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Share Name Share Symbol Market Type Share ISIN Share Description
Catalyst Media Group Plc LSE:CMX London Ordinary Share GB00B282R334 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 43.50 42.00 45.00 43.50 43.50 43.50 0.00 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 0.0 -1.1 -5.3 - 9

Catalyst Media Group PLC Final Results for the year ended 30 June 2020

31/12/2020 7:00am

UK Regulatory (RNS & others)


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RNS Number : 1826K

Catalyst Media Group PLC

31 December 2020

31 December 2020

Catalyst Media Group plc

("CMG" or the "Company")

Final Results for the year ended 30 June 2020

Notice of Annual General Meeting ("AGM")

The Board of Catalyst Media Group plc is pleased to announce the final results for the Company for the year ended 30 June 2020. CMG is a 20.54% shareholder in Sports Information Services (Holdings) Ltd ("SIS") and the results for the year to 30 June 2020 incorporate its share of the profits of SIS for its year ended 31 March 2020.

Financial overview

-- CMG loss before taxation GBP1.1 million (following an impairment charge of GBP1.2 million of the carrying value of the interest in SIS) (2019: loss of GBP0.6 million following GBP4.3 million impairment charge)

   --    Loss per share 5.27p (2019: loss per share 2.80p) 
   --    Net asset value per share 60.7p (2019: 67.7p) 
   --    SIS approved and paid a dividend of GBP5.0 million on 31 October 2019 to its shareholders 

o On receipt of its share of the SIS dividend, being GBP1.03 million, the Board of CMG approved the distribution of GBP1.05 million to CMG's shareholders by way of a dividend of 5p per share

   --    SIS revenues for the year ended 31 March 2020 GBP212.6 million (2019: GBP241.4 million) 
   --    SIS operating profit, prior to litigation fees, of GBP3.6 million (2019: GBP7.4 milliuon) 

Notice of AGM

The Annual Report and Accounts for the year ended 30 June 2020, together with the notice of AGM and form of proxy, will shortly be available on the Company's website at www.cmg-plc.com .

The AGM is to be held at 6 Stratton Street, London W1J 8LD on 10 February 2021 at 10.00 a.m. In light of the current Covid-19 situation, the General Meeting will be held as a closed meeting.

Enquiries:

Catalyst Media Group Plc

   Michael Rosenberg, Non-executive Chairman                              07785 727 595 
   Melvin Lawson, Non-executive Director                                        020 7734 8111 
   Strand Hanson Limited                                                                020 7409 3494 

James Harris / Matthew Chandler / Jack Botros

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

Chairman's Statement

I am pleased to present the results for Catalyst Media Group plc ("CMG" or the "Company") for the year ended 30 June 2020, which incorporates our share of profits for Sports Information Services (Holdings) Ltd ("SIS") in which CMG has a 20.54% interest.

The main asset of CMG continues to be the 20.54% shareholding in SIS, which, as detailed below. CMG equity accounts for its share in the profits of SIS.

After taking account of CMG's share in the profits of SIS for its year ended 31 March 2020 of GBP0.13 million (2019: GBP3.8 million), CMG recorded a loss before taxation of GBP1.1 million (2019: loss of GBP0.6 million), following an impairment charge of GBP1.2 million of its carrying value of its interest in SIS (2019: GBP4.3 million). Net assets at the year end were GBP12.8 million (60.7p per share) (2019: GBP14.7 million (69.7p per share)).

The Board of CMG (the "Board") has reviewed its investment in SIS and has taken account of the current trading position of SIS. As announced in June 2020 and November 2020, SIS's operations have been impacted as a result of Covid-19. The disruption to racing since mid-March 2020, together with the closure of licensed Betting offices at various stages during the year, has and continues to impact on SIS's trading in its current financial year. Accordingly, whilst SIS has sought to take steps to mitigate the effects of Covid-19 which are referred to later, SIS's management has informed the Company that they expect that SIS will be loss-making in its current financial year ending 31 March 2021. However, SIS's management believe that the digital and international opportunities which are now being successfully implemented should enable SIS to return to profitability in subsequent years. Accordingly, and notwithstanding SIS's management's view of the future opportunities available to SIS, taking into account the impact of Covid-19 on the operations of SIS, and the uncertainties concerning the future possible liability that may arise from the TRP litigation, the Board of CMG has decided to reduce the valuation of its investment in SIS from GBP13.6 million to GBP12.5 million.

