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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% 53.00 52.00 54.00 53.00 53.00 53.00 0.00 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 0.0 -0.6 -2.8 - 11

Catalyst Media Group PLC Interim Results

26/03/2020 7:00am

UK Regulatory (RNS & others)


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RNS Number : 6322H

Catalyst Media Group PLC

26 March 2020

26 March 2020

Catalyst Media Group Plc

("CMG", "Catalyst" or the "Group")

Interim Results for Six Months Ended 31 December 2019

Catalyst Media Group Plc announces its interim results for the six months ended 31 December 2019.

CMG is a 20.54% shareholder in Sports Information Services (Holdings) Ltd ("SIS") and the results include its share in the profits of SIS as an equity accounted associate.

Financial Highlights for the six months to 31 December 2019

-- CMG profit after taxation and before adjustment to investment valuation of GBP0.32 million (2018: GBP0.42 million)

   --        Earnings per share of 1.53p (2018: 1.98p) 
   --        Net asset value per share of 66.3p (2018: 70.2p) 
   --        In the six months to 30 September 2019, SIS achieved 
   -    Revenues of GBP121.1 million (2018: GBP120.7 million) 
   -    EBITDA of GBP1.9 million (2018: GBP8.5 million) 
   -    Profit after tax on ordinary activities of GBP1.7 million (2018: GBP2.1 million) 

-- In October 2019, SIS declared a dividend of GBP5.0 million of which GBP1.03 million was received by CMG

   --        CMG declared a dividend of GBP1.05 million in October 2019, paid in November 2019 

Impact of Covid-19

Since 12 March 2020 , horse racing fixtures began to be cancelled and there are now no horse racing or greyhound racing fixtures in the UK, or indeed in the majority of countries. As a result, SIS has informed the Company that whilst trading is and will be impacted going forward, it still expects to make a profit for the year ending 31 March 2020, prior to any provisions or adjustment as a result of Covid-19, and at this point, no guidance can be provided for the following financial year pending the resumption of racing . In addition , SIS's cash resources will be impacted , though fortunately SIS currently has significant cash reserves amounting to approximately GBP58 million. The actions now being taken by SIS's management, including suspending operations, are intended to seek to ensure that as and when conditions improve and racing recommences , SIS will be well placed to continue to provide the range of services previously offered to the market.

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 / Richard Tulloch

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

For the six month period ended 31 December 2019, the Company has generated a net profit after taxation before adjustment to investment valuation of GBP0.32 million (2018: GBP0.42 million).

Net assets as at 31 December 2019 were GBP13.9 million (30 June 2019: GBP14.8 million). Net cash as at 31 December 2019 was GBP0.3 million (2018: GBP0.4 million).

CMG's main asset remains its 20.54% stake in SIS and, in October 2019, the Company received a dividend of GBP1.03 million from SIS. Following the payment of a dividend of GBP1.05 million to shareholders in November 2019, the value of CMG's investment in SIS has been reduced from GBP14.3 million to GBP13.6 million. As a result, the net assets per share as at 31 December 2019 were 66.3p (2018: 70.2p), though the carrying cost of our investment in SIS will need to be reviewed again at the year end in light of the present difficulties.

CMG equity accounts for its share in the profits of SIS which were GBP1.7 million after tax for the six month period to 30 September 2019 (2018: GBP2.1 million). SIS revenues for the period were GBP121.1 million (2018: GBP120.7 million) which was derived from the business of providing integrated television and data services to Licensed Betting Offices in the UK, Ireland and overseas. Operating profits of SIS for the period decreased to GBP1.9 million, compared to GBP2.5 million in the comparable period for 2018.

On receipt of its share of the SIS dividend, being GBP1.03 million, the Company had a cash balance of approximately GBP1.37 million and as announced on 31 October 2019, the Board of CMG approved the distribution of GBP1.05 million to CMG's shareholders by way of a dividend of 5p per share. The dividend was paid on 22 November 2019 to CMG shareholders on the register of members as at 8 November 2019.

CMG currently has cash of approximately GBP0.3 million which is sufficient for its present needs.

Set out below is an overview of SIS's key divisions for the period under review.

SIS Betting - UK and Ireland Retail

SIS continued 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 over 97% of the 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 greyhounds as well as the prestigious Saudi Cup, the most valuable horse race this year.

