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

Catalyst MediaAnnouncement

30/03/2016 07:05

RNS Number : 4553T
Catalyst Media Group PLC
30 March 2016
Catalyst Media Group Plc
("CMG", "Catalyst" or the "Group")
Interim Results for Six Months Ended 31 December 2015 and Loan Facility
Catalyst Media Group Plc announces its interim results for the six months ended 31 December 2015.
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 2015
 CMG profit after taxation and before adjustment to investment valuation of 1.22m (2014: 0.33m)
 Valuation adjustment of 1.25m (2014: 0.36m) resulting in a loss after taxation of 24,449 (2014: 28,655)
 Earnings per share (before valuation adjustment) 5.02p (2014: 1.23p)
 Loss per share (after valuation adjustment) 0.10p (2014: 0.11p)
 Net asset value per share (excluding shares held in treasury) of 102.3p (2014: 98.3p)
 SIS revenues for six months to 30 September 2015 111.6m (2014: 106.9m)
 SIS EBITDA for six months to 30 September 2015 of 20.1m (2014: 16.0m)
 SIS profit after tax on ordinary activities for the six months to 30 September 2015 of 6.1m (2014: 1.8m)
 Arrangement with Racecourse Media Group ("RMG") ensures media rights extended to 2022
 Post period end, agreement with Horse Racing Ireland ("HRI") and the Association of Irish Racecourses ("AIR") to extend Irish horse racing media right to 2023
 Following closure of Outside Broadcasting during 2013, as previously indicated, SIS's profits going forward will be weighted towards the second half
In addition, the Company announces that it has entered into a loan agreement with AB Group Ltd and Harwood Holdco Limited, companies in which two of the Company's Non-executive Directors, Melvin Lawson and Christopher Mills are associated respectively, to provide a loan through to 31 March 2017 for, in aggregate, up to 100,000 to provide funds to CMG (the "Loan"). The Loan will be unsecured and will accrue interest at a rate of 5.0% per annum on outstanding amounts.
Michael Rosenberg, Chairman of Catalyst commented:
"The recent announcement by SIS of an agreement with HRI and ARI together with the successful conclusion by SIS of an arrangement with RMG during the period under review, were significant steps for SIS as they have secured ongoing media rights through to 2023 and 2022 respectively. Although the new agreements will result in lower margins from 2018, when they come into effect, SIS has already undertaken a number of initiatives to create new revenue streams including mobile games, streaming technology and in-running betting. SIS continues to perform in line with SIS's management expectations, with strong cash flow generation, and SIS's full year results are expected to be broadly in line with those achieved last year."
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