As previously reported, SIS paid a dividend of approximately GBP5.0 million to its shareholders in October 2019, of which GBP1.03 million was received by CMG. Upon receipt of such funds and taking into account the Company's position at that time, the Company distributed a total of GBP1.1 million to shareholders via a dividend of 5p per share in November 2019.

SIS Betting - UK and Ireland Retail

SIS continues to provide a core service based on content from Racecourse Media Group horseracing, SIS British Greyhound Service, Irish Horseracing, Chelmsford City Horseracing, 49s and International Horseracing on mid and long-term agreements to almost the entire UK and Irish retail market, including all the major UK bookmaking groups and the majority of the independent market.

Additionally, SIS supplies additional content and services to its UK and Irish retail customers to cover early morning and additional evening products and has recently extended these services adding Mexican greyhound racing and renewing several existing arrangements.

SIS Betting - International & Online

In the year SIS has continued to progress development of its 24/7 racing channels covering horseracing, greyhound racing, virtual racing and mixed channels, with additional content and improved user experience. SIS now has over 35 channels with customers designed to maximise betting opportunities for international retail and online operators and has signed numerous international and online operators to multi-year agreements. SIS continues to progress its strategy to increase distribution, in both new and existing international and online markets, using proprietary production technology as well as ultra-low latency streaming and data pricing services.

In addition, this year saw the launch of the SIS Competitive Gaming (e-sports) service during the lockdown in May with commitment to customers for multiple 24/7 service channels.

SIS Results

As announced on 19 November 2020, SIS's profit before tax for the year ended 31 March 2020, was GBP0.8 million.

SIS's cash balance as at 31 March 2020 was approximately GBP60.1 million and there has been no dividend declared nor paid by SIS since the end of its financial year.

The results of SIS for the year ended 31 March 2020 are as follows:

 
                                           31 March 2020                                 31 March 2019 
                                     Before                                        Before 
                               individually    Individually                  individually    Individually 
                                significant     significant                   significant     significant 
                                     items*          Items*        Total           items*          Items*        Total 
                                    GBP'000         GBP'000      GBP'000          GBP'000         GBP'000      GBP'000 
Turnover                            212,593               -      212,593          241,404               -      241,404 
Operating expenses                (208,975)         (3,577)    (212,552)        (234,018)         (5,147)    (239,165) 
                            ---------------  --------------  -----------  ---------------  --------------  ----------- 
Group operating profit                3,618         (3,577)           41            7,386         (5,147)        2,239 
Profit on disposal 
 of operations                            -               -            -           17,836               -       17,836 
Other interest receivable 
 and similar income                     756               -          756              619               -          619 
Interest payable and 
 similar expenses                       (1)               -          (1)              (6)               -          (6) 
                            ---------------  --------------  -----------  ---------------  --------------  ----------- 
Profit before taxation                4,373         (3,577)          796           25,835         (5,147)       20,688 
Tax on profit                         (695)             509        (186)          (3,391)             978      (2,413) 
                            ---------------  --------------  -----------  ---------------  --------------  ----------- 
Profit after taxation                 3,678         (3,068)          610           22,444         (4,169)       18,275 
                            ---------------  --------------  -----------  ---------------  --------------  ----------- 
Other comprehensive 
 income                               1,279               -        1,279            4,458               -        4,458 
                            ---------------  --------------  -----------  ---------------  --------------  ----------- 
Total comprehensive 
 income                               4,957         (3,068)        1,889           26,902         (4,169)       22,733 
                            ---------------  --------------  -----------  ---------------  --------------  ----------- 
 

Notes: *Individually significant items relate to litigation fees.

 
Share of net assets and liabilities 
 of associate 
                                      31 March 2020  31 March 2019 
Total assets                                 97,150        119,521 
Net liabilities                            (36,428)       (55,688) 
                                      -------------  ------------- 
Net assets                                   60,722         63,833 
                                      -------------  ------------- 
 

India

As previously reported, the claim in respect of the Indian project continues to be pursued but the outcome remains uncertain. The legal and associated costs relating to this claim have been significantly reduced but are still impacting profits. SIS have accounted for legal costs as they arose.

