REG - Catalyst Media Group - Interim Results <Origin Href="QuoteRef">APY.AX</Origin> <Origin Href="QuoteRef">CMX.L</Origin>

Catalyst MediaAnnouncement

31/03/2015 07:30

RNS Number : 9191I
Catalyst Media Group PLC
31 March 2015
Catalyst Media Group Plc
("CMG", "Catalyst" or the "Group")
Interim Results for Six Months Ended 31 December 2014
Catalyst Media Group Plc announces its interim results for the six months ended 31 December 2014.
CMG is a 20.54% shareholder in Satellite 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 2014
 CMG profit after taxation and before valuation adjustment of 331k (2013: 2.2m*)
 Valuation adjustment of 359k (2013: 2.2m) resulting in a loss after taxation of 28,655 (2013: 7,770*)
 Earnings per share (before valuation adjustment) 1.23p (2013: 7.91p*)
 Loss per share (after valuation adjustment) 0.11p (2013: 0.03p*)
 Net asset value per share (excluding shares held in treasury) of 98.3p (2013: 103.5p)
 SIS revenues for six months to 30 September 2014 106.9m (2013: 123.2m (excluding Outside Broadcasting services 101.1m))
 SIS EBITDA for six months to 30 September 2014 of 16.0m (2013: 22.3m (excluding Outside Broadcasting services 18.1m))
 SIS profit after tax on ordinary activities for the six months to 30 September 2014 of 1.8m (2013: 10.7m (excluding Outside Broadcasting services 5.4m))
 Following closure of Outside Broadcasting during 2013, SIS's profits going forward will be weighted towards the second half
 Dividend of 1.0m received from SIS on 5 December 2014
Notes:
* Comparative figures for the six months ended 30 September 2013 include the results for SIS's Outside Broadcasting services which formed part of SIS Live and which have been discontinued.
Michael Rosenberg, Chairman of Catalyst commented:
"Although SIS's first half profits were below the previous year, it is anticipated that the second half results will show an improvement as following the closure of Outside Broadcasting, the majority of SIS's profits will now be generated in the second half of its financial year. Meanwhile SIS continues to generate significant free cashflow. Since the announcement of the final result, there has been no change in the expiration dates of the various fixed term contracts for the existing racecourse media rights."
Enquiries:
Catalyst Media Group Plc
Michael Rosenberg, Non-executive Chairman: 07785 727 595
Melvin Lawson, Non-executive Director: 020 7637 8412
Strand Hanson Limited: 020 7409 3494
James Harris
Richard Tulloch


