674Acquisitions 875 - -------- -------- 3,390 674Discontinued operations 799 102 -------- -------- 4,189 776Cost of sales (1,872) (285) -------- --------Gross profit 2,317 491 Net administrative expenses:Impairment of goodwill and loans tosubsidiary (785) (345)undertakingsOther administrative expenses (4,500) (1,446)Other operating income 26 16 -------- -------- Operating lossContinuing operations 1 (1,744) (484)Acquisitions (20) - -------- -------- (1,764) (484)Discontinued operations (1,178) (800) -------- -------- (2,942) (1,284)Provision for loss on operations to bediscontinued (100) -Profit on disposal of discontinued operations 169 - -------- --------Loss on ordinary activities before interest (2,873) (1,284)Interest receivable 12 1Interest payable (130) (3) -------- -------- Loss on ordinary activities before taxation (2,991) (1,286)Taxation 2 (1) - -------- --------Loss on ordinary activities after taxationfor (2,990) (1,286)the financial yearMinority interests - equity 480 65 -------- -------- Retained loss for the financial yearattributable to members of the parent company (2,510) (1,221) -------- -------- Loss per share - basic and diluted 3 (8.7)p (8.4)p -------- -------- CONSOLIDATED BALANCE SHEETAS AT 31 OCTOBER 2004 2004 2003 Unaudited udited £'000 £'000 Fixed assetsIntangible fixed assets 2,944 1,667Tangible fixed assets 310 26 -------- -------- 3,254 1,693 -------- -------- Current assetsStocks 60 -Debtors 2,011 700Cash at bank 2,146 56 -------- -------- 4,217 756 Creditors: amounts falling due within one year (3,018) (955) -------- --------Net current assets/(liabilities) 1,199 (199) -------- -------- Total assets less current liabilities 4,453 1,494 Creditors: amounts falling due after more than one year (626) (404) -------- -------- 3,827 1,090 -------- -------- Capital and reservesCalled up share capital 13,406 10,388Share premium account 3,283 1,675Shares to be issued 1,360 780Other reserves 223 223Profit and loss account (14,446) (11,936) -------- --------Shareholders' funds 3,826 1,130 Minority interests - equity 1 (40) -------- -------- 3,827 1,090 -------- -------- CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31 OCTOBER 2004 Note 2004 2003 Unaudited Audited £'000 £'000 £'000 £'000 Net cash outflow from operating 4 (1,855) (692)activities Returns on investment and servicingof financeInterest received 12 1Interest paid (49) (3) -------- -------- (37) (2) Capital expenditurePayments to acquire intangible fixed - (4)assetsPayments to acquire tangible fixed (110) (18)assets -------- -------- (110) (22) Acquisitions and disposalsSale of subsidiary undertakings 102 -Purchase of subsidiary undertakings (50) (106)Cash acquired with subsidiary 60 3undertakings -------- -------- 112 (103) -------- -------- Net cash outflow before financing (1,890) (819) FinancingIssue of ordinary shares 4,000 530Share issue expenses (119) (63)Repayment of loans (250) -New loans issued 349 404 -------- -------- 3,980 871 -------- --------Increase in cash 2,090 52 -------- -------- RECONCILIATION OF NET CASH FLOW TOMOVEMENT 5IN NET FUNDS/(DEBT)Increase in cash in the year 2,090 52Repayment of loans 250 -Cash inflow from new loans (349) (404)New finance leases (184) - -------- -------- 1,807 (352)Net (debt)/funds brought forward (348) 4 -------- --------Net funds/(debt) at 31 October 2004 1,459 (348) -------- -------- NOTES TO THE PRELIMINARY STATEMENTFOR THE YEAR ENDED 31 OCTOBER 2004 Operating lossThe loss on continuing operations includes an exceptional bad debt provision of£427,000 (2003 - £nil). Taxation on loss on ordinary activitiesThe charge in the accounts represents an adjustment relating to prior years. Noprovision for taxation is necessary due to losses in the current year. Loss per share 2004 2003 Unaudited Audited £'000 £'000 Loss for the year (2,510) (1,221) -------- -------- '000 '000Weighted average number of shares in issue 29,007 14,593 -------- -------- Pence PenceBasic loss per share (8.7) (8.4) -------- --------The exercise of the company's share options and the issue of shares in respectof contingent consideration would not result in any dilution in the loss pershare in either period. Net cash outflow from operating activities 2004 2003 Unaudited Audited £'000 £'000 Operating loss (2,942) (1,284)Amortisation of goodwill 76 13Impairment of goodwill 785 -Depreciation of tangible fixed assets 26 1Decrease in stock 25 -Increase in debtors (1,194) (662)Increase in creditors 1,369 816Other non cash items - 424 -------- --------Net cash outflow from operating activities (1,855) (692) -------- -------- Analysis and reconciliation of movement in net funds/(debt) 1 November Other non cash 31 October 2003 Cash flow changes 2004 Audited Unaudited Unaudited Unaudited £'000 £'000 £'000 £'000 CashbalancesCash at bankand in hand 56 2,090 - 2,146 --------- -------- -------- --------Net cashbalances 56 2,090 - 2,146DebtFinance leases - - (184) (184)Loan stock dueafter one year (154) (349) - (503)Other loansdue after oneyear (250) 250 - - --------- -------- -------- --------Netfunds/(debt) (348) 1,991 (184) 1,459 --------- -------- -------- -------- General The financial information set out in this preliminary announcement does notconstitute the Company's statutory accounts for the years ended 31 October 2004or 2003 within the meaning of section 240 of the Companies Act 1985. Thestatutory accounts for the year ended 31 October 2003 have been delivered to theRegistrar of Companies. The statutory accounts for the year ended 31 October 2004 will be delivered to the Registrar of Companies following the Company'sforthcoming annual general meeting. The audit report on the full financialstatements for the year ended 31 October 2004 has yet to be signed. The auditreport on the year ended 31 October 2003 was qualified. It is expected that the audit report will be qualified on the grounds that thecomparative consolidated profit and loss did not include the results of WorldSports Solutions (International) Limited (WSSI) for the period to 4 April 2003when WSSI went into creditors voluntary liquidation which was not in accordancewith Financial Reporting Standards. The accounting policies and presentation of figures in this preliminary statementhave been prepared on the same basis as set out in the previous years financial statements. Copies of this announcement will be available at the Company's registered office: 3-5 Rathbone Place, London, W1T 1HJ The annual report will be posted to shareholders in due course.This preliminary announcement was approved by the directors on 11 April 2005. This information is provided by RNS The company news service from the London Stock Exchange