Litigation

As previously announced on 9 October 2020, in the case brought by The Racing Partnership ("TRP") and others against SIS's subsidiary, Sports Information Services Limited ("SISL"), and others, the Court of Appeal handed down judgment in relation to the appeals against various elements of the High Court judgment of Mr Justice Zacaroli in respect of liability issues in the Case as follows:

1. Upheld SISL's appeal in relation to the finding of breach of confidence in relation to certain race day data supplied to SISL by a co-defendant; and

   2.       Upheld TRP's appeal against the dismissal of its claims for unlawful means conspiracy. 

There has been no ruling given towards damages and SIS has, after consultation with its advisors, sought an appeal to the Supreme Court which it expects to happen in late 2021 if granted.

Current Trading

As previously announced on 17 June 2020 and 19 November 2020, SIS's operations were impacted between mid-March 2020 and June 2020, following the outbreak of Covid-19. Following the cancellation of horse and greyhound racing from mid-March 2020, SIS saw the resumption of horse and greyhound racing in England from 1 June 2020 and horseracing in Ireland from 8 June 2020, with the reopening of Licenced Betting Offices in England from 15 June 2020 resulting in a return to full operations at SIS.

Further Covid-19 restrictions started to be implemented in October and November 2020, as a result of which SIS saw further temporary closure of the majority of the retail Licensed Betting Offices which it provides services to. SIS continues to be able to provide content for its customers during this time and has sought to offset revenue shortfalls from retail with increased digital revenues.

With the uncertainty and tiering system likely to continue through to the end of SIS's financial year in March 2021, SIS's management believes that there remains significant uncertainty as to when retail markets will reopen in full.

SIS's profitability for the year to March 2021 has been significantly impacted by Covid-19 and SIS's management expects to make a loss for the current financial year, although the magnitude of the loss is currently difficult to forecast given the uncertain nature of the retail market return.

Despite the impact of Covid-19, SIS has continued to see growth in its International and online customer base, most recently launching channels for Latin American and European customers, and has seen the launch of its Competitive Gaming (esports) product as well as increased benefit from the acquisition of the 49's business completed earlier in the year.

Outlook

As stated above, SIS's management have informed the Company that they expect SIS to make a loss for the year ending March 2021 and, accordingly, cash reserves are expected to be lower than in previous years, though SIS's management expect that they will however remain significant.

SIS has successfully handled the significant disruptions from Covid-19 during 2020, which has particularly impacted the retail customer business. Whilst SIS expects to make a loss for the year ending March 2021 there has been significant acceleration of growth in customers in its online business, which together with more opportunities opening up internationally, provides diversification of its activities and underpins the business for the future.

As a result of Covid-19 uncertainties, SIS has deferred any dividend this financial year but will consider a dividend next financial year.

CMG continues to be cash positive and operated at very low overhead levels.

AGM

The next Annual General Meeting of CMG will take place on 10 February 2021. Formal Notice of the meeting is set out at the end of the report and accounts together with the form of proxy.

Michael Rosenberg OBE

Chairman

30 December 2020

Strategic Report

The Directors present their strategic report for the year ended 30 June 2020.

Principal activities and review of the business

The principal activities of the business are outlined and reviewed in the Chairman's Statement. A review of the business is included within the Chairman's Statement.

Principal risks and uncertainties

Investment in SIS

The principal strategic investment of the Group is its 20.54% holding in SIS. The Group is entitled to appoint one director to the board of SIS which currently comprises eight directors, of which five are appointed by shareholders, two are independent and one is the Chairman. Although it can influence the board on strategic decisions, the Group is not in a position to control the day-to-day business and affairs of SIS other than with the support of other directors and a majority of shareholders of SIS.

There are a number of risks and uncertainties associated with the business of SIS which could potentially have an adverse impact on the value of the Group's investment. At a technical level this includes the fact that the customers of SIS rely upon real time data and uninterrupted content delivery. Loss of content would result in reduced quality of services and potentially reduced income. Therefore SIS has adopted advanced disaster recovery solutions and has built back up facilities which are located around the country.

Financial risk

The Group is subject to financial risk through its exposure to financial assets and liabilities. The Group's main financial risk is its exposure to its investment in SIS.

Credit risk

The Group is not exposed to any credit risk.