Chairman's Statement
For the six month period ended 31 December 2014 the Group has generated a net profit after taxation but before adjustment to investment valuation charges of 330,795 (2013: 2.2m). After taking account of the adjustment to valuation charge of 359,450 as referred to below, the Group recorded a loss of 28,655 for the period.
Net assets as at 31 December 2014 were 24.0m (30 June 2014: 25.5m). Net cash as at 31 December 2014 was 89,237 following the repurchase by the Company of, in aggregate, 3,209,316 ordinary shares of 10p each in the capital of the Company ("Shares") for a total consideration of 1.5m equating to an average buyback price of 0.46p per Share. These Shares are currently held in treasury. Excluding the Shares held in treasury, the net assets per Share as at 31 December 2014 was 98.3p (2013: 103.5p).
The main asset of the Group remains the 20.54% stake in SIS and, in December 2014, the Company received a dividend of 1.0m from SIS. In line with previous policy, the Board has reduced the value of the investment by the amount of its profit share for the period being 359,450. Accordingly, the value of the investment in SIS has been reduced to 24.0m after taking account of the dividend receipt referred to above.
CMG equity accounts for its share in the profits of SIS which were 1.8m after tax for the period (2013: 10.7m). Total revenues of SIS for the period were 106.9m (2013: 123.2m) of which 96.4m (2013: 90.6m) were derived from the business of providing integrated television and data services to licensed betting offices in the UK, Ireland and overseas and a further 10.5m (32.6m) was contributed by SIS Live services, which provides satellite news gathering and associated transmission services to its customers. The decrease in revenues of SIS Live was a result of the previously reported closure of Outside Broadcasting, which had revenues of 22.1m for the six month period to 30 September 2013.
SIS's EBITDA for the period to 30 September 2014 was 16.0m compared to 22.3m in 2013 (18.1m excluding Outside Broadcasting). The major factors impacting the current period were the costs of renewing the media rights for Irish racing, a one off contribution in 2013 relating to a new studio facility for a client and additional costs relating to new growth initiatives during 2014. These initiatives included a new streaming platform and an investment in the La Liga football data services. 
Following the closure of Outside Broadcasting services, whose profits were weighted towards the first half of SIS's financial year, SIS's profits will now be weighted towards the second half of its financial year when SIS Betting makes the majority of its profits. Accordingly, SIS's management anticipates that its full year outcome will be in line with internal budgets, with trading at the operating level prior to exceptional items expected to be marginally lower than that achieved in the year to March 2014. In addition, SIS's management anticipates that exceptional items will be significantly lower in the current financial year than in the previous year, as there will be no impact of the closure of Outside Broadcasting.
SIS BETTING
SIS provides 100,000 betting opportunities per year with live and virtual content beamed into shops via generic or bespoke channels text services and data feeds. Content includes UK and Irish horse and greyhound racing plus overseas racing from France, South Africa, United Arab Emirates and Latin America.
Since the last published Report and Accounts of CMG to 30 June 2014 there has been no change in the expiration dates of the various fixed term contracts for the existing racecourse media rights. However, SIS has now added two new media rights venues, and broadcasting has commenced from the all-weather floodlit track at Chelmsford City which will host 58 race fixtures during 2015 and the new greyhound track at Towcester.
SIS LIVE
SIS LIVE offers comprehensive connectivity solutions via a vast satellite and fibre infrastructure. SIS's rapidly growing fibre network connects the Company's established teleports in Milton Keynes and MediaCityUK in Manchester with key broadcasting locations around the UK, including major UK broadcasters, Premier League football grounds and horse and dog racing tracks. The Company has the largest mobile satellite uplink fleet in Europe and an award winning range of portable VSAT and uplink products. In November 2014 six new satellite news gathering vehicles, which are operated by SIS, were delivered to Sky News.

Outlook
The business of SIS continues to generate cash but its future direction will depend on the renewal of its various media rights agreements. It was encouraging to receive a dividend during 2014 but there can be no certainty as to the timing or quantum of future dividends. Meanwhile CMG continues to operate on a very low cost base.

Consolidated interim statement of comprehensive income

Notes
6 months to 31 December 2014
Unaudited
6 months to 31 December 2013
Unaudited
12 months to 30 June 2014
Audited





Revenue

12,500
12,500
25,000





Cost of sales

-
-
-
Gross profit

12,500
12,500
25,000





Administrative expenses

(46,242)
(34,289)
(111,259)
Other operating income

-
-
3,172
Operating loss

(33,742)
(21,789)
(83,087)





Financial income

914
787
2,898
Net financial income

914
787
2,898




Share of profit of equity-accounted associate
1
359,450
2,195,315
1,367,348
Valuation adjustment of equity-accounted associate

(359,450)
(2,195,315)
(4,298,334)





Loss before taxation

(32,828)
(21,002)
(3,011,175)





Taxation

4,173
13,232
17,888





Loss for the period 

(28,655)
(7,770)
(2,993,287)





Share of other comprehensive income of associate

-
-
(69,014)
Total comprehensive income loss for the period

(28,655)
(7,770)
(3,062,301)





Attributable to equity holders of the company

(28,655)
(7,770)
(3,062,301)





Earnings / (loss) per share:
4



Basic

(0.11p)
(0.03p)
(10.83p)
Diluted 

(0.11p)
(0.03p)
(10.83p)
Pre valuation adjustment

1.23p
7.91p
4.72p


Consolidated interim statement of financial position

Notes
31 December 2014
Unaudited
31 December 2013
Unaudited
30 June
2014
Audited
Assets