SIS Betting - International & Online

SIS produces 24/7 channels covering horseracing, greyhound racing, virtual racing and mixed channels, having secured content covering the whole 24-hour period - content includes horseracing from Melbourne Racing Club and Thoroughbred Racing South Australia, Palermo in Argentina, Latin America, South Korea, Philly PARX and Spain as well the UK and Irish horseracing and greyhound racing from UK, Ireland and Mexico.

SIS has over 30 channels designed to maximise betting opportunities for international retail and online operators and has signed a number of international and online operators to multiyear agreements. SIS continues to progress its strategy to increase distribution, in both new and existing International and Digital markets, using proprietary production technology as well as streaming and data pricing services.

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.

Litigation

Further to the Company's announcement in January 2020, in respect of the case brought by The Racing Partnership Limited and others (together the "Claimants") against SIS's subsidiary, Sports Information Services Limited ("SISL"), and others, SIS has informed the Company that the Claimants have filed at the High Court particulars of the damages sought. The Claimants are seeking damages in excess of GBP40 million.

SISL has reviewed the particulars of the damages sought with its legal advisers and is currently preparing a robust defence, in tandem with the ongoing appeal. SISL's management continue to firmly believe that in the event that damages are awarded to the Claimants, any final award of damages would be considerably less than the amount claimed.

SISL have advised the Company that the Court of Appeal have set a date for the appeal hearing of 7-9 July with judgement expected to be handed down towards the end of the year.

SISL continues to hold a high level of cash of approximately GBP58 million and should a final award of damages be made at the level the Claimants seek, the likelihood of which SISL management considers remote, there is sufficient cash available to meet such award.

Current Trading and Impact of Covid-19

The current year has seen the implementation of the Triennial Review from 2018 announced by the Department for Digital, Culture, Media and Sport which introduced a stake reduction in Fixed Odds Betting Terminals ("FOBT") maximum stakes from GBP100 to GBP2. Since the stake reduction came into force in April 2019, SIS has seen a fall in the number of UK Licensed Betting Office subscribers from approximately 9,250 to approximately 7,950, which is slightly lower than SIS's management expected. However, until the recent Covid-19 outbreak SIS's performance was ahead of SIS management's expectations and the investment and progress in Digital and International markets had continued. Announcements in the last 12 months by SIS have included the launch of a World Greyhound Tote (aimed at tote based territories around the world), Competitive Gaming (E-sports product) expansion into Eastern Europe and South America both with new retail and online operators and a number of new retail and online customers in Europe for its Watch and Bet 24/7 channels.

Since 12 March 2020 , horse racing fixtures began to be cancelled and there are now no horse racing or greyhound racing fixtures in the UK, or indeed in the majority of countries. As a result, SIS has informed the Company that whilst trading is and will be impacted going forward, it still expects to make a profit for the year ending 31 March 2020, prior to any provisions or adjustment as a result of Covid-19, and at this point, no guidance can be provided for the following financial year pending the resumption of racing . In addition , SIS's cash resources will be impacted , though fortunately SIS currently has significant cash reserves amounting to approximately GBP58 million. The actions now being taken by SIS's management, including suspending operations, are intended to seek to ensure that as and when conditions improve and racing recommences , SIS will be well placed to continue to provide the range of services previously offered to the market.

SIS's focus at this time is on the wellbeing of its staff and has confirmed that it is operating in compliance with the UK Government's latest guidance. SIS has implemented its business continuity plans throughout March to manage the frequently changing circumstances and has reached the position today where it believes that the actions it is taking are in the company's, employees', shareholders' and stakeholders' best interests. SIS will be working in the int erim to ensure that it is prepared for the relaxing of restrictions around sporting events and social distancing and the resumption of racing.

Consolidated interim statement of comprehensive income

 
                                        Notes          6 months          6 months      12 months 
                                                 to 31 December    to 31 December     to 30 June 
                                                           2019              2018           2019 
 
                                                            GBP               GBP            GBP 
                                                      Unaudited         Unaudited        Audited 
 
 Revenue                                                 12,500            12,500         25,000 
 
 Cost of sales                                                -                 -              - 
                                               ----------------  ----------------  ------------- 
 Gross profit                                            12,500            12,500         25,000 
 
 Administrative expenses                               (51,279)          (49,574)      (119,411) 
 Other operating income                                       -                 -              - 
                                               ----------------  ----------------  ------------- 
 Operating loss                                        (38,779)          (37,074)       (94,411) 
 