Liquidity risk

There is a very low risk that the Group will encounter difficulty in meeting its financial obligations as they fall due, on the basis that the Group operates with minimal overheads and cash flow is well managed.

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The principal liabilities of the Group and Company arise in respect of administrative expenditure and trade and other payables. Trade and other payables are all payable within three months.

The Board receives cash flow projections on a regular basis as well as information on cash balances.

Key Performance Indicators (KPIs)

The Company's key performance indicators used by the Board in monitoring the general performance of the Group and its investments are:

Net asset value per share

The net asset value per share of the Group was 61 pence as at 30 June 2020 (2019: 70 pence). The net asset value per share decreased slightly during the year to 30 June 2020. The net asset value of the Group as at 30 June 2020 and 30 June 2019 is shown in the Group's consolidated statement of financial position on page 20.

Administrative expenses

The Directors closely monitor the anticipated overheads for the Group and ensure that these are kept to a minimum.

Earnings per share (EPS)

EPS shows the relative performance year-on-year of the Group's profitability measured as an amount of profit or loss attributable to one ordinary share. The calculation of earnings per share is based on the weighted average number of issued ordinary shares in issue for the financial year and the profit/(loss) after taxation attributable to ordinary shareholders. EPS in respect of operations for the year and the previous year is shown in the Group consolidated statement of comprehensive income on page 19.

Key Performance Indicators of Associate

The Directors additionally monitor the performance of SIS in order to evaluate the general performance of the Group.

Michael Rosenberg OBE

Chairman

30 December 2020

Consolidated statement of comprehensive income for the year ended 30 June 2020

 
                                                           Year          Year 
                                                          ended         ended 
                                                        30 June       30 June 
                                                           2020          2019 
                                             Note           GBP           GBP 
                                            -----  ------------  ------------ 
 
 Revenue                                      3          25,000        25,000 
 
 Cost of sales                                                -             - 
                                                   ------------  ------------ 
 
 Gross profit                                            25,000        25,000 
 
 Administrative expenses                              (123,600)     (119,411) 
                                                   ------------  ------------ 
 
 Operating loss                                        (98,600)      (94,411) 
 
 Financial income                             9             712         5,312 
 Financial costs                              10              -             - 
                                                   ------------  ------------ 
 Net financial income                                       712         5,312 
 
 Share of profit of equity-accounted 
  associate, net of tax                       2         125,294     3,753,685 
 Impairment of equity-accounted associate           (1,160,843)   (4,270,701) 
 
 Loss before taxation                               (1,133,437)     (606,115) 
                                                   ------------  ------------ 
 
 Taxation                                     11         25,583        16,623 
 
 Loss for the year                                  (1,107,854)     (589,492) 
                                                   ------------  ------------ 
 
 Share of other comprehensive profit 
  of associate                                2         262,707       915,673 
 
 Total comprehensive loss for the 
  year                                                (845,147)       326,181 
                                                   ------------  ------------ 
 
 Attributable to equity holders of 
  the Company                                         (845,147)       326,181 
                                                   ------------  ------------ 
 
 Loss per share: 
 
 Basic                                        12        (5.27p)       (2.80p) 
                                                   ------------  ------------ 
 
 Diluted                                      12        (5.27p)       (2.80p) 
                                                   ------------  ------------ 
 

Consolidated statement of financial position as at 30 June 2020

 
                                                                                30 June      30 June 
                                                                                  202 0         2019 
                                                                      Note          GBP          GBP 
                                                                     -----  -----------  ----------- 
 Assets 
 Non-current assets 
 Investment in associate                                               2     12,474,980   14,274,706 
 
                                                                             12,474,980   14,274,706 
                                                                            -----------  ----------- 
 
 Current assets 
 Trade and other receivables                                           14        62,741       39,007 
 Cash and cash equivalents                                             15       270,654      383,612 
 
                                                                                333,395      422,619 
                                                                            -----------  ----------- 
 
 Total assets                                                                12,808,375   14,697,325 
                                                                            -----------  ----------- 
 
 Equity and liabilities 
 
 Capital and reserves attributable to equity holders of the parent 
 Share capital                                                         16     2,103,202    2,103,202 
 Capital redemption reserve                                                     711,117      711,117 
 Merger reserve                                                               2,402,674    2,402,674 
 Retained profits                                                             7,553,900    9,450,670 
 
 Total equity                                                                12,770,893   14,667,663 
                                                                            -----------  ----------- 
 
 Current liabilities 
 Trade and other payables                                              18        37,482       29,662 
 Corporation tax payable                                               19             -            - 
                                                                                 37,482       29,662 
 
 Total equity and liabilities                                                12,808,375   14,697,325 
                                                                            -----------  ----------- 
 
 

The financial statements were approved by the Board of Directors and authorised for issue on 30 December 2020.