Chairman's Statement
For the six month period ended 31 December 2015 the Group has generated a net profit after taxation but before adjustment to investment valuation charges of 1.22m (2014: 0.33m). After taking account of the adjustment to valuation charge of 1.25m as referred to below, the Group recorded a loss of 24,449 for the period.
Net assets as at 31 December 2015 were 25.0m (30 June 2015: 25.0m). Net cash as at 31 December 2015 was 13,688 (2014: 89,327). Excluding the shares held in treasury, the net assets per share as at 31 December 2015 was 102.3p (2014: 98.3p).
The Group's main asset remains its 20.54% stake in SIS. The value of this investment has been maintained at 25.0m by deducting the amount of CMG's profit share for the period being 1.25m.
CMG equity accounts for its share in the profits of SIS which were 6.1m after tax for the six month period to 30 September 2015 (2014: 1.8m). Total revenues of SIS for the period were 111.6m (2014: 106.9m) of which 102.3m (2014: 96.4m) 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 9.3m (2014: 10.5m) was contributed by SIS Live services, which provides satellite news gathering and associated transmission services to its customers. Operating profits of SIS for the period were 7.8m compared to 3.4m, in the comparable period for 2014. 
SIS BETTING
SIS is a leading supplier of data, pictures and pricing across a range of sports enabling more than 100,000 betting opportunities a year. The new arrangements recently announced with RMG and with HRI and the AIR have secured ongoing media rights for SIS through to 2022 and 2023 respectively, thereby removing one of major risks faced by SIS and ensuring SIS will continue to be an important provider of both UK and Irish horseracing media and data going forward, albeit at lower margins when the new agreements start during the course 2018. The Irish deal ensures that retail bookmakers across the UK and Ireland and internationally will have access to Irish horseracing as part of a comprehensive package of content.
SIS has at the same time been focussing on how to enhance the profitability of the company in the light of the reduced margins from the traditional sources. Several initiatives are under way including mobile games, streaming technology, in-running betting and trading services all of which are beginning to show positive results.
MOBILE GAMES
SIS has created some innovative on-demand racing games which merge the excitement of sports betting with a casino mechanic so that customers can play whenever they want. These games can be played across a range of platforms including desktop, mobile and tablet and the current portfolio of games includes horseracing, greyhounds, cycling as well as some seasonal specials. SIS provides these games direct to gaming providers, such as betting companies, who then sell them on to the end consumer.
IN-RUNNING BETTING
SIS has devised a low cost transmitter using GPS transmission technology, the size of a smart phone which is inserted into the saddlecloth and carried on the horse. This relays real time data on the horses, providing greater insight into the respective performance of each horse and it is believed that this will provide additional betting opportunities that could revolutionise in-running horseracing betting. 
SIS STREAMING PLATFORM
SIS has delivered a technology solution suited to live sports for the betting industry with a tuned, secure, low latency streaming product which can stream both own and third party content from any source to any destination. SIS has already launched IPTV streaming services in the UK and Internationally together with live racing streaming with Bet and Watch and Watch and Bet capabilities. 
SIS TRADING SERVICES
SIS compiles odds for a range of sporting events, thereby offering an outsourced trading service providing price and price derivatives for betting operators. The range of markets covered by the trading services currently include Ante Post, Early Prices, Board Prices and Starting Prices for both horse and greyhound racing and SIS expects to extend the service to other sports in due course.
SIS LIVE
SIS Live provides satellite uplinks, SNG and satellite internet services. It also is engaged in media fibre, teleports, distribution and satellite capacity provision. It is becoming the connectivity provider of choice for critical media content in the UK, having recently provided the media connectivity for the Rugby World Cup in England in 2015.
Its fibre network connects its headquarters with resilient connectivity into key broadcast locations including major UK broadcasters, sports venues, network operators and studio facilities. Signals can be routed directly from the company's teleport sites or to national and international customers via a combination of satellite and fibre paths.
It provides innovative cost effective and reliable end to end high quality streaming solutions for live webcasts, social streaming, brands and marketing initiatives for premium providers.
INDIA
SIS continues to progress the outstanding amounts due and the associates tax liabilities relating to the India Commonwealth Games in 2012. Progress has been made in recent months and SIS expects to be in a position to successfully resolve the outstanding items in the next 12 to 18 months. 
OUTLOOK
SIS continues to trade in line with SIS's management expectations and revenues and profit after tax for SIS's year ending 31 March 2016 are expected to be broadly in line with those of the previous year. However cash generation continues to be strong and the year end balance should significantly exceed that of the prior year.
No decision has yet been made by the Board of SIS with regard to any dividend payments but the situation remains under review. As a result, although the overheads of CMG are very low, CMG will need access to funding going forward. The Company has therefore entered into a loan agreement with AB Group Ltd and Harwood Holdco Limited, companies in which two of the Company's Non-executive Directors, Melvin Lawson and Christopher Mills are associated respectively, to provide the Loan through to 31 March 2017 for, in aggregate, up to 100,000 to provide funds to CMG. The Loan, which is unsecured, will accrue interest at a rate of 5.0% per annum on outstanding amounts.


Consolidated interim statement of comprehensive income

Notes
6 months to 31 December 2015
Unaudited
6 months to 31 December 2014
Unaudited
12 months to 30 June 2015
Audited





Revenue

12,500
12,500
25,000





Cost of sales

-
-
-
Gross profit

12,500
12,500
25,000





Administrative expenses

(46,446)
(46,242)
(119,991)
Other operating income

-
-
-
Operating loss

(33,946)
(33,742)
(94,991)





Financial income

6
914
1,012
Financial costs

(26)

160
Net financial income

(20)
914
1,172




Share of profit of equity-accounted associate
1
1,248,832
359,450
4,352,427
Valuation adjustment of equity-accounted associate

(1,248,832)
(359,450)
(2,836,073)





Loss before taxation

(33,966)
(32,828)
1,422,535





Taxation

9,517
4,173
22,866





Profit / (loss) for the period 

(24,449)
(28,655)
1,445,401





Share of other comprehensive income of associate

-
-
(489,469)
Total comprehensive income loss for the period

(24,449)
(28,655)
955,932





Attributable to equity holders of the company

(24,449)
(28,655)
955,932





Earnings / (loss) per share:
4



Basic

(0.10p)
(0.11p)
5.62p
Diluted 

(0.10p)
(0.11p)
5.62p
Pre valuation adjustment

5.02p
1.23p
16.66p


Consolidated interim statement of financial position

Notes
31 December 2015
Unaudited
31 December 2014
Unaudited
30 June
2015
Audited
Assets




Non-current assets




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


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





Current assets




Trade and other receivables

18,692
12,879
30,660
Cash and cash equivalents

13,688
89,327
16,969


32,380
102,206
47,629





Total assets

25,032,380
24,075,322
25,047,629





Equity and liabilities









Capital and reserves attributable to equity holders of the parent




Share capital

2,541,136
2,764,567
2,541,136
Capital redemption reserve

273,183
49,752
273,183
Merger reserve

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

19,764,245
18,813,794
19,788,694


24,981,238
24,030,787
25,005,687





Current liabilities




Trade and other payables

51,142
32,726
40,480
Corporation tax payable

-
11,809
1,462


51,142
44,535
41,942





Total equity and liabilities

25,032,380
24,075,322
25,047,629


Consolidated interim cash flow statement


6 months
to 31 December 2015
Unaudited
6 months
to 31 December 2014
Unaudited
12 months
to 30
June
2015
Audited




