Interim Results (1501P)

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RNS Number : 1501P

Music Festivals PLC

29 September 2011

29 September 2011

Music Festivals plc

("Music Festivals" or the "Group")

Unaudited half-yearly results for the period ended 30 June 2011

Music Festivals plc (AIM: MFP), a company which owns, develops and produces music festivals, is pleased to announce its half-yearly results for the period ended 30 June 2011.

Highlights

-- The Group was admitted to trading on AIM on 28 June 2011, raising GBP6.5 million (gross) through a placing of 5,421,259 new ordinary shares at 65p per share and GBP3 million nominal of convertible loan notes at par

-- Acquisitions of five companies at an aggregate cost of GBP12.3 million were made during the period, funded by a further issue of new ordinary shares and a further issue of GBP2.3 million nominal of convertible loan notes

-- The five companies acquired were: Benicassim Limited (the parent company of Maraworld, SA); Kent Festival Limited; Finsbury Park Events Limited; EP Events Limited; and SP Events Limited

-- As a result, the Group owns and produces the following live music festivals:

-- Benicassim - the largest international live music festival in Spain, held annually in the Castellon region, close to Valencia;

-- Hop Farm Music Festival - a large live music festival with internationally acclaimed artists held annually at the Hop Farm, Paddock Wood, Kent, England;

-- The Feis Festival - a new two-day Irish-focused music festival held in Finsbury Park, London; and

-- Two other companies which did not trade during the period

-- Net cash of GBP2.2 million as at period end

-- All revenues earned in second half of financial year

David Mansfield, Non-Executive Chairman of Music Festivals plc, commented:

"I am very pleased that the Group obtained its listing on AIM and acquired festivals which showcase some of the best live music talent in the international festival market.

"Due to the timing of the completion of the acquisitions, the interim results only include trading for the two days at the end of the period under review. The second half of the year will contain all the trading revenue since this is the period during which the Benicassim and Hop Farm Music Festival take place.

"The only income generated by the acquired companies in the period under review was that for The Feis Festival, but since this occurred pre-acquisition, its results are not consolidated. Following the end of the period under review, the two major festivals took place, with record ticket sales at Benicassim Festival ("FIB") and encouraging ticket sales at the Hop Farm Music Festival.

"FIB sold almost double the number of tickets for the 2011 festival compared with 2010 and the number of festival-goers across the four days was over double that in 2010.

"The Hop Farm Music Festival tickets sales for 2011 were ahead of 2010 albeit over a three day period as opposed to the two day period in 2010. The three day festival led to a 34.4% increase in festival-goers against 2010.

"Whilst the Directors were encouraged by the increase in ticket sales at both festivals for 2011, due to increased costs the gross margin and profitability of the festivals was lower than expected.

"The investment made in the current year to grow the ticket sales is expected to benefit the advance bookings for the festivals for 2012. Tickets for FIB 2012 went on sale in July 2011 and are encouraging at this early stage. Tickets for the Hop Farm Festival 2012 went on sale on Friday, 23 September 2011 and are also encouraging at this early stage.

"Our strategy is to maximise the quality of the offering to festival-goers and increase the attendance levels at the Hop Farm Music Festival as well as FIB, where capacity allows. We shall seek out growth areas in live music festivals through both organic growth and further acquisitions."

For further information please contact:

 
 Music Festivals plc 
 Vince Power (Chief Executive)            Tel: [phone] 
                                                         1420 
 
 Merchant Securities Limited (Nominated Adviser and Broker) 
 John East/Virginia Bull                  Tel: [phone] 
                                                         2200 
 
 Mission Public Relations 
 Andrew Murray-Watson                     Tel: [phone] 
                                                         7800 
 

Chairman's Statement

I am pleased to report the interim results for Music Festivals plc for the two day period ended 30 June 2011.