Michael Rosenberg OBE

Director

Consolidated statement of changes in equity for the year ended 30 June 2020

 
                                         Attributable to equity holders of the Group 
 
                                                    Capital                                     Total 
                             Share      Share    Redemption      Merger      Retained    Shareholders 
 30 June 2020              Capital    Premium       Reserve     Reserve       Profits          Equity 
                               GBP        GBP           GBP         GBP           GBP             GBP 
 At 1 July 2019          2,103,202          -       711,117   2,402,674     9,450,670      14,667,663 
 
 Loss for the 
  year                           -          -             -           -   (1,107,854)     (1,107,854) 
 Other comprehensive 
  income: 
 Share of other 
  comprehensive 
  profit of associate            -          -             -           -       262,707         262,707 
                        ----------  ---------  ------------  ----------  ------------  -------------- 
 Total comprehensive 
  profit for the 
  period                                    -                         -     (845,147)       (845,147) 
 Dividends paid                                                           (1,051,623)     (1,051,623) 
                        ----------  ---------  ------------  ----------  ------------  -------------- 
 At 30 June 2020         2,103,202          -       711,117   2,402,674     7,553,900      12,770,893 
                        ----------  ---------  ------------  ----------  ------------  -------------- 
 

The following describes the nature and purpose of each reserve within owners' equity:

 
 Share capital        Amount subscribed for shares at nominal 
                       value. 
 Share premium        Amount subscribed for share capital in 
                       excess of nominal value. 
 Capital redemption   Amounts arising from the purchase by the 
  reserve              group of its own shares. 
 Merger reserve       Amounts arising from the merger of subsidiary 
                       investments. 
 Retained profits     Cumulative profit of the Group attributable 
                       to equity shareholders. 
 
 
                                          Attributable to equity holders of the Group 
 
                                                    Capital                                      Total 
                             Share      Share    Redemption      Merger       Retained    Shareholders 
 30 June 2019              Capital    Premium       Reserve     Reserve        Profits          Equity 
                               GBP        GBP           GBP         GBP            GBP             GBP 
 At 1 July 2018          2,103,202          -       711,117   2,402,674     21,323,087      26,540,080 
 
 Loss for the 
  year                           -          -             -           -      (589,492)       (589,492) 
 Other comprehensive 
  income 
 Share of other 
  comprehensive 
  profit of associate            -          -             -           -        915,673         915,673 
                        ----------  ---------  ------------  ----------  -------------  -------------- 
 Total comprehensive 
  profit for the 
  period                         -          -             -           -        326,181         326,181 
 Dividends paid                                                           (12,198,598)    (12,198,598) 
                        ----------  ---------  ------------  ----------  -------------  -------------- 
 At 30 June 2019         2,103,202          -       711,117   2,402,674      9,450,670      14,667,663 
                        ----------  ---------  ------------  ----------  -------------  -------------- 
 

Consolidated statement of cash flows for the year ended 30 June 2020

 
                                                                                         Year ended     Year ended 
                                                                                            30 June        30 June 
                                                                                              202 0           2019 
                                                                                 Note           GBP            GBP 
                                                                                -----  ------------  ------------- 
 
 
 Cash flow from operating activities 
 (Loss) / profit before taxation                                                        (1,133,437)      (606,115) 
 Adjustments for: 
 Share of profit from associate                                                           (125,294)    (3,753,685) 
 Impairment of investment in associate                                                    1,160,843      4,270,701 
 Finance income                                                                               (712)        (5,312) 
 Corporation taxes recovered                                                                      -          4,365 
 
 Net cash flow used in operating activities before changes in working capital              (98,600)       (90,046) 
 Increase in trade and other receivables                                                      1,849          1,229 
 Decrease in trade and other payables                                                         7,820          (579) 
 