 Financial income                                           464             4,912          5,312 
 Financial costs                                              -                 -              - 
 Net financial income                                       464             4,912          5,312 
                                               ----------------  ----------------  ------------- 
 
 Share of profit of equity-accounted 
  associate                               3             359,245           440,172      3,753,685 
  Impairment of equity-accounted 
   associate                                                  -                 -    (4,270,701) 
 
 Profit before taxation                                 320,930           408,010      (606,115) 
 
 Taxation                                                     -             9,020         16,623 
 
 Profit/(loss) for the period                           320,930           417,030      (589,492) 
                                               ----------------  ----------------  ------------- 
 
 Share of other comprehensive 
  profit of associate                                         -                 -        915,673 
 Total comprehensive income/(loss) 
  for the period                                        320,930           417,030        326,181 
                                               ----------------  ----------------  ------------- 
 
 Attributable to equity holders 
  of the company                                        320,930           417,030        326,181 
                                               ----------------  ----------------  ------------- 
 
 Earnings/(loss) per share:               4 
 Basic                                                    1.53p             1.98p        (2.80p) 
                                               ----------------  ----------------  ------------- 
 Diluted                                                  1.53p             1.98p        (2.80p) 
                                               ----------------  ----------------  ------------- 
 

Consolidated interim statement of financial position

 
                                      Notes   31 December   31 December      30 June 
                                                     2019          2018         2019 
 
                                                      GBP           GBP          GBP 
                                                Unaudited     Unaudited      Audited 
 Assets 
 Non-current assets 
 Investment in associate                3      13,607,067    14,316,221   14,274,706 
                                             ------------  ------------  ----------- 
                                               13,607,067    14,316,221   14,274,706 
                                             ------------  ------------  ----------- 
 
 Current assets 
 Trade and other receivables                       18,795        10,422       39,007 
 Cash and cash equivalents                        326,182       449,583      383,612 
                                             ------------  ------------  ----------- 
                                                  344,977       460,005      422,619 
                                             ------------  ------------  ----------- 
 
 Total assets                                  13,952,044    14,776,226   14,697,325 
                                             ------------  ------------  ----------- 
 
 Equity and liabilities 
 
 Capital and reserves attributable 
  to equity holders of the parent 
 Share capital                                  2,103,202     2,103,202    2,103,202 
 Capital redemption reserve                       711,117       711,117      711,117 
 Merger reserve                                 2,402,674     2,402,674    2,402,674 
 Retained profits                               8,719,977     9,541,519    9,450,670 
                                             ------------  ------------  ----------- 
                                               13,936,970    14,758,512   14,667,663 
                                             ------------  ------------  ----------- 
 
 Current liabilities 
 Trade and other payables                          15,074        19,403       29,662 
 Corporation tax payable                                -       (1,689)            - 
                                             ------------  ------------  ----------- 
                                                   15,074        17,714       29,662 
                                             ------------  ------------  ----------- 
 
 Total equity and liabilities                  13,952,044    14,776,226   14,697,325 
                                             ------------  ------------  ----------- 
 

Consolidated interim cash flow statement

 
                                                       6 months          6 months      12 months 
                                                 to 31 December    to 31 December          to 30 
                                                           2019              2018           June 
                                                                                            2019 
                                                            GBP               GBP 
                                                      Unaudited         Unaudited            GBP 
                                                                                         Audited 
 
 Cash flow from operating activities 
 Profit / (loss) before taxation                        320,930           408,010      (606,115) 
 Adjustments for: 
 Share of profit from associate                       (359,245)         (440,172)    (3,753,685) 
 Impairment of associate                                      -                 -      4,270,701 
 Finance income                                           (464)           (4,912)        (5,312) 
 Corporation taxes recovered                                  -             4,365          4,365 
                                               ----------------  ----------------  ------------- 
 
 Net cash outflow from operating activities 
  before changes in working capital                    (38,779)          (32,709)       (90,046) 
 Decrease in trade and other receivables                 20,212            20,524          1,229 
 Decrease in trade and other payables                  (14,588)          (10,840)          (579) 
 
 Net cash outflow used in operating 
  activities                                           (33,155)          (23,025)       (89,396) 
                                               ----------------  ----------------  ------------- 
 
 Investing activities 
 Dividend received                                    1,026,884         8,214,659      8,214,659 
 Interest received                                          464             4,912          5,312 
 