Non-current assets




Investment in associate
1
23,973,116
28,000,000
25,000,000


23,973,116
28,000,000
25,000,000





Current assets




Trade and other receivables

12,879
35,158
31,097
Cash and cash equivalents

89,327
571,596
538,416


102,206
606,754
569,513





Total assets

24,075,322
28,606,754
25,569,513





Equity and liabilities









Capital and reserves attributable to equity holders of the parent




Share capital

2,764,567
2,764,567
2,764,567
Capital redemption reserve

49,752
49,752
49,752
Merger reserve

2,402,674
2,402,674
2,402,674
Retained surplus 

18,813,794
23,366,286
20,311,755


24,030,787
28,583,279
25,528,748





Current liabilities




Trade and other payables

32,726
23,475
31,399
Corporation tax payable

11,809
-
9,366


44,535
23,475
40,765





Total equity and liabilities

24,075,322
28,606,754
25,569,513


Consolidated interim cash flow statement


6 months
to 31 December 2014
Unaudited
6 months
to 31 December 2013
Unaudited
12 months
to 30
June
2014
Audited




Cash flow from operating activities




(Loss) before taxation

(32,828)
(21,002)
(3,011,175)
Adjustments for:




Depreciation, amortisation and valuation adjustment

359,450
2,195,315
(1,367,348)
Share of profit from associate

(359,450)
(2,195,315)
4,298,334
Finance income

(914)
(787)
(2,898)
Corporation taxes recovered

6,626
14,214
27,446





Net cash outflow from operating activities before changes in working capital 

(27,116)
(7,575)
(55,641)
Decrease / (increase) in trade and other receivables

18,217
(25,665)
(21,604)
Increase / (decrease) in trade and other payables 

1,318
(18,714)
(10,000)





Net cash outflow used in operating activities 

(7,581)
(51,954)
(87,245)





Investing activities




Dividend received 

1,026,884
-
-
Interest received

914
787
2,898





Net cash inflow from investing activities

1,027,798
787
2,898





Financing activities




Shares purchased into treasury

(1,469,306)
-
-




Net cash outflow from financing activities

(1,469,306)
-
-





Net decrease in cash and cash equivalents in the period

(449,089)
(51,167)
(84,347)
Cash and cash equivalents at the beginning of the period

538,416
622,763
622,763





Cash and cash equivalents at the end of the period

89,327
571,596
538,416

Consolidated interim statement of changes in equity

Share
capital
Unaudited
Capital redemption reserve
Unaudited
Merger
reserve
Unaudited
Retained surplus/ (deficit)
Unaudited
Total shareholders equity
Unaudited






At 1 July 2013
2,764,567
49,752
2,402,674
23,374,056
28,591,049






Loss for the 6 month period to 31 December 2013
-
-
-
(7,770)
(7,770)
Total comprehensive loss for the period
-
-
-
(7,770)
(7,770)






At 31 December 2013
2,764,567
49,752
2,402,674
23,366,286
28,583,279






Loss for the 6 month period to 30 June 2014
-
-
-
(2,985,517)
(2,985,517)
Share of other comprehensive loss of associate
-
-
-
(69,014)
(69,014)
Total comprehensive loss for the period
-
-
-
(3,054,531)
(3,054,531)






At 30 June 2014
2,764,567
49,752
2,402,674
20,311,755
25,528,748

Share
capital
Unaudited
Capital redemption reserve
Unaudited
Merger
reserve
Unaudited
Retained surplus/ (deficit)
Unaudited
Total shareholders equity
Unaudited






At 1 July 2014
2,764,567
49,752
2,402,674
20,311,755
25,528,748






Loss for the 6 month period to 31 December 2014
-
-
-
(28,655)
(28,655)
Share repurchase



(1,469,306)
(1,469,306)
Total comprehensive loss for the period
-
-
-
(1,497,961)
(1,497,961)






At 31 December 2014
2,764,567
49,752
2,402,674
18,813,794
24,030,787
On 15 July 2014 the Group purchased in the market 502,272 Shares of 50p per Share. On 17 December 2014 the Group purchased in the market a further 2,707,044 Shares at 45p per Share. The purchases were made out of distributable reserves and the Shares are being held in treasury by the Group.