 Net cash flow used in operating activities                                                (88,931)       (89,396) 
 
 Investing activities 
 Dividend received                                                                        1,026,884      8,214,659 
 Interest received                                                                              712          5,312 
 
 Net cash flow from investing activities                                                  1,027,596      8,219,971 
 
 Financing activities 
 Dividends paid                                                                         (1,051,623)   (12,198,598) 
 
 Net cash flow used in financing activities                                             (1,051,623)   (12,198,598) 
 
 Net decrease in cash and cash equivalents in the year                                    (112,958)   ( 4,068,023) 
 Cash and cash equivalents at the beginning of the year                                     383,612      4,451,635 
                                                                                       ------------  ------------- 
 
 Cash and cash equivalents at the end of the year                                 15        270,654        383,612 
                                                                                       ------------  ------------- 
 
 

Notes to the financial statements

   1.         Basis of preparation and significant accounting policies 

These consolidated financial statements of Catalyst Media Group plc have been prepared in accordance with accepted International Financial Reporting Standards (IFRSs), International Accounting Standards (IAS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations (collectively "IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies listed below include those applicable to SIS, given its materiality to the Group as a whole.

Catalyst Media Group plc is a publicly limited company registered in England and Wales where it is domiciled for tax purposes.

The financial statements are prepared under the historical cost convention.

These results are audited, however the financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 30 June 2020, but is derived from the 2020 Report and financial statements. The auditors have issued an unqualified audit report in respect to these financial statements.

Going concern

The Directors can report that based on the Group's budgets and financial projections, they have satisfied themselves that the business is a going concern. In assessing the Group as a going concern, the Directors are also mindful of the business of SIS, that provides the entire value of the Group. The Directors are satisfied that SIS is a going concern. The Board has a reasonable expectation that the Company and Group have adequate resources and facilities to continue in operational existence for the foreseeable future and therefore the accounts are prepared on a going concern basis.

   2.         Investment in associate 
 
           Year Ended 30 June 2020                 Group 
                                                     GBP 
           Cost 
           At 1 July 2019                     14,274,706 
  Share of profit - 2020                         125,294 
  Share of other comprehensive 
   profit - 2020                                 262,707 
  Dividend received - 2020                   (1,026,884) 
  Impairment of equity-accounted 
   associate                                 (1,160,843) 
           At 30 June 2020                    12,474,980 
 
 
 
           Year Ended 30 June 2019            Group 
                                                GBP 
           Cost 
           At 1 July 2018                22,090,708 
  Share of profit - 2019                  3,753,685 
  Share of other comprehensive 
   loss - 2019                              915,673 
  Dividend received - 2019              (8,214,659) 
  Impairment of equity-accounted 
   associate                            (4,270,701) 
                                        ----------- 
           At 30 June 2019               14,274,706 
                                        ----------- 
 

The Group's interest in the associate, SIS, a company incorporated in England and Wales, is held by Alternateport Limited. Alternateport Limited holds an investment of 20.54% in the equity share capital of SIS and is entitled to appoint a director and alternate director to the SIS board. This right has been exercised since acquisition. Alternateport Limited is a wholly owned subsidiary of Catalyst Media Holdings Limited, a wholly owned subsidiary of Catalyst Media Group plc.

The Directors have noted that subsequent to SIS's 31 March 2020 reporting date, it has recorded significant losses as a result of the restrictions imposed due to the Covid-19 pandemic. These losses have not been formally reported on, or audited, and the Directors note that it is not considered practicable for SIS to prepare financial statements to 30 June 2020 under IFRS.

The Directors have assessed that while the impact of Covid-19 is significant, given it relates to broader circumstances rather than discretely identifiable transactions, it is not appropriate to adjust for its share of SIS's losses for the period 1 April 2020 to 30 June 2020. These losses, together with the Group's share of SIS's results for its remaining financial period to 31 March 2021, will be reflected in the Group's financial statements for the year ended 30 June 2020.

A copy of the strategic forecasts prepared by SIS was made available to the Directors of CMG showing management forecasts of the income statement, statement of financial position and statements of cash flow. SIS's management have assumed a relatively low level of future profits at a steady level over a period of five years and applied a discount rate of 15% to arrive at a present value. In conjunction with these forecasts, the potential impact of the settlement of the ongoing TRP litigation has been considered. The losses made by SIS for the period 1 April 2020 to 30 June 2020 have also been included in the analysis.