Group Activity

During the period five acquisitions, at a total cost of GBP12.3 million, were made to acquire Benicassim Limited, Kent Festival Limited, Finsbury Park Events Limited, EP Events Limited and SP Events Limited:

-- The acquisitions own and manage the following major music festivals:

-- Benicassim (FIB) - the largest international live music festival in Spain, held annually in the Castellon region, close to Valencia. Headline artists that have played the festival include Oasis, Muse, The Killers, Gorrilaz, Kings of Leon, Radiohead, Kasabian and Franz Ferdinand with over 100 artists playing live each year;

-- Hop Farm Music Festival - a large live music festival with internationally acclaimed artists held annually at the Hop Farm, Paddock Wood in Kent. Headline artists that have played the festival include Neil Young, Bob Dylan, Eagles, Prince, Morrissey and Paul Weller with around 80 artists playing live each year and growing; and

-- The Feis Festival - a new two-day Irish-focused music festival held in Finsbury Park, London.

Current Trading

After the end of the period under review, the Company's two major festivals took place, Benicassim ("FIB") and the Hop Farm Music Festival. The Directors were encouraged by the performance of these festivals, which generated the strongest ticket sales ever at FIB and encouraging ticket sales at Hop Farm Music Festival.

FIB sold almost double the number of tickets for the 2011 festival compared with 2010 and the number of festival-goers across the four days was over double that in 2010.

The Hop Farm Music Festival tickets sales for 2011 were ahead of 2010 albeit over a three day period as opposed to the two day period in 2010. The three day festival led to a 34.4% increase in festival-goers against 2010.

Whilst the Directors were encouraged by the increase in ticket sales at both festivals for 2011, due to increased costs the gross margin and profitability of the festivals was lower than expected.

The investment made in the current year to grow the ticket sales is expected to benefit the advance bookings for the festivals for 2012. Tickets for FIB 2012 went on sale in July 2011 and are encouraging at this early stage. Tickets for the Hop Farm Festival 2012 went on sale on Friday, 23 September 2011 and are also encouraging at this early stage.

Funding and Results

The Group issued 14,189,640 new ordinary shares during the period which, when valued at 65p, the price at which ordinary shares were placed on admission to AIM, had a market value of GBP9.2 million. In addition, the Group issued GBP5.3 million of convertible loan notes. Of these, the securities issued on admission to AIM were 5,421,259 new ordinary shares at 65p per share and GBP3 million nominal of convertible loan notes at par.

There were negligible operating losses of GBP22,000 incurred within the two day trading period. The Group had net funds of GBP2.2 million as at the period end.

Board Changes

We are pleased to appoint Matt Heiman to the Board as Non-executive Director. Matt has a mergers and acquisitions background and has founded, as well as invested in, a number of start-ups including Mobix Trading and Diagonal View.

A separate announcement incorporating further details with regards to Mr Heiman's appointment, including the information required by Schedule 2(g) of the AIM Rules, will be made shortly.

In addition, Noel Lyons has resigned from the Board as a Non-executive Director with immediate effect. We would like to thank him for his contribution towards the Company's IPO and wish him all the best for the future.

Outlook

The second half of the year will produce all the annual revenue for the Group, since it is the trading period in which FIB and Hop Farm Music Festival took place.This preponderance of income in the second half of the year is expected to continue for the foreseeable future.

The Group's strategy is to maximise the quality of the experience to festival goers and to increase the attendance levels at the Hop Farm Music Festival as well as FIB, where capacity allows. The Directors will also seek growth areas in live music festivals, through both organic growth and potential further acquisitions

We look to the future with confidence.

David Mansfield

Non-Executive Chairman

Consolidated Statement of Comprehensive Income (unaudited)

For the period ended 30 June 2011

 
                                                                 Period to 
                                                              30 June 2011 
                                                     Note          GBP'000 
 
 Operating and administrative expenses 
  distribution costs                                                  (22) 
                                                            -------------- 
 
 Operating loss                                                       (22) 
 
 Loss before taxation                                                 (22) 
 
 Taxation                                                                - 
                                                            -------------- 
 
 Loss for the period attributable to shareholders                     (22) 
                                                            ============== 
 
 Loss per share                                        5             Pence 
 Basic                                                             (0.232) 
 Diluted                                                           (0.189) 
 