 Net cash inflow from investing activities            1,027,348         8,219,571      8,219,971 
                                               ----------------  ----------------  ------------- 
 
 Financing activities 
 Dividends paid                                     (1,051,623)      (12,198,598)   (12,198,598) 
                                               ----------------  ----------------  ------------- 
 Net cash outflow from financing activities         (1,051,623)      (12,198,598)   (12,198,598) 
                                               ----------------  ----------------  ------------- 
 
 Net movement in cash and cash equivalents 
  in the period                                        (57,430)       (4,002,052)    (4,068,023) 
 Cash and cash equivalents at the 
  beginning of the period                               383,612         4,451,635      4,451,635 
 
 Cash and cash equivalents at the 
  end of the period                                     326,182           449,583        383,612 
                                               ----------------  ----------------  ------------- 
 

Consolidated interim statement of changes in equity

 
                                      Share   Capital redemption       Merger   Retained surplus/   Total shareholders 
                                    capital              reserve      reserve           (deficit)               equity 
                                                             GBP                                                   GBP 
                                        GBP            Unaudited          GBP                 GBP            Unaudited 
                                  Unaudited                         Unaudited           Unaudited 
 
 At 1 July 2018                   2,103,202              711,117    2,402,674          21,323,087           26,540,080 
 
 Profit for the 6 month period 
  to 31 
  December 2018                           -                    -            -             417,030              417,030 
 Dividend paid to company 
  shareholders                            -                    -            -        (12,198,598)         (12,198,598) 
 Total comprehensive loss for 
  the period                              -                    -            -        (11,781,568)         (11,781,568) 
 
 At 31 December 2018              2,103,202              711,117    2,402,674           9,541,519           14,758,512 
                                -----------  -------------------  -----------  ------------------  ------------------- 
 
 Loss for the 6 month period 
  to 30 
  June 2019                               -                    -            -         (1,006,522)          (1,006,522) 
 Share of other comprehensive 
  profit 
  of associate                            -                    -            -             915,673              915,673 
 Total comprehensive profit 
  for the 
  period                                  -                    -            -            (90,849)             (90,849) 
 
 At 30 June 2019                  2,103,202              711,117    2,402,674           9,450,670           14,667,663 
                                -----------  -------------------  -----------  ------------------  ------------------- 
 
 
                                      Share   Capital redemption       Merger   Retained surplus/   Total shareholders 
                                    capital              reserve      reserve           (deficit)               equity 
                                                             GBP                                                   GBP 
                                        GBP            Unaudited          GBP                 GBP            Unaudited 
                                  Unaudited                         Unaudited           Unaudited 
 
 At 1 July 2019                   2,103,202              711,117    2,402,674           9,450,670           14,667,663 
 
 Profit for the 6 month period 
  to 31 
  December 2019                           -                    -            -             320,930              320,930 
 Dividend paid to company 
  shareholders                            -                    -            -         (1,051,623)          (1,051,623) 
                                -----------  -------------------  -----------  ------------------  ------------------- 
 Total comprehensive loss for 
  the period                              -                    -            -           (730,693)            (730,693) 
                                -----------  -------------------  -----------  ------------------  ------------------- 
 
 At 31 December 2019              2,103,202              711,117    2,402,674           8,719,977           13,936,970 
                                -----------  -------------------  -----------  ------------------  ------------------- 
 

Notes to the interim financial statements

   1.       Corporate information 

The Company is a company incorporated in England and Wales and quoted on the AIM market of the London Stock Exchange plc.

   2.       Basis of preparation 

These unaudited consolidated interim financial statements cover the six month period from 1 July 2019 to 31 December 2019 including the financial results of Sports Information Services (Holdings) Limited ("SIS") for the six month period to 30 September 2019.

These consolidated interim financial statements of the Company and its subsidiaries (the "Group") for the six months ended 31 December 2019 have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) as adopted by the European Union and also in accordance with the Companies Act 2006.

The accounting policies adopted for the preparation of this unaudited interim statement are consistent with the accounting policies adopted in the Group's financial statements for the year ended 30 June 2019 and will remain so for the year ending 30 June 2020.

The financial information set out above does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. Statutory accounts for the year ended 30 June 2019, on which the report of the auditors was unqualified and did not contain a statement under section 498 of the Companies Act 2006, have been filed with the Registrar of Companies.