After reviewing the forecasts and other factors detailed above, the Directors concluded that the carrying value of the investment in SIS should be reduced to GBP12.5 million. The value of the investment in SIS has therefore been impaired by GBP1.2 million to achieve this.

 
           Share of profit of associate           2020         2020        2019 
 
                                                          CMG share   CMG share 
                                             SIS Total 
                                                            GBP'000     GBP'000 
                                               GBP'000 
 
Revenue                                        212,593       43,667      49,584 
                                            ----------  -----------  ---------- 
 
Operating profit after 
 individually significant 
 items                                           3,618          743       1,517 
 
Net interest receivable                            755          155         126 
Profit / (losses) on 
 business wind down                            (3,577)        (735)       2,606 
Profit on disposal of                                -            -           - 
 joint venture 
Profit on disposal of                                -            -           - 
 fixed asset 
                                            ---------- 
Profit before tax                                  796          163       4,249 
Taxation                                         (186)         (38)       (496) 
                                            ----------  -----------  ---------- 
Share of profit after 
 taxation                                          610          125       3,753 
                                            ----------  ----------- 
Net income from associate                          610          125       3,753 
                                            ----------  -----------  ---------- 
 
Other comprehensive 
 income: 
Actuarial gain                                   1,968          404       1,443 
Deferred tax                                     (689)        (141)       (500) 
Change in value of hedging 
 instrument                                          -            -        (27) 
                                            ----------  -----------  ---------- 
                                                 1,279          263         916 
 Share of net assets 
  and liabilities of associate 
Net assets                                      93,833       19,273      24,550 
Net liabilities                               (33,111)      (6,801)    (11,438) 
                                            ----------  -----------  ---------- 
           Net equity                           60,722       12,472      13,112 
                                            ----------  -----------  ---------- 
 

As at 30 June 2020, SIS was continuing to deal with tax and legal issues that arose from the 2010 Commonwealth Games (CWG) in Delhi, India. SIS, via a partnership of the name of SIS Live, delivered the host broadcast production and facilities contract for the 2010 CWG. Given continuing scrutiny of the entire CWG project immediately after the closure of the Games, approximately 40% of the contract has still not been paid. A provision of GBP5.9 million was made in respect of this non-payment in the SIS financial statements for the year ended 31 March 2011.

As at 30 June 2020, SIS continued to be involved in a litigation case brought by The Racing Partnership ("TRP") and others against SIS's subsidiary, Sports Information Services Limited ("SISL"), and others. SISL has successfully defended two of the three claims and, following the year end, both SISL and TRP have been granted permission by the judge to appeal elements of the judgement. SISL have been ordered by the judge to pay 20% of TRP's costs.

SIS Live received a draft assessment in March 2014 from Indian tax authorities in relation to the year ended March 2011. SIS has strongly rejected the draft assessment, and continues to appeal it through the Indian judiciary system. As appeal proceedings continue it is not possible to quantify the potential tax liability that may arise of the subsequent recoverability of that amount through the courts and therefore no further provision has been made in the accounts of SIS.

On 27 June 2020, SIS acquired 100% of the share capital of 49's Limited for a net consideration of GBP4.8m with a potential for further deferred consideration to follow contingent on company performance. While the acquisition of 49's Limited is a significant event arising after SIS's financial reporting date of 31 March 2020, the Directors have concluded that its impact on the Group's share of SIS's results to 30 June 2020 is immaterial and therefore does not require adjusting for.

   3.         Post balance sheet events 

There were no events subsequent to the Statement of Financial Position which require disclosure.

See note 2 for a description of the impact of the post balance sheet events as they relate to SIS's reporting date (31 March 2020) on the Group's valuation of the investment in associate as at 30 June 2020.

   4.         Annual Report 

The Annual Report for the year ended 30 June 2020 will be available today from the Company's website www.cmg-plc.com .

The Annual General Meeting will be held at 6 Stratton Street, London W1J 8LD, at 10.00 a.m. on 10 February 2021.

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END

FR ZBLFXBLLFFBQ

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December 31, 2020 02:00 ET (07:00 GMT)

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