Cash flow from operating activities




Profit / (loss) before taxation

(33,966)
(32,828)
1,422,535
Adjustments for:




Depreciation, amortisation and valuation adjustment

1,248,832
359,450
(4,352,427)
Share of profit from associate

(1,248,832)
(359,450)
2,836,073
Finance income

(6)
(914)
(1,012)
Finance expense

26
-
(160)
Corporation taxes recovered

4,173
6,626
14,962





Net cash outflow from operating activities before changes in working capital 

(29,773)
(27,116)
(80,029)
Decrease / (increase) in trade and other receivables

15,850
18,217
439
Increase / (decrease) in trade and other payables 

10,662
1,318
9,080





Net cash outflow used in operating activities 

(3,261)
(7,581)
(70,510)





Investing activities




Dividend received 

-
1,026,884
1,026,884
Interest received

6
914
1,012





Net cash inflow from investing activities

6
1,027,798
1,027,896





Financing activities




Shares purchased into treasury

-
(1,469,306)
(1,478,993)
Interest paid

(26)
-
160




Net cash outflow from financing activities

(26)
(1,469,306)
(1,478,833)





Net decrease in cash and cash equivalents in the period

(3,281)
(449,089)
(521,447)
Cash and cash equivalents at the beginning of the period

16,969
538,416
538,416





Cash and cash equivalents at the end of the period

13,688
89,327
16,969

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 2014 - restated
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






Profit for the 6 month period to 30 June 2015
-
-
-
1,474,056
1,474,056
Share of other comprehensive loss of associate
-
-
-
(489,469)
(489,469)
Share repurchase
-
-
-
(9,687)
(9,687)
Cancellation of Treasury shares
(223,431)
223,431
-
-
-
Total comprehensive profit for the period
(223,431)
223,431
-
974,900
974,900






At 30 June 2015
2,541,136
273,183
2,402,674
19,788,694
25,005,687

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






At 1 July 2015
2,541,136
273,183
2,402,674
19,788,694
25,005,687






Loss for the 6 month period to 31 December 2015
-
-
-
(24,449)
(24,449)
Share repurchase
-
-
-
-
-
Total comprehensive loss for the period
-
-
-
(24,449)
(24,449)






At 31 December 2015
2,,541,136
273,183
2,402,674
19,764,245
24,981,238

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 2015
16,557,120
8,442,880
25,000,000
Additions - share of profit
1,248,832
-
1,248,832
Dividend received
-
-
-
Valuation adjustment
-
(1,248,832)
(1,248,832)




At 31 December 2015
17,805,952
7,194,048
25,000,000
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 2015 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 25,000,000.
Share of profit of associate*
30 September
2015

31 December 2015
31 December 2014
30 June
2015

SIS Total

CMG share
CMG share
CMG share

'000

'000
'000
'000
Revenue:





SIS Betting Services
102,299

21,012
19,803
42,591
SIS LIVE services
9,300

1,910
2,151
4,453






Total revenue
111,599

22,922
21,954
47,044






Operating profit from ongoing operations
7,800

1,602
687
5,270
Net interest payable
61

13
(128)
(121)
Profit on disposal of associate
-

-
-
8
Profit on disposal of fixed asset
-

-
-
1
Exceptional items
(261)

(54)
(107)
218






Profit before tax
7,600

1,561
452
5,376
Taxation
(1,520)

(312)
(93)
(1,024)
Share of profit after taxation
6,080

1,249
359
4,352
Net income from associate
6,080

1,249
359
4,352






Other comprehensive income





Actuarial (loss) /gain
-

-
-
(610)
Deferred tax
-

-
-
121

-

-
-
(489)






Share of gross assets and liabilities of associate





Gross assets
145,622

29,911
29,601
30,077
Gross liabilities
(58,933)

(12,105)
(16,482)
(13,520)
Net equity
86,689

17,806
13,119
16,557
*The period covered by the associate's accounts is the six months to 30 September 2015. The revenues have been stated excluding internal revenues.
The financial results for SIS are taken from SIS's management accounts to 30 September 2015, 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 decrease the value of the investment in associate in the financial statements by 140k (2014: 97k).
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 2015 to 31 December 2015 including the financial results of SIS for the six month period to 30 September 2015.
These consolidated interim financial statements of the Company and its subsidiaries (the "Group") for the six months ended 31 December 2015 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 to be adopted in the financial statements for the year ended 30 June 2016.
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 2015, 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 2015
6 months to
31 December 2014
12 months to 30 June
2015
Basic and Diluted


Earnings per Share pre valuation adjustment - pence
5.02p
1.23p
16.66p
(Loss) / profit per Share - pence
(0.10p)
(0.11p)
5.62p




Profit attributable to equity shareholders (before valuation adjustment)
1,224,383
330,795
4,281,474
(Loss) / profit attributable to equity shareholders
(24,449)
(28,655)
1,445,401




Weighted average number of Shares in issue
24,411,357
26,960,934
25,705,802
5. Share repurchases
There were no Shares repurchased during the six month period ended 31 December 2015.

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