Notes to the interim financial statements


1. Investment in associate
Share of net assets
Fair Value of Intangibles
Total

Group
Group
Group

Cost



At 1 July 2014
13,786,364
11,213,636
25,000,000
Additions - share of profit
359,450
-
359,450
Dividend received
(1,026,884)
-
(1,026,884)
Valuation adjustment
-
(359,450)
(359,450)




At 31 December 2014
13,118,930
10,854,186
23,973,116
The Group's interest in the associate, Satellite Information Services (Holdings) Limited, ("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 2014 and has, in line with previous policy, reduced the value of the investment by the amount of its profit share for the period. As a result, it has concluded that the investment should be held at a value of 23,973,116.
Share of profit of associate*
30 September
2014

31 December 2014
31 December 2013
30 June
2014

SIS Total

CMG share
CMG share
CMG share

'000

'000
'000
'000
Revenue:





SIS Betting Services
96,411

19,803
18,608
40,708
SIS LIVE services
10,471

2,151
6,700
11,416






Total revenue
106,882

21,954
25,308
52,124






Operating profit from ongoing operations
3,347

687
2,822
4,920
Net interest payable
(623)

(128)
(237)
(450)
Profit on disposal of fixed asset
-

-
160
(2,156)
Exceptional items
(520)

(107)
(219)
163






Profit before tax
2,204

452
2,526
2,477
Taxation
(454)

(93)
(331)
(1,110)
Share of profit after taxation
1,750

359
2,195
1,367
Net income from associate
1,750

359
2,195
1,367






Other comprehensive income





Actuarial (loss) /gain
-

-
-
(90)
Deferred tax
-

-
-
21

-

-
-
(69)






Share of gross assets and liabilities of associate





Gross assets
144,115

29,601
31,672
36,722
Gross liabilities
(80,243)

(16,482)
(14,254)
(22,936)
Net equity
63,872

13,119
17,418
13,786
*The period covered by the associate's accounts is six months to 30 September 2014. The 2013 revenues have been restated to exclude internal revenues.
The financial results for SIS are taken from SIS's management accounts to 30 September 2014, adjusted in order to align the accounting policies of SIS (whose accounts are prepared under UK GAAP) and CMG (whose accounts are prepared under International Financial Reporting Standards). Adjustments have been made in respect of the recognition of the fair value of derivatives held by SIS as at the balance sheet date. The net effect of these adjustments is to increase the value of the investment in associate in the financial statements by 97k (2013: increase of 3,785k).
2. Corporate information
The Company is a company incorporated in England and Wales and quoted on the AIM market of the London Stock Exchange plc.
3. Basis of preparation
These unaudited consolidated interim financial statements cover the six month period from 1 July 2014 to 31 December 2014 including the financial results of SIS for the six month period to 30 September 2014.
These consolidated interim financial statements of the Company and its subsidiaries (the "Group") for the six months ended 31 December 2014 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 interim statement are consistent with the accounting policies adopted in the financial statements for the year ended 30 June 2014.
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 2014, 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.
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 to
31 December 2014
6 months to
31 December 2013
12 months to 30 June
2014
Basic and Diluted


Earnings per Share pre valuation adjustment - pence
1.23p
7.91p
4.72p
(Loss) per Share - pence
(0.11p)
(0.03p)
(10.83p)




Profit attributable to equity shareholders (before valuation adjustment)
330,795
2,187,545
1,305,047
(Loss) attributable to equity shareholders
(28,655)
(7,770)
(2,993,287)




Weighted average number of Shares in issue
26,960,934
27,645,673
27,645,673
5. Share repurchases
On 15 July 2014, the Company purchased, in the market, 502,272 Shares at a price of 50p per Share.
On 17 December 2014, the Company purchased, in the market, a further 2,707,044 Shares at a price of 45p per Share.
The Shares repurchased during the period will be held in treasury by the Company.

This information is provided by RNS
The company news service from the London Stock Exchange
  END
IR DBLFXEXFLBBF