New financial reporting requirements

The Group has applied the following new financial reporting standards for the first time in preparing its financial statements for the year ended 30 June 2020. There has been no material impact on the Group's financial statements

-- IFRS 16: Leases

Standards, interpretations and amendments to published standards not yet effective

At the date of authorisation of these consolidated financial statements, the IASB and IFRIC have issued the following standard and interpretations which are effective for annual accounting periods beginning on or after the stated effective date. This standard and interpretations is not effective for and has not been applied in the preparation of these consolidated financial statements:

-- IFRS 17: Insurance Contracts (effective as of 1 January 2021)

The Directors anticipate that the adoption of this standard will not have a material impact on the Group's financial statements in the period of initial adoption.

   3.       Investment in associate 
 
                                      Total 
                                      Group 
                                        GBP 
 Cost 
 At 1 July 2019                  14,274,706 
 Additions - share of profit        359,245 
 Dividend received              (1,026,884) 
 
 At 31 December 2019             13,607,067 
                               ------------ 
 

The Group's interest in its associate SIS, a company incorporated in England and Wales, is held by Alternateport Limited ("Alternateport"). Alternateport 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 is a wholly owned subsidiary of Catalyst Media Holdings Limited, a wholly-owned subsidiary of the Company. The intangible assets represent the value attributable to the ongoing business activities of SIS, which are subject to an annual valuation adjustment.

The Board has reviewed its valuation of the investment in SIS as at 31 December 2019 and has, in line with the Group's accounting policies, reduced the value of the investment by the amount of its profit share for the period and dividends received. As a result, it has concluded that the investment should be held at a value of GBP13,607,067.

 
 Share of profit of associate*     30 September   31 December   31 December     30 June 
                                           2019          2019          2018        2019 
                                      SIS Total     CMG share     CMG share   CMG share 
                                        GBP'000       GBP'000       GBP'000     GBP'000 
 Revenue: 
 SIS Betting Services                   121,062        24,866        22,391      47,263 
 SIS LIVE services                                                    2,394       2,321 
 
 Total revenue                          121,062        24,866        24,785      49,584 
 
 Operating profit from ongoing 
  operations                              1,911           393           527       1,517 
 Net interest receivable 
  / (payable)                               261            54            26         126 
 (Losses) / profits on business 
  wind down                                   -             -             -       2,606 
 Profit on disposal of fixed 
  asset                                       -             -             -           - 
 
 Profit before tax                        2,172           446           543       4,249 
 Taxation                                 (423)          (87)         (103)       (496) 
                                  -------------  ------------  ------------  ---------- 
 Share of profit after taxation           1,749           359           440       3,753 
                                  -------------  ------------  ------------  ---------- 
 Net income from associate                1,749           359           440       3,753 
 
 Other comprehensive income 
 Actuarial (loss) /gain                       -             -             -       1,443 
 Deferred tax                                 -             -             -       (500) 
 Change in value of hedging 
  instrument                                                                       (27) 
                                  -------------  ------------  ------------  ---------- 
                                              -             -             -         916 
                                  -------------  ------------  ------------  ---------- 
 
 Share of gross assets and 
  liabilities of associate 
 Gross assets                           111,971        22,999        28,786      24,550 
 Gross liabilities                     (46,392)       (9,529)      (11,687)    (11,438) 
                                  -------------  ------------  ------------  ---------- 
 Net equity                              65,579        13,470        17,099      13,112 
                                  -------------  ------------  ------------  ---------- 
 

*The period covered by the associate's accounts is the six months to 30 September 2019. The revenues have been stated excluding internal revenues.

As at 31 December 2019, 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. Following the period end, SIS has informed the Company that the Claimants have now filed at the High Court particulars of the damages sought, being in excess of GBP40 million.

   4.       Earnings/(loss) per share 

The calculation of the basic earnings per ordinary share of 10p each in the capital of the Company ("Share") is based upon the following:

 
                                                   6 months       6 months     12 months 
                                                         to             to    to 30 June 
                                                31 December    31 December          2019 
                                                       2019           2018           GBP 
                                                        GBP            GBP 
 Basic and Diluted 
 Profits per share - pence                            1.53p          1.98p       (2.80p) 
 
 
 Profit attributable to equity shareholders         320,930        417,030     (589,492) 
 
 Weighted average number of Shares 
  in issue                                       21,032,030     21,032,030    21,032,030 
                                              -------------  -------------  ------------ 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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