Consolidated Statement of Financial Position (unaudited)

as at 30 June 2011

 
                                       30 June 2011 
                                            GBP'000 
 Assets 
 Non-current assets 
 Intangible assets                           15,194 
 Tangible assets                                 15 
 Investments                                      9 
                                      ------------- 
 
                                             15,218 
                                      ------------- 
 
 Current assets 
 Trade and other receivables                  7,948 
 Cash and cash equivalents                    2,157 
                                      ------------- 
 
                                             10,105 
 
 Current liabilities 
 Trade and other payables                  (11,567) 
                                      ------------- 
 
 Net current liabilities                    (1,462) 
                                      ------------- 
 
 Non-current liabilities 
 Financial liabilities - borrowings         (5,340) 
                                      ------------- 
 
 Net assets                                   8,416 
                                      ============= 
 
 Shareholders' equity 
 Share capital                                1,469 
 Share premium                                6,969 
 Retained earnings                             (22) 
                                      ------------- 
 
 Total equity                                 8,416 
                                      ============= 
 

Consolidated Statement of Cash Flows (unaudited)

For the period ended 30 June 2011

 
                                                                   Period to 
                                                                30 June 2011 
                                                                     GBP'000 
 Net Cash out flow from operating activities beforeChanges 
  in working capital                                                    (22) 
 
 Decrease in trade and other receivables                                 191 
 Decrease in trade and other payables                                   (79) 
                                                              -------------- 
 
 Net cash flow generated from operating activities                        90 
                                                              -------------- 
 
 Investing activities 
 
 Acquisitions of subsidiary undertakings including non-cash 
  items                                                             (12,285) 
                                                              -------------- 
 
 Net cash outflow from investing activities                         (12,285) 
                                                              -------------- 
 
 Financing activities 
 
 Issue of ordinary share capital                                       9,223 
 Issue of convertible loan stock                                       5,341 
 Expenses related to the issue of ordinary share capital 
  and convertible loan stock                                         (1,110) 
 Conversion of unsecured loan to ordinary share capital                (250) 
                                                              -------------- 
 
 Net cash flow from financing activities                              13,204 
                                                              -------------- 
 
 Net increase in cash and cash equivalents in the period               1,009 
 
 Cash and cash equivalents at the beginning of the period              1,148 
                                                              -------------- 
 
 Cash and cash equivalents at the end of the period                    2,157 
                                                              -------------- 
 

Notes to the Interim Report

1. Corporate Information

Music Festivals plc ("the Company") is a company incorporated in England and Wales and quoted on the London Stock Exchange's AIM Market.

2. Basis of preparation

These condensed interim financial statements of the Company and its subsidiaries ("the Group") for the period ended 30 June 2011 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs).

These condensed interim financial statements do not constitute Statutory Accounts under the Companies Act 2006, have not been audited, and do not include all of the information required for full annual financial statements.

No comparatives figures have been prepared for the period ending 30 June 2010, since this was prior to the incorporation of the Company.

3. Total Comprehensive Income and Expense

There are no additional items of income and expense which are not included within the profit and loss account for the period.

4. Segmental analysis

A segment is a distinguishable component of the Group that is engaged in providing products or services in a particular business sector (business segment) or in providing product and services in a particular economic environment (geographical segment), which is subject to risks and rewards that are different in those other segments.

The Group operated in the period in one segment, the provision of live music in two markets, the United Kingdom and Spain. The disclosures required by IFRS8 relating to profits, losses, assets and liabilities of the segment are, therefore, shown by the financial statements as a whole.

5. Loss per share

The calculation of the basic loss per share for the period ended 30 June 2011 is based upon the loss for the period attributable to shareholders of the Group of GBP21,963 on 9,488,527 ordinary shares being the weighted average number of ordinary shares in issue during the period.

The calculation of diluted loss per share is based on the basic loss per share adjusted to allow for the issue of shares on the assumed conversion of all options resulting in 11,619,937 issued ordinary shares.

6. Dividend

No dividend has been paid in the period.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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